PEACE INDEPENDENCE DEMOCRACY UNITY PROSPERITY MINISTRY OF AGRICULTURE AND FORESTRY. Environmental Management Framework (EMF)

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized LAO PEOPLE S DEMOCRATIC REPUBLIC E4119 PEACE INDEPENDENCE DEMOCRACY UNITY PROSPERITY MINISTRY OF AGRICULTURE AND FORESTRY Environmental Management Framework (EMF) Scaling-up Participatory Sustainable Forest Management (SUPSFM) Lao Forest Investment Plan SUPSFM Preparation Team Vientiane, Lao PDR

2 January 2013 TABLE OF CONTENTS 1 Introduction Background Further Scaling Up of PSFM FOMACOP/SUFORD/SUFORD AF/Feasibility study FIP Goals and Objectives of SU-PSFM Project Components of SU-PSFM FIP Responsible agencies World Bank Project Oversight Commitment to environmental safeguards World Bank and IFC Guidelines and Policies Safeguards Implementation Government of Lao PDR environmental commitments 12 2 Implementation experiences from SUFORD: a summary of key issues and actions under SU-PSFM Illegal wildlife trade Illegal logging Pesticide Use Physical cultural resources Fire control Shifting cultivation Baseline assessment procedures for biodiversity values Monitoring and evaluation 15 3 Information and reporting Environmental data GIS datasets Harvesting planning and operation procedures Incident reporting Communication of EMF Audit and Review Budget for environmental management and monitoring 19 4 Mitigation External Factors Illegal wildlife trade Physical Cultural Resources Concessions granting Fire Control Illegal logging Forest conversion from shifting cultivation FIP Components mitigation and management Mitigation and management 35 Component 1 Strengthening and Expanding PSFM in PFA 35 Component 2: Piloting Landscape PSFM 36 Component 3: Enabling Legal and Regulatory Environment 37 Component 4: Project Management FIP Activities within PFAs and landscapes - Forestry FIP Activities within PFAs and landscapes - Livelihoods 38 2

3 References 46 Appendix 1 47 Integrated environmental safeguards screening process: how to use 47 Project Risk Consequence vs Likelihood Matrix 48 Appendix 2 50 Negative Checklist 50 Step 1: Negative (-ve) Checklist Screening 50 Step 2: Identification of safeguard issues and preparation of mitigations measures. 50 Step 3: Safeguard documentation and information disclosure 51 Step 4: safeguard clearances and implementation 52 Step 5: Supervision, monitoring and reporting 52 Appendix 3 53 Performa s and Project Environmental Impact Evaluation Checklists 53 Appendix 4 62 FIP Environmental Impact Legal Obligation Setting 62 Summary of key Lao PDR laws relating to forestry resources sector 63 3

4 1 Introduction The Environmental Management Framework (EMF) aims to provide guidance to Department of Forestry, Ministry of Agriculture and Forestry, Lao PDR, its staff, agencies involved in planning and implementation, consultants, provincial and district government, and beneficiary communities on the environmental safeguards in the implementation of the Lao PDR Forest Investment Program. The EMF outlines the environmental risks and proposes appropriate mitigation required. The EMF is derived from the Environment and Social Impact Assessment (ESIA), which provides detailed information on the project. The EMF summarizes commitments and provides mitigation, management, and monitoring programs. A Community Engagement Processes Framework, which outlines social and environmental issues, has been prepared as a separate document. The EMF mitigation measures also aims to ensure all project activities are in compliance with Lao PDR and World Bank environmental safeguards. The EMF is a dynamic document, subject to review at least annually or when there is a major change in FIP design or activities. This EMF includes the following: A background to SUFORD, and description of FIP SU-PSFM Components World Bank and Government of Lao policies, commitments and legislative requirements relating to the environmental management of SU-PSFM activities A summary of the environmental context of FIP SU-PSFM and its potential impacts Environmental management and mitigation measures relating to key environmental issues learnt from SUFORD; and Detailed environmental monitoring program. 1.1 Background Lao PDR is one of the least developed countries in Southeast Asia. The country has considerable natural resources in forests, water resources, and minerals and these are significant for economic and cultural development, and environment protection. Its forests cover about 40% of the country, the highest percentage in Southeast Asia, but the total area of forest has been declining dramatically from 70% of the land area of 26.5 million ha in 1940, to 49% in 1982, and to only 40% or about 9.5 million ha in Data on changes in forest cover suggest that during the 1990s the annual loss of forest cover was around 1.4% annually, giving an average annual loss of forest cover of about 134,000 ha. In addition to the decline forest area, there has been a steady fragmentation of forests and a decline in the average growing stock within the residual forest, which have both reduced carbon values and had a negative impact on biodiversity. Annual emissions from deforestation and forest degradation were estimated at 95.3 million tco2e in 1982, declining to 60.6 million tco2e by For the period from , the average annual emission is estimated at 51.1 million tco2e. The program themes of the Lao Forest Investment Plan (FIP) to which this EMF relates, have been developed to support the Forestry Sector 2020 target to attain a 4

5 70% forest cover in Lao PDR. The program themes have been developed to directly address the drivers of deforestation and forest degradation identified. The underlying idea is that grassroots forest managers operating in any and all forest areas will become more active and vigilant in protecting the forests in their areas from the drivers of deforestation and degradation, and will rehabilitate degraded lands using land management systems that will provide them with livelihood benefits, while enhancing carbon stocks. 1.2 Further Scaling Up of PSFM As the completion of SUFORD drew near, the Government (GOL) proposed the Lao Investment Plan to the Forest Investment Program (FIP) of the Climate Investment Funds (CIF) with the core objective of reducing GHG emissions from forests by reducing deforestation and forest degradation, conserving and enhancing carbon stocks, and sustainable management of forests (five GHG emission-reducing activities that together constitute REDD+). The Lao Investment Plan includes components on managing five categories of forest areas, i.e. PSFM in three categories of state forest areas (production/ conservation/protection), village forestry in village-use forests, and smallholder forestry in land allocated to villagers, as well as a component on enabling policy and regulatory mechanisms. The proposal was favorably considered by FIP with funding provided for three projects, namely: (a) Protecting Forests for Ecosystems Services with the Asian Development Bank (ADB) as the designated Multilateral Development Bank (MDB) partner, (b) Smallholder Forestry with the International Finance Corporation (IFC) as the designated MDB partner, and (c) Scaling up PSFM (SU-PSFM or the Project) with WB as the designated MDB partner. 1.3 FOMACOP/SUFORD/SUFORD AF/Feasibility study FIP The current implementation of Participatory Sustainable Forest Management (PSFM) in Production Forest Areas (PFAs) has its roots in village forestry, which was piloted in the late 1990s covering two state production forests (Dong Sithouane in Savannakhet Province and Dong Phousoi in Khammouane Province). The piloting of village forestry was undertaken by the Forest Management and Conservation Project (FOMACOP) with technical assistance provided by the Ministry for Foreign Affairs of Finland (MFAF) and financial support by the International Development Agency (IDA) of the World Bank (WB). The appropriateness of the village forestry systems and procedures has been shown by the inclusion of Dong Sithouane and Dong Phousoi in the FAO List of Exemplary Managed Forests in Asia in the early 2000s, as well as by the certification as sustainably managed forests of forest management units (FMUs) in the two forest areas by the Forest Stewardship Council (FSC) in with extension for the period The piloting of village forestry was followed by the institution of participatory management of production forests for nation-wide application as an official government policy in the early 2000s. Much of the current PSFM concepts, systems, and operating guidelines have been formulated based on the pilot village forestry model. PSFM was first applied in in 8 PFAs, which have a total area of 0.66 million ha and are located in 4 provinces in Southern Lao. This was undertaken by the Sustainable Forestry and Rural Development Project (SUFORD), which like FOMACOP were provided with technical assistance support by MFAF and financial support by IDA. MFAF and IDA continued their support through SUFORD-AF in 5

6 expanding the application of PSFM to cover a total of 16 PFAs, which have a total area of 1.28 million ha and are located in 9 provinces in Southern and Central Lao. SUFORD was the main pillar of World Bank/GOL engagement in forestry in Lao PDR and focuses on sustainable management of natural production forests. SUFORD The project is financed until December 2008 through an IDA Credit of US$9.9 million with parallel financing from GOF in the amount of EUR8 million. SUFORD currently operates in 8 Production Forest Areas (PFAs) in Champasak, Khammouane, Savannakhet, and Salavan. The development objective of the project is to achieve the sustainable management of natural production forests to alleviate rural poverty. Specific project objectives are to: (a) Improve the policy, legal and incentive framework enabling the expansion of Participatory Sustainable Forest Management (PSFM) throughout the country; (b) Bring the country s priority natural production forests under PSFM; and (c) Improve villagers well-being and livelihoods through benefits from sustainable forestry, community development and development of viable livelihood systems. The project also contributed to in situ biodiversity conservation through the maintenance of natural forest composition and structure, through the establishment of high conservation value forests within PFAs, and through creating buffers around and connectivity between National Biodiversity Conservation Areas (NBCAs). Sustainable management of production forest areas has entailed management of all resources: commercial timber; household wood; botanical NTFPs; biodiversity; and environmental services provided by the forest landscape. Forest management and control systems sufficient to achieve initial forest certification by Forest Stewardship Council (FSC) have been established. Considering SUFORD s implementation successes and GOL s obvious commitment, the World Bank and GOF provided further support to the project. Additional Financing (under World Bank Operational Policy 13.20), is an instrument that provided additional IDA resources (on IDA grant terms), and allowed for a project extension of up to 3 years after the current closing date. GOF grant resources complemented IDA resources, which was governed by bilateral agreement between the Governments of Finland and Lao PDR. The SUFORD-Additional Finance (AF) project was a continuation of a first phase from The AF phase took place in five new provinces, where the majority of the population comprised ethnic groups that needed special attention and culturally appropriate communication to make them partners in the project. Additional and extra special attention was also further needed to involve ethnic group women in the project. SUFORD-AF extended project implementation into five new provinces (Xayaboury, Vientiane, Bolikhamxay, Sekong, and Attapeu) and included 8 new PFAs with a total area of 539,630 ha. About 438,660 ha are intact forest, and of this about 352,150 ha are on slopes that were potentially harvestable. The 311 villages of SUFORD-AF were inside or on the border or maximum 5 km from the border of a Production Forest Area (PFA). The project was implemented by the Department of Forestry together with NAFES and supported by the World Bank (WB) and the Ministry of Foreign Affairs (MFA), Government of Finland. All agencies attach great importance to ensuring that 6

7 vulnerable groups such as ethnic groups and women share equally in the benefits derived from the project and ensure that adverse impacts are either avoided, or if unavoidable, mitigated. The SUFORD-AF works on ethnic group issues through relations established to the Lao Front for National Construction (LFNC), Department of Ethnic Affairs, and the Lao Women Union (LWU) and the Division for the Advancement of Women in MAF. The aim of the SUFORD-AF project was to achieve the sustainable management of natural production forests, including sustainable logging for rural poverty reduction through, among others, revenue sharing with villages, and improve the policy, legal and incentive framework for this. Sustainable logging was planned based on forest inventories established with villagers participation. Improvement of villagers livelihoods through benefits from casual labor, selective revenue sharing from sustainable production forestry and village development grants was anticipated in the short and long run. Villagers were expected to take an active part in implementing forest management activities such as land and forest zoning, forest inventories as well as in designing a forest management plan at the sub-forest Management Area (FMA) that coincides with the khumban area comprising a number of villages. 1.4 Goals and Objectives of SU-PSFM The objectives of the SU-PSFM are broader than the SUFORD objectives. The main thrust of SUFORD is linked to timber extraction in a sustainable manner with livelihood co-benefits according to a management plan for demarcated PFAs and SFMAs (benefits are labor opportunities and share of timber revenue for a limited number of villages and village grants for all project villages). SU-PSFM objectives are linked to REDD+ and climate change mitigation leading to CO2 emission reductions and the protection of forest carbon stocks. Its justification is the combating of carbon emissions caused by a decrease in the forest cover. A future global Strategic Climate Fund (SCF) under the Climate Investment Funds (CIF) will provide finance for targeted programs in selected developing countries to pilot new approaches. Project Development Objective The project development objective (PDO) is to significantly reduce GHG emissions from deforestation and forest degradation by: (a) Scaling up participatory sustainable forest management to cover 2.3 million ha of PFAs, (b) Developing new approaches to management of forests at landscape scale, and (c) Further strengthening the enabling policy and regulatory frameworks 1.5 Project Components of SU-PSFM The SU-PSFM Project will build on lessons learned from SUFORD and take advantage of existing and emerging opportunities for collaboration with development partners. Key lessons from SUFORD, which have been factored into project design, include mechanisms to increase capacity of the Department of Forestry (DOF) and Department of Forest Inspection (DOFI) for effective planning and implementation; improved project management by bringing consistency to deployment of capacitated staff in project areas; creating sustainable institutional mechanisms through a rigorous community engagement framework; improved safeguard mechanisms through capacity building, additional staff, partnerships with CSOs, and monitoring; 7

8 expanding incentive options through sustainable livelihoods, PES, and REDD+ benefits; and deployment of dedicated staff, integration in project design, capacity building, and monitoring to mainstream equity and gender issues in all project activities. Opportunities for collaboration exist with ongoing and planned investments by development partners in PFAs, conservation, protection and village-use forests, and in forest law enforcement. These include KfW investments in protection and conservation forest areas in Northern Lao, ADB and IFC in Southern Lao, and GIZ- EU on forest law enforcement, in addition to linkages with ongoing WB projects in poverty reduction, biodiversity, food security, and trade. The Project will include four components designed for the attainment of the PDO, as follows: Component 1: Strengthening and expanding PSFM in Production Forest Areas There are 34 PFAs with a total area of 1.91 million ha located in the 9 SUFORD provinces in Central and Southern Lao, but SUFORD provided support to only 16 PFAs with a total area of 1.28 million ha. The Project will continue to support activities in the 16 PFAs covered by SUFORD, but will expand PSFM implementation to cover all 34 PFAs, while adding 7 more PFAs with a total area of 0.39 million ha located in 3 Northern Lao provinces. Thus the Project will support the implementation of PSFM in 41 PFAs with a total area of 2.30 million ha. Table 1 lists the 41 PFAs and provides some relevant information about them. Component 1 will have three sub-components, namely: Sub-component 1A: Capacity Building and Partnerships: The subcomponent is aimed at establishing mechanisms to ensure the availability of adequate and effective capacity for project implementation. The Project will take advantage of increased capacity in the natural resources and civil society sectors, as well as utilize from the outside those skills that are not available in the country. The sub-component will include the following main activities: Sub-component 1B: Community Engagement and PSFM Management Planning: Investments in capacity and partnerships will permit the Project to engage effectively with communities and initiate PSFM management planning in PFAs. Approaches to strengthen tenure and expand sustainable livelihood options are embedded within the community engagement process. The subcomponent will include the following main activities: Sub-component 1C: Implementing PSFM plans in Production Forest Areas: Capacity building and community engagement will provide the foundation to effective implementation of PSFM management plans. This subcomponent will focus on PFA management, consolidation and expansion of forest areas under certification, and implementation arrangements for livelihoods. The sub-component will include the following main activities: Component 2: Piloting landscape PSFM Landscape PSFM offers a cross-sectoral and integrated approach to manage development activities, minimize negative environmental impacts, mitigate climate change, and reduce poverty. Although this approach has not yet been implemented in Lao PDR, interest and support for working at the landscape scale is growing, e.g. ADB and KFW work on biodiversity conservation and corridors using PSFM as a model. This component is aimed at developing frameworks for managing forests at 8

9 landscape scale and will pilot the application of the framework a Northern Lao biodiversity corridor in cooperation with KfW and in a Southern Lao biodiversity corridor with ADB. L-PSFM plan implementation will be limited only to PFAs within the forest landscapes in conjunction with Component 1. Sub-component 2A: Developing Methodologies and Frameworks for L- PSFM Sub-component 2B: Establishing Pilot L-PSFM Models Component 3: Enabling legal and regulatory environment Component 3 will include sub-components on strengthening legal and regulatory frameworks, strengthening forest law enforcement and governance, and creating public awareness for climate change and REDD+. This component will cover the following sub-components: Subcomponent 3A: Strengthening Legal and Regulatory Frameworks Sub-component 3B: Strengthening Forest Law Enforcement and Governance Sub-component 3C: Creating Public Awareness for Climate Change and REDD+ Component 4: Project management This component will cover the following sub-components: Sub-component 4A: Project management at the national and sub-national level Sub-component 4B: Technical Assistance Sub-component 4C: Monitoring and Evaluation 1.6 SUPSFM Responsible agencies Several recent administrative changes have been effected by the GOL that will influence and facilitate SUPSFM project implementation. In summary these changes are as follows World Bank The Project will operate in conformity with the Grant Agreement signed between GOL and WB. Annual, as well as non-periodic, supervision missions will be conducted by the WB Task Management Team to assess the progress. The WB Supervision Missions will give special attention to the implementation of the environmental safeguards framework and implementation plans Project Oversight Multi-stakeholder Project Steering Committees (PSC) will be organized at different levels by appropriate authorities. The Minister of Agriculture and Forestry will chair the National PSC; its members will represent various ministries (MONRE, MAF, MOIC, MPI, etc.) and other stakeholders including CSOs At grassroots level, the village level institutions of each participating village will be organized to provide guidance concerning village participation in PSFM and livelihoods development. Various sectors of the village will be represented including sub-groups, women, elders, youth, and ethnic minorities. 9

10 Technical assistance will be provided by the Government of Finland, which will appoint a Chief Technical Advisor (CTA). A National Project Management Office (NPMO) will be established at DOF to be put in charge of overall project coordination and management both at the national and sub-national levels, procurement, financial management, reporting, and monitoring and evaluation. NPMO will also be responsible for implementing national level project activities related to policy and legal issues, with technical assistance provided by the CTA. The project will utilize existing Technical Resource Centers (TSCs) or establish new centers, which will house staff that will provide a diversity of technical services to communities, and in forest management planning and implementation. The Project will also collaborate with external organizations such as LNFR/LWU, NGOs/CSOs, national/regional universities and training centers, and the Lao Wood Industry Association. 1.7 Commitment to environmental safeguards World Bank and IFC Guidelines and Policies The environmental and social policies and procedures of the World Bank are widely regarded as international standards for the environmental and social management of development projects. The World Bank undertakes environmental screening of each of its proposed projects. The Bank classifies each project into one of four categories depending on its type, location, sensitivity and the nature and magnitude of impacts on communities and the environment. While the SU-PSFM project is not expected to have adverse environmental impacts, it has been assigned Category "A" status because it may trigger several bank safeguard policies. Refer to Table 1 and Table 2. This is a precautionary measure to ensure that all safeguards policies are given proper attention, and to help the SU-PSFM preparation team identify ways to enhance the expected positive impacts. For a Category A projects the borrower, the Government of Lao PDR is responsible for preparing an ESIA, from which the safeguards in this document where identified. Table 1 World Bank Project Classification Category A: A proposed project is classified as Category A if it is likely to have significant adverse environmental impacts that are sensitive, diverse, or unprecedented. These impacts may affect an area broader than the sites or facilities subject to physical works. EA for a Category A project examines the project's potential negative and positive environmental impacts, compares them with those of feasible alternatives (including the "without project" situation), and recommends any measures needed to prevent, minimize, mitigate, or compensate for adverse impacts and improve environmental performance. For a Category A project, the borrower is responsible for preparing a report, normally an EIA. Category B: A proposed project is classified as Category B if its potential adverse environmental impacts on human populations or environmentally important areas--including wetlands, forests, grasslands, and other natural habitats--are less adverse than those of Category A projects. These impacts are site-specific; few if any of them are irreversible; and in most cases mitigation measures can be designed more readily than for Category A projects. The scope of EA for a Category B project may vary from project to project, but it is narrower than that of Category A EA. Like Category A EA, it examines the project's potential negative and positive environmental impacts and recommends any 10

11 measures needed to prevent, minimize, mitigate, or compensate for adverse impacts and improve environmental performance. Although the SU-PSFM is intended to improve overall forest management capability and increase forest cover in Lao PDR, there is a risk that some sub-project activities my cause localized small scale negative impacts. As such the EMF will be compliant with World Bank Safeguard Policies: Environmental Assessment (OP 4.01), Natural Habitats (OP 4.04), Forest Strategy (OP 4.36), Pest Management (OP.4.09) Physical Cultural Resources (OP 4.11). This EMF addresses only with possible environmental aspects of the project. Social impacts and relevant safeguard triggers discussions for Involuntary Resettlement (OP 4.12) and Ethnic Minorities (OP 4.10) are considered in detail in the CEPF. Refer to Table 2 below. Table 2 Relevant World Bank Safeguards Triggered World Bank Safeguard Environmental Assessment (OP 4.01) Natural Habitats (OP 4.04) Forest Strategy (OP 4.36) Physical Cultural Resources (OP 4.11) Pest Management (OP.4.09) Description/Comment In World bank Operations, the purpose of Environmental Assessment is to improve decision making to ensure projects are sound and sustainable, and that potentially affected people have been clearly consulted. The (OP 4.01) is the umbrella policy for the Banks environmental policies. Forests are managed for a broad range of goals, which include livelihoods, timber, conservation, biodiversity and environmental services, and cultural purposes. The World Bank does not support projects that involve significant conversion or degradation of critical natural habitats. Where this does occur, analysis must prove that benefits far out way the costs. These issues are addressed within the various technical guidelines and policies that have been developed over the SUFORD years, and the SUPSFM project environmental screening process outlined in this EMF. The World Bank has supported forest management projects in Lao PDR that include governance capacity building, increasing village grassroots participation, livelihood enhancement, sustainable forestry, biodiversity management and conservation, forest planning and law enforcement. In regard to this trigger these issues are addressed in within the technical guidelines and policies that have been developed over the SUFORD years, and the project environmental screening process outlined in this EMF. The project activities will be widespread across several provinces. The areas are replete with physical cultural resources of various sizes and values. The project environmental screening process, outlined in this EMF, will help identify and design appropriate responses to manage physical cultural resources. Together with Chance Find Procedure these provide an appropriate and effective response to cultural heritage. Although pesticide use is discouraged where alternative natural biological solutions can be practically applied, total avoidance is unlikely. Discouragement assists land managers from becoming dependent on costly and potentially destructive chemicals and fertilisers. The inclusion of this Safeguard encourages adoption of Integrated Pest Management Strategies. The project environmental 11

12 Involuntary Resettlement (OP 4.12) Ethnic Minorities (OP 4.10) screening process in this EMF will help identify and design appropriate responses to pest control. Refer to CEPF. Refer to CEPF. 1.8 Safeguards Implementation This document is the Environmental Management Framework (EMF). It aims to provide the national, provincial and district government, the SUPSFM team, consultants, village officials, private and public sector agencies and beneficiary community members with adequate guidance for effectively addressing environmental safeguard issues. The process will be implemented as part of the project cycle and the activities will be fully integrated into the selection, approval, implementation, and monitoring and evaluation process. The EMF is developed based on the implementation experience of the SUFORD project and the scope of activities to be carried out under the SU-PSFM. The EMF describes a safeguard screening and review process and safeguard actions, including monitoring and supervision, to be carried out and it will be applied to all investments to be financed by the World Bank for the project Project staff at central and local levels will be responsible for implementation of the EMF and ensuring full compliance, including keeping proper documentation in the project file for possible review by the World Bank. This document is considered a living document and can be modified and changed in line with the changing situation or scope of the activities. Close consultation with the World Bank and clearance of the revised EMF will be necessary. 1.9 Government of Lao PDR environmental commitments Beside the World Bank Safeguard Policies, the existing environmental safeguard system of Lao PDR is important, and has been analyzed before the environmental safeguard compliance framework for SU-PSFM. The World Bank safeguard policies place emphasis on using, applying and strengthening the country safeguard systems (CSS) related to environmental management. Appendix 4 describes the CSS related to environmental safeguards in Lao PDR, including institutional arrangements and responsibilities, as well as the regulatory framework of laws and policies. Different ministries are concerned with environmental issues and environmental safeguards in the context of private and public investment. With regards to SUPSFM they primarily include the Ministry of Agriculture and Forestry (MAF), and the Ministry of Environment and Natural Resources (MoNRE). Legislative and other requirements relevant to SUPSFM include: local, provincial and national laws and regulations, operating licenses, permits and approvals, international standards and conventions and legal obligations to which the GOL is a party. Appendix 4 provides a summary of these key documents relevant to SUPSFM. 12

13 2 Implementation experiences from SUFORD: a summary of key issues and actions under SU-PSFM A safeguard assessment was carried out to review the environmental management performance of the SUFORD project to identify lessons learned. Overall, the audit did not find major non-compliance issues or significant negative impacts on the environment. On the contrary, SUFORD-style low impact logging and management do not cause significant long term or irreversible detriment to wildlife, biodiversity and sustainable forestry of PFAs. The alternative to SUFORD-style logging of PFAs is a situation of heavier habitat encroachment and ongoing high wildlife extraction the no management scenario. The review of documents and discussions with key SUFORD specialist s highlights several on-going environmental management issues with SUFORD managed PFAs which are likely to continue to be challenging in new PFAs under SU-PSFM. These are summarized below. 2.1 Illegal wildlife trade Significant overharvesting of wild vertebrates typifies all areas of PFAs with repeated major violations of wildlife protection and trading laws were observed (MAF, 2010). In terms of catalysts for wildlife hunting, roads are among the most damaging changes to an area. SUFORD road and track development potentially completes links between the markets and new sources of wildlife where roads and track upgrades have been put into new areas. Therefore, one of the most effective means of preventing illegal wildlife activities is to limit road developments under any new investments. Of particular importance is to avoid areas that are likely to contain HCVs, typically features such as wetlands, floodplain forests, caves, saltlicks etc. In addition, situational monitoring of new PFA villages for hunting activities and reporting outcomes to DOFI and other line agencies should be institutionalized. 2.2 Illegal logging The most significant threat to biodiversity and sustainable forestry is from illegal logging. Overall the rate of deforestation declined in old SUFORD PFAs since active project implementation, largely due to the protection offered by the legal status and project presence. At the same time, deforestation rates accelerated outside PFAs driven largely by conversion of forests into agricultural concessions, and illegal over harvesting of timber quotas. The fact that PFA forest cover, in most cases, is stabilizing indicates that protection of forests is more effective inside the PFAs than outside, and that SUFORD mechanisms are effective. Well-documented cases of illegal logging within PFAs has triggered several responses by GOL in an effort to curb the practice. SUFORD initiated forest cover assessments using analysis of satellite imagery and ground truthing, providing this information to DOFI, and enhanced patrols to monitor changes. These and other actions to address illegal logging will be continued under SU-PSFM. 2.3 Pesticide Use Pesticide and fertilizer use is an emerging issue particularly as Lao PDR agricultural sector is influenced more by market based drivers, such as the need for increased productivity per area of land. The SU-PSFM project activities will be widespread across many provinces, with variable environmental conditions. Although pesticide use in the project will be discouraged where alternative natural biological solutions 13

14 can be practically applied, total avoidance is unlikely. Integrated Pest Management Strategies are required where pesticide and fertilizer use is unavoidable. To determine if pesticides are necessary sub-component projects, such as assisted rehabilitation and NTFP development, are filtered through the Negative Check List and Project Screening Process. 2.4 Physical cultural resources Project activities will cover diverse ethnicities, cultures, and spiritual practices that have the potential to impact on Physical Cultural Resources (PCR). PCR are defined as movable or immovable objects, sites, structures, groups of structures, and natural features and landscapes that have archeological, paleontological, historical, architectural, religious, aesthetic, or other cultural significance. PCR resources will be listed in the CEPF checklist and confirmed during PLUP planning which will identify areas that have physical cultural resources. In addition Chance Find Procedures have been developed to mitigate against damage or loss to PCRs. 2.5 Concession granting As a multiple-use landscape, a PFA is able to accommodate legitimate and wellplanned complementary development activities. However, due to unclear jurisdictional concession granting mandates, particularly between province and central tiers, and weak monitoring and compliance enforcement, SUFORD PFAs have experienced considerable difficulties in meeting its sustainability objective in some areas because of incompatible concession granting. Improvements to monitoring and reporting, strengthening governance and interagency coordination, enforcement and legal frameworks will be used as mitigation approaches. 2.6 Fire control SUFORD studies have shown that villages have a high dependency on deciduous dipterocarp forests for household income. These forest types are fire-prone ecosystems, however current fire frequencies are believed to exceed natural levels. From a wildlife habitat perspective it was observed that fire at current levels in some SUFORD PFAs could reduce habitat suitability for some species. Information on fire events will be integrated in the CEPF, and community based fire management will be introduced. Indigenous fire management practices will be supplemented with training and early warning, communication, and response protocols will be established with forest department staff and TSCs. PLUP will be used to identify high risk villages and PFAs with appropriate fire management plans. 2.7 Shifting cultivation Shifting cultivation involves cutting down vegetation, burning it in situ and then planting crops on the cleared land. Once crops are harvested, the land is left fallow for natural vegetation to re-grow. This agricultural system has traditionally been widely practiced in many parts of Lao, but most prominently in the north. Shifting cultivation (rotational) practices have been developed to account for these conditions, however conversion of land for concessions and other forms of development (mining, hydropower etc) is making even less land available for farming and food production. This is having a two-fold affect. The first is that it is forcing villages to reduce the fallow periods. A shorter fallow period produces lower yield rates than longer fallow. The second response is that to make up for the short fall in food availability, shifting cultivation is now expanding more rapidly into new forest areas, vis. pioneer shifting 14

15 cultivation. In addition, lands that had been rehabilitated in an effort to produce harvestable timber have also been converted to shifting cultivation. The dilemma that will be faced by the project is that should it pursue stronger enforcement to protect forest resources, it may have the very negative consequence of reducing people s food resources. Land use planning under SUPSFM (PLUP and FLUZ) will need to ensure that adequate lands, both quality and quantity, are retained for the purposes of food security including shifting cultivation 2.8 Baseline assessment procedures for biodiversity values PFAs are a landscape comprising both forest and agricultural zones. The SUFORD project has been using the High Conservation Value (HCV) methodology to assist PFA management planning, to minimize conflict between functions. This procedure will continue to be used under SU-PSFM. Six types of HCV exist and a forest area meeting any of the criteria for any of them becomes a High Conservation Value Forest (HCVF). The six criteria encompass human culture (e.g. sites of traditional spiritual import), utilitarian value (e.g. soil protection) and 'pure' biodiversity. Three HCV categories are related to 'pure' biodiversity. The presence of a HCV does not necessarily mean that a strict conservation or protection management regime needs to be applied. Many HCV values can be maintained or enhanced through implementation of the current environmental regulations adopted in forest management and through simple conservation guidelines and regulations for specific HCV values. The biggest threats to habitats arise from forest conversion, illegal logging and encroachment, rather than direct effects of PSFM logging itself, which is low impact. Most of the components of biodiversity within Lao PDR, with the exception of a few large mammal species and birds, are largely unknown. Information about the status even of many large mammal species remains inadequate. This information can only be gathered through extensive field surveys. In recognition of this a precautionary approach has been adopted in the latter stages of SUFORD to assess HCV conservation values. A pragmatic methodology for determining high conservation values, i.e. those of regional (HCV1-3) or local importance (HCV4-6) has been adopted, and a revised toolkit for HCV assessment in Production Forest Areas (SUFORD, 2010b) has been utilized. Refer to SUFORD (2010b). Forest Resource Assessment and Planning Manual. Volumes 1-4. (High Conservation Value Forest; NTFP; Village Regulations), Department of Forestry, Lao PDR. Under the new project. Baseline assessments of biodiversity and wildlife values will be undertaken in new project PFAs during the project preparation stage. 2.9 Monitoring and evaluation Mechanisms to monitor implementation of environmental safeguard measures were not adequate, and gaps were often left unaddressed. Safeguard assessments should build on stronger links with line agencies, especially DOFI. This is mutually beneficial because as skills in DOFI continue to be developed simultaneously investments in the forestry sector become more secure. In addition, overall strengthening of DOFI will lead to sustainable timber harvests and increased revenue generations for the GOL in the medium and long term. 15

16 The safeguard assessment also found that SUFORD project learned from lessons during implementation and took steps to address many issues, such as the introduction of forest cover assessments in the later part of SUFORD AF. Under SUPSFM it is recommended that safeguards are further strengthened and integrated using mechanisms such as the Negative Checklist and Project Screening processes contained in this EMF. The details of the various monitoring activities along delegated responsibilities will be finalized during implementation, when the structure of Social and Environmental Management Team and or safeguards manager is known. Situational monitoring and sharing of results amongst line agencies and partners of what villagers do in relation to wildlife collection, fire management, pesticide use, logging etc is a fundamental tool in arresting loss or destruction of PFAs resources. In addition the following guidelines are recommended to ensure compliance with environmental safeguards: 1. Provide clear guidelines on integrating safeguard measures into PLUP and FLUZ planning and implementation process 2. Increase awareness and knowledge of Provincial and District DOF and DOFI, village leaders and committees, as well as SUPSFM facilitators to enhance understanding of potential negative impacts of SUPSFM related activities 3. As a component of PLUP and FLUZ determine appropriate training and skills development for safeguards management 4. Present and seek adoption of safeguards with MONRE and other development partners where cross agency integration is required 5. Develop indicators for safeguards monitoring and include a section on environmental safeguard performance in project progress 3 Information and reporting 3.1 Environmental data Environmental baseline datasets collected is listed below. Additional surveys will be required for new provinces and new PFAs. 1. Biodiversity and wildlife assessments 2. Landscape characteristics, including waterways and fisheries resources 3. HCV identifications and mapping 4. Concession and lease areas current and proposed 5. Northern provinces key habitat features likely to provide harbor for key species 6. Situational wildlife sightings and assessments from village surveys 7. Situational wildlife trade assessments from village surveys 8. Situational small-scale timber collection/logging activities 9. Current fire practices in targeted high-risk villages from PLUP surveys 10. Physical Cultural Resources assessment 11. Pesticide management assessment. 16

17 It is understood that a planning period will commence early in 2013, which allow time for various baselines studies to be completed, and project design and implementation arrangements to be finalized. It is recommended that within this period the baseline studies above be completed. It is also recommended that during this period that all environmental monitoring indicators are formulated and detailed monitoring plans be completed and budgeted. 3.2 GIS datasets The following GIS datasets are required for baseline knowledge and effective monitoring: - Aerial photographs and or satellite imagery covering all new PFAs - Village land use maps - Current location of villages, administrative boundaries - Current concession area allocations - Location of existing and proposed infrastructure developments - Vegetation cover inventory - High resolution elevation and slope class data - HCV localities in PFAs. 3.3 Harvesting planning and operation procedures Various technical guidelines and procedures have been developed over the SUFORD project cycle for the management of timber resources and environments within PFAs. These include: 1. Monitoring the implementation of Code of Logging Practice 2. Guidelines of forest harvesting in PFAs 3. Procedures for access road clearance 4. Pre-harvest inventory for annual operational plans 5. Guidelines for control of timber production 6. Guidelines for the forest land use zonation 7. Guidelines for monitoring PFA harvesting implementation These will continue to be used as the principle technical documents for forest timber harvesting. However, recommendations have been made to modify the methods by HCV evaluations in PFAs. 3.4 Incident reporting All environmental incidents should be reported as soon as practicable to the designated person, and the village grievance committee. An environmental incident is defined as any incident that impacts on, or may potentially impact on the environment or community, or any activity result in regulatory non-compliance or breach of safeguard guidelines, GOL policies, standards or commitments. All incidents are to be reported, regardless of their perceived or actual seriousness. The Project Environmental and Social Manager will formulate a monitoring committee for each of the PFAs made of representations from DAFO, PAFO and other key line agencies. The monitoring committee will meet quarterly to discuss project activities and progress, and address issues of grievance and illegal activities that have been passed through Grievance Committees. 17

18 Figure 1 Incident reporting 3.5 Communication of EMF The content of the EMF will be communicated to SU-PSFM staff, PAFO/DAFO staff, contractors and consultants, communities, and all other institutions involved in project activities via an induction program. Multiple copies of the EMF should be made available to all DAFO and PAFO offices, with key components provided in appropriate language. 3.6 Audit and Review The EMF includes a requirement to undergo regular internal and external audit that will assess: - Appropriateness of the EMF to the current forest practices and conditions - Awareness of PAFO, DAFO and villagers of the EMF and all associated plans and safeguard procedures - Village grievance committee records as they relate to environmental safeguards issues and compliance - Performance of managers, contractors and PAFO/DAFO staff in implementing and maintaining the EMF strategies and safeguards; and - Availability of adequate resources and expertise for implementation of the EMF. The findings of audit reports and recommendations will be presented to MAF and DOF in the Annual Report. Corrective actions will be incorporated into the EMF and CEPF as required. Table 3 EMF maintenance and reporting requirements Target Action Responsibility Schedule Maintain an up-to date EMF Review and update EMF, and submit revisions to DOF Environmental and Social Manager Annual 18

19 Communication structures between Project and GOL in place Meet reporting requirements for approval DOF to develop procedures and schedule for coordination and reporting Prepare quarterly reports Prepare ad-hoc reports Environmental and Social Manager Environmental and Social Manager Environmental and Social Manager Prior implementation Bi-annual As required to 3.7 Budget for environmental management and monitoring Preliminary cost estimates for environmental mitigations and monitoring are provided in Table 4. A final detailed budget will be determined as part of the consultation process with GOL. 19

20 Table 4 Environmental Safeguards Budget (US$ 000) Year Issue Safeguards activity Comment Illegal Wildlife Trade Limit new road developments and road/track upgrades. Avoid road network development of any kind in or near key landscape features identified as HCV1-6. Negative Checklist and Project Screening Procedures Compliance with GOL various laws and regulations relating to forestry developments. Village situational monitoring with results shared with law enforcement agencies and line departments. Share monitoring results with law enforcement agencies and line departments. Biodiversity Assessment - PFAs and khumbans Environmental Safeguards Manager: Monitoring and evaluations specialist. Satellite images On-going consultations, PLUP and FLUZ. No specific budget required On-going consultations, PLUP and FLUZ. No specific budget required On-going consultations, PLUP and FLUZ. No specific budget required On-going consultations, PLUP and FLUZ. No specific budget required On-going consultations, PLUP and FLUZ. No specific budget required On-going consultations, PLUP and FLUZ. No specific budget required 2x provinces in year1, 1x province in year2 60 Project environmental safeguard manager / TA multi agency cooperation Satellite image analysis and reporting multi agency cooperation 9 9 9

21 Pesticide Management PLUP specific enquiry is given regarding the village use of chemicals, and sub project requirements Personal and village safety equipment and training requirements Pesticide use warning signboards in high risk villages Chemical incidence committees established in high-risk villages, includes training. Equipment is to be purchased under subcomponent project funding Poison or contaminations testing Monitoring and Evaluation Physical Cultural Resources Cultural Heritage and Archaeological surveys Detailed cultural heritage and Archaeological surveys to identify PCR at risk from sub component project activities Monitoring and Evaluation On-going consultations, PLUP and FLUZ. No specific budget required Funding part of subcomponent project budget. No extra budget required. Funding part of subcomponent project budget. No extra budget required. Can be existing Grievance Committees using PLUP process to inform on the expansion of their activities to include pesticide monitoring and reporting. Funds to be used where contaminations have occurred as a result of SUPSFM activities See also request for SUPSFM Safeguards Manager in Illegal Wildlife Trade budget. On-going consultations, PLUP and FLUZ. No specific budget required. Funding part of subcomponent project budget. No extra budget required. See also request for SUPSFM Safeguards Manager in Illegal Wildlife Trade budget Concession Granting 21