Document of

The World Bank

FOR OFFMCIL USE ONLY

Ltd. 3I754-R.

Repont No. 8146-BR

STAFF APPRAISAL REPORT

BRAZIL

NATIONAL ENVIRONMENTAL PROJECT

January 31, 1990

Country Department 1Latin America and the Caribbean Region

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank autborization.

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CURRENCY EQUIVALENTS(As of November 24, 1989)

Currency Unit = Brazilian New Cruzado (NCz$)US$ 1.00 = NCz$ 6.82

WEIGHTS AND MEASURES

1 meter (m) = 3.28 feet1 kilometer (km) = 0.62 miles1 hectare (ha) = 10,000 m2 = 2.47 acres1 square kilometer (km2) = 100 hectares = 0.386 sq miles1 nautical mile = 1853 meters1 cutiic meter (m3) = 1.31 cubic yards or 264.2 US

gallons1 kilogram (kg) = 2.2 pounds1 ton = 1,000 kg = 2,205 pounds

GOVERNMENT OF BRAZIL FISCAL YEAR

January 1 to December 31

IBAMA (THE EXECUTING AGENCY'S FISCAL YEAR)

January 1 to December 31

FOR OMFCUL US ONLY

ABBREVIATIONS AND ACRONYMS

ABEHA Associacao Brasileira de Entidades de Heio Ambiente(Brazilian Association of Environmental Entitiea)

APA Area de Protecao Ambiental (Environmental ProtectionArea)

BA State of Bahia

BAP Bacia do Alto Paraguai (the Upper Paragual Basin -Pantanal)

CEPED/BA Centro de Pesquisa/Bahia (Center for Research, State ofBahia)

CETEC/MG Fundacao Centro Tecnologico de Minas Gerais (Foundation"Technological Cente;", Minas Gerais)

CETESB/SP Companhia de Tecnologia de Saneamento Ambiental, SaoPaulo (Company for Environmental Sanitation Technology,Sao Paulo)

CIRM Comissao Interministerial para os Recursos do Mar(interministerial Commission for the Resources of theSea)

CNIA Centro Nacional de Informacao Ambiental (National Centerfor Environmental Information)

CNPq Conselho Nacional de Desenvolvimento Cientifico eTecnologico (National Council for Scientific andTechnological Development)

COGERCO Coordenacao do Gerenciamento Costeiro (the CoordinationGroup for Coastal Management)

CONAMA Conselho Nacional de Meio Ambiente (NationalEnvironmental Council)

DIRAF Diretoria de Administracao e Financas/IBAMA (IBAMA'sDirectorate for Administration and Finance)

DIRCOF Diretoria de Controle e Fiscalizacao/IBAMA (IBAMA'sDirectorate for Control and Fiscalization)

DIREC Diretoria de Ecosistemas/IBAMA (IBAMA's Directorate forEcosystems)

DIRPED Diretoria de Incentivo a Pesquisa e Divulgacao/IBAMA(IBAMA's Directorate for Incentives to Research andInformation)

This document has a rstricted distribution and may be used by recipients only in the perfonranceof their offical dutiesL Its contents may not otherwise be disclsed without Wotld Bank authodrzation.

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DMI/RG Departamento de Meio Ambiente/Rio Grande do Sul(Department of Environment, Rio Grande do Sul)

DNAEE Departamento Nacional de Aguas e Energia Eletrica(National Department of Water and Electric Energy,electric sector regulatory agency).

DNPM Departamento Nacienal de Produ%ho Mineral (NationalDepartment for Mineral Production/Ministry of Mines andEnergy)

ELETROBRAS Centrais Eletricas Brasileiras S.A. (Federally-ownedelectric utility holding company)

ELETRONORTE Centrais Eletricas do Norte do Brasil S.A.

ES State of Espirito Santo

FATMA Fundacao de Amparo a Tecnologia e Meio Ambiente - SantaCatarina (State Environmental Foundation - SantaCatarina)

FEMA Fundacao Estadual de Meio Ambiente - Mato Grosso (StateEnvironmental Foundation - Mato Grosso)

FEEHA Fundacao Estadual de Engenharia de Meio Ambiente doEstado do Rio de Janeiro (State Foundation ofEnvironmental Engineering of Rio de Janeiro)

FLONA Floresta Nacional (National Forest)

FUNAI Fundacao Nacional do Indio (National Indian Foundation)

IBAMA Instituto Brasileiro do Meio Ambiente e dos RecursosNaturais Renovaveis (Brazilian Institute for Environmentand Natural Renewable Resources (Ministry of theInterior))

IBDF Instituto Brasileiro de Desenvolvimento Florestal(Brazilian Institute for Forestry Development/formerlypart of the Ministry of Agriculture)

IBGE Instituto Brasileiro de Geografia e Estatistica

IEF Instituto Estadual de Florestas

INPE Instituto Nacional de Pesquisas Espaciais (the NationalInstitute for Space Research)

ITCF Instituto de Terras, Cartografia e Florestas - Parana

IUCN International Union for the Conservation of Nature

KfW Kreditanstalt fuer Wiederaufbau (Bank forReconstruction/German Federal Republic)

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MA Ministerio da Agricultura (Ministry of Agriculture)

HHU Ministerio de Habitacao, Urbanismo e Meio Ambiente(hinistry of Housing, Urban Affairs and theEnvironment/extinct in 1989)

MIC Ministerio da Cultura (Ministry of Culture)

MINTER Ministerlo do Interior (Ministry of the Interior)

MM Ministerio da Marinhs (Ministry of the Marine)

MM Ministerio das Minas e Energia (Ministry of Mines andEnergy)

MT State of Mato Grosso

MS State of Mato Grosso do Sul

NGO Non-Governmental Organization

OEMA Orgao Est-dual do Meio Ambiente (State levelenvironmental agency)

PADCT Programs de Apoio a Ciencia e Tecnologia (CNPq),(theprogram of support for science and technology)

PCBAP Plano de Conservacao da Bacia do Alto Paragual(Conservation Plan for the Alto Paraguai Basin(Pantanal))

PCU Project Coordination Unit (Nucleo de Coordenacao Geraldo Programa Nacional do Meio Ambiente)/IBAMA

PNGC Plano Nacional de Gerenciamento Costeiro (The NationalPlan for Coastal Management)

PNMA Programa Nacional do Meio Ambiente (NationalEnvironmental Program)

POA Plano Operativo Anual (Annual Operating Plan)

PR State of Parana

RADAMBRASIL Satellite Imagery Agency/ part of IBGE

RENIMA Rede Nacional de Informacao sobre o Meio Ambiente(National Environmental Information Network)

RIMA Relatorio de Impacto de Meio Ambiente (EnvironmentalImpact Assessment)

RJ State of Rio de Janeiro

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RN State of Rio Grande do Norte

RS State of Rio Grande do Sul

SADEN Secretaria de Assesoramento da Defesa Nacional(Secretariat for Advice in National Defense(Presidency))

SC State of Santa Catarina

SEAMH Secretaria Estadual de Agricultura e Meio Ambiente-Espirito Santo

SECIRM Secretaria da Comissao Interministerial para os Recursosdo Mar (Secretariat of the Interministerial Commissionresponsible for the Resources of the Sea)

SEMA Secretaria Especial do Meio Ambiente (former SpecialSecretariat for the Environment, until 1988 part of theMinistry of Housing, Urban Development and theEnvironment)

SEPLAC Secretaria de Planejamento e Coordenacao (IBAMA) (TheSecretariat for Planning and Coordination (IBAMA))

SEPLAN Secretaria de Planejamento da Presid@ncia da Repdb'ica(Secretariat of Planning of the Presidency of theRepublic/has status of a Ministry)

SIGERCO Sistema de Informacoes do Gerenciamento Costeiro (theInformation System for Coastal Management)

SINIE Sistema Nacional de Informacoes Espeleologica4JNationalInformation System for Caverns

SINIMA Sistema Nacional de Informacoes sobre o Meio Ambiente(The National Information System for the Environment)

SINUC Sistema Nacional de Unidades de Conservacao (theNational System of Conservation Units)

SISNAMA Sistema Nacional do Meio Ambiente (The NationalEnvironmental System/comprises federal and state levelenvironmental agencies)

SMA Secretaria de Meio Ambiente - Sao Paulo

SP State of Sao Paulo

SPHAN Secretaria do PatrimOnio Hist6rico e Artlstico Nacional(Secretariat for the National Historical and ArtisticHeritage/Ministry of Culture)

SSMA Secretaria de Saude e Meio Ambiente - Rio Grande do Sul

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STN Secretaria do Tesouro Nacional (National TreasurySecretariat)

SUDEPE Superintendencia do Desenvolvimento da Pesca (formerSuperintendency for the Development of Fisheries, untilFebruary 1989 part of the Ministry of Agriculture)

SUDHEVEA Superintendencia da Borracha (former Superintendency forthe Development of Natural Rubber, until February 1989part of the Ministry of Industry and Commerce)

UN United NationsUNDP United Nationa Development Programme

VW World Wildlife Fund

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BRAZIL

NATIONAL ENVIRONMENTAL PROJECT

STAFF APPRAISAL REPORT

Table of Contents

Page No.

ABBREVIATIONS AND ACRONYMS ......................... i

I. LOAN AND PROJECT SUMARY .1

II. THE ENVIRONMENT SECTOR. 4

A. Environmental Strategy, Legislation, Policies andInstitutions. 4

B. Environmental Management and Protection. 7C. The National Patrimony of the Ecosystems of the Amazon,

Pantanal, Atlantic Forest and Brazilian Coast .8D. Past Bank Strategy and Lending for Environmental Programs .... l

III. THE PROJECT ..... 12

A. Origin and Rationale for Bank Involvement . . .12

B. Proiect Obiectives .... 12

C. Project Description . . .......................... 13

1. Summary ...................... 13

2. Detailed Features . . ......................... 15

a. Conservation Units ........................... 15

(i) Consolidation of Existing ConservationUnits .. 15

(ii) Establishment of Model ConservationUnits ........... 16

(iii) Establishment of New ConservationUnits ................ 16

(!.v) Training ................. 1(v) Strengthening of the National System of

Conservation Units .17

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Table of Contents (continued)

Page No.

b. Protection of Ecosystems . ..... . ... ..... * .... 18

(i) Pantanal ... 18(ii) Atlantic Forest. . ..20(iii) Brazilian Coast .21

c. institutional Development .22

Mi) Strengthening of IDAMA .22(ii) Support for Environmental Action

Programs ... 25(iii) Technologies for Environmental

Management . .26

(iv) Environmental Education..... ............. 27

3. Project Cost .28

4. Financing Plan .30

IV. PROJECT ORGANIZATION AND MANAGEMENT . . .31

A. Organization

1. Project Management .312. Monitoring and Evaluation .343. Flnancial Management, Accounts and Auditi . .35

B. Procurement .. 37

C. Disbursements and Special Account . . .38

V. PROJECT JUSTIFICATION . . ...... ..... 40

A. Benefits ......... 40

B. Risks . .41

VI. AGREEMENTS .41

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Table of Contents (continued)

ANNEXES

Annex 1. IBAMA Organizational Chart ................. ........... 44

Annex 2. IBAMAs Proiect Xmplementaticn ................. ..... 45

Annex 3. Proiect Components by year .............................49

Annex 4. Summary Accounts by year ... ..... .0. . . ... .... .... **....50

Annex 5. Financing Plan .......................................... Sl

Annex 6. ScheduLle of Disbursements..... ...... .o .............. .. 52

Annex 7. List of Conservation Units included under theConservation Units Component .... ... ........ 53

Annex 8. Coastal Management; Legal and Institutional Fratework ... 56

Annex 9. Monitoring and Evaluation....#* ...... *..............57

Annex 10. Documents available in the Proiect File .... 70

MAPS

Map 1 - Fed-eral Conservation Units (IBRD Map 22019)

Map 2 - Conservation Units of the Atlantic Forest (IBRD Map 22020)

Map 3 - The Pantanal (IBRD Map 22059)

Map 4 - Brazil: Natural Vegetation (IBRD Map 22018)

BRAZIL

NATIONAL ENVIROWMENTAL PROJECT

I. LOAN AND PROJECT SUMMARY

Borrowers Federative Republic of Brazil

Ezecuting Aaencv: Instituto Brasileiro do Meio Ambiente e dos RecursosNaturais Renovaveis (lBAMA).

Amounts USS 117 million equivalent.

Termst Repayable in 15 years, including 5 years of grace, atthe Bank's standard variable interest rate.

Beneficiaries: The project would benefit Brazil's federal and statelevel environmental agencies.

Proiect Obiectivesand Descriptiont The objectives of the project are to strengthen

(i) the protection of the country's most importantconservation areas and imminently endangeredecosystems, with special emphasis on the reduction ofeconomic and environmental losses associated withuncontrolled deforestation, soil erosion, ond air andwater pollution in the Pantanal, Legal Amazon,Atlantic Forest and Brazilian Coast, (ii) theinstitutions of the environmental sector, with specialemphasis on the strengthening of IBAMA and StateAgencies in the Legal Amazon and Pautanal, and (iii)the regulatory framework of the environmental sector.

The project would support the first three-year phaseof Brazil's National Environmental Program (ProgramaNacional do Meio Ambiente--PNHA). It would finance:ti) the strengthening of the National System ofConservation Units, through improved protection ofexisting conservation areas and establisbment ofadditional ones representative of importantecosystems; (ii) Protection of Ecosystems, providingenvironmental management and protection for theacutely threatened Pantanal, Atlantic Forest, and theBrazilian coast; and, (iii) Institutiunal Develowment,by strengthening IBAMA and state level EnvironmentalAgencies, through the provision of staff training,equipment, improved technical information, legal andtechnicAl assistance programs; improvement ofregulations and technical guidelines for environmentalmanagement; and, environmental education.

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Protect Risks: One main risk is that the project executing agency,IBAMI, which has been created only recently, is notyet fully consolidated, and therefore might experienceproblems in ca:rying out this additional program. Tothe extent possible, this risk has been addressed inproject designs IBAMA is to be strengthened under theInstitutional Development component, projectimplementation arrangements and key staff are alreadyin place, and detailed operating agreements withparticipating states have been designed to assureproject execution at the state level. Risks to thecontinuity of the project might arise in connectionwith current changes in the Federal Government andchanges in State Governments in 1991. Regarding thelikely commitment of the incoming new FederalGovernment, prospects for implementing the projectseem good, given that the president elect advocatesstrong environmental programs. While substantialenvironmental policy reforms have been enacted in1989, project success would depend on theidentification and removal of any remaining policieswhich might adversely affect the specific goals ofenvironmental protection in the ecosystems of theAmazon, Pantanal, Atlantic Forest and the BrazilianCoast. Under the project, the policy framework wouldbe addressed through IBAMA sponsored studies of andproposals for strengthening the legai and policyframework. It would also be addressed through theBank's policy dialogue and Economic and Sector Work.

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Estimated Costs:

Local Foreisn Total(US$ M)

A. Conservation Units 37.8 5.4 43.2

B. Protectionof Ecosystems 47.3 5.2 52.5

C. Institutional DeveloDment 42.8 7.8 q0.6

D. Proiect Management,Monitoring and Evaluation 2.5 0.2 2.7

Total Baseline Costs 130.4 18.6 149.0

Physical Contingencies 4.8 1.1 5.9Price Contingencies 10.9 0.4 11.3

Total Proiect Costs 146.2 20.2 166.4*

Local Foreign TotalFinancing Plan (US$ million)

Government 49.4 49.4IBRD 96.8 20.2 __7.0

Total 146.2 20.2 166.4

Estimated Disbursements (US$ million)s

Bank FY 1990** 1991 1992 1993

Annual 19.0 35.0 34.9 28.1Cumulative 19.0 54.0 88.9 117.0

* includes about US$ 10.1 million in local taxes** includes initial deposit of US$ 10 million into the Special Account

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II. THE ENVIRONMENT SECTOR

A. Environmental Strategy. Legislation. Policies and Institutions

2.01 During the 1980s in Brazil, there has been a growing recognitionat the level of Government that sustainable and efficient economicdevelopment can be assured only if development programs are based on soundnatural resource management. The environmental sector has, therefore,emerged as an area for which analysis of policies, institutions andstrategy has become urgent, and Government has made significant efforts toestablish a systematic policy and institutional framework. Brazil'senvironmental sector faces three major issues that Government policy isattempting to addresst

(i) the need for better conservation of bioloaical resources: (a) howbest to provide for the long term conservation of representativesamples of all of the country's endemic systems under its NationalSystem of Conservation Units; and (b) how best to protect the mostvulnerable ecosystems - such as the Pantanal wetlands, theremnants of the Atlantic Forest and parts of the the BrazilianCoast-, now recognized as on the verge of destruction, fromuncontrolled land clearing, pollution and other harmfulactivities;

(i) the need for strenattenina of the institutional frameworks howbest to equip the institutions of the environment sector forenvironmental management, protection, and enforcement of theexisting regulatory framework for environmental licensing,monitoring, protection and planning; and,

(iii) the need for further strenQtheninQ of the regulatorv frameworks(a) how best to harncss the potential contribution of the Amazonto development, without giving rise to the environmental andagricultural production problems of recent years, such as thedegradation of soils and loss of forest cover; (b) how to improvethe management of land and water resources in order to reduce theincidence of soil erosion, water pollution, siltation and theharmful consequences of these for agricultural production, healthand water management (periodic flooding or water shortages), and(c) how to address the effects of rapid urbanization andindustrial growth on air pollution, water management and wastedisposal.

2.02 Over the last two years, in parallel to the preparation of theprogram that would be supported by the proposed project, the Government hasmodified a number of important policies and laws, which conflicted withenvironmental protection and management goals. One major action was theadoption of the *Nossa Natureza' Program for the control of environmentaldegradation, especially in the Amazon. It revised the two key policieswhich had, until its decree in April 1989, directly contravenedenvironmental goals. These weret (a) the prohibition of new fiacalincentives for the establishment of extensive beef cattle schemes in forestareas in the Amazon (previously, these incentives had been a major causefor land clearing in rainforest areas); and, (b) the elimination of

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legislation which required land clearing as proof of land occupancy and aprecondition for land titling (this also had been a major cause of landclearing in the Amazon). The lNossa Natureza' Program also includedmeasures in support of eztractive sustainable uses of the forest; for thecontrol of mining (to cut down on the indiscriminate use of mercury); and,for setting aside large forest areas as National Forests. At the sametime, Government undertook a major institutional reform of the environmentsector, merging the previously dispersed government agencies which hadenvironmental responsibilities into a single National Environmental Agency(IBAXA), with greater autonomy in environmental management and protection.

2.03 LeQislation and Policies. Brazil's national legislationemphasizes the protection of the environment, primarily through (a) theConstitution of October 5, 1988 (Art. 225), (b) Law 6,938 of August 31,1981 and complementary legislation for Amazonia under the 'Our Nature*Program which amended Law 6,938 and was passed on July 18, 1989 (seeProject File, Environmental Legislation). These laws established theNational Environmental System (SISNAMA), which is constituted by federal,state, Federal District, territory, municipal and other public entitiesresponsible for the protection and improvement of environmental quality,under the guidance of the Conselho Superior do '(eio Ambiente andcoordination of the Conselho Nacional do Meio Ambiente. The 1988Constitution considers the ecosystems of the Amazon Forest, the AtlanticForest and Serra do Mar, the Pantanal Matogrossense and the Coastal Zoneas areas of *National Patrimony" in which the environment must bepreserved. State constitutions and laws may, but only in some caseseffectively do, further detail federal environmental legislation andstandards. State level environmental legislation is likely to besignificantly revised, as new state constitutions are passed (1989/90).Most of Brazil's environmental laws have been passed in the 19809, andcontributed to a significant increase in environmental considerations indevelopment planning, and a framework for efficient environmentaladministration has been put in place. However, to realize the legislativemandate, federal and state environmental laws need to be furtherstrengthened and made consistent with legislation and policies in othersectors.

2.04 Institutions. Since February 1989, Brazil has had a singleNational Environmental Agency - IBAMA - under the Ministry of the Interior(Law 7.735 of February 22, 1989). IBAXA substitutes for, and continues theactivities of, four former institutions: the Brazilian Institute forForestry Development (IBDF), the Superintendency for the Development ofFisheries (SUDEPE), and the Superintendency for the Development of NaturalRubber (SUDHEVEA), under the Ministry of Agriculture; and, the Secretariatfor the Environment (SEMA), under the Ministry of Housing, Urban Affairsand the Environment. In the medium term, the merging of these institutionsinto a single, strengthened agency, provides the prospect of more effectivemanagement of the environment sector. In the short term, IBAMA'sIntegration of four predecessor agencies involved a major internalreorganization, which has been carried out underway rince IBAMA'sadministrative statutes and management structure were defined by Governmentin July/August 1989; substantial further strengthening is expected tocontinue over the coming year.

i

2.05 IBAMA's new structure (Annex 1) has, through the distribution ofresponsibilities among its five directorates, assured a certain measure ofcontinuity in the carrying out of the functions of its predecessororganizations. For instance, the directorates of 'Control andFiscalization' and of *Incentives for Research and Information", retainlargely previous functions and programs of SEMA; the directorate ofEcosystems continues the conservation related activities of IBDF; and thedirectorate of Natural Resources continues the comercially orientedactivities of IBDF, SUDHEVEA and SUDEPE. IBAMA's role as a federal agencyis primarily one of promulgating environmental regulations, and preparinglegislation for approval by CONAMA and Congress; it also provides technicalback-up support functions to the states in the areas of licensing, lawenforcement, training, environmental education and information. As asuccessor to IBDF, IBAMA has retained direct operational responsibility forBrazil's system of Conservation Units (para. 2.10). So far, IBAMA hastaken an active stance in law enforcement, for example in its 1989 campaignfor the prevention of forest fires in the Amazon.

2.06 IBAMA is headquartered in Brasilia and has Superintendencies inall 25 States. Its operations are funded out of the federal budget and ofits own income, which is generated through fees and fines applied in theforestry and rubber sectors. Under the 'Nossa Natureza' program a NationalFund for the Environment has been created, which enables IBAMA to receivefinancial contributions from a variety of sources and to pass them on toenvironmental projects. IBAMA also acts as the Secretariat of the NationalEnvironmental Council (CONAMA), which is composed of all SISNAMA agenciesand representatives of the principal sectors of the economy (energy,agriculture, mining etc.). CONAMA has an essential role in reviewingproposals for, and the enforcement of, environmental standards andlegislation.

2.07 Through the 1988 Constitution, most licensing, monitoring,protection and law enforcement functions have been shifted to the state-level, where they should be carried out or organized by the StateEnvironmental Agencies (OEMAs). This change has come at a time, however,when the majority of state-level agencies lack the resources or technicalcapacity to handle these new responsibilities. Most OEMAs have only beencreated in recent years (some states, e.g. Acre, still lack onealtogether), and their technical capacities, administrative structure andpowers vary significantly. Some OEMAs are Secretariats for theEnvironment; others are foundations, *autarquias' or public enterprises, orcombine (e.g. in the case of Rio de Janeiro) a Secretariat with an'executive' branch, usually a foundation. Two surveys, which were carriedout in 1986187, showed that with the exception of a handful of states inthe South and Southeast, the OEMAs tended to operate in precariousconditions, being poorly staffed and equipped, and lacking essentialadministrative and financial autonomy. In 1986/87, country-vide totalenvironmental staff at the OEHAs and SEMA (including all professionallevels) amounted to about 6000. Of these, 50Z were concentrated in Rio deJaneiro and Sao Paulo alone. Concern with the weakness of most OEMAs hasgrown following the promulgation of the 1988 Constitution, and significantefforts have begun in most states, to create or strengthen their OEMAs.

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B. Envirotmental Manaaement and Protection

2.08 Although there has been marked progress, overall environmentalmanagement and protection remain weak. Enforcement of environmental lawsis only partially effective, because of the constraints under which theenvironment sector operates. The use of legal instruments, such asenvironmental impact studies (RIMeAs), licensing (and subsequent monitoringand law enforcement), environmental zoning, and the protection and theconservation of biodiversity in Conservation Units and in unique ecosystemshave been limited by: (a) severe institutional and funding problems, at thefederal and state levels; (b) a lack of clear standards and guidelines forthe preparation, approval and enforcement of RIMAs, which are mandatory forall large industrial, mining, infrastructure or agricultural investments;(c) a lack of well defined regulations; td) a lack of systematicconsideration of environmental factors in regional and sectoral planning;(e) inconsistencies between environmental law and some broader economicpolicies and incentives; (f) a lack of environmental research, as well aspoor use and dissemination of existing scientific information; and, (g) alack of public awareness and understanding of environmental issues. As aresult, serious and in part irreversible damage to the environment hasoccurred in many areas of Brazil, at high economic and social cost. Themajor resulting problems include the sharply accelerated depletion ofnatural renewable resources, especially deforestation in frontier areas,losses in bio-diversity, soil erosion, and air and water pollution.

2.09 If major, irrecuperable losses in genetic materials are to beavoided, Brazil's conservation system must urgently be strengthenedthrough increased protection in existing conservation areas and thedesignation of additional, carefully selected areas. In order to preservesome of Brazil's unique ecosystems, which are on the verge of sufferingirreversible losses, localized conservation efforts will not suffice, andbroader regional programs for environmental management, control of land useand polluting activities, watershed protection and law enforcement for theprotection of flora and fauna will be necessary. Brazil is widelyrecognized as possibly containing the richest diversity of geneticmaterials in the world, and has been classified as one of the world's sixOmega-diversity countries by the World Wildlife Fund. Major examples ofendemisms in Brazil can be found in the Amazon, the Pantanal wetlands, theAtlantic Forest, the Cerrado and along the Coast.

2.10 To protect Brazil's biological resources, Government hasestablished its National System of Conservation Units (SINUC), with theobjective of setting aside and protecting areas essential to theconservation of bio-diversity. As of July 1989, Brazil had 123 federalConservation Units (2.451 of tho national territory) and 205 stateconservation areas. So far, however, the maintenance of this conservationsystem, which requires significant research, protection and land tenureregularization, has been weak, and virtually all of the existingConservation Units (Biological and Ecological Reserves, National Parks,Areas of Environmental Protection, and National Forests) are poorlyprotected. The flora and fauna of some are being decimated by encroachingillegal timber logging, squatters, miners or poachers. Similarly, moststate conservation areas (which have been set aside in addition to thefederal Conservation Units) are also underprotected. Of the federalConservation Units, only about one third have full legal title to the land

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involved. Some, although created by law, have hardly been managed andprotected. Some Conservation Units have been poorly designed and do notsufficiently preserve viable and representative tracts of ecosystems. Forseveral ecosystems, for which no representative samples have been set asideso far, there is an urgent need for the designation of additionalConservation Units. And finally, Government sees a need to strengthen thecriteria for establishing conservation priorities and strategies under theSINUC.

C. The National Patrimony of the Ecosystems of the Amazon. Pantanal,Atlantic Forest and the Brazilian Coast

2.11 Of Brazil's forests, 78Z are located in the Leaal Amazon (asdefined in Law No. 5374 of December 7, 1967), which comprises an area of4,978,247 square kilometers. The Amazon rain forests sustain anezceptionally rich and diverse plant and animal lifes they are thought tosupport some 30,000 species of plant life, whereas only an estimated 10,000species are thought to exist in all of temperate South America. Similarly,the Amazon River contains over 2000 known species of fish, eight times thenumber in the Hississipi River basin and ten times the number found in allof Europe. With regard to the conservation of bio-diversity, and themanagement of land resources in Brazil, the acceleration of deforestationof primary rain forests in the Legal Amazon region in the 19809 has becomean acute environmental problem. According to IBDF, in 1987 and in 1988roughly 20 million hectares of land were cleared per annum, out of which anestimated 8 million annually may have been primary rainforests. This ledto stepped up Government controls, which - based on preliminary data for1989 - succeeded in slowing down further land clearings. Land clearing isconsidered as negative in most cases, because it sets in motion a chain ofevents which result in permanent losses of bio-diversity, sustainableforest-based production and soil fertility. It causes emissions of C02into the atmosphere (which over time could attain levels of globalsignificance in the context of the Ogreenhouseu effect), and massive soilerosion, with consequent siltation of rivers, floodplains and reservoirs.Deforestation to date has been most accentuated in the Southwest of Para,the Northwest of Maranhao, Northern Mato Grosso and Rondonia. The largerscale economic activities of mining, livestock and agriculture, which inthe areas of the development frontier substitute for traditional rubbertapping and other extractive, forest based activities, and very small scaleagriculture practiced by Indians or other traditional riverine populations,are often associated with adverse environmental impacts. Sustainableagriculture is very rarely achieved under Amazonian soil and climateconditions. Typically, forests are only briefly replaced by annual crop orlivestock production; large tracts of eroded and weed-infested lands havealready been virtually abandoned by farmers in the 1980s, because theircultivation on the basis of chemical inputs would be possible only atexceedingly high costs. There have been no successful reforestation norsustainable forest management projects in the Amazon so far.

2.12 Closely related to the question of the occupation of the Amazonianrainforest areas is that of the adjacent Cerrado, much of which is alsolocated in the Legal Amazon and covers some 1,9 million sq. km.; theCerrado contains relatively little researched savannah-type eco-systems.However, with recent advances in agricultural research, the Cerrado is

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considered by many as a viable alternative to the Amazonian rainforestareas for the expansion of Brazil's agricultural frontier. Today, theequilibrium of the Cerrado eco-system is rapidly changed and possiblyendangered by large scale land clearing for agricultural purposes and forthe provision of charcoal for the iron industry. So far, no ConservationUnits have been created in the Cerrado, and it is therefore considered asone of the priority areas in which new Conservation Units need to bedesignated in order to preserve viable samples of its ecosystems.

2.13 The Pantanal (see Map 3) is the largest wetlands area in SouthAmerica. It comprises the entire basin of the Alto Paraguai River, an areaof some 496.000 square kilometers, of which 393.000 square km. are locatedin Brazil, in the States of Mato Grosso and Mato Grosso do Sul, while theremainder is located in Bolivia and Paraguay. The Brazilian Alto ParaguaiBasin encompasses two interdependent ecosystems: the so-called Lower Basin(or Pantanal floodplain) with some 160.000 sq. km., and the Upper Basin (orRim). The Lower Basin receives its waters from the Upper Basin and remainsflooded for long periods. The Pantanal floodplain is the habitat for aunique and extremely rich array of wildlife. In addition to tourism, theeconomic importance of the Pantanal is based on livestock activities, whichhave been carried out since colonial days, apparently without disturbingthe ecological balance of the region. Since the 19709, this traditionalbalance has been upset as a result of the expansion of the agriculturalfrontier in the Upper Basin. The principal factors are (a) soil erosionassociated with the large scale, mechanized production of soy beans andrice; (b) compacting of the soil through the use of heavy farm machinery,preventing percolation of water, and leading to heavy run-off, increasederosion and siltation of rivers, and (c) the intensive use of agro-chemicals, which are washed into the standing waters of the Lower Basin(the period of the heaviest use of agro-chemicals coincides with the cycleof the Piracema, a principal species of fish). Fish are also threatened byuncontrolled overfishing, and, most recently, by the dumping of hazardouschemicals, especially of large quantities of mercury, used in gold mining.Fish, in turn, are essential to the food chain that guarantees the survivalof most other wildlife in the Pantanal. Other agents of environmentaldegradation are (d) heavy deforestation in the Upper Basin, as well asalong river banks, (e) uncontrolled urban and industrial discharges intothe river system, (f) the construction of dikes and roads, and (g) in theLower Basin, large scale predatory hunting of commercially valuablespecies, such as alligators ("jacares', prized for their hides), jaguars,snakes, parrots, etc., and fishing and mining (some of which involves heavydredging). As a result of the joint impact of all of these factors,several species in the Lower Basin, and the survival of the Pantanal eco-system as a whole are thought to be seriously threatened.

2.14 The Atlantic Forest (Mata Atlantica) of Brazil, which extendsalong the Brazilian coast from Rio Grande do Sul to Rio Grande do Norte(over a length of about 1.600 km. and between 20 and 200 km. inland), hasbeen classified by the International Union for the Conservation of Nature(IUCN) and the World Wildlife Fund (VWF) -s one of two tropical forests inthe world threatened with imminent extinction. Less than 3Z of theoriginal pre-colonial forest cover is left, and only a small fraction ofthe remaining forest has protected status. The remnants of the AtlanticForest are located in the midst of Brazil's most densely occupied andindustrialized regions. Much of the Atlantic Forest has been destroyed in

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the process of colonial occupation. Further environmental degradation iscaused today by the combined impact of urban, industrial, mining, land-clearing and logging activities and by a general lack of law enforcementand other munagement and protection measures. Today, the remaining forestsare affected by soil erosion, the siltation of rivers, and a reduction innumbers of plant and animal species. In addition to its importance for themaintenance of bio-diversity, the remaining Atlantic Forest fulfills othercritical functions, such as protecting steep hillsides from erosion andlandslides in this area of heavy rainfall, and protecting the aquifers ofthe country's most populous zones and major cities. The remaining forestsare also home to important resorts and centers of tourism. The AtlanticForest is unusually rich in endemisms,- various types of primates and othermanmals, birds and plant species. A variety of ecological sub-systemsexist in the Atlantic Forest, due to its north-south extension and changingaltitudes (ranging from 2000 meters to coastal mangroves and islands alongthe coast). Several Conservation Units are located in the Ocean MountainRange (Serra do Mar) section between the States of Espirito Santo and SantaCatarina, where, with a few interruptions around major urban centers orrivers, a continuous stretch of forest remains intact. However, importantfragments in urgent need of preservation also exist further north (seeMap 2).

2.15 Brazil's Coastal Zone extends over 7.408 km., encompassing 17 ofthe nation's 25 states. Government considers environmental planning,administration and law enforcement mechanisms for Brazil's coastalecosystems as largely inadequate. The Coastal Zone has sustained thegreatest environmental changes since early colonial days, but only inrecent years has more attention been given to the need for better knowledgeand protection of the coastal environmunt. The acute pressure on andpotential environmental hazards to land and water ecosystems along Brazil'scoastline result from the highest population concentrations in the country,and competing urban, industrial, fishing, shipping, tourism and strategicuses, and prospecting for oil and gas. More than half of Brazil'spopulation live within less than 60 km of the coast, and mostpetrochemical centers and 40 industrial districts are located within thesame range. Off shore, about 1400 drills for petroleum have been carriedout, accounting for approximately 45X of known Brazilian reserves.Fipheries account for a production of seven to eight hundred thousand tonsper year, although little is known about total potential and the dynamicsof the respective fish populations. In order to contain environmentaldangers posed by industrial hazards, to preserve bio-diversity, and tomaintain the potential for tourism, fisheries and other environmentalservices along the coast, environmental management must urgently beimproved. Environmental zoning, planning and protection of biologicalresources would be urgent first steps, to contain further degradation. Inthis context, and in accordance with the specific legislation andinstitutional responsibilities for coastal management (see Annex 8), thefederal government has initiated a program to provide technical assistanceto interested states and municipalities along the coast.

D. Bank Strategy and Past Lending for Environmental Proarams

2.16 Over recent years, environmenta:. issues have assumed increasingimportance in connection with the Bank's program in Brazil, because mostoperations have a direct impact on the environment, and, beyond this,

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because the Bank's interest in sustainable and efficient economicdevelopment can only be assured if development programs in Brazil are basedon sound natural resource management. Externalities must be fully takeninto account or long-term returns to the economy will be misjudged anddevelopment activities riuk being misoriented. The Bank is concerned withthe impact of envirormental problems on people (among others throughproblems in air and water pollution, and sanitation), and of world-wideeffects of environmental problems, such as the deforestation of the Amazonbasin and the extinction of unique species. As an internationalorganization and a supplier of important financial resources to Brazil, ithas made it part of its strategy asd program to assist Brazil in theresolution of these problems.

2.17 The overall objective of a medium-term strategy for assistingGovernment in the environmental sector in Brazil would be to help put inplace an economically rational system of environmental management andprotection, that addresses the issues of conservation of bio-diversity, theprotection of vulnerable ecosystems, institutional development, and anadequate regulatory framework. The establishment of a system ofenvironmental management and protection by the Government of Brazil facesmajor constraints: lack of knowledge, lack of appropriate economicincentives, lack of financial resources, and lack of institutionalcapacity. To help overcome these constraints, the Bank's assistancestrategy in the environmental sector is multi-pronged. Through lendinginstruments, the Bank is helping to finance freestanding projects andenvironmental protection components of projects which have an impact on theenvironment, and it is helping to strengthen the institutional capacity oforganizations directly dealing with the environment, as well as oforganizations in other sectors, whose programs might have significanteffects on the environment. Economic and sector work, as well as relatedsupport for ongoing Brazilian technical assessments of the environment, arebeing deployed to increase the knowledge-base for the identification ofappropriate economic and other policy incentives and interventions thatwould support sound environmental management and protection. In the short-ternm, four objectives call for immediate supports (i) the strengthening ofBrazil's Conservation System; (ii) the protection of critically endangeredecosystems, which otherwise might suffer permanent, irreversible losses,(iii) the strengthening of the institutional capacity to implement andmonitor environmental policies, and (iv) the initiation of a longer termprocess to improve the regulatory framework. Over the medium-term, asenvironmentally-damaging activities become better understood--both on thetechnical and economic fronts-- these institutional regulatory efforts willhave to be supplemented, as appropriate, by more market-oriented policyinstruments such as, pollutant taxes, selective tax-subsidy schemes andmarketable permits.

2.18 The Bank's lending program for Brazil emphasizes a wide spectrumof environmental issues, including soil erosion, depletion of renewableresources and bio-diversity, and air and water pollution from industrial ormining sources. Over the last decade, the Bank has supportedenvironmental, forestry, and Amerindian protection programs under many ofits projects in Brazil. The Northwest Region Development Projects (Loans2060, 2116 and 2353-BR) and the Carajas Iron Ore Project (Loan 2196-BR)were the first significant environmental programs, which were supported bythe Bank; they had mixed results and provided important lessons regarding

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the design and execution of environmental programs. This first set ofprojects was followed by the more successful Loans for the Electric PowerSector (First Electric Power Sector Loan (Loan 2720-BR)), and for PollutionControl in Sao Paulo (Loans 1822-BR and 2831-BR). The most recent loans insupport of environmental management were the Parana Land Management Project(Loan 3018-BR) (which, among others, provided funds for start-upconservation activities in the Atlantic Forest Region of the State ofParana), and the Amazon Basin Malaria Control Project (Loan 3072-BR). In1989, the Bank also agreed to reallocate funds under the Northwest Loans toan emergency campaign for the containment of forest fires in Amazonia. Amajor lesson emerging from the experiences under these projects has beenthe recognition of the importance of the consistency of the objectivesreflected in the overall economic policy framework, and of any specificenvironmental actions supported in project or sectoral lending.

III. THE PROJECT

A. Origin and Rationale for Bank Involvement

3.01 Government has, since 1987, financed the preparation of theproposed project under a national project preparation facility, incollaboration with UNDP. A special task force for the NationalEnvironmental Program (Programa Nacional do Meio Ambiente (PNMA)) wascharged with the responsibility for the project, first within SEMA and nowin IBhMA. As part of the preparation process, several of the activitiesproposed under the project have already been organized and start-upactivities are underway with financial support from IBAMA and a number of.state governments. Based on the range of its project experience in Brazil,its broad technical and economic work on environmental issues. and its gooddialogue with Government, the Bank appears to be in a singular position toassist the Government in the implementation of its National EnvironmentalProgram. Within its broader lending strategy for Brazil, considering theimportance of a comprehensive action program for environmental managementand protection in Brazil, the Bank considers the proposed project as one ofits highest priorities. The proposed project would be one of severalproposed Bank activities designed to support the environment sector.

B. Project Obiectives

3.02 The project's objectives would be to strengthen, in accordancewith Brazil's environmental policies, (i) the protection of the country'smost important conservation areas, (ii) the protection of !mminentlyendangered ecosystems, (iii) the institutions and the regulatory frameworkof the environment sector. In the context of protection activities,special emphasis would be given to a reduction of economic andenvironmental losses associated with uncontrolled deforestation, soilerosion, and air and water pollution in the ecosystems of the Pantanal,Amazonia, Atlantic Forest and the Coast. In the context of institutionaldevelopment, special emphasis would be given to a strengthening of IBAMAand of OEHAs in the Amazon and Pantanal. In the context of the regulatoryframework, spe-ial emphasis would be given to the guidelines for RIMAs,Environmental Zoning, River Basin Management and Ecotoxicology. The

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project would be an important element in the context of the government'sbroader -.wtempts to integrate environmental considerations into regionalplanning and development.

C. Proiect Description

1. ,Sumr

3.03 The project would support the first three-year phase of Brazil'sNational Environmental Program (Proarama Nacional do Meio Ambiente--PNMA).A smmnary of the main components is presented below.

3.04 Conservatio2 Units. This compouent would supportt (a) protectionand management programs and studies for about 50 existing federalConservation Units; (b) development of five of the existing 50 ConservationUnits, which will be supported under the project, into Model ConservationUnits; (c) studies for the establishment of 20, and actual establishment of5 additional, aew Conservation Units; (d) staff training; and (e)improvement of methodologies in the selection and management ofconservation areas under the National System of Conservation Units (SINUC),consolidation of existing federal and state protected areas under a singlenational plan for the conservation, and establishment and implementation ofadditional areas, as may be required to ensure the protection of thecountry's bio-diversity.

3.05 Protection of Ecosysters. This component would support specialprojects for environmental management and protection of the ecosystems ofthe Pantanal wetlands, the remnants of the Atlantic Forest and endangeredecosystems along the Brazilian Coast:

- For the Pantanal integrated programs would be established in theStates of Mato Grosso and Mato Grosso do Sul, for (i) thecontainment of pollution of river systems by toxic substances usedin agriculture, mining and industry; (ii) better protection offlora and fauna by the forest police; (iii) the establishment of asystem for monitoring water quality; (iv) special programs toreduce the negative impact of "garimpow mining techniques on theenvironment; (v) special programs to contain, in collaborationwith agricultural extension services and through afforestation ofriver banks, the present degradation of vegetation in theecological reserve areas of the Taquari and Sao Lourenco riversub-basins; (vi) centers for animal rehabilitation; (vii) theestablishment of guidelines and plans for the development and theconservation of the Basin, (viii) the establishment of anenvironmental data bank; (ix) the training of technicians in themanagement of Jacare and Capivara animal populations (to developbreeding techniques for commercial purposes); (x) studies of thepopulations and habitat use of alligators (caiman c. yacare);(xi)environmental education for local populations; and, (xii) thetraining and equipment of the Pantanal teams within the stateenvironmental agencies of Nato Grosso and Mato Grosso do Sul.

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- For the Atlantic Forest integrated programs would be establishedin the States of Santa Catarina, Parana, Sao Paulo, Rio de Janeiroand Espirito Santo, to (i) protect existing State ConservationUnits, (ii) improve the ecological representativeness of the areasunder conservation through the creation of additional protectedareas, (iii) recover degraded areas, (iv) improve the protectionof watersheds, (v) establish effective law enforcement mechanismsfor pollution control and forest protection; and (vi) strengthenthe OEHAs for purposes of carrying out the specific actionprograms.

- For the Brazilian Coasts programs would be established, in theStates of Rio Grande do Sul, Santa Catarina, Sao Paulo, Rio deJaneiro, Bahia, and Rio Grande do Norte, for environmentalplanning, monitoring and protection. Among others, the programswould initiate longer term improvements in environmentalmanagement through environmental zoning along the Braziliancoastline (including an area of 6 nautical miles offshore) andthrough protection of endangered species in priority locations.

3.06 Institutional Development. This component would supports

- the strenathenins of IBAMA, through provision of managementconsulting services which would assist with the organization ofIRAMA (completing the merging of lIAMA's predecessor organizations- SEMA, IBDF, SUDEPE and SUDHEVEA - and defining theadministrative arrangements); staff training; analysis of andproposals for environmental legislation and policies relevant tothe manAgement of natural resources; establishment of a nationalnetwork and a center for environmental information; and theestablishment of three centers for the interpretation of remotesensing images;

- support for environmental action programs and training at thelevel of OEMAs;

- imarovement of reaulations and technical iuidelines forenvironmenzal management, in connection with Environmental ImpactStatements (RIMAs), environmental zoning, river basin managementand ecotoxicology; and,

- eavironmental education.

3.07 The first two of these components, Conservation Units andProtection of Ecosystems, support complementary urgent environmentalprotection programs, with a geographical concentration in the highestpriority areas for the protection of bio-diversity in the country. Thethird component, Institutional Development, would have broader, country-wide impact through improvements in the regulatory framework andstrengthening of environmental administration and services through Brazil'sfederal and state level envir,)nmental agencies.

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2. Detailed Features

a. Conservation Units

3.08 This component would assist IBAMA to carry out its mandate (as asuccessor to IBDP) of protecting Brasil's federal Conservation Units. Theproject would combine neasures for immediate protection and for medium termimprovements of the SINUC. It would (a) consolidate, develop and manage 50existing federal conservation unito; (b) establish a total of S modelconservation units, representative of different conservation categories, inthe Pantanal, Amazon and Atlantic Forest regions; Ic) create, implement andmanage new conservation Units in ecosystems which are poorly representedunder the SINUC; (d) train staff for the management and protection ofConservation Units; and (e) strengthen the National System of ConservationUnits (SINUC), by harmonizing the conservation objectives, functions andmanagement criteria under the - so far separate - federal and stateconservation systems, and by integrating conservation efforts of IBAMA andOEKAs For the Conservation Units component, IBAMA has submitted to theBank for its r.view and comments (a) descriptions of the tasks and requiredqualifications for each higher level staff or consultant position, (b)draft terms of reference for studies and other consultant assignments, and(c) annual operating plans for 1990.

(i) Consolidation of Existing Conservation Units (US$ 31.2 million)

3.09 This sub-component would provide for urgent protection, landtenure regularization and monitoring needs in priority conservation areas.Fifty Conservation Units (25 National Parks, 9 Biological Reserves, 10Ecological Stations, 5 APAs, and 1 state level ecological station) (see inAnnex 7) have been selected by IBAMA, according to a set of prioritycriteria, to receive investments for their protection, development ---management during the First Phase of the PMA. In this context, theproject would strengthen IBAMA's Directorate for Ecosystems, and finance,as needed, for each of the 50 selected Conservation Units some or all ofthe following items:

(a) (i) the establishment of the minimum necessary infrastructure forthe purposes of protection, administration, visitors (NationalParks), and fire prevention; establishment of the requiredinfrastructure: visitors' centers, headquarters, warehouses, guardposts, fire detection towers, fences, access roads; (ii) equipment(trucks, four-wheel drive cars, boats, power generators, radio);and (iii) maintenance facilities. For each Conservation Unit, aseparate investment plan has been prepared. In 1989, some initialprotection measures have already been carried out in some of theConservation Units, under a separately funded emergency campaignfor the containment of forest fires in Amazonia, and especially inConservation Units (see para. 2.05);

(b) a land tenure survey, and, to the extent possible, regularizationof land tenure, demarcation and cadastral registration ofConservation Unit lands Funds for any indemnifications, whichmight be called for in the context of the regularization of landtenure, would be provided in parallel to the project, out of

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IBAhMAs regular budget and by the Governiment's Titulos da DividaAgraria (these can be used for purposes of conservation of naturalresources, and are made available by Brazil's Monetary Council).Infrastructure investments would only be made in locations forwhich land tenure has been regularized;

(c) preparation of 15 new management plans, which will be essential tothe conservation of bio-diversity in those areas, which arealready under conservation, but still lack the appropriatemanagement;

(d) review and updating of 10 existing management plans, which need tobe improved, to deal with zoning, control, utilization,development of buffer zones adjacent to conservation units,research and other matters, and participation of localpopulations; and,

(e) monitoring of Conservation Units.

As a condition for disbursement for each Conservation Unit, IBAMA wouldhave updated the 1988 baseline data on the status of that Unit.

(ii) Establishment of Model Conservation Units (US$ 5.7 million)

3.10 This sub-component would demonstrate alternative conservationconcepts and the standards which over time should be attained throughoutthe SINUC. Five of the fifty Conservation Units, which will be fundedunder the project (see Annex 7) will be upgraded to the highest standards,as Model Conservation U'tAte. Attainment of these standards would not bepossible for all 50 Conservation Units over the coming 3 years, due to thepresent constraints on qualified staff. The model units would demonstratedifferent conservation concepts and methodologies, and serve trainingpurposes. The following have been selected as Model Conservation Unitssone ecological station in Amazonia (Anavilhanas), one ecological station inthe Pantanal (Taiama), one National Park (Monte Pascoal), one BiologicalReserve (Sooretams) and one APA (Serra da Mantiqueira) in the AtlanticForest (see MAP (1)). For all five Conservation Units, detailed plans havebeen developed as part of project preparation.

(iii) Establishment of New Conservation Units (US$ 3.2 million)

3.11 This sub-component would respond to the need for additional, newConservation Units, which are required to ensure the conservation ofrepresentative samples of the country's ecology and biodiversity. Theproject will finance:

(a) the preparation of 20 basic studies for the creation of new units:10 in the first year in highly threatened ecosystems, and 10 inthe second and third year in other ecosystems also indicated asdeficient in Conservation Units;

(b) in accordance with reconmendations of these studies, establishment(through legal, management and protection arrangements), in thesecond and third project year, of at least five new Conservation

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Units, giving priority to those most acutely endangered. IBAMAwould seek to legally establish these new Conservation Units bythe end of the second project year, submitting the necessary draftlegislation. The remaining proposed new Conservation Units wouldbe established during the Second Phase of the PNMA.

(iv) Training (US$ 1.3 million)

3.12 To address the risks posed by the lack of qualified staff in thearea of conservation, the project would, in close collaboration with theHuman Resources division of IBAMA, finance the establishment of a MobileSchool for Conservation Unit Management. The Mobile School would have twoteams of trainers, and would also rely on specialist consultants. Courseswould have an average length of 15 - 20 days, and involve a maximum numberof 20-25 participants each. In each region (North, Northeast, Center West,Southeast and South) there will be one higher level and one technical levelcourse per year (this adds up to a total of 10 courses/year). The modulesof the basic curriculum, which already has been developed by IBAMA, wouldbe adapted to specific local conditions and problems. The project wouldalso finance studies for the establishment (under the proposed Second Phaseof the PNMA) of a Conservation Units Training Center.

tv) Strengthening of the National System of Conservation Units(US$ 1 million)

3.13 This sub-component would initiate improvements in the NationalSystem of Conservation Units (SINUC). While the SINUC includes asconservation categories National Parks, Biological Reserves, EcologicalStatians, Environmental Protection Areas and National Forests, it lacks, sofar, legal instruments for other conservation categories, which are alsoconsidered as essential by conservationists. The project will supportstudies necessary for the redesign of the SINUC and for the preparation ofa Master Plan of the National System of Conservation Units. In connectionwith the redesign of the SINUC, the project would finance (a) a study onthe conceptual, legal and administrative framework necessary for thestrengthening of the National System of Conservation Units; (b) a detailedsurvey of the ecological representativeness of existing protected areas,with the objective of identifying major gaps; (c) a study of mid- andlong-term staffing needs and incentives required to enhance ConservationUnit staff development opportunities; and, (d) the legal establishment andoperation of the revised SINUC.

3.14 The redesign of the SINUC has the objective of eli 4tuting gapsand making federal and state level conservation strategies consistent,through preparation of (a) programs for the creation of the conservationand management categories necessary to attain broader conservationobjectives country wide (as part of project preparation, a first discussiondraft/proposal for the SINUC has already been prepared); (b) programs forthe creation of additlonal Conservation Units, in order to make the systemmore representative; (c) federal guidelines which would allow the states tostructure state level conservation systems, in accordance with broadernational objectives and complementary to the federal system of ConservationUnits; and (d) criteria and guidelines for Conservation Units which belongto private firms and/or other public institutions. The Plan would also

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consider (e) strategies for decentralizing further the administration ofconservation activities, involving states and municipalities as well aspopulations living in the vicinity of Conservation Units, through extensionservices, and promotion of compatible land use patterns; (g) development ofmore reliable funding mechanisms for the management of Conservation Units;and (g) the involvement of relevant national NGOs. Under the SINUC MasterPlan the existing 123 federal and 205 state Conservation Units would beintegrated within a single national conservation system.

b. Protection of Ecosystems

3.15 This component would support immediate environmental protectionneeds. It would comprise three special projects for the protection of theecosystems of the Pantanal, Atlantic Forest and Brazilian Coast. Thesespecial projects would complement measures supported under the ConservationUnits component, and finance integrated broader environmental action plans,with the objective of slowing down and reversing present processes of acutedegradation. For this component, IBAMA has submitted for review andcomment by the Banks (a) descriptions of the tasks and requiredqualifications for each higher level staff or consultant position,(b) draft terms of reference for studies and other consultant assignments,and (c) annual operating plans for 1990. For the execution of theProtection of Ecosystems the execution of the respective OperatingAgreements with each of the participating States and executing agencies, onterms and conditions satisfactory to the Bank, will be a condition for therespective disbursements in each State.

Ci) The Pantanal (USS 19.5 million)

3.16 The Special Project for the Pantanal would have the objective ofslowing down and - to the extent possible - redressing, current processesof rapid environmental degradation in the Upper and Lower Basins of theAlto Paraguai River. It would address the multiple factors threatening thePantanal, complementing activities financed under other components of thePNMA (Conservation Units and Institutional Development components), andunder several earlier initiatives to save the Lower Pantanal Basin, whichhave been promoted by local and international NGOs and by the NorthwestRegion Development projects (Bank Loans 2060-BR and 2116-BR; see para.2.18). It would expand ongoing environmental protection and managementefforts in the Lower Basin and support controls and containment of soilerosion and pollution causing activities in the Upper Basin, whichcontribute significantly to environmental problems in the Lower Basin. ThePantanal Special Project would support the creation and implementation of aconservation plan for the floodplain (Plano de Conservacao da Bacia/PCBAP)and actions to address the most urgent environmental problems. It wouldcontribute to the integrated development of the Pantanal, throughcoordination of activities of IBAMA and the OEMAs of Mato Grosso and MatoGrosso do Sul, establishing for the first time clear accountabilities andadministrative arrangements for the environment sector between the twostates.

3.17 The project would, through parallel, integrated programs in MatoGrosso and Mato Grosso do Sul, combine measures for immediate protection,and measures in support of longer term improvements of environmentalmanagement. With regard to immediate protection needs, the project wouldfinancet

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(a) containment of pollution, through a strengthening ofmonitoring, controls and (in the case of agriculture)extension services to reduce pollution caused by industries,mining and agriculture;

(b) iwproved law enforcement in the protection of flora andfauna, through technical training and equipment of, andpatrolling by, the Forest Police, under a system of increasedprotection in strategic points (notorious for inroads ofpoachers or miners);

(c) the establishment of a system for monitorina water quality,involving technical training of laboratory technicians, andoperation of a basic network of 58 monitoring points;

(d) a vrogram to contain pollution. caused by inadeauateOJarimjop mining techniques, by establishing and monitoringcompliance with norms and criteria which would allow for therational exploitation of high value minerals, whileintroducing at the same time controls of the environmentallymost damaging procedures, such as the indiscriminate use ofmercury and disposal of solid wastes in the river; bycarrying out ecotoxicological measurements of currentpollution levels in the affected rivers; by identifyingalternative, environmentally acceptable techniques; and byrecovering some of the degraded areas;

(e) the containment of the present degradation of vetetation inthe ecological reserve areas of the Taauari and Sao Lourencoriver sub-basins, through local recovery programs (includingextension and community participation) in two pilot areaswhich were adversely affected by agricultural and livestockactivities; and,

(f) in collaboration with the environmental policing services,the establishment of two centers for animal rehabilitation.from where apprehended animals (rescued from smuggling) couldbe delivered, before being returned to their naturalhabitats.

3.18 In support of medium term structural improvements, the projectwould finance:

(g) the establishment of guidelines and plans for the develonmentand the conservation of the Basin:

(h) the establishment of an environmental data bank:

(i) the training of technicians in the management of Jacare andCavivara animal vopulations;

t3) the evaluation of the populations and habitat use of caimanc. vacare in the areas of influence of the Paraguaizinho andBento Gomes basins, for purposes of conservation:

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(k) creation of locally adapted environmental educationinstruments (with support from IBAMA's environmentaleducation team (para.3.35) through the training of atechnical team for the elaboration of graphical informationmaterials aiming at raising awareness about the importance ofconservation among local populations in the Pantanal; and,

(1) training and eauitment of the Pantanal nroiect teams, withinthe state environmental agencies of Mato Grosso and MatoGrosso do Sul.

3.19 While the proposed special project would only involve theBrazilian Pantanal, government intends to seek cooperation agreements withParaguay and Bolivia with the objective of eventually promoting theintegrated management of the entire basin.

(ii) The Atlantic Forest (US$ 27.7 million)

3.20 The special project for the Atlantic Forest would aim at reversingthe process of destruction of the fragile remains of this eco-system, byaystematizing and integrating action programs for its preservation andsustainable uses, among others by making consistent the environmentalpolicies of the federal and state environmental agencies, and by means ofthe recently created Atlantic Forest Consortium of the states of EspiritoSanto, Rio de Janeiro, Sao Paulo, Parana and Santa Catarina. The fivestates, which constitute the Consortium account for some 90Z of theremaining Atlantic Forest; the Consortium may shortly be expanded toInclude the remaining, Northeastern states in which account for smallerremnants of the Atlantic Forest. This special project would complement andbe integrated with activities under the PNMA's Conservation Units andInstitutional Development components, and under the Coastal Managementspecial project (paras. 3.22-3.24). For the State of Sao Paulo, thisspecial project is likely to receive parallel financing from Kf for acomplementary set of measures under a proposed Sao Paulo State project.

3.21 The special project consists of five state level plans, each ofwhich combines programs for strengthening the protection and management ofexisting state level Conservation Units (federal Conservation Units will beattended under the Conservation Units component), the creation ofadditional conservation units, activities in support of sustainable,ecologically compatible development strategies, strengthening of lawenforcement capabilities (monitoring and policing), research andenvironmental zoning, and environmental education. Most importantly, theproject would finances

(a) aeronhotogrammetric and satellite-imaae-based coveraze, toserve as the basis for the delimitation of priority actionareas (where significant stretches of Atlantic Forestremain), and demarcation of the existing State ConservationUnits;

(b) consolidation of state Conservation Units through landregularization, establishment of headquarters facilities,contracting of guards, acquisition of equipment, etc.;

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(c) inventories of flora, fauna and soils for the elaboration ofralevant diagnostic studiesl

(d) zoning and land use studies, for the identification ofalternatives for sustainable development;

(e) conmmunication and training Programs for local communities;

(f) monitoring and protection services, through ForestBatallions; and,

(g) institutional strenathenina for purposes of conservation,management and pollution control.

Each of the five states has completed a satisfactory plan and already begunto implement such protection programs for the respective sections of theAtlantic Forest.

(iii) The Brazilian Coast cUSs 5.3 million)

3.22. The Special Project for Coastal Management vould combine measuresfor urgent environmental controls in priority locations, and initiatelonger term structural improvements, providing for environmental zoning andmonitoring along the Brazilian coastline (including an area of 6 nauticalmiles offshore), in the concerned States of Rio Grande do Sul, SantaCatarina, Sao Paulo, Rio de Janeiro, Bahia, and Rio Grande do Norte. Thisvould be done in compliance with Brazil's special legal dispositions forcoastal management, and Brazil's National Plan for Coastal Management(PNGC) (see Annex 8).

3.23 Special legislation and institutional arrangements apply tocoastal management in Brazil. In accordance with this legislation, theSecretariat of CIRM (SECIRM/Ministerio da Marinha) is responsible for thecoordination of the National System for Coastal Management. TheCoordination Group for Coastal Management (COGERCO) is responsible for theelaboration of the PNGC. The project would give continuity to and expandthe programs which CIRM has initiated in six states in 1987 for prioritysections of the coast. The program for the six states would include: (a)the macro-zoning of their entire coastlines; (b) provision of technicalenvironmental data essential for the environmental monitoring of thecoastline; (c) establishment of monitoring systems in all six states; and,(d) promotion of a system of geo-codification, which would allow forefficient digital processing of information collected in the course of themacro-zoning of the coast. The project would finance four activities:

(a) the Information Svstem for Coastal Manatement (SIGERCO),involving: the collection, analysis and systematization ofexisting data about the coastal zone, by the OEMAs of eachof the six states; geo-codification for data processing andmapping purposes; and, use of the data base for monitoring.

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(b) management. consisting oft zoning (identification of thepotential and the alternitive uses of ecosystems. withspecial emphasis of the protection and monitoring of speciesof coastal flora and fauna which are threatened withextinction)t identification of external factors impactingupon the ecosystems under consideration; and, monitoring ofselected priority areas, for the purpose of corrective andpreventative actions;

(c) human resources, involving: training of personnel to developactivities of coastal management; public informationcampaigns, especially among local cosmunities, to fostercommunity participation in coastal management; promotion ofregional 'Colegiados Costeiros' and local 'Comites de DefesaLitoral' bringing together representatives of institutionsand communities involved; promotion of technical exchangebetween professionals involved in coastal management indifferent parts of the country, through professionalmeetings and training fora; and,

(d) infrastructure: based on updated assessments, as needed,improvement of the infrastructure (e.g. for theinterpretation of satellite images, mapping and on-sitemonitoring) available to the OEMAs and coastalmunicipalities for planning and controlling the coastalenvironments under their jurisdictions.

3.24 This program would build upon and intensify activities alreadyinitiated in all six states. It would be coordinated by SECIRM, in closecollaboration with IBAMA and the respective OEtMAs. During the proposedSecond Phase of the PNKA, this program could be expanded to include alarger number of states. As a condition for disbursement under thiscomponent in each State and at the level of SECIRM, local projectcoordination and administrative arrangements would need to be in place, onterms and conditions satisfactory to the Bank.

c. Institutional Develoment

Mi) Strengthening of IBAMA (US$ 14.9 million)

3.25 This sub-component would support the build-up and strengthening ofessential functions of IBAHA, providing for management expert services andthe strengthening of IBAM4' s training, information and legal supportfunctions within SISNAMhA. For this component, IBAMA has submitted forreview and comment by the Bank: (a) descriptions of the tasks and requiredqualifications for each higher level staff or consultant position, (b)draft terms of reference for studies and other consultant assignments, and(c) annual operating plans for 1990.

3.26 Structuring of TBAMA. This activity would support and acceleratethe merging of IBAMA's predecessor organizations, SEMA,, IBDF, SUDEPE andSUDHEVEA, in accordance with Decree No. 97 946 of July 11,1989. Theproject would finance the services of a management consuiting firm, whichis to assist IBAMA in the first project year in completing the merging of

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its predecessor agencies. The structuring of I8AMA would comprise twostages, Ci) with assistance from the management consulting firm, taecompletion and fine-tuning of redeployment of staff, equipment etc., andthe preparation of administrative manuals for the routine functioas ofIBAM9s five directorates and state-level superintendencies, and (ii) basedon the recommendations of the management consulting firm, as needed, theupgrading of infrastructure, equipment and services available to IBAMA.The first stage activities would be carried out during the first half of1990, and the second stage activities would be largely implemented duringthe second half of 1990. IBAMA has submitted to the Bank for comentsdraft terms of refeience for the tasks to be carried out by the managementconsulting firm. At Negotiations, the Bank has received from Governmentassurances that a firm, with qualifications and under terms of referencesatisfactory to the Bank will be contracted by IBAMA no later than June 30,1990.

3.27 Develooment of Human Resources. This activity would support thetraining of human resources within the environment sector, at the federaland state levels, to bridge crl:ical knowledge gaps and to consolidate theapplication of the sector's technical and legal guidelines. The projectwould finance the strengthening of the Human Resources Unit in IBAMA, andthe training of up to 1200 technicians of the IBAMAISISNAMA system until1992, through 29 courses of 120 hours each, 2 seminars of 16 hours eachabout environmental mAnagement, 3 16-hour seminars about publicparticipation in environmental management; 1 course about legal instrumentsfor citizens' actions in defense of the environment. The project wouldalso provide for the development of a body of teaching materials and videosfor future continuous use in the sector (guidance materials forenvironmental administration, environmental impact statements, zoning,Conservation Units etc.). Courses and teaching materials would concentrateon the preparation and review of environmental impact statements (RIMAs)and legal instruments. In each state, one trainer would work on apermanent basis with the OEMAs, giving continuity to training programs andproviding in-service training in connection with ongoing analyses of RIMAs.

3.28 Environmental Legislation. This activity would contribute to theconsolidation and fine-tuning of environmental legislation consistent withnew federal and state level constitutions. The project would provide, forIBAMA and for OEMAs, studies and specialists for the (a) review andanalysis of federal environmental legislation, (b) preparation of aninventory of all federal legislation which relates significantly to theenvironment, and, (c) analysis of any conflicts or uncertainties regardingjuridical attributions, or of any areas not covered by current legislation.It would also finance (d) the preparation of legislative proposals forconsideration in the current federal and state-level legislative processes,(e) assistance to the National Congress in the elaboration of theOlegislacao ordinariaw which will refer to the dispositions of Article 225on the environment of the Federal Constitution, and (f) advisory servicesto the state level constituent and legislative assemblies, in the case-by-case elaboration of state-level environmental legislation, includinglegislation for environmental zoning, protection of natural areas andenvironmental standards. To develop this legal analysis, the project wouldfinance a group of corsultant specialists in environmental disciplines andlaw, who would work under the supervision of the Legal Department(Procuradoria) of IBAMA. Following a first study and review period, this

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group would present a document summarizing its recommendations to theexecutive and legislative branches of the federal administration;subsequently, it would be available to follow-up on request from federalagencies and state governmnts for assistance by IBAMA in drafting specificenvironmental legislation, for submission to the legislature.

3.29 Environmental Information. This activity would provide theenvironment sector, as well as any other interested entities, withimproved, efficient access to environmental data. The project wouldstrengthen the National System for Environmental Information(SINIMA)(created by Law 6.538 of 1981) through the establishment of aNational Center for Environmental Information (Centro Nacional deInformacao Ambiental - CNIA), which would integrate and improve theinformation resources of the four agencies merged into IBAMA. CNIA wouldbe built-up to serve as a national repository for environmental informationand documentation on national and international materials (books, films,journals, data bases, microfilms etc.). CNIA would be equipped withtelephone access services country-wide, and staffed by specializedenvironmentalist staff. The project would also finance the establishmentof a National Network for Environmental Information (Rede Nacional deInformacao Ambiental - RENIMA), complementary to CNIA, which would, for thefirst time, integrate IBAMA and the QEMAs into a joint environmentalInformation network, and establish links with other environmentalinformation centers (government, private sector, academic etc.) in Braziland abroad. The project would finance the equipment and experts necessaryfor the establishment and operation of CNIA and RENIMA. The project wouldalso support the further development of IBAU.'s data bases on technical-scientific and legal environmental informacion, and the creation and/orstrengthening of environmental information centers at the OEKAs, with thevery modest objective of assuring a minimum level of bibliographicalreference resources. It would also provide for training courses for therespective personnel. Environmental Information activities of the projectwill be closely integrated with the parallel environmental education (para.3.35), training (para. 3.27) and remote sensing (para. 3.30) activities.CNIA has been created by means of Portaria No.1066/89-P, of November 1,1989 of the President of IBAMA.

3.30 Remote Sensina. This activity would broaden the access to, anduse of, remote sensing data for local environmental monitoring and planningpurposes. Under SINIMA, the project would support the establishment ofthree regional centers for the interpretation and application of remotesensing images for environmental planning, mapping, monitoring andmanagement purposes, in Manaus, Sao Paulo and Cuiaba, and the strengtheningof the already existing (former IBD?) facility at IBAMA. The project wouldprovide for in-service training of the respective staff, and for broadertraining in collaboration with the PNMA Human Resources activities (seepara. 3.27). The project would also finance, for each of theinterpretation centers, the acquisition of one SITIH 150 ImageryInterpretation system, and of one Geographical Information System, andformal training of 29 technicians for the use and running of the system. Asa condition for disbursements under this component, lBAMA would submit tothe Bank (a) a copy of the executed agreement between IBAMA and INPE,satisfactory to the Bank, under which INPE shall train staff to be assignedby IBAMA for tha interpretation of remote sensing data in the four centers

- 25 - I

included under the project, and (b) detailed terms of reference for theadministration and staff of, and first yaar training programs and requiredconsultant services for these centers. IDAM4 would submit to the Bank, notlater than June 30, 1990, for comuent, a draft agreement between IBW(A andINPg.

(ii) SuDnort for Environmental Action Programs (US$ 8.1 million)

3.31 Because of the far-reaching decentralization of environmentalmanagement and controls under the 1988 Constitution (Article 23), theprovision by IBMAH of training, equipment and technical assistance to thestates has become essential for the implementation of Brazil'senvironmental policies. To this end, the project would:

(a) significantly strengthen the environmental management andprotection functions of OEHAs, especially in the Amazon,Pantanal and Atlantic Forest regions, through upgrading ofequipment and facilities essential to carrying outenvironmental protection and monitoring activities, in atleast 10 OEMAs (primarily in the legal Amazon), and throughup to 30 local training programs. As part of IBAMA'spreparation of Annual Operating Plans for the first projectyear, the baseline survey data on the specific needs of OEMAs(see para. 2.07) have been updated for the Pentanal, Amazoniaand Atlantic Forest states;

(b) assist with the development of state-level environmentalstrategies through support for 4 pilot projects which wouldhelp develop environmental protection strategies for:(i) protection of rivers and watersheds (PlanoDiretorlParaiba do Sul), (ii) the conservation of naturalsites in historical centers (Parati, Tiradentes, GoiasVelho), (iii) local, small scale conservation strategies(Santuario do Riacho Fundo), and, (iv) conservation of bio-diversity in caves; and,

(c) provide technical assistance in the preparation of at least30 state and local level environmental action programs, whichwould be considered as urgent to the prevention ofenvironmental losses. This technical assistance would beprovided by an interdisciplinary IBAMA team of fourspecialists, and in addition, as needed, by short tenmconsultant specialist services. OEMAs would propose theseaction programs for external funding (which is increasinglybeing offered by bi-lateral aid organizations, NGOs etc.),for funding under the National Environmental Fund (see para.2.06), or for financing during the Second Phase of the PNMA.IBAMA will restrict its selection of proposals for thepreparation of environmental action programs for purposes ofthe Environmental Action Programs subcomponent, to be startedduring 1990, to proposals submitted by the States or StateAgencies to IlAM not later than May 31, 1990;

3.32 The signing of the respective Operating Agreement between IBAMAand each of the participating states and executing agencies would be aprecondition for disbursements in each state.

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(iii) Technologies for Environmental Management ((US$ 24.4 million)

3.33 This sub-component would support the first stage of a complexprocess of improving the regulatory framework of the eavironment sector,for several key areas, through:

(a) studies to review and improve technologies and the regulatoryframework for environmental management, for the topics ofEnvironmental Zoning. Evaluation of Environmental Impacts,River Basin Management and Ecotoxicology, (with specialemphasis on the lesser known ecosystems of Amazonia, theCerrado, and the Pantanal). These studies would becoordinated by IBAMA and carried out through a nationalnetwork of specialized academic institutions, takingadvantage of, and strengthening, capabilities in theenvironmental sciences in Brazil's academic and researchinstitutions. IBAMA would also seek to build upon theexperiences of the more accomplished OEMA8 (e.g. CETESB/SaoPaulo; FEEMAIRio de Janeiro; CEPEDIBahia; DNA/Rio Grande doSul; or, CETECIMinas Gerais);

(b) preparation of technical guidebooks for environmentalmanagement, which would establish a comon base of referencefor the OENAs, IBAMA and sectoral agencies; and,

(c) the dissemination and application of the improved guidelineswithin SISNAMA.

3.34 To arrive at improved guidelines for the topics of EnvironmentalZoning, Evaluation of Environmental Impacts, River Basin Management andEcotoxicology, the project strategy foresees an iterative process ofstudies and proposals, workshops and critiques, and eventual pilotapplications. Work under this component would be closely coordinated withCNPq's PADCT environmental program. Because of the involvement, networkingand support for academic institutions specializing in environmentalmatters, this component would also directly benefit Brazil's major academictraining and research programs in the environmental sciences. DuringNegotiations agreement has been reached that, no later than June 30, 1990,IBAMA will have prepared, and submitted to the Bank for review andcoments, detailed terms of referencL for the first set of studies proposedunder the Technologies for Environmental Management sub-component.

(iv) Environmental Education (US$ 3.2 million)

3.35 This sub-component would support environmental education for thegeneral public outside the environment sector. It would involve thedevelopment of methodologies, instruments and mechanisms for environmentalinformation, essential to the formation of public awareness ofenvironmental issues, and support the strengthening of IBAMAs environmentaleducation unit. The project would finance the following specific actionprogramst

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(a) establishment of a SISNAMA environmental education network,to optimize the production and dissemination of environmentalteaching materials, in support of educational and technical-scientific activities; (18 graphical productions, 18 videosand 6 films would be produced, and audiovisual materials ofinterest to the program would be purchesed);

(b) production and distribution of region-specific educationalmaterials and legal information about the environment(videos, printed materials), to support environmentaleducation in primary and secondary schools, in public foraand through national environmental non-governmental agencies(NGOs); 9 documents about environmental themes relevant tothe North, Northwest and Northeast regions, and 3 documentscontaining methodological guidelines for the treatment ofenvironmental questions in primary and secondary educationwould be produced, with the objective of reaching at least3000 teachers; in addition, a video and manual in support ofat least 400 state level courses for the training teacherswould be produced;

(c) promotion of environmental knowledge among the interestedpublic through: the structuring and implementation of acorrespondence course on environmental education for at least3000 students, in collaboration with Brazilian Universities(using education modules produced under this and other sub-components (human resources, environmental technologies) ofthe project; the production and dissemination of a video onenvironment.al legislation and community participation; and,production of 12 radio and 3 television programs, and abrochure explaining the ecological and social significance ofConservation Units; and,

(d) provision of teaching materials and technical assistance tosupport the environmental education activities foreseen underthe Atlantic Forest (see paras. 3.20-3.21) and Pantanal (seeparas. 3.16-3.19) special projects, and the educationactivities in the five model Conservation Units, which wouldbe consolidated under the project (see para. 3.10).

D. Proiect Cost

3.36 Total project costs are estimated at US$166.4 million with aforeign exchange component of US$20.2 million, or about 122 (Loan andProject Summary). Foreign exchange requirements are based on theassumption that all goods and services would be acquired in Brazil with thepossible exceptions of foreign consultant services, study tours abroad,vehicles, and data processing equipment and software. The cost estimateincludes about US$10.1 million equivalent in local taxes. Physical andprice contingencies are equivalent to 42 and 6S of baseline costs,respectively. Physical contingencies were added to baseline costs at 102for civil works, 5S for equipment, furniture and technical assistance.Price contingencies were estimated in US dollar terms, based oninternational inflation rates estimated at 7.2Z for 1989 and 4.42 p.a.thereafter. It was assumed that periodic local currency devaluations,

- 28 -

estimated on a purchasing power parity basis, would compensate fordifferences between projected US dollar inflation and local inflationrates. Recently, however, civil works costs have been rising more rapidlythan local inflation. Since civil works costs are a small part of projectcost, risk of exposure under the project is small. No additional localprice contingencies have been added. However, the Bank will monitor thisaspect carefully and has advised Government that it would have to cover anyincreases. The detailed costs by year are shown in Annexes 4 and 5. Asummary of the costs is shown in the following Table.

_ 29 -

TA B L E I

,,.,t,

sat~~Ouat I lSOso^lm *,C ........ c... ----... o.st ts31 uo

IUI S S *ol.gA ba

1 1 fioe'qv letal (*caRp Cases

a c5stvaalal u tlls

MUaGINIUI I 06011C110o 9 iAlStIG comSIvatllo Unit$ it 1 I lo 7 11 4sm0 COV5RiVATla UNItlS S.0 0? 1? :3 4as Coaitgawatto. AiltS 21 0S 2 O isuAatOtIttt PUt 0 9 aI I a 'tarno IttatWi a. tltiltC 9 S II 7TuININGu t 2 0e0 ' 3STN[IOINtmUIc Of sIuNc o s I I a 8 a

... .. ... ....... .......... ....... ............ .......

Sdo-vlasl CONSina1iOat quitS 3? 5 4 d3 2 '3 29a. PIOTECtION @9 IC@S?SW(NS

....................

tetICtlhoGf I;0 AWn flu" 23 0 2 2 1 1 SIITOeIUCG Of M*t(I OutUtl! * 2 O 6 4 e 2 3

C-qttlt It alaim. &a1taS I 0.3 2 2,S ,R?aUIO s I getaltltallett 1 0 * S aI cStGute PA4uitiw I taWttlSIID I a OI I a

c-ostItatlOt , Plt I ato PA itl "Sll 26 0 2 3 * 2amimat ctabas I. * 1 3 IstutlS Of .tacaS an1 CwtaP S WItWtS 0. @0 0 S a 0MtIIGm gbinmatUut n / utI I ef JACeuAS MO oplavam 02 @0 0 3 0 s

suca1s I tUliulsJ I tat tCh CPm ititS 0.2 @0 0 2 6 0, .................... ....................

S,*etolteSt Ptfu I. I* 19. S S 132. t"tlle laws?

-MmCTiss P suitl ln StATE mSt ItOt t sOs UNItS i0.9 1.4 12 4 :2 aatls4 ge ofN Swatc cssawatitO tvolts 1.4 * o .S 'o I

S tMm tctt iUM 1* 0e 1 e t O tnuoliisai £5151 t. 2.0 0.2 2.3 It 2Sta sNDIa OF sIsn1s cssuis 1.2 t O LO e2e

""AM ~~~~~~~~~~1.6a 0.2 2.0 aLiuatllS I iMUtlo J tOtt ctmmitts 1.9 0.S 1 2. ISpecial 4t,m PiW i Patule 0.4 0.0 0.4 0MItIlG 0.0 * 0.0 0

.;......... .................... ....... ............ .......

S*-tleal At%iltC FOREST 24. a 3 2t * ,, :9. tisaat maisii

...................

sOTt oa lms 2.1 0.2 2.3 2tAlUhU CG '3 0.1 1.4 9OAStAtUltzue4t t 0 e 3 00 t 3 10ltaimiaws cm naato Is losing 0? 0. 0 0 t S 0"aflout Ptam foe CoaSI """MT 0.4 0 0 0 4 9 0PISIICtIS 09 &Na@t spInStD 0.1 00 0 I to 0

......... ;.... W........ ........ ...... .. ......... .;......

So-fisl tllith Fnu LalIt 4 0. 1.3 0 4.... ..... *s 4w......... ......... ......... .......

S*ub-ttal tsig Ilo Of L tCmSus 41.3 &. 13.1 to 31C. titiuttlat OlvtiLPUl

................ ............. ;

StIfutitat s W $W It.a 2.t 1 4.0 t leSUPPORT? toO 315 I uwiomIata scom nmain I. .1 &Is la Sswitslm°sta ini I lUsAtOav fgitUj 2U.1 4 3 24.4 t lqtl uIutaIt t53413 2.8 13 3 a to 0

........- .............. ...... ........ .......

Smteittl tIlttUiall&t tI5ILOUtI 42.L '; 0 II 34a 4SttlstUlt4 . ItClliU. MO £V6tUISN 0of 111 INJECt 2.6 . I.L? 6 2

total outing COSTS fs 13.4 I8? 14St I i3 t;O01uspI.Sp t'qmasus 4.6 I. S. Is 4

I.6 0.4 11.3 S I........... ........... ....... .......... .......

1o1 ot ists 1*2 I 1 .2 66.4 Ai III

............................... ............................................................................

_p t. tWi 5.1i

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E. Financina Plan

3.37 The Cost-Sharing Ratio. A cost-sharing ratio of 75Z of totalproject cost, excluding taxes, is proposed, taking into account that (M)the benefits of the proposed environmental activities will materialize overthe long-term, while major action for the conservation of natural resourcesshould no longer be deferred, despite present fiscal limitations, (ii)important initial policy and institutional actions have already been madeby Government during the preparation of this Loan. in the attempt to put inplace a significant environmental protection program despite its fiscalconstraints, and (iii) risks to the prompt execution of environmentalprotection programs through shortfalls or delays in counterpart fundingneed to be minimized.

i.38 Recurrent Costs. With regard to recurrent costs, the followinghave been taken into accounts (i) the number of IBAM,'s personnel whosesalaries are financed under the project would be very low, representingsalaries and wages equivalent to less than 52 of the costs. Out of llAMA'spayroll of over 5000 staff, only 33 are included under the project. IBAHAwill pay its personnel out of its own resources, to which the project islikely to contribute through additional revenues generated in the contextof law enforcement activities (fines) and of increased tourism potential innatural sites. US$ 110.9 million (672 of total project cost) would be forinvestments, while operating costs would account for US$ 55.5 million (332of total project cost). Recurrent operating costs, needed to maintainbasic protection services in federal and state Conservation Units, wouldamount to about US$ 50.5 million (see Annex 4). Operating costs would befinanced on a declining basis during project execution, and fully assumedby IBAMA and State Governments after completion of the project (para.4.21).On average, this vould increase the annual environmental budgets of each ofthe 10 states participating under the Protection of Ecosystems component byabout US$ 3 million by the end of the project financing period. Over thesame period, IBAMA's annual budget for the protection of Conservation Unitswould need to be increased by US$ 20 million (a 20S increase over IBAMA's1989 overall budget level) to cover recurrent costs. Against thebackground of fi$m Government commitment to better protection andconservation of natural resources, and in view of the - in the case of eachState - relatively small increase in operating costs, it is assumed thatIBAMA and the state governments executing the Protection of Ecosystemscomponent would easily be able to assume the eventual permanent incrementalrecurrent costs under their regular budgets. Under the studies forimprovements of the SINUC, the project would also support studies offurther possibilities to secure long term sustainable financing forenvironmental protection activities.

3.39 The proposed Bank loan of US$117 million equivalent would financeabout 752 of total estimated costs, net of taxes, or 702 including taxes.The Loan would be repayable over 15 years, including a five-year graceperiod, and would bear interest at the Bank's standard variable rate. TheFederative Republic of Brazil would be the Borrower. Counterpart fundswould be provided by the Federal Government of Brazil. As a condition forEffectiveness, the counterpart funds required to carry out the first yearof the Project shall have been allocated in terms consistent with theestimated costs therefor in the 19'0 budget of the Borrower. To enableIBAMA to prepare for start-up acti$ities, project expenditures incurredbetween November 15, 1989 gad the date of signing would be eligible forretroactive financing up to a maximvm of US$11.7 million, or 102 of theloan amount. The Financing Plan is presented belows

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Local Foreism TotalFinancinR Plan (US$ million)

Government 49.4 49.4IBED 96.8 20.2 117.0

Total 146.2 20.2 166.4

3.40 The Government has confirmed that it intends to negotiate with theKreditanstalt fuer Wiederaufbau (KfW) a loan, on concessionary terms of theGerman Rainforest Fund, of DM 30 million, which, if approved, wouldsubstitute for the equivalent amount of counterpart funds for the financingof the Conservation Units component.

IV. PROJECT ORGANIZATION AND MANAGEMENT

A. Organization

1. Prolect Management

4.01 IBAMA would be the project executing agency. The project wouldreinforce IBAMA's recently established regular structure (see Annexes 1 and2) for the specific purposes of the PNMA, in accordance with task spec4.ficneeds, and under terms and conditions satisfactory to the Bank. While thiswould facilitate the proper execution of the project, it would alsoestablish or consolidate the permanent structures necessary to continueessential environmental management and protection functions beyond theperiod of the project. IBANA would be in charge of overall coordinationand monitoring of the project, and execute directly the Conservation Unitsand Institutional Development components. For the Protection of Ecosystemscomponent, and for state level Environmental Action Programs under theInstitutional Development Component, IBAMA would sign Operating Agreements,satisfactory to the Bank, with participating State Governments and otheragencies as needed (see Annex 2). IBAMA has provided to the Bank, forreview and conments, its draft Operating Agreements with participatingStates and executing agencies. The signing of the respective OperatingAgreement with each of the participating States and executing agencies, forthe execution of the Special Projects under the Protection of Ecosystemscomponent, and of the state level Environmental Action Programs under theInstitutional Development Component, will be a precondition fordisbursements under the project in each respective state. The Bank hasalso reserved the right to request from IBAMA, as a condition for itsapproval of such Operating Agreements, evaluation reports on thecapabilities of any State or State Agency or the Federal District, to carryout their obligations under their respective Operating Agreement.

4.02 To coordinate the execution of the project through four ofllAMA's five directorates, and its financial, legal and administrativeoffices, the President of IBAMA will rely on a small Project CoordinationUnit (PCU). The PCU has already been established in IBAMA's Secretariatfor Planning and Coordination (SEPLAC)(see Annex 1) for purposes of the

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National Environmental Program (PMfk). In this context, IBAMA's alreadyexisting PNMA task force (para. 3.01) has been reassigned in November 1989to the PCU in SEPLAC. Under current legislation, SEPLAC is to assist thePresident in the coordination and supervision of planning, budgeting,administrative modernization, informatics, coordination with regionalagencies and international cooperation in environmental affairs. The PCUis headed by a Project Coordinator, who will be assisted by one coordinatorfor each of the three components of the project, two project monitoringofficers, and support staff. The institutional structure for thecoordination of the PNMA, including the PCU, has been created throughPortaria No. 1060/89-P, of October 31, 1989. The appointment of thecoordinator and higher level staff of the Project Coordination Unit, and ofcomponent and sub-component coordinators in IBAMA's directorates, withqualifications and under terms satisfactory to the Bank will be a conditionof Effectiveness.

4.03 Responsibilities for the implementation of components and sub-components within IBAMA's directorates (see Annex 2) are as follows:

(i) The Conservation Units ComDonent would be executed by theDirectorate for Ecosystems (DIREC). For purposes of theConservation Units Component, IBAMA is, in addition,negotiating with the Government of the Federative Republic ofWest Germany for a technical assistance package, which wouldsupply short and longer term specialists to DIREC, some ofthem during the start-up phase of the project.

(ii) The Protection of Ecosystems Component would be coordinatedas follows:

_ the Special Proiect for the Pantanal, would be coordinatedby DIRECs the states of Mato Grosso and Nato Grosso do Sulwould execute the project, under Operating Agreements withIBAMA. In each of the two states' OEHAs, the SpecialProject for the Pantanal would be carried out by PNMA taskmanagers. Only with regard to inter-state coordinationneeds, project execution would depend on a smallinterstate coordination unit, which would be attached tothe group in charge of developing the Conservation Planfor the Alto Paraguai Basin (PCBAP). The head of theinterstate coordination unit would be appointed byagreement of the Governors of Nato Grosso and Nato Grossodo Sul.

- the Special Proiect for the Atlantic Forest would becoordinated by the Directorate for Control andFiscalization (DIRCOF); the States of Santa Catarina,Parana, Sao Paulo, Rio de Janeiro and Espirito Santo wouldexecute the project, under Operating Agreements withIBAMA. Interstate coordination of the project between thegroup of five participating states would be carried out bythe already functioning Atlantic Forest Consortium (para.3.20)

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- the S2ecial Proiect for the Brazilian Coast, would becoordinated by DIRCOF; the project would be executed bythe Secretariat of the Interministerial Commissionresponsible for the Resources of the Sea (Secretaria daCommissSo Interministerial oara go Recursos do Mar--SECIRM), which directs a federal-level coordination groupinvolving all Government agencies which have legalresponsibilities for coastal management, and by the Statesof Rio Grande do Sul, Santa Catarina, Sao Paulo, Rio deJaneiro, Bahia and Rio Grande do Norte, under OperatingAgreements with IBAMA. As a condition for disbursementunder the project in each State and at the level ofSECIRM, local project coordination and administrativearrangements would need to be in place, under terms andconditions satisfactory to the Bank.

(iii) The Institutional Development Component would be executed:

- For the sub-components of (a) the Strengthening of IBAMA,(b) the Program in Support of Environmental Action; and, (c)the Development of Human Resources for the environmentsector, by the Directorate for Administration and Finance(DIRAF), which would also support other project components,in accordance with its general administrative attributions;

- For the sub-components of (d) Technologies for EnvironmentalManagement; and, (e) Environmental Education for the generalpublic, by the Directorate for Incentives to Research andInformation (DIRPED), which would also supportenvironmental education and other institutionalstrengthening activities under other project components inaccordance with its general administrative attributions.

4.04 IBAMA's four Directorates participating in the execution of theproject and, in addition, its Directorate for Natural Resources, wouldparticipate in a multidisciplinary group for the evaluation of projectsproposed under the Program in Support of Environmental Actions (para.3.31). Eachi of IAMIA's Directors would be fully accountable vis-a-vis theProject Coordinator for the implementation of PNMA activities under theirrespective responsibilities. Within the Directorates, each projectcomponent and sub-component would have a special subject coordinator, incharge of all implementation and monitoring activities for the respectivetasks. IBAMA has provided to the Bank a detailed incremental staffing planfor purposes of the PNMA at the level of each of the four IBAMAdirectorates in charge of project implementation, and at the level ofIRAMA's financial, administrative and legal offices, in accordance withIBAMA's recently approved detailed administrative structure.

4.05 Personnel. IBAMA has submitted to the Bank, for its review andcomments, profiles and qualifications of key technical staff (for the PCUand the coordination of the project's components and subcomponents).Presently, Brazil has a general hiring freeze, which prohibits thecontracting of personnel for the federal level public service. Agreementhas been reached that project personnel would be recruited among formerIBAMA, SEUA, SUDEPE and SUDHEVEA staff, to the extent that their profiles

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and qualifications would correspond to the above mentioned, agreed uponposition profiles. Agreement has also been reached that, to the extentthat positions cannot be filled in accordance with these specifications byexisting IBAMA or other Government personnel, IBAMA would, as long as thehiring freeze prevails, resort to contracting long term technicalspecialist services; and that, should the general hiring freeze be liftedat some point during the implementation period of the project, IBAMA wouldconsider, on a case by case basis, the alternatives of hiring permanentstaff instead of third party services.

4.06 In order to lay the foundation for project implementation startingin January 1990, IBAMA has prepared, for review and comments by the Bank,the PNMA Annual Operating Plans (POAs) for IBAMA's FY 1990, and held aninternal seminar to familiarize staff with the objectives of the PNMA andwith their respective future responsibilities under the project (theoutline for this seminar has been submitted to the Bank). Similarly,seminars will be organized in participating states. During the initialmonths of the project, workshops will be organized to train project stafffor the purposes of monitoring, and administrative procedures (accounting,procurement, disbursement, Operating Agreements, etc.). During the projectimplementation phase, there would be routine internal evaluation seminarsto exchange information on, and discuss progress of, the project among thecoordinators of its different segments.

2. Monitorint and Evaluation

4.07 Monitorina would be an essential function in the projectmanagement process, In order to assure the anticipation and timelyresolution of any bottlenecks, and quality control. Monitoring would focuson the compliance with project targets in terms of quantity, quality andtimeliness, and of follow-up by management on any issues previouslyhighlighted in the context of monitoring. The PCU and the task managerswithin the Directorates of IBAMA would monitor project implementation onthe basis of frequent field visits; field visit routines and budgets wouldbe laid out systematically to assure even coverage of states and fieldlevel project sites over each project year. The project also providesflexibility for additional ad hoc trips, in response to emerging needs.Monitoring would involve a standardized routine of reports, reviews andconsolidation of data, through (a) monthly action oriented updating reportsfrom local level project executing agents, reporting on key actions of thepreceding months, and highlighting key points for the month to come; (b)trimestral progress reports, comparing original plans, actual achievementsin quantitative and qualitative terms, and highlighting issues requiringintervention of the project coordination; (c) special issue orientedreports, whenever needed; (d) routine review meetings; and, (e) shortspecial studies, which may be conuissioned by the project coordinator,should he see a need to probe into emerging problems. Detailed monitoringindicators have been established (see Project File). During Negotiations,the Bank has received assurances that it would receive consolidatedsemeetral Monitoring Reports from IBAMA on March 31 and September 30 ofeach project year.

4.08 Evaluation. Project performance would be evaluated during thesecond semester of each project year, in order to ascertain whether (a) the

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project is attaining the basic objectives which have been established foreach component and sub-component; tb) whether the strategies to attain theproject's objectives prove to be effective (or would need to be adjusted);(c) whether the priorities and specific tasks set out under the projectcontinue to be valid or would need to be adjusted in function of newfactors, which were not foreseeable at the time of project design;(d) whether the technical quality and the efficiency of projectimplementation is satisfactory; and, (e) to identify any bottlenecks whichmay need to be resolved to facilitate further progress of the project. Forkey monitoring and evaluation indicators please refer to Annex 9. A moredetailed set of indicators is available for each project component in theProject File.

4.09 The Government has agreed that (a) IBAMA would cause the annualevaluations to be carried out by an interdisciplinary team, through aBrazilian academic institution, with qualifications satisfactory to theBank, whose services would be contracted by IBAMsh in accordance with Bankguidelines, and (b) the evaluation team would be given full access toreview IRMA's Annual Operating Plans (POAs), budgets, expenditures andmonitoring reports, to carry out extensive field visits and to contactproject executing agencies. During Negotiations, the Bank has receivedfrom IBAMA, for its review and comments, detailed terms of reference forthe external evaluation of the project. Government has provided assurancesthat, following the submission to the Bank of a shortlist of institutionsto be invited to prepare proposals for project evaluation, and a set ofselection criteria, such an institution would be hired no later thanSeptember 1, 1990. Government has also confirmed that the evaluation workwould be supervised by SEPLhN, with the purpose of assuring compliance withthe terms of reference and of ascertaining satisfactory performance of theoutside institution to be contracted for the evaluation work. The resultsof the annual evaluations would be discussed in an annual seminar,involving all directors of 18AMA, the PNMA PCU, and all higher level staffresponsible for the implementation of the PNMA at the level of IBRMA; thisseminar would have the purpose of discussing evaluation results, and theirimplications for annual planning and any corrective steps which may becalled for. The Project Coordinator would also invite participating statesand agencies for a discussion of evaluation results.

3. Financial Manaaement. Accounts and Auditina

4.10 Annual Planninu and Budgeting. IBAMA's Secretariat for Planningand Coordination (SEPLAC) would be responsible for the project's budgetingprocess. Targets and costs established at appraisal would be adjustedannually during the project implementation period. By May 31 of each year,each executing agency would have prepared and submitted to IBAMA an annualbudget. SEPLAC would consolidate these plans after ensuring internalconsistency, and submit the consolidated operating plan and budget to thePCU for its review and approval. By August 30, the PCU would submit itsfinal approved version of the budget to MINTER, who would pass it on, forfurther approval by Congress, by October 31. During Negotiations,Government has provided assurances that: (a) the project's annual workprogram and budget would be made available to the Bank by June 20 of eachyear for review and coments; (b) that the Treasury (Secretaria do TesouroNacional) of the Ministry of Finance would make available to IBAMA, throughthe Ministry of Interior, all funds for expenditures to be financed by theBorrower, either from the counterpart funds or from the proceeds of theLoan, required to carry out the Project, in accordance with and within thetime periods set forth in the relevant Plano de Aolicacao (investment

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plan); and (c) that IBAMA would make available to each project executingentity funds in a timely and adequate amount as specified in the annualOperating Agreements.

4.11 Accounts and Accounting Procedures. IBAMA's Department of Finance(DF) would be responsible for the timely request of funds from theproject's co-financiers, the downstream flow of funds to each of theproject executing entities and the upstream flow of justification ofexpenses ("Prestacao de Contas"). Special Accounts in US Dollars would beopened and maintained at the Central Bank and in a commercial Bank abroad(para. 4.22). Each executing entity would maintain separate accounts forproject expenditures, which would be consolidated by DF. DF would alsomaintain a separate cost accounting, with one cost center for each of thesub-components established in the appraisal cost tables.

4.12 With three sources of funding, supplying an annual allocation ofover US$40.0 million, the project financial execution will bear a heavyincremental burden upon IBAMA's recently created financial department(DIRW ). In view of this, DIRAM has taken measures to strengthen itscapabilities, through improved staffing and accounting equipment, and thecreation of an internal project auditing uni_ which will be responsible fortraining and supporting financial units of each of the executing entities.The Bank will reconfirm, as a condition for Loan Effectiveness, thestaffing and equipment of IBAMA's Finance Department, with qualificationsand under terms satisfactory to the Bank.

4.13 Auditins Arrangements. The Special Accounts at the Central Bankand at a comercial bank abroad, project accounts at each of the executingentities, and project consolidated accounts at IBAMA would be auditedannually by independent private or public auditors acceptable to the Bank.After the audit, and not later than six months after the close of theproject's fiscal year, PCU would transmit to the Bank certified copies ofthe audited accounts together with certified copies of the auditor'sopinions and management letter.

4.14 During the annual audits of project accounts, the independentauditors would give a separate opinion of the Statements of Expenditure(SOEs) supporting disbursement requests, the internal controls of projecttransactions and the implementation of these controls, the supportingevidence for the expenditures and the eligibility of the expenses inaccordance with the Loan Agreement. The audit report would also include adescription of the audit procedures followed. The separate projectaccounts maintained for the project by the executing agencies would beavailable for review and spot checked by the Bank during supervision.

4.15 During negotiations, the Government has provided assurances that:(a) the Special Accounts and the project accounts would be maintained andaudited annually by satisfactory independent auditors according tostandards and procedures satisfactory to the Bank; (b) terms of referenceof the auditors would include, inter alia, detailed procedures for theexamination and verification of the SOEs for the project accounts; and (c)certified copies of the audited accounts and of the auditors' reports wouldbe submitted to the Bank within six months of the close of each projectfiscal year.

^ 37 -

B. Procurement

4.16 Procurement arrangements are swmmarized in the following tables

Procurement ArranRements(USS million)

Project Element ICB LCB Other Total

Civil Works 12.3 4.3 16.6(8.6) (3.0) (11.6)

Equipment 4.0 20.2 2.6 26.8Furniture (2.8) (14.2) (1.9) (18.9)

Vehicles, 9.0 1.9 0.7 11.6Computers (6.3) (1.5) (0.4) (8.1)

TechnicalAssistance, 55.9 55.9Training (39.3) (39.3)

Operating Costs 55.5 55.5(39.0) (39.0)

TOTAL 13.0 34.4 119.0 166.4(9.1) (24.3) (83.6) (117.0)

Note: Figures in parentheses are the respective amounts financedby the Bank.

4.17 Goods and works would be procured under contracts awarded inaccordance with procedures consistent with those set forth in the Bank'sGuidelines for Procurement under IBRD Loans and IDA Credits. Consultants,with qualifications, experience and terms and conditions of employmentsatisfactory to the Bank, would be selected in accordance with principlesand procedures satisfactory to the Bank on the basis of the Guidelines forthe Use of Consultants by the World Bank Borrowers and by the World Bank asExecuting Agency.

4.18 Because of the widely dispersed nature and relatively small sizeof individual civil works contracts, it is unlikely that foreigncontractors, and even major national contractors, would be interested inbuilding the proposed facilities. Accordingly, Local Competitive Bidding(LCB) procedures, which are satisfactory to the Bank, would be used forcivil works construction. Interested foreign bidders would be allowed toparticipate. Where construction contracts are expected to exceedUS$750,000, plans, specifications, and other bidding documents would besubmitted to the Bank for review prior to the Invitation to Bid beingissued.

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4.19 Once bids would have been received and evaluated, IBAM& would sendthe Bank a copy of the bids, its bid evaluation and recommendation forcontract award. IBAMA has submitted model bidding documents for Bankreview at Negotiations. Once reviewed by the Bank and found acceptable,these documents would be used for bidding all contracts between US$150,000and US$750,000. Once bids are received and evaluated, IBAMA would send theBank a mall scale floor plan indicating what is proposed to be built and acopy of the bid evaluation with their recommendation as to the successfulbidder. The Bank would request prior review for any civil works contractbelow US$150,000 only in the case of the first two contracts. Work byforce account would be permitted ior am--l works (mostly improvements toexisting facilities) below VS$ 150,000, in aggregate value not exceedingUS$ 4.3 million. Total civil works procurement under the project isestimated at about US$16.3 million, excluding contingencies.

4.20 Where possible, goods to be procured would be grouped intocontracts amounting to more than US$250,000 to be awarded throughInternational Competitive Bidding (ICB) following the Bank's Guidelines forprocurement. Such procurement would amount to an estimated total ofUS$13.0 million. Contracts for goods costing th.e equivalent of US$250,000or less would be procured through LCB procedures satisfactory to the Bank.The aggregated value of such contracts would amount to an estimated US$21.7million. Contracts for goods estimated to cost the equivalent of US$30,000 or less, but not exceeding, in the aggregate, the equivalent of US$3.3 million would be awarded on the basis of selection of the lowest bidderamong at least three price quotations. At Negotiations, IBAMA hassubmitted to the Bank for its review and comments, the (i) biddingdocuments to be launched during the first semester of 1990, and (ii) itsdraft agreement on a Tecnical Cooperation Project with UNDP, for theprovision of consultant and equipment for project implementation, which itis presently negotiat .g. By June 30, 1990, IBAMA will enter into anagreement with the United Nations Development Program (Projeto deCooperacao Tecnica), the terms and conditions of which shall have beenpreviously agreed upon with the Bank.

C. Disbursements and Snecial Account

4.21 The proceeds of the proposed Bank loan would be disbursed againstthe following categories, as indicated belowt

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Disbursement

Allocation of Percentage ofCateaorv Loan Amount Total EZienditure

(USS million) to be Financed

Foreign Local

1. Civil Works and Buildings 9.i

For Part A of the Project 1001 46?(Conservation Units)

For Parts B and C of the 1ooz 75SProject (Protection of Ecosystems,Institutional Strengthening)

2. Goods 24.2

For Part A of the Project 100? 46?(Conservation Units)

For Parts B and C of the 100? 75ZProject, and for ProjectManagement, Monitoring and Evaluation

3. Technical Services and Consultants 35.0

For Part A of the Project 100? 46?(Conservation Units)

For Parts B and C of the 1OO? 75ZProject, and for ProjectManagement, Monitoring and Evaluation

4. Recurrent Costs 35.3 90? up to anaggregate amountof $ 15,000,000and thereafter60? up to anaggregate amountof $30,000,000and 302 of suchcosts thereafter

5. Unallocated 12.7

T 0 T A L 117 0

Estimated Disbursements (USS million)s

Bank FY 1990* 1991 1992 1993

Annual 19.0 35.0 34.9 28.1Cumulative 19.0 54.0 88.9 117.0

* includes initial. deposit of US$ 10 million into Special Accounts

- 40 -

4.22 In order to reduce the interval during which the Government wouldfinwnce the Bank's share of project costs with its own resources, twoSpecial Accounts in US dollars would be establishedt one in the CentralBank of Brazil, for expenditures in cruzados novos, and one in acommercial bank abroad, for paymnts in other currencies. The amount to bedeposited in the Special Accounts initially is estimated at US$9.75 millionfor the account in the Central Bank of Brazil, and 0.25 million for theaccount in the commercial bank abroad. The Bank would replenish theSpecial Accounts for the amount of withdrawals on account of eligibleexpenditures at the request of the Borrower. Retroactive financing will bemade available for project expenditures incurred after November 15, 1989,up to an amount not exceeding 102 of the loan amount.

4.23 Disbursemenm s for contracts not exceeding US$150,000, forceaccount and operating expenses not mnde under contract, would be madeagainst Statements of Expenditures (SOEs) prepared by the various executingagencies and certified by PCU. Supporting documentation would not besubmitted to the Bank, but would be available for inspection by the Bankduring project supervision missions.

4.24 The project is expected to be implemented over three years but, inaccordance with the disbursement profile for region-wide projects, thedisbursement period was estimated to extend over four years from approvaldate (Loan and ProJect Su-mmry and Annex 6).

V. PROJECT JUSTIFICATION

A. Benefits

5.01 Brazil is a country of outstanding environmental importance, withabout one th'rd of the world's remaining tropical forests, a major share ofglobal bio-diversity, and it faces serious environmental problems. TheproJect would contribute to sustainable and efficient economic developmentthrough sound management of natural resources and strengthening ofGovernment capabilities for the implementation of Brazill's environmentalpolicies. Specific benefits would be:

Mi) better immediate protection and conservation of bio-diversity infifty existing priority Conservation Units, and the creation of atleast five additional Conservation Units in other endangeredhabitats;

(ii) better environmental management and protection of the ecosystemsof Amazonia, the Pantanal, the Atlantic Forest, and the Coast;and,

(iii) broader improvements of the institutional and regulatoryframework, which would have a country wide impact:

(a) within the environment sector (better human resources, betteraccess to and use of environmental information and existingexpertise, better human resources and equipment for selected State

- 41 -

Environmsntal Agencies, improved legislation, better environmentallicensing, planning and control procedures, and systematic gaugingof opportunities for environmental financing fLom a variety ofpublic and private sources) and.

(b) outside the environment sector (among the wider coumunity,better information, coomunity involvement and environmentaleducation).

B. Risks

5.02 One main risk is that the project executing agency, IBAMA, whichhan been created only recently, is not yet fully consolidated, andtherefore might experience problems in carrying out this additionalprogram. To the extent possible, this risk has been addressed in projectdesigns IBAMA is to be strengthened under the Institutional DevGlopmentcomponent, project implementation arrangements and key staff are already inplace, and detailed Operating Agreements with participating states havebeen designed to assure project execution at the state level. Risks to thecontinuity of the project might arise in connection with current changes inthe Federal Government, and changes in State Governments in 1991.Regarding the likely commitment of the incoming new federal government,prospects for implementing the project seem good, given that the presidentelect advocates strong environmental programs. While substantialenvironmental policy reforms have been enacted in 1989, project successwould depend on the identification and removal of any remaining policieswhich might adversely affect the specific goals of environmental protectionIn the ecosystems of the Amazon, Pantanal, Atlantic Forest and theBrazilian Coast. Under the project, the policy framework uould beaddressed through IBAMA sponsored studies of and proposals forstrengthening the legal and policy framework. It would also be addressedthrough the Bank's policy dialogue and Economic and Sector Work.

5.03 Because of the unprecedented nature and scope of the project, anintensive, above average technical supervision effort by the Bank will beessential to minimize project risks. In project design, special care hasbeen taken to detail, beyond the usual measure, project activities,Implementation schedules and task budgets, in order to facilitate in-depthsupervision follow-up by the Bank. Special arrangements have been made forthe supervision of financial and procurement matters (para. 3.39). TheBank's supervision effort would be particularly intensive during the start-up phase of the project.

VI. AGREEMENTS

6.01 During Negotiations, the conditions and agreements listed belowhave been agreed upon, with regard to Effectiveness and Disbursement of theLoan, and to key dated covenants:

6.02 The followina will be conditions of Effectiveness of the Loans

(I) that a unit responsible for Project coordination is operating in amanner satisfactory to the Bank, with adequate staff, equipment,

- 42 -

facilities and other resources, and that the positions of head ofsaid unit and of three coordinators who will assist the head ofthe unit in coordinating in general the activities under each partof the Project, have been filled with professionals whosequalifications, experience and terms of reference are satisfactoryto the Bank (para. 4.02);

(II) that IBAMA has assigned 8 professionals, whose qualifications,experience and terms of reference are satisfactory to the Bank, tobe responsible, within IBAMA, for matters relating to theexecution of the Conservation Units, Pantanal, Atlantic Forest,Brazilian Coast, Strengthening of IBAMA, Environmental ActionPrograms, Technologies for Environmental Management andEnvironmental Education components and sub-components of theProject, respectively (para. 4.02);

(III) that higher level staff, in adequate numbers and withqualifications and experience acceptable to the Bank, have beenretained by IBAMA to strengthen its Directorate for Administrationand Finance, and that the latter has been provided with adequateaccounting equipment (para. 4.12);

OV) that the counterpart funds required to carry out the first year ofthe Project shall have been allocated in terms consistent with theestimated costs therefor in the 1990 budget of the Borrower(para.3.39);

6.03 The followin. will be conditions for Disbursement of the Loans

(V) for each existing Conservation Unit to be consolidated under theproject, IBAMA would have updated its 1988 baseline data on thethe status of that Uzit (para. 3.09);

(VI) for the execution of the Protection of Ecosystems andInstitutional Development components, that the respectiveOperating Agreements with each of the participating States andexecuting agencies will have been signed on terms and conditionssatisfactory to the Bank (paras. 3.15 and 3.32);

(VII) for the Brazilian Coast sub-component, as a condition fordisbursement under the project in each State and at the level ofSECIRM, that local project coordination and administrativearrangements be in place, on terms and conditions satisfactory tothe Bank (para. 3.24);

(VIII) for the Remote Sensing sub-component, that IBAMA will havesubmitted to the Bank (a) a copy of the executed agreement betweenIBAMA and INPE, satisfactory to the Bank, under which INPE shalltrain staff to be assigned by IBAMA for the interpretation ofremote sensing data in the 4 centers included under the project,and (b) detailed terms of reference for the administration andstaff of, and first year tzaining programs and requiredconsultants'services for, the 4 centers included under the project(para. 3.30).

- 43 -

6.04 The following will be dated covenantes

(IX) IBAMA will restrict its selection of proposals for the preparationof environmental action programs for purposes of the EnvironmentalAction Programs subcomponent (para. 3.31), to be started during1990, to proposals submitted by the States or State Agencies toIBAMA not later than May 31, 1990;

(X) by June 30, 1990, IBAMA will have furnished to the Bank, forcomments, detailed draft terms of reference for the first set ofstudies proposed under the Technologies for EnvironmentalManagement sub-component (para. 3.34);

(XI) by June 30, 1990, IBAMA shall contract the services of amanagement consulting firm to assist with the structuring of IBAMA(para 3.26);

(XII) by June 30, 1990, IBAMA shall enter into an agreement with theUnited Nations Development Program (Projeto de CooperacaoTecnica), for the provision of consultants and equipment forproject implementation, the terms and conditions of which shallhave been previously agreed upon with the Bank (para. 4.20);

(XIII) by September 1, 1990, an independent academic institution will behired by IBAMA, with qualifications and under terms of referencesatisfactory to the Bank, for the carrying out of annualindependent evaluation studies of the project (para. 4.09).

6.05 Goverment has also provided assurances that:

(XIV) the project's annual work program and budget would be madeavailable to the Bank by June 20 of each year for review andcomments;

(XV) that the Treasury (Secretaria do Tesouro Nacional) of the Ministryof Finance would make available to IBAMA, through the Ministry ofInterior, all funds for expenditures to be financed by theBorrower, either from the counterpart funds or from the proceedsof the loan, required to carry out the project, in accordance withand within the time periods set forth in the relevant Plano deADlicacao (investment plan); and

(XVI) that IBAMA would make available to v-ch project executing entityfunds in a timely and adequate amount as specified in the annualOperating Agreements.

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Annex 2

45 Page 1 of 4

IBMAProiect smolementation Arrangements

1. Brazil's National Environmental Agency. the Brazilian Institute forEnvironment and Natural Rene'table Resources eIBAMA). will coordinate allproject activities, and dlrectly execute the Conservation Units andInstitutional Development components.

2. SBAMA has been created by Law 7.735 of February 22. 1989, and isclassified under Brazilian law as entidade autarquica de regime especial',having administrative and financial autonomy. It is linked to the Ministryof the Interior. Under IRAMA's statutes, its main attributions are toformulate, coordinate, execute and cause to execute the national policy forthe environment and for the preservation, conservation and the rational use,the fiscalization and control of, and support for, natural renewableresources.

3. IBAMA is headquartered in Brasilia and has Superintendencies in all25 States. lBAMA's operations are funded out of the federal budget and outof its iacome, which is generated through fees and fines applied in theforestry and rubber sectors. Under the *Our Nature ProgramO a National Fundfor the Environment has been created, which enables llAMA to receivefinancial contributions from a variety of sources and to pass them on toenvironmental projects. lSAMA acts as the Secretariat of the NationalEnvironmental Council (CONAMA). which is composed of all SISNAMA agencies andrepresentatives of the principal sectors of the economy (energy, agriculture,mining etc.). CONAMA has an essential role in reviewing proposals for andthe enforcement of environmental standards and legislation.

4. lSAM substitutes for, and continues the activities of. previouslyfour separate institutions: the Brazilian Institute for Forestry Development(13D?), the Superintendency for the Development of Fisheries (SUDEPE), andthe Superintendency for the Development of Natural Rubber (SUDHEVEA), underthe Ministry of Agriculture; and, the Secretariat for the Environment (SEMA).under the Ministry of Housing, Urban Affairs and the Environment. lBAMA'sadministrative statutes and management structure were defined by Governmentin July/August 1969, and Congress has approved its personnel and salarystructure in December 1989. lAMA,'s new structure has, through thedistribution of responsibilities among its five directorates (very much inline with the distribution of responsibilities among its predecessororganizations), assured a certain measure of continuity in the carrying outof the previous functions of SZHA. IBDF, SUDEPE and SUDNEVEA. While lBAMA9sbasic organlration has been implemaented at the federal level, it is stillbeing concluded at its State level Superintendenc is, where more than 80S ofthe staff are located. Further consolidation of the institutional reforms ofth environment sector will continue in 1990 (for ISAMA's statutes, pleaserefer to the legimento Interno' and Organizcao Basica documents in theProject File).

5 The basic concept underlying project Implementation arrangementswithin SUAMA is not to create a separate structure within IBAMA, but rather,to strengthen the executive capabilities within 1BAMA's regular structure,thereby contributing to the project's overall Institution-building objectivesand to the sustainability of activities beyond the project period.

6. Project implementation arrangements continue the already establishedadministrative mechanisms, which have been put In place since 1987 by SEMA,IBAMA and the participating States for the project preparation, with

-46 - Annex 2-46- ~~~~~Page 2 of 4

significant support from a UNDPIPNMA Technical Cooperation Project. Becauseof its positive experience with the UNDP assistance, IBAMA plans to contracta follow-on Technical Cooperation Project with UNDP, for purposes ofimplementing the PNHA.

7. The President of IBAMA will rely on a small Project CoordinationUnit (PCU), in IBAMA's Secretariat for Planning and Coordination (SEPLAC).for the coordination of the project. The Project will be executed by four ofIBAMA's five directorates, &nd through its financial, legal andadministrative offices, and participating States and executing agencies.Under current legislation, SEPLAC is to assist the President in thecoordination and supervision of planning, budgeting, administrativemodernization, informatics. coordination with regional agencies andinternational cooperation in environmental affairs. The PCU has already beenestablished for purposes of the National Environmental Program (PNMA), andIBAMA's already existing PNMA task force is being reassigned to the PCU. ThePCU is headed by a Project Coordinator. who will be assisted by onecoordinator for each of the three components of the project, two projectmonitoring officers, and support staff. The institutional structure for thecoordination of the PNMA, including the Project Coordination Unit (PCU), hasbeen created through Portaria No. 1060/89-P. of October 31, 1989.

3.8 Responsibilities for the implementation of components and sub-components by IBAMA's directorates, participating States and executingagencies are:

Ci) The Conservation Units Component would be executed by theDirectorate for Ecosystems (DIREC). The ultimate responsibilityfor executing the component will be retained by IBAMA at thefederal level, whereas responsibility for day-to-day execution atthe field level will be delegated to the State levelSuperintendencies, very much in line with their earlier IBDFattributions and existing operational routine. For purposes ofthe Conservation Units Component, IBAHA is negotiating with theGovernment of the Federative Republic of West Germany a technicalassistance package, which would supply short and longer termspecialists to DIREC, some of them during the start-up phase of-the project.

(ii) The Protection of Ecosystems Component would be coordinated byIBAA at the federal level. while execution will be contractedout, through Operating Agreements with respective States andagenciess

- the Special Proiect for the Pantanal, would be coordinated byDIBEC; the states of Hato Grosso and Hato Grosso do Sul wouldexecute the project, under Operating Agreements with IBAMA.In each of the two states' OEMA9, the Special Project for thePantanal would be carried out by PNMA task managers. Onlywith regard to inter-state coordination needs, projectezecution would depend on a small Interstate coordinationunit, which would be attached to the group in charge of theConservation Plan for the Alto Paraguai Basin (PCBAP). Thehead of the interstate coordination unit would be appointedby agreement of the Governors of Mato Grosso and Hato Grossodo Sul.

- the Special Proiect for the Atlantic Forest would becoordinated by the Directorate for Control and Fiscalization(DIRCOF); the States of Santa Catarina, Parana, Sao Paulo,

Annex 2Page 3 of 4

Rio de Janeiro and Espirito Santo would execute the project,under Operating Agreements with IEAMA Interstatecoordination of the project between the group of fiveparticipating states would be carried out by the alreadyfunctioning Atlantic Forest Consortium.

- the SPecial Proiect for the Brazilian Coast would becoordinated by DIRCOF; the project would be executed by theSecretariat of the Interministerial Commission responsiblefor the Resources of the Sea (Secretaria da CommisfslInterministerial oara os Recursos do Har--SECIRM), whichdirects a federal-level coordination group involving allGovernment agencies vhich have legal responsibilities forcoastal management, and by the States of Rio Grande do Sul,Santa Catarina. Sao Paulo, Rio de Janeiro. Bahia and RioGrande do Norte, under Operating Agreements with IBAMA.

(iii) The Institutional Development Comqr,nent would be executed:

- For the sub-components of (a) the Strengthening of IBAMA, (b)(b) the Program in Support of Environmental Action; and, (c)the Development of Human Resources, by the Directorate forAdministration and Finance (DIRAF). which would also supportother project components, in accordance with its generaladministrative attributions;

For the sub-components of (d) Technologies for EnvironmentalManagement; and, (e) Environmental Education, by theDirectorate for Incentives to Research and Information(DIRPED). which vould also support environmental educationand other institutional strengthening activities under otherproject components in accordance with its generaladministrative attributions.

9. IBAMA's five directorates would participate in a multidisciplinarygroup for the evaluation of projects proposed under the Program in Supportof Environmental Actions. Each of IBAMA's Directors would be fullyaccountable vis-a-vis the Project Coordinator for the implementation ofPNM activities under their respective responsibilities. Within theDirectorates. each project component and sub-component would have a specialcoordinator, in charge of all implementation and monitoring activities forthe respective tasks. IBAMA has provided to the Bank a detailedincremental staffing plan for purposes of the PNMA at the level of each ofthe four lBAMA directorates in charge of project lmplemontation, and at thelevel of IBAMA's financial, administrative and legal offices, in accordancewith I2BHA'u recently approved detailed administrative structure.

10. llAMA's project coordination staff will determine, on a case bycase basis and depending on the respective issues.and availablecapabilities, to what extent they vish to rely on the Superintendencies ofIBAMA for field level Implementation, in addition to their obligatoryroutine of field visits, as a minimum once every two months in each of therespective participating States. In addition to their own field visits,2BAMA's PCU and Directorates will rely on a detailed monitoring andevaluation system (see PNMA-Estrutura de Administracaol Monitorial inProject file, and Annex 9 below).

11. Responsiblities for project Implementation are sumarized in thefollowing tables

WIU Annex 2

1oge 4 of 4

ocSlE.*otck Oramaas wAm Uma ininatalto

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................

151101 31iu111 81 011 1C 111Stt 9 M3l5 t li I O0t'S *IlVS l1901.W0"S

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.........................

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*tstlstl ttt...gs ....s... stt..t...................... 5111 0111AN831103 1

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- 6, -

-50 - AWEy L

Jallowtt (lkwiOtCwIst b ROJBtC?

SUtNNAT *ACcunts COSt SunR111i

trs S mil to (USS Nil iAIl I otalt................. ................ *----R--- o* ateLocal Ifo*l9t Total local loe.e.' loee. Eschiingp costs

I. lwvISluIml costs9x stlas

................

O CIVIL Nows a UltDINGS 9a 42 140 9a 4 2 140 30 9* (t I UIPNH I is S t 23 2 160 7 3 242 30 16C.t 1IcISANUD COHPulRS ltI *l01 l t - 10 * 70 mOo - IOUIPItIl

............ ............ .

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...................

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..... ..... .... ........ .... ;........ ..... ............ ............ ....................

S*letal PERSONNEL tlPEuSIS 50 5O0 5 - 5 3

VItCI vt Costs 0 1 0a 0 2 01 @ 1 0 2 30 0OITHER NIB1IA 3 2 0 4 3 6 32 04 3 6 t° 2

..... ....... ........ ... ...... ..... .. i.. .... .. ........ ..... ................ ...

Swb-leot1 tUtERIUt J 3 0 4 37 3 3 0 3. 35 CoWiRaCIIO SivICiS

....................

Wi(iCII AtiUEWAJCt O I 00 01 0o 08 01 30 0ttt1ER StERCtS 171 5 3 9 S 4 It 8 I 9 it4 10 13

ie4_ t~IluRaCttO SRtilCES I 6 20 IS S16 2 O5 1a 13... ... ....... .. . ... .... ....... ..... ............ ......... .. ... .... ....... ......

SwIlotl IONt tCUIPUtIUI 6 6 3 6 50.2 466 3 6 so 2 7 34,..... ....... ........ ..... ....... ..... ...... ..... ......... .. ... .... ....... ...

total IUVtEIStII COIS 83 S s I S8 S 63 S s S S I Sg s 66

lI a ututRt' CoSts...............

PtSONNEI laPtEStS...................

SLIhUI mS AtD it&uCaCLS :95 * '9 s1 15 * 13iRvE&t* LttoHwCS 46 4 a 48 4 * 3

... ... .............. ....... ........ ....... ..... ....... ....... ............ .......

So-?olal PERSSomLi tEapStLS 24.3 24 J 24 3 24. 3 16B. IlRIUA

eh;ld vumnCucstls 2 1. 1 3. 5 2 1 1 3 5 30 2OINEtt AtIRIAt 4 9 0.1 1 .4 40 S 5 s. 4 :0 4

.......... .. ..... ..... ................... ......... ......... .......

Seh-le'..; ajiRthTt 7.3 t.6 69 7. 1. 6 . to 1C. fJt01RClto SOtVICtS

....................

WHtIM UIIlt(tt1t 10 0. 4 1.4 1 0 1. 4 30 1OTHER SUWICAS 14 3 I 6 IS, 143 1a is .9 10 it

.... .... .......... .............. ..... ....... ........ .......... ............

ihteoal IStIUCTEO SERVICES '1 3 2 0 1?. I s.3 2.0 1t.3 12 12.... ... ...... ...... .... .... ...... .......... .......... ......... .............

Total RECuIRtN cCtes *469 3.6 s 469 S a0. 6S 1 ttTotal SAS&IlUI COSTS 130 4 18. 7 149 I 130 4 * 1 149. 1 13 0oo

Php,sil Cot:iq see 48 1.1 1 48 1.1 6 .1 is 4Price Cattt p i 109 0 4 11.3 10.9 0.4 11.3 3

total ttdCt tOStS 146t 2 20.2 166 4 1412 203X 166 4 12 11251*5*. ShutS. SIS isaS ssan$.se... 2855 iSiSS SIiI

...................................................................................................

gm 1 tS t

- 51 -

ANNEX S

BRAZIL

NATIONAL ENVIRONMENTAL PROJECT

FINANCING PLAN

_________________________________.______________________________________.___

TOTAL IBRD GOVERNMENTCOMPONENTS US$ M 2 USS M 2 USS M

A) Conservation Units 48.6 47 22.7 53 25.9

B) Protection of Ecosystems 58.4 80 46.8 20 11.6

A) Institutional Development 56.3 80 45.1 20 11.2

D) Project Coordination,Monitoring, Evaluation 3.1 80 2.4 20 0.7

TOTAL 166.4 70 117.0 30 49.4e_______________________-…----------__-_-----------------_------_______…_____________0

- 52 -

AMNE 6

BRUZIL

RATIONAL EnVYRONRERThL PROJECT

ESTIMATED SCUEDULE OL AWNK DISBURSD0ITS(US$ million)

Bank Disbursed CumulativeFiscal Quarter During Disbursement Z BalanceYear Ending Quarter Amount of Total of Loan

1990 Dec 31, 1989 0.0 0.0 117.0Mar 31, 1990 10.0 1I 10.0 11 8 107.03un 30, 1990 9.0 19.0 16 98.0

1991 Sep 30, 1990 8.7 27.7 24 89.3Dec 31, 1990 8.8 36.5 31 80.5Mar 31, 1991 8.8 45.3 39 71.7Jun 30, 1991 8.8 54.1 46 62.9

1992 Sep 30, 1991 8.7 62.8 54 54.2Dec 31, 1991 8.7 71.5 61 45.5Miar 31. 1992 8.8 80.3 69 36.7Jun 30, 1992 8.8 89.1 76 27.9

1993 Sep 30, 1992 9.0 98.1 84 18.9Doc 31, 1992 9.0 107.1 91 9.9MIar 31, 1993 9.0 116.1 99 0.9Jun 30, 1993 0.9 117.0 100 0.0

}/ Initial deposit of US$10.0 mIllion into the Special Account.

- 53 -ANNZX 7Fag. 1

BRAZIL

NATIONAL ZNVTRONMEITAL PROJECT

Conservation Units to be Assisted Unagr the Proiect

PARQUZ NACIONAl ARt! (H! )

01. P.N. HONS? PASCOAL - JA 22,500

02. P.N. AMAbONIA - PAIAN 994,000

03. P.N. ARARADOS DA SRRA - RS 10,250

04. P.N. ARAGUAIA - TO 562,312

05. P.N. BRASILIA - DP 28,000

06. P.M. CABO ORANGE - AP 619,000

07. P.N. CAPARAO - MG/ES 26,COO

08. P.R. CHAPADA DIAMANTINA - IA 152,000

09. P.N. CHAPADA DOS GUIMARAZS - HT 33,000

10. P.N. CHAPADA DOS VEADE%ROS - GO 60,000

I1. P.N. MAS - GO 131,000

12. P.N. GRANDE SZRTAO VEREDAS - MG/BA 64,000

.13. P.N. ITATIAIA - RJI/G 30,000

14. P.N. JAU - AM 2,272,000

15. P.N. LAGOA DO PEIXE - RS 34,000

16. P.N. LZNCOIS KARANHENSES - MA 170,086

17. P.M. MARINHO DOS ABROLHOS - BA 91,800

18S. P.N. PACAAS NOVOS - RO 756,801

19. P.N. PANTANAL MATOOROSSENSZ - MT 135,000

20. P.N. PICO DA MEILI - AM 2,200,000

21. P.M. SAO JOAQIM - SC 38,600

22. P.N. SUMRA DA SOCAINA - RJ/SP 100,000

23. P.N. SZRhA DA CANASTRA - MO 71,525

24. P.N. SRR DA CAPIVARA - PI 97,933

25. P.N. SZRRA DOS ORGAOS - RJ 11,000

- 54 -AX 7Patg 2

RESERVA SIOLOCICA (AREA (MI

01. R.J. SOORSTAMA - ES 24,000

02. R.3. AIUWARI - AM 288.000

03. R.3. ATOL DAS ROCAS - RN 36,249

04. R.5. GUAPORE - RO 600,000

05. R.5. LAGO DIRATUBA - AP 385,000

06. R.I. POCO DAS ANTAS - RJ 5,000

07. R.5. RIO TROMBETAS - PA 385,000

08. PB. SERRA NIGRA - PE 1,100

09. R.8. UNA - A 11.400

ESTACAO ECOLOGICA

01. I.E. ANAVILEANAS - AM 350,018

02. 1.Z. TAIAMA - MT 14,225

03. E1.. BABITONGA - SC 7,882

04. E.E. GUARAQUECABA - BR 13,638

o3. Z.I. JUAMI-JAPURA - MT 745,950

06. E.I. JUREZA - SP 24,605

07. E.E. MARACA-JIPIOCA - AP 72,000

08. E.Z. PIRAI - RJ 4,000

09. E.1. SERRA DAS ARARAS - MT Z8.700

10. 1.g. TAIM - RS 33,995

AREA DE PROTECAO AMBIENTAL

01. APA DA SEEM DA MASTIQUEIRA - MGISPIRJ 402,517

02. APA DE CAIRUCU - RI 33,800

03. ADA DE CAUMIA-IGUAPI Z PMEUE - SP 202,882

04. ADA DE GQARAQUECAJA - PR 291,500

05. APA Dg JnICOACOARA - CE 6,800

UNIDADE ISTADUAL

01. E.. STADUAL DI AGUAS EN MDADAS - Dr 10,547

- 55 -

ANNEX 7?ago S

PROGRAIA MACIORA DO NUO ANRWI??

COIPON! NTE UNIDADES DE CONSERVAYXO

ITUROS *#A KL(CAO K PIIOIOEAKS

(@mgluioido Vlwntza Il )

ClIERIT GO RACKS 0 CUIIrICS SM"O*IOS

A * fVAGILtOArt OOS - Prosxsgedsat Ms ccntros m*bvoms

tCcSStS1QuS - Tito de fe.s.itcnAt.vidadfs *od'strMs *OXbii

- t£*edso di esgeceas= Ctwlefto #f n rVe* wsam (ari)- e.u sos one protte

* *IOIEScIATVIOO * r de iatwit gs nac'ORal- Aea de intgnsi wA"dil- Cadimtsuo do icossitiSi- Aer prtetida

Co PROILEWA * Ninorucie I richas- Oisetawnte= Pgiugcetl - lime, !acdios

- ca- nca- rsio- Veodallimo- t^Im"ao- PtcYwa a gtricultqv

O* EStSOE CACUKSASS - Naots / *1N-TCCG?eotecwQvrfr uS* - ieftutlrstva

* ~~~* C9iseasbut

- Pland do eanso- MtWi&l * stlgtlve 'iia 141st'tIt - duClteve

E SaI Ji PU5O1 * rtcs wr rielari wt * -wt o de mp eiro/voweretvuios

- CastohA - fstus$ itt hoji- Tewe so rwha1lv,

f 9 ItMACAIUSO votuu/dusidade 0w0l.guall do ciatre wba00"is wotxis

- geca do a* tivediad oli-il5O

-56-

Coastal anaesementInstitutions ang Leaislation

1. The Special Project for Coastal Management would be Implemented bythe Secretariat of the laterministerial Comission responsible for theResources of the Sea (Secretarig da Com-lusso Interministerial narn osRecurjo do f _--SECIRM), which directs a federal-level coordination groupInvolving all Covernment igencies which have legal responsibilitles forcoastal management.

2. Special legal dispositions apply to coastal management. OnSeptember 12, 1974, with Decree No. 74.557, the Federal Government createdthe Interministerial Comission responsible for the Resources of the Sea(Cogmislo Intermlnisterial pcr. go Recursos do Mar--CIM). Other key steps were the followings (i) on July 26. 1982, theGovernment of Brazil joined the International Convention for the Preventionof Pollution of the Seas (l on September 16, 1982. the Government ofBrasil set forth the test of the International Convention's charter inDecree No. 67.566; (iii) also In 1982, the National Congress ratified theVuited Nations Convention for the lights of the Sea; (iv) on April 7, 1986,the Government issued Decree go. 92.522 approving the Socond Sectoral Planfor Sea L.sources (Plano Setorial oars gs Recursos do Mbr); and. finolly.(v) In 1988 the Covernment submitted to the National Congress for app:ovala proposed law for the creation of the National System for CoastalManagement (SisteMa Nacional de Gerenciamento Coeteiro), whichinstitutionalizes the joint vork program of CIRM and CONAMA (parc. 7).

-57- Annex 9

Monitoring and Evaluation

1. Monitoring and Evaluation would be complementary functions, toprovide project management with feedback on project performance andresults. Monitoring would aim at controlling compliance with short termtargets, while annual evaluation would analyze whether the project achievesdesired results and impact.

2. Monitorina would have the essential function of ensuring theanticipation and timely resolution of any bottlenecks, and quality control.Monito:eing would focus on the compliance with project targets in terms ofquantity, quality and timeliness, and of follow-up by management on anyissues previously highlighted in the context of monitoring. The PCU andthe task managers within the Directorates of $BAMA would monitor projectimplementation on the basis of frequent field visits; field visit routinesand budgets would be laid out systematically to assure regular fieldcoverage. The project also provides flexibility for ad hoc trips.Monitoring would involve a standardized routine rof reports, reviews andconsolidation of data, through (a) monthly action oriented updating reportsfrom local level project executing agents, reporting on key actions of thepreceding months, and highlighting key pointz for the month to come; (b)trimestral progress reports, comparing original plans, actual achievementsin quantitative and qualitative terms, and highlighting issues requiringintervention of the project coordination; (c) special issue orientedreports, whenever needed; (d) routine review meetings; and. (e) shortspecial studies, which may be coumissioned by the project coordinator, whenhe sees a need to probe into emerging problems. The Bank would receiveconsolidated semestral Monitoring Reports from IBAMA on March 31 andSeptember 30 of each project year.

3. The purpose of Annual Evaluation would be to measure progresstowards the project's larger objectives, and to identify any factors in thesectoral or broader social and economic project environment which couldundermine the achievement of project objectives. Project performance wouldbe evaluated by an inter-disciplinary technical team, from an independentacademic institution, during the second semester of each project year.SEPLAN would supervise the quality of the work of the evaluation team,which would be contracted by I1AM, in accordance with Bank guidelines forthe hiring of consultants.

4. Annual evaluation of the project would analyze the progress andquality of project execution, prospects for eventual longer term impact,issues in strategy, and constraints, if any; it would also review theusefulness and contribution made by project monitoring, and overallperformance of project management at the level of BAMA and participatingstat is. The broad indicators listed below will be further fine-tuned byIBAMU and SEPLAN, In the course of preparing the terms-of-reference forthe annual evaluation team.

5. Detailed monitoring and evaluation indicators and liplementationschedules have been established for each project component, specifyingobjectives, physical targets and other expected project results, schedulesand deadlines, and Institutional responsibilities. The detailed indicatorsare available in the Project Pile and should be used as the basis for BankSupervision.

Annex 9- 58 - Page 2 of 13

6. This Annex lists. by component. some key targets to be monitoredunder the project, and considerations in annual evaluations.

Monitoring and EvaluationReZ Tarmets and Indicators

A. CONSERVATION UNITS

1. Monitoring/Targets

a. Consolidation of Existing Conservation Unlits

starting in 1990: Revision/updating of 10 management plansstarting in 1990: Elaboration of 15 new management plansstarting in 1990: installation of physical structures, equipment,personnel for supervision, protection. administration, educationand tourism (in the case of National Parks), in all 50Conservation Unitsstarting in 1990: periodic surveys and monitoring ConservationUnitsstarting in 1990: Land survey and demorcation (completion ofdemarcations in 1992) for all Conservation Units with incompleteland regularization status

b. ZEtablishment of Model Conservation Units

starting in 1990: installation of physical structures, equipment,personnel for supervision, protection, administration, educationand tourism (in the case of National Parks) in all 5 Model UnitsBy early 1992s Adequate functioning of the five Units

c. Establishbent of New Conservation Units

1990s Viability studies for 10 new Conservation Units1991: Viability studies for another 10 new Conservation Unitsstarting in 1991: Decrees of creation of a minimum of 5 newConservation Unitsstarting in 1991s better representation of ecosystems in SIMUCstarting in 1991: Protection of new Conservation Unitsearly 1992s initiation of physical desma rcation of at least fivenew Conservation Units

t iuAuiaA1990s Creation of Mobile School1990: Preparation of teaching modules19901199111992: ten regional courses in each year

*. Strenothenal of the National System of Conservation Units (SINUC)

1990: Data gathering and studieslelaboration of new SINUC Plans* study of the conceptual, legal and administrative parameters;- study of ecological representativeness2 study of medium- and long tem personn l needs- desip of aw administrative policy

_ 59 _ Annex 9Page 3 of 13

end 1990s completion of new SINUC Planend l990: initiation of implementation of new SINUC Plan

2. Evaluation

(l) For evaluation of the Drogress and quality of execution:Regarding the equipment of 50 priority Conservation Units withcontrol and protection mechanisms (observation towers,headquarters, houses for park wardens, watch posts, firecombat equipment etc.): are the infrastructure works of thedesired quality, sited appropriately and staffed as needed?Do they prove to effective in protection and managementactivities? Are they duly assisted, supplied and supervisedby IBAMA?Regarding the preparation of 20 basic studies for newconservation areass Are terms-of-reference, methodologies,performance of researchers contracted and presentation ofintermediate and/or final results of satisfactory quality andtiming? Art they resulting in geographical and legaldefinition of additional Conservation Units?Regarding the establishment of five new Conservation Units:Are the steps for their legal establishment, staffing andequipment duly taken by IBAMA? What, if any, are factorsadversely affecting project implementation, but out of IBAMA'sdirect control?Regarding the five Model Conservation Units: Is theirestablishment progressing satisfactorily? Do they achievetheir purposes of conserving representative samples of theAmazon, Pantanal and Atlantic Forest Ecosystems, and ofdemonstrating in an exemplary way alternative conseGvationstrategies?Regarding the elaboration of 15 Management Plans andrevision/improvement of 10 existing ones for federalConservation Units: are progress, methodology and quality ofthe preparation of the plans, or the final plans,satisfactory? Are steps undertaken to apply therecomendations of the management plans in the respectiveConservation Units?Regarding the carrying out of land tenure registrationactivities for all conservation units in question (landdiscrimination and demarcation of limits)s is technical andlegal work proceeding on schedule? Are legal or financingmechanisms applied for land regularization performing tosatisfaction?

Regarding the establishment of a Mobile School for theManagement of Conservation Units: are curricula, selectLon ofparticipants and performance of students satisfactory? Mhatadjustments if any, should be made?

Regarding the Revision of the SINUCs are studies proceeding oanschedule, and what steps are being initiated to incorporateeventual recommendations into the legal and methodologicalframework of the SINUC?

-60 Annex 9Page 4 of 13

(ii) For longer term Impact evalulationt

Is the project making progress towards:

the elimination or minimization of undue uses of conservationunits, guaranteeing their integrity?

the elimination or minimization of illegal invasions ofConservation Units?

the integration of the work of federal and state agenciesresponsible for the Conservation Units?

benefitting populations in the vicinity of Conservation Unitz(vses for scientific, recreational, cultural or economicpurposes)?

guaranteeing the effectiveness of state level agencies toprotect Conservation Units?

S. PROTECTION OF ECOSYSTEMS

a. Pantanal

1. MonitorinslTaruets

by mid-1990: establish integrated management modelby 1993: complete Conservation Plan for Bacia do Alto Paraguai(PCBAP)Implementation of licensing system for pollutant activities,(starting in 1990): (a) sub-bacias Cuiaba, Taquari, Coxims, Jamiand Correntes (1990)s (b) sub-bacias Sao Lourenco, Itaquira,Miranda,.Aquidauna, Negro (1991)s (c) sub-bacias Paraguai, Jaura,Cabacal, Apa (1992)Adoption of effective supervision/policing system for flora andfauna (starting 1990)Implementation of water quality controlControl of Gariapo miningreclamation of degraded areastraining of 15 technicians for management of jacare and capivara(by end 1991)development of a technical model for management of jacare forPantanal producers (by end 1992)

stablisbment of 2 centers for reception and rehabilitation offorest life (1990)Public awareness campaigns (starting 1990)

2. Evzluation

(ii) For evaluation of the urorerss and uality of eaccution:

Is the project achieving a tangible degree of modernization, interms of equipment and training, of state and local environmentalInstitutions?.

-61 Annex 9-Pae5of 13

_ Are environaental monitoring services established and functioningto schedule? What are the key results and practical useslfollow-up of monitoring data by responsible authorities?

- Are there improvements in environmental protection activities forflora and fauna?

- Do the strategies to recover aegraded areas prove to be effective?

- Do project strategies to better orient and control mining related,environmentally hazardous practices, prove to be effective?

- Are the projects aimed at increasing the knowledge and sustainableuses of local flora, fauna and fisheries resources for economicpurposes successful?

- Is coordination and integration of environmental protection andmanagement programs in the Pantanal between Mato Grosso and MatoGrosso do Sul improvisg?

- Is the knowledge-base about the Pantanal being improved throughthe project's studies and data-bases?

Are education and public awareness campaigns having any measurableimpact?

(ii) For longer tern im,act evaluations

Are regional development and planning reflecting recommendationsof the Integrated Conservation Plan for the Alto Paraguai Basin(PCBAP) in regional planning and development?

- Ate Government, Municipalities and citizens' organizationsincreasingly containing the process of degradation of theecosystem caused bys poaching, predatory fisheries, pollution(mining, agricultural, urban and industrial), deforestation ofriverbanks and affluent areas pollution?

- Are new, recently licensed or established economic activities inthe Pantanal compatible with environmental protection objectives?

b. Atlantic Forest

1. MonitorinulTarnetes

a. Genera

- EstablisbmentlMplementation of the Consortium for the Atlantic Forestof the states of Santa Catarina, Parana, Sao Paulo, Rio de Janeiro,Espirito Santo

- Consolidation of 26 existing state conservation units- Surveys /nventories of Atlantic Forest Region, for Registration as

UNESCO Blosphere Reserve (underway since 1989)s Decrees of areas1990191; Declaration as Biosphere Reserve, 2nd semester, 1992)

-6 - Annex 9

Page 6 of 13

- Establishment of an integrated system of supervision- Research with the objective of identifying. by 1992. potential and

possible uses of Atlantic Forest areas- Promotion of sustainable development, especially in fishing communities

Environmental Education for the Public- Training for technical staff

b. Existina Conservation Unitst

Santa Catarinas- surveys/management plans and their implementation forconservation units of Pedra Furada, Serral do Tabuleiro.Sassafras, Canela Preta and Acuai

- delimitation, demarcation and registration of Serra doMar and Coastal Mountains

- Land and soil surveys for Pedra Furada, Tabuleiro,Canela Preta and Aguai(demarcation 90/92;infrastructure1991; signposts 1992;

- in each the four conservation units, installation of 1administration building. 1 depot, 1 garage. 1 office and1 shelter;

- development of eco-tourism programs

Parana: - infrastructure for Morumbi IX (visitors center,administration)

Sao Paulos - Jureia and Carlos Botelho Park, research/surveys offlora and fauna

- Management Plans for conservation units of CarlosBotelho. Jureia and Petar

- Delimitation and demarcationsAlto da Ribeira (75km);Jureia-Itantins (36 k1m); Jacupinga (58 km); CarlesBotelho (71 km); landsurveys for same units4

- 1992:demarcate conservation units.Infrastructure and equipment of Petar, Jureia,

Jacupiranga, Carlos Botelho (253 km fence; 2 nurseries;8 gates; 6 offices; 6 shelters; 2 laboratories; 13sentry boxes; 12 residences for field staff; signposts)

Rio de Janeiros- management plans for 3 conservation units (Desengano,llha Grande, Pedra Branca)

- delimitation, demarcation, registration of Serra do Marand Coastal Mountains

- land surveys of conservation areas not yet appropriatedby the State

- establishment of Center for Selection and Recuperationof forest fauna of Guarantiba

- establishment of seed bank In Biological Reserve ofAraras

- land surveys/regularization 4 conservation units(identification of boundaries/perimeters 1st semester1991)

Espirito Santo,. consolidation, development and manaoement of 6conservation units, totalling som 7000 ha (Duas Bocas,Pedra Azu., Forno Grande, Mestre Alvaro, Fonts Grande,Cachoeira da Fumaca)

- Delimitation, demarcation and registration of Serra do

-63 - Annex 9Page 6 of 13

Mar and Coastal Mountains;- Installation of 45 km of fenee and 20 guard houses, 6

administrative headquarters, 8 guard towers. 12 sentryboxes, 6 depots, 6 sheds

- train 66 staff of existing conservation units

c. New Conservation Units:

Santa Catarina:- identification of new areas for conservation units andwatershed protection

- studies for proposed areas, landsurveys etc.

Parana: - create, equip and regularize land tenure of Park ofEufrasina

Espirito Santo:- establishment of 7 new conservation units (State Park ofSetiba, Ecological Station of Manguezal de Conceicao daBarra, Manguezal de Anchieta Park of Cacarenema; StatePark of Itaunas Guarany et al..

d. Sustainable DeveloAment:

Sao Paulo: - Studies for the sustainable use of resources of theAtlantic Forest and the associated eco-systems of theLagunar de Iguape-Cananeira region (survey of plantspecies: 3 management plans and pilot projects; periodicfield evaluations)

Rio de Janeiro:- establishment of system for monitoring flora and fauna

EsDirito Santot- economic and social studies, includinS field researchand interpretation of satellite images

- pollution control, cooperation with PROCOP and Sao PauloState programs;

- environmental monitoring

e. Suoervision/Monitorinat

Santa Catarina:- establishment of a company of Forest Police (192 men)- construction of units for this company- equipment (vehicles, radio, fire-fighting)- strengthening of existing civil supervision team of OEMA

Paranas in- tegrated state supervision system- equip environmental protection team- build 18 posts for and equip battalion of Forest Police- supervision of the use and occupation of land in Serra

do Mar and Bacia Litoransa, by the Executive Secretaryof the Coastal Council

- Equipment for/ Monitoring of Industrial and domesticeffluents (lacia Litoranea)

Sao Paulo: - through strengthening of the Department of Protection ofof Itatural resources of the State of Sao Paulo and theForest Police

- -~~~~~~~~~~6 - Annex 9Page 8 of 13

- elaboration and implementation of a plan for aerialsupervision

- special operationfi for supervision('Blitz )- Equipment of Forest Police Battalion

Rio de Janeiro:- equipment of two existing patrols- creation of six new patrols

EsTirito Santot- increase contingent to 250 men;- build troops of forest police- education and training of personnel- protection infrastructure and equipment- control and supervision of forest resources (operacao

verde')

f. Research:

Santa Catarinas- systematic survey of fauna (habitats, geographicdistribution, present situation)

Parana:s- monitoring water quality and quantity/Dacia Litoranea- socio-economic and environmental impacts/Serra do Mar- Inventory of Manguezais- zoning of aquatic estuary ecosystem- micro-zoning in environmentally critical areas- survey of infrastructure for eco-tourism- survey of historic and pre-historic sites- survey of fauna- evaluation of fisheries potential in 'microbacias*

Sao Paulos - scientific surveys of the effects of atmosphericpollutants affecting flora close to Cubatao

- soil surveys/Serra da Paranapiaba for purposes ofrecuperation of degraded areas

Rio de Janeiros- activities/contributions for conservation managementplans

Espirito Santos- completion of environmental macro-zoning

g. Environmental Education:

Santa Catarinat- media campaigns- development of locally adapted programs- development of didactic materials for local schools- convenios with municipal governments/proamotion of

municipal workshops- college-level lectures/debates

creation and distribution of basic texts to 25 000students and 1000 professors

Parana: - Expositions- Training of staff for visitors centers- development of local educational programs

Annex 9Page 9 of 13

- 18 courses for teachers- publications- ecological programs for visitors

Sao Paulos - development of environmental education programs- development of published materials

Espirito Santo:- 5 posts for environmental education- 2 courses/So hours; 10 courses /30 hours; 34 courses120

hours- production of 4 posters, 4 textbooks (circulation 25 000

each); folders, videos, slides

2. Evaluation

(i) For evaluation of the Progress and quality of ezecutions

_ are the schedules for the implantation and consolidation of anIntegrated Protection System being adhered to? If not, what arethe major obstacles, case by case?

- Are investments in the consolidation of 26 ezisting ConservationUnits being carried out at the desired levels of quality and pace,and are they accompanied by the necessary staffing, education andtraining programs?

3 With regard to the definition of additional areas to be put underconservation, are technical studies, and land discrimination.legalization, demarcation and protection activities according toschedule?

3 Are the execution of each of the state level projects and theperfoamance of the Interstate Consortium conducive to theattainment of project objectives related to better environmentalprotection?

(ii) For longer term mDact evaluations

Is the project making progress towards $ts longer term objectives of:

- Preservation of species on site?- Preservation of watersheds and soils?- Preservation of Natural Landscapes?- Creation of social mechanisms/processes to address urgent

environmental issues?- for critical areas, harmonization of environmental preservation

and sustainable development needs?- Consolidation of hillsides in high risk areas?- Preservation of fish resources?

(iii) Brasillan Coast

1. MonitorinulTarRets

starting in 1990:

- provide human resources, material, equipment for ezpansion ofcoastal Mane t

- e6 - ^Annex 9Page 1o of 13

train personnel (7 training courses -6 regional, one national)implement information systemZoning and monitoringContinuous updating of geographic informationtechnical and financial evaluationinvolvementlawareness generation with local communitiespreparation of legislation pertinent to macro-zoningprotection of endangered species

2. Evaluation

(Ui) For evaluation of the progress and quality of executionw

Are project progress and quality satisfactory in terms of:

execution of macro-zoning in the States of Rio Grande do Sul,Santa Catarina. Sao Paulo, Rio de Janeiro, Bahia and Rio Grande doNorte, &tong the entire extension of the respective statecoastlines?

- generation of technical environmental information. for areasselected as a result of zoning?

- implementation of environmental monitoring mechanisms in the sixstates?

- geo-codification for purposes of mapping/macro-zoning?-. establishment of a system of environmental information for the

Coast.

(11) For longer term imnact evaluation:

Is the project making progress towardss

- Knowledge of the coastal resources and their rational use- Continuous updating/feedback to the system on Information forCoastal Management, for purposes of zoning and corrective actionprograms;- use of collected data by state governments and municipalitiesfor environmental management and planning.

C. INSTITUTIONUL DEMELOPMENT

1. Monitorina/Tariets

a. Strentthenina of IBAMA

contract, by June 30, 1990, management consulting firm toconsolidate structuring of 1BAMA. Results/recommendation by end1990; implementation to be completed by mid-1991Develop a training program/environmntal management (team to beformed January 1990; terms of Reference to be prepared fort- environmental impact studies- licensing, control and supervision- administration of conservation units- nvironmental zoning- public participation in environmentt1 management, environmental assistance for develcpment planning

Annex 9Page 11 of 13

- environmental priorities for the industrial sectors- publication of basic documents starting July 1990; first 4courses September-December 1990Establish RENIMA and CNIA, starting 1990; operationalize by 1992establish, equip and train personnel for 4 centers in remotesensing (starting 1990), which should become fully operational in1992.

b. Support for Environmental Action Prosrams

Until 1992:

strengthening of at least 10 OEMAssupport to at least 30 proposals for training of human resourcessupport to up to 4 pilot projectsassistance in the preparation of at least 30 state andlormunicipal proposals

c. Technoloites for Environmental Managetent

January 1990, Formation of Teams/preparation of First Conference1990 1st semestert Elaboration of term-of-reference for technicalstudies1990 2nd semester:Establishment of Study and Researchsystems/networksby December 1991: Publications of studies and research resultsby December 1992: Publication of Technical Manuals/TestApplicationsDecember 1992s Dissemination of Technical Manuals (EnvironmentalZoning, RIMAs, River Basin management, Ecotoxicology)

d. Environmental Education

establish a system to optimize productlon and dissemination ofinstructional materials on the environmentproduction educational material on the environment (production of9 documents on themes relevant to regions of North, Center-Westand Northeast (three documents respectively by Nov.90/91192)production of 3 methodological documents (North Nov.90 CenterWest, Nov. 91; Northeast Nov.92)2 Videos (1990) methodological/legal12 Radio programs (by August 91)3 Videos on Conservation Units (by August 1991)10 Information leaflets (by Pkuist 1991)structure correspondence course to reach 3000 participantsSupport to Pantanal. Atlantic Forest and BraziiLan Coast projects/supervision (annually to each region)

2. Evaluation

ti) fo: the ealuation of urotress and alitv of ecutions

(a) Structurina of SlAMA

What are the progress, results and issues Lu the structuring of

-68 - Annex 9Page 12 of 13

IBAHA?_ What are the quality of teaching materials and of cOurses promoted

by IBAMA's Unit for Human Resources and Training? How is theirwork being accepted and judged in terms of its usefulness withinthe environmental sector?

_ Regarding the consolidation of all environmental legislation: whatare the legal aspects on which work has been carried out? Howstrong is the lnterest of States to obtain support from 1BAMA inthis area?

- What, if any, are pending key issues in the implantation of REIMA(one National Center and support to 27 state level documentationcenters)?

- To the extent that they function already, what has been the outputand contribution of the three new centers for the interpretationof remote sensing?

(b) Suooort for Environmental Action Programs

evaluation would concentrate on the aspects of selection criteria in, andquality and preliminary results oft

_ Strengthening at least 10 environmental agencies (OEMAs) in theproject's priority areas;

- Support to at least thirty local training programs;- Support of four pilot projects in new conservation strategies;- IBAMAs technical assistance to States and Municipalities in the

preparation of small environmental projects, for the purpose ofobtaining external financing;

cc) Technolosies for environmental administration:

Evaluation should follow-up on the terms of reference and performance ofresearch networks, and on study, workshop and publication outputs proposedfor the processes of elaboration of revised guidelines for the preparationof RIMAs, Environmental Zoning, River Basin Planning and Ecotoxicology.

(d) Environmental Education:

Evaluation should focus on questions oft

- quality, use and costs of education materials produced?- performnce of IAM&'s education division, which is being

strengthened under the project?- Integration of lBAMA's education activities with related

activities of other federal (e.g. EKBRATER, BORWPA) and stateagencies?

(ii) For looaer tesm enact evaluations

Is the project making progress towards

- consolidating the re-organization of the National EnvironmentalAgency (IBAM1O?

- Improving federal and state level environmental administration,especially with regard to the enforcement of the regulatory

b9-Annex 9Page 13 of 13

f ramework?supporting the exe ative, legislative and jurisdiction powers ofthe federal and st. te governments in the elaboration andstrengthening of o environmental legislation?contributing towar s more knawledgeable decision making in theenvironmental sect r, as a result of RENIM&?increasing the tec aical capabilities and use of satellite imageryf6r environmental anagament and planning?increasing municip 1 and local participation in the resolution ofenvironmental prob ems?

- 70 -

ANNEX 10o

Document Available Ln the Proiect Fil.

1. Institutional Development Component (IDAMA, August 1989; inPortuguese)t contains full component description, monitoring andevaluation indicators, and implementation schedule.

2. Conservation Units Component (IAMA, August 1989, La Portuguese):contains full camponent description, sonitoring and evaluationIndicators, and implemntation schedule.

S. Conservation Units Components lank Working Paper, October 1989(being up-dated, to Include September 89 mission data):

4. Protection of Icosystems Componants Pantanal (IlhMA, August 1989,In Portuguese)l contains full component description, monitoringand evaluation Indicators, *and implementation schedule.

S. Protection of Ieosystems Components Atlantic Forest (IBAMA. August1989, In Portuguese): contains full component description.monitoring and evaluation indicators, and implementation schedule.

6. Protection of gcosystoms Components Coastal Management (LAMA,August 1969, In Portuguese): contains full component description,monitoring sad evaluation Indicators, and implementation schedule.

7. Project Organisation and Implementation (llAMA, August 1989: inPortuguese):

B. Draft Project Operating Agreeeants

9. Annual Operating Plans for all project components, for Year 1.

10. Project Cost tables.

:1. Znviroamintal legislation.

12. A review of IrasilLan legislation affecting the environment (SENA,1986, In Portuguese) :

13. Position Descriptions for Year 1 higher level staff andconsultantst

14. Position Descriptions for Sechnical Assistance requested by SlAMAfrom MS ln connection with the project.

15. Outline for Semlnar to be held by IllwA to familiarioe all of Itsstaff vith the project objectives, targets and coordinationarrangements:

16. Description of pilot activities proposed under the InstitutionalDevelopment Component Znvironmental Action Progrms:

seve o2 2

? f JPralltanary study sad cn of tefereuce for LaproVeesnt of the

Is. Legisltion certifying that OTitulos de Dlvi1 Agrarle' can beused for purposes of indeunlflcatlon in connection with theprotection of natural resources.

9. *The *Ross& Matures* Ptrogram.

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