PROJECT BRIEF

1. IDENTIFIERS: PROJECT NUMBER:PROJECT NAME: Bangladesh - Aquatic Biodiversity

ConservationDURATION: 5 yearsIMPLEMENTING AGENCY: The World BankEXECUTING AGENCIES Government of Bangladesh

Ministry of Fisheries and Livestock, Department of FisheriesBangladesh Water Development BoardLocal Government Engineering Department

REQUESTING COUNTRY OR COUNTRIES: People’s Republic of BangladeshELIGIBILITY: Bangladesh ratified the CBD on May 3, 1994.GEF FOCAL AREA: BiodiversityGEF PROGRAMMING FRAMEWORK: OP 2 (Coastal, Marine, and Freshwater

Ecosystems)2. SUMMARY: In this project, the GEF aims at financing the incremental costs of promoting wetlands and aquatic biodiversity conservation and sustainable use in Bangladesh. It will do so by complementing the IV IDA's Fisheries Project. The GEF approach relies on removing barriers for successful mainstreaming of aquatic biodiversity and wetlands conservation within the fisheries sector through demonstration, capacity building, enhancement of the information base for sound decision making, incentive development, and policy development. The GEF components will contribute to support the piloting of community-based aquatic sanctuaries; enhance local capacity for addressing aquatic ecosystem management issues; enhance the knowledge base for sound ecosystem management and decision-making, including monitoring and evaluation for sustainable long-term aquatic ecosystem management; and develop policy and action plans for aquatic biodiversity conservation, mainly by mainstreaming it within the fisheries sector. It is expected that these activities will have substantial multiplicative effects both in Bangladesh and in other Asian countries.

3. COSTS AND FINANCING (MILLION US):

GEF: - Project- PDF:Subtotal GEF:

US$ 5.0 millionn/aUS$ 5.0 million

CO-FINANCING:

-IDA:-DFID:-Govt. of Bangladesh:-BeneficiariesSubtotal Co-Financing:

US$ 27.8 millionUS$ 15.5 millionUS$ 9.64 millionUS$ 2.9 million

US$ 55.84 million

TOTAL PROJECT COST: US$ 60.84 million

4. ASSOCIATED FINANCING (MILLION US$)

5. OPERATIONAL FOCAL POINT ENDORSEMENT:

Name: MD. Abdul AzizOrganization:

Title: DEPUTY SECRETARY, ERD

Date: October 11, 1998

6. IMPLEMENTING AGENCY CONTACT:

Christophe Crepin, Regional Coordinator, SAS, ENVPhone (202)-473-39727, FAX (202)-522-3256

BLOCK 1: PROJECT DESCRIPTION

BACKGROUND

Aquatic Biodiversity and Inland Fisheries

1. Bangladesh is rich in terms of globally important wetland ecosystems and associated aquatic biodiversity. The total area of inland waters is estimated at ca. 7 million ha or close to 50% of the country. These inland water habitats form the largest floodplain in Asia (Ganges/Bramaputra), widely considered to be one of the most important wetland complexes in the world1. Therefore, at least half of the country can be considered a huge seasonal wetland subjected to periodic flooding and containing a complex array of inter-connected habitats and ecosystems. The entire system (i.e., more than half of the country) is widely accepted as a wetland of international importance under the Ramsar definition. These ecosystems include rivers, estuaries, seasonally inundated wetlands (beels and haors), lakes, and baors (oxbow lakes). There are more than 50 semi-permanent freshwater wetlands that have been identified as wetlands of international importance (Scott 1989); because of the periodic flooding and their hydrological characteristics, however, these sites cannot be viewed as isolated habitats for conservation purposes and must be viewed as part of this entire, dynamic system.

2. Aquatic ecosystems in Bangladesh are therefore part of a vast floodplain whose characteristics are determined by periodic flooding and its biodiversity is highly adapted to these ecological characteristics. Most species show complex life cycles which include elaborate migration patterns, high fecundity, high mortality, and strong dispersal characteristics. Thus most aquatic biodiversity in Bangladesh depends on the intricate ecological relations produced by annual flooding on a very large scale and the hydrological relations between the different habitats described above.

3. The floodplains and other wetlands are also considered important international wintering and stopover grounds for migratory waterbirds (primarily shorebirds and ducks), supporting millions of individuals belonging to 150 species. This avifauna includes rare and endangered species such as the Black-headed Ibis, Spot-billed Duck, Swinhoe’s Snipe, and the globally threatened Pallas’ Sea-Eagle. The vast Assam plains in eastern Bangladesh have been identified as an Endemic Bird Area (EBA) by Birdlife International under the status of “urgent conservation priority.” Bangladesh’s rich aquatic biodiversity also includes 260 species of finfish belonging to 55 families (placing Bangladesh third in the world in terms of fish species per land area), the Gangetic dolphin (Platanista gangetica), 2 crocodilians including the Gharial, 19 amphibians, 63 species of palaemonid and penaid prawn, crabs (primarily Potamonidae), 24 species of aquatic chelonians (tortoises and turtles), freshwater mussels (Unionidae), and snails. It is widely accepted, however, that Bangladesh’s aquatic biodiversity has not yet been adequately described, and scientists believe that future research will uncover new species previously unknown to science. At any rate, the known levels of endemism in the Ganges/Bramaputra basin are very high: 25% of the aquatic species found in this basin are found nowhere else. Because its mouth occur in Bangladesh, and given the dispersal behavior of aquatic biodiversity described above, the floodplains of Bangladesh become crucial for conserving the globally important biodiversity of the entire basin.

4. Not surprisingly, Bangladesh is also endowed with vast fish resources. The total fish production of the country is about 1.3M metric tons out of which inland fisheries contribute almost 80% (0.99M).

1 A Directory of Asian Wetlands (IWRB, 1986) and Wetlands and Integrated River Basin Management in Asia and the Pacific (UNEP and Wetlands International, 1997).

About 12 million people depend directly or indirectly on inland fisheries. Fish and fisheries provide 60% of the national protein, 8% of export earnings, and 5% of GDP. The importance of fisheries in Bangladesh is clearly very large, and given its strategic importance for food security and national development, the fisheries sector has received considerable attention. Since independence, the Department of Fisheries (DoF) has implemented a series of development projects with the assistance of various donors, aimed at supporting the fisheries sector while expanding the incomes of poor people.

Threats to this Biodiversity

5. Wetlands in Bangladesh and their associated freshwater biodiversity, however, have been impacted because of the high population densities throughout the country, pollution, and the heavy exploitation of inland fish resources. In addition, many natural freshwater habitats, ecological processes, and hydrological cycles have been altered through interference of the large-scale engineering works for agriculture, flood control, and road projects.

Government Response and Project Strategy

6. Fully addressing and mitigating the impacts of these large-scale infrastructure works upon wetlands and aquatic biodiversity will take time and will require a better understanding of the inter-relations between hydrological cycles, natural ecosystems, and aquatic biodiversity. Addressing these root causes in order to sustain the fisheries sector, however, is much more feasible because of its strategic importance. The project is therefore based upon the strategy of mainstreaming aquatic biodiversity within the fisheries sector. With an increased information base, it is possible to start mitigating some of these impacts, particularly if it becomes widely understood that the sustainability of the fisheries sector depends upon the healthy functioning of hydrological and ecological cycles. In addition, and because most freshwater ecosystems in Bangladesh were naturally dependent upon the flooding regimes which determined the ecological characteristics and adaptations of its biodiversity, freshwater biodiversity conservation in the country cannot be approached from the perspective of establishing protected areas. Instead, aquatic conservation can only be achieved through a large-scale sustainable use approach which preserve and enhances local habitats at small local scales but have strong cumulative impacts upon the entire basin. Therefore, the principle of mainstreaming biodiversity conservation within the widespread inland fisheries sector provides the best alternative to maximize the chances of successful aquatic biodiversity conservation over the long term.

7. The Bangladesh Conservation Strategy (1992) recognizes this approach, and contemplates a series of activities to ensure ecosystem integrity and biodiversity conservation, including actions at the level of water resources management, policy, zoning, shrimp culture, regulation, and targeted research. The long-term sustainability of fisheries and the conservation of biodiversity in Bangladesh have to be intimately related to each other. Mainstreaming biodiversity and ecological considerations within the fisheries sector offers the best opportunity to achieve biodiversity conservation goals.

Project Objectives

This GEF supported activity is fully blended with the IDA IV Fisheries Project.

8. The development objective of the IV Fisheries Project is to support the fisheries sector in Bangladesh with a special emphasis on sustainable resource management. Two overarching goals are

rural poverty alleviation and employment generation. The specific objectives of the IV Fisheries Project are:

to achieve ecologically sustainable fisheries management to expand employment opportunities and increase income for fishermen to develop technical skills in both the public and private sector as well as the capacity of

the Department of Fisheries for effective implementation of field work

9. The global environmental objectives of the GEF components of this project are to conserve globally important wetlands and aquatic related biodiversity in Bangladesh by mainstreaming biodiversity and aquatic ecosystem conservation within the inland and coastal fisheries sector. Importantly, this project will also help develop a model with broader applicability for mainstreaming biodiversity considerations in a sector with crucial social, economic, and environmental dimensions throughout tropical regions.

Project Description

10. The IV Fisheries project and its GEF components are described below. The World Bank, through IDA would finance most of the open-water fisheries components, the freshwater and shrimp aquaculture, an important part of the institutional support, and management by technical assistance would be financed by DFID. The incremental costs associated with addressing global biodiversity issues will be financed by the GEF. GoB and beneficiaries will contribute to costs under several components on matching basis.

A. Inland Open-Water Fisheries Management (Total Cost: $12.9M; GEF $1.0M)

i. The objectives of this component are to focus on sustainable resource management as a basic means to reduce poverty and improve local people’s nutrition through the sustainable development of open-water fisheries in an environmentally sound manner. It would involve the following components: Community-managed fisheries stock enhancement (native species only), including establishment of community-based aquatic sanctuaries in a variety of ecosystems as described in the background section, fish pass construction, and aquatic habitat restoration (channel and beel de-silting). Local communities would be directly involved in the design, site selection, management, and monitoring of the investments and actions taken by all the interventions. A proper phasing of this component will be developed as described on section “Institutional and Implementation Arrangements” below.

ii. The GEF would partly support the piloting of community-based aquatic sanctuaries by financing the incremental costs required to establish biodiversity-friendly specific activities within these sanctuaries. This sub-component will involve the establishment of at least 50 community-based sanctuaries in different representative ecosystems. Establishment of fish sanctuaries is already accepted as a tool to conserve economically important fish stocks and increase fish production in other parts of Asia. Only limited experience has been gained by ICLARM in Bangladesh. Protection would be organized and provided on a voluntary basis by local fisher, who would also be direct beneficiaries of the increased production, thus providing strong incentives for sustainable participation in the program. Aquatic sanctuaries will be established by motivated communities, who will be responsible for marking boundaries and enforcing permanent exclusion of extractive activities. Whenever possible, an effort will be

made to rescue traditional knowledge for aquatic resources management and biodiversity conservation.

iii. Under a baseline scenario, these sanctuaries would provide shelter to commercially important species only with an uncertain and probably marginal value to broader biodiversity objectives. Under the alternative scenario, the GEF will finance the incremental costs of excluding all extractive activities in the sanctuaries, restricting and enforcing hunting, increasing community awareness, and conducting independent biodiversity monitoring. These biodiversity-friendly aquatic sanctuaries therefore will go far beyond protecting only target fish species, and will provide valuable information and experience for policy development.

iv. Overall management of this component will be by DoF with technical support from consultants and fisheries biologists posted at the divisional level. At the sanctuary level, a Sanctuary Management Committee will be established, including members from local councils, NGOs and fisher. These community-level committees will be responsible for all aspects of site selection, design, and enforcement, with support from local NGOs. Since these sanctuaries are relatively small, the value of this component is based on its demonstration value and high potential for future widespread establishment of sanctuaries throughout Bangladesh.

v. Criteria for establishment of the sanctuaries will be developed prior to CEO endorsement. These criteria will combine ecological considerations (global biodiversity importance), community interest, geographical and ecological representation, and others to be identified, as described on section “Institutional and Implementation Arrangements” below.

B. Coastal Shrimp Aquaculture (Total Cost $7.4M; GEF financing $0.5M)

i. This component is designed to demonstrate biodiversity-friendly and sustainable production by relatively small land owners at the community level. Most components (baseline) will be financed by IDA and will be based upon current understanding of the inherent challenges with all shrimp projects. The best practice to be followed includes mangrove protection based on a full recognition of the ecological services provided by mangroves; and increased selectivity during the stocking process to ensure a minimization of negative impacts upon non-target species.

ii. The GEF will finance the costs to achieve biodiversity conservation based on a full understanding of the linkages between production and its broader ecological and biodiversity implications. The incremental activities required to reach this output will start by assessing existing interactions, including identification of impacts upon the life-stages of different non-target species and development of a conceptual model to quantify these impacts. The project will then pilot some innovative and more selective techniques and will develop recommendations and relevant plans for action to minimize these impacts. Results will feed back into the following training sub-component of the program, on an ongoing basis.

iii. The training program for shrimp fry collectors will then aim at reducing inappropriate handling and unscientific transportation of the fry. In this sub-component, 30,000 fry collectors and small fry traders (29.5 thousands post-larvae collectors and 500 post-larvae and prawn fry traders) will be trained and low cost equipment developed for temporary storage of shrimp post-larvae at the collection centers and scientific transportation of the post-larvae to the farming areas.

iv. All improvements to existing polders will be done under strict environmental conditions and assessment, without destruction of any natural habitats. Community organizational aspects would be arranged through contracts between the Water Development Board and an experienced NGO. If a new polder is developed, it will be preceded by a feasibility study, covering environmental (including global environment), engineering, aquaculture, economic, socio-economic and community organizational aspects.

C. Freshwater Aquaculture, Extension and Training (Total Cost $4.5M; no GEF financing)

i. This component will fund an aquaculture demonstration program, providing technical support and credit/inputs to individuals, and groups of farmers. Its objective is to increase fish supplies from aquaculture through intensified yields and increased areas under production, to strengthen extension links by which newly researched technologies reach farmers, and to improve management of fisheries at thana level through greater co-operation between the DoF and the private sector. Training will also be provided to DoF officials, including all staff in the relevant thanas and districts. No GEF resources will be required for this component but it is expected to allow some reductions in overfishing pressure.

D. Institutional Support to DoF, Capacity Building and Policy Development (Total Cost 24.4M; GEF $3.5M)

i. Through this component, the GEF will support the establishment of a long-term foundation for successful mainstreaming through institutional support, capacity building, ecological assessments, and policy development.

Institutional Support and Capacity Building

11. The GEF will finance the incremental costs of capacity building to strengthen local capacity to deal with global biodiversity issues, based on improved ecological and aquatic ecosystem management. Staff within the DoF currently have mainly a strong focus on fish biology and production, but are weak in dealing with other more specific issues linked to biodiversity conservation.

12. Training opportunities will be provided to DoF, NGOs, academic institutions, and the private sector through national and international formal education, workshops, seminars, and courses on relevant topics. As already mentioned , the GEF will finance incremental costs defined as those that will increase staff capacity beyond those required to support management activities with an exclusive fish production vision in order to incorporate full consideration and understanding of biodiversity issues. These skills include freshwater and aquatic ecology, population biology and modeling, taxonomy, cultural aspects, traditional knowledge, and genetics.

Ecological Assessments and Policy Development

13. Policy recommendations and operational action plans will be developed based on a comprehensive assessment of priority ecological issues. Despite the strong attention that the fisheries sector has received in Bangladesh, the current information base is not adequate to make sound long-term decisions regarding sustainable aquatic ecosystem management and biodiversity conservation. The GEF will finance the incremental costs of key targeted research and studies, as well as

monitoring and evaluation activities to help scope the dimension and complexity of biodiversity conservation and mainstreaming related needs. These actions would allow to identify vital data and key linkages between the fisheries sector and freshwater biodiversity conservation that would serve as a strong basis to implement the conservation strategy and for future mainstreaming. These include:

Assessment of ecosystem integrity and sustainability within the context of large-scale water projects. Emphasis will be on the relations between aquatic biodiversity conservation and inter-connections between deepwater areas, baors, beels, and sanctuaries, (including understanding the food webs) as well as additional biological and ecological information in relation to the annual hydrological cycle. This component will allow for a full understanding of the root causes of biodiversity loss and will serve as the foundation for developing policy recommendations designed to mitigate these losses.

Contribution to the formulation and testing of ecological management practices for Hilsa fishing

areas. Current fishing practices are indiscriminate and thought to be destructive to associated biodiversity. Therefore, this activity would characterize the life-cycles of biodiversity associated with Hilsa fisheries which are of important culture value in Bangladesh. This information will be used to develop and implement a management plan for Hilsa that is biodiversity-friendly and which is expected to be considered as an innovative and pilot initiative.

Characterization and monitoring of aquatic biodiversity in all project areas, as an add-on to monitoring of floodplain productivity (non-GEF financed).

Dynamics of introduced exotic species and evaluation of impacts upon native biodiversity. Previous fisheries projects introduced a variety of exotic species which are believed to have had a negative impact upon native biodiversity. This study will scope and describe these impacts, develop policy recommendations and plans as well as pilot actions for eradication if possible.

14. The results of these activities will be used to develop policy recommendations and prepare strategic and technical action plans. An important tool to be used is a freshwater biodiversity database to integrate, monitor and manage existing information, plan future activities and prioritize areas for action, assess dynamics and changes in freshwater ecosystems, evaluate and measure impacts of human activities, etc. The information generated will be used to fine-tune project activities throughout the life of the project, develop new policies, and serve as the basis for dissemination and future fisheries projects preparation and implementation.

15. The GEF supported activities in this component will come in addition to complementary baseline capacity building activities. These baseline activities to be financed primarily by DFID include additional staffing and a team of national and international consultants to implement and monitor the impact of the project; overseas training for DoF staff to strengthen its capacity to manage fisheries sustainability; and the provision of improved DoF office and communication facilities in districts covered by the project.

Project Costs (U.S.$)

Component Total Cost IDA, DFID, GOB

GEF

A. Inland Open-Water Fisheries Management 13.01 12.01 1.0Community-Based Stocking Including Establishing Aquatic Sanctuaries

7.4 6.4 1.0

Restoration of Fish Habitats 1.91 1.91Fish Passes and Regulators 3.7 3.7

B. Coastal Shrimp Aquaculture 7.43 6.93 0.5Completion of TFP Polders 3.9 3.9Development of New Polder 2.8 2.8Biodiversity –friendly Shrimp Fry Collection and Training

0.73 0.23 0.5

C. Freshwater Aquaculture, Extension, and Training 4.5 4.5

D. Institutional Support to DoF, Capacity Building, and Policy Development

24.4 20.9 3.5

Project Management Unit 0.80 0.80National and Expatriate Consultants 8.5 8.5Transport, Machinery, Equipment 5.8 5.8Training, Workshops, Courses, Attendance to International Meetings

1.4 0.9 0.5

DoF District Offices 0.8 0.8Seed Farms and Training Centers 3.7 3.7

Policy development :5. Ecosystem Integrity, Sustainability,

and Water Issues

0.8 0.8

5. Ecological management of Hilsa fisheries areas

0.8 0.4 0.4

- Biodiversity monitoring 0.6 0.6 - Ecological relations of exotic species 0.3 0.3 - Action plans and Aquatic Database 0.9 0.9

Physical and Price Contingency 11.5 11.5 includedTOTAL 60.84 55.84 5.0

Global Benefits and Target Populations

16. As described in Section 1 (Background), at least half of the country can be considered a huge seasonal wetland subjected to periodic flooding and containing a complex array of inter-connected habitats and ecosystems. These inland water habitats form the largest floodplain in Asia (Ganges/Bramaputra), widely considered to be one of the most important wetland complexes in the world2.

17. The floodplains (particularly Haor Basin) are considered important international wintering and stopover grounds for migratory waterbirds (primarily shorebirds and ducks), supporting millions of individuals belonging to 150 species. This avifauna includes rare and endangered species such as the Black-headed Ibis, Spot-billed Duck, Swinhoe’s Snipe, and the globally threatened Pallas’ Sea-Eagle. The Assam plains in eastern Bangladesh have been identified as an Endemic Bird Area (EBA) by Birdlife International under the status of “urgent conservation priority.” Bangladesh’s rich aquatic biodiversity also includes 260 species of finfish belonging to 55 families (placing Bangladesh third in the world in terms of species per land area), the Gangetic dolphin (Platanista gangetica), 2 crocodilians including the Gharial, 19 amphibians, 63 species of palaemonid and penaid prawn, crabs (primarily Potamonidae), 24 species of aquatic chelonians (tortoises and turtles), freshwater mussels (Unionidae), and snails. It is widely accepted, however, that Bangladesh’s aquatic biodiversity has not yet been adequately described, and scientists believe that future research will uncover new species previously unknown to science. At any rate, the known levels of endemism in the Ganges/Bramaputra basin are very high: 25% of the aquatic species found in this basin are found nowhere else, and its mouth occurs in Bangladesh.

18. The project will have significant benefits on the conservation of this globally important biodiversity by supporting targeted priority activities and mainstreaming it within the fisheries sector. Significant lessons for replication in Bangladesh and other countries could be drawn from monitoring, studying, and disseminating the effects of project activities on biodiversity conservation.

19. In short, more than 50 semi-permanent freshwater wetlands throughout Bangladesh (more than 75% of the country) have been identified as wetlands of international importance, along with a host of rare and endangered species, such as Black-headed Ibis, Spot-billed Duck, Swinhoe's Snipe, Pallas's Fish-eagle, Gangetic Dolphin, Gharial and many fish species. The Ganges/Brahmaputra Basin has a 25% level of endemism, and the mouth of this river and it's floodplains in Bangladesh are crucial for the conservation of many of these endemics. Conservation of biodiversity in the inland wetlands of Bangladesh is therefore of global importance to biodiversity.

20. Most components of the complementary baseline activities would qualify as a program of targeted interventions for poverty alleviation because fish production is mainly carried out by the landless rural poor. The target population includes part-time subsistence fisher-families for whom fishing has traditionally been the only source of animal protein, poor women who are beginning to get involved in fishing activities, and small-scale shrimp farmers. The project would target the poor in two different ways: (i) by improving the value of floodplain fisheries through the stocking program and organizing the beneficiaries through NGOs to take advantage of the increased value of the resource; and (ii) channeling credit through NGOs to target groups particularly for inland and coastal aquaculture.

2 A Directory of Asian Wetlands (IWRB, 1986) and Wetlands and Integrated River Basin Management in Asia and the Pacific (UNEP and Wetlands International, 1997).

Institutional and Implementation Arrangements

21. The project would be implemented over a five-year period following a flexible approach to ensure that lessons learned are rapidly incorporated in the entire project, with objectives and activities adjusted accordingly. A full phasing schedule will be developed prior to CEO endorsement, indicating the key activities of each component that would constitute each phase, and the corresponding budget. The World Bank would appraise the achievement of the benchmarks/outputs of the first phase upon which the second phase would proceed. The benchmarks would include, but not limited to, selection criteria for the aquatic sanctuaries (biodiversity of significance, consideration of root causes operating at the selected sites etc.), and participatory activities and dialogue with communities to ensure their effective participation.

22. The executing agency will be the Department of Fisheries (DoF) and Ministry of Fisheries and Livestock (MOFL). The importance of enlisting the participation of key sectors in Bangladesh responsible for water management is recognized. Therefore, the Bangladesh Water Development Board and the Local Government Engineering Department will be integral to all project activities.

23. A project steering committee comprising three NGO, two private sector, and public sector representatives has been set up under the chairmanship of the Secretary, Ministry of Fisheries and Livestock, to guide project preparation and implementation. A small project implementation unit (PIU), under the direction of a Project Director (PD), would be established in DoF to handle accounting, procurement and administration. Financial management requirements as set out in B.P 10.02 will be addressed by the financial management specialist on the team. Project implementation would be carried out through the normal units of DoF as much as possible, with the PD providing appropriate coordination.

Block 2: Project Rationale

CAS Objectives Supported by the Project

CAS document number 17453-BD – Date of latest CAS discussion: March 6, 1998

24. The Bank’s overarching mission is to help Bangladesh reduce poverty by promoting rapid, job-creating economic growth and interventions that directly assist the poor. At the rural sector level, this goal is to be achieved through faster rural and agricultural development – shared economic growth, increased food security, and improved natural resources management. The linkages between aquatic biodiversity conservation, sustainable fisheries management and poverty alleviation are fully supportive of CAs objectives and are the foundation for this project. The CAS also aims at expanding partnerships with NGOs and donors, another characteristic of this project.

Rationale for GEF Support

25. As mentioned above, Bangladesh is rich in terms of aquatic biodiversity. Given its pressing priorities of poverty alleviation and achieving nutritional goals, however, it is very unlikely that Bangladesh would be able to address aquatic biodiversity issues without GEF support. There are serious technical, policy and information barriers that limit the prospects for achieving aquatic biodiversity conservation without a GEF grant. Mainstreaming biodiversity and ecological

considerations within the fisheries sector offers the best opportunity to achieve these goals. The GEF would finance the incremental costs necessary to achieve these goals by using the $61 million IV fisheries project as a vehicle, having therefore a very large leverage impact.

26. Freshwater biodiversity has been substantially impacted because of the high population densities throughout the country, pollution, and the heavy exploitation of inland fish resources. In addition, many natural freshwater habitats, ecological processes, and hydrological cycles have been altered through interference of the large-scale engineering works for agriculture, flood control, and road projects. Because most freshwater ecosystems in Bangladesh were naturally dependent upon the flooding regimes which determined the ecological characteristics and adaptations of its biodiversity, freshwater biodiversity conservation in the country cannot be approached from the perspective of establishing protected areas. Fully addressing the impacts of these large-scale infrastructure works will take time and will require a full understanding of the inter-relations between hydrological cycles, fisheries, natural ecosystems, and aquatic biodiversity. With an increased information base, it will also be possible to start addressing some of these impacts, particularly if it becomes widely understood that the sustainability of the fisheries sector depends upon the healthy functioning of hydrological and ecological cycles. Therefore, the principle of mainstreaming biodiversity conservation within the widespread inland fisheries sector provides the best alternative to maximize the chances of successful aquatic biodiversity conservation over the long term.

27. Nevertheless, many of these root causes will be addressed through IDA funds (baseline), including:

(a) Habitat alteration: Bangladesh has one of the world's richest and most diverse inland aquatic environments, supporting a variety of living aquatic resources. Fish migration and recruitment in natural water depend on good ecological conditions, but in recent years, for both natural and man-made reasons, the environment has been seriously degraded, one of the major consequences being the siltation of rivers and canals. Canals are a crucial element in interconnecting the open-water network and maintaining the migration of fish for breeding in the floodplains. Due to siltation, many formerly perennial canals and tributaries now flow only seasonally, and without these connections, stocks and production and species diversity will eventually decline. The project would assist in desilting/reopening important routes by which riverine fish reach floodplains to breed and graze.

(b) Effects of flood control: In order to increase food grain production, many flood control, drainage and irrigation (FCDI) projects have been implemented in the country. These projects were implemented without assessing their impact on fisheries. Some of the projects have blocked fish migration routes. The inclusion of properly designed fish passes to allow passage of fish through FCDI embankments and water regulators is one way of resolving this problem. A pilot program to establish a fish pass in FCDI project was taken in the Flood Action Plan. This limited experience has demonstrated that fish pass construction is economically viable and socially acceptable if potential conflicts among resource users are adequately addressed. The IV Fisheries Project will support the construction of fish passes and installation of fish friendly regulators.

(c) Over-fishing: The IDA loan and associated baseline co-funding will directly address the issue of over-fishing. A key incentive to be provided is the granting of 7-year leases to local communities for fisheries management. This will create a positive feedback mechanism for sustainable fisheries by internalizing the benefits of sustainable production over the mid to long term. Previous experiences demonstrates that this lack of “ownership” by local communities (based on yearly leases) has been the main incentive for unsustainable fishing practices, a practice that promotes “mining” of the resource in order to maximize profits within the 1-year period.

GEF Operational Strategy and Program Objectives Addressed by the Project

28. The project directly addresses guidance from the Biodiversity Convention and the COPs, including the promotion of conservation and sustainable use of biological diversity in vulnerable areas. It responds to COP-2 guidance through financing of measures for conservation and sustainable use and in-situ conservation. The second COP also reaffirmed the importance of the ecosystem approach, which is the primary framework under which this project was designed.

29. The project addresses GEF Operational Program Number 2 (Coastal, Marine, and Freshwater Ecosystems). It directly addresses OP objectives (conservation and sustainable use), including in-situ protection, and having a primary focus on ecosystems in areas at risk.

30. The project explicitly addresses all GEF outputs under OP 2, i.e., sectoral integration, sustainable use, and institutional strengthening.

Main Sector Issues and Government Strategy

31. Regarding aquatic biodiversity, the main sector issues have to do with the impacts of infrastructure, agricultural expansion, flood control, and fisheries upon the functioning of natural ecosystems and hydrological cycles. These issues are complex and cannot be approached from isolated perspectives or from the perspective of one sector alone. Therefore a crucial strategic consideration of the IDA IV fisheries project and its associated GEF components is to strengthen the understanding of linkages between sectors, impact on fish production, and aquatic biodiversity conservation. These factors have not only reduced fish yields in inland open waters, but have also seriously affected the abundance of some species (particularly valuable migratory carps) and may even be putting the availability of more resilient floodplain fish at risk.

32. The Government’s strategy to deal with these issues is developed in the Bangladesh Conservation Strategy (1992) and contemplates a series of activities to ensure ecosystem integrity and biodiversity conservation, including actions at the level of water resources management, policy, zoning, shrimp culture, regulation, and targeted research. These mainstreaming needs have been used as the basis for this project. Importantly, the Government of Bangladesh has just issued a National Fisheries Policy that outlines the government’s strategy of dealing with these issues which is consistent with these principles.

33. Increasing fish production is an important development objective for Bangladesh. There is some evidence that fish production in inland waters is declining. This is a result of over-fishing, construction of flood control development interventions (FCDI) projects, indiscriminate use of insecticides and pesticides, discharge of industrial effluents, destructive fishing practices, and siltation of river and canal belts. The protection and development of open-water fisheries is further

complicated by the common property nature of the resources which, in this case, makes controlling access to them difficult.

34. The Government is addressing the negative impact of flood control and road infrastructure on floodplain fisheries through a program whereby the floodplains are stocked with fingerlings. GOB is also considering establishing fish sanctuaries, constructing fish passes and desilting canals. Mitigation measures concerning shrimp farming include promotion of improved traditional rather than intensive shrimp farming; group formation; extension services on how to deal with shrimp disease outbreaks; conservation of wild seed and larvae and promotion of hatcheries for fry production. It recognizes institutional bottlenecks and the public sector’s over-involvement in fisheries activities and has expressed its intention to reorganize and restructure fisheries institutions and encourage the private sector and NGOs to play a greater role. It also recognizes the need for greater coordination within and among government agencies concerned with fisheries development and management to reduce duplication and overcome hurdles posed by multi-tier jurisdiction situations.

Project Alternatives Considered and Reasons for Rejection

35. Regarding the GEF components, the identification and implementation of traditional freshwater protected areas was considered and rejected because the degree of degradation that has already occurred in the country prevents from establishing a representative and meaningful system. In addition, establishing protected areas and therefore restricting fishing use would have enormous social consequences because of the high fishing pressure, population density, and poverty of landless fishers. Instead, a mainstreaming approach was chosen which builds upon the opportunities provided by the Fourth Fisheries Project.

36. An option considered was to follow a sector investment project approach that would provide more leeway to deal with institutional and policy issues. This alternative was rejected due to the complexity of the sector, inadequate information on some subsectors, and shortage of in-house fisheries expertise.

37. Another option considered but rejected was to include public sector construction of structures needed to increase shrimp production. The shrimp component would, instead, be designed to be a pilot for demonstrating environmentally-friendly production by relatively small land owners. Construction of salt-water inlets, flushing structures or channel improvements would be preceded by an agreement with a community group under which the community (assisted by NGOs) would approve the design, participate in supervision of construction, and agree to take over responsibility for operation and maintenance upon completion (except for major repairs) with technical assistance when required from BWDB. This would help in mitigating the deteriorating environment and minimizing social conflicts in shrimp farming areas.

Major Related Projects Financed by the Bank and/or Other Development Agencies (Completed, Ongoing And Planned)

38. Oxbow Lakes Fisheries (IDA): The project provided financing for hatchery and fingerling rearing facilities for six lakes. According to the Project Performance Audit Report, the project successfully demonstrated the application of aquaculture techniques in water bodies of around 300 ha which increased yields from 150 kg/ha to about 800 kg/ha without additional feeding. The experience of that project verifies the basic concept of floodplain stocking employed under the Third Fisheries Project. One weakness of the project was the insufficient delegation of tasks to the beneficiaries.

39. Shrimp Culture (IDA): The project aimed at improving shrimp culture within polders on 7,000 ha, 5,600 of which were located in the eastern Cox’s Bazar area, where shrimp culture during the wet season alternates with salt pans. The other 1,400 ha of polder land were located in a polder in the project area and they were part of a large scale test for improved shrimp culture in the shrimp/paddy rotation. The project also included hatchery development, extension services, credit and technical assistance financed by UNDP. It involved and NGO for organizing farmers.

40. Third Fisheries (IDA): The project was designed to support a sectoral development process aimed at (a) increasing incomes, particularly of the poor, and fish production for domestic consumption and export, (b) supporting the fisheries development in the west part of the country with emphasis on private sector participation, (c) accelerating the expansion of fish production in floodplains, and (d) strengthening sectoral institutions. The project demonstrated that fingerling stocking is technically and economically feasible.

41. Related Projects (IDA) that are under preparation include:

Water Sector Improvement; Gorai River Restoration; Coastal Embankments Rehabilitation II

42. Other projects include:

Second aquaculture (ADB) Aquaculture extension in Mymensingh, Phase I and II (DANIDA) Fisheries Training and Extension, Phase II (DFID) Northwest Fishculture Extension (IFAD/DANIDA) Oxbow Lakes Small Scale Fisheries Development (IFAD/DANIDA) Sundarbans Biodiversity Conservation Project (ADB/GEF)

43. The UNDP is also currently preparing a biodiversity project with Block-B funds. The project will address habitat conservation in a coastal location and in the northeast of the country (a large flood lake). Since the IV fisheries project does not contemplate work in the northeast of the country or habitat protection, both projects are highly complementary. Similarly, this project is fully complementary to the Block-B for the Bay of Bengal (International Waters) and will provide important lessons for the development of the SAP.

Lessons Learned and Reflected in Proposed Project Design

44. Experiences gained through project supervision, project implementation completion reports and reviews of fisheries sector in Bangladesh and the Asia region has been assessed. The major lessons learned include: (a) project design should be simple and flexible; (b) borrower ownership, beneficiary participation, and commitment of implementing agencies are critical for project success; (c) thorough project preparation is a prerequisite for successful implementation; (d) shrimp cultivation is a risky venture; to avoid diseases, schemes should be operated as designed and farmers should be advised not to misuse the system by over-intensification in order to make quick gains; good management of shrimp farms and promotion of hatchery-produced, disease free fry are also important; consideration of other more disease resistant and marketable species and polyculture to replace shrimp monoculture should a serious shrimp disease occur; (e) mechanisms for cost recovery and/or sharing should be agreed with all concerned during project preparation; (f) sound environmental planning, social compatibility and supportive institutional framework for a project are as essential to its successful implementation and eventual sustainability as are economic, financial and technical considerations; (g) NGOs are more effective than public sector agencies in motivation and formation of beneficiary groups; and (h) untested concepts, such as fish passes, should be tried out first at a pilot level.

Indications of Borrower Commitment and Ownership

45. A Steering Committee comprising representatives of public, private, and NGO sectors has been set up under the chairmanship of the Secretary, MOFL, to guide project preparation and implementation. DOF, with support of consultants, is responsible for project preparation. An extensive participatory approach is being followed to ensure ownership by key stakeholders. Staff of implementing agencies have been involved in intensive discussions with IDA missions. GOB’s commitment is also reflected in the cabinet’s recent approval of a National Fisheries Policy.

Value Added of Bank Support

46. A strong leadership role is required given the magnitude of issues and the number of donors working in the sector and the impact of investments of other sectors on fisheries. The Bank is in a unique position to play that role given its role in coordinating policies and donor activities in the sector and its accumulated understanding of what is needed to develop the sector (acquired through project and sector work). It is also in a position to build partnerships with experts in the sector and NGOs (including local, regional, national, and foreign NGOs), other institutions, and donors.

Block 3: Project Preparation

47. Has a Project Preparation Plan been Agreed with the Borrower?

Yes

48. Has Recipient Drafted a Project Implementation Plan?

Yes

49. Advice/Consultation Outside Country Department

i. Within the World Bank: ENVGC, SASRD, SACDH, EASRD, SACBDii. Other international agencies: DFID, UNDP, ADB, ICLARM

iii. NGOs: Prashika, IUCN, Bangladesh Center for Advanced Studies, Nijera Kori, Caritas

50. Issues Requiring Special Attention

A. Economic and Financial - None

B. Technical - None

C. Institutional - A major objective is to emphasize the participation of communities in almost all project components. Most of the responsibility for contracting and management falls upon the community, with the DoF at district and thana at levels retaining a supervisory and advisory role. A key role will be played by the beel-level committee, which will receive support from a contracted NGO as well as from DoF. The project will thus help to develop the capacity of both the DoF and the beneficiary communities to implement and manage sustainable fisheries development projects.

D. Social - i. The emphasis in the open-water components will be on the smaller water bodies where fishing

communities can be more easily organized into groups to manage project activities, hence ensuring the benefits are available directly to fishermen and equitably distributed. Those components (fish passes, habitat renewal) which promote the in-migration of fish will increase the proportion of smaller fish sizes, to the benefit of subsistence fishermen.

ii. Women will be encouraged to participate as much as possible in all project activities. However, the component most directly benefiting women is the training in shrimp fry collection, an activity which provides employment to tens of thousands of poor women in the coastal areas. Promoting more environmentally friendly collection techniques will help to make their livelihoods sustainable.

E. Resettlement - No voluntary or non-voluntary resettlement will occur. Some minimum land acquisition, especially in the case of fish pass construction, is envisioned.

F. Environmental - A detailed Environmental Analysis has been carried out that analyzed and identified the potential adverse environmental impacts of each of the proposed project

components. The design of each project component took these concerns fully into account in its design to eliminate or minimize potential adverse impacts. Although in some cases the full extent of an impact could not be fully predicted, the project has formulated a comprehensive monitoring program, the data from which would be used to adjust implementation procedures to mitigate any impacts that are found to be damaging to the environment. The design of each individual civil works activity would include an environmental analysis to assure that any required environmental mitigation is included as part of construction.

G. Stakeholder Participation - The approach taken to preparing the IV Fisheries Project was to take full advantage of past experience by appointing a team of specialist national and international consultants to prepare reports analyzing all aspects of the sector. The preparation process adopted a participatory approach, with the consultants’ visiting different parts of the country to seek the views of a cross section of stakeholders in the private and public sectors, followed by a series of national and divisional workshops to discuss the reports’ findings. The reports were finally discussed and reviewed during a pre-appraisal mission by the World Bank and DFID in February-March 1998.

H. Sustainability and Risks - Project sustainability is addressed at three levels: technical, institutional, and financial.

51. Technical sustainability. Inland fisheries management (stock enhancement, habitat restoration, fish passes/regulators, and aquatic sanctuaries), coastal shrimp aquaculture, and freshwater aquaculture extension and training components of the project appear technically sustainable. There would be special focus on appropriate management of the fisheries resource and promotion of approaches and technologies that would increase fish and shrimp production in a sustainable manner. Giving beneficiaries longer term instead of one year leases of water bodies would provide the incentive for resource conservation. Mainstreaming of aquatic biodiversity concerns into the development of the fisheries sector would contribute to long-term sustainability.

52. Institutional sustainability. The sustainability of community-based fisheries management as an institution is less secure. It depends on the organization and cohesiveness of the management of the groups and GOB’s commitment to long-term leases of water bodies to the communities. Institutional sustainability would be ensured by the significant involvement of NGOs in assisting the communities in organizing themselves to implement and operate the project and by the GOB’s commitment to beneficiary participation and agreement to lease water bodies to the communities for a period of seven years. The project would nurture broad-based support among major stakeholders (Government, communities, private sector, and NGOs).

53. Financial sustainability. The likelihood that the project would be financially sustainable after the close of the credit is substantial. All components have high financial rates of return and positive net present values. Most O&M responsibilities would be borne by the beneficiaries. Fiscal burden on GOB would be small.