GLOBAL ENVIRONMENT FACILITY 1699P Mexico Protected Areas Program: Proposed Restructuring Project Project Document May 1997 THE WORLDBANK THE WORLD BANK GEF Documentation The Global Environment Facility (GEF) assists developing countries to protect the global environment in four areas: global warming, pollution of international waters, destruction of biodiversity, and depletion of the ozone layer. The.GEF is jointly implemented bythe United Nations Development Programme,the United Nations EnvironmentProgramme, and the World Bank. GEF Project Documents --identified by a green band - provide extended project-, specific information. The implementing agency responsible for each project is identified by its logo on the cover of the document. Global Environment Division Environment Department World Bank 1818 H Street, NW Washington, DC 20433 Telephone: (202) 473-1816 Fax: (202) 522-3256 Report No. 16998-ME Mexico ProtectedAreas Program: Proposed Restructuring Project Project Document May 1997 Mexico Country Management Unit Latin America and the Caribbean Regional Office CURRENCY EQUIVALENTS Currency Unit Mexican US$ 1.00 1992/93 3.2 pesos 1994 3.3 pesos 1995 7.0 pesos 1996 7.7 pesos = 1997 8.0 pesos WEIGHTS AND MEASURES Metric System Vice President: Shahid Javed Burki, LACVP Director, Country Department: Olivier Lafourcade, LAMXC Manager, Sector Leadership Group: Michael Baxter, LASLG Sector Leader: Adolfo Brizzi, LAMX1 Task Leader: Christine Kimes, ENVGC ABBREVIATIONS AND ACRONYMS BANOBRAS Banco Nacional de Obras y Servicios Publicos CI Conservation International CONABIO Consejo Nacional para el Conocimiento y Uso de la Biodiversidad CONANP Consejo Nacional de Areas Naturales Protegidas CTAs Consejos Tecnicos Asesores CTEP Technical Committee for Evaluation and Planning CTFANP Technical Committee for the Fund for Natural Protected Areas CTI Technical Committee for International Outreach DGDR Directorate General for Regional Development FANP Fund for Natural Protected Areas FMCN Fondo Mexicano para la Conservacion de la Naturaleza GEF Global Environment Facility GOM Government of Mexico IBRD International Bank for Reconstruction and Development ICR Implementation Completion Report INE Instituto Nacional de Ecologia IPDPs Indigenous Peoples Development Plans NGO Non-Govermmental Organization PA Protected Area PAM Mexico Environment Project POA Annual Operating Plan PRODERS Programa de Desarrollo Regional Sustentable PROFEPA Procuraduria Federal de Proteccion al Ambiente SEDUE Secretaria de Desarrollo Urbano y de Ecologia SEMARNAP Ministry for Environment, Natural Resources and Fisheries SINAP National System of Protected Natural Areas TNC The Nature Conservancy UCANP Coordinating Unit for Natural Protected Areas UCE External Credit Unit WWF World Wide Fund for Nature MEXICO: PROTECTED AREAS PROGRAM PROPOSED RESTRUCTURING TABLE OF CONTENTS I. BACKGROUND----------------------------------------------------------------------- 1 A. Project Origins ----------------------------------------------------------------- 1 B. Project Implementation ------------------------------------------------------- 2 C. Performance Review and Redesign ----------------------------------------- 3 D. Sector Policy Reforms -------------------------------------------------------- 5 E. Status of Project Implementation -------------------------------------------- 6 II. ENDOWMENT FUNDS FOR BIODIVERSITY CONSERVATION -----7 A. Background --------------------------------------------------------------------- 7 B. The Proposed Fund for Protected Areas (FANP) -------------------------8 III. THE RESTRUCTURED PROJECT ------------------------------------------ 10 A. Project Objectives and Description-----------------------------------------10 B. Project Costs and Financing-------------------------------------------------11 C. Complementary Support for Reserve Conservation Programs---------15 D. Procurement-------------------------------------------------------------------16 E. Disbursements-----------------------------------------------------------------17 IV. PROJECT IMPLEMENTATION ARRANGEMENTS--------------------19 A. Reserve Conservation and Central Coordination Programs ------------19 B. FANP Administration--------------------------------------------------------22 C. Supervision, Monitoring, and Evaluation --------------------------------- 25 V. FANP MANAGEMENT----------------------------------------------------------27 A. Operations Management-----------------------------------------------------27 B. Asset Management------------------------------------------------------------30 C. Administration, Accounts, and Audits-------------------------------------3 1 VI. BENEFITS AND RISKS ----------------------------------------------------------32 A. Benefits-------------------------------------------------------------------- 32 B. Risks----------------------------------------------------------------------------32 VII. AGREEMENTS REACHED AND RECOMMENDATION -------------34 A. Agreements and Assurances-------------------------------------------------34 B. Recommendation-------------------------------------------------------------36 TABLES Table 1: Cost Summary By Component ------------------------------------------------ 12 Table 2: Financing Summary 1993-2001 ----------------------------------------------- 13 Table 3: Summary of Complementary Funding ---------------------------------------1 5 Table 4: Summary of Procurement Methods ------------------------------------------- 17 ANNEXES Annex 1: Project Reserves - Summary Data Annex 2: Task Force for Fund for Protected Areas (FANP) Annex 3: Detailed Cost and Financing Tables Annex 4: FANP Investment Analysis Annex 5: Complementary Funding Tables Annex 6: Disbursement Schedule Annex 7: Policy Framework for CTAs Annex 8: FMCN Organigram Annex 9: By-Laws of CTFANP Current Membership of CTFANP (sectoral affiliation) System for Immediate Response to Natural Disasters Annex 10: Monitoring Indicators Annex 11: Outline of FANP Operational Manual Annex 12: FANP Spending Rules: Eligible Activities Cost-sharing Ratios by Category ("rubros") Annex 13: FANP Funding Cycle Annex 14: Asset Management Investment Firms Selection Criteria Investment Guidelines MAP IBRD 28937 This report is based on the findings of restructuring missions which visited Mexico in September 1996 and March 1997, comprising Christine Kimes (Task Leader), Adrian Demayo (LASLG), Alberto Ninio (LEGLA), and Musa Asad (Consultant). Mr. Olivier Lafourcade is the Country Director, Adolfo Brizzi is the Sector Leader, and Michael Baxter is the Sector Leadership Group Manager. Part I: Project Summary MEXICO PROTECTED AREAS PROGRAM: PROPOSED RESTRUCTURING I. BACKGROUND A. Project Origins 1. Mexico is ranked fourth among the thirteen megadiversity countries containing 10% of the world's biodiversity. Besides being biologically important, Mexico's forests and wildlands have broad importance both nationally and globally for environmental, social and commercial reasons. In recent years, there has been a growing recognition that Mexico's diverse ecosystems and biodiversity are being threatened by deforestation, over-exploitation, uncontrolled tourism, accelerated economic development and arbitrary settlement policies. 2. In response to these threats, the Government of Mexico (GOM) developed a strategy for protecting critical habitats in the late 1980s. The main policy goals included: (a) integration of protection and sustainable development of natural resources with social, economic, and moderni- zation processes needed for development; (b) making ecosystems conservation compatible with the need for rational natural resource use to support sustained community development; and (c) ensuring the recovery, protection and conservation of natural resources and the equilibrium of ecosystems. 3. As one instrument to meet these objectives, the GOM created the National System of Protected Natural Areas (SINAP) comprising parks, reserves, and monuments. SINAP was designed to: (a) preserve natural settings, (b) safeguard genetic diversity, (c) ensure rational utilization of ecosystems, (d) provide areas conducive to scientific research, (e) promote rational and sustained resource utilization and preservation, (f) establish forest zones to protect human activities in mountainous flood zone regions, and (g) protect cultural heritage. 4. In the early 1 990s, GOM and the Bank began to explore ways in which Bank financial support could assist GOM in achieving its environmental objectives. This dialogue culminated in March 1992 in the approval of a SDR 21.4 million (US$30 million equivalent) GEF grant for the Mexico Protected Areas Program, and an associated US$50 million IBRD loan for the Mexico Environment Project (PAM) in April 1992. The GEF grant was approved to finance the implementation of emergency plans, management plans, and operating plans derived from them in up to 17 SINAP protected areas with unique global biodiversity. The emergency plans would include only the absolutely essential activities for ensuring the viability of the reserve (basic salaries, equipment for fighting forest fires, surveillance, and basic public awareness), while the operating plans (POAs) could include other activities such as basic infrastructure investment, communication and scientific equipment, vehicles, and basic studies. 2 B. Project Implementation 5. The loan agreement and the associated GEF grant agreement were signed in April 1992. In late 1992, the project implementing agency, Secretaria de Desarrollo Urbano y de Ecologia (SEDUE), reorganized its Subsecretaria de Ecologia into two semi-autonomous institutes: the Instituto Nacional de Ecologia (INE) and the Procuraduria Federal de Proteccion al Ambiente (PROFEPA). INE was given the responsibility for the protected area system, while PROFEPA was charged with enforcing environmental regulations. Because of this reorganization, the PAM and GEF projects had to be restructured to be consistent with the new institutional arrangements, and the loan and grant agreements had to be amended. At the same time, a panel of experts was consulted regarding the GEF project scope, and, following their recommendations, the number of SINAP protected areas included in the GEF project was reduced to a maximum of 12. Conse- quently, the GEF grant amount was reduced to SDR 17.83 million (US$25 million equivalent). The amendments to the IBRD loan agreement and GEF grant agreement were finalized in early 1993, and the loan and grant became effective in April 1993. 6. The twelve reserves included in the final GEF project design represented about one-third of the total number of biosphere and special biosphere reserves (35) in the SINAP system. However, they accounted for more than one-half of the total area, in hectares, of all 35 reserves combined. The twelve reserves eligible for GEF funding were: (1) El Vizcaino Biosphere Reserve, Baja California Sur; (2) Islas del Golfo Special Biosphere Reserve, Mar de Cortes; (3) Calakmul Biosphere Reserve, Campeche; (4) Montes Azules Biosphere Reserve, Chiapas; (5) Mariposa Monarca Special Biosphere Reserve, Michoacan y Mexico; (6) Sian Ka'an Biosphere Reserve, Quintana Roo; (7) Isla Contoy Special Biosphere Reserve, Quintana Roo; (8) Ria Lagartos Special Biosphere Reserve, Yucatan; (9) Sierra de Manantlan Biosphere Reserve, Jalisco y Colima; (10) El Triunfo Biosphere Reserve, Chiapas; (11) Isla Isabel National Park, Nayarit; and (12) Cascadas de Agua Azul Special Biosphere Reserve, Chiapas. In practice, only the first 10 reserves in this list have been covered by GEF-supported project activities; information on these reserves is attached in Annex 1. 7. The governmental reorganization and staffing changes of late 1992 translated into project start-up delays, which were compounded by budgetary constraints resulting from loan/grant effectiveness not coinciding with the budgetary appropriation cycle. As a result, implementation did not really get underway until 1994. Delays continued to affect implementation during 1994, as the operational and emergency plans for 1994 were not presented to the Bank for no-objection until Oct./Nov. 1994. In Dec. 1994, the economic crisis and peso devaluation hit Mexico, which resulted in budget austerity measures and severe spending controls being imposed on publicly funded pro- jects throughout 1995. During this same period, natural resource management responsibilities were again reorganized within GOM, precipitating another round of staffing changes. A new ministry for environment, natural resources, and fisheries (SEMARNAP) was created in December 1994, INE was placed under its jurisdiction, and oversight of SINAP was included in its mandate. 3 8. The cumulative impact of these historical developments was that implementation progress during 1993-95 was significantly less than originally anticipated (the original grant closing date was Dec. 31, 1995). During the 18-24 months that the project was effectively under implementa- tion, management plans were completed for 6 reserves, emergency plans for another 3. and Technical Advisory Committees (CTAs) were established in 6 reserves to ensure local input into protection plans and programs. Within these technical accomplishments there was tremendous variation from site to site, both in the scope and quality of management plans and in the degree of involvement of CTAs in protection programs. On-site protection activities were initiated at all 10 reserves, but their effectiveness was hampered by slowness in circulation of funds to the field level. By end-1995, only US$ 3.96 million out of the approved US$ 25 million had been disbursed. C. Performance Review and Redesign 9. In an effort to reach a common understanding regarding the causes of the slow implemen- tation progress, the GOM and the Bank agreed in mid-1995 to commission an independent analysis of project performance, with the goal of identifying practical changes which could be made to improve project implementation and help justify the extension of the project closing date (the 4 year implementation period specified in the original legal agreement had been unrealistically short for a project of this nature, independent of the particular country conditions). A Mexican NGO, Pronatura, was selected to conduct this exercise, and a team of Pronatura staff carried out the operational audit in August-September 1995, working closely with involved parties. The assess- ment exercise was managed in a participatory, transparent way, and generated much interest among participants. It demonstrated the GOM's openness and willingness to work closely with the NGO community, even on sensitive issues. 10. The assessment was completed in October 1995, and the findings highlighted the following project limitations: (a) Inter-institutional structure: too many bureaucratic levels existed between the Bank and GOM counterparts (Hacienda, Banobras, SEMARNAP, and INE) to efficiently administer the technical and financial aspects of the project with the adaptability and timeliness required to achieve its on-site objectives in large and remote protected areas. (b) Institutional capacity of Executing Agency: INE's centralized structure and skill mix were not well adapted to provide effective support to a site-level protected areas operation; cumbersome GOM disbursement procedures slowed flow of funds to the field. (c) Bank procedures: prior review of even small size goods and services contracts introduced delays into implementation of a highly decentralized project; frequent changes of task managers resulted in discontinuity of oversight efforts and technical advice; frequency of super- vision missions was inadequate to provide timely support and feedback to project staff and management. 4 (d) Local Participation: despite the project goal of promoting local participation through CTAs, these CTAs were not functioning effectively, and incentives (funding, policy, etc.) were not utilized effectively to encourage participation of conservation NGOs, research centers, and local communities in project activities. (e) Sustainability: no policy or budgetary framework existed to ensure the financing of recurrent costs of protection programs at the 10 reserves beyond the life of the GEF project. 11. To address these limitations, the assessment report recommended several practical changes that were considered necessary to strengthen management performance, accelerate the flow of funds to the field, and increase local participation. These included: (a) provision of training and technical assistance to INE staff at all levels, particularly with respect to park management, financial planning, and participatory techniques; (b) streamlining of Bank procurement review requirements, consistent with the decentralized nature of project design; and (c) introduction of third party management of reserve protection programs, where feasible. In addition, Pronatura highlighted the urgent need to address the long term financial sustainability of the reserves, through a combination of budgetary allocations, cost-recovery mechanisms (such as entrance fees, concessions, etc.), and establishment of a capital endowment. 12. Extension of Closing Date. Despite the imminence of the closing date, the GOM did not act immediately on the report's recommendations, but continued to study its options for improving project performance. Consequently, by Dec. 31, 1995, the Bank and GOM had not yet agreed on an action plan that would ensure achievement of project objectives and satisfactory project implementation. In view of the special status of GEF resources and the fact that once canceled, there was no assurance that grant funds would be available in future, the Bank waived its normal procedures (which require that extensions be granted only when implementation arrangements are fully satisfactory for the purposes of completing the project) and authorized a four month extension of the closing date to April 30, 1996. It was estimated that this period would be sufficient to permit the Bank and GOM to reach agreement and put in place the changes in implementation arrangements needed for satisfactory project completion and achievement of project objectives. 13. Based on consultations during this four month period, the Bank and GOM were able to satisfactorily conclude negotiations for revising project implementation arrangements, amending the grant agreement, and extending the closing date to permit completion of the project. The major changes agreed in April/May 1996 included: (a) streamlined procurement review procedures, in keeping with the small size of goods and service contracts; (b) authorization of third party manage- ment of reserve protection programs; (c) furither refinements to the revolving fund mechanism operated by BANOBRAS, to accelerate flow of funds to the field; (d) inclusion of Indigenous Peoples Development Plans (IPDPs) in the project, to promote the full participation of indigenous communities in project conservation activities; and (e) extension of the closing date until June 30, 2000. The list of eligible reserves was reduced to 10, to reflect actual practice under the project. 5 14. It was also agreed during the April/May negotiations that the Bank and GOM would begin working together to design an endowment mechanism that would ensure long-term recurrent financing of reserve conservation programs in the 10 GEF reserves. Assuming agreement could be reached on a satisfactory management framework and financial structure, the intent was to amend the existing GEF grant agreement to include the establishment of an endowment fund as an additional project component. Undisbursed funds from the GEF grant would be used to capitalize the endowment and create a financial framework that could, over time, attract other donors (bilateral, multilateral and private) and provide expanded support to the SINAP. D. Sector Policy Reforms 15. In parallel with efforts to improve performance under the GEF project, the Zedillo Administration was taking steps to improve the policy and financial framework applicable to the entire national protected areas system. Building on the National Development Plan and National Environment Program 1995-2000 (both of which emphasized the importance of conserving national protected areas), in May 1996 GOM issued "Program for Natural Protected Areas in Mexico 1995-2000", which was the first coherent attempt to develop a strategy for protecting Mexico's rich biological resources in consultation with the national community of scientists, conservationists, and indigenous peoples. The priorities of this program are to: (a) strengthen management at the reserve level, (b) broaden the coverage and representativeness of protected areas, (c) decentralize and re-categorize national parks, (d) strengthen central and local institutions responsible for protected areas management, (e) improve funding for recurrent costs of conservation in protected areas, (f) ensure adequate local community participation in the design and implementation of protected areas management plans, (g) apply an ecosystems management approach to regional development programs, (h) improve inter-institutional coordination, (i) increase education and training, and (j) develop adequate biodiversity information systems. 16. As first steps in implementing this strategy, the GOM established a National Council for Natural Protected Areas (CONANP), composed of representatives from conservation NGOs, the academic community, business and social sectors, and indigenous peoples, to provide ongoing policy advice to GOM regarding the national protected areas system. CONANP began functioning as an advisory group in April 1996 while the "Program for Natural Protected Areas 1995-2000" was being formulated, and the committee's official statutes were promulgated in July 1996. In addition to this initiative to involve civil society in policy formulation, the GOM also took steps to increase its financial support for protected areas management. Recognizing that budgetary allocations for SINAP were unreasonably low (about US$1 million in 1995), the President increased fiscal support for the system in 1996 to almost US$ 3 million, and to about US$ 3.5 million in 1997. The goal of these increased allocations in the short term is to ensure budgetary support for essential recurrent costs in 25 high priority protected areas (covering permanent personnel, basic operating costs, and basic equipment). Over the longer term, the goal is to gradually extend the same basic coverage to a larger share of the national system. 6 E. Status of Project Implementation 17. The conclusion of negotiations in April/May 1996 permitted project activities to resume on their planned trajectory. During 1996, substantial progress was made in preparing management plans for El Triunfo, Mariposa Monarca, and Sierra de Manantlan, and agreement was reached on the framework for the management plan for the Islas del Golfo. Progress was also made in devel- oping the methodology for working with indigenous communities to address their needs and preferences regarding conservation and natural resource management. Preparation of IPDPs was initiated for the 5 reserves with significant indigenous populations living in or around the protected area or holding natural resource rights in the reserve (Isla Tiburon, Calakmul, Sierra de Manantlan, Mariposa Monarca, and Montes Azules); the IPDP preparation process is expected to be completed by the end of May 1997. SEMARNAP's Directorate General for Regional Development (DGDR) has taken the lead in preparing IPDPs for the project, building on experience with its regional sustainable development program (PRODERS); INE plans to take the lead in the implementation phase of the IPDPs, with continued support from PRODERS. Progress was also made during 1996 in preparing for third party implementation of protection programs; by end-1996, agreement had been reached for third party management of the 1997 reserve protection program in the reserves of Sian Ka'an, El Triunfo, and Sierra de Manantlan. 7 II. ENDOWMENT FUNDS FOR BIODIVERSITY CONSERVATION A. Background 18. One of the most difficult problems facing Mexico in implementing protected area (PA) conservation strategies is limited capacity, particularly in the areas of institutional strengthening and financial resource mobilization. Protection programs need guaranteed long-term funding of essential recurrent and core conservation costs. Yet, protected areas conservation activities have rarely generated net revenue. Even when they have, most governments have typically allocated such revenues to general budgetary support, rather than reinvesting them in specific conservation efforts. 19. Capital endowments have become increasingly important as a financing mechanism to provide the reliable, stable support to sustain effective programs promoting protected areas conservation programs. The essential features of an endowment include: (a) a capital fund which is invested with the aim of maintaining its real value while generating income to fund project activities; (b) a decision-making mechanism to allocate the income for specified uses or to meet agreed objectives; and (c) an administrative mechanism to distribute and monitor the funds disbursed and to evaluate the impact and cost-effectiveness of funded activities, relative to the fund's stated objectives. Increasingly, the mechanisms under (b) and (c) are being managed by private institutions (eg, NGOs, foundations), thereby taking advantage of flexible management and administrative procedures. 20. Because of these design features, endowment funds ensure the long-term viability of conservation activities by stabilizing recurrent cost financing and moderating the volatility in funding. In addition, endowments have proven to yield multiple indirect benefits, including: (a) provision of a flexible instrument for objectives ranging from supporting protected areas manage- ment to community-based conservation efforts; (b) improved flow of funds to the field as a result of agile administrative systems, able to match disbursements from the endowment to actual imple- mentation needs; (c) a catalyst for leveraging additional resources from public, private, domestic, or international sources; these new funds may be blended with existing capital, managed separately for complementary conservation activities, or used on a "matching" basis for eligible sub-projects; and (d) enhanced public-private partnerships through, inter alia, the establishment of managing boards with representative membership, drawn from all sectors of society. 21. The proposed endowment fund under the restructured GEF project would share the features and benefits described above. Overall design and financial structuring of the proposed endowment has drawn on growing GEF experience with environmental funds, as well as expertise from other organizations which provide conservation financing (e.g., WWF, TNC, and USAID). The financial aspects also draw upon research on investment guidelines prepared by the GEF, and financial consultant reports utilized for similar projects. These reports advise on aspects regarding the 8 investment of the capital fund, including: selection of an investment firm to manage the capital assets, appropriate contract terms, investment strategy, and estimates of realistic rates of return. B. The Proposed Fund for Protected Areas (FANP) 22. Following the negotiations between GOM and the Bank in April/May 1996, CONANP nominated a national task force in late May 1996 to develop recommendations on the establishment of an endowment mechanism for the GEF Protected Areas Project. The task force consisted of respected individuals from academia, conservation NGOs, the private sector, indigenous commun- ities, and the GOM (members of the task force are listed in Annex 2). The responsibilities of the task force were to evaluate options and make recommendations to CONANP on: (a) the type of long-term funding mechanism that would be appropriate, including legal status; (b) whether to create a new institution or work within an existing one; (c) the scope of fund activities (what would be eligible for funding); (d) the financial structure (size of fund, financing plan); and (e) operating procedures, including relationship between the proposed capital endowment and GOM. 23. To assist with some of these key design decisions, the task force carried out an extensive consultation process between June-August 1996, in which almost 80 conservation organizations, local community representatives, private businessmen, government officials, and donors were interviewed personally and/or contacted by mail to solicit their views by written questionnaire. Review of the consultation results showed that a majority of respondents favored the establishment of a private endowment fund (outside the control of government), with a decided preference for using an existing institution rather than creating a new entity. Following the completion of this consultation process, CONANP decided that a Fund for Natural Protected Areas (FANP) should be housed within the Fondo Mexicano para la Conservacion de la Naturaleza (FMCN), a three-year old private non-profit organization, established to promote biodiversity conservation and to manage an endowment (funded by USAID, GOM, and private international contributors) for a small and medium grants program. 24. Following this decision, the task force then devoted the months of September-December, 1996, to working through the many details involved in establishing a sound endowment fund mechanism and making periodic recommendations to CONANP for decisions, as needed. The range of issues covered during this period included: (a) trustee and organizational arrangements; (b) internal legal documents; (c) financing and financial management requirements; (d) asset management options; (e) eligible activities and spending rules; (f) project cycle and institutional responsibilities (FMCN, SEMARNAP, INE, CTAs); (g) disbursements to the field and financial controls; (h) monitoring and evaluation. Based on this work, CONANP designated in December 1996 the first members of the technical committee to oversee FANP operations within FMCN, and this committee began functioning immediately thereafter. The task force supported FANP start-up within FMCN, by assisting with the first meetings of the FANP technical committee and initiating the recruitment process for the Director of the new fund. 9 25. Based on progress to date, it is now possible to describe how the proposed Fund for Protected Areas would be designed, managed, and operated, and how the GEF Protected Areas Project would be restructured to incorporate this new financial mechanism. GOM and BANOBRAS have confirned in writing that they wish to restructure the project along these lines, to reassign GEF grant resources to FMCN, and to cancel funds from Grant 28604 in favor of FMCN for the purpose of capitalizing the endowment. 10 III. THE RESTRUCTURED PROJECT A. Project Objectives and Description 26. The proposed project restructuring builds on the April/May 1996 agreements and continues the GOM effort to address the weaknesses identified in the 1995 Pronatura assessment report. The restructured project would have the following objectives: (a) protect unique biodiversity in eligible biosphere and special biosphere reserves; (b) strengthen protected areas management at the reserve level; (c) promote local participation, including indigenous communities, in the implementation of protected areas operating and management plans; and (d) ensure long-term recurrent cost financing for core protection and conservation activities. 27. To support GOM's efforts to achieve these objectives, the restructured project would include the following major components: (a) reserve conservation programs: this component would consist of a core group of protection, community outreach, sustainable use, and training activities aimed at improving reserve management and ensuring effective biodiversity conservation in the 10 project reserves; reserve conservation programs would be prepared and implemented in each reserve with input from local stakeholders through the CTA mechanism, and would include activities identified through the IPDP process; examples of activities included in a reserve conservation program would be: regular patrols for surveillance, biodiversity monitoring, signs/postings/trails, fire prevention and control, habitat rehabilitation, control of exotic (invasive) species, construction of rustic infrastructure, environ- mental awareness training, local community capacity-building, and pilot income-generating activi- ties focused on conservation and sustainable use of natural resources; activities to strengthen reserve management capacity would also be included in reserve conservation programs (such as training of the reserve management team and support for the CTAs); implementation of the reserve conservation program could be managed directly by the reserve director and his core staff or contracted out to a third party with appropriate experience (eg., NGOs, universities institutes, etc.); the specific management modality would be worked out on a case by case basis and could vary over time; (b) central coordination programs: this component would consist of activities coordi- nated at the national level for the purpose of strengthening project performance, with particular emphasis on protected area management, the CTA mechanism, and project evaluation; criteria for activities included in this component would be that they benefit a group of project reserves or CTAs, and for this reason could not be implemented at the reserve level as part of an individual reserve conservation program; examples of central coordination activities covered by this component would be: training programs (including workshops and specialised technical assistance) for core reserve staff in modem reserve management techniques (including stakeholder participation, conflict resolution, financial systems, etc.); training programs (including workshops 11 and specialised technical assistance) for CTAs to enhance their capacity to play a meaningful role in reserve protection and conservation, as partners of reserve management; national coordination of project planning, contracting, and procurement; and independent evaluations of project implemen- tation; and (c) permanent endowmentfor protected areas: this component would consist of the establishment and operation of the Fondo para Areas Naturales Protegidas (FANP) within the Fondo Mexicano para la Conservacion de la Naturaleza (FMCN) for the purpose of supporting reserve conservation and coordination programs benefiting the 10 project reserves; component activities would include: establishment of the endowment's legal, financial, and operating structure; incremental staff, management, and office support to enable FMCN to assume its additional financial, administrative, and technical oversight responsibilities for the operation of the FANP; and operation of the FANP under the rules established in an Operational Manual satisfactory to the Bank; within FMCN, a technical committee composed of representatives of civil society (CTFANP) would be responsible for policy decisions and program oversight; except in 1998, only the proceeds from investment income would be used to fund reserve conservation, central coordination, and FANP administrative programs. 28. Project activities supported by the FANP are expected to continue over a 35-40 year period. Bank supervision is expected to terminate after the fourth full year of FANP operations (2001), with the final ICR review mission taking place in 2002. However, the legal agreement provides for a 10 year "lifetime" should the Bank wish to exercise its oversight prerogatives beyond 2001. B. Project Costs and Financing 29. Costs. Project costs for the restructured project fall into 3 distinct categories: (a) original project arrangements (actual expenditures incurred between 1992-96); (b) transition program including establishment of the endowment (1997); and (c) endowment supported program (1998 onwards); for the purpose of illustrating project costs under the endowment mechanism, a 4 year time slice (1998-2001) has been estimated that is representative of the much longer implementation period that the endowment would make possible. 30. Total costs for the restructured project (1992-200 1) amount to US$46.2 million, of which about 51 % would be directed to conservation activities at the reserve level, about 35 % consists of the capitalization of the endowment, 12 % represents central coordination activities for the protection program, and about 2 % represents endowment administration costs. Once the FANP is operational (1998 onwards), project costs are expected to average about US$3.5 million per year, with costs broken down as follows: about 61% for protection programs in the reserves, about 28% for local community participation activities, about 4% for management training programs, about 2% for protection program coordination and evaluation, and about 5% for endowment administration. A sunmmary cost table by project component is presented in Table 1, and detailed cost tables by period, by component, and by activity are attached in Annex 3. 12 TABLE 1. COST SUMMARY BY COMPONENT (US$ million) CY92-96 CY97 CY98-01 TOTAL Reserve Conservation Basic Conservation 7.07 2.86 8.66 18.59 Community Activities 0.10 0.73 3.61 4.44 Management Strengthening 0.00 0.00 0.53 0.53 Subtotal Reserve Conservation 7.17 3.59 12.80 23.56 Central Coordination Management Strengthening 0.16 0.41 0.35 0.92 Project Supervision 4.27 0.12 0.31 4.70 Subtotal Central Coordination 4.43 0.53 0.65 5.62 FANP Endowment Capital - 16.30 0.00 16.30 Administration - 0.09 0.58 0.67 Subtotal FANP Endowment - 16.39 0.58 16.97 OVERALL TOTAL 11.60 20.51 14.04 46.15 31. Financing. Project costs would be financed by a combination of GEF grant resources (reallocation of GEF TF 28604), government budgetary support, income generated through debt swap options, co-financing from NGOs/foundations (under parallel financing arrangements), and investment income generated by the endowment. Within the project financing plan for the restruc- tured project (1992-2001), the breakdown by financier gives the following share in overall project costs: GEF support represents about 57% of project costs, GOM about 31% (including budgetary support and the FANP income resulting from the GOM's debt swap program), FANP income about 11% (excluding the debt swap income), and co-financiers about 1%. A summary financing plan for the restructured project (1992-200 1) is presented in Table 2 below. 13 TABLE 2. FINANCING SUMMARY 1992-2001 Total GOM GEF FANP " NGO Reserve Conservation 23.56 9.17 8.58 5.32 0.50 Central Coordination 5.62 3.67 1.21 0.58 0.15 FANP Administration 16.97 0.00 16.39 0.58 0.00 TOTAL 46.15 12.84 26.18 6.48 0.65 (') Includes $1.3 million in income derved from GOM debt swap authorizations to FMCN. 32. Once the FANP is operational (1998 onwards), the financing plan will depend solely on GOM fiscal support, FANP investment income, and NGO co-financing. Over time, additional private sector and international donors are expected to become partners in this endeavor, but no assumptions have been made in this regard for the purposes of the project financing plan. During the 1998-2001 period, the relative shares of each major financing source would be as follows: GOM 59% (including debt swap income), FANP income 37% (excluding debt swap income), and NGOs 4%. As project activities will continue beyond the period for which project costs have been estimated (ie, beyond 2001), these relative shares would be expected to change over time, with the share attributable to future co-financiers gradually increasing. GOM has confirmed its commitment to provide the necessary financial resources for project implementation once the endowment is operational, and this commitment is reflected in the joint Bank, FMCN, GOM grant agreement. Detailed financing tables by project implementation period are attached in Annex 3. 33. As indicated in Table 2 and the detailed tables in Annex 3, co-financing from NGOs/ private foundations is a new element in the project financing plan. The primary co-financier identified at this time is the FMCN competitive grants program, which supports: (i) identification of conservation/sustainable use priorities; (ii) local community capacity building; (iii) conservation and sustainable use sub-projects; and (iv) publications/ scholarships. FMCN funding is being targeted to priority biological regions identified in a 1996 study sponsored by CONABIO, Pronatura, WWF, and others; all 10 project reserves are included in the FMCN priority regions, and sponsors active in these areas are therefore eligible to receive funding (within the FMCN program categories). In 1996, FMCN approved a total of US$ 1.7 million equivalent in small/ medium grants, of which about 10% (almost US$ 180,000) went to recipients in GEF project reserves; this overall amount was split between seven proposals which included conservation programs focused on particular species, biological monitoring, and sustainable use activities with local communities (the latter represented about half of the total amount). To ensure that Directors, third party contrac- tors, and local communities take advantage of this complementary funding source, training/ information dissemination activities will be organized for reserve staff, third party contractors, and 14 CTAs who will act as facilitators for local community sponsors; the IPDP process would provide another mechanism for sharing information about this program at the community level. The FANP funding cycle will explicitly build in linkages to the FMCN competitive grants cycle. 34. International NGOs (including CI, TNC, and WWF) have been active partners with GOM in promoting effective conservation and community participation in some of the project reserves, and this is expected to continue in the coming years. Under the restructured project, co-financing for training/capacity-building programs targeted to reserve managers and CTAs in the GEF project sites would be provided by TNC within the framework of a SEMARNAP/TNC parallel program to strengthen protected area management. Under this arrangement TNC would be working with other foundations and local NGOs to provide technical assistance and training. 35. Financial Assumptions. The financing plan above assumes that FANP income (invest- ment proceeds and/or capital) would be managed prudently to ensure a stable flow of funding for FANP activities. To this end, sound investment and endowment management techniques would be employed, as described below: (a) Investment Management. To avoid low or negative investment returns on FANP capital, FMCN would establish well-designed investment guidelines (see para 74) based on investment research drawn from current market information and other recently established GEF environmental funds. In accordance with these guidelines, preliminary investment analysis for the FANP (see Annex 4) assumes a 7.0 percent real rate of return, although it is expected that average total returns will be substantially higher over the life of the fund. Conservative institutional investors (pension funds, insurance firms, etc.) routinely realize nominal returns between 12 and 15 percent on their long-term investment portfolios. (b) Endowment Management. The annual amount of FANP income available for spending on project activities would be determined by several endowment management rules designed to protect the endowment capital and cope with potential shortfalls and/or volatility of investment income. These rules include: (a) limited capital invasion would be permitted in 1998, to offset the likely shortfall of investment proceeds in 1997 resulting from capitalization of the FANP in mid-year; (b) from 1999 onward, only investment income would be used to fund project activities; (c) a capital reserve account would be established (amounting to 1% of FANP capital) for reinvestment to help offset the erosion of the real value of FANP capital due to inflation and for funding, as necessary, of emergency interventions in response to natural and environmental disasters; and (d) at least US$5 million in additional capital fuLnds would be mobilized by the year 2001 to complement the initial GEF seed capital. A FANP fund-raising strategy, satisfactory to the Bank, would be developed by CTFANP by October 31, 1997, to provide a framework for the capital mobilization efforts. 15 C. Complementary Support for Reserve Conservation Programs 36. The restructured project and FANP spending rules have been carefully designed to focus on those core activities that are essential to ensuring sound protected area management and biodiversity conservation. Lessons learned in Mexico and elsewhere show that, if this "institutional backbone" is in place, then it acts as a catalyst for additional funding for complementary conservation activities, as contributors are confident that essential PA protection functions are being assured. This has been the case in the GEF-supported reserves, where the assurance of GEF funding has attracted complementary finance from a variety of contributors, including NGOs (both national and international), educational groups (secondary schools/university institutes), public agencies, private sector companies, and external donors. Activities funded by non-GEF resources have included, inter alia: environmental education, research and management plans, sustainable development projects (including eco-tourism), soil conservation, habitat restoration, land regularization, infrastructure, and protection programs. 37. Since the GEF grant was approved in 1992, complementary funding in the 10 project reserves has amounted to about US$5.2 million equivalent. Another US$ 12.4 million equivalent has been committed for the 1997- 2001 period, much of which has been proposed under the expec- tation that the proposed endowment would be established this year. A summary of the complementary funding flowing into the project reserves by type of activity is presented in Table 3 below: Table 3. Summary of Complementary Funding (US$000) 1992-96 1997-2001 ACTIVITY VALUE VALUE Environmental Awareness 2,001.3 466.1 Sustainable Development 2,893.4 2,885.1 Core Protection 267.9 2,642.8 Conservation Activities 80.3 1,047.6 Infrastructure -- 5,351.8 ACTIVITY TOTAL 5,242.9 12,393.4 Analysis of the complementary funding in the 10 project reserves shows that this funding has been concentrated in a few reserves, while other parks receive relatively little in the way of additional non-GEF support. These variations in overall funding levels would be taken into account under the FANP when establishing the annual reserve allocations for reserve conservation activities. Detailed information by funding source and by reserve is presented in Annex 5. 16 D. Procurement 38. Works, goods, and services to be financed out of the GEF proceeds would be procured using the latest Bank guidelines. The procurement methods applicable to the various expenditure categories for the 1997-2001 implementation period, as well as the respective thresholds for Bank prior review, are summarized in Table 4 below. Cofinanciers would administer procurement for their share of the financing according to their respective rules and procedures. 39. In general, responsibility for applying the procurement methods summarized below would be as follows: (a) Reserve Directors or third party contractors for reserve conservation programs; (b) UCANP for centrally coordinated institution building and local participation activities; and (c) the Director FANP for FANP administration. INE could request that FMCN/FANP act as procurement agent should the need for bundled procurement arise (eg, for national competitive bidding). Where INE wishes to contract a third party to manage a reserve conservation program, UCANP would be responsible for inviting proposals, evaluating responses, and selecting the third party candidate, while FMCN/FANP would manage the contractual relationship with the selected NGO(s). 40. Procurement of civil works and goods would generally be carried out in accordance with shopping or direct purchase procedures. This is because: (a) for reserve conservation activities, reserve programs would vary from site to site, and execution of small civil works and purchase of goods would be spread throughout the year; (b) eligible expenditures for activities centrally coordinated by INE would primarily consist of services (e.g., consultants, travel, training programs, publicity, etc.); and (c) FANP administrative expenditures would be relatively small and associated with personnel, office supplies, and limited office equipment. As such, specific procedures would be: (i) small civil works, generally not expected to exceed US$350,000, would be procured under lump sum fixed price contracts awarded on the basis of quotations obtained from three qualified contractors in response to a written invitation; and (ii) contracts for goods, generally not expected to exceed US$100,000 per reserve, would be awarded on the basis of shopping wherever possible. In remote locations where less than three suppliers or contractors would be available for procurement, direct purchase would be allowed for contracts costing less than US$15,000 (goods) and US$30,000 (works). All works and goods contracts would be subject to Bank ex-post review, to be carried out during routine supervision. 41. For consultant services, including from NGOs, contracts with consulting firms valued at US$100,000 or more would be subject to Bank prior review (terns of reference, letter of invitation, recommendation for award, and proposed contract). For individual consultants, prior Bank review would be required for contracts valued at US$50,000 or more. Bank ex-post review would also be carried out during the course of routine supervision. In application of these guidelines, the FANP asset manager is being selected through an international short list procedure, and the FANP Director was selected through a national competitive procedure. 17 Table 4. Summary of Procurement Methods (US$'000) Category Other NBF Total Limit Prior Post Review Review Small Civil Works 1,610 a/ 120 e/ 1,730 350/contract all gl Goods 1 00/reserve g/ all Equipment /Vehicles 4,070 b/ 95 e/ 4,165 Materials / Supplies 1,990 b/ 190 e/ 2,180 Services 100/firm; all 50/person Consultants 100 c/ 38 e/ 138 Training 580 c/ 207 e/ 787 ____ _ Miscellaneous _ __ all Salaries 3,860 f 3,860 Operating Costs 670 c/ 4,710 f/ 5,380 Endowment Capital 16,300 d/ 16,300 Overall Total 34,540 a/ Lump sum fixed contracts awarded on the basis of three quotations. b/ Shopping or direct purchase. c/ In accordance with Bank guidelines for specialist, consultant, and NGO services. d/ Procurement is not applicable e/ To be financed by partner NGOs (FMCN, TNC). f7 To be financed by the GOM. g/ Contracts of higher value would be procured using local competitive bidding. E. Disbursements 42. GEF funds would be disbursed under two separate grant agreements: the existing agree- ment (No. 28604) with BANOBRAS and a new agreement with FMCN. The BANOBRAS agreement, reduced to SDR 5.83 million (US$9.9 million equivalent) is expected to fully disburse by April 1998. The planned 1997 work program, comprising reserve conservation, central coordination, and FANP start-up costs, would be funded out of the existing BANOBRAS grant. 18 The new grant agreement with FMCN for SDR 12 million (US$16.3 million equivalent) would be used to capitalize the FANP and would be disbursed in a single tranche (expected in June 1997). FANP funding of activities would begin in calendar 1998. A revised disbursement schedule for the restructured project is attached as Annex 6. 19 IV. PROJECT IMPLEMENTATION ARRANGEMENTS 43. Under the restructured project, implementation arrangements would be substantially decentralized and more agile than is currently the case. Local participation in project activities would be strengthened, and coordination with national government institutions would be promoted to ensure consistency with national protected areas management legislation and policies. Two primary institutions, INE and FMCN, would be responsible for project implementation; they would be supported in carrying out their respective roles by SEMARNAP, CONANP, and the CTAs. The role and functions of each institution under the Project are described below, as well as local participation arrangements. A. Reserve Conservation and Central Coordination Programs 44. INE. INE is a semi-autonomous agency of SEMARNAP charged, inter alia, with implementation of policies and programs for the National System of Protected Natural Areas (SINAP). Under the restructured project, INE would continue to be responsible for implementing park management programs in the 10 eligible reserves, and for managing selected centralized programs aimed at strengthening PA management and promoting local participation at the site level: (a) Implementation of reserve protection programs would be the responsibility of the Reserve Director, in collaboration with local stakeholders through the CTAs (in some reserves, implementation of the reserve conservation program would be the responsibility of a third party contractor, working closely with the Reserve Director and CTA). The Reserve Director reports to the Chief of the Coordinating Unit for Natural Protected Areas (UCANP), based in Mexico, DF. Each Reserve Director is assisted by a core group of 4 permanent staffmnembers, paid by GOM, responsible for coordination, operations, project supervision, and administration. Each year, the Reserve Directors would prepare an annual operating plan (POA) to provide the framework for implementation of the reserve conservation program, including where applicable, implementation of an Indigenous Peoples Development Plan. The core reserve staff working with the reserve director oversee implementation of specific conservation activities, such as: biodiversity monitoring, fire prevention and control, demarcation, minor civil works, community outreach, dissemination of information, environmental education, and sustainable use activities. The admin- istrative specialist is responsible for payment administration, book-keeping, and files maintenance. Typically, this core team of permanent personnel is complemented by project managers and seasonal labor, who are hired on a contractual basis to carry out specific conservation programs. (b) Design and implementation of the central coordination program managed at the national level would be the responsibility of the Coordinating Unit for Natural Protected Areas (UCANP). A full time coordinator within UCANP would ensure that training programs and technical support on cross-cutting protected area management issues would be developed and implemented for reserve staff and for CTAs. The coordinator would also be responsible for 20 procurement planning and managing the third-party contracting process (where appropriate), and for organizing independent evaluations of project performance according to a timetable and under terms of reference agreed with the Bank. With respect to the FANP funding cycle, UCANP would: (i) issue guidelines to Reserve Directors on an annual basis regarding the preparation of POAs for submission to FANP; (ii) review, comment, and approve annual reserve operating plans; (iii) prepare a central coordination POA; (iv) consolidate the approved reserve and central POAs into a single report (including a consolidated procurement plan); and (v) submit the consolidated INE plan to FMCN for FANP funding of eligible activities. 45. SEMARNAP. SEMARNAP's institutional mandate is to design and oversee implemen- tation of the GOM's policies on environment, natural resources management, and fisheries. Under the restructured project, SEMARNAP would continue its current responsibilities of setting public policy and establishing the appropriate legal framework for national parks management. In executing this function, SEMARNAP would be advised by CONANP. It would also continue to oversee the implementation of park management programs carried out by INE. SEMARNAP, through DGDR and PRODERS, would provide technical advice and financial support to INE in the implementation of IPDPs in selected reserves (satisfactory execution of IPDPs would be a FANP eligibility condition for funding reserve conservation programs). Maintenance of a satisfactory policy framework for protected areas would be an on-going obligation of SEMARNAP during project implementation. A draft protected areas policy letter describing the policy framework within which the GEF project will be implemented was reviewed during the restructuring discussions; submission of a protected areas policy letter satisfactory to the Bank would be a condition of approval. 46. A joint agreement between the Bank, FMCN and GOM spells out SEMARNAP's and INE's implementation responsibilities under the restructured project. A subsidiary agreement between FMCN and SEMARNAP, satisfactory to the Bank, would specify their respective responsibilities and procedures to be followed under the new FANP mechanism. A draft subsidiary agreement between SEMARNAP and FMCN was reviewed during discussions to restructure the project legal framework; signature of the subsidiary agreement would be a condition of effectiveness of the joint Bank, FMCN, and GOM grant agreement. 47. CTAs. As mentioned previously, Technical Advisory Committees (CTAs) have been established to provide local input into the development and implementation of protection programs affecting their communities. However, as involvement of CTAs in project activities to date has been mixed (to non-existent), an effort has been made under the restructured project to clarify their role, functions, and composition, and to ensure adequate support for their participation. Under the restructured project, CTAs would be partners of the INE Reserve Directors by contributing to the reserve protection programs, proposing measures and activities to increase the effectiveness of conservation efforts, and monitoring program results. CTAs would provide written comments on the draft annual operating program for the reserve, prior to its submission to INE headquarters for review. Evidence of meaningful input and participation of CTAs in the reserve conservation 21 program (such as written comments or minutes) would be an eligibility criteria for FANP funding of each reserve's annual program. To build local capacity and enhance the effectiveness of CTAs as conservation partners, project activities would include technical assistance, training, and a meeting budget as needed to support CTA functioning. A policy note prepared by INE outlining the proposed role, functions and recommended composition of CTAs that would apply in project reserves is attached as Annex 7. 48. Local Participation. Successful project implementation depends on local support for project objectives and local participation in particular activities. The restructured project provides for substantial local input into and participation in the reserve conservation programs, including implementation of IPDPs. This will take various forms: (i) planning and monitoring: through the CTA mechanism described above, local communities will have a seat at the table and will have a say when it comes to reviewing annual operating plans, ensuring that local concerns are being addressed, and monitoring POA execution; in those reserves where IPDPs have been agreed, the POA reviewed in the CTA will include priority activities identified through the IPDP consultation process; (ii) implementation: local community members will participate in the implementation of project activities in their capacity as employees hired by reserve directors or third-party contractors for specific conservation programs; these would include activities such as regular inspection patrols, fire prevention and control, habitat rehabilitation, construction of rustic infrastructure, signs/postings, environmental awareness, etc.; the income generated from this employment would be of direct benefit to community members and their families; (iii) beneficiaries: local communities will also benefit directly from project activities related to training in conservation and sustainable use practices, support for the design of small productive projects, and funding of small productive projects compatible with conservation of the protected area in question; where applicable, IPDPs will provide the framework for how indigen- ous communities choose to participate in the project and for establishing their priorities related to conservation and sustainable use. In the five reserve areas where IPDPs are under preparation, meaningful consultation with indigenous communities on their respective IPDP would be a condition of effectiveness of the joint Bank, FMCN, GOM agreement. 49. Project activities for which local communities would be direct beneficiaries (eg., capacity building, small project design, and small project implementation) would be funded by SEMAR- NAP and by FANP. In addition, Reserve Directors would make every effort to mobilize additional funding to leverage FANP/GEF resources. The FMCN competitive grants program would be one such source of additional funding for local community action related to capacity building, 22 conservation, and sustainable use activities (see para 33). B. FANP Administration 50. FMCN. FMCN is a Mexican private non-profit organization, established in 1994, to manage a permanent endowment (initially capitalized by USAID, the GOM, and private contributors) for a small and medium grants program for biodiversity conservation. It has a well- designed management structure and sound operating procedures and administrative systems. To take advantage of the strengths of an existing private conservation organization, with a proven track record, FANP would be established within FMCN. Under the restructured project, FMCN would be responsible for establishment of the FANP, sound investrnent of the FANP endowment, funding of eligible project activities, institution of reliable accounting procedures and financial controls for recipients of FANP resources, and performance evaluation of the asset manager, including audits. 51. As originally established in 1994, FMCN's management structure comprised a Board, three Technical Committees (Administration and Finance; Evaluation and Planning; and International Outreach); and an Executive Director. To carry out FMCN operations on a daily basis, the Executive Director has been assisted by a small staff (9 members) organized into three divisions: (a) Technical (responsible for the competitive grants program); (b) Administration (responsible for finance and administrative matters); and (iii) Communications (responsible for computerized information systems and outreach). To enable FMCN to assume the additional responsibilities associated with the FANP, the FMCN Board of Directors modified FMCN's organizational structure in December 1996 to include a fourth Technical Committee, responsible for FANP oversight (CTFANP), and a fourth division, responsible for day-to-day management of FANP activities (Protected Areas Division). FMCN's expanded organizational structure is presented in Annex 8. 52. Under the restructured Project, the FMCN Board and Executive Director would have general oversight of FANP activities, while CTFANP would have primary responsibility. The mandates of FMCN's Technical Committees and its administrative and communications divisions would be expanded to include provision of technical and administrative assistance to FANP. A separate asset manager would be recruited to manage the FANP endowment. Responsibilities for project implementation within the FMCN are summarized below: (i) FMCNBoard: The Board would have general oversight of FANP operations, and would approve the annual spending plan each year, based upon the recommendation of the CTFANP; the Board would modify the advice of its Technical Committee only in exceptional circumstances, such as if CTFANP advice were deemed contrary to the objectives of the FANP or to pose a threat to the FMCN's financial integrity; (ii) CTFANP: This Technical Committee would be composed of seven members, drawn from different sectors of society (public, private, social, academic, and conservation groups). 23 CTFANP would be responsible for overall management and direction of FANP, including: (a) setting FANP policy; (b) establishing goals and priorities; (c) approving the: (i) selection (and replacement) of the Technical Director, (ii) By-laws and Operational Manual, (iii) FANP fundraising strategy and targets, and (iv) the FANP annual spending plan (including eligible reserve, central coordination, and FANP administration expenditures); and (d) overseeing imple- mentation of FANP funded activities. CTFANP would operate with considerable operational independence, in conformity with its internal by-laws. CTFANP's draft by-laws were reviewed during the discussions to restructure the project legal framework; a revised version of these by- laws, incorporating Bank comments, are attached as Annex 9; adoption of CTFANP by-laws, satisfactory to the Bank, would be a condition of approval. (iii) CTAF: The Administration and Finance Technical Committee oversees financial aspects of FMCN operations, including selection and supervision of FMCN's external asset managers, approval of investment guidelines, and selection of external financial auditors; under the restructured Project, CTAF would be responsible for: (i) selection (and replacement) of the FANP asset manager, (ii) approval of the FANP investment policy guidelines and asset management contract; and (iii) selection of independent auditors to evaluate FANP financial accounts and to conduct annual performance audits of the FANP asset manager. (iv) CTI: The International Outreach Technical Committee is a liaison mechanism with the international community aimed at mobilization of additional funding; under the restructured Project, the CTI would assist the CTFANP to implement the FANP fundraising strategy; (v) CTEP: The Evaluation and Planning Technical Committee oversees FMCN's small and medium competitive grants program and is responsible for corporate planning; under the restructured Project, the CTEP would integrate the FANP and its institutional needs into the corporate planning process; (vi) Executive Director: The Executive Director would be responsible for supervising the work of the FANP Director and ensuring that the FANP program is being implemented effectively; the FANP Director would report to the Executive Director; (vii) Protected Areas Division: Day-to-day administration of the FANP would be entrusted to a Director for Protected Areas (the FANP Director). The Director would be responsible for: (a) providing support to the CTFANP and carrying out its decisions; (b) ensuring coordination between CTFANP, CONANP, and government institutions; (c) maintaining links to other institutions, with similar interests or complementary programs; (d) coordinating the preparation of the FANP annual spending plan, working closely with INE staff; (e) managing FANP operations to ensure timely delivery of resources to eligible project activities; (f) ensuring that agreed administrative procedures and financial controls are implemented; (g) supporting fund- raising efforts for the FANP; and (h) implementing monitoring and evaluation systems for the FANP program. The FANP Director would be supported by a small staff (e.g., an administrative 24 assistant and a financial officer) and would call on cross-support from the Administration and Communications Divisions from time to time. Employment of the FANP Director would be a condition of effectiveness; (viii) Asset Manager: In order to minimize risk and to benefit from a competitive selection process, FMCN would recruit a new asset manager to manage the FANP capital. FMCN has prepared a short list of internationally recognized, reputable firns, satisfactory to the Bank, and these firms have been invited to submit proposals for managing the endowment; completion of the international selection procedure is expected by late May. The asset manager would make day to day investment decisions within the investment guidelines established by CTAF. Evaluation criteria, the final selection process, and a draft asset management contract were reviewed during project restructuring discussions. Selection of an asset manager and signature of an asset management contract (including investment policy guidelines), both satisfactory to the Bank, would be conditions of effectiveness of the GEF grant to capitalize the FANP. 53. A grant agreement between the Bank, FMCN, and GOM would specify FMCN's project implementation responsibilities and legal obligations vis-a-vis the Bank. To ensure that GEF funds are utilized for the purposes and under the arrangements set forth in the Operational Manual, the Grant Agreement would include protection clauses requiring the return of part or all of the GEF funds if FMCN and GOM are not in compliance with their respective obligations or if project performance is unsatisfactory and corrective actions are not being taken. 54. CONANP. CONANP was officially established in July 1996 to provide SEMARNAP with policy guidance regarding national strategy and specific policies affecting natural protected areas. CONANP has been an active participant during the FANP design process; its responsibilities have included designation of the trust fund task force, approving the basic parameters of the proposed mechanism, and naming the members of CTFANP. CONANP's role under the restructured Project with respect to the FANP would consist of naming members for vacant CTFANP seats, in accordance with CTFANP rotation policy and sectoral balance. Individual CONANP members may also participate in evaluation activities related to the protected areas program. 55. Local Community Participation. CTFANP membership has been designed to ensure that local community input is reflected in FANP management decisions. CTFANP's by-laws specify that its membership must be drawn from a cross-section of society (classified into 5 sectors: private, public, academic, conservation NGO, and social) and that no one sector may dominate the commit- tee (each sector is limited to a maximum of 30%, or 2 seats, on the CTFANP). The "social" sector is defined as comprising social, indigenous, and farmer organizations. At present, two social sector representatives (one an indigenous leader) are members of CTFANP, and have shaped basic deci- sions regarding eligible FANP activities benefiting local communities. This local input into deci- sions at the national level is a necessary complement to local input through CTAs and IPDPs. 25 C. Supervision, Monitoring, and Evaluation 56. Supervision. The Chief of the UCANP (INE) and the full time project coordinator are responsible for technical supervision of the reserve conservation programs in the reserves, as well as the centrally coordinated activities aimed at institutional strengthening and local participation. SEMARNAP, in its oversight capacity, is responsible for monitoring INE performance in carrying out PA management programs, including this Project. CTFANP would be responsible for supervising FANP-funded activities, through its Director of Protected Areas. CONANP would advise SEMARNAP on policy issues, as needed, through its close links with CTFANP. 57. Monitoring and Evaluation. To assist in monitoring project implementation, performance monitoring indicators, acceptable to the Bank, would be included in the FANP Operational Manual. These indicators would be reported on each year as part of the project funding cycle and would be consolidated in the annual reports submitted to the Bank (see para 59). Reserve Directors and UCANP would provide information on performance and impact indicators for reserve and central coordination activities, respectively, as part of their annual operating plans. Impact and outcome indicators would also be developed and reported on for the FANP administration component. Trends in funding levels for community participation activities would be included within the project monitoring framework. Draft monitoring indicators were reviewed during project restructuring discussions; receipt of a monitoring letter, satisfactory to the Bank, would be a condition of approval of project restructuring. Proposed indicators are attached as Annex 10. 58. To complement information provided through regular reporting channels, independent technical evaluations would be carried out at the end of the second full year and fourth full year of FANP operations to determine the effectiveness of the conservation program, the suitability of conservation activities funded by FANP, and the extent, nature, and impact of local participation and IPDPs in reserve conservation programs. The terms of reference and qualifications of the consultants retained by INE for these independent evaluations would be satisfactory to the Bank. No more than three months after the completion of each evaluation, the results would be made available to CTFANP, INE, and the Bank to provide input into the mid-term and final review missions (see para 62). 59. Reporting. INE managers (and third party contractors) who receive FANP funds would report to the FANP every 4 months (April, August, December) on physical and financial perfor- mance as part of the funding replenishment mechanism. The FANP Director would submit to the Bank trimestrial progress reports (May, September, January), tracking FANP program, investment and financial performance; the end-year report would provide a consolidated overview of performance during the year. INE would submit an annual report to the Bank every March on performance during the previous calendar year; this annual report would provide detailed information on agreed monitoring indicators. A model report format for FANP and INE was reviewed and agreed upon during restructuring discussions, and would be included in the FANP operational manual. 26 60. Formal Bank Supervision. The GEF grant agreement for the FANP would have an effective life of 10 years. It is expected that the Bank would supervise the project through the fourth full year of FANP operations (2001). The decision concerning the termination or extension of supervision beyond this date would be based on the Bank's evaluation of project performance, and whether the project is satisfactorily meeting its objectives. Timing of Bank supervision missions would be geared to the FANP funding and reporting cycles, with missions taking place in April and September. 61. Given the decentralized nature of the restructured project, flexible supervision arrangements would be put in place to ensure timely feedback to the project implementing agencies. Cross sectoral expertise from both headquarters and Mexico City would be sought in staffing the supervision team; skills required would comprise: protected areas management, social sciences/ anthropology, training/capacity-building, finance and management. Partnerships with conservation or cultural NGOs would also be explored to provide specialised supervision expertise. 62. In addition to regular supervision missions, FMCN, INE, and the Bank would conduct a Mid-Term Review following the second full year of FANP operation (mid-2000) to assess overall project performance, progress in implementing reserve and central coordination activities, asset manager performance, and effectiveness of FMCN/FANP organizational arrangements. This review would serve to: (a) fine-tune the project and determine any needed modifications; (b) evaluate investment performance; and (c) contribute to fund-raising efforts to increase FANP's capital. A Final Review would be carried out two years later (mid-2002) and would provide the basis for the Project Implementation Completion Report. Included in the mandate of both review missions would be ethnographic studies of the impacts of the community participation and IPDP programs in order to capture lessons about the social challenges of biodiversity conservation. 63. Implementation Completion Report (ICR). In view of the GEF project's association with the Bank's Environmental Project (PAM), INE would prepare a contribution to the PAM ICR when that project closes at the end of 1997, reporting on implementation progress under the GEF component during the life of the PAM. A final GEF ICR would be prepared by FMCN with input from INE no later than six months after completion of the Final Review mission with the Bank (ICR expected by end 2002). As a complement to the ICR, FMCN, with input from INE, would present a plan for the future operation of the project, furnish the plan to IBRD for comment, and carry out the plan taking into account IBRD comments. 27 V. FANP MANAGEMENT A. Operations Management 64. Operational Manual: FMCN management of the FANP would be guided by an Operational Manual which would include: (a) FANP's objectives; (b) description of FMCN/CTFANP organizational structure (including by-laws of CTFANP and key operational contacts); (c) funding sources (including, eventually, planned fund-raising activities); (d) definition of eligible expenditures and detailed spending rules; this would include rules for the use of unspent income and mechanisms for incorporating and managing additional grants and assets provided by sources other than the GEF; (e) description of the funding approval cycle and institutional responsibilities; (f) operating procedures for disbursing to Reserve Directors and/or third party contractors and to the INE central management unit; (g) guidelines to ensure that protection programs will follow good environmental practices and properly address any sensitive social issues; (h) procurement rules; (i) guidelines for contracting an asset manager, as well as detailed investment guidelines for the FANP; (j) auditing, financial recording, and reporting procedures; and (k) guidelines on monitoring and evaluation of FANP-supported activities. An outline of the FANP Operational Manual is attached as Annex 11. A draft Operational Manual was reviewed during discussions to restructure the project legal framework; adoption of a final Operational Manual, satisfactory to the Bank, would be a condition of effectiveness. 65. Program Spending Rules. The operation of the FANP, and thus the project financing plan from 1998 onward, is based on explicit spending rules that govern how investment income can be spent on different project activities. These spending rules would be detailed in the FANP Operational Manual, and would be satisfactory to the Bank. Three categories of program spending rules would be applied: (a) overallprogram: this category of spending rule would establish the relative share of FANP spending on the three project components: reserve conservation, central coordination, and FANP administration; it is proposed that, at least initially, 75 to 82 percent of annual FANP program expenditures be devoted to reserve conservation programs at the reserve level; 9 to 12 percent to central coordination activities managed at the national level; and 9 to 12 percent to FANP administration; these ranges could be adjusted during project implementation with the agreement of the Bank; (b) inter-reserve: this category of spending rule would establish the share of FANP spending directed to each reserve, within the reserve conservation program component; the allocation per reserve would be based on an agreed set of criteria, including biological importance, area, degree of threat, and funding available from other sources (including self-financing); allocations would be reviewed and adjusted on an annual basis to reflect changing circumstances (including policy indications by SEMARNAP/INE); to be eligible to receive FANP funds, each reserve director would have to submit on an annual basis evidence of: (a) meaningful CTA 28 involvement in the POA planning process (with written comments regarding the annual operating plans); (b) GOM (or other) counterpart funding for permanent personnel, basic operating costs, and preparation of management plans; and (c) where applicable, implementation of an IPDP, satisfactory to the Bank; FANP allocations for the first full year of FANP operation (1998) are expected to range between US$70,000 and US$110,000 per reserve; and (c) eligible expenditures: this category of spending rule would establish which activities are eligible for FANP spending as well as the explicit cost-sharing formula between GOM and FANP for eligible activities included in the reserve conservation, central coordination, and FANP administration components; the definition of eligible expenditures and the agreed cost-sharing ratios for each expenditure category are attached as Annex 12. 66. As FANP attracts further capital endowments over time, FMCN and the CTFANP wourld have the authority to expand coverage to other priority reserves in the SINAP, based on guidance provided by CONANP or the appropriate GOM authority. An agreed financial threshhold would trigger such consideration, and criteria to be used in selecting new areas for funding would include the biological importance of the area, such as the representativeness of the habitat andlor special species. CTFANP would also have the responsibility of determining when reserves are ready to "graduate", ie, when resources raised from local cost recovery mechanisms and complementary funding are such that access to the FANP would no longer be justified. Flexibility regarding such future decisions would be incorporated into the GEF legal agreement with FMCN; specific mechanisms and criteria to be used in making such decisions would be included in the FANP fund- raising strategy to be prepared by October 1997 and implemented thereafter (see para 35). 67. FANP Funding Cycle. Funding for annual work programs (POAs) in the reserves and at the national level would be provided in accordance with an agreed funding cycle and the detailed FANP spending rules. The funding cycle under the restructured project would begin in July of each year, when FMCN/CTFANP would notify INE of the funds available for programming at the reserve level and for centrally coordinated activities. Funding availability communicated to INE would be based on investment income generated during the previous 12 months (or part year). Reserve Directors, working with their CTA, would then prepare POAs for review by INE headquarters. Bank supervision missions would be scheduled at this juncture to ensure timely input into the content of INE plans; CTFANP (through the FANP Director) would also have an opportunity to comment at this time. After addressing comments received (if any), the reserve conservation programs would then be consolidated and approved by INE. In parallel, the project coordinator at INE headquarters would prepare an annual work program for centrally coordinated activities for approval by UCANP. These documents would be submitted to FMCN/FANP by September 25 of each year, along with supporting documentation relating to eligibility criteria (ie, GOM counterpart, CTA participation, IPDP implementation) and to procurement planning. 68. The FANP Director would review and consolidate this information into a FANP annual spending plan (which would also include FANP administrative expenses). CTFANP would 29 evaluate the plan for eligibility according to the spending rules agreed for FANP, and make its approval decision accordingly, based on eligible expenditures and available income. The Bank would exercise oversight during the first four years of FANP operation by reviewing for no- objection the FANP consolidated annual spending plan prior to its approval by the FMCN Board. To ensure that the Bank's review would not create unnecessary delays in the process, a service standard of three weeks has been specified in the approval cycle. Following the Bank's "visto bueno", the FANP annual spending plan and CTFANP's recommendation would be submitted for consideration at the December FMCN Board meeting. The key steps and target dates in the annual funding cycle are attached as Annex 13. 69. Once final approval for the FANP annual spending plan is given by the FMCN Board, resources would be available on January 1 for funding program activities. On the basis of calendarized annual spending plans, FANP would make direct deposits in bank accounts designated by the Reserve Directors (for reserve protection programs) and by the Chief of UCANP (for centrally coordinated activities). In accordance with the Operational Manual, these deposits would be made in three tranches throughout the year, with the initial deposit being an advance. All replenishments would be based on actual eligible expenditures made, as evidenced by supporting documentation submitted to FANP. To ensure proper handling of FANP funds, an agreement would be signed between FMCN and each Director outlining the Director's obligations vis-a-vis FMCN (separate accounting, reporting, etc.). Obligations in this respect would be spelled out in the FANP operational manual. 70. Reserve Level Protection Programs. The annual protection programs prepared by the Reserve Directors would be comprehensive and would include activities eligible for FANP support as well as items supported by other financiers (GOM, private sector benefactors, other domestic and international donors). As such, the plans would include: basic protection activities as defined under the project (eg, essential personnel, basic conservation, emergency needs, basic operating and equipment costs, small-scale civil works, and maintenance needs); basic community conservation programs, including environmental training, capacity building, design and implementation of small scale sustainable use projects; IPDPs for reserves with significant indigenous populations living in and around the park; management strengthening activities (training for core reserve staff, support to CTAs); and complementary activities (such as preparation of management plans, major infrastructure, and scientific research). In designing and implementing reserve plans, Reserve Directors would involve CTAs and indigenous peoples, where IPDPs are under implementation, to ensure consensus on objectives and selected activities. 71. FANP Launch. To facilitate the job of Reserve Directors, UCANP staff, and CTFANP members in understanding the FANP and the operational procedures of the new system, a workshop would be held the first week of July 1997 to coincide with the beginning of the FANP annual funding cycle. At this workshop, all aspects of the new funding mechanism would be reviewed to ensure that participants understand their respective roles and critical steps in the process. To aid in operationalizing the FANP, the FANP Operational Manual would be reviewed 30 by workshop participants to verify that guidelines and formats are clear; revisions would be made based on workshop recommendations prior to initiation of the 1998 FANP project cycle. B. Asset Management 72. To offset attachment risks, FANP's initial (GEF) capital would be held by FMCN in an offshore account with an internationally reputable investment firm. Based on best practice experience, this approach would minimize the risk that creditors of a country could legally claim or attach the assets of an endowment in payment of a government's defaulted debt obligations. It is also more financially prudent than locating FANP capital in Mexico, where capital markets are not yet fully developed and the overall financial sector remains unstable. Over the medium-term, possible investment strategies involving local currency denominated instruments could be explored, given appropriate economic conditions. 73. The asset manager, selected competitively in line with Bank guidelines, would be responsi- ble for investment management of the FANP endowment. Selection criteria would take into consideration: investment capability, experience and reputation, and ability to guarantee the safety and stability of the invested assets. Because the size of the FANP endowment is relatively attractive for international investment firms, fees charged should be below or in line with interna- tional standards (0.5 to 0.75 percent of invested capital); however, fees charged would not be an over-riding factor in the selection of the firm. A list of interationally reputable firms under consideration for the investment mandate and proposed selection criteria are provided in Annex 14. 74. To avoid liability associated with the selection of securities in which to invest, FMCN would sign an agreement for discretionary investment management services rather than brokerage services. This would ensure that the investment finn takes responsibility for security selection, consistent with detailed investment guidelines. These guidelines, defined by CTAF and satisfac- tory to the Bank, would address: (a) general information about the client, fund duration, and tax treatment; (b) investment objectives indicating capital appreciation and preservation goals, expected returns, and risk profile; (c) performance objectives indicating security allocation by class and location, combined with relevant benchmarks for monitoring performance; (d) criteria for selecting securities (e.g., quality, value, etc.); (e) any investment limitations or special criteria (e.g., environmental screening, use of derivatives); and (f) performance reporting arrangements. Draft investment guidelines are provided in Annex 14. 75. To increase the effectiveness of FANP asset management performance, FMCN has retained the services of a specialized endowment consultant to provide periodic, ongoing advice on matters such as: changes in investment strategy; verification of disbursement performance; program income requirements; disbursement needs; and asset manager performance. This advisor reports to the CTAF. 31 C. Administration, Accounts, and Audits 76. FANP would use FMCN's established administrative procedures (as defined in its Administration Manual, prepared with technical assistance from WWF) which have been reviewed and found satisfactory to the Bank. FANP would maintain separate income and expense accounts (in both accounting and banking terms) for investment proceeds and program expenditures respectively. In terms of accounting only, expense accounts would also be maintained separately for individual reserve, central coordination, and FANP administrative activities. However, reserves and other implementing entities would maintain independent bank accounts in order to facilitate efficient flow and management of FANP funds disbursed. 77. Independent auditors acceptable to the Bank would be contracted to carry out annual external financial audits of FMCN, and FANP's accounts and activities in accordance with generally accepted accounting principles. The audit for FMCN would provide an opinion regarding the overall financial health of the institution, in line with Mexican law. The audit report for FANP would provide a separate opinion regarding accounts for park reserves and for the central coordination program, supporting documentation received by FANP for funds spent, and FANP financial statements. A management report would also be included, with analysis regarding overall financial management, control, and effectiveness. 78. An independent annual audit of the asset manager would also be conducted. This audit would focus on investment management performance relative to benchmarks as defined in the investment policy guidelines, and would also include a management report. Within four months of the close of each fiscal year, the results of financial audits would be made available to CTAF, the FMCN Board, and the Bank. 32 VI. BENEFITS AND RISKS A. Benefits 79. Historically, the GOM has been constrained in its capacity to mobilize resources for protected areas conservation and to effectively channel those resources to the field level in a timely manner. The establishment of FANP would address these constraints for the reserves included in the GEF project, and over time, would provide the nucleus for future expansion to other reserves in the SINAP. The FANP would contribute to the long-term viability of conservation activities by: (a) stabilizing recurrent costfinancing; and (b) moderating the volatility in funding from the GOM and donors. The FANP would also increase the effectiveness of protection programs at the reserve level by streamlining procurement and disbursement procedures, thereby increasing timeliness of protection interventions. In addition to these two fundamnental benefits, FANP represents a commitment to a new approach to biodiversity conservation in Mexico, one based on public- private partnership and on a more balanced mix of national and international resources. If successful in meeting its objectives in the initial years, FANP is likely to be able to tap into significant additional resources from public, private, domestic, or international sources. 80. Beyond the establishment of the FANP, the restructured project would result in enhanced protection of biodiversity in the ten reserves due to increased support for local participation through the CTAs and involvement of indigenous peoples in the conservation process. This increased institutional capacity at the local level will be as important to the long-term success of conservation efforts in Mexico as the creation of innovative financing mechanisms (such as the FANP) at the national level. Taken as a whole, the restructured project offers the possibility of demonstrating and testing a new conservation model in Mexico which, based on preliminary experiences, shows potential for future replication. B. Risks 81. Financial risks facing the project are that investment returns and/or GOM counterpart contributions are lower or more volatile than estimated. To minimize the risk associated with investment returns, a spending rule would be employed to reserve "excess" profits from higher return years to be used in lower return years. Regarding the GOM counterpart funds, the GOM has already begun implementation of its plan to provide ongoing funding of core staff and related expenditures in the reserves. This, combined with a project conditionality that links FANP disbursements to evidence of GOM counterpart funds, should reduce the risk of the GOM not providing necessary funding. In addition, GOM has confirmed by letter its commitment to provide the necessary financial resources for project implementation once the endowment is operational, and this commitment is reflected in the joint Bank, FMCN, GOM grant agreement. 82. Management risks include the fact that FANP is a new organizational structure, and that there may be glitches in the transition from the BANOBRAS-managed system to the new set-up; 33 the introduction of new procedures may also result in confusion during the initial year of operation, leading to delays in project implementation. These risks would be mitigated in several ways. First, FANP is being established within an existing organization - FMCN - with a proven track record. Second, calendar year 1997 is being used to put in place the FANP administrative systems so that they are ready to function by January 1998, thereby increasing the likelihood of a smooth transition. Third, potential confusion on the part of FANP recipients will be minimized through training and orientation activities, including provision of user-friendly reference kits, prior to the FANP becoming operational. 83. Finally, there is a technical risk that, despite the effort to establish and operate FANP, the project may still be unsuccessful in protecting natural areas and biodiversity due to local commun- ities' poverty and lack of income alternatives. To address this risk, the restructured project emphasizes community outreach and training activities, and includes conditionalities linked to the local participation of affected communities (through CTAs) and indigenous peoples (through CTAs and IPDPs). The project would also build links to programns supported by other financiers (GOM, NGOs, private sector, donors) to facilitate coordination of complementary conservation and sustainable use activities and to increase the flow of resources in support of conservation and sustainable development in and around the project reserves. It is recognized however, that, while these steps are positive and desirable, the restructured project will be unable to fully address the pressures for social and economic development in the peripheries of the most populated reserves, and that it represents a starting point in this respect. Consequently, the project monitoring framework will include indicators to track funding levels for community activities, and the FANP fund-raising strategy to be developed will address needs in this regard. 34 VII. AGREEMENTS REACHED AND RECOMMENDATION A. Agreements and Assurances 84. Actions already taken: a) letter from GOM and BANOBRAS sent to Bank requesting the restructuring of the project, the reassignment of GEF funds to FMCN, and the cancellation of funds from Grant 28604 for this purpose; b) letter from GOM sent to Bank confirming its commitment to provide the necessary financial resources for project implementation; c) letter from INE sent to Bank outlining policies and procedures applicable to CTAs; and d) FANP Director selected. 85. Assurances received during restructuring discussions: a) GOM would provide financial, human, and physical resources for project implementation, in accordance with the FANP Operational Manual (para 32); b) endowment management rules would be as described in Chapter III and a FANP fund-raising strategy would be developed by October 1997 (para 35); c) procurement arrangements would be as outlined in Chapter III (paras 38-41); d) SEMARNAP would maintain a satisfactory policy framework during project implementation (para 45); e) implementation responsibilities would be as outlined in Chapter IV; f) consultations with indigenous peoples during the preparation of IPDPs would be such as to ensure informed participation in their formulation and subsequent implementation (para 48); g) independent evaluations would be carried out at the end of the second full year of FANP operation and at the end of the fourth full year (in 2000 and 2002, respectively), such evaluations to include specific analysis of the extent, nature, and impact of local participation and IPDPs in reserve conservation programs (para 58); 35 h) mid-term and final review missions by the Bank would take place after the indepen- dent evaluations, and would utilize the report of the independent evaluators as input to review mission discussions, with specific attention to the social challenges of biodiversity conservation (para 62); i) reports from FANP and INE would be submitted to the Bank according to the timetable and format agreed, such format to be included in the FANP Operational Manual (para 59); and j) the FANP spending rules, eligibility criteria, and funding cycle would be as outlined in Chapter V (paras 64-70). 86. Conditions of Approval of the proposed project restructuring would include: (i) receipt of a revised Protected Areas Policy Letter (para 45); (ii) adoption of the FANP Charter by CTFANP, satisfactory to the Bank (para 52); (iii) receipt of a satisfactory Monitoring Letter (para 57); (iv) final clearance of Project Restructuring Document (including public disclosure release); and (v) no-objection issued by the GEF CEO. 87. Conditions of Effectiveness of the amendments to Grant 28604 and the joint GOM, FMCN, Bank grant agreement would include the following actions (in addition to the standard legal opinion requirement): a) signature of a subsidiary agreement, satisfactory to Bank, between SEMARNAP and FMCN (para 46); b) submission of IPDPs satisfactory to the Bank, including evidence of indigenous community participation in the IPDP process (para 48); c) employment of the FANP Director (para 52 (vii)); d) signature of an asset management contract (including investment policy guidelines) both satisfactory to the Bank (para 52 (viii)); e) adoption of a final FANP Operational Manual, satisfactory to the Bank (para 64). 36 B. Recommendation 88. The proposed restructuring would constitute a suitable basis for the amendments to the existing loan, guarantee, and grant agreements, reducing the existing Grant 28604 to SDR 5.83 million (US$9.9 million equivalent) and for the grant to FMCN for SDR 12 million (US$16.3 million equivalent). 5/23/97 Part II: Technical Annexes ANNEXES Annex I Project Reserves - Summary Data Annex 2 Task Force for Fund for Protected Areas (FANP) Annex 3 Detailed Cost and Financing Tables Annex 4 FANP Investmnent Analysis Annex 5 Complementary Funding Tables Annex 6 Disbursement Schedule Annex 7 Policy Framework for CTAs Annex 8 FMCN Organigram Annex 9 By-Laws of CTFANP Current Membership of CTFANP (sectoral affiliation) System for Immediate Response to Natural Disasters Annex 10 Monitoring Indicators Annex 11 Outline of FANP Operational Manual Annex 12 FANP Spending Rules: * Eligible Activities * Cost-sharing Ratios by Category ("rubros") Annex 13 FANP Funding Cycle Annex 14 Asset Management * Investment Finns * Selection Criteria * Investment Guidelines ANNEX 1 Page 1 of 6 Calakmul Decreto 23 de mayo de 1989 como reserva de la biosfera. En 1993 ingres6 a la red intemacional del programa el Hombre y la Biosfera de la UNESCO. Ubicaci6n Se encuentra en el sureste del estado de Campeche, en el limite con el estado de Quintana Roo al este y con Guatemala al sur. Esta inmersa en su mayor parte en el municipio de Champot6n, y al noreste y noroeste dentro del municipio de Hopelchen. Superficie La zona nucleo es de 248,261 ha y la de amortiguamiento es de 474,925 ha, siendo la mayor resrva de bosque tropical en Mexico. Biodiversidad La herpetofauna esta compuesta por un minimo de 60 especies, 17 anfibios y 43 reptiles. 235 especies de aves se han registrado, y hay 94 especies de mamiferos potencialmente presentes en Calakmul. Su composici6n floristica consiste en vegetaci6n de selva alta perennifolia o subperennifolia con 145 especies de plantas vasculares. Le siguen en orden de importancia numerica la selva mediana subperennifolia con 138, las agrupaciones de hidr6fitos con 115 y la selva baja subperennifolia con 102 especies de plantas vasculares. Relevancia intemacional Su mayor importancia es la de albergar ecositemas sumamente amenazados y una muy rica biodiversidad. Por su extensi6n y ubicaci6n representa una de las ultimas posibilidades de conservar poblaciones gen6ticamente saludables de especies que estdn seriamente amenazadas de extinci6n en M6xico. Participaci6n de ONG's e instituciones de investigaci6n Pronatura, Centro de Investigaciones Hist6ricas y Sociales de la UAC, Departamento de Biologia de la Facultad de Medicina Veterinaria Zootecnista de la UADY, Universidad Simon Fraser en Canada, Universidad de Carolina del Norte, Mississippi State University, PROAFT, ECOSFERA y BIOCENOSIS. El Triunfo Decreto En 1972 como area tipica y natural del estado de Chiapas. En 1990 fue declarada como reserva de la biosfera y en 1993 fue aceptada por el programa el Hombre y la Biosfera de UNESCO. Ubicaci6n Se encuentra en la Sierra Madre de Chiapas, al sur del estado de Chiapas, comprendiendo los municipios de Villa Corzo, Angel Albino Corzo, Mapastepec, Pijijiapan, Siltepec Acacoyahua y la Concordia. Superficie 119,177 ha. ANNEX I Page 2 of 6 Biodiversidad Se reportan diez tipos de vegetaci6n: bosque Iluvioso de montania, selva alta perennifolia, selva baja caducifolia, matorral de niebla, bosque de niebla, selva mediana subcaducifolia y subperennifolia, bosque de pino-encino liquidambar, bosque de pino encino, bosque ripario templado y vegetaci6n secundaria. En esta reserva se encuentra un centro de endemismos de cicadas. Cuenta con 542 especies de vertebrados: 22 especies de anfibios, 63 especies de reptiles, 362 especies de aves (entre ellas el quetzal), 95 especies de mamfferos, representando un 22% de la fauna de Mexico. Relevancia internacional Esta reserva representa uno de los remanentes mas grandes de bosque de niebla en el pafs. Participaci6n de ONG's e instituciones de investigaci6n TNC, WWF, USAID, Instituto de Historia Natural, Asociaci6n de Arte y Cultura Popular, CONABIO, National Fish and Wildlife Foundation. Isla Contoy Decreto 8 de febrero de 1961. Reserva natural y refugio de fauna. Ubicaci6n Municipio de Isla Mujeres en el estado de Quintana Roo. Superficie 230 ha. terrestres. Biodiversidad Zona de refugio y reproducci6n de aves y tortugas marinas. Alberga alreadedor de 77 especies de aves. Relevancia intemacional Isla de la regi6n caribenia sin impactos significativos en sus caracteristicas naturales, por lo que se convierte en un lugar de gran atractivo turistico. Participaci6n de ONG's e instituciones de investigaci6n Amigos de Isla Contoy, Amigos de Sian Ka' an y Porcontoy. Islas del Golfo Decreto 2 de agosto de 1978 como zona de reserva y refugio de aves migratorias y de la fauna silvestre. A principios de la administraci6n de Miguel de la Madrid se le asign6 la categorfa de reserva especial de la biosfera. Ubicaci6n Golfo de California, aproximadamente 100 islas y otros tantos islotes en los estados de Baja California, Baja California Sur, Sonora y Sinaloa. Superficie 380,000 ha han sido calculadas. ANNEX 1 Page 3 of 6 Biodiversidad Aproximadamente la tercera parte de todas las especies de cetaceos del mundo se encuentran aquf, mas de 800 especies de peces habitan sus aguas y de 6stas se extrae mas del 50% de la producci6n pesquera del pais. En sus islas se encuentran especies que son nativas o estan restringidas a ellas en la siguiente proporci6n: 29% de las aves, 80% de los reptiles, 3% de las plantas y 41% de los mamiferos. Relevancia intemacional La regi6n cuenta con el 52.7% de los litorales del pais, con una longitud de 6,108 km. Destaca ademas por contar con una superficie de mas de medio mill6n de ha de bahias, esteros, marismas y lagunas litorales, que representan un potencial productivo muy importante. Participacion de ONG's e instituciones de investigaci6n CICESE, Instituto de Biologia y la Facultad de Ciencias de la UNAM, el Instituto de Investigacionmes Oceanol6gicas de la UABC, SEDEMAR, SG, WWF, Agrupaci6n Sierra Madre, S.C., Centro de Investigaci6n y Desarrollo de los Recursos Naturales de Sonora, CI, ITESM-Guaymas, CES. Manantlain Decreto 23 de marzo de 1987 como reserva de la biosfera, desde 1988 forma parte de la red internacional de reservas de la biosfera del Programa el Hombre y la Biosfera de la UNESCO. Ubicacion Se extiende sobre los municipios Autlan de Navarro, Casimiro Castllo, Cuautitlan, Tuxcacuesco y Toliman en el estado de Jalisco y los municipios Comala y Minatitlan en el estado de Colima. Superficie 139,577 ha. Biodiversidad Se han identificado mas de 2,774 especies de plantas vasculares. Se han registrado mas de 110 especies de mamiferos, 336 de aves, 53 de reptiles y anfibios, 16 de peces y 180 familias de insectos, 6 6rdenes de aracnidos y 9 generos de crustaceos. Relevancia internacional A rafz del descubrimiento de Zea diploperennis en 1979, la Universidad de Guadalajara se dio a la tarea de realizar estudios en la Sierra de Manantlan. Debido a su ubicaci6n geografica y su particular orograffa, en la Sierra de Manantlan se puede observar una transici6n vegetal tropical a una de bosques templados frios, ya que la regi6n se encuentra entre dos grandes reinos biogeogrdficos del continente americano: el Neartico y el Neotr6pico. Participaci6n de ONG's e instituciones de investigaci6n Universidad de Guadalajara, IMECBIO, SAGDR, INI. ANNEX 1 Page 4 of 6 Mariposa Monarca Decreto Decretada en 1986 para proteger el fen6meno de hibemaci6n de la mariposa Monarca Ubicaci6n Estado de Michoac6in y estado de Mexico. Superficie 16,110 ha, fragmentada en cinco poligonos denominados Santuarios. Biodiversidad 350 especies de flora (bosque de Quercus, de coniferas y mes6filo de montania); 163 especies de fauna (25 invertebrados, 8 anfibios, 9 reptiles, 105 aves y 28 mamiferos). Relevancia internacional Involucra la sobrevivencia de la poblaci6n migratoria de Norteam6rica (Canadd, E.U.A. y M6xico) de la mariposa Monarca. Participacion de ONG's e instituciones de investigaci6n Interesadas: "Grupo de los Cien", Centro de Ecologia UNAM, Colegio de postgraduados de Chapingo y Universidad Nicolaita de Michoacan. Montes Azules Decreto 12 de enero de 1978 como reserva de la biosfera para la protecci6n de los ecosistemas tropicales, ya que las selvas altas son consideradas las mds ricas y complejas de todas las comunidades vegetales del mundo. Ubicaci6n Estado de Chiapas en los municipios de Ocosingo y Margaritas. Superficie 331,200 ha. Biodiversidad Estan representados el 28% de los mamiferos (106 especies), el 32% de las aves (306 especies), el 12% de los reptiles (84 especies), el 9% de los anfibios (25 especies) y el 14% de los peces del porcentaje total del pais. Asimismo se localizan 12 tipos de vegetaci6n. Relevancia intemacional Es el area natural protegida de mas alta diversidad biologica de Mexico y Norteamerica. Habitada por grupos indigenas mayas tradicionales como los lacandones, contiene un sinniunero de vestigios arqueol6gicos. Participaci6n de ONG's e instituciones de investigaci6n Conservaci6n Internacional, Centro de Ecologiade la UNAM, Na-bolom, A.C. ANNEX 1 Page 5 of 6 Ria Lagartos Decreto 26 de junio de 1979 como zona de refugio faunfstico, 29 de agosto de 1986 recibe reconocimiento internacional por la convenci6n de Ramsar segun criterios adoptados en la reuni6n de Cagliari en 1980. A principios de la administraci6n de Miguel de la Madrid se le asign6 la categorfade reserva especial de la biosfera. Ubicaci6n Se localiza en el extremo oriental de la franja litoral de Yucatan; al norte limita con el Golfo de Mexico, al sur con los municipios de Tizimfn, Rfo Lagartos y San Felipe, al este con Quintana Roo- y al oeste con el municipio de San Felipe. Superficie 56,999 ha. Biodiversidad Cuenta con 391 especies animales, que incluyen 142 especies endemicas de Mesoamerica. Entre las aves de la Reserva existen 72 migratorias y 141 residentes. Ademas existen 41 especies de mamfferos, 56 de reptiles, 10 de anfibios, 50 entre crustaceos, gastr6podos y bivalvos, 16 de peces y 98 de plantas. Relevancia intemacional Aloja a la unica poblaci6n anidante en Mexico de flamenco rosa, la diversidad y abundancia de aves es alta, es uno de los ultimos sitios continentales de descanso y alimentaci6n de aves migratorias, antes de que inicien la travesfa del Golfo de Mexico. Participaci6n de ONG's e instituciones de investigaci6n UICN, CINVESTAV, Pronatura, UADY, CICY, BIOCENOSIS, ECOSFERA, INAH. Sian Ka'an Decreto 20 de enero de 1986 como reserva de la biosfera. Ubicaci6n Estado de Quintana Roo en los municipios de Felipe Carrillo Puerto y Solidaridad. Superficie 528,000 ha de las cuales aproximadamente 120,000 ha son marinas. Biodiversidad Cenotes, petenes, lagunas, cayos y ojos de agua. Selvas altas, medianas y bajas caducifolias (150,000 ha aproximadamente); la vegetaci6n inundable cuenta con 175,000 ha y una plataforma arrecifal de 150,000 ha. Existen 800 especies de plantas vasculares y 2,161 de animales. Relevancia intemacional Contiene alta diversidad biol6gica y protege la segunda barrera arrecifal mas importante del mundo. ANNEX 1 Page 6 of 6 Participaci6n de ONG's e instituciones de investigaci6n Amigos de Sian Ka'an, Ecosur, Universidad de Quintana Roo, UNAM, Econciencia, Centro Regional de Investigaci6n Pesquera, The Nature Conservancy (TNC). Vizeaino Decreto En 1988 como reserva de la biosfera Ubicaci6n Principalmente en el municipio de Guerrero Negro, Baja California Sur. Superficie 2,546,790.25 ha. Es el drea natural protegida mas grande de la Repdblica Mexicana y de Latinoamerica. Biodiversidad Litoral marino y ecositemas de desierto. Destacan dos especies amenazadas: berrendo y lborrego cimarr6n. Incluye sitios de valor arqueol6gico (pinturas rupestres y petroglifos). Sus lagunas costeras y bahfas son refugio para la reproducci6n de la ballena gris. Cuenta con 308 especies de vertebrados (terrestres y marinos). De estas especies 17 estan amenazadas, 4 en peligro de extinci6n, 6 bajo protecci6n y una rara. Relevancia intemacional Es zona de reproducci6n de la ballena gris, en ella se localiza la ultima poblaci6n del berrendo peninsular y cuenta con poblaciones importantes de borrego cimarr6n. Es el area natural protegida con ecositema desertico y litoral mas grande de America. Participaci6n de ONG's e instituciones de investigaci6n CICIMAR, CIBNOR, UABCS, Pronatura. ANNEX 2 TASK FORCE FOR FUND FOR PROTECTED AREAS (FANP) Task Force Members Lorenzo Rosensweig, Director General, FMCN Hans Herrmann, Director General, ProNatura Juan Bezaury, Director, Amigos de Sian Ka'an Guillermo Castilleja, Representative and Director, WWF Alejandro Robles, Director, CI Juan Carlos Belausteguigoitia, SEMARNAP Javier de la Maza. Director. Protected Areas, INE Deocundo Acopa, Farmers' Organization/Indigenous Community Daniel Pinero. UNAM Coordinator Ramon Perez Gil, Director, CESPEDES TABLE 1. COST SUMMARY BY COMPONENT (US$ million) CY92-96 CY97 CY98 CY99 CYOO CY01 TOTAL Reserve Conservation Basic Conservation 7.07 2.86 2.00 2.20 2.23 2.23 18.59 Community Activities / IPDPs 0.10 0.73 0.85 0.91 0.92 0.92 4.44 Management Strengthening 0.00 0.00 0.11 0.14 0.14 0.14 0.53 Subtotal Reserve Conservation 7.17 3.59 2.97 3.25 3.29 3.29 23.56 Central Coordination Management Strengthening 0.16 0.41 0.15 0.08 0.06 0.06 0.92 Project Supervision 4.27 0.12 0.05 0.07 0.09 0.09 4.69 Subtotal Central Coordination 4.43 0.53 0.20 0.15 0.15 0.15 5.61 FANP Endowment Capital - 16.30 0.00 0.00 0.00 0.00 16.30 Administration - 0.09 0.13 0.15 0.15 0.15 0.67 Subtotal FANP Endowment - 16.39 0.13 0.15 0.15 0.15 16.97 OVERALLTOTAL 11.60 20.51 3.30 3.55 3.59 3.60 46.15 rDj 0 TABLE la. PRE-FANP COSTS AND FINANCING (US$ million) COSTS FINANCING CY92-96 CY97 CY92-96 CY97 TOTAL GOM GEF GOM GEF NGO Reserve Conservation Basic Conservation 7.07 2.86 9.93 0.73 6.35 1.01 1.85 0.00 Community Activities/IPDPs 0.10 0.73 0.83 0.00 0.10 0.44 0.29 0.00 Subtotal Reserve Conservation 7.17 3.59 10.76 0.73 6.44 1.45 2.13 0.00 Central Coordination 4.43 0.53 4.96 3.40 1.02 0.27 0.18 0.08 FANP Endowment Capital - 16.30 16.30 0.00 0.00 0.00 16.30 0.00 Administration 0.09 0.09 0.00 0.00 0.00 0.09 0.00 Subtotal FANP Endowment - 16.39 16.39 0.00 0.00 0.00 16.39 0.00 OVERALL TOTAL 11.60 20.51 32.11 4.13 7.47 1.72 18.71 0.08 . za C TABLE lb. FANP COSTS AND FINANCING (US$ million) COSTS FINANCING CY98 CY99 CYOO CY01 TOTAL GOM FANP NGO Reserve Conservation Basic Conservation 2.00 2.20 2.23 2.23 8.66 5.22 3.45 0.00 Community Activities 0.85 0.91 0.92 0.92 3.61 1.77 1.34 0.50 Management Strengthening 0.11 0.14 0.14 0.14 0.53 0.00 0.53 0.00 Subtotal Reserve Conservation 2.97 3.25 3.29 3.29 12.80 6.99 5.32 0.50 Central Coordination Management Strengthening 0.15 0.08 0.06 0.06 0.35 0.00 0.27 0.08 Project Supervision 0.05 0.07 0.09 0.09 0.31 0.00 0.31 0.00 Subtotal Central Coordination 0.20 0.15 0.15 0.15 0.65 0.00 0.58 0.08 FANP Administration 0.13 0.15 0.15 0.15 0.58 0.00 0.58 0.00 OVERALL TOTAL 3.30 3.55 3.59 3.60 14.04 6.99 6.48 0.57 0 1h TABLE 2. FANP COST SUMMARY BY ACTIVITY CY98 CY99 CYOO CY01 TOTAL Basic Conservation Core Personnel and Operating Costs 1.27 1.32 1.33 1.33 5.26 Equipment 0.08 0.07 0.07 0.07 0.29 Core Conservation 0.65 0.81 0.82 0.83 3.11 Subtotal Basic Conservation 2.00 2.20 2.23 2.23 8.66 Community Participation Community Activities 0.85 0.91 0.92 0.92 3.61 CTA Training 0.12 0.08 0.07 0.07 0.35 Subtotal Community Participation 0.98 0.99 0.99 1.00 3.96 PA Management Strengthening Reserve Conservation Training 0.08 0.10 0.10 0.10 0.37 Central Coordination Training 0.06 0.04 0.03 0.03 0.16 Subtotal Management Strengthening 0.14 0.13 0.13 0.13 0.53 Project Supervision 0.05 0.07 0.09 0.09 0.31 FANP Administration 0.13 0.15 0.15 0.15 0.58 OVERALL TOTAL 3.30 3.55 3.59 3.60 14.04 Table 3. FANP RESERVE CONSERVATION CY98 CY99 CYOO CY01 TOTAL Basic Conservation Core Personnel and Operating Costs 1.27 1.32 1.33 1.33 5.26 Equipment 0.08 0.07 0.07 0.07 0.29 Core Conservation 0.65 0.81 0.82 0.83 3.11 Subtotal Basic Conservation 2.00 2.20 2.23 2.23 8.66 Community Activities Environmental Awareness 0.18 0.16 0.14 0.14 0.62 Sustainable Use Project Design 0.18 0.18 0.18 0.18 0.72 Sustainable Use Project Implementation 0.49 0.57 0.60 0.60 2.27 Subtotal Community Activities 0.85 0.91 0.92 0.92 3.61 Management Strengthening Reserve-level Staff Training 0.08 0.10 0.10 0.10 0.37 CTA Training / Meetings 0.03 0.04 0.04 0.04 0.16 Subtotal Management Strengthening 0.11 0.14 0.14 0.14 0.53 m m U' Total Reserve Conservation 2.97 3.25 3.29 3.29 12.80 0 '0 Table 4. FANP CENTRAL COORDINATION ACTIVITIES CY98 CY99 CYOO CY01 TOTAL Management Strengthening Reserve Training 0.06 0.04 0.03 0.03 0.16 CTA Support / Training 0.09 0.04 0.03 0.03 0.19 Subtotal Management Strengthening 0.15 0.08 0.06 0.06 0.35 Project Supervision INE Coordination & Equipment 0.03 0.03 0.03 0.03 0.12 Evaluations 0.02 0.04 0.06 0.06 0.18 Subtotal Project Supervision 0.05 0.07 0.09 0.09 0.31 Total Central Coordination 0.20 0.15 0.15 0.15 0.66 D' 0Z '.0 Table 5. FANP ADMINISTRATION CY98 CY99 CYOO CYOI TOTAL Salaries 0.05 0.06 0.06 0.06 0.23 Operating Expenses 0.03 0.03 0.03 0.03 0.12 Consultants (including for audits) 0.03 0.03 0.03 0.03 0.12 Travel & Misc. (including training) 0.02 0.02 0.02 0.02 0.07 Equipment 0.01 0.01 0.01 0.01 0.05 TOTAL FANP ADMINISTRATION 0.13 0.15 0.15 0.15 0.58 0 Table 6. FANP COMMUNITY PARTICIPATION CY98 CY99 CYOO CYOI TOTAL Reserve Conservation Environmental Awareness 0.18 0.16 0.14 0.14 0.62 Sustainable Use Project Design 0.18 0.18 0.18 0.18 0.72 Sustainable Use Project Implementation 0.49 0.57 0.60 0.60 2.27 CTA Training / Meetings 0.03 0.04 0.04 0.04 0.16 Central Coordination CTA Support / Training 0.09 0.04 0.03 0.03 0.19 TOTAL COMMUNITY PARTICIPATION 0.98 0.99 0.99 1.00 3.96 ac TABLE 7. FINANCING SUMMARY (US$ million) CY92-96 CYST CYSS-O CY92-O1 Total GOM GEF Total GOM GEF NGO Total GOM FANP () NGO Total GOM GEF FANP "' NGO Reserve Conservation 7.17 0.73 6.44 3.59 1.45 2.13 0.00 12.80 6.99 5.32 0.50 23.56 9.17 8.58 5.32 0.50 Central Coordinafion 4.43 3.40 1.02 0.53 0.27 0.18 0.08 0.65 0.00 0.58 0.08 5.62 3.67 1.21 0.58 0.15 FANP Administration - - - 16.39 0.00 16.39 0.00 0.58 0.00 0.58 0.00 16.97 0.00 16.39 0.58 0.00 TOTAL 11.60 4.13 7.47 20.51 1.72 18.71 0.08 14.04 6.99 6.48 0.57 46.15 12.84 26.17 6.48 0.65= )IndAudes a $1.3 million GOM contribubon from debt swap authorizations to FMCN. U) as (D 0 INVESTMENT ANALYSIS - FANP ENDOWMENT FUND GEF Capital - US$16 .3 million? (US$t0001 6/97-12/97 CV98 CY99 CYOO CYOI1 CY02 CY03 CY04 CY05 CY06 CY07 CYOS CY09 CYIo CoIl1 GET Contributions (1) 16,300 0 0 0 0 Capital nominal, BOY 16,3001 15,9411 16,0201 16,1011 16,181 16,2621 16,3431 16,4251 16,5071 16,5901 16,6731 16,7561 16,8401 16.9241 17,009 Offshore Investment Income (nominal) (2) 774 1,514 1,522 1,530 1,537 1,545 1,553 1,560 1,568 1,576 1,584 1,592 1,600 1,608 1,616 Investment Management Fees (3/ 611 1201 1201 1211 121 1221 1231 1231 1241 1241 1251 1261 1261 1271 128 Net Investment Income 7131 1,3951 1,4021 1,4091 1,4161 1,4231 1,4301 1,4371 1,4441 1,4521 1,4591 1,4661 1,4731 1,4811 1,4881 20,888 Capital Reserve Fund (4/ 821 1591 1601 1611 1621 1631 1631 1641 1651 1661 1671 1681 1681 1691 170 2,387 Investment Income Available 632 1,2351 1,2421 1,2481 1,2541 1,2601 1,2671 1,2731 1,2791 1,2861 1,2921 1,2991 1,3051 1,3121 1,318 18.01 Capital Invasion 400 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total Offshore Income Available 1.032 1.235 1.242 1.248 1.254 1.260 1.267 1.273 1.279 1.286 1.292 1.299 1.305 1.312 1.318 18.901 End of year capital (real) (5) 15,9211 15,6101 15,3061 15,0071 14,7141 14,4271 14,1461 13,8701 13,5991 13,3341 13.0741 12,8181 12,5681 12,3231 12,083 1. Th. GET lonttibutions to the Fund .*. fully di,b. ..d in Year 1 The.e conttlbuti-oS ate limited to the refoornes troe the GET. 2. Assumes. 7.0% real return. Iowene,, a well-managed unnservatie ivestment portfolio would yid returns between 6.0S and d.SS 3. Assumes a 0.75% ot tapital theta.. n reality, fees ma Ydiffer eliahtly dependin on the market. 4. 1% of capital will be set a.ida -nnually ilts the capital reserne At the dlstretion of the CTFANP, this tan be used to oene natural dlsaster e-p-nOes, in actordanta with the CTFANP By-Laws, or reino-sted to ofset inflationary Impatte. h. Assumes a 2.5% long-term dollar inflation rate, whih e,odes teal apit1 -aloe over time. Also assumes that the tapital resee i4 50% sPent. ft no meinntmnet isn made during the lib of the Fund, denapitalization will otnut in appro-kately 40 years. BOY seglnelog of Yea. Figures may not be premee due to rounding erors. TOTAL INCOME AVAILABLE TO FANP PROGRAM __ _ __ _ _ __ _ _ __ _ _ (US $0 0 ______I _________________________ CY98 CY99 CYOO CYOl TOTAL Total Offshore Income 1,032 1,235 1,242 1,248 4.766 GOM contributions to FANP (/1 279 334 335 349 1,297 Local Interest Income M2I 92 110 110 112 4241 TOTAL 1.402 1,679 1,687 1,7091 6,477 1 1. Through an existing agreement with the GOM, FMCN retains the right to carry out debt swap transactions for mobilizing 0 increased resources for conservation activities. FANP Investment income would be used to carry out these transactions, yielding additional investment income (between 27%-28% as of March 31, 1997, net of transaction fees). 2. Investment income and GOM contributions to FANP will be disbursed to a local (Mexicol account managed by FANP. Funds in this account, while undisbursed for subprolect activities, will generate Interest in pesos (estimated at around 7%). INVAX4B1 .XLS ANNEX 5 Page 1 of 2 COMPLEMENTARY FUNDING (US$000) 1992-96 1997-2001") ACTIVITY VALUE VALUE Environmental Awareness (2) 2,001.3 466.1 Sustainable Development'3) 2,893.4 2,885.1 Core Protection (4) 267.9 2,642.8 Conservation Activities (5) 80.3 1,047.6 Infrastructure (6) -- 5,351.8 ACTIVITY TOTAL 5,242.9 12,393.4 ORGANIZATION0 NGO 1,885.5 1,085.6 Public Agency 2,287.9 454.1 Private Enterprise 59.9 10,597.1 External (multi/bilateral) -- 84.6 University 1,009.6 172.0 ORGANIZATION TOTAL 5,242.9 12,393.4 RESERVE Calakmul 3,330.7 n/a Montes Azules n/a 10,793.8 Ria Lagartos n/a 511.1 Sian Kan 1,536.5 445.3 Triunfo 329.4 243.2 Vizcaino 46.3 400.0 RESERVE TOTAL 5,242.9 12,393.4 Source: Adapted from 1997 POAs prepared by INE / DRs NOTES (1) Primarily 1997contributions, except for a $1Om and $400k multi-year private contributions. (2) Environmental education, monitoring, and research (3) Sustainable use and productive projects (4) Reserve level salaries, administrative costs, and plans (5) Soil conservation, reforestation, land regularization) (6) Reserve level installations, guard posts, etc. (7) Details on Organizations provided on page 2 Figures may not add precisely due to rounding. nia = insufficient data ANNEX 5 Page 2 of 2 ORGANIZATIONAL GROUPINGS NGO PRIVATE PUBLIC UNIVERSITY EXTERNAL ENTERPRISE AGENCY AMACUP AEF CONABIO CETMAR AID CI AHM ESSA CIQRO UNDP FFI FMC IHN ECOSUR NFWF LBS INI UNAM PRONATURA PEC PROFEPA UQR TNC PRONARE WWF SAGAR SRA AEF Agro Empresarios de Finca(s) AHM Altos Hornos de Mexico AID US Agency for International Development AMACUP Association for Mexican Popular Culture and Art CETMAR Oceanic Studies Technology Center CI Conservation International CIQRO Q. Roo Science Research Center CONABIO National Biodiversity Commission ECOSUR Secondary School for the Southern Frontier ESSA Salt Export Agency FFI Flora and Fauna International FMC Ford Motor Company IHN National Institute of History INI National Indigenous Peoples Institute LBS Laboratorios Sandia NFWF National Federation for Wildlife Fund PEC Private Enterprise (Confidential) PROFEPA Federal Agency for Environmental Protection PRONARE National Reforestation Program PRONATURA National Conservation NGO SAGAR Ministry of Agriculture SRA Ministry of Agrarian Reform TNC The Nature Conservancy UNAM National University of Mexico UNDP United Nations Development Program UQR University of Q. Roo WWF World Wildlife Fund ANNEX 6 Page 1 of 1 MEXICO PROTECTED AREAS PROJECT Revised Disbursement Schedule by Year (US$O000) Actual Grant 28604 Disbursement Category 1993-96 1997 1998 2l Total 1. Emergency Plans 2209 877 470 3556 2. Operating Plans 2240 708 382 3330 3. Incremental Costs 1299 865 465 2629 4. Management Support 94 100 55 249 5. FANP Support 0 65 35 100 Sub-Total Grant 28604 5842 2615 1407 9864 Grant "FMCN" 1. FANP Capitalization 16306 16306 TOTAL 5842 18921 1407 26170 Based on historic or expected SDR/US$ exchange rates 21B y April 30, 1998 ANNEX 7 Page 1 of 7 REGLAS DE FUNCIONAMIENTO DE LOS CONSEJOS TECNICOS ASESORES Justificaci6n Con el proposito de formalizar e institucionalizar los mecanismos de concertaci6n que permitan la participaci6n de diversos sectores de la sociedad involucrados o preocupados por las actividades de conservaci6n in situ de los recursos naturales, se integraran, asociados a cada Area Natural Protegida (ANP), los denominados Consejos T6cnicos Asesores (CTA's). Marco Normativo De conformidad con lo dispuesto en los articulos 15 fracci6n X, 18, 46, 47, 157 y 158 de la Ley General del Equilibrio Ecol6gico y Protecci6n al Ambiente; en los articulos 54 fracciones V y VI y 56 fracci6n 11 del Reglamento Interior de la Secretaria de Medio Ambiente, Recursos Naturales y Pesca; asi como en cumplimiento a lo establecido en Capitulo VI, apartado 13 "Fomento a la Participaci6n Ciudadana", del Programa de Medio Ambiente 1995 - 2000, y en el Capitulo VIl Estrategias, apartado 4. "Desarrollo de estructuras organizativas internas e instituciones locales" del Programa de Areas Naturales Protegidas de Mexico 1995 - 2000, la Unidad Coordinadora de Areas Naturales Protegidas (UCANP) del Instituto Nacional de Ecologia (INE), emite las siguientes reglas.' I DISPOSICIONES GENERALES Articulo 10. Los CTA's, como su nombre lo indica, tendran como tarea la de asesorar t6cnicamente y emitir consejos y recomendaciones a la Direcci6n del ANP para coadyuvar a la 6ptima observancia de la politica ecol6gica nacional en materia de ANP dictada por el INE y la SEMARNAP con estricto apego al Decreto Presidencial sobre la creaci6n de dicha ANP. Articulo 2O. Los CTA's, estaran regidos por un reglamento interno especifico emitido por el propio Consejo y aprobado por la UCANP, el cual debera observar las disposiciones establecidas en las presentes reglas. Articulo 3ro. En el caso de que un ANP se encuentre decretada en 2 o mas estados, se podra constituir un CTA para cada estado, si asi se considera I Para el caso de las ANP incluidas en el Proyecto GEF, se han observado las disposiciones establecidas en la Enmienda al Acuerdo de Donaci6n del Fondo Global para el Medio Ambiente (GEF) en su Secci6n 3.07 incisos a) y b) realizada por el Banco Mundial y el Gobierno de Mexico el 24 de abril de 1996. I ANNEX 7 Page 2 of 7 conveniente para su mejor funcionamiento; de ser asi, los CTA's constituidos deberan reunirse por lo menos 1 vez al ano conjuntamente. Articulo 40. Estas reglas de funcionamiento conformaran el Anexo I del Acta Constitutiva correspondiente a cada C.T.A's. Articulo 5to. El INE a traves de la UCANP y de su personal en la Direcci6n del ANP, asi como de la Delegaci6n de la SEMARNAP en cada entidad federativa, apoyara tecnicamente las labores de los C.T.A's. II. DE LA INTEGRACI6N DEL CONSEJO Articulo 6o.- Los integrantes del CTA seran representantes locales y nacionales acreditados, nombrados por los diversos sectores de la sociedad relacionados e interesados en la protecci6n, uso, desarrollo y conservaci6n de los Recursos Naturales del ANP en cuesti6n y sus 6reas de influencia. Articulo 7to. Se buscara consolidar y fortalecer los mecanismos de concertaci6n y coordinaci6n con la participaci6n de representantes de los siguientes sectores de la sociedad: * Piblico: Gobierno Federal, Estatal y Municipal * Social: Grupos comunitarios, ejidales y organizaciones sociales. * Academico: Centros de investigaci6n e Instituciones de educaci6n superior • Privado: Organizaciones empresariales o en general de la iniciativa privada • ONG: Representantes de organizaciones conservacionistas Articulo 80.- El C.T.A. estara integrado de la siguiente manera: 1. Un Presidente Honorario, que recaera en el C.Gobernador Constitucional del estado, o, en su caso, por quien designe el propio Gobernador. II. Un Presidente Ejecutivo, que sera electo por mayoria de votos en reuni6n del Consejo. Ill. Un Secretario Tecnico, que sera el Director del ANP IV. El (los) Presidente(s) Municipal(es) en que se ubica el ANP V. Representantes de Instituciones Academicas y Centros de Investigaci6n con programas activos en el ANP. 2 ANNEX 7 Page 3 of 7 VI. Representantes de organizaciones sociales, ejidos y comunidades, propietarios y poseedores de la tierra establecidos en el ANP VIl. Representantes de organismos empresariales o de la iniciativa privada en general, vinculados con el uso, aprovechamiento o conservaci6n de los recursos naturales del ANP Vil. Representantes de Organismos No Gubernamentales con programas activos y reconocida experiencia en las tareas de protecci6n y conservaci6n del ANP. Articulo 9o. El Delegado Federal de la SEMARNAP en el estado o un representante designado por este y el Secretario Tecnico, participaran en las reuniones del Consejo con voz pero sin voto y se encargaran de vigilar y apoyar el buen funcionamiento del CTA. Articulo 1 0o. El Presidente del Consejo y el Secretario Tecnico, invitaran a otras dependencias y entidades de la administraci6n pCublica federal y estatal a participar en las reuniones del Consejo cuando asi lo ameriten los asuntos que seran tratados, asi como a un representante del Consejo Nacional de Areas Naturales Protegidas. IlIl DE LA INSTALACION Y ORGANIZACION Articulo 1 lo. Con el prop6sito de que las reuniones del Consejo sean lo mas agil y ejecutivas posibles, el total de integrantes de estos Consejos no excedera de 15 personas. Articulo 12o. Los Consejeros mencionados se incorporaran al CTA a invitaci6n formulada por el Presidente Ejecutivo y el Secretario Tecnico del mismo. En el caso de los CTA's de nueva creaci6n la convocatoria la realizaran el Delegado Federal de la SEMARNAP en el estado y el Director del ANP. Articulo 13o. El CTA., quedara instalado mediante Acta firmada por cada uno de los Consejeros, a partir de la cual la UCANP, otorgara a sus miembros la acreditacion correspondiente. Articulo 14o. Por cada miembro titular que represente a alguna instituci6n del sector publico o privado podra haber un suplente debidamente acreditado; para el caso de particulares, cuando la acreditaci6n sea personal, la misma sera intransferible. 3 ANNEX 7 Page 4 of 7 Articulo 150. Los miembros del CTA debidamente acreditados que falten 2 veces de manera consecutiva a las reuniones del Consejo, podran ser expulsados de manera definitiva. iv. AMBITO DE COMPETENCIA DEL CONSEJO Artfculo 160. En el ejercicio de sus funciones, el Consejo, Subconsejos y Comisiones, deberan observar lo establecido en el Decreto del ANP correspondiente, en su Programa de Manejo y en los criterios de la Politica Ecol6gica dictada por la SEMARNAP y el INE. Articulo 170. El CTA debera ser renovado cada dos anios o antes si fuera necesario por incumplimiento de funciones de sus miembros, con la capacidad de ratificar a aquellos que hayan demostrado su interes y trabajo por la conservaci6n del ANP. Articulo 180. El CTA. debera proponer anualmente la agenda de reuniones y podra convocar a reuniones extraordinarias a petici6n de sus miembros, a traves del Secretario Tecnico. Articulo 190. El Secretario Tecnico, en su caracter de Director del ANP, retomara las propuestas y opiniones emitidas en el CTA, asi como las denuncias, para que sean atendidas ylo turnadas al sector correspondiente. V. DE LAS FUNCIONES DEL C.T.A. Articulo 20o. El CTA, fungira como 6rgano consultor, asesor, de apoyo y de concertaci6n cuyas funciones seran las siguientes: I. Proponer y promover medidas para incrementar la capacidad y eficiencia de conservaci6n del Areas Naturales Protegidas. II. Analizar y en su caso participar en la elaboraci6n del Programa de Manejo del ANP. Ill. Revisar, analizar y, en su caso, enriquecer con propuestas concretas el Programa Operativo Anual. 4 ANNEX 7 Page 5 of 7 IV. Para contribuir al logro de los objetivos y estrategias establecidas en el Programa de Manejo, proponer a trav6s del Programa Operativo Anual y en su caso en el Programa Emergente: proyectos de investigaci6n, educaci6n ambiental, desarrollo sustentable, ecoturismo, etc., al Secretario Tecnico en su caracter de Director del ANP, para su consideraci6n y la del propio Consejo. V. Promover la participaci6n social en las actividades de conservaci6n del area y sus zonas de influencia, tanto en forma permanente como ante emergencias ecol6gicas, en coordinaci6n con la Direcci6n del ANP. VI. Asesorar continuamente la instrumentaci6n de los proyectos que se realicen en el ANP, proponiendo y promoviendo acciones concretas para el logro de los objetivos y estrategias consideradas en el Programa de Manejo. VII. Observar el cumplimiento, de lo dispuesto en la Ley General del Equilibrio Ecol6gico y la Protecci6n al Ambiente, la Ley Forestal y demas leyes que resulten aplicables. Vil. Detectar cualquier actividad, problema o contingencia ecol6gica en el ANP y su zona de influencia que pudiera afectar la integridad de los recursos y la salud de los pobladores locales, y coadyuvar con el Director del ANP para su soluci6n o control. IX. Hacer uso, en caso necesario, del derecho que otorga la Ley del Equilibrio Ecol6gico y la Protecci6n al Ambiente, para hacer denuncias populares ante ilicitos no resueltos en el ANP. Entregar asimismo, dichas denuncias a las instancias pertinentes, con copia a la Direcci6n de la ANP y a la UCANP. X. Coadyuvar en la busqueda de nuevas fuentes de financiamiento que permitan lograr la capitalizaci6n del ANP y el Desarrollo de nuevos proyectos que incrementen los niveles de conservaci6n de la misma. XI. El CTA podra hacer comentarios a los informes tecnicos de evaluaci6n y de auditorias. VI. DE LOS SUBCONSEJOS Y LAS COMISIONES Articulo 21o. El CTA podra considerar la creaci6n de tantos Subconsejos como sean necesarios para realizar sus funciones, recomendandose constituir por lo 5 ANNEX 7 Page 6 of 7 menos el Cientifico - Academico y el de Desarrollo Social y Concertaci6n. En ellos se discutiran propuestas concretas previas a las sesiones plenarias del CTA. Articulo 22o. Los Subconsejos estaran integrados por miembros del propio C.T.A., haciendo participar en sus reuniones a especialistas en los asuntos que se requiera abordar. Articulo 230. Las funciones de estos Subconsejos seran definidas en el Reglamento Interno de cada CTA de acuerdo al numero y tipo de Subconsejos necesarios en el ANP. Articulo 24o. Las reuniones de los Subconsejos seran previas a las del Consejo en Pleno, siendo facultad del Presidente Ejecutivo o del Secretario Tecnico citar a sus miembros. Articulo 25o. Cuando se requiera, el CTA. podra formar Comisiones Especiales para la atenci6n de asuntos especificos de interes para el ANP. Estas comisiones quedaran constituidas por simple acuerdo del Consejo, previa constancia en la minuta correspondiente, dandose por concluidas en cuanto el asunto que las gener6 sea concluido. VII. FORMALIDADES DE LAS REUNIONES Articulo 26o. El CTA. debera celebrar reuniones cuando menos 3 veces al ano, de las cuales se elaboraran minutas de trabajo. Una de estas reuniones debera llevarse a cabo con autoridades o representantes de la UCANP/INE con el prop6sito de evaluar y dar seguimiento a las propuestas y actividades desarrolladas durante el ar7o, los resultados y recomendaciones de estos trabajos seran integrados en un informe. Articulo 27o. Tanto el informe como la minutas de trabajo mencionados en el articulo anterior, deberan sefialar: lugar y fecha de realizaci6n de la reuni6n, periodo que comprende el informe, lista de asistentes, objetivos de la reuni6n propuestas y sugerencias de cada sector, conclusiones, compromisos de las Comisiones y firmas aut6grafas de los participantes. Articulo 28o. Las reuniones del CTA seran conducidas por el Presidente Ejecutivo y el Secretario Tecnico. Las resoluciones se tomaran vflidamente por mayoria de votos de los miembros del Consejo, presente. En caso de empate el Presidente Ejecutivo del mismo tendra voto de calidad. 6 ANNEX 7 Page 7 of 7 Articulo 290. En las reuniones del CTA podran participar, con voz pero sin voto, miembros del Consejo Nacional de Areas Naturales Protegidas (CNANP), invitados especiales del CTA, asi como representantes y especialistas designados por la UCANP/INE. Articulo 300. Las reuniones se celebraran en el lugar que definan el Presidente y el Secretario del mismo, para ello, debera expedirse convocatoria escrita con no menos de ocho dias de anticipaci6n ni mas de quince, por medio de comunicaciones fehacientes, correo, fax, telefono, correo electr6nico, etc. Articulo 310. La cedula de convocatoria debera contener. I El lugar, fecha y hora de celebraci6n de la reuni6n, II. El orden del dia de los asuntos a tratar. Ill. La firma del convocante, si este cuenta con sello, debera tambien estamparlo, y IV. La fecha de expedici6n. Articulo 32o. Para la instalaci6n valida de las reuniones, cuando se realicen por virtud de primera convocatoria, deberan estar presentes cuando menos la mitad mas uno de representantes, cuando se reunan por virtud de segunda o ulterior convocatoria, la reuni6n se celebrara validamente, cualquiera que sea el numero de representantes que concurran. Articulo 330. Si el dia senialado para llevar a cabo alguna reuni6n, no asistiera la mayoria requerida para su validez, el convocante elaborara una constancia, misma que servira de base para que de inmediato se expida la segunda convocatoria, la que se celebrara en un plazo no menor de ocho ni mayor a 30 dias, contados a partir de la expedici6n de la segunda convocatoria. Vil. TRANSITORIO Articulo 340. Las presentes reglas de funcionamiento entraran en vigor a partir del momento en que se convoque al C.T.A. y se hagan del conocimiento de los Consejeros. 7 FMCN ORGANIZATIONAL PLAN BOARD OF DIRECTORS ADMINISTRATION AND [PLANNING AND EVALUATION INTERNATIONAL PROTECTED NATURAL AREAS FINANCE COMMITTEE COMMITTEE ADVISORY COMMITTEE TECHNICAL COMMITTEE RUBEN AGUILAR ANDRES M. SADA I I KATHRYN FULLER MAURICIO RUIZ GALINDO I , I . I EXEUIVE DRCOR EVALUATION ADMINISTRATIVE I COMMUNICATIONS | |PROTECTED NATURAL AREAS M DIRECTOR DIRECTOR DIRECTOR I DIRECTOR | ANNEX 9 Page 1 of 9 REGLAMENTO INTERNO DEL COMITE TECNICO PARA LAS AREAS NATURALES PROTEGIDAS DEL FONDO MEXICANO PARA LA CONSERVACI6N DE LA NATURALEZA, A.C. CONSIDERANDO * Que las ANP son una de las estrategias viables para lograr la protecci6n y conservaci6n in situ de los recursos naturales del pais y son espacios donde se pueden suceder acciones demostrativas de uso sostenible de los mismos. * Que hist6ricamente las ANP han padecido por la insuficiencia de recursos para operar a los niveles minimos adecuados. * Que en el programa de Areas Naturales Protegidas de la SEMARNAP se postula como una alternativa de soluci6n al problema mencionado al proponer el establecimiento de un Fondo Patrimonial para el financiamiento a largo plazo de las siguientes diez 6reas naturales protegidas: Calakmul, Isla Contoy, Islas del Golfo, Manantl6n, Monarca, Montes Azules, Ria Lagartos, Sian Ka'an, Triunfo y Vizcaino. * Que la existencia de un fondo patrimonial estimulara la captaci6n de una mayor cantidad de recursos provenientes de diversas fuentes. * Que la SEMARNAP renegoci6 con Banco Mundial la utilizaci6n de los recursos del GEF que el Gobierno Mexicano emplea para el apoyo a los programas de las ANP. * Que tanto el Banco Mundial como la SEMARNAP coincidieron en que es oportuno y conveniente formalizar la constituci6n de dicho fondo para canalizar los recursos remanentes en GEF. * Que despues de realizar una consulta entre personas e instituciones de diversos sectores de la sociedad mexicana el CONANP decidi6 no crear un fideicomiso nuevo sino apoyarse en una estructura hoy existente. * Que es el Fondo Mexicano para ia Conservaci6n de la Naturaleza Asociaci6n Civil una persona moral cuyo mandato en favor de los recursos naturales del pais coincide con el previsto para el Fondo para las Areas Naturales Protegidas (FANP) y tiene el interes y la capacidad para responsabilizarse de la constituci6n y operaci6n del FANP. * Que dicho FANP habrd de contar con un Comite T6cnico similar a los demas Comit6s del FMCN, pero que se rija por un reglamento especifico, se resuelve aprobar el siguiente reglamento con ese caracter: CAPITULO PRIMERO DE SU CONFORMACI6N Art.l.- Se constituye el Comite T6cnico del Fondo para las Areas Naturales Protegidas (CTFANP) dentro del FMCN, con el prop6sito de manejar el Fondo para las Areas Naturales Protegidas conforme a la normatividad y condiciones que le determina el presente reglamento interno. Art.2.- El FMCN ser6 el representante legal del Fondo para las Areas Naturales Protegidas, asf como del CTFANP, en tanto que ninguna de estas instancias tendr6n una personalidad juridica propia y distinta de la del FMCN. ANNEX 9 Page 2 of 9 Art.3.- El CTFANP estara integrado por siete miembros. Seran nombrados por el Consejo Nacional de Areas Naturales Protegidas (CONANP), preferentemente, pero no exclusivamente, de entre sus miembros y deberan ser ratificados por el Consejo Directivo del FMCN, a quien el CTFANP deberia reportar. Art.4.- En aras de una adecuada representaci6n de los intereses generales y comunes de la sociedad mexicana e internacional en lo referente a la conservaci6n y uso de la biodiversidad presente en las Areas Naturales Protegidas del pafs, siete de los integrantes del CTFANP habr6n de provenir de los sectores que se enumeran a continuaci6n. Ninguno de los sectores podrd representar mas del 30% del CTFANP. a) Iniciativa Privada, sector empresarial, b) Gobierno Federal, sector publico c) Universidades o Centros de Investigaci6n, sector acad6mico. d) Organizaciones Conservacionistas no Gubernamentales y e) Organizaciones Sociales, Indrgenas o Campesinas, sector social. CAPITULO SEGUNDO DE SUS FUNCIONES Y RESPONSABILIDADES Art.5.- El CTFANP ser6 el instrumento de enlace entre el FMCN y el INE-SEMARNAP y entre el FMCN y los Directores de las Areas Naturales Protegidas financiadas a trav6s del Fondo para las Areas Naturales Protegidas. Entre sus responsabilidades especificas se pueden enlistar las siguientes: a) Desarrollar los manuales administrativos y de procedimientos necesarios para aplicar los recursos provenientes de los fondos GEF y los de otras fuentes que ingresen al FANP para apoyar a las ANP, asi como las politicas y normatividad aplicable a las licitaciones y subcontratos, asi como las relativas a adquisiciones. b) Elaborar la descripci6n de puesto y el perfil profesional del Director Tecnico del Fondo para las Areas Naturales Protegidas (DTFANP) y conducir el proceso de convocatoria, evaluaci6n, selecci6n y designaci6n del mismo. En su oportunidad decidir sobre la conveniencia de su destituci6n o reemplazo. c) Informar y servir de enlace con el Consejo Nacional para las Areas Naturales Protegidas. d) Emitir una opini6n al INE sobre los Programas Operativos Anuales de las Reservas y sobre las necesidades generales compartidas por varias reservas (POA central). e) Evaluar los presupuestos anuales consolidados que se deriven de los Programas Operativos Anuales de cada area y los costos de operaci6n del propio CTFANP y la Direcci6n T6cnica y proponerlos al Banco Mundial y al Consejo Directivo del FMCN, para su aprobaci6n. f) Conocer y mantener al dia la informaci6n sobre la disponibilidad y el ejercicio de recursos para las ANP g) Coordinar y evaluar los programas de trabajo y los reportes de actividades del DTFANP y su personal as[ como los procesos de auditoria a los diferentes receptores de los recursos. h) Elaborar y proponer una estrategia de procuraci6n de fondos para las ANP. i) Resolver cualquier situaci6n o conflicto que pudiera presentarse con respecto a la aplicaci6n de los recursos y en su caso solicitar la intervenci6n del Consejo Directivo del FMCN para la resoluci6n del mismo. Esto deberd incluir el Sistema de Respuesta a Desastres Naturales cuyo funcionamiento se describe en el anexo I de este documento. ANNEX 9 Page 3 of 9 j) Autorizar e instruir al Fondo para las Areas Naturales Protegidas del FMCN para que 6ste provea fondos a los Directores de las Reservas que corresponda seg6n lo establecido en los Convenios respectivos con las Autoridades, sea para el ejercicio ordinario de sus POA o para cubrir alguna emergencia o imprevisto (conforme a los procedimientos especificos de acceso a los Fondos de Emergencia). k) Designar las comisiones y a los miembros de las mismas, de acuerdo con las necesidades que se presenten en el cumplimiento de los fines del propio CTFANP y del Fondo para las Areas Naturales Protegidas I) Decidir sobre la suspensi6n de los pagos o ministraciones a las Reservas cuando por votaci6n de la mayorfa num6rica de sus miembros asi se resuelva habiendo causa justificada para ello (como lo podria ser el contravenir los procedimientos de ejercicio aprobados) m) Resolver sobre cualquier otro asunto relativo al adecuado manejo y operaci6n del Fondo para las ANP, dentro de los limites y facultades que senialan el propio Contrato del FMCN con el Banco Mundial y la SEMARNAP para el caso de los recursos GEF, o cualquiera otro instrumento legal aplicable suscrito por el FMCN en relaci6n con las ANP y los t6rminos de este mismo reglamento. n) Autorizar las auditorias preventivas y correctivas a que haya lugar para velar por el 6ptimo uso de los recursos para las dreas naturales protegidas o) Resolver, en su momento, sobre la conveniencia de ampliar las actividades de este fondo a otras 6reas naturales protegidas y/o otras acciones de conservaci6n p) Las demas que el CONANP y el FMCN consideren prudente solicitarle cumplir y que concuerden con el esp[ritu y naturaleza del propio CTFANP q) Aplicar el Sistema de Respuesta Inmediata a los Desastres Naturales de acuerdo al procedimiento establecido como anexo I del presente reglamento. Art.6.- El CTFANP se apoyard en un Director T6cnico del Fondo para las Areas Naturales Protegidas (DTFANP) que tendra como responsabilidad primaria el seguimiento de la operaci6n de este nuevo mecanismo de canalizaci6n de apoyo financiero a las ANP de recursos privados o externos. Art.7.- Sin perjuicio a la habilidad y capacidad del Consejo directivo del FMCN de proveer recomendaciones en cualquier asunto tema del presente reglamento, las decisiones del CTFANP deberdn ser respetadas por 6ste, siempre y cuando no pongan en riesgo la integridad financiera del FANP o del mismo FMCN o contravengan sus respectivas misiones. Art.8.- El CTFANP a trav6s del DTFANP y con la informaci6n que le provean las areas respectivas del FMCN tendra la obligaci6n de notificar con oportunidad (6 meses antes) a los Directores de las Reservas y al INE sobre la disponibilidad de recursos prevista para el ejercicio inmediato posterior, a fin de que 6stos puedan realizar las consultas a que haya lugar y preparen en tiempo y forma los proyectos de POA para el siguiente ejercicio. Art.9.- Se considerara conflicto de intereses cuando un miembro del CTANP o el Director del CTANP: a. Se encuentre directamente involucrado en el proyecto, contrato, acuerdo o conflicto que tenga que resolver el CTANP, o bien, tenga inter6s directo en el asunto encomendado. b. Est6n involucrados en la resoluci6n que deba tomar el CTANP o bien, en el asunto que se le encomiende; su c6nyuge, sus parientes consanguineos en lfnea recta sin limitaci6n de grados, colaterales dentro del cuarto grado o los afines dentro del segundo. ANNEX 9 Page 4 of 9 c. Hubiere parentesco de consanguinidad dentro del cuarto grado o de afinidad dentro del segundo, con cualquier persona involucrada en el conflicto o resoluci6n que deba tomar el CTANP, o asunto encomendado. d. Exista amistad o enemistad manifiesta entre las partes involucradas en el conflicto o resoluci6n que deba tomar el CTANP o bien, en el asunto encomendado. e. Tenga o haya tenido relaci6n de servicio con la persona ffsica o moral involucrada en el conflicto o resoluci6n que deba tomar el CTANP o en el asunto encomendado. f. En cualquier situaci6n en la cual pueda surgir un conflicto de intereses entre los miembros del CTANP y algOn tercero que tenga inter6s en los asuntos del Fondo de Areas Naturales Protegidas. Las situaciones sefialadas anteriormente, deber6n hacerse del conocimiento del CTANP o bien del Consejo Directivo del FMCN de manera previa a la toma de cualquier decisi6n o resoluci6n. CAPITULO TERCERO DE SU ESTRUCTURA Art. 10.- El CTFANP estara integrado por siete miembros voluntarios. Las funciones de coordinaci6n de 6ste seran responsabilidad de un Secretario T6cnico. Contar6 con un Presidente y un Vicepresidente. Art. 11.- El CTFANP sera renovado a raz6n de dos miembros por aho a partir del tercer ahio de su establecimiento. El proceso de renovaci6n serd por sorteo de entre sus miembros en un principio y por antigOedad posteriormente. En la renovaci6n del CTFANP habr6 de garantizarse en todo momento conservar el car6cter plural de su composici6n de acuerdo con lo estipulado en el articulo 40. del presente Reglamento Interno. Art.12.- La elecci6n de los cargos dentro del CTFANP la hard el propio Comite, de entre sus miembros, en su primera sesi6n de trabajo, excepto el cargo de Secretario T6cnico que habra de desempenar el Director T6cnico del FANP. Art.13.- Los cargos de Presidente y Vicepresidente seran ocupados preferentemente por miembros del CONANP. Art. 14.- Seran facultades y obligaciones del Presidente las siguientes: a) Representar al CTFANP ante el FMCN, el INE-SEMARNAP y el CONANP. b) Presidir las sesiones del CTFANP c) Informar y enviar a la autoridad ambiental y a los aportantes al Fondo para las Areas Naturales Protegidas por escrito: i) El informe anual de las actividades financiadas en las Reservas o ANP, ii) Los estados financieros auditados del Fondo para las ANP, asi como el dictamen del auditor. d) Convocar a reuniones de Comit6 por lo menos dos veces en un aho. e) Girar instrucciones y verificar el debido cumplimiento de los acuerdos tomados por el Comite T6cnico. f) Delegar en el Vicepresidente o en el Director T6cnico alguna de sus facultades. ANNEX 9 Page 5 of 9 g) Las demas que se le confieran mediante acuerdo del CTFANP o que se desprendan por interpretaci6n de este reglamento. Art.1 5.- Ser6n facultades y obligaciones del Vicepresidente, las siguientes: a) Asumir las responsabilidades, facultades y obligaciones que le confiera el Presidente. b) Ser el enlace del CTFANP con otros Comit6s T6cnicos del FMCN c) Las demas que se le confieran mediante acuerdo del Comite Tecnico. Art.16.- Ser6n facultades y obligaciones del Director T6cnico del FANP en su cardcter de Secretario T6cnico del CTFANP, las siguientes: a) Las que le confiera el Presidente. b) Enviar a los miembros del CTFANP los documentos que le instruya el Presidente. c) Notificar al CONANP sobre el nombramiento o cambios en los cargos de los miembros del CTFANP. d) Convocar a sesi6n a los miembros del CTFANP. e) Tomar la lista de asistencia en las sesiones del CTFANP, verificar el qu6rum, computar la votaci6n sobre acuerdos que se tomen. f) Formular las Actas derivadas de las sesiones del CTFANP, recabar las firmas de los asistentes y realizar todas las gestiones necesarias para la formalizaci6n de las actas. g) Llevar un control de seguimiento para certificar la adecuada atenci6n o resoluci6n de los acuerdos tomados por el CTFANP. h) Representar al CTFANP ante los Directores de las Reservas o ANP. i) Llevar el archivo y descargo de la correspondencia del CTFANP. j) Las demas que se le confieran mediante acuerdo del Comite Tecnico. CAPITULO CUARTO DE LAS REUNIONES DEL COMITE Art.17.- El CTFANP podr& reunirse en cualquier lugar dentro del territorio de la Rep6blica Mexicana. Podra sesionar cuando alguno de sus integrantes lo considere necesario y asf lo exprese con el apoyo de otros dos miembros en una notificaci6n por escrito al Secretario Tecnico del CTFANP para que sea 6ste el que expida la convocatoria correspondiente. Art.18.- Anualmente se realizardn al menos tres reuniones del CTFANP. Una para la revisi6n de las propuestas de Programa Operativo para el siguiente ejercicio fiscal, para analizar y autorizar el presupuesto anual a ejercer por parte del Director T6cnico del Fondo para las ANP y para dar las instrucciones al FMCN sobre la administraci6n de los recursos. Esta primera reuni6n se realizard cuando menos 120 dias antes del fin del ejercicio fiscal anual. Una o varias sesiones para conocer de los avances en el desarrollo de los POA's en las ANP, segun se estime necesario y una reuni6n que se llevar6 a cabo a mas tardar 90 dias despu6s de finalizado el ejercicio fiscal, con el prop6sito de revisar los resultados tecnicos, financieros, auditorfa y dictamen fiscal del programa Operativo del ejercicio inmediato anterior. Art.19.- Las convocatorias para las sesiones del Comit6 deberdn ser entregadas personalmente o enviadas por escrito a cada uno de los Miembros cuando menos con quince dias de anticipaci6n a la fecha de la sesi6n, por correo certificado, telefax, correo electr6nico o por Servicio de Mensajeria a la ultima direcci6n que dichos destinatarios hayan registrado con el ANNEX 9 Page 6 of 9 FMCN o con el CTFANP a trav6s de su Secretario T6cnico. La convocatoria contendra la hora,fecho, lugar y orden del dia de la sesi6n y deberd ser firmada por el Presidente, el Vicepresidente o el Secretario Tecnico. Art.20.- Si por falta de qu6rum la sesi6n no pudiera celebrarse el dfa sesialado para la reuni6n, se har6 una segunda convocatoria autom6ticamente (sin mediar nueva solicitud), dentro de los tres dias siguientes, con expresi6n de esta circunstancia y en la junta, se resolver6 sobre los puntos indicados en el orden del dia, requiri6ndose para ello cuando menos la presencia de la mayorfa de los Miembros del Comit6; las decisiones se tomardn por el voto favorable de la moyoria de los Miembros del Comite presentes en la sesi6n. Art.21.- Las sesiones del Comite serdn presididas por el Presidente y a falta de 6ste por el Vicepresidente, en ausencia de 6ste por el Secretario T6cnico. Art.22.- Para que la reuni6n del Comite T6cnico se reconozca como valida habr6n de encontrarse presentes cuando menos la mayorfa simple de los miembros del CTFANP y haber mediado el procedimiento de convocatoria descrito. Art.23.- Las decisiones para cualquier asunto referente al Fondo para las Areas Naturales Protegidos se tomar6n como oficiales del CTFANP, siempre y cuando se haya alcanzado en la votaci6n la mayorfa numerica. Art.24.- Cada uno de los miembros del Comite tendr6 voz y voto en las sesiones del mismo. No habr6 voto de calidad. Asimismo, podr6 abstenerse de emitir su voto, sin embargo, una vez adoptoda alguna resoluci6n en una sesi6n, a pesar de su abstenci6n, 6ste no podra rectificar. Art. 25.- El Secretario T6cnico levantor6 un Acta de toda sesi6n del CTFANP la que sera firmada por lo menos por el Presidente y el Secretario. A las actas se agregaran la lista de asistencia y los documentos que justifiquen que la convocatoria se realiz6 en los t6rminos previstos en el presente Reglamento. Art. 26.- El Director T6cnico del Fondo en para las Areas Naturales Protegidas en su cardcter de Secretriao Tecnico del Comite debera asistir a todas las sesiones del CTFANP. ANNEX 9 Page 7 of 9 TRANSITORIOS Art. Primero.- El CONANP en su sesi6n ordinaria del 2 de septiembre de 1996 acord6 autorizar al FMCN para que a trav6s de un Fondo para las Areas Naturales Protegidas supervisado por un Comit6 T6cnico especffico administre los recursos provenientes del GEF para canalizarlos a trav6s de los Directores de las Reservas y para el caso del llamado "POA Central" a traves de las oficinas centrales del INE. Art. Segundo.- Por designaci6n del CONANP en su sesiones ordinarias del 28 de octubre y 2 de diciembre de 1996 se constituyen como el primer Consejo Tecnico del Fondo para las Areas Naturales Protegidas las siguientes personalidades: 1. Mauricio Ruiz Galindo (sector privado) 2. Deocundo Acopa Lezama (sector social) 3. Sebasti6n Poot Balam (sector social) 4. Jorge Sober6n Mainero (sector academico) 5. Exequiel Ezcurra Real de AzOa (sector acad6mico) 6. Javier de la Maza Elvira (sector publico) 7. Juan Bezaury Creel (organizaciones no gubernamentales) Art. Tercero.- De conformidad con lo que senala el articulo 11 de este reglamento, el propio Consejo T6cnico debe definir quienes ocupar6n los cargos de Presidente y Vicepresidente, el DTFANP designado ocupard ex-oficio el cargo de Secretario Tecnico del Consejo, en tal virtud, en su primer sesi6n de trabajo el Consejo Tecnico eligio a Don Mauricio Ruiz Galindo como el primer Presidente del mismo y al Dr. Exequiel Ezcurra Real de Azua como su Vicepresidente. ANNEX 9 Page 8 of 9 Anexo 1 SISTEMA DE RESPUESTA INMEDIATA A LOS DESASTRES NATURALES El Comite T6cnico del Fondo para las Areas Naturales Protegidas, habiendo recabado la opini6n favorable del Instituto Nacional de Ecolog[a y del Consejo Consultivo Nacional para las Areas Protegidas, formula y emite la presente propuesta de Sistema de Respuesta Inmediata a los Desastres Naturales del FANP, mismo que estara a disposici6n de los Directores de las diez Reservas beneficiarias de los recursos del FANP detalladas en el Reglamento Interno. El Sistema de Respuesta Inmediata a los Desastres Naturales tiene como prop6sito el proveer recursos extraordinarios (i.e. adicionales a los que canaliza para cubrir el POA), para la atenci6n de las necesidades excepcionales que las areas naturales protegidas puedan requerir como consecuencia de desastres naturales o accidentes. Origen de los fondos: Los fondos para este prop6sito provendr6n de la reserva de capital del Fondo para las Areas Naturales Protegidas de acuerdo a lo establecido en el manual de operaciones del mismo. El acceso a los recursos del Fondo de Emergencia estar6 abierto a las diez Reservas beneficiarias de los apoyos del GEF, en todo momento y cuantas veces sea necesario hasta alcanzar un limite de 10% del ejercicio previsto para todas las 6reas. De acuerdo a lo establecido en el documento de actividades elegibles, s6lo ser6n cubiertas actividades que son obviamente impredecibles e imprevisibles, cuya necesidad sea consecuencia de una contingencia (desastre natural ) comprobable y cuya atenci6n se estime critica para la continuidad de la operaci6n del drea natural protegida y ia salvaguarda de los recursos que esta contiene. No ser6n cubiertas otras actividades no previstas o no presupuestadas que a lo largo del desarrollo del POA se antojen necesarias. El ejercicio de este seguir6 las mismas reglas que se sigan para el ejercicio del presupuesto regular del &rea protegida. En la eventualidad de una contingencia, conforme los t6rminos antes descritos, se seguir6 el siguiente procedimiento para el empleo de los recursos del Sistema de Respuesta a Desastres Naturales: 1.- El Director de la Reserva plantear6 por escrito, al DTANP, la necesidad de atender una emergencia comprobable, describiendo la naturaleza de la misma, el presupuesto requerido y las actividades a realizar. 2.- El DTANP somete la solicitud al CTFANP para su evaluaci6n y aprobaci6n, misma que podr6 otorgar el Presidente del CTFANP (o a quien 6ste designe) junto con cuando menos uno de sus miembros. Recabada la autorizaci6n, el DTFANP lo comunicar6 al Director de la Reserva y procederd a radicar los fondos autorizados, en una o varias ministraciones dependiendo del monto en cuesti6n. 3.- Con la autorizaci6n y aun cuando no haya recibido los fondos, el Director de la Reserva podrd hacer los gastos a que haya lugar y reembolsarlos a partir de los recursos que reciba del Sistema de Respuesta a los Desastres Naturales. 4.- El Director de la Reserva enviara un informe, t6cnico y financiero, al CTFANP sobre el ejercicio de los fondos recibidos a mas tardar 60 dias despu6s de la fecha de recepci6n de la ultima ministraci6n. ANNEX 9 Page 9 of 9 Algunos ejemplos de estas actividades relacionadas con el Sistema de Respuesta a los Desastres Naturales son: a) control y combate de incendios que sobrepasen la capacidad de combate prevista en el POA. b) tareas de rescate, c) gastos hospitalarios y medicos mayores para el personal que participe directamente en al resoluci6n de la contingencia d) acordonamiento y sefializaci6n de una zona que sobrepasen la capacidad de acci6n de acuerdo al POA autorizado e) reparaciones a instalaciones, infraestructura o equipo resultado de un desastre natural Todos aquellos gastos adicionales extraordinarios que requieran de un desembolso inmediato y que est6n directamente relacionados con un desastre natural. VERSION APROBADA POR EL COMITE TECNICO DEL FANP, DURANTE SU REUNION DE MAYO 13 DE 1997 EN LAS OFICINAS DEL FMCN EN LA CIUDAD DE MEXICO. MEXICO: PROTECTED AREAS PROJECT Monitoring and Evaluation Indicators (a) Development Objectives: Impact Indicators Narrative Summary Performance Indicators Data Source Assumptions 1. Conservation of significant 1.1 Stabilization or improvement in 1.1. I Remote image inter- GOM continues to biodiversity in 10 protected natural habitat cover (for each PA) pretation of satellite data implement policies/programs areas (PA) 1.1.2 Ground-truthing aimed at promoting sustainable use of natural 1.2 Stabilization or improvement in 12.1 Census in selected resources demographic status of indicator areas in years 1, 5, 10. etc. Next Administration pursues species (for each PA) same goals Sustainable use activities 2. Sustainable resource use in 2.1 Increased knowledge and adopt- 2.1.1 Rapid rural appraisals generate income levels satis- buffer zone surrounding each ion of biodiversity-friendly land use/ of sustainable use practices factory to families/economic PA resource use practices by commun- 2.1.2 Community attitude agents ities and economic agents in PA surveys in years 1,5,10, etc. buffer zones 2.1.3. Participatory monit- oring and evaluation 2.2 Stabilization of human encroach- 2.2.1. Periodic census of ment areas of human settlement o o MEXICO: PROTECTED AREAS PROJECT Monitorng and Evaluaton Indicators (b) Development Objectives: Outcome Indicatofs Narrative Summary Performance Indicators Data Sourme Assumptions I. Effective implement- 1.1. Qualified, trained PA manage- 1.1. PA Director reports, super- GOM continues to assign ation of PA management ment team (INE permanent vision missions priority to SINAP plans personnel) in post 1.2 Implementation of POA at res- 1.2.1. FANP reports/PA Direc- FANP mechanism works erve level witbin expenditure norm tor reports smoothly (80-lI W/o FANP budget allocation to reserves) 1.3.1. INE Annual Report 1.3.2. Independent evaluations, 1.3 Implementation of POA within supervision missions, mid-term satisfactory technical norms review, final review 2. Local participation in 2.1. PA maniagement plans reflect 2.1.1. Attitude surveys of CTA Local communities/economic conservation and sustain- local/regional consensus on members agents interested in participat- able use activities conservation'sutainable use ing 2.2. Number/% of fantilies (includ- 2.2.1 POAs, including IfDP GOM continues to support ing indigenous) participating in sus- section; INE Annual Reports; decentralization efforts tainable use projects in buffer zone independent evaluations, ethnographic studies. 2.3. Nunber of agreements reached with local communities and 2.3.1. POAs TB Annual economic agents to apply sustain- reports. N, able use practices within identified o o _______ multiple use zones _ ___ _ MEXICO: PROTECTED AREAS PROJECT Monitoring and Evaluation Indkators (b) Development Objectives: Outcome Indicators (continued) Narrative Summary Performance Indicators Data Source Assumptions 3. Adequate and timely 3.1. FANP investment perfomance 3.1.1. Asset manager quarterly Skilled investment manage- fimding available for basic meets or exceeds target norms reporls and annual performance me-nt, economic volatility not a conservation and sustain- audits significant issue able use activities 3.2 Fisca support for [NE peman- ent stafloperating costs in the PAs 3.2.1. INE consolidated POA/ GOM continues to give priority meets or exceeds agreed norms reports by PA Directors to SINAP 3.3 Increase in fimding available 3.3.1. POAs, Independent for sustainable use activities evaluations, mid-term review Parnership witb other through PA POA (FANP, GOM, mission. etc. organizations sustained FMCN, NGOs. etc.) 3.4. FANP fimd-raising target of 3.4. FANP reports US$5 million in additional Perspective donor willingess resources met or exceeded by 2001 to support protection/sustainable use activities through endowment mechanism os z fD m o ) 00 MEXICO: PROTECTED AREAS PROJECT Monitoring and Evaluation Indicators (c) Project Management: Output Indicators Narrative Summary Performance Indicators Data Source Assumptions 1. Basic consenration 1.1. Customized indicators per 1.1. PA Director reports Funding available on a timely program in operation in the reserve, based on threats and 1.2. INE Annual Performance basis 10 reserves particular characteristics Report 1.3. Independent evaluations . Basic community 2.1. Number of environmental 2.1/2.2/2.3. POAs for each Active outreach to community parficipation program in education programs carried out/ reserve, including IPDP groups by PA "jefes de operation in the 10 reserves beneficiaries reached sections proyecto" 2.2. Number of sustainable use 2.1./2.2.12.3. INE Annual Effective coalition-building by projects approved and in operation Performance Reports PA Directors 2.3. Number of CIA taining workshopsiCTA members tained 2.4. CTAs established and meeting 2.4.1. CTA meeting minutes. regularly with PA management in comments on management each reserve plans and/or POAs Basic management 3.1. Number of PA management 3.1.1. INE Annual Perform- Framework for taining strengthening programs in teams trained in modem PA ance Report activities for PA staff (both operation in the 10 reserves management techniques permanent and contracual staff) 3.2. Impro ed PA management 3.2.1. Superision missions, systems in operation at the reserve independent evaluations, nid- level term review MEXICO: PROTECIED AREAS PROJECT Monitoring and Evaluation Ilndicators (c) Project Management: Output Indicators (continued) Narrative Summary Performance Indicators Data Source Assumptions 4. improved program 4.1. INE consolidated report Supervision missions Inproved management systems coordintfion and superv- complete and submitted vllithin at [NE central level ision of the project PAs at FANP time norms the national level 4.2. Consuttations between INE Good coordination between .. . . . lNESh~~~~~~~qFeadzxuatrts and INE/field central level and reserve elsd plannedlexecuted in timely anner level 4.3. INE annual perfonnance report issued according to agreed timetable 4.4. Independent evaluations organ -ized/executed according to agred timetable - 5. FANP endowment 5.1. FAN? approval cycle and 5.1. FANP reports Good coordination between mechanism established and fimding cycle operated %ithout FMCN and INE functioning material delays (10 working days) 5.2. Supervision missions 5.2. Capital reserve established for Good cNoordination between emergency and remivestaent OWN, INE, and WB at critical purposes jimctures in funding cycle 5.3. Fund-raising strategy approved DQZ by CTFAN-P/FMCN; and under implementation o 0 0 5.4. Admin. costs within target .___________ _ snorms and not exceeding 12% of ANNEX 10 Page 6 of 9 I I -A MEXICO: PROTECTED AREAS PROJECT Mo.nitring and Evaluation lndicaton (d) Project Management: ComponentsdActivities Namtive Sunmmry input Data Source Asm ptions A. Berv&e Cxnsnai US$ 3-3.3 million per year for: Activities will be monitored Specific targets will be updated lamz~zu labor. equipment, materials, operat- through regular reporting and on an annual basis through the 1. Conservation Activities ing costs, specialised TA, training supervision missions FANP funding approval cycle * firefighting activities, workshops, meeting * enforcement expenses. travel. Specific physiial indicators * pathways/markers will be reviewed through the * rustic infirstucture annual FANP approval cycle . exotic species eradication * site rehabilitation 2. Community Participa- tion Activities * enNironmental edu- cation * capacity building workshops . sustainable use proj-ects (desigp and operation) 3. Managemnent Strength- eningActivities * training for PA 0 reserve staff CTA meetings _ MEXICO: PROTECTED AREAS PROJECT Mositoring and Evaluation Indicaters (d) Project Management Components/Activ ities (continued) Narrative Summary Inputs Data Source Assumptions B. Cenal nUSS 150,000 per year for: program Activiies will be monitored Specific tarets will be updated Progm coordinator. trining activities, through regul rvporting and on an annual basis through the * organLization of PA specialized expertise, procurement supervision missions FANP fimding approval cycle training activities costs, report prpaation. * organization of Specific physical indicatos CTA training will be reviewed through the activities annual FANP approval cycle * procurement plan- ning for 10 reserves * organization of in- dependent evaluation missions * prep/approval of INE consolidated POA (reserve and central levels) * preparerissue INE annual performance report C. FANP Endovmi=t US$ 150,000 per year for. FMCN Activities will be monitored Specific targets will be updated * management of incremental operating costs assoc- through regular reporting and on an annual basis through the (D M capital endowment iated with management of the supervision nissions FANP funding approal cycle co >c * managmt of FANP: staf£ office expenses, spec- o o funding mechanism ializcd expertise, services, travel, Specific physical indicators for FANP -eligible audits, etc. will be reviewed tbrough the activities annual FANP apptoval cycle hind msbmg activities 00 ANNEX I 1 Page 1 of 3 ] ~~~FOANDOPARA |MANIJAL DEOPERACIONES |R AF-AS NATURA LES PRO TF,GIDAS| 1. Contenido 1.1 Indice 1. Contenido 1.1 indice 1.2 Guia de utilizaci6n 1.3 Lista de acr6nimos 2. Antecedentes 3. Estructura de la organizaci6n 3.1 Misi6n y objetivos del FANP 3.2 Descripci6n del FMCN 3.3 Organigrama del FMCN 3.4 Reglamento interno del CTFANP 3.5 Descripci6n y responsabilidades del DFANP 3.6 Descripci6n y responsabilidades del DR 3.7 Descripci6n y responsabilidades del Coordinador Central 4. Actividades elegibles 4.1 Actividades y rubros elegibles 4.2 Aportaci6n m6xima de recursos FANP 4.3 Nivel de gasto 4.4 Elegibilidad de ANPs 4.5 Receptores elegibles 5. Calendarizaci6n 5.1 Calendarizaci6n de actividades 5.2 Ciclo de proyecto 5.3. Calendarizaci6n de reportes y desembolsos 5.4. Ciclo de reportes y desembolsos 6. Politicas institucionales 6.1 Conflicto de intereses 6.2 Condiciones de efectividad 6.3 Criterios de medio ambiente 1 ANNEX 1 1 Page 2 of 3 FONDO0 PAPA MANUAL DE OPERACIONES . (RRAS AA T1!JRA i.F PRFS TFIfA, 1. Contenido 7. Fuentes de recursos 7.1 Capitalizaci6n 7.2 Manejo financiero 7.3 Recursos provenientes de la compra de deuda pu'blica externa 7.4 Acceso a fondos complementarios 8. Adquisiciones y contrataciones 8.1 Adquisiciones 8.2 Contrataciones de consultores o servicios 8.3 Personal temporal complementario 9. Procedimientos administrativos 9.1 Contabilidad general 9.2 Cuentas bancarias 9.3 Ministraciones y recibo de efectivo 9.4 Desembolsos 9.5 Caja chica 9.6 Inventarios 9.7 Presupuestos 9.8 Reportes financieros 9.9 Guardado de libros y documentos 10. Monitoreo y evaluacion 10.1 Monitoreo y evaluaci6n general 10.2 Indicadores para actividades de conservaci6n en las ANPs 11. Formatos administrativos 11.1 Formato de conciliacion bancaria 11.1 Reporte financiero consolidado cuatrimestral 11.3 Reporte de dep6sitos y desembolsos 11.4 Desglose por periodo por actividad elegible 11.5 Desglose total anual por actividad elegible 11.6 Total anual por actividad elegible 11.7 Solicitud de cheques 2 ANNEX 1 1 Page 3 of 3 MANUAL DE OPERACIONES FONDO PARA4 . REAS NATIR[F. RTSh. 1. Contenido 11.8 Recibo de caja chica 11.9 Forma de registro de caja chica 1 1.10 Certificaci6n de reportes financieros 12. Anexos 12.1 Convocatoria del FMCN 97-98 12.2 Carta responsiva 12.3 Registro Federal de Causantes del FMCN 12.4 Documento proyecto 12.5 Listado calificado de individuos y empresas consultoras 12.6 Listado o registro de proveedores de materiales de equipo 12.7 Contrato con el agente financiero 12.8 Convenio subsidiario entre el FMCN y la SEMARNAP 12.9 Convenio de donaci6n GEF 3 ANNEX 12 Page 1 of 4 ACTIVIDADES Y RUBROS PRESUPUESTALES "ELEGIBLES" (Susceptibles de ser cubiertas con financiamiento del GEF) Documento elaborado por el Cornite de Disefno del Consejo Nacional para las Areas Protegidas y aprobado por el Comite Tecnico del Fondo para las Areas Naturales Protegidas Enero 1997 1.- ANTECEDENTES La relaci6n de rubros que se presenta a continuaci6n desglosa las actividades que son susceptibles de ser financiadas con recursos GEF. Uno de los criterios acordados para definir la elegibilidad de las actividades fue su condici6n de "basicos", es decir su caracter de actividades indispensables para garantizar la continuidad de la operaci6n de la Reserva en cuesti6n, en el entendido de que ellas complementan el financiamiento de otros rubros basicos que cubre ya el Gobierno de Mexico a traves de sus instituciones. Los rubros no incluidos en esta relaci6n habran de ser cubiertos con fondos provenientes de otras fuentes. Los porcentajes de cobertura maxima se detallan en la tabla al final del documento. 2.- RUBROS ELEGIBLES A) GASTOS BASICOS DE OPERACION (oficina del area natural protegida) Renta de oficina Viaticos Pasajes Telefono/Fax Papeleria, material de oficina Mensajeria Estos rubros podran ser cubiertos con recursos GEF s6lo los dos primeros anlos de operaci6n del Fondo para las Areas Naturales Protegidas (de forma decreciente). Despues de ese plazo sera responsabilidad del Gobierno el cubrir o recaudar los fondos necesarios para estas actividades. I ANNEX 12 Page 2 of 4 B) EQUIPO BASICO PARA OPERACION Vehiculos (camionetas, camiones, lanchas, etc.) Otros medios de transporte (bestias, bicicletas, etc.) Equipo de radio-comunicaci6n Equipo de campo Instrumental de medici6n (aparatos o equipo) Herramientas varias Mobiliario y equipo de oficina Se refiere tanto a la compra como a la renta del todo, partes o refacciones del equipo en cuesti6n. La proporci6n de los recursos necesarios para cubrir estos rubros que sera cubierta con recursos GEF decrecera gradualmente en los primeros tres afios y se mantendra constante a partir de ese momento. C) ACTIVIDADES BASICAS DE CONSERVACION Inspecci6n y vigilancia Control/protecci6n y monitoreo de especies clave (indicadoras o ex6ticas segun corresponda). Prevenci6n, control y combate de incendios Sefializaci6n, senderos Zonificaci6n (deslinde/amojonamiento) Comunicaci6n, difusi6n, y promoci6n Educaci6n ambiental Restauraci6n ecol6gica (rehabilitaci6n) Obras de infraestructura menor Personal temporal complementario como jefes de proyecto, trabajadores eventuales investigadores y asistentes de investigaci6n Las actividades basicas de conservaci6n pueden implicar la contrataci6n temporal de personal directamente por la Administraci6n de la Reserva, por ejemplo las cuadrillas para combate de incendios o un equipo para levantamiento y amojonamiento. Los subcontratos se regiran por los procedimientos que defina el Comite Tecnico del Fondo para las Areas Protegidas. D) ACTIVIDADES BASICAS COMUNITARIAS Capacitaci6n ambiental Disefio de pequefios proyectos Implementaci6n de pequeffos proyectos productivos de manejo y uso sostenible Los pequefios proyectos productivos (PPP) seran identificados a traves de actividades basicas de conservaci6n, educaci6n, o los programas de desarrollo de pueblos indigenas. Se requerira una contrapartida de 25% que podra ser cubierta en especie para aquellos proyectos que rebasen los 10,000 dMlares de costo. 2 ANNEX 12 Page 3 of 4 Ejemplos de este tipo de actividades pudieran ser proyectos de agricultura organica, cultivo de mariposas, producci6n de artesanias, ecoturismo, etc. Los recursos del Fondo de Areas Naturales Protegidas del GEF seran considerados para este prop6sito como una fuente de ultimo recurso toda vez que existen fuentes alternas de financiamiento entre ellas por ejemplo la convocatoria anual a proyectos de conservaci6n del FMCN. E) ACTIVIDADES BASICAS DE CAPACITACION Capacitaci6n del personal de la reserva Capacitaci6n y entrenamiento de los CTA's Talleres y viaticos relacionados con la capacitaci6n F) ACTI'VIDADES BASICAS DE COORDINACION Sueldo de un coordinador en el INE oficina Mexico Viaticos (incluye transportaci6n) Inserciones pagadas (convocatorias) Talleres para Directores de Reservas Talleres de fortalecimiento de CTAs Auditorias tecnicas Se refiere a las actividades basicas que desde las oficinas centrales se realizan para coordinar, evaluar, dar seguimiento y apoyar el trabajo en las Reservas, es decir las actividades que se han incorporado en el pasado dentro del denominado "POA central". G) ADMINISTRACION DEL PROGRAMA DENTRO DEL FMCN Sueldos y prestaciones del personal Consultorias Comisi6n por manejo financiero Viaticos (transportaci6n) Papelerfa y material de oficina Mensajeria Mantenimiento de equipo de oficina Mantenimiento de vehiculos Mantenimiento de infraestructura Mobiliario y equipo de oficina Comunicaci6n, difusi6n y promoci6n Publicaci6n Inserciones pagadas (convocatorias) 3 ANNEX 12 Page 4 of 4 Los conceptos anteriores se refieren al costo de administraci6n del programa dentro del FMCN y considera la creaci6n y operaci6n de un Comite Tecnico adicional (Comite Tecnico del Fondo de Areas Naturales Protegidas) y la contrataci6n de un equipo basico de trabajo integrado por un Director y dos Asistentes. 3.- RUBROS NO ELEGIBLES Personal Basico Gasto Corriente Basico Programas de Manejo Estos rubros seran cubiertos en su totalidad con recursos fiscales por lo cual no son elegibles de financiamiento con recursos GEF. Se les incorpora en esta relaci6n unicamente para reflejar el acuerdo al que se arriba con el Banco Mundial, el compromiso de las dependencias oficiales de Mexico y el visto bueno del Comite Tecnico del Fondo para las Areas Naturales Protegidas. APORTACION MAXIMA DE RECURSOS GEF (porcentajes por rubro) RUBRO PRESUPUESTAL 1998 1999 2000 2001 2002 A) GASTO BASICO DE OPERACION 50 25 0 0 0 B) EQUIPO BASICO PARA OPERACION 75 50 50 50 50 C) ACTIVIDADES BASICAS DE CONSERVACION 100 100 100 100 100 D) ACTIVIDADES BASICAS COMUNITARIAS 100 100 100 100 l00 E) ACTIVIDADES BASICAS DE CAPACITACION 100 100 100 100 100 F) ACTIVIDADES BASICAS DE COORDINACION 100 100 100 100 100 G) ADMINISTRACION DEL PROGRAMA(FMCN) 100 100 100 100 100 4 ANNEX 13 Page 1 of 3 PROGRAMA GEF-FMCN PARA AREAS NATURALES PROTEGIDAS CICLO DE PROYECTO PARA LA APLICACION DE RECURSOS GEF A DIEZ AREAS NATURALES PROTEGIDAS. Este documento describe la secuencia de actividades necesarias para canalizar los recursos GEF (intereses) generados por el manejo financiero de la donaci6n de $15.5 millones de d6lares al Fondo de Areas Naturales Protegidas y forma parte integral del Manual Operativo y de Procedimientos de este Programa. Glosario: ANP Area Natural Protegida BM Banco Mundial CCE Coordinador de Credito Externo CAF Comite de Administraci6n y Finanzas del FMCN CTA Comite Tecnico Asesor CTFANP Comite Tecnico del Fondo para Areas Naturales Protegidas DFANP Director del Fondo para Areas Naturales Protegidas DR Director del Area Natural Protegida FMCN Fondo Mexicano para la Conservaci6n de la Naturaleza JUCANP Jefe de la Unidad Coordinadora de Areas Naturales Protegidas PDPI Programa de Desarrollo de Pueblos Indigenas POA Programa Operativo Anual Secuencia Inicio Conclusi6n Descripci6n I Jul. 1 Jul. 1 El CAF del FMCN informa al CTFANP sobre la disponibilidad de ingresos para el siguiente afio. 2 Jul.2 Jul.2 El CTFANP comunica esta informaci6n al JUCANP 3 Jul.3 Ju1.4 El JUCANP informa de la disponibilidad y monto de los recursos a los Directores de las 10 Areas Naturales y el Coordinador de Credito Externo (POA central) y solicita la elaboraci6n de los POA's individuales correspondientes. 4 Ju1.4 Ago.15 Los DR elaboran los POA's en coordinaci6n con los CTA's tomando en cuenta los PDPI's seguin proceda. 5 Ago. 15 Ago. 18 Los DR y el CCE someten los POA's a la consideraci6n del JUCANP para su revisi6n y aprobaci6n y envian copia de estos al DFANP para __________ _____ _________ recabar la opini6n del CTFANP. ANNEX 13 Page 2 of 3 6 Ago.18 Sept.lo. El CTFANP revisa los POA's, incluyendo el central y envia sus comentarios al JUCANP 7 Ago. 18 Sept. 1o. El BM envia una misi6n tecnica que aporta sus comentarios para que el JUCANP los integre a los POA's correspondientes. 8 Ago. 18 Sept. lo. El JUCANP revisa los POA's individuales y los aprueba o envia de regreso a los DR y los CTA para su reformulaci6n. 9 Sept. lo. Sept. 5 Los DR son informados por el FMCN de la aceptaci6n o rechazo de sus pequenos proyectos productivos comunitarios para su incoreporaci6n en el POA correspondiente 10 Sept. lo. Sept. 15 Los DR y el CCE reformulan los POA's y los vuelven a someter al JUCANP 11 Sept. 15 Sept. 25 El JUCANP autoriza los POA's individuales y los integra a un POA consolidado. 12 Sept. 25 Sept. 25 El JUCANP envia el POA consolidado al CTFANP 13 Sept. 25 Oct. 8 El CTFANP integra el gasto administrativo del FANP y elabora un Programa Anual de Gasto o Presupuesto Consolidado. 14 Oct. 8 Oct. 23 El CTFANP se asegura de que en el Presupuesto Consolidado aplique al normatividad del Manual Operativo y de Procedimientos y lo somete a la consideraci6n del oficial del BM encargado del proyecto. 15 Oct. 23 Nov. 12 El BM revisa el Presupuesto Consolidado e infonna al CTFANP y el JUCANP de su aprobaci6n. 16 Dic.12 Dic.12 El Presupuesto Consolidado es sometido a la consideraci6n y aprobaci6n del Consejo Directivo del FMCN quien gira instrucciones al CTFANP pra que lo ejecute e informe al INE-JUCANP de su aprobaci6n 17 Dic.12 Dic.13 El Director del FMCN notifica al BM de la aprobaci6n del Presupuesto Consolidado y solicita a este que gire instrucciones al agente financiero para la liberaci6n de los fondos correspondientes. 18 Ene.1 Dic.31 Se inicia la ejecuci6n del Programa Anual de Gasto de acuerdo al Presupuesto Consolidado aprobado y aplicando el Manual Operativo y de Procedimientos 19 Mar. 1 Abril 7 Los DR someten a la consideraci6n del CTFANP pequefios proyectos productivos de las comunidades presentes en las ANP para su ANNEX 13 Page 3 of 3 consideracion en la convocatoria en curso del FMCN. 20 Abril 7 May.9 Los pequenos proyectos productivos de las comunidades son presentados a traves de las organizaciones e instituciones locales correspondientes como propuestas de financiamiento dentro de la convocatoria del FMCN en curso. 21 Jul. 1 Jul. 1 Se repite el ciclo ANNEX 14 Page 1 of S ASSET MANAGEMENT INVESTMENT MANAGEMENT FIRMS Schroder Capital Mgmt. International (UK) Smith Barney (US) * Morgan Grenfell Asset Management (UK) * Morgan Stanley (US) Natwest Investment Management (UK) Jariskowsky Fraser & Co. Ltd. (Canada) * Kleinwort Benson Investment Mgmt. (German) * Canagex (Canada) Framlington Institutional Department (French) Phillips, Hager & North Ltd. (Canada) * Selected for short list ANNEX 14 Page 2 of 5 SELECTION CRITERIA CRITERIA WEIGHT1 COMMENTS Organization 10% - Ownership - publicly or privately held in accordance 2 with laws of country of establishment - # professionals - 200 or more investment professionals 1 - #/type of accounts - 100 or more accounts, with at 3 least 1% relevant to mandate - Assets under management - $1 billion or more 4 Investment Philosophy & Process 10% - Conservative to moderate style 2 - Decision-making process - mix of investment 2 professionals and investment committees - Discipline/Risk management - in line with industry 2 - Sound legal history - no major allegations/suits 4 Key Personnel for Mandate 25% - Experience - 30 combined years in field and firm 12.5 - Coverage - 1 or more Manager assigned to mandate 12.5 Client Relationship 5% - Reports and presentation quality - quarterly or more 2.5 and in line with industry - Compliance with policy - in line with contract 2.5 Financial proposals will only Fees and Transaction Costs 10% be considered for firms meeting the minimum qualifying points. Performance 30% - Relative to indices - meet or exceed S&P and EAFE 10 - Consistency - 5 or more years meet/exceed indices 20 Responsiveness to Request for Interest / Proposal 10% Non-responsive firms to be Letters excluded from further 5 consideration. - Response to scenario posed - degree completeness 5 - Response to information request - degree completeness (1) Miiimum Qualifying Points = 85 out of 100. ANNEX 14 Page 3 of 5 PRELIMINARY INVESTMENT GUIDELINES FANP - FMCN General Information 1. The client is a Mexican private foundation (FMCN) with a December 31 year end. 2. Revenues from the account will not be taxed. 3. No cash withdrawals are expected. 4. FMCN has a five-year time horizon. 5. Short-term fluctuation in value shall be considered secondary to long-term results. Investment Objectives 6. The primary objective for investing the assets of FANP shall be the preservation and enhancement of the value of the endowment capital through adequate diversification of high quality instruments, with an acceptable degree of risk. The portfolio rate of return over any four year period should also rank in the top quartile in the Outside Performance Measurement Evaluation. A secondary objective is to provide capital preservation in real terms. Over four-year moving average periods, the portfolio is expected to provide an annual rate of return of at least 6.5% over inflation. Performance Objectives 7. Investment decisions for the overall portfolio (US$15.5m) will be based on the Investment Policy Statement which follows. The Benchmark Portfolio is used as a guideline to evaluate actual portfolio performance. It assumes that the total portfolio value at inception is invested in the asset mix set out in the benchmark portfolio and held constant over time. Over a four-year moving average, the asset manager's performance excluding fees should exceed by at least 1% the performance of the benchmark portfolio. ANNEX 14 Page 4 of 5 Long-term Investment Policy Investment Minimum Benchmark Maximum Index (%/) 00)(C/) Cash 0 5 10 3 mos. US T-bill US Fixed Income 40 50 80 Lehman Intermediate Intl. Fixed Income 0 5 5 SOLB World Govt. US Equities 20 30 40 S&P 500 Intl. Equities 0 10 20 MSCI EAFE Security Selection Fixed Income Investments 8. Securities for the Portfolio may be comprised of securities issued by or guaranteed as to principal or interest by the US Government or its agencies or instrumentalities ("Government Securities"), Federal Agency-Backed Mortgage Obligations, Corporate Debt, and Collateralized Mortgage Obligations (CMOs) recognized as being of "investment grade". 9. Corporate debt may be purchased with AA rating or better by Moody's Investor Services, Inc., or an equivalent rating by another recognized rating service or considered equivalent by the Investment Manager. Such debt is considered to be "investment grade". 10. The Investment Manager may not invest more than 5% at cost of the total market value of the Portfolio in any one issue. On an exceptional basis,- investments in Government Securities may be exempted from this limit, provided that such investments do not exceed the 5% limit for more than 60 days. 11. The dollar-weighted average maturity of the fixed income portion of the Portfolio shall be five years or less. Equity Investments 12. The target equity position will be achieved over a twelve month period (dollar averaging). ANNEX 14 Page 5 of 5 13. Equity positions will emphasize quality, diversity and marketability. The Portfolio's investments in equity will emphasize larger capitalization companies from a cross section of industries. 14. No one equity shall make up more than 5% at cost of the total market value of the equity portion of the Portfolio. A position that grows to, or otherwise becomes, 10% or more of the total market value of the equity portion of the Portfolio shall be reduced as the Investment Manager believes appropriate, so as not to overweight the Portfolio in any one position. Other Restrictions 15. The currency exposure of the Portfolio may be actively managed from the base currency of the US Dollar. Third currency hedging is permitted. The Portfolio will not be permitted to have net short positions in any single currency. 16. Derivatives (e.g., forwards, futures, swaps, options) may be used at all times or as circumstances warrant to hedge against interest and exchange rate risks. To the extent possible, use will be made of hedging products that are traded on recognized exchanges. Where this is impracticable, transactions will be entered into only with brokers of financial institutions of sound financial standing. 17. The Portfolio may be invested up to 20% in open-ended collective investment schemes, such as mutual funds. 18. To the extent possible and excluding collective investment schemes, the Investment Manager will seek to minimize investments in companies which, in the opinion of the Investment Manager, have poor social and environmental records. Annual Review 19. It is the intent of the CTANP to review these general investment principles and guidelines at least annually, effect changes as required, and communicate any changes or additions in writing to the Investment Manager on a timely basis. Such changes or additions shall take effect only after the Investment Manager has accepted them in writing. 20. 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