Public Disclosure Authorized. Public Disclosure Authorized. Public Disclosure Authorized. Public Disclosure Authorized. Report No.

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1 Project Name Region Sector Project ID Supplemental Project Borrower(s) Implementing Agency Environment Category Date PID Prepared Report No. PID8639 Uruguay-Maritime Management Project Latin America and the Caribbean Region Other Environment UYPE57753 UYGE60923 Government of Uruguay OPP Projected Appraisal Date March 2001 Projected Board Date June Country and Sector Background B November 1, 2000 (revised) Coastal Contamination. The marine and coastal biota along the Uruguayan coastline are increasingly affected by human activities. Marine biodiversity is threatened by oil spills and other forms of hydrocarbon pollution, shipgenerated wastes and wastes from coastal municipalities. Oil pollution is caused by petroleum loading zones, and heavy traffic of fishing, cargo and recreational boats generates a large amount of hydrocarbon residuals. Concentrations of hydrocarbons are spread along the coastline by sea currents and winds. The permanent exposure to toxic contaminants such as oil has the potential to generate changes in the composition of marine populations and communities of species. A serious oil spill in February 1997 contaminated over 20 miles of the Uruguayan coastline. This oil spill also jeopardized the Isla de Lobos, home to a large population of sea lions. Marine Traffic Security. Expanding economic activity due to recent regional economic integration (MERCOSUR) has increased oil activity and commercial traffic is expected to increase along the Uruguayan coastline, and the country's current navigation information infrastructure is insufficient to control marine traffic security and prevent oil spill incidents. The 1997 oil spill highlights the need for improved hydrographic and other maritime information systems. Annually, thousands of ships pass close to the coast of Uruguay in the deeper water channels of the Rio de la Plata. Large areas of the Rio de la Plata have not been mapped using modern technologies, and consequently there might still be some uncharted rocks posing a threat to maritime traffic. In addition, there are areas with a high level of ship traffic that require continuous dredging, raising concerns of spoils management. Government agencies are slowly mapping the shipping channels, but much remains to be done. In addition, government units responsible for monitoring ship traffic are hampered by a lack of modern equipment to track the position of each vessel. Environmental Management of Ports. The Port of Montevideo is the nation's most important port, handling most exports and imports. Other major ports include Colonia, Nueva Palmira, Fray Bentos and Juan Lacaze. The basic

2 management of ports is under the jurisdiction of the Administraci6on Nacional de Puertos (ANP). The Bay of Montevideo in which the Port is located has several environmental management problems, which include processing of ship wastes, cleaning of holds, fuel spills and discharges from the local refinery, air pollution, handling of hazardous materials, and the discharge of organic wastes and industrial pollutants from several small streams and storm water outfalls. In conjunction with a high sediment load from the Rio de la Plata, these discharges have led to anoxic conditions in the Bay, turbid conditions and fairly high concentrations of heavy metals in the sediments. The Uruguayan Navy is responsible for emergency management, in particular responding to hydrocarbon spills in and around the port. Fisheries Management. The management of fisheries in the region is jointly carried out by Argentina and Uruguay on the basis of estimates of long-term sustainability and agreed quotas. In practice, however fish stocks have been declining. Both countries established exclusive fishing zones of approximately 200 miles width, jointly managed under the Frente MarUtimo Agreement and the Administrative Commission of Rio de la Plata. In addition, some areas have been designated as off-limit, being important for the juveniles of various species. However, these areas have not been respected and fish stocks have been declining. Biodiversity in the region is under threat. Clearly, in the face of declining stocks, pollution from ships and land-based sources adds to the stress. Institutional Issues. agencies: Maritime management is the responsibility of several - The Prefectura Nacional Naval, as part of the Coast Guard branch of the Navy, is responsible for the management fisheries enforcement and contingency. - The ANP handles a variety of issues associated with ports, but these tend to be commercial rather than environmental. - The Instituto Nacional de Pesca (INP) responsible for all matters related to fishing, but it does not carry out operational or enforcement tasks. - The Servicio de OceanografUa, HidrografUa y MeteorologUa of the Navy (SOHMA) has the principal responsibility for mapping coastal areas and providing the shipping industry with charts. - The Direccion Nacional de Medio Ambiente (DINAMA) has principal responsibility for environmental policies nationwide. - Land-related environmental issues are handled by local municipalities. The execution of responsibilities has been limited mainly because of a lack of financial and human resources but also by inter-agency rivalry. Improved urban environmental management, land use regulation enforcement and actions by local municipalities and other sectors (such as energy) could play a role in improving coastal zone management in general, but are beyond the scope of this project. This mix of agencies and lack of a clear leader in coastal zone and maritime management begs for a solution. This is especially important for Uruguay, where the proper management of its ports and the unhampered flow of trade are of key importance in maintaining its position in MERCOSUR and as a signatory to the MARPOL Convention. 2. Objectives of the Project The proposed project will provide for improved management of maritime natural -2 -

3 resources and overall biodiversity in the near-in coastal areas (within 200 miles) of Uruguay. The project will also address specific operational and economic priority issues such as: (a) port pollution and emergency response systems in and around the Bay of Montevideo; (b) the high potential for maritime accidents and oil spills due to outdated hyrographic data and poor navigational aids; (c) degradation of the fishing grounds due to over-fishing and pollution; and (d) selected institutional issues which hamper effective, coordinated coastal pollution management. The project will provide initiatives in all these areas, for long-term and economically-sustainable management of maritime resources. 3. Rationale for the Bank's Involvement The World Bank serves as a catalyst in supporting the development of action plans, as well as a source of specialized advice drawn from a global knowledge base in the areas of biodiversity conservation, innovative pollution management instruments, and modernization of public sector environment agencies. The value-added of Bank support includes the ability to mobilize global experts, technical support for preparation, supervision capacity, and the development of linkages with other sources of expertise and funding. This project will build upon the findings of the Bank's prior sector work in environmental management as well as sector work related to fisheries management in the region. 4. Description The main project components and specific activities under each component include: A. Environmental and Safety Improvements in Port, Prevention of Pollution and Control of Ship Wastes. The component includes: (a) reception facilities for ship-based wastes; (b) equipment for the disposal of wastes generated at ports; (c) training and technical assistance for port personnel to strengthen their response capacity to emergencies; (d) improved navigational aides including buoys and lighthouses; and (e) improved storage, handling and transport of hazardous materials and wastes. The GEF portion of this component would address capacity building to handle ship-based wastes and compliance with international conventions. B. Improved Oil Spill Mitigation and Vessel Monitoring. This component includes: (a) oil spill contingency plans and strengthening of emergency response capacity; (b) hydrographic mapping of the Uruguayan coast; and (c) improved vessel monitoring systems. The component would address capacity building to handle oil spills drawing on international experiences. The GEF part of this component would support the development of a marine electronic highway, as well as co-funding of some of the above-mentioned activities. C. Promotion of Sustainable Fisheries. This component would support: (a) the preparation of a fisheries information base, though improving stock assessments; and (b) the preparation of an action plan for the fisheries sector. GEF portion of this component would address maintaining ecosystem integrity as well as biodiversity issues beyond those species of commercial interest. The activities that would be financed by GEF include: (a) assessments of - 3 -

4 coastal and marine biodiversity; (b) identification of critical sites for conserving this biodiversity; (c) identification and establishment of marine protected areas, based on these results; and (d) mainstreaming biodiversity concerns in fisheries management through pilot activities, such as improved gear selectivity and innovative management methods. 5. Financing Total US$m Government 10.0 IBRD 25.0 GEF 5.0 Total Project Cost Implementation Project Implementation. During the preparation of the project by consultants, a complete analysis will be carried out to determine the appropriate implementation agency for the project as a whole. 7. Sustainability The key requirements for project sustainability will be a strong institutional responsible for managing project implementation and an emphasis on extensive coalition building across several organizations and with the private sector. Supporting cost-recovery mechanisms will also significantly enhance the sustainability of the proposed project over the long term. 8. Lessons Learned from Past Operations in the Country/Sector Lessons learned from other environmental projects in the region, in particular in Argentina, include; (a) the need to build institutional capacity in the DNMA which plays a critical role in natural resource management in Uruguay; (b) support the Navy and its natural resource management units, as well as the ANP and INAPE, (c) the need to increase the involvement of NGOs; (d) an emphasis on participatory management planning and implementation; and (e) the understanding that public-private partnerships have been successful in addressing problems only where a clear strategy and location-specific environmental targets were defined. Taking these lessons into account, the project will contribute to strengthening environmental management in Uruguay. The project would contribute to assisting regional NGOs and provide for representation in inter-agency units for coordinating the project. The project will be implemented in coordination with the associated Argentina GEF Coastal Pollution Prevention and Marine Biodiversity Project and the Argentina Sustainable Fisheries Management Project. The project will coordinate with the Frente Maritimo and the Rio de la Plata and Uruguay river projects implemented by Argentina and Uruguay and supported by UNDP\GEF. Lessons learned from other countries indicate the need to take prompt action to prevent the collapse of highly threatened fish stocks. In the case of Uruguay's coastline fisheries, potential actions may include reducing fishing efforts through: (a) gear restrictions; (b) a reduction of fishing time; and/or (c) a permanent reduction of the fishing fleet. Such actions are expected to protect marine biodiversity dependent upon the continued - 4 -

5 functioning of the large marine ecosystem. 9. Program of Targeted Intervention (PTI) No. 10. Environment Aspects (including any public consultation) Issues: The scope and types of environmental issues requiring attention will emerge during project preparation. The investments proposed will reduce pollutants going into these waters rather than generating them. However, we expect that these investments will be focused in the area of port environmental management, specifically the handling and disposal of shipgenerated wastes in the port, proper disposal of dredge spoils, and the handling of fuels and (possibly) hazardous materials. 11. Contact Point: Task Manager Steven Oliver The World Bank 1818 H Street, N.W. Washington, D.C Tel: Fax: The InfoShop The World Bank 1818 H Street, NW Washington, D.C Telephone: (202) Fax: (202) Web: This information describes an evolving project, the preparation of which is about to be undertaken by consultants. The components described in this PID are subject to change. This PID processed by the InfoShop during the week ending November 10,