Page 1 INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE I. Basic Information Date prepared/updated: 05/01/2008 Report No.: AC3115 1. Basic Project Data Country: Brazil Project ID: P094233 Project Name: Espirito Santo Biodiversity and Watershed Conservation and Restoration Project Task Team Leader: Gunars H. Platais GEF Focal Area: Biodiversity Global Supplemental ID: Estimated Appraisal Date: May 12, 2008 Estimated Board Date: July 24, 2008 Managing Unit: LCSEN Lending Instrument: Specific Investment Loan Sector: General agriculture, fishing and forestry sector (100%) Theme: Biodiversity (P);Other environment and natural resources management (S) IBRD Amount (US$m.): 0.00 IDA Amount (US$m.): 0.00 GEF Amount (US$m.): 4.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: BORROWER/RECIPIENT 2.69 GLOBAL ENVIRONMENT - Associated IBRD Fund 2.53 Local Sources of Borrowing Country 2.78 8.00 Environmental Category: B - Partial Assessment Simplified Processing Simple [] Repeater [] Is this project processed under OP 8.50 (Emergency Recovery) or OP 8.00 (Rapid Response to Crises and Emergencies) Yes [ ] No [X] 2. Project Objectives The project’s development objective is to support the adoption of sustainable land use practices in two key Atlantic Forest watersheds in Espirito Santo, thereby contributing to higher income for farmers and improved water supplies. This objective will be met through an increase in area under sustainable land use practices which will be accomplished in part through the establishment and implementation of payment mechanisms for watershed conservation; and an increase in areas that adopt Sustainable Land Management (SLM) practices through the implementation of Payment for Environmental Services mechanisms and the participation and capacity building of local actors. The primary target groups are the farmers in the watersheds, IEMA, CESAN, and other government agencies to be strengthened, and the Watershed Committee. The entire population and industries of Vitorias metropolitan area dependent on reliable water supplies would also benefit, complementing the activities of the Aguas Limpas Project Page 2 The global objective is to reduce threats to globally important biodiversity (for example, the endangered Muriqui monkey) from agricultural production systems and increase habitat for species in two key rainforest watersheds of the Atlantic Forest. These objectives can be met through the restoration and/or protection from encroachment of areas of critical habitat and through the implementation of sustainable market-based mechanisms to finance Protected Areas (PA) management and conservation of biodiversity in agricultural landscapes. 3. Project Description Component 1. Strengthening the policy and regulatory framework in the watershed: Improving biodiversity conservation and watershed conservation in the Jucu and Santa Maria de Jetiba watersheds requires strengthening the participatory institutions responsible for planning and implementing NRM strategies in the watersheds, including technical agencies capable of monitoring conditions and developing responses to problems and governance mechanisms that bring stakeholders together in participatory ways to agree on appropriate responses. Component 2. Targeted biodiversity protection and Protected Area management: This component will undertake targeted intervention to restore and enhance the protection of critical areas for biodiversity conservation, and support the PAs in the watersheds, including the elaboration of management plans, and assisting land owners in the creation of private nature reserves. Component 3. Integrating biodiversity in production landscapes: Sustainable management of landscape mosaics requires a two-pronged approach: (a) measures to remove obstacles to the adoption of land use practices that would be beneficial both to farmers and the environment, such as lack of knowledge or non-availability of inputs; this sub-component will seek to remove these barriers; and (b) measures to induce the adoption of practices that generate positive externalities, particularly in biodiversity conservation and water services protection, but are unattractive to individual land users; this sub-component will seek to address these tradeoffs by fostering a range of markets for biodiversity goods and services, and in particular by developing payment for environmental services (PES) mechanisms in collaboration with water users (such as CESAN and small HEPs), mechanisms that will also contribute to PA support. Component 4. Monitoring and Evaluation: The project will establish monitoring and evaluation mechanisms at two distinct levels: a) a project-level Monitoring and Evaluation Framework for the activities covered in the project which will track progress in implementation, measure intermediate outcomes, and evaluate project impacts; and b) a regional-level Information System covering the two basins intervened by the project and which will support the creation of an environmental information system that will allow for the tracking of key variables across various institutions. A communication and dissemination strategy will also be developed and implemented under this component. Page 3 4. Project Location and salient physical characteristics relevant to the safeguard analysis The project focuses on two critical, high-biodiversity watersheds in south-central Espirito Santo: the watersheds of the Jucu and the Santa Maria da Vitoria Rivers, comprising 401,000 ha, or 9 percent of the State’s territory. Of particular interest are the mountainous upper parts of the two catchments, which were settled more than a century ago by European immigrants and are still primarily held by smallholder agricultural families. Farming consists of corn, beans, tubers, horticulture, coffee, bananas, fruit trees, planted forest, cattle, and poultry. Farming has led to a reduction of forest cover and fragmentation, encroachment of steep slopes and protected riparian forest, soil erosion, water pollution, silting of rivers, and pasture degradation. In recent decades, agricultural use of steeper hillsides has decreased, allowing the gradual recovery of many areas (secondary forests). Still, habitat loss and degradation from farming remain significant threats to biodiversity and to the ecological functions of this ecosystem. Riparian corridors are particularly threatened due to their higher suitability for irrigation and their greater accessibility. These two watersheds are unique in the State, and in the Atlantic Forest biome, because they retain more than 40 percent of their original forest cover and represent more than a third of the remaining rainforests in the State. The degree of forest cover is even higher in the upper parts of the watersheds, where smallholder agriculture prevails. The watersheds include four public Protected Areas (PAs) (a state park, a biological reserve, and two less strictly protected Areas of Environmental Conservation [APAs]). Despite human pressure, the area still harbors extremely high levels of biodiversity across all categories, and has been identified as containing priority areas for biodiversity conservation within the Central Ecological Corridor of the Atlantic Forest. 5. Environmental and Social Safeguards Specialists Mr Gunars H. Platais (LCSEN) 6. Safeguard Policies Triggered Yes No Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Forests (OP/BP 4.36) X Pest Management (OP 4.09) X Physical Cultural Resources (OP/BP 4.11) X Indigenous Peoples (OP/BP 4.10) X Involuntary Resettlement (OP/BP 4.12) X Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X Page 4 II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts: With its planned interventions, the project touches on several safeguards, as listed above. The project intends to primarily support the recovery of major environmental functions of the forests, that of maintaining its inherent biodiversity, soil conservation, and hydrological and climate regulation. The project area has been impacted by more than a century of traditional human use. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: The project will ensure that any tree planting will be with native species appropriate to the locale, and will avoid the use of pesticide- and herbicide-intensive techniques. The project will support an Integrated Pest Management (IPM) approach, and pesticide use will neither be stimulated nor increased under any new farming model; rather it will be reduced. It is, however, possible that in some cases, even if temporarily, the use of some products of low toxicity and low residual staying power could be used during the first year in which forest species are being introduced. When these circumstances present themselves, the guidelines presented in the Project Operations Manual will be strictly followed. The project does not need a specific chapter on pest management because there are no known issues, and no significant quantities of pesticides are expected to be procured. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. 4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. An Environmental Assessment was prepared and made public through the Environmental Agencies website (http://www.iema.es.gov.br/). The implementing agency is the State Environmental Agency (IEMA) who is fully capable of addressing safeguard policy issues. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. The key public sector stakeholders of the project are the State Secretariat for Environment (SEAMA); its executing agency and project implementing agency the State Institute for Environment and Water Resources (IEMA); the State Secretariat of Planning and Development (SEDES); the State Secretariat for Agriculture (SEAG) and its extension and research arm INCAPER, the State water utility, CESAN; and the State Finance Secretariat. Page 5 The key Civil Society Organizations (CSO) are the watershed management committees from both watersheds and the environmental and agricultural offices of the municipalities within the watersheds. There are a few non-governmental organizations (NGO) that are active in the field and have participated in project preparation and will continue to be tapped for project implementation. Through the watershed committees and the NGOs a wide consultative process has been put in place with ample discussions of the project having taken place. Feedback from these meetings are reflected in project design. These meetings have corroborated that people potentially affected by the project would be in a positive way and therefore there are no concerns about negative impacts on livelihoods through activities supported by the project. B. Disclosure Requirements Date Environmental Assessment/Audit/Management Plan/Other: Was the document disclosed prior to appraisal? Yes Date of receipt by the Bank 04/01/2008 Date of "in-country" disclosure 04/01/2008 Date of submission to InfoShop 05/01/2008 For category A projects, date of distributing the Executive Summary of the EA to the Executive Directors Resettlement Action Plan/Framework/Policy Process: Was the document disclosed prior to appraisal? Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop Indigenous Peoples Plan/Planning Framework: Was the document disclosed prior to appraisal? Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop Pest Management Plan: Was the document disclosed prior to appraisal? Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop * If the project triggers the Pest Management and/or Physical Cultural Resources, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/Audit/or EMP. Page 6 If in-country disclosure of any of the above documents is not expected, please explain why: C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is finalized by the project decision meeting) OP/BP/GP 4.01 - Environment Assessment Does the project require a stand-alone EA (including EMP) report? Yes If yes, then did the Regional Environment Unit or Sector Manager (SM) review and approve the EA report? Yes Are the cost and the accountabilities for the EMP incorporated in the credit/loan? Yes OP/BP 4.36 - Forests Has the sector-wide analysis of policy and institutional issues and constraints been carried out? N/A Does the project design include satisfactory measures to overcome these constraints? N/A Does the project finance commercial harvesting, and if so, does it include provisions for certification system? No The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the World Bank's Infoshop? Yes Have relevant documents been disclosed in-country in a public place in a form and language that are understandable and accessible to project-affected groups and local NGOs? Yes All Safeguard Policies Have satisfactory calendar, budget and clear institutional responsibilities been prepared for the implementation of measures related to safeguard policies? Yes Have costs related to safeguard policy measures been included in the project cost? Yes Does the Monitoring and Evaluation system of the project include the monitoring of safeguard impacts and measures related to safeguard policies? Yes Have satisfactory implementation arrangements been agreed with the borrower and the same been adequately reflected in the project legal documents? Yes Page 7 D. Approvals Signed and submitted by: Name Date Task Team Leader: Mr Gunars H. Platais Environmental Specialist: Mr Gunars H. Platais Social Development Specialist Additional Environmental and/or Social Development Specialist(s): Approved by: Regional Safeguards Coordinator: Mr Reidar Kvam Comments: Sector Manager: Ms Laura E. Tlaiye 05/01/2008 Comments: