FBEA FINAL REPORT Vol I.doc

FORESTRY AND BIODIVERSITY MULTI-PROJECT

PROGRAMMATIC ENVIRONMENTAL ASSESSMENT

(F/BEA)

FINAL REPORT

Consolidated by

Patricia I. Fernández-Dávila M.

March 2005

F/BEA Final Report

Table of Contents

Volume I – Consolidated F/BEA Report

Page

Chemonics: Poverty Relief and Alleviation Activity – PRA

The Field Museum of Chicago: Cordillera Azul Activity

The Nature Conservancy: Parks in Peril (Central Selva; Pacaya-Samiria N.R.)

WWF: Integrated Forestry Program – CEDEFOR

List of Annexes:

Page

Annex F

Volume II – First Phase: Diagnosis and Evaluation

Consolidated Matrix of Findings that limit Environmental Results and Recommended Mitigation Measures

Volume I

Consolidated Forest and Biodiversity Multi-Project

A. EXECUTIVE SUMMARY

In 2004, the Mission arranged the carrying-out of a Forest/Biodiversity Multi-Project Environmental Assessment (F/BEA) of USAID-supported on-going activities that may significantly impact on the environments of tropical forests and associated biodiversity areas, as well as those that directly or indirectly involve timber extraction for sale, with the objective to conduct appropriate analysis and provide recommendations to assure compliance with both the letter and the spirit of USG and GOP environmental policy and mandates related to tropical forests and associated biodiversity areas.

These forest/biodiversity (FB)-associated activities are funded under the SO12/SO13 Joint Environmental Agenda (JEA), SO10 Poverty Reduction and Alleviation (PRA and PRAplus) Activities, and SO12/Parks-in-Peril (PiP) grants. All of these Activities are within the framework of the Mission Integrated Development Initiative (IDI).

The F/BEA scooping statement and terms of reference (SS-TOR) specify the methodology for carrying out the assessment. The final step in the scoping exercise was a survey questionnaire completed during April 2004 by USAID partners and their associates. The results of this exercise provided the assessment parameters. A team of six-persons, representing a range of environment-related specialties, was constituted early in May 2004 by USAID and its IDI partners (except Chemonics-ADP).

The F/BEA team determined that activities being assessed can be conveniently categorized into five classes of actions for analysis purposes. For each class of actions, partners, types of activity interventions and physical locations for intervention sites were identified to assist in structuring the information gathering process.

The large number of site-specific activities and interventions being assessed (both on-going and planned), and travel limitations (due political unrest and accessibility) to some sites, obliged the team to opt for a case study approach, limiting visits to carefully selected representative sites. Complementing site visits and on-site interactions with field personnel and beneficiaries, meetings, interviews and discussions were held in the period of May through July 2004. Utilizing information from site reports, additional document reviews, team discussions, and subsequent interviews and meetings with knowledgeable persons located in Lima, the team prepared a consolidated matrix of findings and conclusions. Subsequently, using a uniform format and common guidelines, each team member prepared a comprehensive technical report focused on his/her particular specialty, which were presented in mid-July. The final step of the aforementioned first phase of the process included the preparation of a draft consolidated report by the Team Leader that was submitted late in July.

The second phase was the preparation of this report that integrates, from the five technical reports and the draft report prepared by the F/BEA Team Leader, the key findings and specific recommendations that will lead to each USAID partner to develop set of actions for mitigating and meeting the requirements Most important Potential Negative Environmental Impacts and Recommended Mitigation Measures

The national forestry macro-zoning process has generated large-scale fragmentation of forest areas. Some forest concessions have been sited in protection lands or adjacent to protection forests. This has caused gaps, which due to the lack of control and protection interrupt the continuity of the biological diversity of the area.

Additionally, lack or weak follow-up of environmental impacts generated by interventions may be contributing to an adverse environmental impact in habitats fragmentation, especially when activities encourage increased agricultural production, usually of monoculture crops, many of which are annuals requiring clean-cropping practices. Farmers may clear forest remnants and secondary forests to plant crops in response to increased demand for crops as raw materials, thereby disrupting natural habitats. These activities may be in conflict with USG/GOP regulations. On the other hand, most actions are designed to directly address only environmental consequences of on-site impacts.

Recommended Mitigation Measures:

· Adjust interventions to the legal framework regarding soil capacity.

· Incorporate the design and implementation of activities in its watershed context, considering it as a unit of management and spatial planning as well as regional ecological economic zoning (EEZ) in process.

· Design and consolidate a system that also integrates forest concessions with areas beyond their boundaries, on the basis of the watershed approach, and of other local/regional initiatives of spatial management and biodiversity conservation (e.g. biological or conservation corridors, regional/municipal conservation areas, communal protection areas, etc.).

· Conduct independent environmental audits on a regular basis in proportion to the intervention scale.

The promotion of cultivation of potentially invasive exotic species in degraded soils with the intention of reclaiming them has been verified. Although these crops may help to recuperate degraded soils, they are highly invasive, and without very careful management, can easily compete with the native vegetation and may even eliminate it. Peruvian Law prohibits the introduction of exotic species of flora and wildlife without specific official authorization.

Recommended Mitigation Measures:

· Eliminate the undesirable practice and eradicate species, because this is a severe breach of existing regulations.

· Act rapidly to avoid the introduction of potentially invasive exotic species even if there is scientific uncertainty about the long-term results of the potential invasion. New species introduction must respect relevant legal regulations.

The F/BEA encountered serious gaps in the application of environmental regulations concerning land-use that generate potential conflicts between land-use capability and present use. This is especially true in activities that promote monocultures where lack of environmental considerations is inherent to activity’s approach. Productive activities both small and large-scale are being managed basically in function of compliance of pre-established objectives and attempts to establish “value-chains” towards economic sustainability. Due to not having permanent personnel specialized in social and environmental matters, but rather hired when thought necessary and at the express request of the beneficiary companies, these parameters are not expressly included in the planning and development of the intervention.

In addition, Peruvian forestry macro-zoning has treated the forest as a unit basically for timber utilization and has not taken into account the heterogeneous nature of the Amazon region from the biological and social viewpoints, or of uses that could have greater potential than present uses. This has given rise to endless conflicts, of varying nature, principally social ones that have had repercussions in the efficient development of the forestry concession process. Despite the fact that a large proportion of conflicts are of social, political and cultural nature, insufficient attention is paid to social conflicts due to overlapping with forest concession areas. From the design of the Activity appropriate conditions have not been given to monitoring environmental and social impacts in benefit of development of enterprise management, articulation with markets and financial services, from the forestry technical viewpoint.

Recommended Mitigation Measures:

· Subordinate interventions to the national legal framework particularly to land-use capability.

· Incorporate use-capability of soils and land-use planning in all actions, considering the watershed approach as a unit for natural resources management and citizen participation.

· Carry-out studies of high-yielding and environmental by suitable crops and promote native products.

· Train implementers and associates personnel in the application of soil capacity parameters consistently with the legal framework.

· Incorporate environmental variables in the monitoring and evaluation system and implement a monitoring system of environmental threats/damages plus a cost-benefit analysis of mitigation measures.

· Design and implement a social and environmental monitoring system at intervention level. If feasible, the implementing organization should see to the incorporation of environmental and social monitoring systems, starting from the stage prior to the execution of the interventions, incorporating them in the planning instruments and providing resources needed for their application throughout the life of intervention.

· Establish environmental and social early-warning systems to manage conflicts, promote citizen surveillance and participation of local organizations linked to management of natural resources and the environment in the intervention area.

· Consider other potential uses in the General Forest Management Plans (GFMP) and emphasize detection and monitoring of large-scale impacts, taking the hydrological watersheds as working units, especially where several concessions are being supported in the same area, as a means toward more efficient and progressive adaptation to the watershed approach. These actions should be performed on a regular basis and in proportion to the extent of the areas intervened. For this purpose, it is recommended the participation of independent external consultants.

Evaluations or baselines on the forest resource or on the biological content of the intervention areas are a long way short of desirable levels, having been obtained indirectly so that it is hard to ascertain whether they really represent the attributes of the ecological spaces that are being improved or managed. Besides, there is a generalized confusion among basic technical concepts (e.g. common name and scientific/botanical name of the biological species). This confusion is found even in the base documents generated (e.g. GFMP and AOP). Worse still when one is making an intervention in an area whose biodiversity is unknown. This can lead to the “planned” harvesting of species impacting species that are not considered or unknown.

Field studies prior to interventions have been insufficient and in some cases absent altogether. Several concession areas are lacking in information about their biological content. In those cases in which forest inventories had previously been carried out, these were limited to a very small portion of the concession area and/or were conducted in terms of the common names of plants without identifying their botanical names. This information cannot be considered baseline information on the botanical content of the areas. It is difficult – if not impossible – to predict environmental impacts and impacts due to styles of resource management, in ecological areas about which biological knowledge is precarious or non-existent.

The opportunity to centralize and exchange technical information generated in Permanent Monitoring Plots (PMP), or silvicultural information, which is beginning to become available in the concessions, has not been capitalized. This refers particularly to information on volumetric increments, on changes in species composition after harvest, presence and location of seed-trees, etc. This information is extremely valuable for the economic planning of forest enterprises, and for the scientific-technical community.

There is no information concerning elements of the flora and fauna, in particular rare species, which may be suffering extinction as a result of the present process of forest concessions. In addition, areas with rare biodiversity have not been defined within forest concessions.

Recommended Mitigation Measures:

· Reinforce biodiversity baseline and define potential impacts on flora and fauna.

· Reinforcement and widening of the system of PMP established, ensuring procedures for collection of biological material and the making of taxonomical studies of elements of flora and fauna within the plots, and the planning and implementation of biological prospecting, using approved and standardized methodologies, which will allow the generation of cumulative knowledge concerning the intervened units.

· Identification and continuous monitoring of areas with rare biological content.

· Establishment of monitoring protocols is required, in order to facilitate decision making concerning the conservation of some of these areas, as may be necessary and plan and coordinate dissemination systems allowing permanent access and analysis of this information by the specialized scientific community, in order to detect rare or threatened species, promoting the systematization of and improved access to information on a permanent basis.

· Conduct independent environmental audits. Evaluation and monitoring of biodiversity should be fostered in a regular manner; proportional to the extension of the areas intervened and carried out by external consultants (auditors) as a means of permanent and progressive improvement.

Furthermore, in the context of all interventions, the following cross-cutting issues are of special concern.

Past and current arrangements to formally comply with environmental procedures for FB-associated activities largely have overlooked USAID environmental policy directives and guidance focused on sustainable development and cost-effectiveness goals. A varied treatment of the environmental aspects in terms of the interventions’ approach is perceived. As well as problems with environmental implications or internal environmental impacts generated by the interventions themselves, there is a relevant problem in the original design of some of the interventions (or in the nature of the organization and action of the implementer) that reveals serious gaps in regard to the application of GOP and USG environmental regulations, in particular those related to land capability, land-use planning and the protection of flora and fauna.

Recommended Mitigation Measures:

· Right from the planning stage of the interventions, incorporate an integral or holistic view of the environment from an ecosystemic approach, with special regard for protection existing flora and fauna species, major land-use capacity of soils in the areas of influence, land-use and watershed planning as a basic framework of the development within the intervention. These actions must be accompanied by mechanisms of information and training of the personnel involved, as well as dissemination to stakeholders.

· In the case of on-going interventions it is recommended submission of all actions to existing laws, which may in some cases be complemented by application of principles and agreements of international character – considering the watershed and land-use capability approaches – as well as measures for protecting existing flora and fauna species in the intervention areas. In these cases the actions must be accompanied by measures for information, dissemination and training.

· Incorporation of these policies into program and activity design, implementation and monitoring, and especially into environmental procedures compliance arrangements, can significantly reduce the compliance burden in terms of financial costs and time, as well as demands on institutional and professional capacities. This also can contribute significantly to achievement of sustainable development results.

Deficiencies have been noted in the evaluations or baseline data which form the axis for environmental adequacy or management, in particular the data concerning biodiversity; in addition to, the weakness follow-up actions on environmental impacts generated by the interventions. In this connection and in general terms, it has become evident that the interventions lack of a monitoring system for environmental threats and that the corresponding mitigation measures implemented are not based on a cost-benefit analysis. Consequently, there is insufficient systematization of experiences, or learning culture, not only as part of the Activity but as part of an internal policy of the responsible organization.

Recommended Mitigation Measures:

· Environmental monitoring and evaluation systems should be incorporated in the planning instruments as well as the resources required for their application over the life of the intervention.

· From the economic standpoint, recommendations center upon regulating pressure on access to and use of the natural resources of the forest. In other words, the measures for mitigating threats will be defined in terms of restricting free access to the resources, redefining property rights (in the framework of EEZ) and planning sustainable extraction of renewable resources. This should be incorporated in the monitoring system of environmental threats, including methodologies for quantifying environmental damage and benefits, as well as the respective cost-benefit analysis for the application of those measures.

· Continuous external monitoring programs should be planned, independent of the operating organization and proportional to the area of influence of the intervention in order to improve environmental appropriateness of the intervention.

There are repeated and continuous misunderstandings and conflicts among USAID’s partners and their associates working in the same area, basically due to contradictions between their approaches (e.g. agricultural production of annual crops vs. sustainable practices in buffer zones). There is a lack of coordination (among implementers) and of communication (toward the stakeholders and general population), causing confusion and some resistance on the part of stakeholders, a key element for the success of the interventions.

Recommended Mitigation Measures:

When in one single area of action, two or more interventions are implemented with USAID funding, permanent coordination mechanisms should be established among the implementing organizations and between these and the Mission, with the objective of avoiding conflicts of approach, saturation of beneficiaries and inefficient use of funds.

F/BEA Major Conclusions

· USAID and GOP environmental procedures and related environmental management policies are sufficiently flexible and compatible to permit design and implementation of a unified procedures compliance system for both.

· Improvements are needed in levels of awareness and understanding among USAID partners and their associates concerning USAID and GOP environmental procedures and processes and of systematic environmental management approaches.

· There is considerable opportunity to improve cost-effectiveness through improved integration of environmental compliance procedures into program and activity results planning, achieving and monitoring. Several elements of this opportunity are identified and discussed in this report.

· Activities within most classes of actions identify and consider at least some on-site environmental impacts. There are opportunities for improvement, most notably for activities providing technical assistance for monoculture crop production. Additionally, improvements are needed in identifying and assessing environmental consequences of indirect impacts that may significantly affect both on-site and off-site FB-environments, including consideration of alternative avoidance/mitigation measures and implementation arrangements.

· Activity designs and implementation generally do not consider synergistic and cumulative indirect impacts of multiple activities. Although such impacts arguably may be outside the manageable interests of implementers at the individual activity level, it may be argued that many are within manageable interests at the USAID partner level. Identification and consideration of these types of impacts should be included at partner-level, and to the extent practicable, incorporated into site-specific activity design and implementation. To the extent that the scope of site-specific activities does not accommodate to mitigation measures for significant indirect off-site impacts, USAID and partners need to seek alternatives for addressing these at the landscape level.

· Further, when assessing benefits of proposed classes of actions and activities compared to no action, and compared to alternative actions or combinations of actions, synergistic and cumulative impacts should be considered. This is especially true for FB-associated activities, because these are subject to special legal restrictions and policy concerns.

· There is opportunity to considerably improve information availability, flow and utilization related to environmental compliance procedures and requirements, consequences and performance. Similarly, improvements can be achieved in processes of environment-related results reporting, documentation and approval. Efforts recently have been initiated to improve effectiveness of baseline and monitoring information generation, availability, flow and utilization, and should continue to receive high priority for attention and funding. Otherwise, effective long-term sustainable management of these fragile ecosystems is in jeopardy.

· The FBEA scoping statement and TOR tasked this assessment with providing recommendations for improving compliance with environmental procedures for forest management assistance activities, for activities carried out within natural protected areas and buffer zones, and for those FB-associated activities being implemented under the PRA/PRAplus Programs. It also tasked the assessment with providing suggestions and guidance for improving responsiveness of FB-associated programs and activities to USAID policies related to integration of USAID environmental procedures with host country procedures and policies, and incorporation of environmental compliance procedures into program and activity results planning, achieving and monitoring.

B. BACKGROUND -- LEGAL AND POLICY SETTINGS

The provisions of USAID Regulation 216 (22CFR216) establish conditions and procedures for environmental review of activities supported with USAID funds, in which compliance is viewed as a process that has the objective of environmentally sound development.

Under Regulation 216, forestry and related biodiversity management activities are not included within the classes of actions determined generally to have significant effects on the environment. Thus, an environmental assessment or impact statement is not automatically required.

However, USAID environmental procedures specify that under certain circumstances programmatic assessments may be applied to classes of actions, in lieu of the application of Initial Environmental Examination and Environmental Threshold Decisions (IEE/ETD) general procedures for each activity [Reg. 216.2(d)(2)]. Also, special and more demanding environmental assessment, management and mitigation requirements apply to activities that may significantly impact on environments of tropical forest ecosystems (FAA Amendments under sections 117-119). These circumstances call for application of additional design standards and environmental consequences criteria, as compared to other activities.

Additionally, past and current arrangements to formally comply with environmental procedures for FB-associated activities largely have overlooked USAID environmental policy directives and guidance focused on sustainable development and cost-effectiveness goals. Incorporation of these policies into program and activity design, implementation and monitoring, and especially into environmental procedures compliance arrangements, can significantly reduce the compliance burden in terms of financial costs and time, as well as demands on institutional and professional capacities. This also can contribute significantly to achievement of sustainable development results.

In furtherance of USAID policy, the F/BEA approach seeks to integrate environmental compliance procedural requirements with more development-focused environmental policies in a way that converts procedural compliance expenditures into development investments.

Incorporating compliance costs into program and activity results planning, achieving and monitoring, and into Peruvian environmental management capacity-building, can be expected to contribute to this end. Such an approach can significantly reduce the proportion of total program and activity costs dedicated to formal compliance, while substantially contributing to achievement of environmental management program and activity investment results essential to sustainable development.

Annexes A and B presents a brief description of the characteristics of the USAID and GOP legal and policy setting surrounding USAID-supported programs and activities encompassed in the F/BEA. These sections are equally relevant to other USAID-supported programs and activities that may significantly affect tropical forests and associated ecosystems. Annex C shows a matrix that summarizes commonalities, expressed as equivalency levels, between major procedural elements of each.

C. RATIONALE, SCOPE AND PURPOSES OF F/BEA

1. Rationale The principal reasons for the F/BEA are:

· Mission’s commitment to develop an Environmental Assessment (EA): Because of Mission concerns about environmental compliance for activities that may impact significantly on FB-associated environments, especially for activities under the Mission Integrated Development Initiative (hereafter referred to as IDI) program, the USAID/Peru FY 2004 Annual Report committed to prepare an environmental assessment of forest and protected areas management activities.

· Gaps in the Alternative Development Program’s Programmatic Environmental Assessment (ADP PEA): ADP PEA, initially was intended to cover all IDI program activities. Subsequently, a decision was made to defer to the F/BEA a more thorough assessment of retrospective and prospective environmental management considerations for assistance program activities that may directly or indirectly affect tropical forests and associated biodiversity areas.

· Global 200 Ecosystem Analysis. Much of Peru’s tropical forests and associated ecosystems are designated among the world’s most valuable and most vulnerable biological assets by the Global 200 ecosystem analysis developed by WWF.

· Size of Program. The USAID/Peru 2002-2006 Strategy Plan allocates nearly US$400 million for IDI programs, and most activities under IDI may potentially significantly impact on the environments of tropical forests and associated ecosystems.

· Magnitude of Focus Area. The geographic focus area of the F/BEA encompasses parts of seven departments that hold over 20 million hectares of Peru’s permanent production forests. Additionally, native communities have ownership and use rights over another 8 million hectares of tropical forests and associated ecosystems. This represents approximately 34% of Peru’s total forest coverage.

· Fragility of Tropical Forest Ecosystems. The region includes environmentally fragile Protected Areas (PA) covering approximately 9.5 million hectares, constituting approximately three-fourths of the total natural protected areas included in Peruvian Natural Protected Areas System (SINANPE) to date.

Table No. 1 State Protected Areas covered by F/BEA Interventions

Chemonics-PRA

(1) Transitory condition prior to final categorization

(2) It’s not considered a PA

· Special Compliance Requirements. Compliance requirements for FB-associated activities are more stringent than for other activities.

· Compliance with GOP Law. Mission management seeks to achieve compliance with GOP environmental procedures by partners and their associates, especially regarding impacts on tropical forests and associated ecosystems.

· Aptness of Multi-Project Programmatic Environmental Assessment. The integrity of tropical forests and associated ecosystems is especially vulnerable to indirect impacts that result from the synergistic and/or cumulative (over time) effects of several activities within a naturally integrated contiguous area generally defined by natural barriers (e.g., a watershed). Individual site-specific activity interventions often do not generate significant off-site impacts, but collectively, such impacts often become significant and may become severe. Over time these impacts may cause irreparable damage. A multi-project programmatic approach to environmental assessment is especially apt under these conditions. It facilitates assessment of synergistic and cumulative impacts that result from numerous site-specific interventions having secondary effects beyond site boundaries. This, in turn, facilitates design of measures at a sufficiently aggregated level to cost-effectively avoid/mitigate such impacts.

Accordingly, a comprehensive “stock-taking” is needed, along with appropriate analysis and recommendations to assure compliance with both the letter and the spirit of USG and GOP environmental policy and mandates related to tropical forests and associated biodiversity areas.

Additionally, the draft ADP PEA does not obviate the need for an in-depth ex-post and ex-ante environmental assessment and compliance review of ADP-funded interventions that potentially may significantly affect tropical forests and biodiversity areas. Such an assessment should include site-specific findings, conclusions and, as appropriate, recommendations for improvements in mitigation actions, baseline information collection, monitoring arrangements, reporting and follow-up actions, to assure adequate future conformance to the USG and GOP environmental mandates and policies.

The multi-project environmental assessment approach proposed is appropriate to assess the environmental effects of a number of individual actions and their cumulative environmental impact in specified geographic areas. Similarly, it is appropriate where the assessment is intended to establish criteria for classes of actions to eliminate or minimize adverse effects of such actions, to enhance the positive environmental effects of such actions and/or to reduce the amount of paperwork or time involved in adhering to environmental procedures.

2. Scope

The F/BEA encompasses all USAID/Peru 2002-2006 Strategy Plan assistance program activities and interventions that potentially may have a significant positive or negative impact on tropical ecosystems within the broad geographic region of focus of IDI programs, except for those activities managed directly by Chemonics-ADP (assessed in the ADP PEA). Thus, the F/BEA includes those activities receiving SO12/SO13 funding under the mission JEA being managed by SO12 (Cordillera Azul and CEDEFOR activities), activity receiving only SO12 funding (TNC-PiP), as well as FB-associated activities being implemented under SO10 funding the Poverty Reduction and Alleviation programs (PRA) and the PRAplus under SO13 funding. Although the F/BEA is applicable to the area of geographic focus of the ADP PEA, it includes additional areas where USAID partners are active. For example, the ADP PEA does not include tropical forest ecosystems in Madre de Dios or Loreto, which are included in F/BEA because of USAID-supported activities in forest concessions there and in the Pacaya-Samiria National Reserve, also located in the latter Department.

Activities encompassed, by lead partner institution, are:

· Chemonics-PRA: Activities providing technical and financial assistance under the SO10 Poverty Reduction and Alleviation (PRA) Activity, including business enterprise development assistance (especially in business planning), and related assistance to raw materials producers, processors and marketers, including agricultural and timber production, processing and market access activities being assisted under PRAplus with ADP funding.

· The Field Museum of Chicago (FM): Under the SO12/13, the Cordillera Azul Activity implements activities related to the Cordillera Azul National Park and buffer zone, including technical assistance for park values protection; to stabilize and generated improved incomes for rural families and communities through agro-forestry, farm diversification and reforestation of degraded areas.

· The Nature Conservancy (TNC): Under the Parks in Peril initiative and supported by the SO12, TNC and its partners develop activities related to PA management assistance and income generation for local families and communities within the Pacaya-Samiria National Reserve (NR), the Yanachaga-Chemillen National Park (NP), the Yanesha Communal Reserve (CR), the San Matias - San Carlos Protection Forest (PF), and surrounding buffer zones.

· World Wildlife Fund (WWF): Through the Integrated Forestry Program – CEDEFOR under the SO12/13, WWF provides technical and financial assistance for management of forest concessions [including the preparation of GFMP and annual operating plans (AOP)], reforestation and agro-forestry.

3. Purposes of the F/BEA

Purposes of the F/BEA are to:

· Identify weaknesses in the application of USAID environmental procedures in on-going and future FB-associated program and activity results design, achieving and monitoring, by classes of actions.

· Identify design, implementation and/or monitoring weaknesses in FB-associated activities that represent threats to the environments of tropical forest ecosystems, and suggest measures to correct identified weaknesses.

· Provide guidance for developing improved design standards and criteria for activities within the various classes of actions that are within the scope of the F/BEA, in order to minimize adverse individual, synergistic and cumulative effects on the environments of affected tropical forest ecosystems.

· Provide guidance to reduce the amount of paperwork and time involved in complying with required environmental procedures and relevant policies.

· Assess adequacy of environmental regulatory and policy compliance arrangements applied (or proposed for application) during design, implementation and monitoring phases of on-going and future activities, and recommend improvement measures by classes of actions.

· Identify effective and efficient alternatives for complying with both USAID and GOP environmental procedures and policies for on-going and future activities within the classes of actions assessed.

Annex E offers a summarized explanation of the methodology used in the F/BEA process and Annex F presents the list of the preparers and of the persons who provided expert assistance and guidance in Peru.

D. MAJOR FINDINGS FOR EACH PARTNER

The present section of the Multi-Project Environmental Assessment concerns on-going and planned site-specific interventions that potentially may significantly affect tropical FB-associated areas or that directly or indirectly involve timber extraction for sale, based on Section 216.6 (d) of 22 CFR 216. Thus, in what follows identification is made about impacts or gaps associated to the classes of actions considered in the framework of the F/BEA, as well as recommendations for mitigation actions in relation to each USAID partner.

It should be noted that the two interventions included in the JEA (CEDEFOR and Cordillera Azul) and the TNC Parks in Peril activity are de facto activities which have as central objective mitigating pre-existing environmental impacts and/or threats through the conservation of biodiversity and sustainable natural resources management. However, USAID has considered it necessary to include evaluation of the adequacy and appropriateness of the environmental review and compliance processes being applied to date for these forestry/biodiversity on-going interventions, which are supported under the current Mission Strategic Plan for 2002-2006, especially as to conformance with (and/or appropriateness of) conditions issued in the relevant ETD’s. In these cases the causes of the impacts or potential threats encountered do not constitute by any means the causes of adverse environmental impacts of the potential threats or problems identified. Rather, the efforts derive from the elements in the present context of the working area of the implementing organizations and/or problems/gaps of the technical assistance in the support which is being given.

Most if not all ongoing and planned future activities that potentially may significantly affect tropical forests and/or associated biodiversity areas (or that are subject to even more demanding provisions) fall under one of three IEEs and the respective ETD; there is one each for SO10, SO12 and SO13.

The referenced ETD’s each issued a negative determination with conditions for activities that potentially may significantly affect tropical forests and associated biodiversity areas.

For the expanded alternative development program (ADP-SO13), the ETD issued a negative determination with conditions for activities in protected areas and for development of forestry management plans, including reforestation activities. The conditions are as follows: “These activities shall be guided by applicable US and Peruvian government environmental regulations, restrictions, and guidelines for the management of tropical forests and for the protection of the biological diversity and the ecological integrity of protected areas. These conditions must be presented in the forest management plans that will be generated for each protected area to be supported by the ADP. The management plans will incorporate an environmental assessment of the potential environmental impacts. The terms of reference for preparation of the management plans shall be submitted to LAC/BEO for approval prior to initiating activities.”

In relation to PRA, the ETD issued a negative determination with conditions for activities and actions designed to achieve three sub-IRs under SO10. These are: 1) support to activities to improve infrastructure development and regulation (sub-IR 1.3); 2) provide capital support to microfinance institutions (sub-IR 2.3), and; 3) support to expand use of environmentally sound production technologies (sub-IR 3.2). The ETD conditions require that 1) the implementing agency assure that environmental concerns are included as appropriate in policy analyses, and that environmental assessments are included for infrastructure projects as an integral part of the project, 2) monitoring and specific environmental analyses must be conducted by the implementing agency to ensure that appropriate mitigation procedures are in place for environmentally sound production technologies interventions of significant scale and magnitude. Additionally, interventions providing capital support to micro-finance institutions must adhere to environmental guidelines known as “micro-enterprises and the environment in Peru” (adapted from the 2001 LAC Environmental Guidelines). Finally, support to expanded use of environmentally sound production technologies must adhere to relevant portions of the LAC environmental guidelines (Chapter 4: “Environmental Issues and Best Practices for Micro-finance Institutions and Micro and Small-Scale Enterprises”). Some activities under way or being planned under PRA potentially may have significant effects on tropical forests and biological diversity. These will be identified and included in the proposed environmental assessment.

Some activities underway or being planned under PRA potentially may have significant effects on tropical forests and biological diversity. As will be seen in the following pages, the Chemonics-PRA activity exhibits serious limitations in the application of environmental regulations, which its original design did not consider, since it is oriented to relief of poverty through the development of markets, the generation of employment and investments.

1. Criteria that qualify Impacts:

For this analysis certain criteria have been defined which qualify the environmental impact in function of the causes that generate or exacerbate it.

For these purposes, it is considered that in virtue of its magnitude the adverse impacts may be:

· Synergistic Impacts: Impacts that cooperating together enhance their effects (a synergistic effect). Certain negative impacts of an individual activity (e.g., a forest concession) may not be significant. However, when a number of these activities are carried out in close proximity to each other within an environmentally interactive landscape (e.g. such as a macro or micro watershed), those negative impacts become significant. In order to anticipate possible significant negative synergistic impacts, one must look at the critical natural wildlife habitats, ranges and/or migratory routes within the scope of an entire watershed (or other natural interactive landscape).

· Cumulative Impacts : These are negative impacts that in the short term or during the period of assistance may not be significant, but that build up negative impacts over time until they become significant.

Additionally, according to the measures that may be taken or in virtue of its capacity of resolution:

· Can be mitigated (M): When the impact is real (has already occurred), and it is still possible to take measures to attenuate/manage/correct it (mitigate) or control the action or cause which generate the impact.

· Can be avoided (A): When the impact is potential (it has not yet occurred) so that the agent (operator) is able to avoid it before its occurrence.

· Unavoidable (U): When the impact is due to factors outside of the operator’s power of control.

Finally, the spatial criteria have been considered:

· On-Site Impacts: If a detected impact affects only physical areas within the activity boundaries

· Off-Site Impacts: If it affects only physical areas outside of the activity boundaries.

Many negative impacts may be both synergistic and cumulative. These impacts always affect off-site areas (and often, on-site areas as well).

It is beyond the scope and the manageable interests of individual activities to develop and apply mitigations for such multiple-activity synergistic and cumulative impacts. Yet, both USAID and the GOP have a moral and legal responsibility to anticipate and to mitigate such impacts. Mitigations must be designed and managed at the interactive landscape level, using the tools of land use planning, and application of other environmental policies, including watershed management, natural protected areas, etc. The recent GOP legislation provides a number of policy opportunities to assist local governments and national environmental institutions to develop and apply planning and implementation for mitigation of these impacts.

In the following pages, a brief analysis is presented of the adverse impacts to which the above-mentioned criteria have been applied, some mitigation measures are being applied and recommendations proposed by the F/BEA team. The analysis is presented independently for each operator an in function of each class of action. For a clearer understanding, please refer to Summary Matrix of Conclusions and Recommendations per Classes of Actions in Section E of this report, which provides the information in summary by classes of action.

In all cases, it should be noticed that the USAID partners are making significant efforts to comply with their Activity objectives and to optimize their activities environmentally, according to the understanding that each organization has of this matter. Positive impacts of the interventions not treated in these pages are emphasized in the technical reports written by the members of the F/BEA team.

2. Determination of Classes of Actions:

The assessment team determined that activities being assessed can be conveniently categorized into five classes of actions for analysis purposes. For each class of actions, partners, types of activity interventions and physical locations for intervention sites were identified to assist in structuring the information gathering process. The results are shown in the matrix below (Table No. 2).

Table No. 2

Matrix of Classes of Actions by Partners, Types of Inputs and Physical Locations of Activities

Forest Concessions

· TA/preparation of GFMPs and AOPs

· TA during plan implementation

· TA/training to Forest Mgmt. Committees

· Collection of data from monitoring plots

· TA/business management

· Financial/in-kind assistance/ Credit Huanuco: Tingo Maria, Puerto Inca (Pachitea)

Loreto

Madre de Dios: Tahuamanu, Manu, Tambopata

San Martin: Bellavista, Huallaga (Saposoa), Mariscal Caceres, Tocache

Ucayali: Atalaya, Coronel Portillo, Padre Abad (Aguaytia-Von Humboldt), Purus

· TA to producers of monoculture crops

Ayacucho: Anco-San Miguel Cajamarca: Bagua, Jaen

San Martin: Tarapoto, Bellavista, Lamas, El Dorado, Picota, Tocache, Mariscal Caceres, Moyobamba, Rioja

Ucayali: Pucallpa, Curimana, Neshuya - Aguaytia