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PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE

Report No.: AB1948 Project Name Venezuela-Expanding Partnerships for the National Park System Region LATIN AMERICA AND CARIBBEAN Sector Forestry (100%) Project ID P085458 GEF Focal Area Biodiversity Borrower(s) GOVERNMENT VENEZUELA Implementing Agency Servicios Ambientales del MARNN - SAMARNN

Centro Sim Caracas (El Silencio) Venezuela Tel: (58 212) 408 17 79 - 81 - 82 Fax: (58 212) 483 45 36 proyectocanaimagef@inparques.gob.ve

Environment Category [ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined) Date PID Prepared December 7, 2005 Date of Appraisal Authorization

February 28, 2006

Date of Board Approval July 27, 2006 1. Country and Sector Background Venezuela boasts among the highest levels of biodiversity in the world, ranking between 4th and 10th according to various taxa. Canaima National Park (CNP), located in Bolivar State in southeastern Venezuela and spanning 3 million hectares, is particularly important, harboring nearly 120 endemic genera, 2 endemic families and 117 endangered species (Huber, 1997). CNP’s massive table-top mountains, known as tepuis1, were classified by Dinerstein et. al (1995) as one of two Globally Outstanding and Relatively Intact ecoregions in Latin America.2 Indeed, CNP was declared a Natural World Heritage Site in 1994 due to its singular scenery, a unique mosaic of ecosystems including high levels of biological diversity, numerous endangered animal species, and a high concentration of globally vulnerable species such as endemic plants and animals restricted to montane and tepui formations. CNP and its surrounding Areas under Special Administration Regimes (ABRAE) constitute 18.3 million ha of essentially continuous and pristine natural habitats that serve as a major biological corridor for genetic flow in the Guiana Shield region (spanning parts of Colombia, Venezuela, Brazil, Guiana, Suriname and French Guiana). Additionally, CNP accounts for 45% of the hydric resources of the Caroní River, the most important hydroelectric resource in Venezuela. Although 85% of CNP is comprised of pristine natural habitats with relatively intact vegetation, Canaima faces a wide range of pressures and threats to its unique biodiversity and fragile ecosystems. Key threats

1 The tepui formations are abrupt, rocky mountains reaching heights of between 800 and 3,015 feet above sea level. Given the region’s warm and moist climate, these formations harbor unique ecosystems that are distinct from those of other tropical mountains due to their high number of endemic species. Thus, a tepui is a physical and biological unit containing unique species and ecosystems. 2 Along with the Japura Negro moist forests in Amazonia, cited in Dinerstein et.al, A Conservation Assessment of the Terrestrial Ecoregions of Latin America and the Caribbean (1995), The World Bank, p. 24.

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include roads, growing local and international tourism, deforestation, mining and colonization (see Annexes 1 and 19). Furthermore, the Venezuelan Parks Institute (INPARQUES) has had to undertake the herculean task of managing an area 50% larger than El Salvador and equal to Belgium with scarce financial resources and a poor institutional presence. Clearly, an effective management model is essential to integrate two key stakeholders (the Pemon indigenous communities and CVG EDELCA), leverage substantial financial and institutional resources in a coordinated manner, and counteract the ongoing degradation of CNP’s globally outstanding biodiversity. The Pemon are the indigenous group in whose ancestral lands the project area is located. Indigenous inhabitants in CNP are estimated at 18,500, 95% of which belong to the Pemon culture. The Pemon live in dispersed, yet growing villages, which increased from 100 to over 250 during the past decade. Key priorities for the Pemon, identified in a recently drafted Life Plan (Plan de Vida) are to conserve their lands’ natural resources, improve quality of life by enhancing sustainable production alternatives and obtain titles for their indigenous lands. Recent land demarcation and titling efforts has been supported by provisions in the 1999 National Constitution, subsequent laws regulating collective territorial ownership (including the Guaicaipuro Mission), and support from NGOs such as TNC. CVG EDELCA, Venezuela’s largest government-owned hydroelectricity company, produces 70% of the country’s energy needs and exports energy to Brazil. The Guri hydroelectric facility, the second largest in the world, is sourced by the Caroní River. CVG EDELCA, in accordance with its social responsibility strategy, is cognizant that it must work together with the Pemon in order to maintain its energy production on the Caroní watershed. In recent years, CVG EDELCA has invested in local conservation and undertaken an ambitious social investment program for the Pemon (the Mayú program), seeking to guarantee the long-term water abundance and quality supplied by CNP’s well-preserved watersheds. In a landmark Inter-Institutional agreement signed between INPARQUES, CVG EDELCA and the Pemon’s indigenous organization (FIEB), the three stakeholders have formally agreed to cooperate around the common objective of preserving CNP’s biodiversity, ensuring its environmental services and supporting Pemon quality of life improvements. This agreement and subsequent meetings held between the three organizations denote a growing level of trust on the part of the Pemon and a growing willingness on the part of CVG EDELCA and INPARQUES to integrate the Pemon into a more effective and participatory governance system. The Project would build upon this historical achievement and develop a participatory co-management model for CNP based on four fundamental criteria: (i) threat prevention and mitigation, (ii) sustainable development of local communities by supporting local benefits, (iii) implementation of sustainable and long-term financial mechanisms to support PA management, and (iv) involvement of all stakeholders, including indigenous peoples, in CNP’s Management Plan design and implementation. The Project would pilot such a model in CNP, support this unique partnership, and seek to replicate a PA co-management scheme to other National Parks in Venezuela and other countries. 2. Objectives The Project Development Objective is to implement an effective co-management model in Canaima National Park (CNP3) supporting sustainable natural resource use practices and preserving cultural and biological diversity. The Global Environmental Objective is to ensure conservation and sustainable use of CNP’s globally important biodiversity. 3. Rationale for Bank Involvement 3 In this document, Canaima National Park (CNP) is defined as the Park contained within strictly defined boundaries and its buffer zone, to be defined during first year of project execution.

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The World Bank, through a GEF grant, would provide a unique contribution to the Project through its capacity to leverage significant financial resources available in government and non-government sectors, capitalize on previous and ongoing Bank operations, and scale up Bank involvement in Venezuela. The WB has a long history of direct involvement with INPARQUES and with Venezuela’s protected area system. Specifically, a US$55 million loan to INPARQUES (1993 – 2004) was designed to support the institution’s institutional capacity to administer PAs. Lessons learned during the execution of this loan have been incorporated into Project design and serve as a backdrop to the Project’s significant leveraging and policy interaction in Venezuela’s environmental sector.

In addition to its long involvement in the sector, the World Bank offers to Venezuela strong technical strengths in three areas that will be critical to the success of a new management model in CNP. Each of these is briefly mentioned below.

In the area of PA management and modernization of national protected area systems, the Bank has considerable experience in the design and implementation of such projects (see also Section B.4), with projects in every eligible country in the region. Overall, the WB is the single largest external financier of biodiversity conservation and protected area projects in the region.

The World Bank became the first multilateral development bank to introduce an indigenous peoples policy and has over two decades of experience implementing this and newer versions of this policy. During this period, the World Bank’s Indigenous Peoples policy and programs have continued to evolve, reflecting a continuous learning process in relation to indigenous peoples, their struggles for survival and cultural recognition, and their demands for greater participation in decision-making and development processes4. A rich array of projects and initiatives throughout the region are addressing the complex issues that come into play when ancestral territories of indigenous peoples are located in state-declared protected areas.

Additionally, the Project will focus on measures to ensure the long-term financial sustainability of the project. The Bank has developed considerable expertise in developing local private-public sector alliances, promoting benefit-sharing and valuing environmental services (ES). More specifically, the WB has projects that are ongoing or under preparation to develop protected area trust funds in Peru, Bolivia, Colombia, Mexico, Honduras, Nicaragua, and elsewhere.

4. Description Consolidating the Canaima National Park (CNP) and effectively integrating indigenous communities into the Park’s decision making and benefit-sharing processes is a priority to the Government of Venezuela (GoV) and a strategic objective to be used in the consolidation of Venezuela’s National Park System. Long-term conservation of the National Park System and its associated ES requires a new integrated management model that effectively mitigates threats and prevents future natural resource degradation. Total project cost is US$24.5 million, US$6.0 million of which is being requested from the GEF (see Table 1 in Annex 4 for a component cost breakdown). The project will have four components: (i) 4 Davis, S., Uquillas, J.E., Eltz, M. et.al (2004). Lessons of Indigenous Development in Latin America: The Proceedings of a World Bank Workshop on Indigenous Peoples Development, The World Bank, Washington, D.C.

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Implementation of Co-management Model; (ii) Biodiversity Conservation and Sustainable Use Programs; (iii) Pemon Life Plan Environmental Sub-Projects, and (iv) Project Management. The first component of the project is primarily concerned with developing the institutionality and tools for moving forward with a new scheme of co-management in CNP, including long-term financial sustainability, and for promoting that model among key stakeholders. The second and third components finance actual on-the-ground investments within CNP: those focused on biodiversity conservation/sustainable NRM, and those proposed and executed by the indigenous Pemon and contained within their own “Life Plan”. Component 1. Implementation of Co-Management Model (US$5.9M Total; US$1.3M GEF) CNP’s new management model will not be effective unless it truly shares responsibilities and decision making with local communities and institutions, building a collective, long-term vision. This component would finance the establishment, capacity-building and operation of a CNP Co-Management Committee constituted by INPARQUES, FIEB and CVG EDELCA. This Committee will provide technical project oversight, define the Park’s long-term strategies, seek inter-institutional agreements and coordinate the execution of project activities. Another key objective is to design a participatory Management Plan (MP) for CNP (including a zoning and use plan, taking into account the Pemon’s traditional zoning and use plan). The MP will include three key areas for implementation: biodiversity conservation and sustainable use, Pemon environmental programs, and a financial sustainability strategy. The execution of the first two of these aspects will be addressed by Components 2 and 3 of this project. In fulfillment of this subcomponent, the Project will support a comprehensive analysis of CNP’s financial situation and the design of various mechanisms, including: (i) tools to enhance CNP’s self-generated resources, such as ecotourism and a re-indexation of entry fees; (ii) a conservation trust fund (CTF), and (iii) agreements for compensation of CNP’s environmental services. The Project will support the implementation of the first mechanism here mentioned, seeking an adjustment of visitor fees and the effective contribution of income from ecotourism to CNP’s financial situation. The two latter issues considered in this strategy: a conservation trust fund (CTF) and the valuation and conservation of environmental services scheme, will be designed but not executed, due mainly to the fact that both require third party support that lies beyond the scope of this Project (see Annex 4 for a more detailed description). Principal activities in fulfillment of this component include; (i) establishing a participatory Co-Management Committee for CNP; (ii) designing a CNP Management Plan in coordination with the Pemon indigenous communities’ Life Plan; (iii) reaching stakeholder agreements to execute conservation and natural resource use actions in accordance with CNP’s Management Plan; (iv) capacity-building; (v) communication and dissemination strategy of the MP, promoting the acceptance and appropriation of this MP by the many actors in the park, and (vi) design and execution of a Financial Sustainability Strategy for CNP. Key outputs of this component will include: (i) an operational CNP Co-Management Committee contributing effectively to decision-making processes and to project execution in accordance with its functions (see Annex 6); (ii) a completed CNP Management Plan, with significant input from Pemon communities; (iii) at least 6 co-management agreements signed to execute conservation and natural resource use actions; (iv) 20 training programs for key CNP stakeholders and personnel; (v) 5 studies financed for the completion of the MP including ecotourism and carrying capacity; fees’sources and application, and valuation of environmental services; (vi) a financial sustainability strategy designed and under execution, and (vii) communications materials including a project website and 15 video productions.

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Component 2. Biodiversity Conservation and Sustainable Use Programs (US$9.6M Total; US$1.9M GEF) The objective of this component is to support specific actions included in the co-management plan to arrest biodiversity loss in CNP and to promote where appropriate its sustainable use. This component will be under responsibility of the Co-Management Committee, but most activities will be executed by INPARQUES’ regional office in Bolivar state. In fulfillment of this component, the Co-Management Committee will design and support the implementation of biodiversity conservation and sustainable natural use programs addressing Focal Management Targets (FMTs) identified for CNP in a related project under execution titled Enhancing our Heritage (Heritage Project5). Principal activities in fulfillment of this component include; (i) undertaking a comprehensive threat prevention and mitigation program, to include support to sustainable production systems (SPS) with the Pemon within CNP as well as specific restoration activities in key sites; (ii) designing and executing a CNP monitoring system; (iii) designing and executing a participatory land use surveillance program; (iv) implementing an environmental education program, and (v) refurbishing essential infrastructure and park ranger equipment. The GEF will finance the first three of the abovementioned activities, while the remainder is being committed by counterpart donors. Key outputs of this component will include: (i) 9,000 hectares under threat prevention programs and 8 pilot restoration programs, (ii) an effective CNP monitoring system, providing key inputs related to biodiversity and natural resources, socio-economic variables and Park management effectiveness; (iii) an operational Park surveillance program; (iv) an environmental education program, with 1,000 beneficiaries trained, and (v) essential infrastructure provided for the Park. Component 3. Pemon Life Plan Environmental Sub-Projects (US$6.3M Total; US$2.0M GEF) The Pemon Plan de Vida, or Life Plan, designed during the Project preparation phase and included as Annex 20, establishes programs related to: (i) demarcation and titling of indigenous communal lands and their natural resources; (ii) education, culture and territorial management; (iii) health and territorial management infrastructure; (iv) organizational strengthening and (v) economic development with SPS. These programs were then reviewed taking into account the context of this Project’s environmental focus, resulting in project-supported initiatives, activities and outputs designed in coordination with Pemon leaders. While Component 1 enables the active participation of Pemon communities in CNP management, benefit-sharing and decision making, incorporating their ancestral vision regarding conservation and sustainable natural resource use, this third component builds upon that foundation by providing the tools to the Pemon to support and finance those activities they consider most important to ensure the long-term conservation of the Park and their culture. This component will be implemented as a small grants program to finance Pemon Environmental Sub-projects defined as prioritary in their Life-Plan. During appraisal, the procedures for this grant mechanism will be detailed, including size and scope of grants, eligibility criteria, grant selection, a technical assistance program to assist Pemon in preparing and implementing projects, disbursement and financial arrangements. Some activities in this component will be executed by members of the Co-Management Committee (such as capacity building), while the sub-projects will be executed by FIEB or local indigenous organizations.

5 This project is being implemented by INPARQUES and VITALIS and is financed by UNESCO, IUCN and has received support from NGOs, including The Nature Conservancy (TNC).

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Principal activities in fulfillment of Component 3 include; (i) designing a Pemon territorial ordering and zoning plan; (ii) undertaking cultural strengthening, scientific and traditional education projects; (iii) offering programs providing technical and logistical support for indigenous land demarcation and titling; (iv) offering training programs to the Pemon in business administration, natural resource management, ecotourism, monitoring, and related themes; (v) executing SPS projects (i.e., ecotourism and agro forestry) meeting social, ecological and economic sustainability criteria, and (vi) elaborating a guide on traditional fire use and control. Key outputs of this component will include: (i) a Pemon traditional zoning and use plan; (ii) 10 cultural strengthening, scientific and traditional education projects executed; (iii) the necessary studies undertaken to support indigenous land demarcation and titling for at least 35% of CNP, (iv) 800 Pemon trained business administration, natural resource management, ecotourism, monitoring, and related themes; (v) 12 productive projects (i.e., ecotourism and agro forestry) executed and meeting social, ecological and economic sustainability criteria, and (vi) a fire management guide. Component 4. Project Management, Monitoring and Evaluation (M&E) and Dissemination (US$2.7M Total; US$0.9M GEF) The objectives of this component are: (i) project management; (ii) the design and operation of the Project’s Monitoring and Evaluation (M&E) System, and (iii) supporting replicability of project successes throughout the national protected areas system. This component would strengthen the existing administrative team in SAMARNR to effectively respond to the Project’s financial management and administrative coordination, including: (i) procurement, disbursement and financial execution; (ii) preparing Project and Financial Monitoring Reports and Project POAs; (iii) preparing annual execution reports or any request for information by the Bank or other donors; and (iv) receiving inputs from the Co-Management committee regarding technical execution of project activities. In order to ensure Project replicability, INPARQUES will select 4 of the 43 National Parks in which to conduct a series of dissemination activities, including: (i) workshops with key stakeholders, and (ii) annual visits of NP representatives to CNP to view project advances. Key activities and outputs related to this component will include: (i) a capable financial and administrative team operational; (ii) relevant software developed for producing relevant reports, (iii) annual PMRs and POAs submitted to the Bank; (iv) Baseline, Mid-term and End-of-project monitoring of management effectiveness in CNP using the GEF SP1 Tracking Tool; (v) M&E indicators for the Project monitored, as well as the project’s intermediate outcome indicators listed in the project’s Results Framework; (vi) inputs for Bank mid-term and final Project evaluations; (vii) 7 workshops with key stakeholders and (viii) 6 exchange visits of NP representatives to CNP. 5. Financing Source: ($m.) BORROWER/RECIPIENT 14.75 GLOBAL ENVIRONMENT FACILITY 6.00 FOREIGN PRIVATE COMMERCIAL SOURCES (IDENTIFIED) 3.77 Total 24.5 6. Implementation It was decided that SAMARNR act as the Project’s financial and administrative coordinator given its robust track record in financial management and disbursement. A Grant Agreement will be signed

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between the World Bank (as representative of the GEF) and SAMARNR, as representative of the Ministry of the Environment. As the Project’s financial and administrative coordinator, SAMARNR will also sign an Execution Agreement with the World Bank prior to disbursement. SAMARNR will strengthen its administrative and financial team to effectively undertake FM functions, including: co-submitting with the Co-Management committee the Project’s annual work plans, as well as submitting budgets, disbursement records, procurement plans, TORs, counterpart financing, and PMRs. Project execution and coordination with the other related institutions will build upon arrangements defined during the Project’s PDF-B stage, whereby the three key partners (INPARQUES, CVG EDELCA and FIEB) signed an Inter-Institutional Agreement defining functions and responsibilities. This inter-institutional arrangement provides the basis for a Co-Management Committee, which will undertake CNP’s overall management and will also act as technical project coordinator. The three Project partners will establish a CNP Co-Management Committee. This committee’s key functions will include: (i) overall Project coordination and technical oversight; (ii) approval of POAs, annual budgets and annual reports necessary to execute programs and activities in CNP; (iii) coordination and promotion of stakeholder participation and financial support, including approval of subsidiary agreements; (iv) approval of CNP’s Management Plan and specific Zoning and Use Plans and submission to relevant authorities for their ratification; (v) obtaining consensus and collaboration among stakeholders around CNP’s strategies, activities and programs, and (vi) technical supervision of the Project’s execution and impact in line with the Park System’s broader environmental and institutional development goals and in line with the World Bank’s Safeguard Policies. The Co-Management Committee may approve, if necessary, the involvement of additional members. During Project execution, Subsidiary agreements will be signed between SAMARNR and project stakeholders. These agreements will identify organizations to execute specific programs in fulfillment of Project objectives, their technical and financial responsibilities, activities and execution timelines. Relevant organizations will prepare annual work plan proposals to the Co-Management Committee for its approval. A model of a subsidiary agreement will be included in the Project’s Operational Manual. Prior to appraisal, Coordination Agreements will be signed between SAMARNR and each of the following committed and potential co-financing partners in order to guarantee management and investment coordination. Official co-financing confirmation letters and activities to be financed by each co-financier will be defined before appraisal. Co-financing commitments include: CVG EDELCA, US$6.1 million; MARN/INPARQUES, US$6.3 million; Ministry of Tourism, US$2.5 million and other donors, US$3.8 million. 7. Sustainability Financial sustainability is central to Project design. The Project contemplates the design and execution of a long-term Financial Sustainability Strategy for CNP. CNP’s special conditions favor the implementation of conservation incentives, since the Park supplies 45% of the Caroní River’s hydric resources. The valuation of ES will support the elaboration of strategies for compensation to CNP providing key resources. Additionally, CNP’s outstanding scenic beauty represents a significant potential for the development of eco-tourism activities as the critical aspect for development in the Project’s Financial Sustainability Strategy, linking conservation with PA financial sustainability and regional sustainable development, and may be highly replicable to other areas.. Social sustainability of Project activities will be achieved through high levels of community participation in PA conservation and management, the strengthening of social capabilities, and sustainable natural resource use alternatives. Specifically, the Project will support: (i) active community participation in CNP’s planning and management; (ii) a co-management decision-making and execution structure for

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project activity execution; (iii) sustainable production systems and other economic activities (eco-tourism) as a strategy to reverse inadequate land use, and (iv) participatory Management Plan implementation. The Project will promote institutional sustainability through the following activities: (i) institutional strengthening of Project partners, mainly INPARQUES, SAMARNR and FIEB; (ii) greater coordination and complementarities through the establishment of a CNP Co-Management Committee, (iii) public-private partnerships for project activities through the signing of co-execution agreements and the development of tourism activities, and (iv) greater agility, transparency and flexibility in resource investment and management. INPARQUES will seek replicability by selecting 4 National Parks to disseminate lessons learned and project outcomes, conducting a series of workshops and exchange visits and producing manuals summarizing best practices to be distributed among selected NP representatives. 8. Lessons Learned from Past Operations in the Country/Sector The following lessons learned are drawn from a range of projects in both Venezuela and LAC, where similar projects have contributed to participatory conservation sustainable natural resource use initiatives. INPARQUES’ institutional capacity. The WB loan to INPARQUES approved in 1993 and completed in 2004 supported INPARQUES’ institutional capacity to administer PAs under its jurisdiction. However, the Project’s Implementation Completion Report (ICR) points out key challenges faced during project implementation, namely: a lack of continuity and permanence of key staff; the need for ongoing and timely supervision by MARN and the Bank; the need for more effective coordination between various governmental entities; the need for a more decentralized organizational structure within INPARQUES to promote agile and effective decisions, and political volatility. These lessons have been taken into account in the proposed Project. Specifically, the recognition of structural deficiencies in the model of centralized park management through INPARQUES is the impetus behind this project’s focus on helping them to transition to a more participatory model of park management, including not only local communities but major actors such as EDELCA, in the case of CNP. Active stakeholder participation. The principal lesson learned from the Bank’s experience working with protected areas throughout Latin America is that active stakeholder participation is the most effective approach to conserving threatened resources. Where the local communities are indigenous, effective and close dialogue must be established with indigenous communities throughout project design and execution, and government entities must receive specialized training in indigenous issues. Evidence of taking this lesson to heart in the current project is reflected in the Inter-institutional Agreement signed during project preparation by the three organizations (INPARQUES, EDELCA, and FIEB) in June 2004 and the project design itself which is predicated on stakeholder participation and co-management. In Colombia, the Conservation and Sustainable Development of the Matavén Forest project (Mid-size GEF grant; Project ID 66750) supported the consolidation of a 900,000 hectare indigenous resguardo and ecological zoning and environmental management plans designed in consensus with indigenous authorities. This project was pioneer in creating a community-led conservation area in Colombia. The Naya Biological Corridor in the Munchique-Pinche Sector Project (Mid-Size GEF grant; Project ID 53804) supports environmental land use planning with Afro-Colombian groups and indigenous communities. Experience in the Matavén and Naya GEF-MSPs demonstrates the positively reinforcing relationship between local land governance and biodiversity conservation. Lessons learned in both

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projects regarding sustainable production systems, conservation and indigenous participation will be of high relevance to the current proposal. Protected Areas Consolidation. The Colombian Conservation and Sustainable Use of Biodiversity in the Andes Region Project (Full-size GEF grant; Project ID 63317) contains a Protected Areas Component supporting the establishment and consolidation of National Parks, regional PA systems and civil society reserves. Lessons learned from this component include: (i) management Plans have proved to be useful tools to promote conservation in National Parks; (ii) resources executed by National Parks demanded supervision from the PIU located in the executing agency, the Instituto Alexander van Humboldt (IAvH), but after the Project’s second year resulted in improved management capabilities; (iii) National Parks achieving the best levels of consolidation have garnered higher levels of community participation, and (iv) a Policy of Social Participation in Conservation has been a fundamental tool for the execution of National Park and buffer zone activities. Conservation Incentives. The Bank has considerable experience in the design, implementation, and support of environmental services payment and valuation projects. The WB/GEF-FSP Integrated Silvopastoral Approaches to Ecosystem Management Project (Project ID 72979) under execution in Colombia, Costa Rica and Nicaragua pays and provides technical assistance to livestock producers who undertake biodiversity-friendly land use changes. Relevant lessons learned include: (i) payments for environmental services (PES) in silvopastoral systems have been successful in promoting biodiversity-friendly land use changes; (ii) biodiversity and carbon sequestration increase significantly upon the transition from degraded pastures to silvopastoral systems, and (iii) PES foster a greater environmental conscience among producers and award social recognition for their contributions. Key lessons can be derived from this project’s institutional arrangements and application of incentives for conservation. Two other Bank and GEF-supported initiatives underway in Costa Rica contribute valuable lessons to the proposed project. The first is the Ecomarkets Project (P061314), whose objective is to increase the conservation of forests by supporting the development of markets and private sector providers for environmental services supplied by privately-owned forests. This project has exceeded most key performance indicators, being a key input to the Scaling Up and Mainstreaming Payments for Environmental Services Project currently under preparation (P098838). In this second project the Government of Costa Rica is asking for a US$30m loan to the World Bank to pay farmers for their generation of ES, demonstrating that the concept of PES has been effectively mainstreamed both inside the Bank and in Costa Rica. 9. Safeguard Policies (including public consultation)

Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP/GP 4.01) [X] [ ] Natural Habitats (OP/BP 4.04) [X] [ ] Pest Management (OP 4.09) [X] [ ] Cultural Property (OPN 11.03, being revised as OP 4.11) [X] [ ] Involuntary Resettlement (OP/BP 4.12) [X] [ ] Indigenous Peoples (OD 4.20, being revised as OP 4.10) [X] [ ] Forests (OP/BP 4.36) [X] [ ] Safety of Dams (OP/BP 4.37) [ ] [X] Projects in Disputed Areas (OP/BP/GP 7.60)* [ ] [X] Projects on International Waterways (OP/BP/GP 7.50) [ ] [X]

* By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas

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This Project is expected to have a highly positive environmental impact. If implemented as planned, the Project would have no significant adverse environmental effects. It would also comply with all applicable World Bank safeguard policies, as explained below.

Environmental Assessment (OP 4.01). The Project is classified as Category B, requiring an Environmental Analysis (EA) but not a full-scale Environmental Impact Assessment. The proposed project is aimed at arresting and reversing trends of degradation and biodiversity loss in Canaima National Park (CNP). The proposed Project is aimed at supporting environmental conservation and improving capabilities in CNP to restore natural ecosystem cover and reverse trends of degradation and biodiversity loss. The consolidation of strict conservation areas, added to the support of biodiversity-friendly production systems, is expected to reduce existing threats to effective conservation in CNP and increase its social and economic sustainability. The Project should be largely positive to environmental conservation, for several reasons. First, the Project will not develop facilities or infrastructure generating environmental impact to CNP. Second, the Project will focus on conservation activities. Third, the application of sustainable production strategies will reduce existing pressures on natural resources, restore degraded ecosystems and favor biological connectivity between various vulnerable areas, taking into account local economic and social needs. Eco-tourism activities will support the Pemon communities in the provision of these services and seek the certification of their environmentally-friendly practices. Nevertheless, aspects of the Project could have minor environmental impacts associated with sustainable production systems and ecotourism. Annex 10A provides additional detail regarding the mitigation measures to be taken in the event that project activities generate negative environmental impact. Natural Habitats (OP 4.04) and Forests (OP 4.36). The Project is fully consistent with the Bank’s Natural Habitats and Forests policies. It would not cause, nor facilitate, any significant loss or degradation of forests or other natural habitats. On the contrary, the Project is intended to arrest current levels of biodiversity and natural vegetation cover degradation by improving the protection and management of natural habitats and forests within the Project area. Through its Component 1, the Project will: (i) design and implement a Management Plan for CNP, integrating Pemon traditional values and knowledge; (ii) support capacity-building and training for Park personnel, and (iii) support the consolidation of CNP’s financial situation and the application of incentives for watershed conservation. Through its Component 2, the Project will undertake threat prevention and restoration projects. Component 3 will seek the full integration of the Pemon community to Park decision making and management, incorporating ancestral practices regarding fire and sustainable forest use. The M&E system will contain key indicators to monitor the restoration and preservation of natural habitats and forests in CNP in support of the Bank’s Policies. Pest Management (OP 4.09). The project is fully consistent with the Bank's integrated pest management (IPM) Policy. The Project will support the use of biological or environmental control methods and reduce reliance on synthetic chemical pesticides within CNP, as part of its biodiversity conservation strategy. When working with indigenous groups, the Project will support the use of cultural practices. The Project will support controlling pests primarily through environmental methods and will support organic production. When this is not feasible, the project implementation agency will finance the use of pesticides for control of disease vectors, following IPM Bank application. The Co-Management Committee will be responsible for the application of the Bank's IPM, and will submit required reports to SAMARNR for submission to the Bank.

Cultural Property (OPN 11.03). Some of the conservation areas to be supported under the Project contain significant archaeological, historical, or other cultural patrimony. The preservation of cultural

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sites or relics will be considered a crucial element in CNP’s Co- Management Plan. Chance find procedures will be included in the Project Operational Manual. Involuntary Resettlement (OP 4.12). No involuntary resettlement of any people will take place under the Project. However, the ways of life of communities inhabiting in or near the Project area might be affected through restraints on natural resource use. The team’s assessment is that the participatory nature of Management Plan implementation and planning and the provision of alternative livelihood mechanisms (including sustainable production systems, ecotourism and bio-commerce, will generate positive socio-economic effects at the local community level. The team will prepare a Process Framework before appraisal as mandated by this policy in which the alternative livelihood proposals will be described in agreement with the potentially affected population. Indigenous Peoples (O.D. 4.10). The Project is being undertaken together with the Pemon indigenous community and the FIEB. The Project will not cause any adverse effects on Indigenous Peoples residing in or near project areas. Project execution would support co-management agreements and their implementation in CNP, conservation activities with indigenous communities, and local welfare improvements through access to training and productive projects, mainly ecotourism. The team is preparing an Indigenous Peoples Plan (IPP) to be disclosed and approved by the Bank describing the measures taken to ensure there is no impact on indigenous groups, and outlining potential conflict resolution mechanisms in the unlikely event that conflicts arise.

In accordance with IBRD’s policy on Disclosure of Information (BP 17.50), copies of the Environmental Assessment Report and Process Framework will be available for public viewing at INPARQUES’ office (Caracas, Venezuela) by appraisal.

10. List of Factual Technical Documents 11. CVG EDELCA. 2003. Estudio Plan Maestro de la Cuenca del río Caroní. Econatura - Comisión

Europea – INPARQUES. 1997. Ciencia y Conservación en el Sistema de Parques Nacionales de Venezuela. Una experiencia de Cooperación Interinstitucional. Caracas.

12. CVG EDELCA-CORPORACIÓN VENEZOLANA DE GUAYANA. 2004. La Cuenca del Río Caroní. Una visión en cifras. Caracas.

13. CVG EDELCA (2004). Plan Maestro de la cuenca del río Caroní. Vol 2. Tomo 3. Parte 1. Caracas: CVG EDELCA.

14. CVG EDELCA (2004). La Cuenca del río Caroní. Una visión en Cifras. Caracas: CVG EDELCA.

15. Colmenares, M.Magdalena. and Stubbs, J. “Poverty, social exclusion, and ethnic and racial diversity”, in Venezuela Policy Notes, World Bank, 2003.

16. República Bolivariana de Venezuela. Decreto Nº 1.137, Ampliación del Parque Nacional Canaima. G.O N° 30.809 del 01.10.75.

17. República Bolivariana de Venezuela. Decreto Nº 3110. Plan de Ordenamiento y Reglamento de Uso de la Reserva Forestal Imataca. G.O Nº 38.028 del 22.09.04

18. Interinstitutional agreement between FIEB, INPARQUES and CVG EDELCA during PDF-B phase.

19. IDB (2002) Compilation of Legislation on Indigenous Issues. 20. Aguilera et al. 2001. Biodiversidad en Venezuela. CONICIT – FUNDACIÓN POLAR. Caracas. 21. Bono, G. 1996. Flora y Vegetación del Estado Táchira, Venezuela. Monografía XX. Museo

Regionale di Scienza Naturale, Torino, Italia. 22. Dinerstein, E. Olson, D.M., Graham, D., Webster, A.L., Primm, S.A., Bookbinder, M.P., Ledec,

G. 1995. A conservation assessment of the Terrestrial Ecoregions of Latin America and the Caribbean. Washington D.C. The World Bank.

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23. Fundación Terramar S. C. s/f. Guía ecológica de Canaima. 24. García, S. Y C. Ron. 1998. Estimación del potencial pesquero del Embalse Gurí y su relación con

algunos parámetros limnológicos. IV Jornadas Profesionales de EDELCA , 20 – 23 de mayo de 1998.

25. García, R., J. L. (1999).Observaciones sobre la fauna de Proctotrupoidea y Platygastroida (Hymenoptera) del Auyantepui, Parque Nacional Canaima, Estado Bolívar, Venezuela. Acta Terraris 11: 26 – 39.

26. González-Sponga, M. A. 1997. (1998). Arácnidos de Venezuela. Dos nuevos géneros y cuatro nuevas especies de Opiliones del Tepui Guaiquinimia. Y del Parque Nacional Canaima (Phalangodidae: Cosmetidae). Memoria Sociedad de Ciencas Naturales La Salle. 148: 3 – 16.

27. Guerrero, R. 1993. Fauna Tepuyana en: Informe Técnico sobre los Tepuyes de la Formación Roraima, Venezuela. Acta Terramaris 6: 52 – 57.

28. Hoyos, J. 1985. Flora de la Isla de Margarita. Monografía N° 34. Sociedad y Fundación La Salle de Ciencias Naturales. Caracas.

29. Huber, O, Febres, G. y colaboradores. 2000. Guía Ecológica de la Gran Sabana. Troncal 10: Piedra de la Virgen – Santa Elena de Uairén. The Nature Conservancy –

30. INPARQUES – CVG EDELCA – CVG TECMIN. Caracas. 31. Huber, O. 1997. Ambientes Fitogeográficos de Venezuela en: Serie de Catálogo Zoológico de

Venezuela. Vol. 279 – 298. Caracas. 32. Huber, O. Y C. Alarcón. 1988. Mapa de la Vegetación Actual de Venezuela. MARNR. Caracas. 33. INPARQUES-ECONATURA-COMISIÓN EUROPEA. 1997. Ciencia y Conservación en el

Sistema de Parques Nacionales de Venezuela. Una experiencia de cooperación internacional. Caracas.

34. INPARQUES – VITALIS. 2005. Primer Informe Actualizado de la Evaluación del Parque Nacional Canaima, Venezuela, como Sitio de Patrimonio Natural de la Humanidad (Documento Preliminar). Proyecto Mejorando Nuestra Herencia. The Univertity of Queensland-UNESCO-Patrimonio Mundial-UICN. Caracas, Venezuela.

35. Iturriaga et al. 2000. Estado Actual del Conocimiento de la Microbiota de Venezuela. Documento Técnico para la Estrategia Nacional sobre Diversidad Biológica y su Plan de Acción. MARN.

36. Lasso, C., Novoa, D. Y F. Ramos. 1989. La ictiofauna del lago de Guri: composición, abundancia y potencial pesquero. Parte I: consideraciones generales e inventario de la ictiofauna del lago Guri con breve descripción de las especies de interés para la pesca deportiva y comercial. Mem Soc. Cienc. Nat. La Salle, 49 50 (131 –134): 141 – 158. Caracas.

37. Linares, O. 1998. Mamíferos de Venezuela. Sociedad Aubobon de Venezuela. Caracas. 38. MacGuire et al.1953 – 1989. The botany of the Guayana Highland. Serie de 14 publicaciones del

New York Botanical Gardens: 39. MARNR. Áreas Naturales Protegidas de Venezuela. 1992. Caracas. 40. MARN. 2001. Estrategia Nacional sobre Diversidad Biológica y su Plan de Acción. Oficina

Nacional de Diversidad Biológica. Caracas. 41. MARNR, UNELLEZ y BIOCENTRO.1998 a. Documentos Técnicos para la Estrategia Nacional

sobre Diversidad Biológica y su Plan de Acción. Estado Actual del Conocimiento de la Fauna en Venezuela. G. Ríos, et at Tomos I y II. Guanare, Venezuela.

42. Novoa, D., Koonce, J. Y F. Ramos. 1989. La ictiofauna del Lago Guri: Composición, abundancia y potencial pesquero. Parte II: Evaluación del Potencial Pesquero y Estrategias de Ordenamiento Pesquero. Mem, Soc. Cienc. Nat. La Salle, 49 (131 – 132), 159 – 197. Caracas.

43. Olson, D.M., E. Dinerstein, E.D. Wikramanayake, N.D. Birgess, G. W. Powell, E.C. Underwood, J.A. Dam,ico, I. Itoua, H.S. Strad, J.C. Morrison, C.J. Louks, T. F. Allnutt, T. H. Ricketts, Y. Kura, J. L. Lamoureaux, W.W. Wettengle, P. Hedao & K. R. Kassem. 2001. Terrestrial Ecoregions of the World. A new Map of Life on Earth. BioScience 51 (11): 933-938.

44. Pérez, L. 1996. Niveles de mercurio en peces comerciales del Embalse Guri, Venezuela. V Seminario Guayanés sobre Conservación del Ambiente. Ciudad Guayana, Venezuela.

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45. Taphorn, D. Y J. García. 1991. El río Claro y sus peces. Consideraciones de los impactos ambientales de las presas sobre la ictiofauna del Bajo Caroní. Biollania, 8: 23 – 45.

46. Veiga, M. 1995. Report on Mercury Bioaccumulation in Bajo Caroni and Guri. Report prepared to Profauna, MARNR. Caracas.

47. Welcomme, Robin. 1992. Pesca Fluvial. FAO. Documento Técnico de Pesca. N° 262. Roma, FAO.

48. Welcomme, Robin. 1979. Fisheries ecology of floodplain rivers. Longman, London. 49. Arigoni, R., Seroa da Motta, R. y Ferraz, C., (2000). A estimacao do valor ambiental do Parque

Nacional do Iguacu atraves do metodo de custo de viagem. En: Pesquisa e Planejamento Economico, December, 30 (3): 355-82.

50. Febres, G., (s.f.). Ordenamiento Espacial del Corredor Turístico Laguna de Canaima- Isla Ratón, Sector Occidental del Parque Nacional Canaima. INPARQUES.

51. Flores, A.J., (2002). Valoración económica de los beneficios de un programa para mejorar la calidad ambiental de un ecosistema natural (Estudio de caso: Parque Nacional El Avila- Venezuela). Tesis de Grado. Facultad de Economía. Universidad de Los Andes, Bogotá

52. García, M., (2005). Informe de actualización del esquema tarifario de servicios ecoturísticos de

la UAESPNN. Segundo Informe. Contrato Consultoría. Programa de Fortalecimiento Institucional. Parques Nacionales Naturales de Colombia. Bogotá.

53. Gotman, P., (2002). Putting a Price Tag on Conservation: Cost Benefit Analysis of Venezuela's National Parks. En: Journal of Latin American Studies (34): 43-70.

54. Salazar, H.L., (2004). Aproximación a una tarifa de entrada al Monumento Natural Alejandro de Humboldt, Cueva del Guácharo, Venezuela. Universidad de Los Andes. Bogotá D.C.

55. Simpson, R Davis (1997). Biodiversity Prospecting: Shopping the Wilds Is Not the Key To onservation. Consultado en: www.rff.org/resources_articles/files/biodprospect.

56. Simpson, A. (1996). The Social Value of Using Biodiversity in 57. New Pharmaceutical Product Research. Discussion Paper 96-33 September.

58. Contact point Contact: Juan Pablo Ruiz Title: Natural Resources Mgmt. Spec. Tel: 5280+233 Fax: 57 1 326 34 80 Email: Jruiz@worldbank.org Location: Bogota, Colombia (IBRD) 59. For more information contact:

The InfoShop The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-5454 Fax: (202) 522-1500 Web: http://www.worldbank.org/infoshop