Integrated safeguards data sheet concept stage report No.: Ac5187

Report No.: AC5187

B. Project Objectives [from section 2 of PCN]

The proposed Project Development Objective is to expand and consolidate the protected areas system in the Brazilian Amazon region and implement mechanisms for their financial sustainability. The Global Environment Objective is to assure the long-term conservation and sustainable use of the Brazilian Amazon#s biodiversity of global importance.

The specific objectives of the project are: (i) to create 13.5 million hectares of additional new protected areas in the Brazilian Amazon; (ii) to consolidate 32 million hectares of protected areas (including 6.5 million hectares of pre-existing areas not previously supported by the project); (iii) to further capitalize the ARPA Endowment Fund (FAP), with a goal of raising US$ 100 million by the end of Phase 2; (iv) to test and operationalize additional mechanisms and procedures for financial sustainability of PAs; and (vi) expand the use of the environmental monitoring system for protected areas.

As most of the targets of ARPA#s Phase 1 have been met, the present proposal for the project#s Phase 2 will scale-up on the work carried out during Phase 1, building on its achievements, innovations and lessons learned. ARPA Phase 2 will retain the structure of Phase 1, and include the following components:

Component 1 - Creation of new protected areas. This component will support the creation of new PAs in priority areas of high biodiversity importance with important ecological services in the Brazilian Amazon Biome. It will also assess priorities for the creation of these new PAs to assure the ecological representativeness of biodiversity, the maintenance of ecological processes and the protection of Indigenous Peoples# livelihoods. This component will target the creation of 13.5 million hectares of new PAs (including parks, biological reserves, ecological stations, extractive reserves and sustainable development reserves) over the next four years. PAs under those five categories may be created at federal, state or municipal levels. This component will benefit from the protected area creation guidebook developed under Phase 1, which is based on lessons learned from different parts of the process, such as land tenure regularization, community involvement, and boundary-setting.

The selection of sites for PA creation will be based on the Map of Priority Areas for the Conservation, Sustainable Use and Benefit-Sharing of the Brazilian Biodiversity, the updating process of which, carried out from 2005 to 2007, was supported by ARPA Phase 1. This process will involve broad public consultation. The preparation of environmental, socioeconomic and land tenure diagnoses of the selected priority areas will also be required for the creation of Protected Areas. Finally, due to the characteristics of land tenure in the Amazon region, a significant portion of the forest areas indicated by the Map of Priority Areas comprises unclaimed public lands, a condition that minimizes the necessity of land acquisition by the project. This approach was successful in Phase 1 and is expected to be replicated in Phase 2.

Component 2 - Consolidation of protected areas. The main objective of this component will be to promote the management of existing and recently created protected areas in the Amazon region. It will target the consolidation of 32 million hectares of PAs (this area includes 6.5 million hectares of pre-existing PAs not previously supported by the project). The component will focus on consolidation activities and their associated benchmarks, such as land demarcation of protected areas; outfitting protected areas with basic infrastructure, equipment, and core staff (this will be funded in whole by Brazilian government resources) to secure basic actions of protection and community outreach; the elaboration and implementation of management plans for new and existing protected areas including climate-resilience measures and focus on threatened species; supporting community participation and collaborative management of the protected areas through the creation and strengthening of local Advisory Councils, as well as strengthening the capacity of local associations and committees; and building capacities of staff allocated to the protected areas.

Phase 1 placed greater emphasis on the creation of PAs rather than their consolidation, given the urgency to secure land regularization. This second phase will increase focus on this component, since there is now a larger number of areas to consolidate # those that were already created and the increased goal for Phase 2. Phase 1 was initially aimed at fully consolidating Strict Protection PAs. However, due to the growing recognition of the role of Sustainable Use PAs in biodiversity conservation and in securing sustainable livelihoods for local and indigenous communities, the project will replicate consolidation activities in these PAs as well under Phase 2.

Component 3 - Long-term sustainability of protected areas. The objective of this component is to consolidate mechanisms for the long-term financial sustainability of protected areas consolidated under ARPA. One of the main achievements of Phase 1 was the establishment and initial capitalization of the Fundo de Áreas Protegidas (FAP), ARPA#s endowment fund, which reached US$ 23.9 million at the end of Phase 1. FAP was capitalized with resources from ARPA#s donors (GEF, KfW, and WWF) and with over US$ 3 million from other donors, such as O Boticário and Natura (two Brazilian cosmetics companies). The diversity of donors demonstrates ARPA#s high-profile as a major project in Amazon.

This component will work to further capitalize FAP, with a goal of increasing the endowment fund to US$100 million by the end of Phase 2. It will also support institutional capacity building to develop effective and transparent mechanisms for the disbursement of FAP resources to ensure the proper post-consolidation management of protected areas. Other options, in addition to the endowment, will be explored under this component to assure the necessary financial sustainability of the protected areas system. This will include advancing the search for and testing of appropriate revenue-generating mechanisms for PA sustainability and income-generating activities for communities in buffer zone areas to complement existing government mechanisms and fully meet all protected areas management needs.

Component 4 - Project Coordination, Monitoring and Management. The institutional arrangements for Phase 2 will replicate and build on the structures of the original arrangements, which were considered innovative and found successful by the Bank and by the Government. This component will support the improved operation of the established Project Coordination Unit (UCP) within the Ministry of Environment (MMA), as well as the operation of FUNBIO. It will also support the strengthening and coordination of the project#s advisory board (namely the Technical Forum, Scientific Advisory Panel, and Project Commissions). During Phase 1, MMA and FUNBIO developed several innovative coordination and management systems, such as: (1) the Contas Vinculadas that allow for more autonomy of PA administrators to spend small amounts of their budgets; (2) the Cérebro system used by FUNBIO and PA administrators to plan and monitor PA budgets; (3) the Conservation and Investment Strategy, which is the project#s budget planning framework; and (4) ARPA#s Integrated System of Coordination and Management (SiSARPA), an IT tool that coordinates the Cérebro system with the National Registry of Protected Areas, facilitating communication among project participants at all levels. These innovations will be maintained and improved during Phase 2.

The MMA unit will be responsible for the overall coordination of the four components, and will be specifically responsible for: (a) preparation of annual operating plans; (b) preparation of supervisory reports or any request for information by donors or the Bank; (c) monitoring and evaluation of project activities; (d) assurance that subsidiary agreements and financial execution are effectively carried out; (e) implementation and compliance monitoring of the safeguards in collaborations with ICMBio and State Environment Agencies and (f) communication and dissemination activities of ARPA. FUNBIO will be responsible for procurement and financial management, for both the project and for FAP.

The specific objectives of this component are that: (i) the strengthened PCU is effectively coordinating the project; (ii) the Environmental Monitoring System is implemented and operational, and generating useful information on the biodiversity, socio-environmental, landscape and climate issues related to protected areas; (iii) ARPA#s information system (SiSARPA) is fully developed and integrated with the financial management system of PAs to support decision-making; and (iv) the Conservation and Investment Strategy is updated.
D. Project location (if known)

Brazilian Amazon Region, spreading over the following states: Amazonas, Pará, Acre, Amapá, Rondônia, Roraima, Mato Grosso and Tocantins.

This is the second phase of a primarily biodiversity conservation project, to be implemented by the Ministry of the Environment, in coordination with its executing agencies: IBAMA, ICMBio, and state environmental agencies, all of which apply and comply with the comprehensive Brazilian environmental legislation and resettlement procedures. As these agencies also implemented the first phase of the project, they are familiar with the Bank#s safeguards, which complement Brazilian legislation regarding environmental and resettlement issues.

Ms Judith M. Lisansky (LCSSO)

Ms Adriana Moreira (LCSEN)
II. SAFEGUARD POLICIES THAT MIGHT APPLY

Safeguard Policies Triggered	Yes	No	TBD
Environmental Assessment (OP/BP 4.01)	X
The project is expected to generate a positive impact on the environment, with the expansion of the Protected Areas. The creation and consolidation of PAs has proved to be a viable strategy to reduce biodiversity loss and deforestation in the Brazilian Amazon, through the containment of anthropogenic pressures and the promotion of the sustainable use of natural resources. Also, the simple fact of designating land-use is already hugely effective in counteracting the illegal land market, by conferring permanent private and public land ownership rights. In relation to social aspects, the project will also have positive impacts since PAs are important to secure land tenure for traditional communities and eliminates or greatly reduces the risk of these communities being expelled or losing access to natural resources for their livelihoods. However, given the success of Phase 1 in creating new PAs, there is now less land available for the creation of additional protected areas, specifically in the deforestation frontier. This aspect increases the likelihood for conflict, despite the existence of a strong legal legislation framework for public consultation for creation of new PAs (Law of the National System of Protected Areas - SNUC). Nevertheless, the process to review and update the Amazon portion of the Map of Priority Areas for the Conservation and Sustainable Use of Brazilian Biodiversity, supported by ARPA I in 2006, incorporated community participation aspects that contributed to mitigate potential conflicts in the process of creation of new PAs. This map will help identification of potential areas for creation of new PAs under ARPA II. To further address the issue of eventual conflicts, any PAs creation process will involve broad public consultation. During Phase 1, the governmental agencies implementing ARPA increased capacity to conduct public consultation processes. It is now widely accepted that public consultation allows for adjustments in the PA creation process, responding to needs and demands of local stakeholders. During the previous operation 10.8 million hectares of sustainable use reserves were created combining social demands and priority areas for biodiversity conservation and also implementing subprojects for alternative sustainable income generation in communities located in buffer zones of threatened protected areas. ARPA Phase 2 will invest in improving the capacity of local communities to access governmental policies and programs directed at the sustainable use of natural resources. The preparation of environmental, socioeconomic and land tenure diagnoses of the selected priority areas will also be required for the creation of Protected Areas due to the characteristics of land tenure in the Amazon region, where a significant portion of the forest areas indicated by the Map of Priority Areas comprises unclaimed public lands, a condition that minimizes the necessity of land acquisition by the project. This approach was successful in Phase 1 and is expected to be replicated in Phase 2. Finally, the implementation agencies (MMA, ICMBio and State agencies) have already developed and successfully implemented an environmental management framework, including a resettlement framework, for the first phase of the program. These frameworks will be strengthened along with the existing conflict resolution mechanisms which could include the creation of multiagency working groups to deal with specific issues. Socio-environmental aspects and safeguards will be monitored at the PA level by the responsible agencies and at the Project level by the Ministry of the Environment (MMA).
Natural Habitats (OP/BP 4.04)	X
The potential positive impact of the project for biodiversity is significant given the major focus of the project in the creation and consolidation of Protected Areas on the Amazon Basin, including parks, biological reserves, ecological stations, extractive reserves and sustainable development reserves. In these areas, traditional communities and indigenous groups can plan land use aiming at income generation through the continuation of their traditional practices, while averting deforestation. Traditional communities and indigenous peoples land management and production are generally compatible and benign in terms of impacts on biodiversity, the changing context surrounding community lands bring increasing pressure to carry out non-traditional forms of land use and management. Project activities and capacity-building will seek to foster conservation and sustainable management of natural resources while providing tools such as participatory diagnostics and planning activities, strengthening of local organizations, participatory monitoring and evaluation that will generate an improved platform for community decision-making on a sustainable use of the available natural resources.
Forests (OP/BP 4.36)	X
The project is expected to have a positive impact on the forest since the creation of Protected Areas is valuable tool for the protection of long-term ecological integrity of biodiversity-rich areas, the containment of anthropogenic pressures and the promotion of the sustainable use of natural resources. The PAs to be created under the project includes Extractive Reserves and Sustainable Use Reserves, in which traditional communities can plan land use aiming at income generation through the continuation of their traditional practices. Some of these activities might entail use of forest resources. However, any use is expected to be small-scale or low-impact in nature and would be compatible with the safeguard requirements in regard to community or small-scale forestry activities. The standards and methodologies would be included in the environmental management framework with support for capacity-building in regards to use of forest resources, both timber and non-timber.
Pest Management (OP 4.09)		X
Physical Cultural Resources (OP/BP 4.11)	X
It is not expected that project implementation would have any negative impact on physical cultural resources. However, chance findings during implementation activities of subprojects are possible. To handle such findings, Brazil has a well-developed legislative and normative framework, which is under the oversight of the National Institute for Protection of Historical and Archeological Sites (IPHAN), and FUNAI also has established procedures for safeguarding historical or prehistorical patrimony pertaining to indigenous peoples, via the National Indian Museum which is an agency of FUNAI. The screening and actions procedures for chance finds would be incorporated into the environmental screening section of the project Operational Manual. Additionally, the process to identify and demarcate indigenous lands includes anthropological reports where sacred sites are considered, although the information system needs to be improved to make sure that the identified areas are adequately mapped and included in the MMA#s SIG database for their better monitoring and accessibility for those peoples who deem them sacred.
Indigenous Peoples (OP/BP 4.10)	X
The project triggers OP 4.10 since the project is located in the Brazilian Amazon where about 60% of Brazil's indigenous population or approximately 420,000 indigenous persons live. The preliminary screening indicates that 98% of regularized Indigenous Lands in Brazil are located in the Amazon Region and comprise almost 21% of its territory (approximately 90 million hectares of a total of 430 million hectares in the Amazon). There is also evidence of some 70 isolated or uncontacted indigenous groups in the Amazon. In the previous operation (ARPA), an Indigenous Peoples Planning Framework (IPPF) was applied during implementation whenever project activities of creating or consolidating Protected Areas had any direct or indirect impacts on indigenous peoples whether positive or potentially negative. Project screening procedures ensured that protected areas under the project did not overlap indigenous lands or land claims. Lessons learned during the previous operation will be applied to the new operation and ARPA II will ensure that project socio-environmental diagnoses will also include socio-cultural analysis of traditional land and resource use and significance and, where relevant, specific measures to safeguard the physical and cultural integrity of indigenous peoples living in voluntary isolation. To comply with OP 4.10, during project preparation a social assessment will be carried out, as well as prior informed consultations with indigenous groups. Building on lessons learned in the previous operation, an updated Indigenous Peoples Planning Framework (IPPF) for the current operation will be prepared and consulted, and publicly disseminated prior to appraisal.
Involuntary Resettlement (OP/BP 4.12)	X
Based on a review of available information, the Protected Areas likely to be created or consolidated under this project have a very small probability of causing the involuntary resettlement of inhabitants or the taking of land. This is because the National System of Conservation Units Law (SNUC, 2000) formally requires that people inside three types of Protected Areas be relocated. Therefore, OP 4.12 is triggered. Since SNUC was adopted the general practice in Brazil has been to completely avoid the physical resettlement of inhabitants from the three types of Protected Areas by a variety of means, such as reclassification of all or parts of Protected Areas, or even in some cases by excising portions of the areas. Furthermore, a new Conflict Management Coordination Unit at ICMBio, which will be further strengthened under the proposed project, is carrying out innovative inter-institutional and participatory work to develop best practices for the resolution and/or management of a wide range of conflicts related to human communities in Protected Areas. In the previous operation (ARPA), involuntary resettlement was avoided completely by the reclassification of Protected Areas with residents to the types that could include a human population. Lessons learned during the previous operation will be applied to the new operation. Even more importantly, the Ministry of Environment remains committed to building and consolidating a PA system without removing or disrupting the lives or livelihoods of the resident populations. Nonetheless, since there remains a small possibility of resettlement, during project preparation a Resettlement Policy Framework (RPF) will be prepared and consulted, as well as publicly disseminated prior to appraisal. Because the operation is a Protected Areas project, there may also be a potential for nonphysical displacement such as when the creation or consolidation of Protected Areas causes local populations to have restricted or even to lose access to natural resources they previously used. In order to mitigate these adverse impacts, the previous operation (ARPA) applied a Process Framework that included a range of approaches from participatory co-management to the development of alternative livelihood activities. Additionally, the previous operation was important in providing the responsible governmental agencies with the capacity and means to improve monitoring and control actions directed at the use of natural resources in PAs. Lessons learned during the previous operation will be applied to the new operation. During project preparation, a Process Framework (PF) will be prepared and consulted, as well as publicly disseminated prior to appraisal.
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

Environmental Category: B - Partial Assessment

1. 
   Target date for the Quality Enhancement Review (QER), at which time the PAD-stage ISDS would be prepared: 07/08/2010
   

2. 
   For simple projects that will not require a QER, the target date for preparing the PAD-stage ISDS: N/A
   

C. Time frame for launching and completing the safeguard-related studies that may be needed. The specific studies and their timing¹ should be specified in the PAD-stage ISDS.

The final drafts of the EA and EMF should be completed by July 30, 2010.

The final draft of the IPF should be completed by July 30, 2010.