Grant Assistance Report Project Number: 44129 October 2011 Proposed Grant Assistance Republic of Indonesia and Republic of the Philippines: Developing Sustainable Alternative Livelihoods in Coastal Fishing Communities in the Coral Triangle (Financed by the Japan Fund for Poverty Reduction)
CURRENCY EQUIVALENTS (as of 15 September 2011) Currency peso (P) P1.00 = $0.023 $1.00 = P42.83 Currency rupiah (Rp) Rp1.00 = $0.000116 $1.00 = Rp8,618 ABBREVIATIONS ADB Asian Development Bank ASEAN Association of Southeast Asian Nations CT3 Southeast Asia Coral Triangle member countries (Indonesia, CTI Coral Triangle Initiative DGMCSI orate General of Marine, Coasts, and Small Islands FIRR financial internal rate of return JFPR Japan Fund for Poverty Reduction MAO Municipal Agricultural Office MMAF Ministry of Marine Affairs and Fisheries MPA marine protected area M&E monitoring and evaluation NGO nongovernment organization PCSD Palawan Council for Sustainable Development PMU project management unit QCBS quality- and cost-based selection SSME Sulu Sulawesi Marine Ecoregion SWDO social works and development officer TA technical assistance WWF World Wide Fund for Nature NOTE In this report, "$" refers to US. Vice-President B. N. Lohani, Vice-President-in-Charge, Operations 2 or General K. Senga, Southeast Asia Department (SERD) or J. Mir, Environment, Natural Resources and Agriculture Division, SERD Team leader Team members M. Drilon, Natural Resources and Agriculture Economist, SERD E. Fischelis, Counsel, Office of the General Counsel D. McCauley, Lead Climate Change Specialist, Regional and Sustainable Development Department In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
I. Basic Data Name of Proposed Activity Countries Grant Amount Requested Project Duration JAPAN FUND FOR POVERTY REDUCTION (JFPR) JFPR Grant Proposal Developing Sustainable Alternative Livelihoods in Coastal Fishing Communities in the Coral Triangle Indonesia and the Philippines $2.00 million 3 years Regional Grant Yes / No Grant Type Project / Capacity building II. Grant Development Objectives and Expected Key Performance Indicators Grant Development Objectives: The goal of the project is to raise incomes in poor coastal communities in Berau District in East Kalimantan, Indonesia, and in Balabac in Palawan, Philippines, by pilot-testing support mechanisms for sustainable livelihoods. 1 The objective of the project is to develop model alternative livelihoods that will involve women and indigenous people in development. Expected Key Performance Indicators (to be attained by end of the project, in 2014): 1. Business plans for at least 80 alternative livelihoods developed through participatory planning 2. At least 80 alternative livelihood units, of which 30 are led by women, earning a financial internal rate of return (FIRR) of at least 20% 3. Monitoring and evaluation (M&E) reports circulated 4. At least two project knowledge and lessons products disseminated through national, regional, and global knowledge networks III. Grant Categories of Expenditure, Amounts, and Percentage of Expenditures Amount of Grant Allocated Percentage of Category Expenditures 1. Civil works 382,222 19.1 2. Equipment and supplies 824,825 41.2 3. Training, seminars, and workshops 56,433 2.8 4. Consulting services 61,664 3.1 5. Management and M&E 319,634 16.0 6. Other project inputs 255,222 12.8 7. Contingencies 100,000 5.0 Total 2,000,000 100.0 Incremental cost 60,000 1 These sites are selected to complement Asian Development Bank. 2011. Technical Assistance for Coastal and Marine Resources Management in the Coral Triangle: Southeast Asia. Manila (TA 7813-REG) for resilient coastal and marine ecosystems and human communities in the Southeast Asia Coral Triangle member countries, consisting of Indonesia, Malaysia, and the Philippines.
2 JAPAN FUND FOR POVERTY REDUCTION JFPR Grant Proposal Background Information A. Other Data Date of Submission of 24 January 2011 Application Project Officer Maria Lourdes Drilon, Natural Resources and Agriculture Economist Project Officer s Division, E- mail, Phone Environment, Natural Resources, and Agriculture Division mldrilon@adb.org 632-6509 Other Staff Who Will Need Syarifah Aman-Wooster, Senior Social Development Access to Edit/Review the Report Specialist, Environment, Natural Resources, and Agriculture Division Sector Agriculture and natural resources Subsector Fishery Theme Economic growth, social development, environmental sustainability, gender equity Subtheme Widening access to markets and economic opportunities; indigenous people, other vulnerable groups; natural resources conservation; economic opportunities Targeting Classification TI-G Name of Associated ADB- Financed Operation TA 7813-REG: Coastal and Marine Resources Management in the Coral Triangle-Southeast Asia Executing Agency For Berau District, East Kalimantan, Indonesia: Ministry of Marine Affairs and Fisheries (MMAF) For Balabac, Palawan, Philippines: Palawan Council for Sustainable Development (PCSD) Grant Implementing Agencies For Berau District, East Kalimantan, Indonesia: Dr. Sudirman Saad or General of Ocean, Coastal, and Small Islands, Ministry of Marine Affairs and Fisheries Jl. Medan Merdeka Timur No.16, Jakarta Pusat, Indonesia Phone Number: (62 21) 310-7960 Phone/Fax Number: (62 21) 522-045 Email: sudirmansaad@yahoo.com, sudirmansaad@yahoo.co.id For Balabac, Palawan, Philippines: Romeo B. Dorado PCSD Executive or (PCSD Secretary) PCSD Building, Sports Complex Road Sta. Monica Heights, Puerto Princesa City, Palawan, Philippines Telephone Number: (63 48) 434-4234, 434-4235 E-mail: oed@pcsd.ph
3 B. Details of the Proposed Grant 1. Description of the Components, Monitorable Deliverables and/or Outcomes, and Implementation Timetable Component A Component Name Cost Component Description Monitorable Deliverables/Outputs Implementation of Major Activities: Number of months for grant activities Component B Component Name Cost Component Description Social preparation 289,478 (excluding contingencies) This component will support the following activities: (i) poverty assessment to identify project sites and potential beneficiaries, in particular very poor fishers, women, and indigenous people in the targeted coastal communities; (ii) social preparation to improve the attitude of targeted beneficiaries from being mere recipients of government aid to managers of their own livelihoods; (iii) organization and training of beneficiaries in business and financial management; and (iv) participatory planning in selecting businesses and the conduct of feasibility studies. All activities will be carried out in consultation with local government authorities, nongovernment organizations (NGOs), and other stakeholders. Project implementation will take into account ongoing and related livelihood, community development, and ecosystem management programs and approaches of the government and its development partners in the targeted areas. (i) Socioeconomic and poverty assessment conducted at 12 14 project sites in Berau District of East Kalimantan, Indonesia, and Balabac in Palawan, Philippines (ii) 12 14 coastal villages identified as project sites and about 550 households initially identified as potential direct beneficiaries (iii) Information and focused public awareness campaigns implemented at targeted project sites (iv) Participatory identification and development of livelihood projects conducted in each target village (v) Community groups that will serve as the bases of future livelihood units formed by 80 beneficiary households, about 30% of which are headed by women 12 months Livelihood development and implementation 1,218,423 (excluding contingencies) This component will establish and develop (i) financially sustainable and ecosystem-friendly livelihoods; (ii) livelihood support mechanisms for the provision of (a) technical services; (b) production, post-harvest, and processing inputs; (c) financial facilitation services; and (d) marketing
4 Monitorable Deliverables/Outputs Implementation of Major Activities: Number of months for grant activities Component C Component Name Cost Component Description information and services; (iii) a production profit- and risksharing system among project participants (consultants, the private sector, and beneficiaries); (iv) a marketing system to help target beneficiaries access wider markets and required market facilities; and (v) a program to mobilize savings from capital buildup and profits from the livelihoods of project beneficiaries to fund the growth of beneficiaries existing livelihoods and expand the number of beneficiaries. This component will include an enterprise skills training program that will develop the technical and managerial skills of beneficiaries. Technical support and training programs will be conducted in close coordination with the Marine Affairs and Fisheries Services of Berau District in East Kalimantan, Indonesia and, in the Philippines, the Municipal Agricultural Office (MAO) of Balabac and the Provincial Agricultural Office of Palawan. (i) At least four types of livelihoods consistent with ecosystem-based management in the Sulu Sulawesi Marine Ecoregion (SSME) identified and feasibility studies prepared in 12 14 villages (ii) Training plans for beneficiaries in Berau District and Balabac developed and implemented, with at least 300 beneficiaries trained on technical skills and business management (iii) At least three business partnerships between beneficiaries and the private sector established, including access to microfinance (iv) Technical and/or input and financial assistance provided to 550 very poor households, including women and indigenous peoples (v) At least 80 livelihood units established, of which 30 are led by women, operating with a FIRR of at least 20% and having setup a revolving fund. 27 months Project management 392,099 (excluding contingencies) This component aims to strengthen the project management capacity of officers of the District Marine Affairs and Fisheries Office in Berau District and the MAO in Balabac through targeted training programs on various aspects of projects funded by the JFPR and Asian Development Bank (ADB) and provide basic logistical support to designated government implementing agencies in charge of project M&E and project financial accounting and auditing. Project management training will cover procurement, administering community contracts, disbursement and replenishment
5 Monitorable Deliverables/Outputs Implementation of Major Activities: Number of months for grant activities procedures, financial management and reporting, and M&E. This component will support (i) project coordination, supervision, management, and monitoring; (ii) the preparation of work plans, implementation guidelines, and criteria for expansion and replication; and (iii) independent impact assessment. Partnerships with the private sector to provide management training to beneficiaries toward the sustainable operation of their businesses will be arranged with a number of the private companies in Berau District and Balabac through their corporate social responsibility programs. (i) Comprehensive work plan, contract awards and disbursement projections, and implementation schedule prepared by the end of the first quarter of the first year of project implementation and updated by the end of January of each succeeding calendar year (ii) 100% of funds budgeted for each component disbursed and utilized (iii) Various reports, including inception, progress, completion, financial, and impact assessment reports, prepared and submitted by set deadlines (iv) A gender action plan prepared describing measures and performance targets on how to improve women s participation and empowerment (v) Project management support and training plans prepared and implemented for designated government counterpart personnel (vi) Sustainability and expansion strategies for businesses designed and implemented, including partnerships with the corporate social responsibility programs of at least one private company each in Berau District and Balabac (vii) At least two project knowledge and lessons disseminated through national, regional, and global knowledge networks. 36 2. Financing Plan for Proposed Grant to Be Supported by JFPR Funding Source Amount JFPR 2,000,000 Government 140,774 Communities 41,716 Consultants 56,287 Total 2,238,777
6 3. Background 1. Fishing communities, especially on remote islands and coasts, are the poorest of the poor in Indonesia and the Philippines. In these areas, large percentages of households live below the poverty line. At the same time, the coral reefs and other marine resources that provide their livelihoods are subjected to continuing threats from natural processes and human activities. The Southeast Asia Coral Triangle Initiative (CTI) member countries Indonesia, Malaysia, and the Philippines (CT3) have developed programs for resilient coastal and marine ecosystems and human communities, particularly those bordering the SSME, which have to be complemented with livelihood support for poor communities. As resource degradation is exacerbated by the extreme poverty of artisanal fishers, who engage in fishing as a livelihood of last resort, it is necessary to improve their income-earning potential and retrain them to undertake alternative livelihoods so that they can participate in exercising effective stewardship of coastal resources, particularly coral reefs and their associated ecosystems. Pilot Implementation of these programs has been designed through ADB s regional policy and advisory technical assistance (TA) for Coastal and Marine Resources Management in the Coral Triangle: Southeast Asia with cofinancing from the Global Environment Facility. Some of the targeted poor communities for TA pilot activities are located in Berau District of East Kalimantan, Indonesia, and in the municipality of Balabac in Palawan, Philippines. Supplementary Appendix A describes how this proposed grant project will contribute to poverty reduction in targeted coastal communities (available upon request). 4. Innovation and Knowledge Sharing 2. This project is different from other JFPR grants for livelihood development in coastal fishing communities in Indonesia, such as the Coral Reef Rehabilitation and Management Project and Coastal Community Development and Fisheries Resource Management, in two ways: the project will (i) apply the ecosystem approach in developing livelihoods to ensure the protection of coral and marine resources and (ii) implement the ecosystem approach to complement the establishment of marine protected areas (MPAs). It augments other regional and national programs in CTI countries for resilient coastal and marine resources and human communities by applying the ecosystem-based approach not only to managing coastal and marine resources but also to introducing livelihood activities. 3. A profit- and risk-sharing mechanism with the consultant 2 will be established to minimize the risk to beneficiaries and to encourage consultants to ensure the profitability of beneficiaries livelihoods. Without this mechanism, consultants have less incentive to make livelihoods successful, as they are paid for their services whether or not the livelihoods that they help establish are profitable. Linkages with the corporate social responsibility programs of several timber and coal mining companies in Berau District and a nickel mining company in Bataraza, Palawan, will be established to provide assistance in developing the marketing and management skills of beneficiaries, to continue even beyond the project implementation period. Cooperation combining ADB, government agencies, universities, research institutions, and NGOs in knowledge-sharing programs will be established to disseminate success stories and lessons learned from the project. An information, education, and communications specialist will be engaged by the project on an intermittent basis to lead the public awareness and knowledge management program. His or her main tasks will include packaging project outputs and lessons into knowledge products such as technical reports, guidelines, manuals, policy briefs, news articles, and other public awareness materials. 2 Consultants will be engaged separately by the project for Berau and Balabac.
7 5. Sustainability 4. The first strategy to ensure the sustainability of the project is to change the mindset of beneficiaries so that they understand that they are not receiving grants from the government but in-kind loans that need to be passed on to other beneficiaries. Other members of the communities will be informed of this arrangement so that they can bring social pressure to bear on beneficiaries to perform well and pass on the benefits to other members of the community. Community development officers will work under consultants and with existing community organizations in bringing this message to potential beneficiaries and others. The following, and main, sustainability strategy is to establish profitable livelihoods that will improve the incomes of beneficiaries enough to meet their basic needs, which will encourage them to sustain these activities. The risk- and profit-sharing mechanism will drive consultants to coach communities to manage their livelihoods more efficiently, as they have a stake in their profitability. National and local policies on the sustainable management of coastal and marine resources will encourage the continuity of this project, as they complement one another. For instance, in Berau District, the national and district governments have committed themselves to properly managing the Berau MPA and have been providing TA to coastal communities to encourage livelihoods that supplement management measures in the Berau Marine Conservation Area. As the target villages are within the jurisdiction of the District Marine Affairs and Fisheries Office of Berau, they will get the same assistance that the office provides through its extension workers or other programs, even beyond the project implementation period. Meanwhile, the local government of Balabac uses its MAO and the Office of Social Works and Development to help improve the livelihoods of coastal communities, albeit in limited ways. These two offices provide extension services on fisheries, livelihoods, and community development. They find it opportune to have the project implemented in the coastal villages west of the island to replicate their continuing efforts on poverty alleviation in these areas, which are the poorest in the municipality. 6. Participatory Approach 5. Discussions have been conducted with national representatives of the MMAF in Indonesia, specifically with its units for planning and external cooperation and the directorates of community empowerment and national marine parks. Local discussions have been conducted with the District Marine Affairs and Fisheries Office in Berau, specifically with the sections on coasts and small islands, law enforcement, aquaculture, and post-harvest. Representatives from the orates of Community Empowerment and the National Marine Parks joined fieldtrips during project preparation, together with the of head of the Fishers Forum of Berau and the head of the Law Enforcement of the District Marine Affairs and Fisheries Office. Meetings were conducted with the joint program of The Nature Conservancy and the World Wide Fund for Nature (WWF). In Balabac, consultations were conducted with PCSD staff; the head of the Center for Strategic Policy and Governance of Palawan State University; and the mayor of Balabac and his municipal development officer, municipal agricultural officer, and municipal social works and development officer. Female government officials, both national and local, who are involved in empowering women joined the fieldtrips, including the representative of the orate of Community Empowerment of the orate General of Marine, Coasts, and Small Islands (DGMCSI) in Indonesia and the municipal social works and development officer of Balabac. Consultations were held with local fishers, traders, village officials, and ethnic Molbog leaders in several target communities, with the involvement of several village women, most of whom are engaged in processing the catch.
8 6. From these consultations, the design team identified tentative lists of target communities and potential livelihoods that could be developed, which are acceptable to the primary beneficiaries of the project and other stakeholders and are ecosystem-based. Initially, many fishers, particularly in Berau District, suggested culturing groupers in cages. However, the lack of a hatchery or a track record of success as poor fishers engage in this kind of business prompted the design team not to include this option in the list of potential livelihoods. Another reason culturing groupers without a supporting hatchery is not sustainable is that fish farmers rely on wild-caught fingerlings or fry, exacerbating fishing pressure on the target species. Possible livelihoods proposed in Berau District include transport boats; seaweed culture; processing shrimp paste, fish, and seaweed crackers; and drying fish. Seaweed culture has been tried in the past in Berau District but failed because green turtles graze on the seaweed farms. However, the aquaculture unit of the Marine and Fisheries Office of Berau assured the design team that there are locations that are beyond the reach of green turtles. While business development in Berau District is limited to fishery-related livelihoods because of the government s policy limiting the work plans of agencies to activities within their assigned sectors, proposed enterprises in Balabac in the Philippines include boat transport services, seaweed culture, seaweed cracker processing, and rearing livestock such as goats and cattle. Fisheries in the Philippines are under the purview of the MAO. The list of alternative livelihoods is not all encompassing. It could be modified to address the aspirations of local people and supplement existing government programs, provided that they are ecosystem-based and financially viable. 7. ADB has received no objection to the project from the Governments of Indonesia and the Philippines. During the initial stage of project implementation, a project visioning, scoping, and teambuilding workshop will be conducted to establish a common understanding of the project design framework and objectives among NGOs, local government representatives, and other stakeholders. Using the results of the poverty assessment, and in consultation with recognized fisher organizations and/or other community organizations, target beneficiaries will be selected by local governments (through the District Marine Affairs and Fisheries Services in Berau District and through the MAO in Balabac) and by consultants that will be selected for project implementation. Target beneficiaries, including women, will then directly participate in identifying livelihoods for possible development based on agreed criteria. Once feasibility studies have been prepared, candidate livelihoods will be presented once again to project beneficiaries for final selection. Community development officers and skills specialists will organize beneficiaries and empower them to make organizational and business decisions through training and extension services. Where communities are able, procurement will be contracted to them through community contracts to help build strong ownership and participation in the project. Annual work plans and budgets will be prepared with the participation of fisher organizations, NGOs, and other stakeholders such as local governments and representatives of the DGMCSI for Berau District and PCSD staff for Balabac. Fisher organizations should be equally represented by men and women. Quarterly progress reports will have inputs prepared by community development officers after consulting with beneficiaries on how to resolve any bottlenecks and other issues that arise. Primary Beneficiaries and Other Affected Groups and Relevant Description Berau District: Poor coastal fishers in targeted villages as potential beneficiaries, direct and indirect Fishers organizations, such as the Berau Other Key Stakeholders and Brief Description Berau District: DGMCSI, MMAF Marine Affairs and Fisheries Services of Berau
9 Primary Beneficiaries and Other Affected Groups and Relevant Description Fishers Forum as potential beneficiaries and partners in community organizing Community groups on law enforcement as potential beneficiaries and partners in the protection of coastal and marine resources Balabac: Poor coastal fishers in targeted villages as potential beneficiaries, direct and indirect Organizations of Molbog indigenous peoples as potential beneficiaries and partners in community organizing activities Fisheries law enforcement teams as potential beneficiaries and partners in the protection of coastal and marine resources Other Key Stakeholders and Brief Description Joint program of The Nature Conservancy and WWF Consultants to facilitate community empowerment, implement and coordinate project activities, and provide technical and management assistance Balabac: PCSD Palawan provincial government Balabac municipal government NGOs that have been implementing projects in Balabac Consultants for project implementation to be selected in accordance with ADB s Guidelines on the Use of Consultants 7. Coordination 8. On 8 March 2010, the ADB project officer met with the Embassy of Japan in Manila to discuss the JPFR concept note. The finance attaché had no objection to the proposal and requested additional information about the component on livelihoods and/or enterprises. A revised concept paper was submitted on the same day, incorporating possible microenterprises that could be developed in targeted coastal communities. The microenterprises to be developed and established under the JFPR project will be determined using the socioeconomic and needs assessment surveys to be conducted by the consultant during the initial year of the project. At a coordination meeting with the Embassy of Japan in Jakarta held on 6 October 2010, the issues discussed were (i) NGO selection, (ii) how ADB would control consultants use of funds, (iii) the availability of information on transactions for public viewing in the ADB website, and (iv) the selection of Berau District as the project site among other possible sites within the CTI in Indonesia. 8. Detailed Cost Table 9. Please refer to Appendix 3 for detailed cost estimates and Appendix 4 for fund flow arrangements.
10 C. Linkage to ADB Strategy and ADB-Financed Operations 1. Link to ADB Strategy 10. The table below summarizes ADB strategies that served as guideposts for developing the proposed project grant. Document Poverty Reduction Strategy Enhanced Poverty Reduction Strategy Country Strategy and Program: Philippines, 2005 2007. Proposed country partnership strategy: Philippines, 2011 2016 a Country Strategy and Program: Indonesia, 2006 2009. Proposed country partnership strategy: Indonesia, Year of Last Discussion Objective(s) 1999 The strategy identifies enterprise development as a tool for strengthening the private sector contribution to poverty reduction. 2004 The strategy recognizes that poverty is pervasive in rural areas. Projects that promote enterprise development and job creation in rural areas will be prioritized to make ADB s poverty-reduction efforts more effective. 2011 ADB s country strategy and program for the Philippines mentions the continued emphasis of ADB TA and knowledge products on developing sustainable enterprises, including pilot projects, in the agriculture and natural resources sector to improve the living standards of coastal communities and the rural poor. 2011 Supporting the Government of Indonesia s dual objectives of sustainable economic growth and achieving the Millennium Development Goals, ADB s country partnership strategy for Indonesia has two pillars: (i) pro-poor, sustainable economic growth achieved by stimulating public and private sector investments and (ii) addressing marine and urban environmental issues to improve livelihoods and promote sustainable development. 2012 2015 b Strategy 2020 2008 Inclusive growth is a strategic agenda of ADB. ADB s support for achieving inclusive growth highlights raising the living standards of the poor by improving their access to basic productive assets and markets. a For Board consideration in 2011. b For Board consideration in 2012. 2. Link to Specific ADB-Financed Operation Project Name Project Number REG TA 44113-01 Date of Board Approval February 2011 Coastal and Marine Resources Management in the Coral Triangle: Southeast Asia TA Amount ($ milion) $11.22 million from the Global Environment Facility and $1.00 million from ADB s Technical Assistance Special Fund (TASF-other sources)
11 3. Development Objective of the Associated ADB-Financed Operation 11. Coastal and Marine Resources Management in the Coral Triangle: Southeast Asia is one of three ADB TA projects that supports the CTI and will cover the Southeast Asia portion of the Coral Triangle. It will complement a parallel project in the Pacific 3 and an ongoing project on regional cooperation through information exchange and decision-making that will link ADB s Pacific and Southeast Asia initiatives on the Coral Triangle. 4 These new efforts build on synergies from previous and ongoing coastal investment projects in Southeast Asia and the Pacific, including the second Coral Reef Rehabilitation and Management Project 5 in Indonesia and the Integrated Coastal Resources Management Project in the Philippines, 6 and on SSME action plans for MPAs and sustainable fisheries. The CTI is a subprogram of an Association of Southeast Asian Nations (ASEAN) program the Brunei Darussalam Indonesia Malaysia Philippines East ASEAN Growth Area which falls within the strategic agenda on regional cooperation and integration of ADB s Southeast Asia Department. The project has regional as well as national objectives and activities. The regional activities are (i) establishing a transboundary protected area for integrated coastal and marine ecosystems to address habitat destruction across the SSME; 7 (ii) establishing a monitoring, control, and surveillance system to address illegal, unreported, and unregulated fishing; and (iii) assessing the vulnerability of coastal areas and demonstrating adaptation measures against climate change. The regional activities reflect the commonality of threats, the necessity for collective action to address them, and the connectivity of the ecosystems in the SSME. National activities are those that are implemented only at specific sites in the SSME in direct response to local threats. With cofinancing from the Global Environment Facility, this project will enhance the management of coastal and marine resources in CT3 by providing technical and operational support for institutional strengthening, applying the ecosystems approach to managing marine resources, developing alternative livelihoods, and coordinating stakeholders. The expected impact of the project is resilient coastal and marine ecosystems and human communities in the CT3. The status of coastal and marine ecosystems, coastal fisheries, and the food security of coastal communities in the SSME will have improved by 2020. The primary outcome of this project is the improved management of coastal and marine ecosystems in the SSME priority seascape within the Coral Triangle by 2015. 3 ADB. 2010. Strengthening Coastal and Marine Resources Management in the Coral Triangle of the Pacific, Phase II. Manila. 4 ADB. 2009. Technical Assistance for the Coral Triangle for Regional Cooperation on Knowledge Management, Policy and Institutional Support to the CTI. Manila. 5 ADB. 2002. Report and Recommendation of the President to the Board of ors: Proposed Loan to the Republic of Indonesia for the Coral Reef Rehabilitation and Management Project Phase 2. Manila (Loan 1962-INO, for $33 million, approved on 16 December). 6 ADB. 2006. Report and Recommendation of the President to the Board of ors: Proposed Loan to the Philippines for the Integrated Coastal Resources Management Project. Manila (Loan 2311-PHI, for $33.8 million, approved on 23 January 2007). 7 WWF-SSME Program. 2004. Framework for a Network of MPAs in the SSME. WWF SSME Program. Quezon City, Philippines (48 pages).
12 4. Main Components of the Associated ADB-Financed Operation TA 7813-REG: Coastal and Marine Resources Management in the Coral Triangle Southeast Asia No. Component Name Brief Description 1. Improved policy 1.1 Policy and legislative support to fill gaps in sustainable framework for coastal and marine ecosystem management sustainable coastal and 1.2 Formulation of management mechanisms and marine ecosystem interventions, such as business and management plans management for MPAs, sustainable financing policies, and fostering adaption to climate change by CTI national coordinating committees, local government units, and other stakeholders 1.3 Promotion of capacity building through training and technical and extension support for national and local resource managers, park rangers, local governments, and other stakeholders to improve management effectiveness in marine conservation areas, reserves, and production seascapes 1.4 Conduct of public awareness campaigns to improve stakeholders appreciation and support 2. Ecosystem-based approach to marine resources management pilot-tested 3. Effective project management implementation 2.1 Effective management of MPAs 2.2 Pilot-implementation of a fisheries monitoring, control, and surveillance system against illegal, unreported, and unregulated fishing in the SSME priority seascape 2.3 Pilot-testing of ridge-to-reef management of a coastal zone with large-scale agricultural plantations and marine industries 2.4 Developing and pilot-testing sustainable livelihoods to reduce pressure on marine resources and improve socioeconomic conditions in targeted coastal villages in Sabah, Malaysia 3.1 Setting up a project management mechanism to ensure the timely and effective implementation of project activities and the cost-efficient utilization of project funds and other resources 3.2 Procurement of the services of a consulting firm to manage the implementation of the project under the supervision of the executing agency 3.3 Monitoring and evaluation of project activities through the project coordinator, who will report directly to the ADB officer in charge of this project 3.4 Packaging of the key outputs of the project into tangible knowledge products (e.g., technical reports, guidelines, manuals, policy briefs, news articles, and other public awareness materials) 3.5 Establishment of partnerships with the private sector
13 5. Rationale for Grant Funding versus ADB Lending 12. The JFPR project will complement ADB TA in the CT3, particularly with regard to enhancing the objectives of the CTI project toward making coastal and marine resources and human communities more resilient. While most of the TA will address coastal resource management, the JFPR project will finance poverty reduction activities, such as empowering remote coastal communities to engage in viable business operations, providing capital and production inputs to free beneficiaries from dependence on traders who usually dictate the terms of trade with poor fishers, and developing business mechanisms that are workable for the poorest of the poor and women s groups. It will pilot livelihoods in selected villages that add value, introducing new processed products and/or improving the quality of products that the villages already produce. Backyard livelihoods will be pilot-tested on larger scales to increase their contribution to household income. An innovative production, input-assistance, and profitand risk-sharing system with consultants will be introduced to ensure consultants greater stake in the sustainability of livelihoods. As the JFPR project complements the objectives of ADB TA, it will select villages that are along the boundaries of the SSME, which are poor, remote, vulnerable to control by traders, and susceptible to the economic impacts of declining coastal and marine resources. Such interventions are not eligible for direct ADB loans because of their pilot nature and the high cost of empowering these groups and of developing viable enterprises in remote areas. Hence, grant funding is justified for piloting such new and innovative development schemes that will make CTI TA more holistic. The MMAF of Indonesia has nevertheless requested the Planning and Development Agency to include in its list of projects for funding through loans and/or foreign assistance the continuation of the Coral Reef Rehabilitation and Management Project, which is about to complete its second phase. Through the third phase of this program, the Government of Indonesia would like to proactively alleviate the adverse effects of global climate change and human activities on marine biodiversity, productivity, and livelihoods, as well as on coastal communities way of life and the marine environment s viability as a source of animal protein. The DGMCSI queried the ADB Indonesia Resident Mission in early October 2010 regarding funding opportunities for this program. D. Implementation of the Proposed Grant 1. Provide the Name of the Implementing Agency For Berau District: DGMCSI, MMAF For Balabac: PCSD 13. The MMAF, the agency responsible for managing Indonesia s marine and fishery resources and empowering coastal communities, will be the executing agency. It will provide strategy and policy guidance to the project. The MMAF is a big organization whose responsibilities span research, capture fisheries, aquaculture, post-harvest management, surveillance, and the management of small islands. Hence, the DGMCSI, which is responsible for managing coasts and small islands and empowering coastal communities, will be the implementing agency for Berau District.
14 14. For Balabac, Palawan, PCSD, 8 which was created in 1992 to govern, implement, and direct the Strategic Environmental Plan for Palawan, will serve as the executing agency and implementing agency. Under the law, the PCSD has the power to arrange, negotiate for, and accept donations, grants, gifts, loans, and other funding from domestic and foreign sources to pursue plan activities. As the executing agency, the PCSD will provide strategy and policy guidance to the project. It will implement the project using PCSD staff who currently coordinate and implement its policies, programs, and functions. PCSD staff will administer project activities and facilitate coordination between the project and ADB. 15. The organizational structure of implementation arrangements in Berau District and Balabac are described in Appendix 5. Consultants will be hired for Berau District and Balabac to implement day-to-day livelihood and community development activities of the project (Supplementary Appendix B, terms of reference for consultant). The project and its annual work and financial plans will be approved through the usual government budgeting procedures. 16. Goods will be procured in accordance with ADB s Procurement Guidelines (2010, as amended from time to time). Consultants will be recruited by the executing agencies in accordance with ADB s Guidelines on the Use of Consultants to provide services toward implementing and managing the JFPR grant, as well as monitoring its progress. A vehicle will be procured for Berau District to facilitate implementation in light of limited transport facilities. It is less expensive to reach the prospective project sites in the southern portion of the district through Tanjung Batu. Instead of hiring a speed boat from the city to the project sites, driving to Tanjung Batu allows using one of the supply boats to reach other coastal villages. Except for the vehicle in Berau District and warehouses, materials for various livelihoods costing less than $10,000 will be procured by the cooperatives through direct. Civil works to construct warehouses and fences for cattle will be procured by the executing agencies using the shopping procedure. Community participation may also be used to construct civil works. The mode of procurement for each cost bracket is indicated in Appendix 3. 8 The PCSD consists of members of the House of Representatives representing Palawan Province, the deputy director general of the National Economic and Development Authority, the undersecretary of environment and natural resources, the undersecretary for special concerns of the Department of Agriculture, the governor of Palawan, the mayor of Puerto Princesa City, the president of the Mayor's League of Palawan, the president of the Provincial Chapter of the League of Villages, and the executive director of the PCSDS, with other members drawn from the public or private sectors as the majority of the council may deem necessary. As various sectors are represented in the PCSD, organizing another steering committee for the project would be redundant.
15 2. Risks Affecting Grant Implementation Type of Risk Brief Description Measure to Mitigate the Risk Governance Weather Project management Local politicians intervening in the selection of livelihoods, sites, and beneficiaries Unfavorable weather and sea conditions could affect implementation schedules and enterprise productivity Implementing agencies lack of experience in project implementation may delay procurement and the replenishment of imprest accounts, thus affecting the project implementation schedule A project visioning, scoping, and teambuilding workshop will be conducted at the start of the project to establish common understanding of the objectives and target output of the project. Annual planning and budgeting meetings will be conducted with the participation of the executing agencies, implementing agencies and stakeholders. Quarterly monitoring will involve the executing agencies, implementing agencies, and stakeholders. Activities will be based on the work and financial plans approved by executing agencies, following the receipt of a letter of no objection from national governments. Executing agencies will arrange annual independent audits of finances and performance. These factors will be considered in project and production scheduling. It is important that work plans for conducting training, specialist coaching, scheduling procurement, and even managing cash flow consider weather patterns. Training for project and PIU staff on project management, consultant selection, and ADB procurement and disbursement procedures is included in the work plan and cost estimates.
16 Type of Risk Brief Description Measure to Mitigate the Risk Institutional coordination Lack of coordination among agencies could generate conflict and hamper smooth project implementation In Berau District, a joint secretariat was created in 2004 for the Conservation Alliance, which was established to coordinate the management of the Berau MPA. The Conservation Alliance consists of the Berau Marine Affairs and Fisheries Office, other government agencies, and members of the joint secretariat of NGOs for the Berau MPA, which includes the WWF, The Nature Conservancy, Mitra Pesisir (an NGO organized by the alumni of Hasanuddin University in South Sulawesi for sustainable management of coasts and small islands), and two local NGOs supported by Indonesian Biodiversity Foundation. For Balabac, the PCSD consists of representatives of the Office of the Governor, Southern Palawan congressional district, Department of Environment and Natural Resources, and league of municipalities, as well as other stakeholders. These bodies are envisioned as being actively involved to enhance interagency coordination. 3. Incremental ADB Costs Component Amount requested Justification Type of work to be rendered by ADB $60,000 Incremental ADB Cost The grant aims improve the income of very poor beneficiaries in remote areas. As most project resources will be used to develop livelihoods, additional funding is necessary to survey socioeconomic conditions at the start and end of implementation to determine the project s impact. Likewise, assistance is needed for a midterm review to monitor and evaluate the progress of implementation and provide feedback to keep the project on track. Many of the planned livelihoods involve women s participation. A gender specialist will be engaged to ensure that activity designs are conducive to their participation. Project management has to be trained, particularly on ADB guidelines, to avoid administrative bottlenecks and ensure timely implementation. Socioeconomic assessment at the beginning and end of the project will provide the baseline and post-project data needed to evaluate whether the objective of improving beneficiaries income is achieved. Knowledge management will package lessons from the project as media easily accessible to many users, particularly policy makers who can influence the direction and design of future development projects. The project will analyze the role of women in coastal community organization and coastal resource management and the project's likely
17 Component Incremental ADB Cost impacts on women, and this analysis will be integrated with other analyses in all stages implementation Legal assistance will be supplied toward establishing beneficiary cooperatives and determining the legal requirements to protect the interests of the various stakeholders The project will prepare project management manuals and train stakeholders on their use, covering procurement, the administration of community contracts, disbursement and withdrawal procedures, financial management, and M&E The midterm review will assist in an independent evaluation of the project s progress and recommend ways to keep the project on target. 4. Monitoring and Evaluation Key Performance Indicator Business plans for at least 80 alternative livelihoods developed through participatory planning At least 80 alternative livelihood units, of which 30 are led by women, earning FIRRs of at least 20% M&E reports circulated At least two project knowledge and lessons products disseminated through national, regional, and global knowledge networks Reporting Mechanism Consultant reports with sexdisaggregated data Consultant reports with sexdisaggregated data on the financial status of alternative livelihoods Executing agency quarterly progress reports Plan and Timetable for M&E December 2011 December 2012 December 2013 End of the first month after each quarter End of project implementation End of the first month after each quarter End of project implementation 5. Estimated Disbursement Schedule Fiscal Year (FY) Amount FY2011 300,000 FY2012 580,000 FY2013 920,000 FY2014 9 200,000 Total Disbursements 2,000,000 ----------------------------------------------------------------------------- 9 For expenditures incurred but not yet paid for by the project closing date.
18 Appendixes 1. Design and Monitoring Framework 2. Summary Cost Table 3. Detailed Cost Estimates 4. Fund Flow Arrangements 5. Project Management and Implementation Structure 6. Summary Poverty Reduction and Social Strategy
Appendix 1 19 DESIGN AND MONITORING FRAMEWORK Design Summary Performance Targets and Indicators with Baselines Data Sources and Reporting Mechanisms Assumptions and Risks Impact Improved incomes for poor coastal communities in Berau District in East Kalimantan, Indonesia, and Balabac in Palawan, Philippines 4 years from the end of project implementation, average per capita income of 1,000 poor households increased by 30% from $325 in Berau District and from $230 in Balabac (including 300 households led by women) Reports of (i) District Development Planning Agency (Badan Perencana Pembangunan Daerah) of Berau District in East Kalimantan and (ii) the PCSD in Palawan Assumption Local governments maintaining a strong commitment and ownership for scaling up of model alternative livelihoods Risk Severe climate change and human activities affecting the livelihoods of coastal communities Outcome Model alternative livelihoods developed in the coastal communities of Berau District in East Kalimantan and Balabac in Palawan By the end of project implementation, at least four types of model alternative livelihoods with FIRRs of at least 20% pilot-tested Impact assessment report of the executing agency with sex-disaggregated data at the end of project implementation Assumption Sustainable and ecosystem-based approach to coastal resource management introduced and implemented Risks Local cultures limiting women s participation in livelihood and community activities Destructive fishing activities not being contained by local governments Outputs Output 1: Targeted beneficiaries in coastal communities in Berau District and Balabac trained to develop business plans for livelihoods By the end of project implementation, business plans for at least 80 alternative livelihoods developed through participatory planning Consultant reports with sex-disaggregated data Assumption Competent local consultants available at the project sites and acceptable to stakeholders Risk Political intervention in the selection of specific sites, livelihoods, and beneficiaries
20 Appendix 1 Design Summary Performance Targets and Indicators with Baselines Data Sources and Reporting Mechanisms Assumptions and Risks Output 2: Viable livelihoods successfully implemented by organized coastal community groups At least 80 alternative livelihood units, of which 30 are led by women, earning FIRRs of at least 20% Consultant reports with sex-disaggregated data on the financial status of alternative livelihoods Assumption Time needed to pursue women s livelihoods not affecting their regular roles at home Risk Changes in the cost of production or prices of commodities affecting the viability of livelihoods Output 3: Effective project management system operational M&E reports circulated At least two project knowledge and lessons products disseminated through national, regional, and global knowledge networks Executing agency quarterly progress reports Assumption Executing agency and PMU able to provide enough qualified personnel Risk High turnover of trained personnel in charge of project implementation Activities with Milestones Inputs 1. Coastal communities of Berau District and Balabac mobilized for livelihood development and expansion 1.1 Conduct rapid social assessment of beneficiary communities to generate baseline information (commence in month 7, complete by month 10) 1.2 Identify livelihood opportunities for possible uptake by organized community groups (commence in month 10, complete by month 13) 1.3 Conduct social preparation and mobilization activities to organize coastal communities into groups, cooperatives, and/or associations for microenterprise development (commence in month 7, complete by month 19) 2. Viable livelihoods implemented by organized coastal community groups 2.1 Conduct prefeasibility studies of prototype microenterprises (commence in month 10, complete by month 13) 2.2 Conduct pilot trials of selected microenterprises (commence in month 16, complete by month 25) 2.3 Provide technical assistance and support, including training of organized groups on microenterprise establishment and management (commence in month 16, complete by month 36) 2.4 Link organized community groups with input suppliers and output buyers (commence in month 19, complete by JFPR $2.0 million Cost Item Consultants International and Local Travel Civil Works Equipment Supplies and Materials Training, Seminars, and Conferences Miscellaneous administrative and support Contingencies JFPR Incremental Cost $60,000 Cost Item Consultants International and Local Travel Amount 401,775 124,167 382,222 163,936 693,111 56,433 78,356 100,000 Amount 21,583 18,194