Public Disclosure Authorized
Documentof
The World Bank FOR OFFICIAL USE ONLY
,;A/
3
LI 3 - / A//t
Public Disclosure Authorized
ReportNo.8603-IND
STAFF APPRAISALREPORT
Public Disclosure Authorized
Public Disclosure Authorized
INDONESIA PROJECT SECONDFORESTRYINSTITUTIONSANDCONSERVATION
JUNE 5, 1990
Country Departmant V Asia Regional Office and may be sd by Uh docunt hasa reacted db dudies Its conteIt may ad OtIWISe be disclosed | theIoffic
ly in t{be ao_ WoMbo w
_
of }
CURRENCYEQUIVALENTS (As of March 1990) Currency Unit - Rupiah $1.00 = Rupiah (Rp) 1,795 Rp 1 million - $557
FISCAL YEAR April
1 - March 31
WEIGHTS AND MEASURES 1 1 1 1 1
kilometer square kilometer hectare (ha) kilogram (kg) metric ton (ton)
. (km2 )
1 cubic meter (cu m)
-
-
=
-
0.62 miles (mi) 100 ha - 0.39 sq. miles 2.47 acres (ac) 2.2 pounds (lb) 1.10235 short tons (2.000 lbs) 0.9843 long tons (2,240 lbs) 35.3 cubic feet
INDONESIAN FIVE-YEAR PLANS Repelita
V
-
Fifth
Five-Year
Plan,
1989-94
ABBREVIATIONS
BAPPEDA BPKP DBH Departemen FICP I GOI GOJ HPH ITTO IUCN MAI
MOF PH PHPA PPIU PP TFAP RRL TGHK UUPK UU
-
Provincial Level Planning Agency Directorate of State Accountancy Diameter at Breast Height Department, synonymous with Ministry in Indonesia Bank assisted Forestry Institutions and Conservation I Project Government of Indonesia Government of Japan Concession Agreement International Tropical Timber Organization International Union for Conservation of Nature Mean Annual Increment Ministry of Forests Directorate General of Forest Utilization Directorate General for Nature Conservation Project Planning and Implementation Unit Presidential Directive for Implementing Statute Tropical Forestry Action Plan Directorate General for Soil Conservation and Rehabilitation Consensus Forest Land Use Plan Basic Forest Law (UU No. 5/1967) Statute (Undang-Undang)
USEONLY FOROFFICIAL
INDONESIA SECONDFORESTRYINSTITUTIONS AND CONSERVATIONPROJECT
Table
of Contents
Page No. 1. II.
.
1
. . . . . . . . . . . . . . . . . . . . .
1
INTRODUCTION .... . . . . . . . . . . . . . . . . . . . . THE FORESTRY SECTOR
. . . . . . . . . . .
I I 2 6
. . . . . . . . . . . . . . . . . . . . . . . . Strategies . . . . . .
8 9 11
. . . . .
12
. . . . . . . . . . . . . . Bank Involvement in the Sector Lessons Learn from Previous Forestry . . . . . . . . . . . . Rationale for Future Bank Involvement and Proposed Strategy
12 13 13
Role in the Economy .1... . . . . . Forest Resources . . . . . . . . . . Forestry Planning and Management . . Markets and Exports . . Processing. Fiscal Policy. Forestry Products Trade Policy . . . Sectoral Problems and Constraints . Government's Sectoral Objectives and III.
IV.
. . . .
. . . .
. . . .
. . . .
. . . .
. . . .
. . . .
. . . .
7
DANK INVOLVEMENT IN THE SECTOR AND LESSONS LEARNT
.
14
. . . .
14 14 15 16
. . . . . . . . . . .
18
PROJECT COSTS AND FINANCING . . . . . . . . . . . . . . . .
19
THE PROJECT
.....
. .. . . . . . . . . . . . . . . .
Project Objectives and Strategy . . . Project Description . . . . . . . . . Concession Management and Inspection . Reforestation (Forest Plantations) . . Forestry Research .17 Conservation.17 Service .18 Policy Advisory Role of Women . . . . . . . . . . . . V.
. . . .
. . . .
. . . .
. . . .
. . . .
. . . .
. . . .
. . . .
. . . .
. . . .
. . . .
Project Costs .19 .19 Financing Procurement .21 Disbursements .22 Accounting and Audits .23
This report is based on the findings of an appraisal mission comprising of Messrs. T.P.N. Sinha, Orhan Baykal, Colin Rees, and Wawan Mulyawan which visited Indonesia in March/April 1990. Mr. Akihiko Nishio also assisted in the preparation of the report.
This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
-
ii -
Page No. VI.
ORGANIZATION, MANAGEMENT AND IMPLEMENTATION
. . . . . . . .
Coordination . . . . . . . . . . Forest Concession Management . . . . . . . . . . Reforestation . . .. . . . . . . . . . . . .. Forestry Research . . . . . . . . . . . . . . Conservation . . . . . . . . . . . . . . . . . . Policy Advisory Service .... . . . . . . . . . . Project Implementation Plans and Status . . . .
VII.
. . . . . . .. . . . . . . . .
. . . . . .. .
23
23 23 24 24
24 24
Monitoringand Evaluation . . . . . . . . . . . . . . . . .
24
PROJECT IMPACT . . . . . . . . . . . . . . . . . . . . . . .
25
Benefits/CostEffectivenessof Institutional StrengtheningComponents.... . . . . . . . . . . . . Project Risks VIII.
. . . . . . . . . . . .
23
.
25
. . . . . . . . . . . . . . . . . . . . . . .
27
AGREEMENTSREACHEDAND RECOMMENDATION
. . . . . . . . . . .
27
TABLES IN THE TEXT Table 5.1 Project Costs Suwmary .. . . . . . . . . . . Table 5.2 Financing Plan . . . . . . . . . . . . . . .. . . . . .. .. Table 5.3 Procurement Arrangements ... . . . . . . . .
. . .
19 20 20
ANNEXES Annex Annex Annex Annex
1 2 3 4
Progressof FICP I (Loan2930-IND) ForestryPolicy Matrix ConcessionManagement- Terms of Reference NationalMaster Plan for PlantationsComponent - Terms of Reference
Annex 5 Annex 6 Annex 7 Annex 8 Annex 9 Annex 10 MAP:
ResearchComponent- Terms of Reference NationalParks InvestmentConsultants- Terms of Reference ProjectCosts and Disbursement OrganizationChart ImplementationSchedule List of Related Documentsand Data Available in the Project File
IBRD 22351
-
iii -
INDONESIA SECOND FORESTRYINSTITUTIONS& CONSERVATIONPROJECT LOANANDPROJECT SUMMARY Borrower
t
Beneficiary
s Not applicable
Loan Amount
: $20.0 million equivalent
Terms
: Repayablein 20 years, including5 years of grace, at the Bank's standardvariablerate.
Republicof Indonesia
Project Description s The main objectivesof the proposedproject are to reduce tha pace of deforestationand to sustainand maximizethe long-termbenefits from Indonesianforest resources by addressing critical needs in the areas of
concessionmanagement,resourcemobilizationfrom the forestrysector,nature conservation,reforestationof degradedlands, and technologydevelopmentto support sectoralprograms. The proposedproject consistsof (a) strengtheningof inspection,monitoringand supervisionof concessionaires logging activitieson about 50 million ha of productionforeststo improve revenue collectionand ensure compliancewith environmentalregulationsof the Government; (b) developmentof a master plan, formulate incentives,evaluationcriteriaand supervision systems for reforestationactivitieson about 10 million ha degradedlands to increasethe efficiency of GOI's program for reforestation;(c) developmentof a national forestryresearchstationfor Eastern Indonesiain Irian Jaya and prepare a forestry researchmaster plan; (d)with active participationof local people, developmentof plans and models for conservationand multi-sectoralsustainableuse of mangrove resources,and for the improvedmanagementof ten nationalparks; and (e) provisionof a high-level and experiencedadvisczand short-termexperts for the Ministerof Forestryto assist with strategicplanning and policy review and implementation. Benefitsand risks
s Economicand environmentalbenefitsare expectedfrom: (a) improvedforestrymanagementleadingto a sustainedlonger-termproductionfrom the forestry sector; (b) improvedresourcemobilizationfrom the sector for nationaland sectoraldevelopment;(c) more efficientinvestmentplanningand selectionwhich would reduce investmentcosts while increasing benefits;and (d) more effectiveconservationof Indonesia'svaluabletropicalrain forest resource.
-
iv -
The main project risk would be the innovativenature of the concessionmanagementcomponentwhere inspectionagenciesfrom the private sectorwould be engaged to assist the Governmentin improvingrevenue collectionand compliancewith environmental guidelines. While a similarapproachhas been used for customs in Indonesia,this would be the first approachin the forestrysector. The risk will be minimizedby keeping project size small and starting with only three provincesinitially. The benefits/ costs of the new system would be carefullymonitored and evaluatedand the systemwill be expandedonly after positive resultsare convincinglydemonstrated. There might be some delays in completingthe conservationplans thtt reflectadequatelythe views and needs of local people. The Governmentwill enlist the assistanceof the NGO communityto facilitatethe dialogueon these plans. EstimatedCosts: /a Local -----*$ Research ConcessionManagement Reforestation Conservation Policy AdvisoryService Total Base Costs PhysicalContingencies Price Contingencies Total Costs
/a
Poreign Total million)-------
5.6 6.5 1.4 1.1 0.2
4.0 4.2 1.9 1.4 0.8
9.6 10.7 3.3 2.5 1.0
14.8
12.3
27.1
1.2
0.8
2.0
2.4
1.6
4.0
18.4
14.7
33.1
Inclusiveof duties, taxes and reservedprocurementamountingto $4.4 million equivalent.
FinancingPlan. Local -Government JapaneseGrant Facility ITTO IBRD Total
Foreipn Total million)-------
($
10.8 0.3 0.0 7.3
1.0 0.2 0.8 12.7
11.8 0.5 0.8 20.0
18.4
14.7
33.1
Disbursements 1991 Annual Cumulative Hap:
2.5 2.5
IBRD 22351
1992 -(--------------3.5 6.0
1993 million) 5.0 11.0
1994 1995 --------------5.0 16.0
4.0 20.0
INDONESIA SECOND FORESTRYINSTITUTIONSAND CONSERVATIONPROJECT I. INTRODUCTION This report appraisesthe proposedSecond ForestryInstitutionsand 1.1 ConservationProject in Indonesia. The projectwas identifiedin October 1989, and preparedby the Governmentbetween November1989 and February1990 with some assistancefrom the Bank. Project preparationvas completedin February 1990 and the Project was appraisedin Harch 1990. This report of the appraisalmission. summarises the findings and conclusions II.
THE FORESTRYSECTOR
Role in the Economy 2.1 Indonesiais well endowedwith forest resourceswhich cover more than half of its land area, and constitutethe world's second largestarea of tropicalforestsafter the Amazon. Forestryactivitiesaccount for less than 3 percent of GDP in currentprices and employ some 0.5 million persons,but the sector is much more importantin export trade where it contributes $3 billion per annum (over25 percent)to the non-oil exports and is currently the most importantsource of such exports. Contributionof royaltiesand fees from the forestrysector are estimatedat about Rp 630 billion ($350million) in 1989. Forest productsprovidemost of rural energy needs through firewoodand charcoal,and housing constructionmaterial. Indonesian forestsare also importantecologically,constitutingone of the world's most biologicallydiverse areas with more than 500 speciesof mammals, 1,500 speciesof birds, and 10,000 speciesof trees. These forestsplay a significantrole in protectingIndonesia'swatersheds,preventingsoil erosion and ensuringa sustainedflow of irrigationand drinkingwater for downstream population. Forest Resources Size. Indonesia'sforest area is variouslyestimatedat between 100 2.2 and 114 million ha. Precise resourcedata are not availableand this has been a most significantconstrainton planningand the managementof the sector. Improvedresourceassessmentwas initiatedunder the Bank-assistedForestry Institutionsand ConservationI Project (FICP I, Loan 2930-INDof April 20, 1988) and preliminaryindicationsare that the forest area is at the lower end of the 100 to 114 million ha range. 2.3 Natural Forests. Indonesianforestshave been classifiedinto six major forest types, of which the tropicalrain forest is the most significant, coveringthree quartersof the forest area. This consistsmainly of timber speciesof the Diptocarpaceaefamily, in particularShorea (Meranti), Dipterocarpus(Keruing),Hopea (Merawan)and Dryobalanops(Kapur). These forests,particularlyin the Western Indonesianarchipelago,are rich in
- 2 -
commercialspecieswhich average 50 to 90 cu m per ha, at diameter (DBH)above 50 cm, out of a total volume of about 260 to 300 cu m per ha for all species. The average annual growth in the volume of commercialspecies in natural forests is currentlyestimatedat 1.1 cu m per ha. Indonesia'snatural categories(para. 2.7), of forestsare subdividedinto four usage/conservation which the productionforestsaccount for about 44 percent. These forestshave the potential,if properlymanaged,to produce 25 to 50 million cu m per annum on a sustainablebasis, and to support $3 to 4 billion per annum in exports. However,this considerableresourceand export potentialis threatenedbecause of severalsectoralproblems(para. 2.20). Plantations. Indonesiahas a long history of forest plantations 2.4 which were started in the 19th century. Currentlythe total area of plantationsis estimatedat around 1.8 million ha, about half of which is mainly teak. The balance are fast growing species suitablefor pulpwood,and with some work on tree improvementthey could perhaps produce rough lumber and plywood veneer logs for plywood cores. Under the current five year plan, RepelitaV, GOI has an ambitiousplan to increaseforest plantationarea by 1.5 million ha. Progressin meeting this target has been poor so far. The Government'spolicy is to encourageestablishmentof forest plantationsonly on the already deforestedand degradedlands which total more than 20 M ha. However,not all such lands are suitablefor plantationsbecause of poor soils, infrastructureand land tenure problemsand careful selectionof sites is essential. To encouragereforestationof these lands, GOI wishes to give incentivesthrough fiscal policy measures,land lease arrangements,and improvedresourceinformationand analysis. A presidentialregulation, PP7/1990of March 16, 1990 will give a right to plantationproduction,HPHTI, for 35 years renewableup to 70 years and encouragesincreasedprivate sector participation. Within this improvedpolicy framework,the proposedproject will assist in improvingresourceinformation,analysis,and supervision. 2.5 Location. Over 95 percent of Indonesianforestsare in the sparsely populatedOuter Islands,with the islandsof Kalimantan,Irian Jaya and Sumatraaccountingfor most (over80 percent)of the forest area. Production forests in Kalimantanand Sumatraare the richest in commercialhardwood species,and they account for over 75 percent of Indonesia'sproduction potentialfor logs of commercialspecies. ForestryPlanningand Management Institutions. The Basic ForestryLaw (UUPK)of 1967 gave the 2.6 authorityover Indonesianforeststo the Ministryof Agricultureand Forests. In 1983, the Ministrywas split and a separateMinistryof Forests (MOF)was formedwith the authorityto plan and manage Indonesia'sforestrysector. The responsiblefor forest utilization,forest Ministryhas Directorates-General rehabilitationand soil conservation,and nature conservation. It also has supportagenciesfor researchand inventory,and a Secretariat-General responsiblefor planning,budgetingand manpowerdevelopment. MOF employs about 17,000 persons,most (60 percent)of whom are in the Directorate-General and staff of for Reforestationand Land Rehabilitation.The responsibilities MOF have increasedrapidly,and there is an urgent need to strengthenMOF's capacityby establishingappropriatepoliciesand proceduresfor forest management,by increasingits information,planningand monitoringcapacity, and by staff trainingand in-serviceexperience. Under FICP I, a human
-3 resourcedevelopmentplan is being preparedand will be ready by the end of 1991. ForestryPlanningPolicy. HOF has prepareda ConsensusForest Land 2.7 Use Plan (TGHK) for each province,classifyingforest lands into the following four categories: (a) Protectionforest,which accountsfor 30 million ha (21 percent of forest lands),has been set aside for the protectionof critical watersheds,and to prevent soil erosion logging is not permittedin these forests; (b) Conservationforest,which accountsfor 19 million ha (13 percent), has been set aside to protect biologicaldiversityof flora and fauna, and in these areas also logging or hunting is not permitted; (c) Productionforest,which accountsfor 64 million ha (44 percent), has been allocated for forestryproductionand the major portion (over 53 million ha) of this is under forestryconcession arrangements(para. 2.10), managed typicallyby the private sector under MOF regulationsand supervision;and (d) Conversionforest accountingfor 31 million ha (22 percent)has been allocatedfor agriculturalproduction,and accordinglyin these areas clear felling of trees and conversionto agriculturalusage is permitted. ForestryLand Use Plans. Though the forestryland use policy is 2.8 sound in that it recognizesthe multiple role of forest lands, including conservationand protectionneeds for which one-quarterof Indonesia'sland area (a third of the forest area) has been set aside, the implementationof this policy and resultingTGHK forestryland use plans need to be improved. Agriculture, The TGHKplan was prepared by consensus between Provincial and Transmigration (BAPPEDA) Planning Works, Public Lands (Agraria), Forestry, and lano resource forestry poor and maps out-dated on based was but agencies, information. FICP I is updatingforest resourceinformationfor areas under forest. For the degradedand deforestedareas, base maps, soil, land systems and land use data has been collectedunder the Bank-assistedTransmigrationV Project (Loan2578-IND)and the ADB-assistedLand ResourceEvaluationand PlanningProject. This informationnow needs to be used for better planning of reforestationactivities. ProductionForest Management- Production. The utilizationof 2.9 productionforests increasedrapidlybetween 1968 and 1979, and log production increasedfrom a level of 5.2 million cu m to 25.3 million cu m, at the rate of 15 percent per annum. Since then, log productionhas fluctuatedin the 13 to 37 million cu m range in responseto export demand and trade policy (para.2.16). The forests also produce a range of secondaryforest products includingrattan, fuel, wood/charcoal,silk, turpentineand resins. Of these rattan is commerciallythe most significantwith a productionof about 40,000 tons in 1985. ProductionForest Management- ConcessionAgreement. While all 2.10 forest lands are owned by the State, the extraction,processingand sale of
-4logs from the forests is done mainly by the private sector under forest concessionarrangements. The concessionsare granted by MOF for a minimum area of 35,000 ha and a maximum period of 20 years. Forestryconcessions forest area (53 million ha) with an cover 83 percent of production The concession agreement and average area of about 100,000 Oa per concession. Governmentregulationobligesthe concessionairetos (a) Conduct a forest resourcesurvey and a feasibilitystudy for the extractionof logs and processingactivities(if any); (b) Implementmeasures for forest protection; (c) Respect rights of indigenoustribal populationfor collectionof forest productsfor their own consumption; (d) Prepare annual operationalplans, along with five year and 20 year managementplans that are acceptableto GOI; (e) Prepare environmentalimpact assessment(EIA) for areas to be logged and to take mitigationmeasureswhere adverse impact is anticipated; (f) Follow MOF guidelinesfor log extraction,which in line with MOF Decree of 1981, allows extractionof trees with minimum diameter (DBH)of 50 cm, leavingbehind at least 25 trees per ha of commercial species with DBHmore than 20 cm to act as seed trees for natural regeneration; (g) Restock forest through enrichmentplantingof commercialspecies after logging; (h) Mark boundariesand develop suitableforest roads; and (i) Post a performancebond to guaranteecompliance. ProductionForest Management- Performance. In practicethe 2.11 implementationof forest managementpolicy and the compliancewith the above have been poor. MOP has recentlybeen more concessionagreementregulations and cancel concession aggressivein taking actionsto fine concessionaires is discovered. Also for agreementswhen wrong doing by concessionaires environmentalreasons,MOF has announceda policy to restrictlogging in natural foreststo a level not exceeding32 million cu m per annum. To ensure orientedpoliciesof MOF, and compliancewith improvedand environmentally also to sustainIndonesia'sexport orientedwood industries,the monitoring and control of logging activitiesin productionforestshas to be strengthened. The proposedprojectwould assist with this. ConservationForest Management. Though Indonesiahas classifieda 2.12 third of its forest area, some 49 m ha, as protectionand conservationforest, these areas are coming under populationpressure. The constructionof new roads is bringinglarger areas of the previouslyinaccessibleforestwithin reach of settlers. Consequently,settlersare increasinglyencroachingon conservationareas. Even where adequatelegal instrumentsexist for the control of encroachment,they are either not enforcedor only partially applied since they conflictwith local or traditionalcustoms. These problems
could result in irreparablelosses to both Indonesiaand the world community at large. New approachesare requiredand PHPA needs to strengthenits relationshipand servicesto the populationin areas around the nature conservationareas, for instance,by creatingbuffer zones for the benefit of the local population. This will create incentivesfor them to prevent encroachment. PHPA should also cooperatewith local and international scientiststo monitor and study rare and endangeredspecies in these areas, e.g. Komodi lizard in NTT, Bali starlingin Bali Barat, and Orang Utan, Sumatrantiger, and rhinocerosin Sumatra,so that it is better able to respondto any emergingproblemsthreateningtheir survival. For creating greater awareness,appreciationand support for nature conservationin Indonesia,PHPA should strengthenits servicesand facilitiesfor local touristsat those nationalparks that are close to populationcenters in Java and Bali. Managementplans for these activitieshave now been developedfor the highest priorityareas with help from FAO/IUCN,but architecturaland detaileddesign work for support facilitieshave not been integratedwith the managementplan. In many cases, excessiveconstructionactivitiesare planned. Managementplans and facilitydesigns for nationalparks need to be reviewedwith a view to scalingdown plans for facilitiesconstruction,in line with carryingcapacityof the nationalparks and the availabilityof operationand maintenancefunds. The proposedprojectwill assist in the review and revisionof existingplans before new facilitiesare constructed. 2.13 ProtectionForest (Watershed)Management. Owing to population pressure,deforestationand increasedcultivationof annual crops on steep slopes, Indonesiais increasinglyfacing problemsof soil erosion,lose of productivityof agriculturalland, siltationof river basins and dams, flooding,and consequentenvironmentaland economicdegradation. The problem is most severe in Java, but is also acceleratingin the Outer Islands. GOI, with UNDP assistance,has identified81 watershedsof which 39 are considered priorityareas, and of these 22 are consideredto be in a highly critical condition. The conservationof watershedsposes a difficultproblem. It is difficultto resettlepopulationfrom the criticalslopes. However,agroforestryactivitiesthat are financiallyviable and ecologicallyappropriate, are limited and have to be developedthrough location-specific adaptive research. While appropriaterecommendations have been developedfor several areas in Java, furtherresearchin the Outer Islandswill be required. Support for agriculturalactivitiesin several of thesewatershedshas been providedby USAID and the Bank, in particularunder the Upland Agricultural DevelopmentProject (Loan2474-IND)and FICP I. Experiencewith these activitieshave shown the importanceof inter-agencyco-ordination, strengtheningtechnicalsupportand involvingfarmers in decisionmaking. Further support for watershed conservationactivitiesis plannedunder the proposedNationalWatershedConservationand ManagementProject (FY93) for which GOI intends to seek Bank assistanceafter completionof project preparation.
- 6Processina,Markets and Exports 2.14 MechanicalWood Processing. Indonesia'swood processingindustryis dominatedby sawmillingand panel products industries,which togetherproduce about 17 million cu m per annum of processedwood products,with sawmills producingabout 10 million cu m per annum. The main problem in the sawmilling industryis the low economicviabilityof some mills (30 to 40 percent of the total) that are runningat below 50 percent capacityutilizationdue to a variety of reasonsincludingmanagement,location,and the type of machinery in the mills. It is expectedthat competitionwill force less efficientmills to close, while efficientmills will continueto add capacity. A recent increasein sawnwoodexport taxes (para. 2.20)will put pressureon the profitabilityof the less efficientmills and assist in the restructuringof sawmill industry. Indonesia'splywood industrywith a productionlevel of 6.5 million cu m per annum is efficientand is now operatingat full capacity utilizationon a two-shiftbasis. Partly due to the rapid increasein productionand exports and a market recession,the export price for hardwood plywood was depressedand this was affectingindustryprofitability. Since Indonesianow accounts for about 70 percent of the hardwoodplywood export market, and the price elasticitiesof demand and supply are typicallybetween 0.3 and 0.7 (absolutevalues),Indonesianmanufacturersare finding it advantageousto limit export volumes to supportprices and profitability. GOI is also restrictingthe additionof new plywoodmanufacturingcapacityto conserve resources. Consequently,prices and industryprofits have improved. The plywood industryfaces a shortageof qualifiedtechnicians,and has selectivelyemployedexpatriatesto overcomethe shortage. This has helped genersllyin maintaininggood qualityand capacityutilization. A Wood IndustryStudy financedunder the Bank-supportedBAPINDOV Project (Loan 2277IND) is helping 001 identifykey constraintsin the industry. The main recommendations are that: (a) forest concessionsand primary industriesshould functionas integratedunits until an efficientwood distributionsystem is developed; (b) efficiencyand capacityutilizationof the existingindustries should be improvedbefore new capacityis added; (c)
secondaryindustryshould not be integratedwith forest concessions and should be in locationsnearer market; and
(d) informationand log distributionshould be improved. The Governmenthas endorsedthese recommendations, and is now considering actions to implementthem. 2.15 Pulp and Paper Industry. Indonesiacurrentlyhas 38 pulp and paper mills with an installedproductioncapacityof about 1.4 million tons for paper and 0.75 million tons for pulp. Between 1985-89,the growth in capacity was dramaticfor both paper (14 percent per annum) and pulp (25 percent per annum). The capacttyutilizationof paper mills has improvedfrom 59 percent in 1985 to about 82 percent in 1989, and consequentlyproductionhas increased by 23 percent per annum. This has made Indonesiaa net exporterof paper products. Capacityutilizationof both pulp and paper mills is low due to
-7technicaland managementproblems. Effluentcontrol in older mills has also been neglectedand it is expectedthat some of the older inefficientmills will have to close. A recentlyapprovedBank loan for Industrial RestructuringProject (Loan 3040-INDof June 1989) will address these problems. In planningfuture investmentsin forest plantationsfor supplying the pulp and paper industry,MOF must be carefulto support only those plantationsthat are within marketabledistanceof efficientand environmentallysound pulp and paper mills, to avoid the risk of investingin plantationsfor which the main market outlet disappearsafter the trees have matured. Any feasibilitystudy for plantationinvestmentsmust analyzemarket prospects,includingprospectsfor pulp and paper mills that would purchase logs from the proposedplantation. The proposedprojectwould assist in developingplans for reforestationconsistentwith these market and environmentalconsiderations. 2.16 Export Markets. Indonesiahas emerged as the world's biggest exporterof processedtropicalhardwoods,and in 1988 its exports reached a level of about $3 billion. The growth in exportshas been rapid (30 percent per annum), and has been fueled mainly by the ban on log exportsand the expansionof plywood exports,which now forms over two-thirdsof Indonesia's wood productexports. The main markets for Indonesianplywoodsare Japan (25 percent),China/HongKong (21 percent),and United States (12 percent). For the future, it is expectedthat growth of wood product exportswill be at 3 to 4 percent per annum in overallvolume, though some segmentssuch as furniture,which are small currently,may show growth rates in excess of 10 percent per annum. The future export marketing strategyof Indonesia should emphasizeincreasingexport value through increasesin wood utilization,local value added, and quality improvements. This will ensure that increasesin export values are maintainedwithout over-cutting Indonesia'svaluabletropicalrain forests. 2.17 Local Market. Prior to 1980 the processedwood productswent mainly to local markets,which accountedfor over 75 percent of total production. Since then local consumptionhas increasedat about 5 percent per annum, in line with the general growth in local incomes,but the share of local consumption has dropped below 50 percent owing to the much more rapid growth in exports. The structureof local demand is the oppositeof export demand, and is mainly for sawnwood,which accountsfor about 80 percent of the total demand for processedwood products. This is typicalof the pattern in lower to middle income countries. In the next decade local consumptionof sawnwood is expectedto increaseby 2 to 4 percent per annum, and of plywood by 3 to 6 percent per annum. Fiscal Policy 2.18 The level of tax and royalty collectionsfrom the forestrysector was quite low until 1987 when total revenueexcludingvalue added tax (VAT) amounted to Rp 283 billionor about $5 per cu m of log. Even including estimatedVAT collectionof about $2 per cu m, the level of tax and royalty collectionof about $7 per cu m was low comparedwith profits (rent)of the industryof $30 to 40 per cu m of log. During discussionsin 1987/88 regardingFICP I, the Bank recommendeddoublingof the level of taxes and royalty. GOI has acted promptly on the recommendation.In 1989, MOF announcedan increasein reforestation fee from a level of $4 per cu m to a
-8 level of $10 per cu m by 1990. Export taxes on sawnwoodhave also been raised substantially,but this has been done not for raisingmore revenue,but as an instrumentof industrialand trade policy (para. 2.20). While tax rates have been raised,the collectionof revenueneeds to be strengthenedwith two objectives. The first is to increaseresourcemobilizationfor national developmentthrougha higher rent recovery;and the second is to apply forestryfees, royaltiesand taxes to improveefficiencyof wood utilization. Revenue collectionsuffersbecause currentlyMOF has only a few poorly trained,equippedand motivatedfield staff who are unable to effectively monitor concessionsextendingover Indonesia'svast productionforest area. Furthermore,royaltiesare measuredbased on mill output,which gives little incentiveto improvewood utilization,and also allows under reportingof log consumption. Becauseof the under reporting,revenuecollectionhas suffered and the annual loss in revenue is estimatedat about $200 million. There is now an urgent need to improvemonitoringof log extractionactivitiesin the concessionsthrough improvedinspectionservice. ForestryProductsTrade Policy 2.19 Indonesia'strade policy for forestryproductshas been dominatedby successivebans on the export of primaryproductssuch as hardwood logs and rattan. Startingin 1980, GOI began restrictinglog exports to encourage local processingand employmentcreation,and by 1985 log exportswere totally banned. This decisionhas been controversial. On the one hand, log export ban has been criticizedfor reductionsin log productionfrom a level of about 25 million cu m ia 1980 to a level of 13 million cu m, two years later, and a correspondingreductionin export revenues. Others have pointed out that the drop was temporary,and that with the developmentof a relativelyefficient and export orientedplywood industry,log productionand forestrysector exportshave recoveredto former levels. Similarly,some have welcomed the temporaryreductionin logging due to log export ban as an environmentally sound policy because of a concernabout forestryresourcedepletion(para. 2.21). Under the Bank-assistedFICP I, the impact of the log export ban on the efficiencyof sawmillingand plywood industryhas been analyzed. The tentativeconclusionsare: (a) The log export ban helped to supporta rapid establishmentof a modern and relativelyefficientplywood industrywhich has contributedto the increasein factor productivityof capital and labor at rates higher than in USA and Canada, and is thereforea successfulexample of infant industrypolicy; (b) Factor productivityof wood has not increasedbecause the fiscal policy environmentuntil 1989 was not supportive(pleasesee para. 2.18); (c) Price of raw material should be increasedthroughhigher rent collectionon raw materialto provide incentivefor better material utilization. GOI should improve revenuecollectionto capture a larger portion of the rent and also to improveefficiencyof the industry.
- 9 -
2.20 More recently,at the end of 1989, GOl increasedthe level of export taxes on rough sawnwoodto a level of over 100 percent. The tax has been designedto discourageexport of rough sawnwood,and to encourageexport of more value-addedsecondaryprocessingactivities. This will force the restructuringof the inefficientsawmillingindustry (para. 2.14) by reducing its profitability. To the extent that more value-addedsecondaryindustryis of the wood industry developed,it will be in-linewith the recommendations study. However,there is a danger that exportswill be reduced in the shortrun, and the protectionof the secondaryprocessingindustrycould lead to inefficientindustrialization.¢OI should review the impact of high export taxes after a couple of years of experiencewith a view to reducingthe level of tax and effectiveprotectionif needed to improve efficiency. SectoralProblemsand Constraints 2.21 Forest ResourceDepletion. While Indonesianforestsare large, there is a growing concern that the forestryresourcesare being depletedat a rapid pace of about one million ha (1 percent)per annum. At the current rate of depletionthe economicvalue of forestswill be exhaustedin about 40 years. In additionto the loss of timber,the loss of forest area also poses seriousenvironmentalproblem because of irreversiblelose of the rich genetic diversityof Indonesianforests,the erosion of soil, and the siltationof dams and waterways. Some of the contributingfactorsare discussedbelow. 2.22 Logging Damage. Studieshave shown that about 10 to 50 percent of the remainingstand after logging is damageddue to careless logging practices,and the loss of productiveforest area is estimatedat about 0.2 million ha per annum. Survey of loggingpracticesunder the Bank assisted FICP I has confirmedthat the damage to the forest and soil cover due to logging
is quite serious and extensive.
The main problems are the careless
road constructionand log extractionfrom forest to the road or river (skidding). The FICP I study recommendsthat technicalskills of concessionaires should be upgradedand environmentallysound logging and log transportstandardsenforced. The proposedproject would assist in implementingthese recommendations. 2.23 ShiftingCultivation. While traditionalforms of shifting cultivation,with rotationsof over 20 years, are environmentallysound and sustainable,the shorter rotationshiftingcultivationis not. Because of populationincreasein the Outer Islandsof Indonesia,where most of the forestsare located,shorter rotationshiftingcultivationis increasingly leadingto degradationof forest lands into low fertilitygrass lands (alangalang). The forest area lost due to shiftingcultivationis estimatedbetween 0.3 and 0.5 million ha per annum. Issues regardingshiftingcultivationare being studiedunder FICP I, and the recommendations of the studywould be implementedunder future Bank supportedagricultureand forestryprojects. 2.24 Conversionto AgriculturalUse. GOI has had an ambitious transmigrationprogram under which half a million familiesmigrated to the Outer Islandsduring the previousplan period (1980-84),and settled on 2.5 million ha of forest land. Similarly,other agriculturaldevelopment programs,such as the tree crops NES programs,have also led to the clearing of up to 100,000 ha of forest land per annum for agriculturalusage. Recently,GOI has slowed down these programsbut it is still expectedthat
-
10
-
conversionto agriculturaluse will take up between 0.2 and 0.5 million ha of forest land per annum. While conversionto agriculturaluse is to some degree inevitablein the face of increasingpopulationand demand for food and agriculturalcommodities,such conversionneeds to be well planned to ensure that it does minimal damage to the environment. For instance,critical wetlandswhich act as breedinggrounds for large numbers of speciesof fish and migratorybirds need to be protected. Agriculturaldevelopmentstrategy should put less emphasison increasingproductionthrough increasesin area, and more on increasingproductionby making better use of existing agriculturalareas through their intensifieddevelopmentand increasedyield per unit area. This, for instance,is being done under the Bank supported FisheriesSupport ServicesProject (Loan 2773-IND)which will increaseshrimp productionby increasingyields from existingponds rather than increasethe area of shrimp ponds by convertingcriticalwetlands. Under the fisheries project some supportis also being providedto the Ministry of Populationand Environmentfor developingagriculturaldevelopmentstrategiesthat will be less destructiveof the environment. Similarly,under GOI's Transmigration Program,there is greaterneed to emphasizeincreasingproductivityof existingareas (secondstage development)and to put relativelyless emphasis on creatingnew settlements. The Bank is supportingsuch an approach through assistancefor the preparationof the proposedTransmigrationSecond Stage DevelopmentProject,which will concentrateon furtherdevelopmentand more intensiveland use in existingtransmigrationareas rather than the conversion of new and virgin forest areas. 2.25 Forest Fires. Because of increasingpopulationnear forests, inappropriateforms of shiftingcultivation,logging residues,and also natural causes, forest fires are increasing. Generallythese fires do not spread far because of humid conditionsin tropicalrain forests. But, in some years, unusuallydry conditionsdo cause extensivedamage, as was the case in 1983184when about 3.5 million ha of forestsin East Kalimantanwere destroyed. In some areas, the forest fires are deliberatelystarted by encroachersto convert forest land to grass lands for cattle grazing. Estimatesof forest area lost range between 0.1 and 0.2 million ha per annum. The encroachersare quite often brought into the forests by ill-plannedroads. GOI has now issued a decree which requiresenvironmentalimpact assessmentof proposeddevelopmentprojects includingroads. 2.26 ForestryResearch. Prior to 1983, forestryresearchwas under the Ministryof Agricultureand Forests,and sufferedbecause of the higher prioritygiven to rice research. Consequently,annual funding for forestry researchhas been less than $2 million (0.2 percent of exports),one of the lowest levels in the Asia-PacificRegion. The researchis currently centralizedat Bogor in Java, and does not focus on basic technicalissues concerningforestrymanagementproblemsof the Outer Islandswhere most Indonesianforests are located. Thereforethe current level of understanding of the developmentand regenerationof tropicalrain forests in Indonesiais poor, and this hampers the ability of the forestryresearchservice to offer effectiveadvice on techniquesto support sustainablemanagementof Indonesia'sforests. Furthermore,with increasingpopulationpressures in the Outer Islands and the inevitablereductionin productionforest area. This may eventuallyrequire the establishmentof higher-yieldingforest plantations in the Outer Islands. To supportthis, forestryresearchmust expand adaptive trials for the screeningof exotic species. This would include fertilizer
-
11
-
trials,end use tests, and the measurementof yield, establishmentcost, and pest/diseasevulnerability. Another priorityarea for researchis the regenerationand growth of natural forest under alternativeloggingand managementregimes.This would includemeasurementsof regenerationon sites with varying intensityof logging,levels of mechanizationin loggingand skidding,and post-loggingsilviculturalpractices. This will allow research to advise the forestryserviceand concessionholders on cost-effective policiesand techniquesfor the managementof Indonesianforests,keeping in mind financial,economic,ecologicaland anthropologicalconcerns. Research in these priorityareas is constrainedby a shortageof adequatelytrained manpower, researchfunds and facilitiesin most of the Outer Islands. New Regional researchstationshave been constructedin two (Sumatraand Kalimantan)of the three major forest areas of the outer islands,but the third major area, Irian Jaya, is poorly serviced. The proposedprojectwould assist in alleviatingthese constraintsand meeting forestryresearchneeds. Government'sSectoralOb3ectivesand Strategies 2.27 In line with its broader economicdevelopmentobjectives,GOI's objectivesin the forestrysector are to conserveand sustainnatural resourcesfor longer-termbenefitof the nation throughhigher income and employmentfor the people. Specifically,in its RepelitaV, GOI is emphasizing: (a) Improvementof the managementof natural forestsand plantationsto sustain their productivityfor the futurel (b) Increasein non-oil export revenuesthrough increasedexports of value-addedforestryproducts; (c) Conservationof watershedsto ensure uninterruptedflow of water for irrigationand urban consumption: (d) Protectionand conservationof wildlife,genetic resourcesin natural forests,and scenic and recreationareas; and (e) Reforestationof about 10 million ha of the 20 million ha of deforestedand degradedlands, of which about 1.5 million ha will be undertakenwithin the RepelitaV period and the balance of about 8.5 million ha partly during the RepelitaV period and partly thereafter. Within the frameworkof the objectivesand the national five-yeardevelopment plans (Repelita),MOF has formulateda number of programsand performance targets in priorityareas. The most importantof these program involve improvedconcessionmanagement,nature conservation,reforestationand plantationestablishment,research,and administrationdevelopment. GOI is now seeking support for this program from externaldonors includingthe Bank, ADB, and severalbilateraldonors. While the Bank and other donors are exchanginginformationto ensure complementarity of their assistance,more needs to be done by MOF to coordinatedonor assistance. For this purpose,MOP is organizingseveral round table meetingsof donors under the frameworkof the TropicalForestryAction Plan (TFAP). Bank is supportingthis effort of MOF by the preparationof backgrounddocumentsfor TFAP meetings (para. 3.1).
-
12 -
III. BANK INVOLVEMENTIN THE SECTOR AND LESSONSLEARNT Bank Involvementin the Sector 3.1 A Bank forestrysector identification mission in 1985 discussed sectoralprioritieswith GOI, which resultedin the Bank's first forestry project,the ForestryInstitutionsand ConservationProject (FICP), emphasizinginstitutionalstrengthening,sectoralpolicy improvement, informationcollectionfor better forestrysector planningand conservation efforts. The Project is in the second year of its implementationand progress is good. The main achievementsof the first project have been in policy and institutionalreforms,particularlyfiscal and concessionpolicy (Annex 1). These reforms include: (a) Research. A forestryresearchcouncilwas establishedin October 1988 and a dialoguehas been startedwith private sector, universities,and other Ministriesto define researchpriorities more sharplyin line with user requirements. (b) Fiscal Policy. GOI has announced150 percent increasein the level of taxes/royaltiesfrom $4 per cu m of round log in early 1989 to $10 per cu m by June 30, 1990; (c) Inventory. A forest inventoryusers group includingall the in MO0 and private sector,has been set up to Directorates-General improve the relevanceof informationcollectionand its dissemination; (d) Nature Conservation. A Directorateof Extensionhas been set up to encouragebroaderparticipationin conservingand managing forest resources.
Ce) IndustrialPolicy. In the wood industrysector,GOI has also adopted a policy of increasingproductionvalue through improved efficiencyand value-addedactivitiesrather than through the processingof more logs. (f) Coordination. Inter-Departmental coordinationcommitteeshave been set up to improvecoordinationof policy and operationsregarding watershedconservation,environmentalprotection,and control of shiftingcultivation. (g) ConcessionPolicy. MOF has announcedseveralmeasuresto improve concessionmanagement,includingstrengtheningof inspection, integrationof concessionsand processing,and restrictionon annual log extractionto a level of 32 million cu m. The forestrysector policy studieshave demonstratedseriousproblemsin logging and recommendedbetter enforcementof environmentalguidelines,and strengtheningof technicalcapacityof concessionaires. Supportfor this is proposedunder the proposedproject. (h) TFAP. GOI has organizeda TropicalForestryAction Program (TFAP) discussionin May 1990 based on strategiesand action plans now being developedunder Bank assistedFICP I; and
- 13 -
(i) Reforestation. GOl has announcedimprovedland lease arrangements for forest plantations,accordingto which leases will be granted for 35 years and can be extendedto 70 years. Along with the FICP I, the Bank also initiatedan environmentsector 3.2 study focussingon land, water and forest managementissues in 1987 and followingdiscussionsin 1988 a grey cover sector report was issued in 1989 (ReportNo. 7822-INDof June 5, 1989). The project and sector report were consistent. recommendations Lessons Learnt from PreviousForestryProjects While no evaluationreport for a forestryproject in Indonesiais 3.3 availableas yet, several such reportshave been completedfor Bank-assisted forestryprojectsin other countries,such as the OED report No. 7952 of June 30, 1989 for an Ivory Coast ForestryProject (Loan 1735-IVC),and the OED Report No. 7953 of July 29, 1989 for a Mali ForestryProject (Credit0883MLI). These evaluationreportshave common themeswhich are also applicable to forestrysector operationsin Indonesia. For example,experiencewith these forestryoperationspoint to the need for a more thoroughmarket evaluationbefore investmentsare made in forest plantations. In some cases, as for the Mali 'roject,they also suggest a more thoroughLeview of land tenure status and resolutionof any conflictsbefore investmentsare made. The need to ensure active participationof the local people is also one of the common themes. These lessons,which are also applicableto Indonesia's situation,have been taken into account in formulatingBank's assistance strategyfor the forestrysector in Indonesia. While the initial requestfrom MOF was for Bank supportfor a 3.4 $400 million project,about half of which was for forestryplantations,the Bank and the Governmenthave now agreed on a more cautiousand phased approach,in line with the lessonslearned from other Bank supportedforestry projects (para. 3.3). Accordingly,the proposedproject includesa thorough evaluationof site specificland tenure and marketingproblemsfor reforestation(forestplantation)investments. Rationalefor Future Bank Involvementand ProposedStrategy A strong forestrysector is importantto the Indonesianeconomy 3.5 because of its role in export earnings,Governmentnon-tax revenues,rural energy consumption,and environmentalprotection. The Bank supportedFICP I has progressedwell, and the studiesdone under the projecthave pointed to the urgent need to improveconcessionmanagementand revenue collectionfrom the forestrysector. The resultsfrom the first project have also pointed to the need for improvedplanningof reforestationand conservationactivities, and for an acceleratedprogram in forestryresearchto improve the technical basis for concession,reforestationand conservationmanagementprograms. The emergingfrom the proposedproject will help implementthe recommendations in the continuingpolicy. to assist well placed The Bank is first project. association the Bank's and in the sector, reforms and institutional fiscal with the proposedprojectwill provide a suitablevehicle for such assistance. Bank's assistancestrategywithin a policy matrix frameworkis describedin greater detail in Annex 2.
-
14 -
3.6 The Bank is also planninga Land ResourcePlanningand Management Sector Report (FY 91) which will review forestryland use planningand allocationpoliciesand procedureswithin the frameworkof a multi-sectoral nationalland/spatialplanning. Support for watershedprotection,which also involvesagriculture,is planned tb ough a free-standingwatershedluplands project (FY 93). IV. THE PROJECT Project Obiectivesand Strategy 4.1 The primary objectivesof the proposedprojectare to reduce the pace of deforestationand to sustainand maximize long-termbenefitsfrom the forest resourcesin Indonesia. Strategiesto achieve these objectives include: (a) Better managementof productionforest (concessions)to reduce loggingdamage and to sustain the productiveand regenerative capacityof these forests for the longer-term; (b) Increasein resourcemobilizationfor nationaldevelopmentand reforestationthrough improvedcollectionof forestryroyaltiesand fees; (c) Improve the efficiencyof future reforestationactivitiesthrough improvedsite selectionand planning; sd) Improve the technicalbasis for reforestationand concession managementthroughapplied and adaptiveresearch;and (e) Improve the managementof nature conservationareas throughbetter planning.
Project Description 4.2
The proposedprojectwill include the followingcomponents: (a) ConcessionManagementand Inspection. Logging damage to forestsand environmentin forest concessionareas would be reducedthrough: (i) improvementof the managementof forestryoperationsby concessionairesof about 50 millionha of productionforests, includingthe trainingof managersand staff in better planningof logging,skidding,and road construction;and the developmentof an improvedwood accountingsystem;and (ii) introductionof an improvedconcessioninspectionand audit system, such system to establishthe amount of logs extractedas a basis for royaltyand fee assessmentand collection,and to ensure that environmental guidelinesand appropriatesilviculturalpracticesare followed; (b) Reforestation. Indonesiaplans to invest about $2 billion for the reforestationof degraded lands. To ensure efficientand timely investment,a nationalmaster plan for reforestationof about
-
15 -
10 million ha, includinga review and evaluationof land tenure status of sites, and incentive,financingand controlmechanisms, will be prepared; (c)
ForestryResearch. Planningand managementof researchwould be improvedthrough: (i) strengtheningof the Borrower'sAgency for ForestryResearchand Developmentby improvingplanning, programming,monitoring,evaluation,financialand economicanalysis skills; and (ii) the first phase of a multi-phasedplan for establishmentof a regionalforestryresearchand trainingcenter at Manokwari,Irian Jaya, includingconstructionof buildings for laboratory,staff housing and office and training facilities, provisionof relatedequipmentand furniture,trainingof research station staff and establishmentof a forestryresearchprogram on about 11 sites for researchon forest ecology, silviculture,tree improvement,fire protectionand nature conservation,including livelihoodneeds of the local people, throughthe active participationof the people therein.
(d) Conservation. The NationalConservationPlan for terrestrialand marine conservationwill be reviewedand revised. Improved managementand investmentplans for ten nationalparks and buffer zones around the parks will be developed,with active participation of the local people. An integratedplan for the sustainable multiple-useof mangrove forestsand a conservationmanagementplan for a mangrove reservewill be prepared;and (e) Policy AdvisoryService. The Ministerof Forests'policy formulationand his supervisoryduties will be assistedby the provisionof a highly qualifiedand experiencedresidentforestry advisor,and short-termtechnicalassistance. ConcessionManagementand Inspection 4.3 The proposedconcessionmanagementcomponentwill have two parts: (a) extensionsupport for improvedmanagementof forestryoperationsby concessionaires; and (b) inspectionand audit of concessionsto ensure that forestryoperationsare being done in an environmentallysound and sustainable manner and that logs are measuredand accountedfor accuratelyto provide a sound basis for collectingGovernmentrevenues. The improvedconcession managementand inspectionsystemswill initiallybe implementedin the three provincesof Riau, East Kalimantanand Maluku and then extendedcountry-wide. 4.4 ConcessionManagement. Technicaland operationalguidelinesfor improvedplanningof logging,skidding,and road constructionwill be developed. This will be used for trainingand extensionof improvedskills to concessionaire's managersand staff. A simple but fairly accuratewood accountingsystemwould also be developedto improveinternalcontrolof wood flow by concessionaires.To this effect, the projectwill provide 58 months of internationally recruitedexpert services,and 68 month of locallyengaged expert services. The detailedTORs are in Annex 3. 4.5 ConcessionInspectionand Audit. The proposedprojectwill develop and introduceimprovedconcessioninspectionand audit system to ensure that
- 16
-
environmentallysound and sustainableloggingand log extractiontechniques and also to ensure that they report on log are followedby concessionaires, extractionvolume accurately. In view of the current shortageof well trained field staff within MOF, an externalinspectionservicewill be engaged as an interimmeasure to carry out inspectionand audit while MOF field staff is trained. The inspectionservicewill use a mixture of remote sensing,aerial photographyand on-ground field checks in forests,transportnodes and in mills to establishthe amount of logs extractedas a basis for royalty and fee assessmentand collection,and also to ensure that environmentalguidelines and silviculturalpracticesare followed. As inspectionservicesplay a crucial role in the success of this project and given constraintson GOI's ability to make significantincreasesin the MOF's budget, some Bank financing of the recurrentexpendituresis desirable,to ensure that the necessaryfunds are availableduring the criticalstart-upphase. Accordingly,the proposed project provides financingfor 85 percent of the recurrentcost up to June 30, 1992 and 45 percent thereafter. Reforestation(ForestPlantations) 4.6 To ensure that GOI's plan for reforestationof degraeedand deforestedland is carried out efficiently,a nationalmaster plan for reforestationof about 10 million ha will be preparedafter assessingthe suitabilityof alternativesites from environmental(both ecologicaland social),market and economicperspectives. Land tenure status of siteswill be evaluatedto assess availabilityof sites. The incentive,financingand controlmechanismswill also be reviewedand improvedupon to ensure that the planned $2 billion in investmentsis carriedout in an efficientand sound manner. The plans will be preparedat two levels, environmentally nationaland provincial. For this purpose,existingland capabilityand land use informationfor degradedand deforestedlands will be assembledin a computer (PC) based GeographicalInformationSystem (GIS),and the information updated based on recent remote sensing information(LANDSATV and SPOT) acquiredunder FICP I. Computersare commonlyused in Indonesiain general and HOF in particular. Therefore,the proposedtechnologyis appropriateto local conditions. Decisionrules and criteriawill be developedand introducedfor efficientsite selectionusing GI$ data. A system of regular updatingof the data will also be establishedto keep the informationcurrent and relevant. Separateplans will be developedfor conservationoriented reforestationand the productionorientedplantations. At negotiations, assurancewas obtainedthat the reforestationplan and proposalsfor improved incentives,financingand controlmechanismswill be completedfor 1.5 million ha by October 31, 1991, and for the remaining8.5 million ha by October 31, 1993. These proposalsand plans will be discussedwith the Bank and subsequentlyimplementedafter taking into accountcommentsfrom the Bank. The detailedTORs are in Annex 4.
-
17
-
ForestryResearch 4.7 The forestryresearchcomponentof the proposedprojectwill be implementedas a part of a continuinglong-terminstitutionaldevelopment program and would supportGOI's efforts to further strengthenthe Agency for ForestryResearchand Development(APUD)'sresearchmanagementthrough specificactions to improveplanning,programming,monitoring,evaluation, financialand economicanalysisskills. Planningand managementof research will be improvedby developinga researchmaster plan focusedon high priority needs. Managementreformswill be implementedby making the forestryresearch council and its policy unit operational. At negotiations,assuranceswere obtainedthat the researchcouncilwill meet at least twice a year, and that minutes of councilmeetingwill be providedto the Bank within one month of the meeting. Researchinformationcommunication will be strengthenedthrough seminars,workshops and collaborativeresearchtrials with concessionaires. 4.8 In supportof a change in GGI's policy to re-orientforestry researchtowards the Outer Islands and Eastern Indonesia,where most (95 percent)of Indonesia'sforestsare located,the proposedproject will supportthe first phase of a multi-phasedplan for the establishmentof a regionalforestryresearchand trainingcenter in Irian Jaya, at Manokwari. For this, 6,800 sq mt of buildingsfor laboratory,staff housing and office and trainingfacilitieswill be constructed. Equipmentand furniturewill be provided. Staff for the researchand trainingcenter (about 20) will be given further training. Eleven researchplots, for researchon forest ecology, silviculture,tree improvement,fire protectionand nature conservation, includinglivelihoodneeds of the local people through active participationof the people therein,will be established. Short-termtechnicalassistance(71 months will be provided)for establishingresearchprogram,and for on-the-job trainingof researchstaff. Conservation 4.9 Currently,there is a keen interestamongstdonor communityto assist 001 with the implementationof conservationorientedprojects,but often GO0 is unable to make use of the assistancebecause of a lack of well preparedprojects. The proposedconservationcomponentwill be designedto fill this gap, by (a) reviewingand revisingNationalConservationPlan for terrestrialand marine conservation;(b) developinga better and perhaps lower cost managementand investmentplan for ten high prioritynationalparks and buffer zones around the park with active participationof the local people; and (c) improvingconservationof wetlandsthrough the developmentof an integratedplan for mangroveconservationand by strengtheningPHPA capacity to implementmangrove forest conservation. The nationalpark and wetland conservationcomponentsare describedin greater detail below. 4.10 NationalParks Investment. The ten selectedparks are well distributedthroughoutIndonesiaand are representativeof differentbiogeographiczones, both terrestrialand marine. They include two each in Java (GunungGede, Pulau Seribu);Sumatra (Vay Kambas and Bukit Barisan); Kalimantan(TanjungPuting and Kutai); Irian Jaya (TelukCendrawasih,and Wassur) and one each in Sulawesiand Maluku (LoreLindu and Manusela). Other high prioritynationalparks such as Kerinci Seblat and Bunakanhave not been includedsince they are expectedto be covered in other projects. For the
-
18
-
proposedten parks, while investmentplans exist, in most cases they tend to be too ambitiousand expensive. At negotiations,assurancewere obtainedthat these investmentplans will be scaled down to more manageablesize consistent with environmentalcarryingcapacityand operationsand maintenancefunding realities. Buffer zone proposalswill also be developed,where needed, to ensure that needs of local people, includingthe collectionof firewoodby women, are met without having to encroachon the nature reserve. NGOs were consultedduring the design of this component,and it is expectedthat they will also be involvedduring the review of managementplans. 4.11 WetlandlMangrove Conservation. Indonesia'swetlandshave enormous importanceboth from economicand bio-diversityconservationpoints-of-view. In particular,mangrove swamp forestsare importantfor protectingcoastal areas from erosion and also for rearingmarine and brackishwater fisheswhich support Indonesia'simportantexport oriented (1989 exportsof about $800 million) fisheriesindustry. The mangrove swamps are threatenedbecause of over-exploitation by mangrovechipping,charcoal,and aquaculture industries. The proposedprojectwill developan integratedplan for sustainablemultiple-useof mangroveforest in conjunctionwith local communitiesand NGOs, to be availablefor Bank review by September30, 1991 (Annex 9). Conservationmanagementplan for a mangrovereservewill also be developedand its first phase implemented. Guidelineswill be developedby consultantsfor use by MO0 staff. Policy AdvisoryService 4.12 The proposedprojectwill strengthenpolicy formulationand implementationby providinga highly qualifiedand experiencedresident forestryadvisor to the Minister for a period of three years. The advisor will assist with policy review and ensure that the Ministeris presentedwith views not only from within the Ministry,but also from other sectors such as finance,industry,agriculture,planning,NGOs, as well as newly emerging global concernsregardingprotectionof tropicalforestsand environmentwhich could affect future developmentof the forestrysector. The advisorwill be residentin Indonesiafor three years. Short-termspecialistassistanceof about 24 months will be availablefor analysisof specificpolicy issues. Role of Women 4.13 Women forestryspecialistsare also employedby MOF in all areas of forestry,but very few of them are at manageriallevel. At negcotiations assuranceswere obtainedthat MOF will (a) review the participationof women forestryspecialistsas a part of the ongoing Human ResourceDevelopment Study; and (b) give satisfactoryrepresentationto women in the selectionof candidatesfor foreign trainingin forestryresearchunder the proposed project.
-
19
-
V. PROJECTCOSTS AND FINANCING Proiect Costs The proposedproject is estimatedto cost Rp 59 billion 5.1 ($33.1 million)of which Rp 5.7 billion is in duties and taxes, and Rp 26.4 billion ($14.7million) in foreignexchange (Table5.1). Base costs are calculatedon March 1990 prices based on recent quotations. Physical contingencyestimatesrange between 5 and 10 percent for an overall averageof about 7 percent. Price contingenciesare based on estimatedannual local inflationof 7 percent (1990),and 6 percent thereafter;and estimatedannual foreign inflationof 5.4 percent (1990),and 4.3 percent thereafter. Table 5.1s PROJECTCOSTS SUMMARY S Z $ Million RD Billion Local Foreign Total Local Foreign Total For. Base Rxch. Cost 10.0 Research ConcessionManagement 11.6 2.4 Forest Plantations 2.0 Conservation Policy Advisory Service 0.4
7.3 7.5 3.4 2.5 1.5
17.3 19.1 5.8 4.5 1.9
5.6 6.5 1.4 1.1 0.2
4.0 4.2 1.9 1.4 0.8
9.6 10.7 3.3 2.5 1.0
42 39 58 56 79
36 39 12 9 4
26.4
22.2
48.6
14.8
12.3
27.1
46
100
PhysicalContingencies 2.2 4.3 Price Contingencies
1.5 2.8
3.7 7.1
1.2 2.4
0.8 1.6
2.0 4.0
40 39
8 15
32.9
26.5
59.4
18.4
14.7
33.1
44
122
Total Base Costs
Total Costs la /a
Includestaxes, duties and reservedprocurementamountingto $4.3 million equivalent.
Financing The proposedIBRD loan of $20 millionwill finance 70 percent of 5.2 total project costs net of duties and taxes ($3.2million)and reserved procurement($1.2million). The loan will finance86 percent of foreign exchangeand 40 percent of local costs, and will be at the Bank's standard variableinterestrate for a term of 20 years including5 year grace (Table 5.2). GO0 has agreed to contribute$0.5 million as an untied grant for the project. A conditionof effectivenessof the loan will be the effectiveness of the Japan Grant Agreement. ITTO has approveda grant of $3.8 million out of which about $0.8 million will be used for overseastrainingunder the project.
- 20 -
Table 5.2: FINANCINGPLAN ($ million) IBRD Amount 2 Civil Works Equipmentand Furniture Plantingcosts Inspection Vehicle IncrementalOperatingCosts TechnicalAssistance Training Total
GOJ GOI Amount 1 Amount
3.0 1.5 0.7 5.0
55 71 60 52
6.8 3.0
83 79
0.5
20.0
60
0.5
6 2
ITTO 2 Amount 2
2.4 45 0.6 29 0.5 40 4.7 48 1.4 100 1.3 100 0.9 11 11.81a 36
Total
0.8 2
5.4 2.1 1.2 9.7 1.4 1.3 8.2 33.1
0.8 2
33.1
Table 5.3: PROCUREMENTARRANGEMENTS/a ($million)
ICB
ProcurementMethod Other LCB
Civil Works Equipmentand Furniture
0.8 (0.7)
5.4 (3.0) 0.8 (0.5)
Plantingcosts Inspection Vehicles lb
NA
5.4 (3.0) 2.1 (1.5) 1.2 (0.7) 9.7 (5.0) 1.4
0.5 (0.3) 1.2 (0.7) 9.7 (5.0) 1.4 (0.0)
IncrementalOperatingCosts
(0.0)
1.3 (0.0)
8.2 (6.8)
TechnicalAssistance Training Total
/a /b
0.8 (0.5)
6.2 (3.5)
21.0 (12.8)
Total
3.8 (3.0) 5.1 (3.0)
1.3 (0.0)
8.2 (6.8) 3.8 (3.0) 33.1 (20.0)
Costs are inclusiveof contingencies,duties and taxes. Figures in parentheses indicateexpecteddisbursementfrom the proposedBank Loan. ReservedProcurement.
- 21 Procurement 5.3 below.
Procurementarrangementsare summarizedin Table 5.3 and discussed
5.4 Civil Works ($5.4million). These consist of small office buildings,housing and associatedinfrastructure, scatteredover several sites. These works will be procuredfollowingLCB proceduresin which foreign contractorsare eligibleto participate. LCB proceduresare justifiedbecause these works are small and scattered,contractsizes are expectedto be of less than $2.0 million each. 5.5 Equipmentand Furniture($2.1million). About $0.8 millionworth of equipmentwill be procured followingICB proceduresin accordancewith Bank Guidelines. In bid comparisonthe domesticmanufacturerswill be alloweda 15 percent preferenceor the level of import duties,whichever is lower. $0.3 million worth of office furnitureis small in size, Indonesiais a low cost producerand exporterof furniture.with many suppliersensuring competition. Therefore,LCB proceduresin which foreignsupplierswill be eligibleto participatewill be the most cost-effectiveprocedureand will be followed. Small contractsfor equipment,each of less than $200,000 in value, will also be procuredfollowingLCB procedures. Procurementof small off-theshelf items, each of less than $20,000in value, will be procuredafter invitingquotation from at least three suppliers. These will not exceed $0.5 million in total value. 5.6 ForestryResearchPlots ($1.2 million). This will consist of tree plantingand nursery activitiesof Governmentforestryresearchagency at scatteredsites using hired labor at GOI's standardwage rate (i.e.the relevantlocal market wage rates) and procedureswhich are considered satisfactoryto the Bank. 5.7 InspectionServices ($9.7million). The inspectionserviceswill be procuredafter invitingproposalsfrom prequalifiedfirms followingBank Guidelinesfor hiring of consultants. 5.8 Vehicles ($1.4million). FollowingGOI regulations,vehicle import is not permitted,and the projectwill procure locallyassembledvehicles. Because of reservedprocurement,these vehicleswill not be financedby the Bank. In addition,at negotiations,assuranceswere obtainedthat vehicles will be provided in accordancewith the schedulein Annex 7. 5.9 Other ($13.3million). Consultingservices($8.2 million)will be procured followingBank Guidelinesfor hiring of consultants. Training ($3.8million)will be at institutesacceptableto the Bank. The remainingcosts ($1.3million)will be for incrementaloperatingcosts. 5.10 ContractReview. After an initial review of standardcivil works bidding documentsby the Bank for LCB contracts,only bidding documentsfor contractsestimatedto exceed $500,000will be reviewedprior to issuance. This will result in prior Bank review of four documentscoveringabout 80 percent of the value of contracts. Similarlyfor equipment,all bidding packagesestimatedto cost over $200,000will be reviewedprior to issuance. This will result in Bank review of two documentscoveringover 60 percent of
-
22 -
the value of contracts. All consultantcontractswill be subject to prior review by the Bank. The remainingcontractswill be reviewedon a random basis after award of contracts. Disbursements 5.11 Disbursementsunder the proposedIBRD loan are expectedto be completedby June 30, 1995, about five years after Board Presentation. This Is somewhat shorter than the typical
disbursement period for agricultural
projects in Indonesia,and forestryprojectsBank-wide. The shorterperiod is expected,because of the better than expecteddisbursementperformanceunder FICP I and the smaller size of the proposedprojectwhich will simplify project implementation(Annex 7). 5.12
Disbursementsfrom the proposedIBRD loan will be made fort (a) 55 percent of expenditureson civil works; (b) 100 percent of foreignexpenditure;100 percent of local expenditures(ex-factorycost); and 65 percent of other goods locallyprocured; (c)
60 percent of plantingcosts under the forestryresearchprogram;
(d) 85 percent of expenditureson inspectionservicesup to June 30, 1992, and 45 percent of expenditures,thereafter; (e) 100 percent of expenditureson technicalassistance;and (f)
100 percent of expenditures on training.
5.13 Disbursementsfor training ($3.0million), and researchplots ($0.7million)will be based on Statementsof Expenditures(SOB). In addition,disbursements($0.5million) for the purchaseof items of less than $60,000 (para. 5.5) will also be on the basis of SOEs. These SOEs will be preparedby MOF and detaileddocumentationwill be kept at headquartersin Jakarta. At negotiations,assuranceswere obtainedthat these SOEs will be audited and that the supportingdocumentationwill be made availableto the Bank for review during supervision. Disbursementsfor other components ($15.8million)or 79 percent of loan amountwill be based on fully documented withdrawalapplications. 5.14 To facilitatedisbursementadministration,loan withdrawal applicationswill be aggregatedas far as possible,and will not be for less than $50,000equivalent. In addition,a SpecialAccount (SA) will be set up in the Bank of Indonesia (BI) with a maximum of $1.0 million, equivalentto about four months' disbursement.
-
23 -
Accountingand Audits 5.15 Separateproject accounts,clearly indicatingthe various sourcesof receiptsand expendituresby functionalcategoriesfor their respective project components,will be maintainedby MOF in Jakarta. The accountlngand internalaudit proceduresof MOP is satisfactory.MOF has an internalaudit office which continuouslyaudits its accounts. Strict budget control is maintainedbased on standardunit costs, and expenditurebeyond budgeted amounts is difficult. As requiredby GOI regulations,MOF accountsare audited annuallyby the Directorateof State Accountancy (BPKP). At negotiations,assuranceswere obtainedthat unauditedproject accountsand SOEs will be submittedfor audit and to the Bank within five months of fiscal year-end,and the audit report made availableto the Bank within nine months of the fiscal year. The reportwould includea separateauditors'opinion on SOE, verifyingthat the relatedexpenditureswere made for the agreed purposes of the project. VI. ORGANIZATION,MANAGEMENTAND IMPLEMENTATION 6.1 General. The proposedprojectwill be implementedby the Ministry of Forests (MOF). Coordination 6.2 MOF will have the overall responsibilityfor project coordination, and for this purpose a ProjectCoordinationCommittee (PCC)has been set up, with the Ministeras Chairmanand the DirectorsGeneral and Agency heads as members. A project liaison office has been formed under the Directorof Planning. This office will help implementingagenciesin: (a) solvingany problemsconcerningproject accounting,budgetingand procurementprocedures; and (b) channellingdisbursementrequestsand progressreports to the Bank. Furthermore,the policy coordinationrelatingto the forestrysectorwill be improvedby expandingthe Joint MinisterialForum for ForestryDevelopment, consistingof the Ministriesof Forests,Public Works, Agriculture, Transmigrationand Industry,by including,inter alia, the Ministriesof Populationand Environmentand Manpower. Forest ConcessionManagement 6.3 The DirectorateGeneral for Forest Utilization(PH) will be responsiblefor the implementationof forest concessionmanagementcomponent. Under the SecretaryPH, Project Planningand ImplementationUnit (PPIU)will be responsiblefor procurementof goods and services. The externalinspection servicewill report to the DirectorGeneral through the Directorof Forest Production. At negotiationsan assurancewas obtainedthat a contract satisfactoryto the Bank for the inspectionserviceswill be signed before December31, 1990. Reforestation 6.4 The DirectorateGeneral for Reforestationand Rehabilitation(RRL) will be responsiblefor the implementationof the Forest Plantations
- 24 -
component. Within RRL, the industrialplantationplan will producedby the Directorateof IndustrialPlantations,and a plan for the reforestationof degradedforest lands will be the responsibilityof the Directorateof Regreeningand Reforestation. The SecretaryRRL will ensure coordinationand will also head a PPIU for RRL. At Provinciallevel, Kanwil 1/ as the representativeof MOF, will be responsiblefor technicalcoordination. The SecretaryRRL as head of PPIU will organizeregular review meetings. ForestryResearch 6.5 The Agency for ForestryResearchand Development(AFRD)will be responsiblefor the implementationof the ForestryResearchComponent. Within APRD, the Directorof the Center for ForestryResearchand Developmentwill be responsiblefor the developmentof facilitiesin Irian Jaya, and related trainingand technicalassistance. The Secretaryof AFRD will be responsible for coordinatingthe preparationof a master plan for forestryresearch. At negotiations,an assurancewas obtainedthat consultantsfor the preparation of forestryresearchmaster plan will be engaged prior to December31, 1990. Conservation 6.6 The DirectorateGeneralof Forest Protectionand Nature Conservation (PtPA)will be responsiblefor the Conservation component. The Directorfor NationalPark will be responsiblefor the NationalParks component,and the Director for Nature Conservationfor the MangroveForest Conservation component. The SecretaryPHPA will head the PPIU for conservationand will be responsiblefor overall coordination. PPIU will also be responsiblefor engagingconsultingservices. At negotiationsan assurancewas obtainedthat consultantsfor conservationwill be hired before December31, 1990. Policy Advisory Service 6.7 At negotiations,an assurancewas obtainedthat a highly qualified and experiencedresidentforestryadvisorwill be appointedto the Minister's Office by December 31, 1990 for three years to assist the Minister in policy formulationand supervision. This advisorwill report to the Ministeron a regularbasis. ProJect ImplementationPlans and Status 6.8 The proposedprojectwill be implementedover a four year period startingJuly 1, 1990. Detailedterms-of-reference for key consultancieshave been preparedand agreed with GOI. The detaileddesign for civil works will be preparedduring the first year of the project for constructionin the second year. The implementationschedulefor key project actions (Annex 9) has been discussedwith GOI and was confirmedat negotiations. Monitoringand Evaluation 6.9 Projectmonitoringwill be done by Project Planningand ImplementationUnits (PPIU),and these have been already created for all
1|
MOF's provincelevel office.
- 25
-
project components. A project liaisonoffice has been set up for overall projectmonitoringand liaisonwith outsideagencies. The PPIU and the liaison office will issue quarterlyprogress reports showingphysical achievementsof the project on indicatorssuch as hiring of consultants, number of persons trained,status of master plan preparation,forest revenue collected,establishmentof researchplots, and infrastructureconstructed. These reportswill also includeexplanationsfor major variationsin plans, expendituresand disbursements,as well as detailedplans for the next quarter and any revisionsin longer term plans. 6.10 Project evaluationwill be done in several stages. A mid-term evaluationof the projectwill be started by September30, 1992, and completed by March 31, 1993. The evaluationreport will review the implementation experienceof the proposedproject,includingbut not limited to, costand expectedbenefitsand relevance effectiveness,timeliness,sustainability, of the proposedproject. It will take into account the experiencegained, includingrecommendationsand detailedplans for carryingout the remaining parts of the proposedproject. A project completionreport (PCR)will be startedby June 30, 1994, and completednot later than six months after loan closing. In additionto recordingphysicaland financialachievementsof the project and explainingmajor deviationsfrom plans, these evaluationreports will also assess quality of project outputs and the benefitsthat would accrue from the project. At negotiations,appropriateassuranceswere obtainedon these reportingrequirementsand mid-termevaluationschedule. These reports will be preparedby the project liaisonoffice with assistancefrom PPIU, and consultants.
VII. PROJECT IMPACT Benefits/CostEffectivenessof InstitutionalStrengtheningComponents The benefits from institutionalstrengtheningcomponentsare 7.1 typicallylarge relativeto costs, but such benefitsare often difficultto stage special quantify. Therefore,during the project preparation/appraisal care has been taken to ensure cost effectivenessof proposedinvestmentsfor institutionalstrengthening. For instance,the initialproposal for forestry was for an investmentof over $30 million. During the researchand training stage, the cost was reducedby over 65 percent by preparationlappraisal postponinglower priorityactivities. Similarlyinvestmentsin construction of facilitiesin nationalparks were postponeduntil a revisedand more costeffectiveplan is prepared. 7.2 While the benefits from institutionalstrengtheningcomponentsare difficultto quantify,some attempt has been made to relate the size of these componentsto the size of sectoralassets and investments,which will benefit from these components. In all cases, efficiencyincreasesof one percent or less are sufficientto justify the costs of these components,and it is highly likely that actual efficiencyincreasesdue to project componentswill far exceed these levels. ForestryResearch. The proposed investmentin forestryresearch 7.3 will bring additionalbenefitsby developingtechniquesfor improved productivityof both natural and plantationforestsconsistentwith
- 26 -
environmentaland social welfare considerations.Under current silvicultural and loggingpractices,the Indonesiannatural forestsare estimatedto produce an average annual incrementof about one cu m per ha, which is far below the potentialof such forests. Consideringthat Indonesia'sproductionforests are worth over $6 billion,even a one percentproductivityincreasedue to improvedresearcheffortswould bring benefitsvalued at over $60 million in present value terms. This is far in excess of incrementalforestryresearch costs of about $10 million. 7.4 ConcessionsManaement. The FICP I studieshave shown that more than half of the 32 million ml log productionis not reportedfor royalty calculations. With improvedinspection,log measurementand control the potentialrevenue gain for the whole countrywill be over $200 million per annum, and for Riau, East Kalimantanand Maluku, the additionalrevenuewould be more than $20 million per annum, which is far in excess of the cost of inspection. Additionalbenefitswill come from the sustainablemanagementof the productionforest, and reduced rate of deforestation. The improvedtax collectionsystem will create incentivesfor better utilizationof wood. These will produce incrementalbenefitswhich are estimatedat over $40 million per annum. This again is far in excess of the cost of concession management.
7.5 Reforestation. Improvedplanningof reforestationwill improve the efficiencyof an investmentprogram of about $2 billion. Even if the efficiencyincreasewere a modest 1 percent the resultingbenefit of about $20 millionwill be far in excess of the cost of improvedplanning ($3 million). 7.6 Conservation. The proposedconservationcomponentwill have wide ranging benefits. Improvedinvestmentplanningis expectedto reduce the cost of Nationa'Park developmentby scalingdown the ambitiouspark infrastructure developmentplans, while enhancingconservationand benefitsto local people throughmore effectivebuffer zone development. The improvedplans will also help att.act grant funds for Nationalpark development. Additionalbenefits are expected from the conservationof mangrove swamp forest. This includes (a) protectingcoastalareas from erosion; (b) rearingof marine and brackishwater fish fingerlingswhich supportsthe importantexport-orientedfisheries industry;and (c) providingfire-woodon a sustainablebasis to local communities. 7.7 The policy and implementationadvisorycomponentwill assist MOF's effort to broaden forestrysector policy planningand implementationeffort by involvinga broader range of views and by attractingmore externalresource for the implementationof importantforestrysector programs for conservation and sustainableuse of forestryresources.
- 27
-
Pro3ect Risks 7.8 The main project risk would be the innovativenature of the concessionmanagementcomponentwhere an inspectionagenciesfrom the private sectorwould be engaged to assist the Governmentin improvingrevenue collectionand compliancewith environmentalguidelines. While a similar approachhas been used for customs in Indonesia,this would be the first approach in the forestrysector,and may encounterresistanceand/or become difficultto be establishedeffectively. The risk will be minimizedby keeping project size small and startingwith only three provincesinitially. The benefits/costsof the new system would be carefullymonitoredand evaluatedand the system will be expandedonly after positiveresults are convincinglydemonstrated. There might be some delays in completingthe conservationplans that reflectadequatelythe views and needs of local people. The Governmentof Indonesiawill enlist the assistanceof NGOs communityto facilitatethe dialogueon these plans. VIII. AGREEHENTSREACHEDAND RECOMMENDATION 8.1 At negotiations,the followingassuranceswere obtainedand incorporatedin the Loan Agreements (a) The reforestationplan and proposalsfor improvedincentives, financingand controlmechanismswill be completedfor 1.5 million ha by October 31, 1991, and for the remaining8.5 million ha by October 31, 1993. The plans and proposalswill be discussedwith the Bank and subsequently implemented after taking into account commentsfrom the Bank (para. 4.6)t Cb) The forestryresearchcouncilwill meet at least twice a year to review plan and progress,and the minutes of councilmeetingswill be providedto the Bank within one month of the meeting (para. 4.7); (c) Plans for the parks will be consistentwith environmentalcarrying capacityand operationaland maintenancefunding realities,and the plans for the buffer zones will improve the livelihoodneeds of local people (para.4.10). (d) MOF will review (i) participationof women forestryspecialistsas a part of the ongoing Human ResourceDevelopmentStudy; and (ii) give satisfactoryrepresentationto women in the selectionof candidates for foreigntrainingin forestryresearch (para.4.13); (e) Vehiclesfor the purposesof the projectwill be providedby MOF in accordancewith a scheduleacceptableto the Bank, (para. 5.8); (f) Contractsfor inspectionservices,forestryresearch,policy advisoryservice,and conservationwill be signed before December 31, 1990 (paras.6.3, 6.5, 6.6 and 6.7); and (g) A mid-termevaluationof the projectwill be startedby September 30, 1992 and completedby March 31, 1993 (para. 6.10).
-
28 -
8.2 A conditionof effectivenessof the Loan will be the effectiveness of the Japan Grant Agreement (para. 5.2). 8.3 With the above agreements,the proposedproject is suitablefor a Bank loan of $20 million, at the Bank's standardvariable interestrate, to the Republicof Indonesiafor 20 years, includinga grace period of five years.
- 29 -
ANNEX 1 Page 1 of 2
INDONESIA SECONDFORESTRYINSTITUTIONSANDCONSERVATION PROJECT ProRressof PICP I (Loan 2930-IND)
The ForestryInstitutionsand ConservationProject (FICP)became effective in July 1988, on schedule. Since then, the main achievementshave been in the areas of policy and institutionalreform, in line with Bank preappraisal and appraisalmission recommendations and conditionalities.These actions includes (a) Research. A forestryresearchcouncilwas establishedin October 1988 and a dialoguehas been startedwith private sector, universities,and other Ministriesto define researchpriorities more sharply in line with user requirements. As a result, an agreementbetween OF and the industryassociationhas been signed regardingcooperationon forestryresearch. The Governmenthas adopted a plan which will progressivelyincreasethe participation of private sector in fundingof forestryresearch. Under this improvedpolicy frameworkincreasedsupport for researchis now needed; (b) Fiscal Policy. GOt has announced1502 increasein the level of taxesiroyaltiesfrom US$4 per m3 of round log in early 1989 to US$10 per m by June 30, 1990; (c) Inventory. A forest inventoryusers group includingall the Directorate-Generals in MO0 and private sector,has been set up to improve the relevanceof informationcollectionand its dissemination. In addition,the first phase of national inventory was startedthis year and is expectedto be completedby 1990; (d) Nature Conservation. A Directorateof Extensionhas been set up to encourageparticipationin conservingand managing forest resources in cooperationwith the ForestryDepartment, and consultantshave been engaged to developproposalsfor addressingthe needs of people around park boundariesthroughbuffer zone development. This providesthe basis for expandedBank support for nature conservation as suggestedby the EnvironmentSector Report; (e) IndustrialPolicy. In line with the pre-appraisalmission recommendation, disincentivesfor the constructionof pulp mills have been removed,encouragingthe broadeningof industrialbase. In the wood industrysector,GOI has also adopted a policy of increasingproductionvalue through improvedefficiencyand value added activitiesrather than through the processingof more logs. Followingimprovementin the policy framework,the Bank has provided
ANNEX 1
-30 -
Page 2 of 2
a loan for the IndustrialRestructuringProject (Loan 3040-INDof June 1, 1989) vith support for pulp and paper industry; (f) Coordination. Inter-Departmental coordinationcomuitteeshave been set up to improvecoordinationof policy and operationsregarding watershed conservation,environmentalprotection,and control of shiftingcultivation. A joint inter-departmental conferencewas held for the first time in 1989 to improvecoordination; (g) ConcessionPolicy. The Ministerhas announcedseveralmeasures to improveconcessionmanagement,includingstrengtheningof inspection,integrationof concessionsand processing,and restrictionon annual log extractionto a level of 32 million m 3. The forestrysector policy studieshave demonstratedserious problems in loggingand recommendedbetter enforcementof environmentalguidelines,and strengtheningof technicalcapacityof concessionaires. Support for its implementationwould be provided under the proposed FICT II; and (h)
TFAP. GOI has announced its intention to organize a Tropical ForestryAction Program (TFAP)discussionin 1990 based on strategiesand action plans now being developedunder Bank assisted FICP.
Annex2 Pegs I of 7
DOOEU
SECM FORESIRYaIN ,MFi
Mor PolicyAr's A. Forest Led Use planning
UTIINA amCNSEc^VATNN PSECT rUiCY NiRIX
ON Actloee
Oblestlvegflsse
Beak Assistance
Forost lands servotultiple objectives Including conservstion of genetic diversity, watershed protection for sustained water supply production of timebr and non-ttiber for useby forestproducts *ndhoushold., the industry and as a source of ne agricultural lnndto *ccomodatepopulation increse,
1. Bonk assisted Forestry 00C has zoned torest lands Institutions and Conservation in four categories nature Project (FICP) to helping conservation (13), watershed to updatelinfonmtion through protection (21K), production satellite imagry andground(443) and conversion (22K), but truthing. basedon out-datod informstion. Consequently19 M ha 2. Durlng proposed sector review as of landsclassified nd of LandU Pllnniana forostarea xre permanent onth eonkwould mena withoutforestcovor whileo iissti I;n clarifying 15-19Mhe of are onodfor Institutional rolesIn agriculture Is underclosed canopyforest. landuse planning.
1 An issueto whetherforetry
00C noods to:
lanismi planning In necoesery or It should be loft to 1. Udto forest informtion;
market forces.
2. A related Issu Is whether MOF77rovinclal
Government,or newly created WM s*hould take the load In load use pilnning.ThisIsou wilIbe examined during a forthcoming sector review.
preparation
Because
Involved of oxternaities In eemof thefunctions suchas natureconservaprotionand watershod tection,001cannotrely simplyon pricingand for merkstmochanisms and landallocation, zoning of foret landsIs esential for environmental reasons.
B. ProposedSecond ForestryInstitutions and Conservation (FICP rn would assist In the
2. Prop4r new forestland uiiijTins; and 3. ClnrTtyInstitutional reponsibilittes for land uso. (G0 has formeda spatial/land uso planning beadedby coinission to BAPPENAS Chaibran roview this end other land use planning isues).
of a Hational
Master Planfor Forest Plantations.
Annex2 Page2 of 7
KawPolicy rea S. ProductionForest
ManageConcession mast
AbIcieslssmee The man objectivs are
for to provd woodproducts the xport oriented forest products
industry
(1968
Actions 00C reconizesthat there
and is a seriousproblem has accordingly *groed tot
1. Reviowconcession systm export of usSf biio0n) and andcontrol ineontivfor local use on a *swstainframework. ablobasis. In the past, fromconcesions production 2. Strenstenf oreemont has not beon on a sustainable of concession agreements. basis loading to a rapid rate of deforestation (onemillion ha per annum).Thishas raisd the Issue whetherthe ;i;im and Its concession Incentives framework Is adequate,andhowthe systm Is to be impleented.
Bak Assistance 1. Under FICP AMR with the
T;nsultantshas helpor roviewed Incentive/control _frameork.
The main conclusions *ro: a. Thereturns on Investment mngsm_nt In sustainable are mtarinal with substantialriskdue to long rotstIoneycloIn naturalforest (80 to 80 years), and private investoro ould not havethe Incentive to Mnago forest on a sustainablo basis, even If the forests wero givn on long loese or sold., b. G0I should maintain natural forest evnthough returns are mrginal (around 101) beoeuesof the additional ewelronnon-quantifiable and mentalbenefits; systemneeds c. theconcession with better, to be enforced strongor limitation on areas 10oggdeachyer. 2. Proposd fPl Il wil hlp mnt rleomndations imple comingout trom)ncentivo/ I polleystudiesunderForestry In a few lnitiolly Project, Proincesandthiswillbe fine-tuned andexpanded under ftCPIIIProject.
Annex2 Page8 of 7
KAwPolicy Ares C. Fiscal Policy
Objecttveflters the notion as the owner of shouldit a forestresource tfarshareof the rentfro In harvesting of forest. the pest 00G collection of rent wms poor, andamounted to losethen USS1O/cu.-of with a rent of logcompered The texos/ to 40 cu.s USU3O baed on end woero royalty productwhichdidnot give sufficient incentive to tho industry for bettor rw material utilization,
-01
Actioe
Following reconndations I Project proof Forestry is l osslon,C0I appra increased roforestation levy by 76X In 1869, andhas announceda similar ineres for 1990. The colloctlon of the tax noedsto be Improvedto reduce leakage and to give Incentive for betterwoodutilization.
O&akAsstotancu 1. Under FICPthe fiscal policy is beIng annlyzed and tn tho levelof rent. particular Following confirmation of the level of rent further fiscal e masures are possible. 2. Under proposed FICPII A III tax collection system to wouldbe strengthneod reduco lakage,and a now system of moasuremnt of areaharvestod and logs produced will be Introduced sndtested.
Annex2 Page 4 of 7
MoWPOOtevArIa S. Trad PolIcy
Oblott$_esu
GO Actign
Main 400 objectivoe are:sO? has bannedexport of 1. Increase Exports off iciently. los andseml-fisted rattan to consrve reourco 2. Consrve Roeeoure. *nd encoure local value added. At the ed of 1is9 8. BSlene distrtions cauOs 001 also introduoe a high by tariff and non-tariff export tax on onftine briers on proceesedgoode swn woodwith the sleiiar good In importing counobjective. Whtilerestrictions tries. For Instance, on ratten and n wood the main hardwoodimporting export. are recent, log export country4 Japn levies a ban wasfully effective In 1CXteritf on import of 1986, and ItsImpacthamnow hardwoodplywood, but no bon evaluated (Bankassistariff on log Imports. tance pors. 1). GOt needsto The main istoo Is that reduce protection by: (a) whilo the objectives of increasing raw aterial price consorving reeources an through higher rent eol Ieincresed value addedare tion; and (b)consider god, thereio a dangr replacing non-tariff export that Intfnt Industry probarelor by tariffbarretr, tectioncould le1dto an inefficiant industry,
1oankAssistsnc. 1. Undr FICP Ohetr poliy ain prticularthe imac otog expert bn tn ing nalye. The tentativ conclasion are: . Log export ben resulted In a rapid establishment of a modern nd relatively efficient plywood Industry which has continue to incroee factor productivity of capitol and labor at rates hghor than in U.S.A. andCanad, and is therefore a successful oxmploof intant Industry policy; b. Factor productivity of wood has not increed becaus fisal policy environment until 1989 wasnot supportive (pleas seC); and c. Price of raw mterial should be incroasd through higher rentcollection on raw otterial to provideincentivefor battermterial utilization. 2. UnrderproposedFICP II A Ill tax/royalty collection woiuldbe Improved. S. A reviewof the iqact of trade barriors on sawnwood andsmifinihedrattanshould be carried out by the Bankafter a few years experience, possibly in 1991/92.
Annex2 Pa" 5 of 7
_ s PolicSAres E. Forestry Research
Oblecti ve_lesoI The main objective sro to Improve regeonrtion In logged over forest sndto Improve production from forest plantatioms.
Actton
Bea
Assistace
00Gha. up to nowconcentra1. Undor FICPforestry reserch ted Ita reserch offort In is b 'ing strengthoned In Javs,whereasthe min forest SumatraandKelTintan;and are amr in the outer slandsof Sumatra, 2. UnderFICP I, a regional Kalimantan *nd IrianJaya. rerch *tntion.iI1be In thefuture,00C noedsto constructed In IranJays. putmoreemphasis on rsearch In Sumatra, K limantan and IrianJays
I
w
Annex2 Page 6 of 7
KewPollyc Area
Oblecthv.smues
GOIActions
F. NatureConservation The main objective Is tho In the past00e hagpaid protection otf_ genet divelittieattention to naturo *Ity*s*ource . of genesfor conservation butdevoloped agricultural1 medicine and a seriesof national and forestry research anddaveMoredetailed protected lopmnt Themainissueis area management pIne. Very balancing natureconservation few of the have been needbwithneedsof Iocal i plemonted. Tho plansneed populotions that maybe to be reviewed/rovised to dependent on the resourco. makethm morecost-o fective and to make thm
suitable for foreign funding and implementation.
Bask Assistanc 1. UnderfICPfIvenationsl park plans were reviewed
and *renow beingimplemented.Bufferzone planning has also been started for thefirsttimo ln Indonesia. 2. Under proposed FICPII, roviews and reformulation of dditional plans will be done with a views to Implementationunder FICP III.
I
Annex2 Pogo e of 7
SKu Pollcy Ares G. Institutional Development Policy
Oblfttlveeth/Ia_ MainGOIobjectivo ts to establish functional and effective Institutions capable of formulating and Implementing resource utilization, conservation and anagement programsin line with the Coverneent's policies.The main problems have been: (1) The concontration of W F staff In Java,whereasthe main forest areas in thoouter Islands of Sumatra. Kalimantan andIrianJaya; (2) MOF staff rolationship with local population has been poor; and (3)MOF staff devolopmenthas been poor becauseof a lack of well thought out plan and training needs assessment.
GOI Acties
aitsh AssIstam
Recognising theseproblems, 1. Bankassisted FICPIs helping, MOfhas: (1) Decidedto througheriesot studiesto movestaffto themain identify tho cop andth forestgreas In theouter magnitudof tasks thatneed Islands and forthispurpose, to be undertaknfor regional rosearch and Institutional Improvement. training centers have been constructed in 2. FICPII will establish SumatraandKalimantan systemswhichwillbe the andone Is now planned basis of future institufor IrianJaya; tionalrestructuring undor (2)Roorganized the Ministry tho Forestry IIIProject, in 1988/89*nd addednew andthiswillinclude a Directorate of Extension comprehensive humanresources to improve services; and devolopmentprogrom. (3)Started tho formulation of a comprehensiveHuman RosourceDevolopment Plan.
-J
- 38 -
ANNEX 3 Page 1 of 4 INDONESIA SECOND FORESTRYINSTITUTIONSAND CONSERVATIONPROJECT
TERMS OF REFERENCE Introduction 1. The Governmentof Indonesiahas requestedfinancialassistancefrom the World Bank to implementa Second Forest Institutionsand ConservationProject. The Projectaims to forest management,planningand conservationwith an objectiveof establishingand maintainingan economicallyand environmentally sound resourcemanagementsystem.The project consistsof five main components: (a)
Formulationand implementationof a Concessionhanagementsystem;
(b)
Formulationof a Naster Plan for PlantationEstablishment;
(c)
Formulationand revisionof NanagementPlans for Selected NationalParks and Wetland Areas;
(d)
Formulationof a Master Plan for Forest Researchand Establishment of a ResearchStation in Irian Jaya; and
(e)
Provisionof a High-levelAdvisor to the Ministerof Forest.
2. This TOR deals with the ConcessionManagementComponent,which the Governmentof Indonesiaintends to implementunder a contractualarrangement with an eligibleconsultingfirm. Background 3. Indonesia's forest area is variously estimated at between 100 to 114 millionhectares. Precise resourcedata is not available.Improvedresource assessmentis now being done under the Bank assistedForest Institutionsand ConservationProject (FICP Loan 2930-IND). The current annual output of industrialwood produced from the ProductionForest and ConversionForest is about 32 million m3. Utilizationof the forest for productionof commercial wood is mainly undertakenby the privatesector operatingunder concession arrangementsmade with the Ministryof Forest (MOF). The concessionairesare responsiblefor formulatinggeneral forestmanagementplans, five year developmentplans and annual operationalplans in line with guidelines providedby the MOF to ensure sustainabilityof resourcesand protectionof environment.MOF is responsiblefor allocationof concessionsand monitoring their utilizationthrough its central (DirectorateGeneral for Forest Utilization)and provincial organizations(KANWIL)in collaborationwith the ProvincialForest Departments(DINAS).The main objectiveof the control of MOF is to ensure that the sustainedyield managementprinciplesare observed,
-39-
ANNEX 3 Page 2 of 4
environmentis protectedand revenuesare realized. 4. The studiescarried out under the Forest Institutionsand Conservation Projecthave confirmedthe observationsof the Ministry that performancesof the concessionairesand the forestryorganizationsresponsiblefor control needs improvement.The main problem can be describedin general terms that the concessionairesare not observinggovernmentsguidelinesthus resultsare: decline in resourceproductivity,loss in governmentrevenuesand environmentaldeterioration. Objective 5. In responseto these observationsthe Governmentof Indonesiadecided to strengthenits concessionmanagementsyst_m with the objectiveof establishing an effectiveand comprehensivemanagementsystem capableof capturingmaximum revenuesbased on accurateaccountingof wood productionand assessmentof true value of logs while ensuringthat forest resourcesare utilizedin line managementand environmentalprotection. with principlesof sustained-yield Strategy 5. In view of urgency attachedto the proper managementof forest resources and the anticipatedtime lag to improvepresent institutionalcapabilitythe Governmentof Indonesiadecided to hire servicesof a firm to develop and implement: (a) a wood administration(log accounting)system;and (b) forest operationsinspectionsystem in the short run-anddevelop sustainableforest managementsystems and demonstratetheir implementationin the intermediaterun. The ultimateobjectiveof the Governmentis evolve the institutionsinto more permanentones. The firm, short/intermediate-run therefore,is also expectedto identifyalternativelong-terminstitutional arrangementsand provide trainingprogramsfor all parties (publicand private)accordingly. Descrintionof Task 6. Design of Wood Administration(Log Accountina)System. The consultant will design and test a streamlinedand cost effectivelog measurement, recordingand log flow control system.This system should provide relevant information: (a)
to verify that all logs, both in the forest and various points of transfer,are producedfrom the trees marked and felled within the coup area approvedby the PH;and
(b)
to calculatevolume of wood in terms of species groups, assortment classes (i.e. sawlogs,peelerlogs,etc.) and quality classes as specifiedby the rules and regulationsissued by MOF in order to establisha base for revenuecalculation;
7. The consultantwill design and cost an organization(organizationchart, job description,qualificationand experienceof staff, infrastructure requirement,means of mobilityetc.) for the implementationof the system.He will describe,in detail, procedures for scaling/logmeasurement,log identification,recording,documentationfor log transport,etc. He will also
-40-
ANNEX 3 Page 3 of 4
describemethodologyof determiningintensityof control measures, responsibilities of parties and remediesto be taken in case of nonconformity. 8. Design of Revenue Assessmentand CollectionSystem. The Consultantwill review the current revenue collectionsystem (royalties,ReforestationFees, etc.) and will formulatean improvedRevenueAssessmentand CollectionSystem. The Consultantwill formulate methodologyand proceduresfor estimatingthe net value of the wood removedor cut in the concessionin order to establisha base for MOF and the concessionaireto agree upon their respectivemargins. The methodologywill describesources of productiondata, productioncost information,and informationto be used for assessingthe market value of logs. The related procedureswill describetypes of paymentsby the concessionaire,time and frequencyof payments,and recommendremediesin case of breach of agreements. 9. Design of Forest OperationsInspectionSystem.The consultantwill review the present system of forest operationinspectionas describedby various laws, decreesand orders and assess the effectivenessof its implementationwith a view of designingan improvedand cost effective inspectionsystem. He will: (a)
analyze and identifygeneral and specificobjectivesof intended control;
(b)
design model plans for; (i) General Forest ManagementPlan; (ii) Five-YearDevelopmentPlan; and (iii)Annual OperationPlan, define the purpose of the each plan and describetype of data required,source of data, methodologyof data processingand format of report, specifyqualificationsand experiencerequired to prepare such plans and the proceduresfor plan review,approval and revision;
(c)
design and describein detail systems in terms of clear procedures and methodologyfor the assessmentof concessionaires performance in implementingsuch plans, define remediesneed to be taken in case of breach and unauthorizeddeviationsin implementingsuch plans;
(d)
define organizationalstructure,in terms of organizationchart, personnelrequirement,job descriptions,qualificationsand experience,equipment,mobilityand infrastructureneeds, specify responsibilities and duties of parties .
10. The consultant, after discussing and obtaining the approvalof above systems from the MOP, will implement(a) Log AdministrationSystem; (b) Revenue CollectionSystem ; and (c) Forest OperationsInspectionSystem. For this purposehe will prepare a generalprogram consistingof detailedannual programs describedby: (a)
concessionsto be covered;
(b)
staff to be employed;
- 41 ANNEX 3 Pate 4 of 4
(c)
type, number and timing of reports;and
(d)
cost estimates.
InstitutionBuildingand Training 11. The consultantafter completionof the design stage will prepare a perspectiveprogram for the developmentof the MOF institutionsto supervise concessionmanagementand,in cornectionwith this, the consultantswill prepare and implement,after discussionsand approvalof MOF and and the World Bank, a program to train staff of NOF and DINAS, concessionaires of above mentionedsystems. others regardingthe implementation Timing 12. The design stage is estimatedto be completedwithin a period of six months. Implementationwill commenceimmediatelyafter completionof design stage followingthe reviewsby the Governmentof Indonesiaand the Bank and approvalby the Governmentand will continuefo- a period of three years. Ltoca&in
13. The MOF has selectedtwo provinces;Riau, East Kalimantanand Maluku for commencingimplementationof the (a) Log ManagementSystem;and (b) Forest OperationsInspectionSystem.Full implementationof the Revenue Collection System should be an integralpart of above mentionedsystems.However the consultantshould formulatea phased program to commenceimplementationof whole or part of the Revenue CollectionSystem in all provinces.
- 42 Annex 4 Page 1 o0 3 INDONESIA SECOND FORESTRYINSTITUTIONSAND CONSERVATIONPROJECT
NATIONALMASTERPLANFOR PLANTATIONS COMPONENT Draft Terms of Reference Background The Governmentof Indonesia(GOI)has requestedfinancialassistance from the World Bank (as Loan) and group of donors (as grant funding)to implementa forestryproject,The ForestryInstitutionsand ConservationII Project (FICP II), of which preparationof the NationalMaster Plan for Forest Plantationis a component. The objectiveof the Governmentis to improveforest managementand utilizationpractices,especiallythose carried out by the private sector under concessionmanagement,and expand the productiveresourcebase through establishingnew plantations. The Governmentpolicy in conductingeconomic activity in forestrysector is to encourageprivate investmentand management in market related activitieswhile retainingresponsibilityof sustaining collectivevalue and benefit stream from forest resourcesunder the responsibilityof the Government,through the Ministryof Forest. In view of steadilyincreasinglocal demand for wood products, prospects for maintaining economic gains in serving world wood markets, and the existence of large anthropogenic grasslands and degraded forest areas, the Governmentwants to asses the potentialof expandingits industrialwood productionbase in order to adopt a long term developmentprogram. However, availabledata on land resourcesin terms of locationof land suitablefor plantationestablishment,its productionpotential,and currentuse is not adequateto ensure correctnessof policiesto be adopted and investmentsto be supported. To remedy this the Governmentswants to formulatea National Master Plan for Forest Plantations. NationalMaster Plan for Forest Plantations Objectives The long-termobjectiveof formulatinga NationalMaster Plan for Forest Plantationsis to sustainand expand economicactivitysupportedby wood productsobtainedfrom forest resourceswhile repairingenvironmental damages occurredby poor resourceutilizationpracticesin the past. The immediateobjectivesare: (a) to determinesize, location,suitabilityof land for establishingindustrialplantations, (b) to assess investmentrequirements;
-
43 Annex 4 rage z orTJ
(c)
to identify and
(d)
to establish a sustainable planning and monitoring the headquarters of the Ministry of Forest as well level.
institutional,
legal
and procedural
improvements; system in at province
Desin The component would require
execution
in two stages.
The first
stage
would be: (a)
establishing a data base using existing information, especially those generated by forest studies have been executed under the on going Bank-assisted Forest Institutions and Conservation Project;
(b) upgrading/enhancing match information;
this
data base by developing
(c) developing management alternatives expressed establishment technology, cost and yield; (d) developing economic criteria environmental constraints;
species/sites
in terms of
and identification
of social
(e) designing a decision (problem solving) system by integrating above (economic criteria and constraints) into the data
and the
(f) generating alternative long term development options defined in terms of costs and benefits (economic, financial, social and environmental); (g)
(h)
preparing a matrix to illustrate financial, institutional, legal prerequisites for adopting given development alternative; and
a
establishing National Master Plan for Forest Plantations by training national staff on the job and delivering a complete and sustainable system.
The second stage would be establishing program development capability at provincial level in order to ensure implementation of the National Master Plan for Forest Plantation as an integral part of the National Development Plans (REPELITAs). This would be attained by:
(a)
Building technical and institutional capability for program/project preparation at province level; and
(b)
identifying formal linkages between provincial central agencies.
and
- 44 Annex 4 Page 3 of 3
,Personnel.To assist in formulatingNationalMaster Plan for Forest Plantationof the FICP II the followinginputs will be required: -
81 staff-monthsof international
*
124 staff-monthsof nationalpersonnel;
personnel;
and
A detaileddescriptionof the Personnelinputs is includedin Annex 4, Table 1. £gauiment. The consultantwill prepare system specificationsfor GIS to be installedat the headquartersand the equipmentrequiredat province level. Procurement,installationand maintenancewill be the responsibility of the Governmentof Indonesia. Irafrin±. The Consultantwill have the responsibilityof training counterpart staff on the job. Consultant will prepare and execute training coursesand workshops for the provincial level system operators,surveyors and professionalstaff to be engaged in the preparationof provinciallevel prc;rams in the selected four provinces. Renorting. Consultant will submit 3 monthly progressreports to the Ministryof Forest and a Final EvaluationReport at the end of their contract.
45 _
ANNEX 5 Page 1 of 3
INDONESIA PROJECT SECONDFORESTRYINSTITUTIONSANDCONSERVATION RESEARCHCOMPONENT Terms of Reference 1.
ResearchManagementSpecialist Location:
AFRD, FRDC, Bogor
Durationof Assignment:
6 months
Qualification:
Post-graduatedegree in Forestryor related subject
Experiences
Minimum of ten years experiencein the managementof forestryresearchsystemsat both institutionaland nationallevels,preferablyin a developingcountry. Similarexperiencein a combinedforestryand agriculturalinstitutionor agriculturalinstitution alone may be judged appropriate. Knowledgeof the Indonesianlanguagedesirable.
Position:
Specialistin researchmanagementtechniques,policy guidelines,nationallevel planningand implementation strategiesto prepare a policy and master plan for forestryresearchin Indonesia;reportingthrough the DirectorFRDC to DirectorGeneralAPRD.
Responsibilities:(a) Assistingin the allocation,review and revisionof researchpriorityratings to ensure that researchis responsibleto forestrysector goals and the long-term developmentsplans of GOI; (b) Constructingmethodologiesfor improvedcooperation betweenAFRD, universitiespublic corporations in (Inhutanis)and the private sector (concessionaires) the conductof researchprograms; (c) Preparingan initialMaster Plan for forestryresearch and settinga timetableand guidelinesfor its periodic review; (d) Developinga nationalForestryResearchSystem through the integrationof university,staff, the public and private sectors,bilateraland multilateraltechnical assistanceteams, regionaland subregionalcenters;
-46
-
ANNEX5 Page 2 of 3
approachesto research (e) Encouragingmulti-disciplinary procedures for updatinginterproblemsand developing institutionalresearchand networkingarrangementswith regionaland Internationalresearchinstitutions; (f) Exploringalternativesources for funding research operatingcosts (taxes or levies on production, contractualresearch,generationof funds from research facilitiesand services); (g) Exploringalternativeinstitutionalarrangementsfor conductingforestryresearchincludingprivatizationor forminga corporationto enable more flexibilityin setting salariesand budgets for researchthan is currentlythe case within governmentservice; (h) Interactingwith the high-leveladvisor the Ministerof Forestry (to be providedunder the Project)on research policy matters; (i) Making effectivethe ResearchCouncil and Policy Unit by suggestingchanges in chairmanship,membershipand functionand conveninga meeting of the Councilbefore the end of the consultancy,to considerrecommendations and researchpolicy and to present a draft Master Plan for commentsand suggestionsby the Council. 2.
ResearchPlanninaand ProgrammingSDecialist Locations
AFRD, FRDC, Bogor
Durationof Assignments
2 years
Qualifications
Post-graduatedegree in Forestryor related subject
Experience:
Minimum of 10 years experiencein planning and programmingresearchactivities. Knowledgeof the Indonesianlanguagedesirable. Specialistto work with both the DirectorGeneral,AFRD and the head of the FRDC, Bogor on detailedplanning and programmingof forest research.
Position:
Responsibilities,(a) Implementingmore effectiveresearchplanningby relatingprogram to identifiedpriorities; (b) Arrangingproceduresfor updatingthe Master Plan at five-yearintervalssynchronizedwith Indonesiafiveyear planningperiods (in conjunctionwith the Research ManagementSpecialist,See No. 1 above, with whom there should be at least two months overlap);
- 47 -
ANNEX 5 Page 3 of 3
(c) Developingfurther a researchmanagementinformation system, includinga national researchproject (computerized)for all traceablepast, currentand plannedprojectsat all institutionsengaged in forestryresearchin Indonesia(an inventoryof institutionsand researchworkers reportedlyhas been made). (d) Improvingthe monitoringand evaluationof researchby introducingperiodicexternalreviews and establishing peer review committeesat researchinstitutions; (e) Advisingon personnelmanagementand development programs; (f) Identifyingtrainingrequirementsfor approvedresearch programsand administrativeand service tasks; (g) Advisingon staff training,recruitmentand reallocationin responseto program needs; (h) Promotingthe participationin researchnetworking arrangementswith other researchinstitutionsboth national and international(in conjunctionwith and followingthe departureof the ResearchManagement Specialist); ii) Improvingaccountingand auditingpractices particularlyfor contractresearch(if this procedure is adopted)and for projectsfunded by agencies externalto government; (j) Devising standardproformasfor planning,organizing, staffing, directing and controlling research carried out under differentcategoriesof funding; (k) AssistingGOI with preparationof the research componentfor World Bank ForestryIII; (1) ElaboratingTORe for Consultants(outlinesin Appendix2); (m) Conductingon-the-jobtrainingfor planning, coordinating,accounting,reporting,research informationsystems,managementof contractresearchas required; and (n)
Improving communication of research results by organizinga scheduleof seminarsand workshops for government and industry.
- 48 -
Annex 6 Page 1 of 10
INDONESIA AND CONSERVATIONPROJECT SECOND FORESTRYINSTITUTIONS CONSULTANTS PAMS INVESTMENT FOR NATIONAL TERMSOF REFERENCE The consultants selected to undertake work on the national parks multidisciplinary consist of a small investment component of Forestry II, will core team of expatriateexperts,plus Indoensianconsultants. The team would undertakethe short term planningneeds and be responsiblefor systematically the actual revisionof managementplans for 10 selectednationalparks. For each plan the core team would be joined by PHPA counterpartsdrawn from the park; thesewould be the same counterpartsexpectedto work later with under ForestryII or III. Plannersfrom teams functioning implementation Forests would work closelywith the core team PHPA's NationalPark/Recreation to monitorprogressand also to gain experienceneeded to provideguidance and evaluationfor Indonesianconsultantsdoing futureplan preparationand revision. The core team would consistof the followingmembers: (12months) ProiectManager-ex2satriate Oualifications: Extensiveexperiencein naturalresource conservationprojectmanagement,preferablyin southeastAsia; idealbackgroundwould includenationalpark planningand and teams; excellentcommunication leadershipof multidisciplinary sensitivityand the abilityto leadershipskills,cross-cultural provideon-the-jobtrainingto counterparts. SQooe of work *A
activelyparticipatein a scopingworkshophelpingdetermine investment priorityrankingof nationalparks for potential
*
and assume project leadership and assist in identification recruitmentof remainingteam members,manage project financesand equipment,and coordinatenecessary administration
*
providecoordinationof effortsof all team members,ensuring their contributions meet projectobjectives,standardsof quality,and are producedon time
*
provideperiodicprogressreportsto PHPA Directoratesand make necessaryadjustmentsin the plan of operations
*
maintainnecessarycontactswith.the ConservationAdvisory Commissionestablishedunder FICP II
*
activelyparticipatein field activitiesas team leader
- 49 -
Annex 6 Page 2 of 10
*
ensure timelyproductionof updatedmanagementplans for the 10 selectednationalparks (such plans might includethe managementprescriptiondetailedin an appendixto this annex) and their selectiveimplementation as operational plans under ForestryII
*
provideguidanceto local consultants, particularlythose who may not be familiarwith operationalplanningand national park management
*
provide assistance and guidance as needed in pilot projects to be implementedwith funds in the presentproject
*
organizeand delegateleadershipin workshopswhere revised managementplans (operational plans) are presentedto local PHPA staff, officials and community leaders
*
provide
i
encourage commitment to management plan implementation PHPA providinglegalizedstatus of approvedplans
on-the-job
training
to assigned
PHPAcounterparts by
Marine Park SDecialist-exnatriate (4months) Oualifications: Extensivefield experiencein the planningand management of tropical marine conservation areas, preferably in southeast Asia; ideal background would include practical experiencein marine area tourism, facilities operations, and multipleuse managementof marine buffer zones; cross-cultural sensitivityand the abilityto work within a team effort in both office and field conditionsare imperative;an abilityto provide on-the-job training to counterparts is required. Sgogeof W£ork *
serve as specialistteam member under the leadershipof the Project Manager
*
provide the team's principal review and recommendations of management plans for Pulau Seribu Marine National Park, Teluk Cendrawasih (and additional areas as directed by the scoping workshop)and selectiveimplementation of the plans under FICP II
*
provide recommendations on activities in other nationalparks with significant coastal resources eg. Tanjung Puting
*
actively participate in team field work, providing leading role where the study is relatedto marine resources
Annex 6 Pg 0
- 50 -
*
provideassistanceand guidanceas needed if activities within a marine area have been selectedfor implementation with funds under the presentproject
*
participatein or lead one or more presentationworkshops designedto review final operationalplans
*
provideon-the-jobtrainingto appropriatePHPA counterparts
Environmental AssessmentSnecialist/Ecologist-local (8 months) OualificAtions: Trainedbiologistor ecologistwith experiencein the environmental impact reviewof developmentactivities programs,especiallyin ecologically-sensitive areas such as parks and reserves;ideal candidatewould be a biologistor natural resourcesspecialisttrainedin environmental assessmentin a varietyof habitatsin Indonesia;Englishlanguagespeakingand writingabilityis highly desirable;abilityto functionas a member of a team both in the office and the field, and crossculturalsensitivityare essential. Scope of Work *
serveas specialistteam member under the leadershipof the ProjectManager
*
provide the team'sbasic expertisein the environmental impactreview of developmentactivitiesin or proximal to the priorityparks (for examplereview of existingroads, trail and buildingdesign engineeringand habitator speciesspecificmanagementand protectionproposals)
*
providemajor inputon recommendations to proceedwith or modify activities proposed in the management plans
*
activelyparticipatein the team's fieldwork
*
provide specific recommendations for protecting environmental values of parks with management plans for immediate implementation
*
participate operational
*
provide
Park Planner/Landacale
in or lead one or more workshopsto presentdraft plans in or close to the concerned parks
on-the-job
training
to assigned
PHPA counterparts
Architect-local (8 months)
Oualifications: Experience in the design of physical facilities for administration, protection and tourism within conservation
Annex 6 Page 4 Ot 1u
- 51 -
areas in Indonesia;idealcandidatewould be a trainedlandscape architectwith strongbackgroundin design of roads, trailsand buildingsin ecologicallysensitiveareas,with specialattention to locallyappropriatearchitectural styles and building techniques;Englishlanguageabilityin speakingand writing is desirable;cross-cultural sensitivityand the abilityto function within a team both in the officeand the field are essential. Scope of Rork *
serve as specialistmember of the team under leadershipof the ProjectManager
*
provide the team's primaryreviewof existingdesign engineeringstudies,and assist in recommendations to accept or modify such designsbefore implementation
*
assist the team in developingguidelinesfor future PHPA use in contractingout design engineeringwork
*
activelyparticipatein the team'sfield work
*
providespecificrecommendeddesignmodificationsfor protectionof environmental values if physicaldevelopment activitiesin pilot parks are selectedfor immediate implementation
*
participatein or lead workshopsto presentdraft operational plans in or close to the concernedparks
*
provide
on-the-job
training
to assigned
PHPA counterparts
BufferzoneSgecialist-local 8 months Qualifications: Experiencedrural sociologistor social science disciplinerelatedto rural developmentwith sustaineduse objectives;ideal candidatewould have a backgroundin multiple use activities around conservation areas, a knowledge of Indonesian rural social structures, and experience in involving local residentsand leadersin joint decision-making for resource use; Englishlanguagespeakingand writing abilityis desirable; cross-cultural sensitivity and the ability to function within a planningteam in both the office and the field are essential. Scope of WrkA *
serve as a specialistteam member under the leadershipof the Project Manager
*
provide the team'sprincipleinput in recommendingpractical bufferzone management activities in the operational plans of
Annex 6 Page 5 of 10
-52 -
the priorityparks 'closecoordinationwith ForestryI bufferzoneactivitiesis essential) *
providerecommendations for additionalsite-specific studies and/or field testingtrials of bufferzonealternativesto be undertakenwithin ForestryIII or other implementation phases
*
activelyparticipatein the team's field work
*
providespecificrecommendations on buffer zone activitiesif such activitiesare selectedfor implementation in some areas with funding from the bufferzonecomponentunder ForestryI
*
participate in or lead workshops to present plans in or close to the concerned national
*
provide
Short Tero Consultants-local
on-the-job
training
(19 month)
to assigned
draft parks
operational
PHPA counterparts
-
Oualifications and Scone of Work: To be decided during the project.Exampleswould include:advise on remote sensing aquisition,communityparticipation, fisheriesmanagement.
- 53 -
AN:EX 6 Page 6 of r0
INDONESIA SECOND FORESTRYINSTITUTIONS AND CONSERVATIONPROJECT OUALIFICATIONSAND SCOPE OF WORK OF MANGROVECONSERVATIONCONSULTANTS
Projectteam Leader: 24 months;expatriate. The team leaderwill be responsiblefor the scientificand technical managementand implementation of the project. Specifictaskswill include: 1.
To be responsiblefor the scientificand technicalaspectsof project implementation as outlinedin the projectdocument.
2.
To coordinateand supervisethe projectactivities.
3.
To coordinateproject implementation with the PHPA and coordinate cooperationwith other Indonesianagenciesand NGOs involved.
4.
To coordinate staff.
5.
To develop workplans for all activities staff and counterpartagencies.
6.
To identifysuitableIndonesianconsultantsfor involvementin executionand implementation of specializedprojectactivities.
7.
To consultand where appropriatedevelopcooperationwith other relevantwetland relatedprojectsof PHPA and AWB.
8.
To pay specialattentionto the integrationand considerationof relatedsocio-economic and rural developmentaspectsin project implementation.
9.
To supervisethe financialmanagementof the projectwith assistance from the residentadministrative staff.
and manage the scientificand counterpartproject in conjunction
with project
Oualificationsrecuired: -
(MSc or equivalentin ruraldevelopmentsciencesor equivalent professionalworking experience.
-
At least five years experienceof carryingout socio-economic assessments and rural development in tropical coastal areas.
- 54-
MTEX 6 Page 7 of 10
Reasonableunderstanding of principlesof agro-forestry and/or ecologicalprocessesin tropicalcoastalareas. Experiencein projectdevelopmentand coordination. Fluent in Englishand proficientin Indonesian(or willingto learn). Experiencein leadingmulti-disciplinary teams. CoastalConservationSDegialist A total of 18 mouths;expatriate. The CoastalConservationSpecialistwill be responsiblefor development of guidelinesfor mangroveconservation, coastalreservemanagement planning and first stage infrastructure developmentfor (reserve) management for one key mangrove reserved. Specific
tasks
will include:
1.
To establishcriteriafor the selectionof an existingprotected mangrovearea for conservationmanagementplanning.
2.
To select the site for managementplanningand implementation in consultationand cooperationwith PHPA and other relevantIndonesian authoritiesand NGOs.
3.
To cooperate with the other team members and consultants in the development of guidelines for mangrove management integrating forestry exploitation, conservation and sustainable use of other mangrove forest resources.
4.
Developmentof a conservationmanagementplan includinga detailed bufferzone development and management design for the selected key mangrove reserve in conjunction with local communities, NGOs and authorities.
5.
To coordinatefirst stage reservemanagementimplementation for basic infrastructural development.
6.
To contributeand participatein the projectsworkshopsand training events, includingon-the-jobtrainingof counterpartsand reserve managementpersonnel.
7.
To regularlyreport on activities,scientificresults,management resultsand the cooperationwith the local communities,NGOs and authoritiesto the projectteam leader.
55 -
A.MX 6 Page 8 of 10
Oualificationsrecuired: -
MSc in naturalsciencesor equivalentprofessionalworking experience.
-
Experienceof informationreview,coastalwetland survey techniques.
-
Experiencein bufferzonedevelopment/management.
-
At least one year's experiencein tropicalcoastalwetlands.
-
Fluent in Englishand proficient(or willing to learn) Indonesia.
-
Experiencein runningfieldsurvey teamsand report preparation.
-
Willing to work in difficultrural field conditionsfor long periods of time.
ilanner Land-use2lanningexpert/conservation A total 12 months;expatriate. The land-useplanningexpert(s)will be responsiblefor the development planning in land-use and conservation of guidelines for integrated in two pilot and test these guidelines mangrove areas and will utilize projects. Specific
tasks
will
include:
1.
To establishcriteriafor the selectionof two key mangrove areas of integratedland-useand conservation for the implementation planning as outlined in the project document.
2.
To select the two mangrovesites for integratedland-useand and cooperation with PHPA and planning in consultation conservation and NGOs. other relevant Indonesian authorities
3.
To cooperate with other team members and consultants in the developmentof guidelinesfor mangrovemanagement, integrating conservationand sustainableuse of other forestryexploitation, mangroveforest resources.
4.
To implement multi-sectoral land-use and conservation planning in the two selectedareas in conjunction with local authorities,local NGOs and local communities and with assistance of Indonesian consultants, using and testing the guidelines as outlined in the project document.
5.
in the project's workshops and To contribute to and participate trainingevents,includingon-the-jobtrainingof counterparts.
-56-
ANIREX 6 Page 9 of 10
6.
To regularlyreport on activities,scientificresults,land-use planningresultsand the cooperationwith Indonesiancounterpart agenciesand local communitiesto the projectteam leader.
Oualifications required: -
lMSc or equivalentin a disciplinerelatedto resourceassessmentand land-useplanning,or equivalentprofessionalexperience.
-
Thoroughunderstandingof ecologicalprocessesin tropicalcoastal areas.
-
Knowledgeof principlesof socio-economic evaluation. Experiencewith communitydevelopmentand/orworkingwith people from developingcountries.
-
Preferablyfluent in Indonesianand English (or willingto learn).
-
-Experience in runningfield survey teams and reportpreparation.
-
Willingto work in difficultrural field conditionsfor short periods.
Local Consultants(ShortTerm) A total
of 24 months for Indonesianconsultantsis planned.
Specific terms of reference will be established by the project team after site selection and preliminaryinventoryof problemsand specialized tasks. It is anticipated that a total number of 5 to 10 different specialists will be employed as consultants on a short-term (1-6 months) basis, pending needs for specialistinput. It is expected disciplines:
that
consultancy
input will
be in the following
HltOxlogist: Responsiblefor assessingthe hydrologicfunctionsof the selectedsites, and their contribution to maintaining important environmental services, including: mitigation of storm and flooding hazards,maintenance of groundwater resources, control of surface water flows, water pollution control, etc.
- 57 -
Resource
A.1EX 6 Page 10 of 1U
Economist:
Responsiblefor examiningthe social and economicsignificanceof the functionsof the selectedwetlandsand the environmental and pecuniary resourcesderivedfrom them. An exampleof a specificcase studymight be the assessmentof the environmental and economicimpactof extensive shrimppond siting in mangrove,or the impactof intensification of shrimp pond production.
FisheryExZert: Responsiblefor assessingspecificfisheryfunctionsof the selected sites.
Soil Scientist Responsible for assessingspecificaspectsof soils, in particular potentialoccurenceand impactof acidification. Buffer Zone ManagementSRecialist Assistance particularly
for the preparationof buffer zone managementplanning, in relationto the needs of local communities.
-
58
-
INDONESIA
ANNEX 7 PROJECT Page 1 o SECOND0 FORESTRY INSTITUTINS ANDCONSERVATION PIROJECCOSTSAnDDISUURDIZN gattonal
Ka
tns'j
trPMfrFrs
Qabstity
Deswiplkx Uskt
3 3 2
no 304~U EA~LII -&b-odd G A)
S.VoblaIas-4wdGI)
vat
I
3 3 3
I
a1
Jo I
W.
24
314 40 24 U4 34 34 24 32
3710 2275 3371 3371 3371 3371 3371 337 3315
4.7 6.1 4.3 6. 4.3 .3 4.3 4.3 46.3
13 A3 24 A 24 s 33 4 24 24
49 340 340 333 4 9 4 4t0
700 700 700 700 700
Is 13 3.3 3.3 3.3 33 3. 3.3
3 is 33I
3
~~~4 t0
100 321.? 9.9 3.3 9.0
110 300 im
I
336.
coo tRpM be
33 23 223 I
3 3
ea. code, (US$00U)
so" casu MRPmlion)
it"
Clod mm9 91Ml 92Ml 9319 TOW USt
No
501111Nbodhow"
________01
I
u3s
19
324 20 4 21 146 1
9119 93194TOW 90)9 9119 92)0 9319 TOWI
91
20 S 21 421
0
30 II 27 43
199 310- -49
0 116 333 217 1 23 3 t97 117
70 0 37 17 2 3 3 IS is 304
0 I7 2 i i
~~~249174
0 10 72 323 1I 2) di 30 3$ m x
0
9W
m3
its
219
0
310 0 0 0 0 0 0 0 49
102 0 0 0 0 0 0 0 0
3050 23 345 341 97 239 145 73 345
305 el 41 41 37 43 41 43 27
M91391 3In 0 41 0 41 0 21 0 St 0 43 0 a 0 27 2?
90 0 0 0 0 0 0 0 0
19 20 91 el 36 316 to 41 ft
a0 s 3 65 45 45 G5 45 a 30 30
a0 10 30 20 10
0
0
0
0 28
0 30
0 30i
s4 374 374 39" 106 30 II 731
9 3 17 I 4 3 IS
13
C. TonkiAl Asistan. 1. hillSa11gC L3AmSp"IgILw ramowmamommis sawimbww So W SM1011114 Sm"Osim WdM*A8.Mbd ormalimp"m
SbdmdmreA Swummindlud 1100611106114Wb 0I -0CEWaM&
W-. W.cb Wbk
38 33 24 26 1~W~ 2 a2 32 32 9 9 12~~..h 31 4 33 32 32 W~~~ 9 9
~~WN1 wbu
~W.gB
~welh 32 W.b
sm .
&6-4a3lO
24 33 33 33 24
3 2 24
~~wed 36'3
IFINIMAdlood"Iswea
3.wwm
~~~~24 9
a
W WOMU -
4
~~~~331 331 9I -
-I
700 700 700
139 341 73 73 49 73 73 73 49 Is Is 35 20 31 30 5 231
310 21S 73 71 49 341 73 0 49
9271 3133340
-
2923392
337
37 34 34 16 37
9 34 16 36 37
0 3? 31 31 31
34 9 9 104 19
0
0
0
6
0 Is
0 4
0 61
3 2
731362
363773
D.LI_a S=h~~~~
l~Oo
2
4
NfO
4
9
9 36
I 34
33 441
3800 10m
3.6 9.0
&&-4Id0 D)
I
Ao. & Seo.t Pr~iaf rApbb" SW140101G
~~~~no 200 1001 ~~~~~no 200 209
0010000 200 200
0to No
so 10
0.3 0.44
D)
TOTALDvEa s 1fAT
7 16
34 72
29 144
29 144
74 39S
4 10
40
1 0
45
a.
172
372
474
24
461
94
Is 7,
2
21
21
7
7
30 4
35 4
3s 4
is 4
Ss 34W
21
3
4
39
39
to
71
3br 383
317
749
3M3
711
4 4 4 2, 34
6 4 4 4 20
7 34
34u
1338
76?
99 29n 32XT1 s2m
3 903
44 2
457 2991
I. INCRBMNTALOP.COM7 A. SA*ffA6n3MMMireSh Spum -&S Smamommicamr.%w 9CIOR9W"v Cutcpqb Suhah (U A)
ILCrocemmummns3 Lm fi-vot pow .year
3k so
sw
4 4 4 21
No
a 4 4 41
34, 34 Is a
14 36 If at
44 40 40 k
3000 3000 3000 000
2
4
a
14
s00m
9
36
36
44
3.9 351 35 .3
7 7 7 4 22
.
4 7 7 713
29 29 29 4 361 303 *
6
29 29 29 14 303
79 12 72 29 2621
7
324
14 34 38 6, 16 6
34 34 36 61
4 40 40 2 19 46
20
40
10
t36
32
2
33
16
so
c. car opetaihs co" (O
OOIly.so3
TOTAL INCR.0? COP STS TOTAL COMCPON4ENT COST
4
710
1
3
23
61
:,J3
33
3I",
332 3se 313
19
394
447
I
60
37 76
10304I
an9
306 13
24 33
59 AM= 7 Page 2 of
Forest"
Research
01 Qua*
Usk V* coo coo
Usk 2mllnmi gm "M
VMID84P Sbft"m" odmbaamwu*m -------
Tod $=
t I Wm
I m
now
m
lim No m
sm cow ft Mau=)
RPSO im
10" to" 0.0
an
17" MS Gm
gim
100 0 m 0 0 low 0
0
m
0
ISJU
a
0
m
0
W
OA
AS
0
0
W
"
"
0
0
W
W
OA$
a
0
in
0
am
0
0
40
0
Om
0
a
IM
0
MAN
amb
NOW
Om
W
WIN
Wm
go
I.M
ISM
%GW
no
mNdftbwooin
I
SSAI,
SW,
as
0,
4"
no M M
IJ Q.S OA
Ims
to OA$ 0.0
0 0 00
sdp-Tod
a, an
Sib-T44010C) D. vebma a D) L M PM lawiam S, - molmim V4'
I
I I
I
1,
3m 3MA 30A LI&O is"
I Z-
MWM*M"Tgbb Cbmww"" CANK""
P. Teebguf a-M* we soomit
1
41
4
a
I"
Rh
3
3
toko
6 I
4 1
M 7&0
EA
I
I
7"
6
tsA
mm
4 3
12
Wm
r"mr-d'acmult";
Wm
3
SmdT4dw*wC=wdvw
mm mim
rgncmwdl aI
mm "W
rmmwAw"w romaRLUmin
Wm mm
wvmldmmm
NM
omp
Wm
,
to
VA EA
FA16MWWbWT#GVWWb*
9
Ss" 4" 310A So" 2doi .
gjmmmwop,
4
19 to 140
246 25 30
SI
0 6 0 0 tu
in
ta
24.2
0
0
24.2
0
0
aj MS
34.2 24.2
0 0
0 0
4
I&S
2u
a
s 11 3
Di Di Di
3u 242 U.2
4
2 6
2 6
6
3 11 3
43 U L7
as an
W M
on 30 I" 13"
3$9 440 is 269 30 lim
0
0 0
$42
0 0 0
0 a 10
too too so
0
216 In
0 0
4" 216 In
40
40S
a
418
0 0 0
m m "
0 0 0
no m 60
a
0,
0
a"
a
a 0 0
a a 0
Is* M too
0
0
4m
0 a 0 0
no 350 M ISO ISO1 ml
a 0 01 0
TOW
WM
4M
so
90
2L9
13.5
a 0 a
ta
In is"
13J
0
ol ol
0 0
4
W
of 40 114
tu is"
0 0-
11
0 0
0
0 0
6
0 0 0
M 126
ML?
6
m 3" W
uo
0
us 0
0 0 m
M
0
MN
SW too 0
0
0
a
ISOI m low
I 910
3n
in.?
291 0
som
"I
7$4 126
24.2
1
0 0 01 aI
0 0
24.2
2.5 2.0 Si
so aw 2091 S1W
0 0
DJ
de 91 to
M M M 0 1% -0 M so
a 0
13i
U? so
0
179J 12L?
3
I
74
74
a 0 0
0
4% M la 738
4
200 Wa 200 0 M 4 Ift 0 1 "o n
M
0
306
300
:
as 70
40 70
0 ol
74 001
70 No.
0
0
go
73
41 0
145
0
: a
145 4B
14S 49
0 a
10,
27
14S
v
0
0
145
145 to
0 0
0 0
of a
0
0
0
a
St $I 41
:-
:-
a
$1
0
73
la
M 0 0 30
W, xm
73 145
0
122 0
0 41
a
0
or
$I
to
$I
324 41
In
a
145
0
210 2!
73 1717
0 131
in
in
41 4. 3541 go.
o m tios tosd 0 n 90 to SI$ 399 M 0 113 IM t3M 00
mi 327 $17 3135
0 0
Sol n
613 A
031 law to In
E
Xg
7401
40
am
40
070,
IIW
91'n
145
01
2"
SW
41MI
73
4M
IWI.
a
0
iso UI 4MI
a M
am$
qpwfimwdumtw
["rALCO190tam
0 0 a a
73 a
Z4
a
449
224
PM PM "M
0 0 0 0
0. 4M
MD
US
3Wb-TddGF) 0. BimsdooAXA owo ISM-DWO 11006 LOWMO Bob-TaISIOG) TarALbriMTWMTCM
0 0 a
00
W W
1.1howmidAndlo4bul
0 0 a
0.4
la W
M
T4w
OA
&"-Rmw*MMO-*M vain
SW M
"I"
4"
uSm&Tmwmmr.R=m sm&mlmn"
so M M
W"
BMCOOA(MOQO
sm
vaws
0
as
so
2M
M
S39
$0 las
1001
3M
4m1 274
4501
M
£600 012K 959K a 11 0t Isl0s 2IK 919 Ks2 0 01 S 0 0 set? 0 act Cl a0 II £9o 0 LIP St 0 SI It a0 Is a 0 a It 0 12 55 0 91
"a
V919 914 0 0 319 016 0 a 0 a 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
9111 got £6
K16 OM it a2 61961 £91 LU6 0 i1 0 on 0 2110 Ott 0 a 0 02 0 09 0 K 0 001 0
?
0
111111
4m
OM 3? 9119 214 0 06 2110 0ct a1 01 09 at ac010
t019 £1 0 2319 0 0 0
yISt
21K
0
0 0 0 0 0
91N?Sj#JW 0 08? 999? gill SI 051 0 003 0 r£1o1 0 01l 0 521 00?t a 0 02 0 55 0 0V
MUt ff4
Opt
516
0
961
6s2
2192
al-
0
at10 13011 0 0 0 a2 0 LI 0 9? 0 a a
0 0 0 0 0 0 0
0 0 0 0 0 0 0
0
0
WI? £0?
Kt OIL
6 mg1
3 OSI
0 0 0 0 0 0 0 0 511 Ott
La tot 01
a9 tZ VP
0 0 0 0 0 0 0
OK2 an
0 0 0 0 0 0 0 0I90 0 0
La tot 0?
a2
U?i at? V5 £a it 511 £2 £a K9 Kt
I0
I
I
3 £2 it
a0
a
0
0 0
0 0
0 0
So to to It 19 it Is
0 0 0 0
0 0 0 0
0 0 0 0
0
0
0
0 0
0 0
0 0
U
0 0 0
0 0 0
0 0 0
U
0 0 0
0 0 0
0 0 0
U
a U 0I 91 K
0?
£1 £1
U to LI
ml
Sp 92 09 0
U U
0 0 0 0 0 0 0
IL
0 0 0
0 0 0
£9 0 Is 5910 59101t 0
0 0 0
KiOtt
co
£6 59101c rot1a
m
us 6 tic 5? o 925 ilcm 65
I IC CI 09 I 1 QC St t
at I 2 Kt a U9
Kt 9? 59 6
W ASGI SLUAkaul.am iW.Oj pip
Pt~w ON ON01 OW am"m ON OM OM OK a9m
I
69p 29? WV 292 It? 22 292 292 "Il 091
01£? 65tt a"£ 00 m 651 OKg 6111 65 *m 001? 6001 mi
r9t
S 2 2
193If
Zs 9 9 1 1 1 9
Wa Wa we91om PMWamp" Wa WaawfAN rW
It 1 £
1
VW 193 Wa PUS93m 1931 me1I93tmv 193V
2t 2 1 2
&3
___
____
___
__
I
01 K
0? 0
311Wa
L
£0
U£
292 f
a of1 59? IL " 59?
£t r9t en 192 292 rp 292 ro 292
ml 65239 am119 651 ow 6511 521 65119
0 0 0
£4 01 01
r 29 SI9
6Mu2 11I 9 out a"4 9
9 9
Wa Wa
0 0 0
£9 59 01
22 rot292 4I1
65w? 651t 01£?
9 9 9
mg3 WaM NM
t 0 cc 9
19 Ii'?tL 19 on
-
46 5 Kut O 06 06 WS 5 U WI D et l 41
a
t 9 -
out 05m ow 60 £651
Iu--R
GM OKGMa
ILl
r291
I-A
FM193tu-nm
2 1 1
1
01K£? t 6111 t651 t
Sp9
osrJ
t9Ms-1121
I
0 0 0 0 0 0 0
a1 0 5910 Pt10 0 0 0 Pt10
I U%
o 01 119? £0181 ILL till 90 31
sniUdO
I
PAPs-
0 0
0 0
USo Os 01 t OS
0 0 0 0
£51 u4£
Vt
__A__
0
0 0 0
St to to 5091 5091a 0091£ to
etU of 91 a1t05?
a9
I
5091 £2 09 5091£
arg
Lot 01n WI so9
a9
0010
II 92 219 19
-
11 2 a1
-
ti 2 91 a1
mg
Ms
W
-pf
-OS a_I_______
SW
a (vtl0Ott
-
to 01 91 aI
wbAW
33100 jmwm.1
oosin) 'M'3 -0
(Wam" ~ wpoovmugq
i.n ui
u150="n
uoyz3.p.ui
-09-
pS
UWI3U3)469 UOTGSS*UODo
61
-
-
ANNEX 7
-
Parks\Advisor
National
a-
.
Usk 9m 9t2 m9a
L tNVBSM _
v.
2.tLo
wff
01
_
__
D. dpd_
a_m
-.
TON Us
"m
CO 2 s
6W Wa
_
I
W
5
s
4
a"
2e U24
a 26 4 20
9 a _
BP.A&404"3W. _A1__Aes"* §_b_rdn* "a521
26
o
21
o2
0
2 3
0 a
21
44 49
IS Is
35 25
0 0
I
21*
4_9 4
2m St
o0 0 a 0 0
45 0
*
O
a
0 0 54
0 0 9
3
lb0 I
we a Wodk 3
wrf
1
WM51 3
O
Vd2
n
54 249
Vam
cbovwu
is
__
__
_
_
_
.__
! ia CII * I .nv.Iw 0hdosCamw.
2 a1 2 U
2L9
am 24 Dt5 24
9 9
249t
3o n 14
5
14
I
£4 io
Vd
0
0
0
2s
0
0
0
30
O
0a
0
19
0 0
25
9s
0 0 30
0 0 *
0 0 0
to 2
0
t9 3 IS
32
Ohi
@
O
3_100
0n
0
9o
40
50
0
lo0
129 tZ
0
360
2
0
0
4
0
0
O
s5
0
0
2 3
0 2 t0 II s
0 0 0 0
s
0
2s
260se
ON S
4s
to
0
41
1I2
0
tI
2
0
2
1
0
45
oo 0
M
1maflhSU..
V_E
0
45
so
0
0
a" 3
26
0
2o 7*
20
tI 26 0
0 a
as
25
4
0
34
a
0
4
Wa
C.
0 o2 25 0
34
E{
2. vA
o
0 0
n
45
2U 29
S o4
34 34
04 0
~~45
0
ON
61P
G A)
896aI
3.
33
2.2 S 94
ot 45W t4 41
0
Vdoo0 diu0 11_2
T4t1 9"ml92193 939M4
9amTow 90m
9% l
19191 K1
3U
__CoOOP
__c_ma_ie)
___
WNL
8
4 of
Page
25
-o
T_ VWa V9 vww 304 _
iOWAWTMWM D%wTnbkg a~p |SWaT_
YEa
P'Iuw_ 'Wbtou I GO) TOrAL 111134254
.
Vww
lmbsa
_mmS
_9
4 9
0 2 0 39 0 Is 0 0 .1s
t t0 I 5
2
0 0 0 0 0 0
2
S IS 2?
t0 tO
01 778
6253
464
0
1397
14
31959I
882
£301
300
0
20II
492
702
284
0
ISn$
27
36
14
0
20
9
9
5
0
79 #1
tS
i
4
s
3
0 0
44 12
v a
2
s5
2
0
9
£
3
o0
s
V*V vwa
4 2?
5s 45 14 2
4 0 0 2
a2
2
2 0 0
10 la 22
-
-MI
COST
oe mm
ii. ma.
A. Nd. SkOP. e Tr A I1 _ *_
Van Vd
I _m q L. Cm. AiMv.Op. Vdddoop"m |_
0 0 0 4 0o tt 0 22 tt~~~~~~~~~~I 9 4 5 0 9 4 i
l
t
&t=mb I.L &
Va
~~ ~~~~
_____
?OTALfhCL
DvUOR ITOrALPAm&A
-
$4 14 2 = = tt2
-
-
=
=
it I on
l=
~~ 5
1
4
30 *
25 5
441
750
o
ml
82
334
IS
I ~~
33S
0 5s9
2 3n
11
~~~~~ I
It ~~2
4
It67 31 10
_ 62
-
..
~~M
Wetland/ MangroveConservation Dssoipdm
01
Q=Aft
g.~~~~~~~~~gw-~~~~~~~ Uul g
gm91 am
Usk cold
UN914Tohi uS
3qm0a
*0
Godeloo
AG*
10. u40
0 45
40
VAd
_alilkswelbobw _ 1 A_tUN"mmmb tVauP Ci_i-awn t_t_
van 1X
~
~~~~ V2
1_-m3
o
90 Mdn
Fa
50
40
6
a 6
aTmb
S
9 U 2
00W
-
gem gm0939 am
am co" (USS 000)
1NMTotal
la I
90m9 911991am931
90
9
a
82 24
TOTALVMCL ( O M.=01 TOrALMAN_RO Vh_Uff
t
a a
to
0
80
oa 0
0
0
0
Ia
0
0a
U9 21to 40
02 a t2921 0
0
890 Is to
0
0
i2
10
1O
0
0
t0
0 0
to 80
0 0 0 0 00844t
to n0 to
20 10 3 14
0 0 0 0 a
20
O
0
40
00
9O
$4 O
14
9A
2?1 it
a
10
Is
a
3
94
V.
to 4
0
9 2to4
-
sm
tS 7
0
0.
9 0 9 9 $4
3ao
o
TOWa
04
jdm
3e
Is 8 I1 14
__s
vwho
WI
O6s 03
so
%ftsTAL
TOTAL
us
82
I _____
,_*.
1M1 N
DMCOMa(Itp miaa)
70
V-
T_ Qm d. law OMW9
to0 0W
Ka
_mobw U
mm
Qft
~ ~~~~~~~~~~~~~~~~~~to etu st
:
TOrALl.VWIw4
U*k
to0 88 IS 0 t t9
0 0 o 0 90
0
m
as
2S4
0 0 0 0 0OO
88 s to 18
t0 0 O O
18
0O
0o0 32
85
too o
0a I
0
u
e
42 24
0 is
0 0
it16"
1ml
0
Si
0
18
~~~~~~~~9 Is 0
5
27
a*
0=IfS
92
_9
0
its
870.
83
0.
WI
ml
701 0
oI
783
1
is
10
0 0s
114191
10
0 s 27
4 tt8a
20 O
S1
8) 13
10,
0 0
0
0
so_ISi
25)
a.
go
ni .4I 4O 1
n
I9 1
It
0 0 0
10 a4
40
60 9 21
0
Ls
0
93
8
0
91 om
0 o
4 O
s0 10
14Itoo 3i 21 1
-
63
-
ANNEX 7 Page 6 of 8
Policy
AdvisorgM
xrice
01
Duuipliua
QuauY Iuh
1.nwnff
6tat b
4.11 8 $.
