40253-035: Greater Mekong Subregion Biodiversity

Project Administration Manual

Project Number: 40253-035 Grant Number: G0433 11 May 2015

Socialist Republic of Viet Nam: Greater Mekong Subregion Biodiversity Conservation Corridors Project (Additional Financing)

Contents

I. PROJECT DESCRIPTION 1

A. Project Rationale, Location and Beneficiaries 1

B. Impact and Outcome 2

II. IMPLEMENTATION PLANS 10

A. Project Readiness Activities 10

B. Overall Project Implementation Plan 11

III. PROJECT MANAGEMENT ARRANGEMENTS 18

A. Project Implementation Organizations – Roles and Responsibilities 18

B. Key Persons Involved in Implementation 21

C. Project Management Structure 22

D. Technical Considerations 28

IV. COSTS AND FINANCING 64

A. Detailed Cost Estimates by Expenditure Category 65

B. Allocation and Withdrawal of Grant Proceeds 65

C. Detailed Cost Estimates by Financier 66

D. Detailed Cost Estimates by Outputs/Components 66

E. Detailed Cost Estimates by Year 67

F. Contract and Disbursement S-curve 67

G. Fund Flow Diagram 68

V. FINANCIAL MANAGEMENT 69

A. Financial Management Assessment 69

B. Disbursement 69

C. Accounting 72

D. Internal control 72

E. Financial and Progress Project Reporting 73

F. Auditing and Public Disclosure 73

VI. PROCUREMENT AND CONSULTING SERVICES 75

A. General 75

B. Advance Contracting 75

C. Procurement of Goods and Consulting Services 75

D. Procurement Plan 77

VII. SAFEGUARDS 84

A. Involuntary Resettlement 84

B. Environmental Safeguards 84

C. Ethnic Minority Development Framework 85

VIII. GENDER AND SOCIAL DIMENSIONS 86

IX. PERFORMANCE MONITORING, EVALUATION, REPORTING AND COMMUNICATION 89

A. Project Design and Monitoring Framework 89

B. Monitoring 94

C. Evaluation 95

D. Reporting 96

E. Stakeholder Communication Strategy 96

X. ANTICORRUPTION POLICY 100

XI. ACCOUNTABILITY MECHANISM 101

XII. RECORD OF PAM CHANGES 101

APPENDIXES

1. Project Readiness Filter 102

2. Procurement Capacity Assessment 105

3. Draft Terms of Reference Of Consultants 113

4. Financial Management Assessment 141

Project Administration Manual Purpose and Process

The project administration manual (PAM) describes the essential administrative and management requirements to implement the Project on time, within budget, and in accordance with Government and Asian Development Bank (ADB) policies and procedures. The PAM should include references to all available templates and instructions either through linkages to relevant URLs or directly incorporated in the PAM. The Viet Nam Environment Administration (VEA) under the Ministry of Natural Resources and Environment (MONRE) and the Provincial Peoples’ Committees (PPC) are wholly responsible for the implementation of ADB financed project, as agreed jointly between the Recipient and ADB, and in accordance with Government and ADB’s policies and procedures. ADB staff is responsible to support implementation including compliance by MONRE/VEA and PPC of their obligations and responsibilities for project implementation in accordance with ADB’s policies and procedures. At Grant Negotiations, the Recipient and ADB shall agree to the PAM and ensure consistency with the Grant Agreement. Such agreement shall be reflected in the minutes of the Grant Negotiations. In the event of any discrepancy or contradiction between the PAM and the Grant Agreement, the provisions of the Grant Agreement shall prevail. After ADB President’s approval of the project, changes in implementation arrangements are subject to agreement and approval pursuant to relevant Government and ADB administrative procedures including the Project Administration Instructions and upon such approval they will be subsequently incorporated in the PAM.

ABBREVIATIONS AD - Audit Director ADB - Asian Development Bank ADF - Asian Development Fund AFS - audited financial statements AFOLU - Agriculture, Forestry and Land Use ALM - Agricultural Land Management AP - affected people BCA - Biodiversity Conservation Agency BCC - biodiversity conservation corridors BZ - buffer zone CCB - Climate, Community and Biodiversity Alliance CCBA - Community and Biodiversity Alliance CDF - Community Development Fund CEO - Chief Executive Officer CO2 - Carbon Dioxide CPMU - Central Project Management Unit CPP - community participation in procurement CQS - consultants’ qualifications selection DARD - Department of Agriculture and Rural Development DONRE - Department of Natural Resources and Environment DPIU - district project management unit DMF - design and monitoring framework EMDP - ethnic minorities development plan EMP - environmental management plan EMO - External Monitoring Organization FAO - Food and Agriculture Organization FCPF - Forest Carbon Partnership Facility FPC - Forest Protection Contract FPD - Forest Protection Department FPIC - Free, Prior and Informed Consent GAP - gender action plan GEF - Global Environment Facility GHG - Green House Gases GHG-I - Greenhouse Gas Inventory GIS - Geographic Information Systems GMS - Greater Mekong Sub-region ICS - individual consultant selection IPCC - Intergovernmental Panel on Climate Change IUCN - International Union for the Conservation of Nature LIC - loan implementation consultants LU/LC - Land Use/land Cover LULUCF - Land Use and land use change and forestry MONRE - Ministry of Natural Resources and Environment MOF - Ministry of Finance MPI - Ministry of Planning and Investment MRV - Monitoring, Reporting and Verification NCB - national competitive bidding OFP - Operational Focal Point OMP - operational management plan O&M - operation and maintenance

PA - protected area PAM - project administration manual PAMB - Protected Area Management Board PFES - payment for forest environmental services PIF - Project Identification Form PPC - Provincial Peoples’ Committee PPMU - provincial project management unit PPTA - project preparation technical assistance PRA - Participatory Rural Appraisal PSC - Provincial Steering Committee QCBS - quality- and cost-based selection REDD+ - Reduced Emission form Degradation and Deforestation RF - resettlement framework RP - resettlement plan SSC - Species Survival Committee SFM - Sustainable Forest Management SIS - safeguard information system SOE - statement of expenditure SPS - Safeguard Policy Statement SWOT - Strengths, weaknesses, opportunities and threats TOR - terms of reference VCC - Village Conservation Committee VCP - Village Conservation Plan VEA - Viet Nam Environment Administration VND - Viet Nam Dong VPPT - Village Participatory Planning Team VRO - Viet Nam REDD+ Office WU - Women’s Union

I. PROJECT DESCRIPTION A. Project Rationale, Location and Beneficiaries 1. The Ongoing Project. The Board of Directors of the Asian Development Bank (ADB) approved a loan in various currencies equivalent to SDR19,162,000 from the Asian Development Fund resources to the Socialist Republic of Viet Nam for the Biodiversity Conservation Corridors (BCC) Project on 10 December 2010. The loan agreement was signed on 5 May 2011, and became effective on 9 August 2011. The BCC Project’s expected impact is climate resilient sustainable forest ecosystems in the Central Annamites (Trung Truong Son) benefiting local livelihoods and downstream users while the intended outcome is sustainably managed biodiversity corridors in Quang Nam, Quang Tri and Thua Thien Hue provinces. The BCC Project has four outputs: (i) institutions and communities strengthened in biodiversity corridor management; (ii) biodiversity corridors restored, ecosystem services protected and maintained; (iii) livelihoods improved and small-scale infrastructure support provided to target communities; and (iv) project management and support services operational. 2. The Additional Financing. The proposed additional financing to the ongoing BCC Project, to be funded under the Global Environment Facility (GEF) (hereinafter called the Additional Financing) will address the ongoing fragmentation of the forest landscape and its ability to provide critical ecosystem services such as carbon storage, sustainable biodiversity and local livelihoods. Recent expansion of the regional economy has been based on the harnessing of natural capital, natural resources and ecosystem services, which is undermining critical natural habitats and life-support ecosystem services delivery functions. The forests in the region are reported to provide enormous socio-economic wealth, climate moderation, erosion control, water regulation and ecotourism. The Additional Financing will contribute to the government’s socio-economic development objectives for 2011–2020, the Biodiversity Law 2008, and the National Strategy on Biodiversity to 2020 and Vision to 2030. It will finance key elements of the Forestry Development Strategy and Socio-Economic Development Strategy in restoring and maintaining forest cover to contribute to the national targets such as reducing poverty in mountainous areas. It is also fully harmonized with Viet Nam REDD+ Strategy and the National REDD+ Action Program. It is consistent with ADB’s Strategic Priorities for 2014–2020, the Midterm Review of Strategy 2020, and the Viet Nam Country Partnership Strategy -2012–2015 to support well-planned and timely responses to environment and climate change challenges.

3. The Greater Annamite eco-region has been recognized as a priority landscape for its outstanding global biological value, high level of threat and great need for conservation action. The Central sub-region of the Greater Annamite region, which is known locally in Viet Nam as the Trung Truong Son landscape, extends from Lao PDR in the West into central Viet Nam, and is an area that existed as continual forest despite the previous climatic fluctuations. This has encouraged high degrees of speciation and endemism. A significant number of species of global importance, including the critically endangered grey-shanked douc langur (Pygathrix nemaeus cinerea), black-crowned barwing (Actinodura sodangorum) and the conifer Amentotaxus poilanei are known only within the Trung Truong Son Landscape.

4. Protecting of and maintaining as much as possible the remaining natural forests and restoring and expanding habitats is considered essential to conserve the remaining rich and globally important biodiversity in the region. Within the Trung Truong Son landscape most of the

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natural forests remains within the protected areas (PAs)1 and their immediate surroundings, which are also under serious threat from the expanding economy. The Additional Financing will, therefore, target critical gaps in the protection, management and restoration of eight protected areas and the forest and agricultural landscapes in between with the intent of maintaining and consolidating the biological and ecological viability and vitality of the Trung Truong Son landscape. In particular, the Additional Financing will link the protected areas and their buffer zones and intervening biological corridors as an effective and extensive large landscape that continues to protect and maintain the rich biodiversity, ecosystem services, watershed process, enhance carbon stocks and strengthen climate resilience at the landscape level.

5. The Additional Financing will directly and indirectly benefit over 126,000 people living in and around the PAs in the project area who are largely occupied with subsistence farming through a practice of a mix of rotational swidden agriculture and wet-rice cultivation. Nearly 80% of the inhabitants of the buffer zone belong to one of the many ethnic minorities such as: Van Kieu, Ta Oi, Gie Trieng, Ca Dong, Mnong. The indigenous people living in the area are poor and their livelihood is dependent on agriculture and forest ecosystem services and products. Project activities such as assisted natural regeneration, alternative livelihood development, payment for forest environmental services (PFES), sustainable forest management (SFM) and use, and forest resource benefit sharing can provide improved access to forest resources by the ethnic minorities, improve their production systems, receive monetary benefits from forest protection, and improve the health and wealth of their forests which are intricately linked with their well being.

B. Impact and Outcome 6. Overall, the Additional Financing aims to strengthen the management and ecological integrity of the protected area network in the Trung Truong Son region of Vietnam. Its specific objective is to strengthen institutional and community capacity in management of PAs and their surroundings of the Central Annamites landscape; strengthen landscapes conservation measures at the community level in PAs and their surroundings providing financial sustainability and reduced GHG emissions. This is to be achieved by maintaining and restoring forest biodiversity, ecosystems and related watershed processes, strengthening species conservation, enhancing forest carbon stocks and strengthening climate resilience at the landscape level,2 and actively encouraging the participation and sharing of conservation benefits with local people. The project supports a unified approach for development of regional ecosystem connectivity, addressing forest land degradation, filling gaps in capacity required for sustainable forest management, and supporting climate mitigation, habitat restoration, and biodiversity protection3 within and outside PAs. Table 1 below provides a cross reference between the ongoing BCC project outputs, and the Additional Financing sub-components.

1 Protected Areas in Vietnam are categorized as Special Use Forests that are established because they have special

value for nature conservation, scientific research and protection of historical and cultural relics and landscapes and for recreation and tourism purposes. Special Use Forests consists of Nature Reserves, Nature Conservation Areas, Landscape Protected Areas and Scientific Research and Experiment Forest Areas.

2 A unit of land that contains a mosaic of land uses, but typically would include one or more protected and their

buffer zones, and connecting biological corridors (the latter including protection and production forests, agricultural and other productively used lands, and village settlements).

3 A mandate shared by MARD (i.e. for forests and PAs) and MONRE (i.e. for biodiversity coordination).

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Table 1. Ongoing BCC Project Outputs and GEF Additional Financing Subcomponents BCC outputs Overall project (BCC outputs

and Additional Financing) GEF Additional Financing

Subcomponents (i) Institutions and communities strengthened in biodiversity corridor management

(i) Institutions and communities strengthened in conservation of the Central Annamite landscape

Sub-component 1.1. Improved PA operational management plan (establishment of one new protected area and establishment of two new Project Area Management Boards - PAMBs) Sub-component 1.4: Strengthened biodiversity planning and management at the provincial level

(ii) biodiversity corridors restored, ecosystem services protected and maintained

(ii) Biodiversity conservation landscape managed with ecosystem services protected and maintained

Sub-component 1.1. Improved PA operational management plan(development and implementation of 8 Operational Management Plans) Sub-component 1.3: Strengthened conservation management of target species

(iii) livelihoods improved and small-scale infrastructure support provided to target communities

(iii) Livelihoods improved, small-scale infrastructure support provided and financial sustainability obtained in target villages with reduced greenhouse gas emissions

Sub-component 1.2: Enhanced community participation in benefit sharing from conservation and sustainable use of biodiversityin Protected Areas and their Buffer Zones

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Sub-component 2.1. Improved financial sustainability through ecosystem services and payment for forest environmental services (PFES) Sub-component 2.2 Improved SFM and carbon sequestration in forest landscapes Sub-component 2.3: Established provincial monitoring, reporting and verification (MRV) systems

7. In conjunction with the ongoing BCC Project, the Additional Financing will develop tangible on-the-ground activities targeting spatial and thematic gaps within the Central Annamite landscape conservation framework. Project increments include:

(i) management boards of 8 protected areas (Table 2) implementing operation management plans (OMPs) for the sustainable management of over 231,000 ha in protected areas linked to an additional approximately 450,000 ha of mosaic forest watersheds with benefits to high value biodiversity (with avoided deforestation of 17,764 to 21,712 ha with associated greenhouse gas (GHG) emissions reductions of 4,722,867 tCO2 eq to 7,084,600 tCO2 eq;

(ii) Provision of community approaches in forest protection, conservation and sustainable use and alternative livelihood investment linked to forest restoration and conservation with benefits in enhanced carbon stocks, water and soil

4 Through benefit sharing from assisted natural regeneration, forest co-management and sustainable alternative

livelihood mechanisms.

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retention, biodiversity, climate resilience, and other biodiversity and livelihood contributions (10,000 ha of heavily utilized and degraded forest lands surrounding PAs lands protected and restored, with carbon sequestration of 341,310 tCO2 eq to 462,420 tCO2 eq);

(iii) good practice forest land, watershed and environmental management in Sustainable Forest Management/Reducing Emissions from Deforestation and Forest Degradation (SFM/REDD+) demonstration in two communes of Sao Lao Nature Reserve in Tay Giang Diestrcit, Quang Nam province;5

(iv) integration of multiple stakeholder inputs and on the ground actions (e.g. SFM, sustainable forest use, OMPs, PFES, target species action plans, linked to buffer zone and provincialsectoral planning) supporting globally important species and habitats;

(v) PFES/ecosystem service revenue flows to local communities linked to watershed conservation in three provinces;

(vi) provincial and local level impact monitoring frameworks, specially Safeguard Information Systems (SIS) linked to on-the-ground work with farmers in producing emissions reductions, defining benefit distribution, bridging national-regional policy and implementation, etc.

8. The Additional Financing will specifically address the components, sub-components and activities listed in the description that follows. The structuring of the components and sub-components for the additional financing follows the format that was outlined in the approved Global Environment Facility (GEF) Project Identification Form (PIF) and GEF Chief Executive Officer (CEO) endorsement document.

Table 2. Eight Protected Areas in Trung Truong Son landscape PA Legal

Status of PA

Management Board for PA Exists

Master Plan

Completed

Operational Management Plan Current

Area of PA (ha)

Area of Buffer

Zone (ha) Quang Tri Province

North Huong Hoa + + + - 23,486.00 34,600.00

Dak Rong + + + - 37,681.00 88,755.90 Ho Chi Minh Legendary Trail

+ - - - 5,237.00 6,064.00

Thua Thien Hue Province Phong Dien + + + + 41,508.70 43,600 Sao La TTH + + + + 15,519.93 16,533.90 Quang Nam Province Sao La QN + + + + 15,380.00 33,039.20 Song Thanh + + + - 75,274.00 135,477.90 Ngoc Linh - - - - 17,190.00 36,331.50

Total (hectares) 231,276.63 394,392.40 PA = Protected Area, ha = hectares. Source: Decision No. 1976/QD-TTg dated 30 November 2014 of the Prime Minister.

5 The site is to be confirmed at project inception stage.

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1. Component 1: Strengthened planning and management of the biodiversity and forests in the Protected Areas and their surroundings in the Trung Truong Son landscape

9. The geographic placement of the eight PAs in the Trung Truong Son landscape within the north-south and the east-west biodiversity corridors provide a critical opportunity to conserve and enhance ecosystem services, including carbon rich sinks, critical watersheds important to downstream users, and habitat for biodiversity of global importance. 10. The ongoing BCC project is designed to support the establishment and management of biodiversity corridors to connect important conservation areas, including the PA system.The Additional Financing will contribute important inputs into the landscape and system wide approach. In particular, it will afford opportunities to integrate (spatially and thematically) global environment benefits generated by improved PA management effectiveness and protection, forest restoration, improved community livelihoods and income generation, carbon storage, and improved connectivity between components of the wider landscape.

11. Component 1 seeks to ensure that Government of Viet Nam (GoV) institutions responsible for PA management have the capacity to use appropriate tools and methods and apply these tools and methods for effective and sustainable PA, PA’s surroundings management. Specifically, PA OMPs (1.1, below) and Species Management Action Plans (1.3 below) aid consolidation of baseline projects and support the National Biodiversity Strategy and National Protected Area Strategy. It also supports other key legislation of PA establishment, management and forest protection such as Biodiversity Law (2008), Government Decree No. 117/2010/NĐ-CP (Organization and management of special-used forest system), Prime-Minister Decision No. 07/2012/QĐ-TTg (Issuing some policy for strengthening forest protection that promulgate the piloting of co-management mechanism for Protected Areas), Decision No. 24/2012/QD-TTg (Investment policy for development of special – use forests in 2011 – 2020), Decree No. 99/2010/ND-CP (Policy for Payment for Forest Environmental Services) and help to pilot the implementation of Circular 10/2014/TT-BNNPTPT (Regulation on Criteria for Delineation Buffer Zones of Special Use Forests and Protection Belt of Marine Protected Areas). The implementation of the above strategies and legislations aims to mainstream PA protection and biodiversity conservation objectives into wider corridor sector planning. The Additional Financing will define and address important PA management capacity gaps, threats to habitats and species, forest connectivity and buffer zone issues that will inform the development of landscape wide comprehensive Provincial Biodiversity Management Action Plans and sector planning.

a. Sub-component 1.1: Improved protected area operational management plan

12. The OMPs will build on existing PA master plans that provides the overall framework to guide management and investments in the PAs and their surroundings. Two of the PAs still require master plans, the preparation of which will be funded by Additional Financing. The OMPs will be developed/revised and implemented mobilizing comprehensive stakeholder input. In developing the OMPs, efforts will be made to mobilize recurrent GoV PA investments on the longer term to address main threats to the PAs, along with additional support from the project. 13. The Additional Financing will specifically support: (i) develop new strategic OMPs in 5 focal PAs, (ii) update and assist implementation of priority activities under OMPs in all 8 PAs; (iii) work with the Quang Nam Provincial government to establish one new protected area (Ngoc

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Linh); (iv) establish two new management boards (Ngoc Linh and Ho Chi Minh Legendary Trail); (v) develop a PA Investment Plan (Ngoc Linh); and (vi) prepare master plans for two PAs (Ngoc Linh and Ho Chi Minh Legendary Trail). (see Table 2 for details of PAs status and development requirements).

14. After OMP prioritization, the Additional Financing will allocate part of the sub-component budget to OMP implementation. Local level conservation-related activities may include benefit sharing mechanisms and Protected Area management board (PAMB) engagement with local communities to improve PA enforcement; environmental education and awareness; staff training, research and monitoring, inter-agency protection protocols; PA habitat and species management, and other important PA-buffer zone community conservation priorities. Within the first twelve months of the Additional Financing since its effective date, if a PAMB of the 6 existing PAMBs fails to develop or update its OMP prioritization, funding can be reallocated to other PAMBs with completed OMP prioritization. Within 2 years of the Additional Financing since its effective date, if one of the new PAMBs (Ngoc Linh and Ho Chi Minh Legendary Trail) fails to be established, and their OMP prioritization is not completed, resultant funding can be reallocated to other PAMBs with completed OMP prioritization.

15. Building improved management effectiveness in the 8 target PAs is also expected to reduce degradation and deforestation of PA Strict Protection Zones (or core areas) covering 231,000 ha of Trung Truong Son forest. Assuming the Additional Financing will be able to reduce the current primary forest deforestation rate by 40-60% (currently estimated at 1.18%) and maintain at least ‘medium’ quality forests through improved protection, the Additional Financing will avoid GHG emissions of 4,722,867 tCO2eq to 7,084,600 tCO2eq over 20 years.

b. Sub-component 1.2: Enhanced community participation in benefit

sharing from conservation and sustainable use of biodiversity in Protected Areas and their surroundings6

16. Within the Trung Truong Son landscape there are significant areas of fragmented and heavily used and degraded forest in the immediate vicinity of the protected areas that threaten the viability and the integrity of the PA network and that of the corridor and landscape as a whole. To negate the threat of degradation of forests around the PAs, the Additional Financing will encourage community participation in forest protection and sustainable use and benefit sharing within the buffer zones of the protected areas. 17. Under this sub-component, the integration of community participatory mechanisms in PA management, sustainable resource use, benefit sharing and alternative livelihoods is aimed at providing adequate incentives for local people living in PA surroundings to change current unsustainable and destructive resource use practices. The Additional Finanncing will institute a participatory planning process at the village level in a selected number of villages (40 villages) in PA buffer zones to integrate a number of programs for community benefit sharing linked to conservation such as sustainable resource use of forests and natural resources, PFES revenue from forest protection, sustainable forest management (SFM), Reducing emissions from deforestation and forest degradation (REDD+) and sustainable alternative livelihoods and incomes to encourage community support for conservation. To implement the participatory planning approach at the village level, the Additional Financing will provide technical and



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participatory contract support to faciliate participatory approaches, training and capacity development for staff and communities, block grants to support investments in income generation and livelihood improvement, technical support for scaling up successful PFES revenue delivery mechanisms, feasibility studies for implementation of SFM and REDD+ pilots linked to sub-component 2.2, capacity building for sustainable resource use and implementation of community agreements for protection of forests. The sub-component will complement sub-component 2.1 in terms that the latter will support community benefit sharing through PFES revenues generated from hydro-power, while the former focuses on direct benefit sharing of sustainable forest products and conservation linked livelihood development opportunities. Overall, this sub-component is aimed at testing community approaches and institutional mechanisms for benefit sharing and co-management in buffer zones of protected areas that could lead to development and validation of guidelines and procedures for buffer zone management and resource sharing.

c. Sub-component 1.3: Strengthened conservation management of target species

18. Encompassing both PA habitats and the developing trans-provincial conservation corridor, three “Target Species Management Action Plans” will be developed to help maintain, restore and improve globally and regionally important key species populations by managing inter-connected habitat. The following species are recommended for which management action plans would be developed: (i) Crested gibbon (Nomascus spp.); (ii) Red Shanked douc (Pygathryx nemaeus); and (iii) Giant muntiac (Muntiacus vuquangensis). Globally important mammal species that were considered are the Crested gibbon (Nomascus spp.), namely Nomascus siki and Nomascus gabriellae, the former has a range that is limited by the Mekong River in the west and Viet Nam’s coastal agricultural areas in the east and the latter has a global distribution covering eastern Cambodia, southern Viet Nam and southern Lao PDR. The second target species, the Red-shanked douc langur (Pygathrix nemaeus), is a primate that is endemic to Annamite ranges and currently found only in Central Viet Nam and Lao PDR. The Giant muntiac (Muntiacus vuquangensis) is one of the three ungulates that were described in late 90s of the 20 century. The Giant muntiac is endemic to Annamite ranges and is currently found only in Central Viet Nam and Lao PDR.7 The action plans will help (i) integrate PA species values and protection measures for key target species into the wider landscape; (ii) develop protection measures for their habitats (PA, buffer zones and biodiversity conservation corridor); (iii) harmonize priorities and delegate responsibilities for specific activities; (iv) establish the resources necessary to implement individual activities; (v) update baselines for the key target species and; (vi) set initial guidelines for monitoring success. 19. In developing the plan, wide landscape stakeholder representation and participation will be solicited, to jointly align their positions on key protection issues. The Additional Financing will support technical assistance, workshops and consultation leading towards the preparation of the action plans and provide support for limited on-the-ground implementation of the action plans within the PAs and their buffer zones and additional support is expected to come from project beneficiaries to integrate key biodiversity considerations, and from recurrent GoV investment, community and inter-agency planning. The work will be underscored by regular PA biodiversity

7 Other species that were also considered included the Truong son muntiac (Muntiacus trongsonensis), Crested

argus (Rheinardia ocellata), Annam leaf turtle (Cyclemys annamensis), Three-striped Box Turtle (Cuora trifasciata), Three-striped Box Turtle (Cuora trifasciata) and Ngoc Linh ginseng (Panax vietnamensis). However, given the limitations of funding available, the action planning will be confined to the first three species.

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monitoring and census, community-based protection established by the baseline projects, and improved PA management (1.1, above). The three Species Management Action Plans will form an important input into the anticipated Provincial Biodiversity Action Plans (which will place biodiversity considerations within sector policies and be supported by development, application and monitoring of specific legislation).

d. Sub-Component 1.4: Strengthened biodiversity planning and

management at the provincial level

20. The three Target Species Management Action Plans, PA Operational Management Plans, and community participatory actions in the buffer zones of the protected areas will provide important inputs into the anticipated Provincial Biodiversity Action Plans (which will place biodiversity considerations within sector policies and be supported by development, application and monitoring of specific legislation). The Provincial Biodiversity Action Planning is the mandated responsibility of Department Natural Resources and Environment (DONRE), the ongoing BCC project and the Additional Financing will have a role in facilitating the sharing of field experiences in the action planning process with Department of Agriculture and Rural Development (DARD) and other sectors. 21. The Additional Financing will support the preparation/update of Provincial Biodiversity Action Plans by facilitating the mainstreaming of learning and experiences of PA operational management planning, species management action planning, and community participatory planning (linked to sub-components 1.1, 1.2 and 1.3) into the biodiversity action planning exercises. The Additional Financing will provide technical support to document learning and experiences and its integration with the provincial action planning in the three project provinces.

2. Component 2: Landscapes conservation measures at the community level in PAs and their surroundings to facilitate financial sustainability and reduce greenhouse gas emissions

22. This component will provide critical technical linkages between PA management, sustainable buffer zone forestry and community and smallholder livelihood improvement measures to protect and enhance forest carbon stocks, reduce forest degradation and improve habitat connectivity.

a. Sub-component 2.1: Improved financial sustainability through ecosystem services assessment and payment for forest environmental services (PFES).

23. Already a number of existing hydropower schemes generates PFES revenues to catchment communities in Quang Nam province for protection of critical forested watersheds. A number of new hydropower schemes are expected to also generate new PFES revenues to additional communities in the near future. The Additional Financing supports the scaling up of successful PFES revenue delivery mechanisms and its effective operationization in at least 25 villages (preferably within the 40 villages selected under component 1.2) in the buffer zones around PAs in the 3 Provinces. This sub-component is anticipated to provide learning and experiences and serves as acatalyst in the further extension of PFES programs to other villages within the three provinces as new and additional hydropower schemes are operationalized. Hence, the Additional Financing is intended to contribute to a more wider replication of PFES benefits through the entire landscape of the Trung Truong Son. The PFES work will link with

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sub-components 2.2 and 2.3 in all three provinces and will be implemented through the participatory planning process defined in sub-component 1.2.

b. Sub-component 2.2: Improved Sustainable Forest Management and Carbon Sequestration in forest landscapes

24. The Additional Financing will promote community level SFM interventions, including REDD+ if/where applicable. The project will evaluate the feaasibility of leveraging through REDD+ into buffer zone management to support increased afforestation, improved cmmunity forest management and protection; and will support the improvement of good practice guidelines for SFM through demonstration. This sub-component will adopt a step-wise approach, to ensure that the intervention is feasible and contextually appropriate for the proposed site, based on local context and needs. REDD+, for example, may be an appropriate tool in certain circumstances. The development of SFM/REDD+ will require scoping, feasibility assessments, detailed project design and finally implementation. Once the project has been designed, using a fully participatory approach and assuming its feasibility, ministerial and provincial approvals will be required before the pilot implementation phase begins. This will enable the demonstration of working SFM models and gathering data on outcomes and impacts and the subsequent seeding of activities and its operationalization, which will greatly ease access to ‘follow-on’ and sustainable PFES/carbon/investment finance. The SFM/REDD+ pilot will be closely linked to development of provincial forest impact and safeguard monitoring (related to national and provincial MRV systems) and piloting of local monitoring systems (2.3 below) that underscore recent developments toward legally binding SFM curricula within the NRP at the national level; and promote SFM knowledge and awareness raising..

c. Sub-component 2.3: Established provincial forest impact/safeguard monitoring systems (linked to emerging National Monitoring, Reporting and Verification (MRV) systems)

25. The Additional Financing will support monitoring of Trung Truong Son SFM/REDD+ issues, enhancing institutional capacity to account for GHG emission reduction and increased carbon stocks through establishment of protocols, training and reference carbon baseline and forest impact/safeguard monitoring systems (i.e. the constituent parts of MRV). Importantly a distinction is made here between the development of provincial level capacity for MRV and sub-national impact/safeguard monitoring tools, as opposed to the development of multiple sub-national MRVs themselves. In this way, the technical requirements and overall design of the MRV will be national, created under the UNREDD guidance, while at the provincial level the focus will be on general capacity building for MRV, and specifically on designing impact monitoring frameworks, namely specifically Safeguard Information Systems (SIS). A national level MRV framework was established under UNREDD/FAO component (Phase I). With the project working closely with the National REDD+ Operational Focal Point (OFP), the World Bank Forest Carbon Partnership Facility (FCPF) (focused on the Central Highlands on SFM and REDD readiness work), a developing Phase II UNREDD project and others, the Additional Financing will provide data on land use change (forest loss) and emissions factors at the Trung Truong Son Provincial levels for one – three provincial forests in order to bridge the national-regional and SFM/REDD demonstration gap through training, capacity building, and awareness raising on SFM/REDD+, and (ii) Pilot of SIS at the district and commune level will be undertaken, and linked to the proposed additional financing SFM/REDD+ implementation pilot (2.2, above).

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II. IMPLEMENTATION PLANS A. Project Readiness Activities

26. The following table shows Project readiness of the Additional Financing as of April 2014. Appendix 1 contains the Project Readiness Filter for the activities funded by the Additional Financing.

Indicative Activities 2015 Who responsible

May Jun Jul Aug Sep Oct Establish project implementation arrangements (completed)

CPMU and PPMUs

Advance contracting actions CPMU and PPMUs

Grant negotiations ADB/MoF

ADB approval ADB

Grant signing ADB/MoF/MONRE

Government legal opinion provided MoF/MONRE

Government budget inclusion

Grant effectiveness

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B. Overall Project Implementation Plan Component / Outputs 2015 2016 2017 2018 2019

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

COMPONENT 1:Strengthened planning and management of the biodiversity and forests in the Protected Areas and their surroundings in the Trung Truong Son landscapes

Sub-component 1.1: Improved Protected Area operational planning and management

Output 1.1.1 One new protected area established covering around 17,000 ha and conserving globally important species and habitats and maintenance of carbon pool

Recruit National PA Investment Planning Specialist (Institution)

Preparation of PA Investment Plan (IP) for Ngoc Linh Nature Reserve (mapping, threats analysis, biophysical resource assessment, socio-economic survey, participatory multi-stakeholder consultations at district and provincial level, drafting of IP, submissions to MARD and PC, final drafting and processing of IP)

Output 1.1.2 Two new PA management boards established and effectively planning and managing about 22,000 ha of new and existing protected areas for globally important species and habitats and maintenance of carbon pool

Recruit PA Management and PA Institutional Specialists

Preparation of PA Master Plans for Ngoc Linh Nature Reserve and Ho Chi Minh Legendary Trail (participatory multi-stakeholder consultations with 4 communes, information gap analysis, additional data gathering, biophysical resource assessment, assessment of land use patterns, socio-economic survey, collaborative workshops to design, prioritize programs and drafting of Master Plans)

Output 1.1.3 Five PA operational management plans established with stakeholder participation addressing key threats to biodiversity rich forests in over 159,000 ha of protected areas

Output 1.1.4 Eight new and/or revised operational management plans covering around 231,000 ha integrating conservation, co-management, PFES benefits and community livelihood activities in the PAs and their surroundings under effective implementation

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Component / Outputs 2015 2016 2017 2018 2019


Recruit PA Management Planning Specialists and PA Planning and Community Participation Facilitators, Provincial Biodiversity and PA Specialists and Community Participation and Development Specialists

Participatory multi-stakeholder workshops in each targeted PA to review current status of OMPs and identify data/information gaps, prioritize actions for OMP development

Engage and deploy PA Management planning consultants to prepare draft OMPs based on priority actions identified by stakeholder working groups (above)

Support data/information gathering, threats analysis, biophysical resource assessments, socio-economic surveys/gender analysis, review technical and management issues etc. for each targeted PA

Collaborative multi-stakeholder workshops to finalize OMPs and identify priority actions for implementation including, but not limited to zoning, co-management and institutional arrangements, capacity building for PA managers and staff, law enforcement, sustainable financing, alternative livelihoods development, access and benefits sharing (ABS), monitoring and evaluation, information, education and communications

Implementation of priority actions identified in respective OMPs for targeted PAs

Output 1.1.5 Staff in eight protected areas trained in operational management planning and effectively facilitating stakeholder participation in forest conservation and management

Conduct PA capacity development/training needs assessment for each targeted PA

Design of training and training of trainer (TOT) program, including curricula and materials targeting PA managers and PA operational and technical personnel

Implementation of training program for PA staff in targeted areas

Sub-component 1.2: Enhanced community participation in benefit sharing from conservation and sustainable use of biodiversity in Protected Areas and their surroundings

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Output 1.2.1 Institutional arrangements in place and effectively supporting conservation and sustainable benefits for local communities in at least 40 villages in six Protected Areas and their surroundings

Output 1.2.2 At least 10,000 ha of forest land in PAs and their surroundings under co-management regimes and providing NTFP and PFES and livelihood benefits to local communities (linked to sub-component 2.1)

Output 1.2.3 At least 20% of total value of livelihoods and incomes of participating households derived from sustainable use of forest resources

Establish multi-stakeholder village participatory planning teams in 6 PAs, with agreed terms of reference

Identify and engage participatory village planning specialist facilitators for targeted areas

Conduct participatory multi-stakeholder meetings which focus on awareness creation, mobilization of communities and identification of potential benefits

Conduct participatory resource mapping activities to establish inventory of assets

Conduct sustainable livelihood assessments (using appropriate methodology) to establish HH level asset inventories and income baselines

Collaborative village community planning meetings to establish priority investment areas and strategies, monitoring and evaluation processes to be integrated into village conservation plans

Implementation of village conservation plans

Sub-Component 1.3: Strengthened conservation management of target species

Output 1.3.1 Baselines updated for at least 3 key target species in Trung Truong Son landscape

Output 1.3.2 At least three globally important species management plans developed and under effective implementation in Trung Truong Son landscape.

Recruit Target Species Conservation Specialists

Conduct rapid ecological assessment/species inventory in project target PAs (NOTE: included in activities under Sub-Component 1.1 (surveys within PAs and 1.3 (additional surveys outside PAs))

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Support stakeholder workshop/consultations to validate data and select/re-affirm target species for conservation

Create monitoring/tracking system with desired parameters (e.g. camera traps, SMART etc.) coordinated with Output 1.3.3

Establish experts group (e.g. multistakeholder to include communities, government, NGOs, community and local scientific/research institutes)

Experts group/stakeholder participation in development of species management plans including integration with PA OMPs as relevant

Design and implement social marketing/knowledge management initiatives to support each management plan

Identify sources of funding and engage partners (e.g. local NGOs) for plan implementation

Species action plan implementation

Output 1.3.3 At least 20% reduction of incidents of timber poaching and trapping reported in the eight project PAs and their surroundings

Conduct enforcement training needs assessment at target PAs and buffer zones

Review appropriate training tools and methods for law enforcement

Design and implement capacity development for provincial, district government officials PA staff, village/commune stakeholders in law enforcement (e.g. monitoring and surveillance, investigation protocols, evidence handling, case management, interagency cooperation mechanisms) Coordinated with activities under Outputs 1.1.3 and 1.1.4.

Sub-Component 1.4. Strengthened biodiversity planning and management at the Provincial level

Output 1.4.1 Three Provincial Biodiversity Actions Plans mainstreaming landscape level biodiversity and ecosystem services values derived from project (PA OMPs, species management actions plans, buffer zone participatory and PFES mechanisms, etc.)

Assign Biodiversity and PA Specialists at provincial level to initiate dialogue with DARD to define steps and time table for integration of experiences of project into BAP process

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Engage specialist to undertake analysis of technical, operational and management gaps in biodiversity spatial planning and action plan implementation, consolidate lessons learned and recommend future directions

Support collaborative, multi-stakeholder workshops in each province to review good practices in biodiversity conservation and sustainable use among three target provinces and update provincial BSAPS

Develop and disseminate policy brief for key decision makers at provincial level

COMPONENT 2: Landscapes conservation measures at the community level in PAs and their surroundings providing financial sustainability and reduced GHG emissions

Sub-component 2.1: Improved financial sustainability through ecosystems service assessment and payment of environmental services (PFES).

Output 2.1.1.Scaling up of delivery mechanisms for revenue (benefit) distribution systems (BDS) in buffer zones around PAs in 3 Provinces. (by 2018, at least 25 of the 40 village groups referred in 1.2 receive payments of environmental services for conservation of forests)

Output 2.1.2 At least 20% of selected buffer zone communities in the three Trung Truong Son provinces effectively applying PFES revenues for livelihood improvement activities linked to conservation outcomes.

Facilitation of long term forest management and protection agreement between relevant PAMBs and DARD

Engage facilitators and conduct awareness and orientation meetings with Commune People’s Committees and community planning teams on Forest Protection Contract (FPC) implications and arrangements

Follow up multi-stakeholder consultations to define roles and responsibilities of parties, align with Village Conservation Plans and confirm options for FPCs and/or PFES

Develop and disseminate information briefs on implications, processes and potential benefits from FPC/PFES programs, with emphasis on marginalized, resource poor segments of village populations

Implement FPC/PFES program including documentation/contract management, tracking of disbursements, monitoring of benefits, reporting

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Sub-component 2.2: Improved SFM and carbon sequestration in forest landscapes

Output 2.2.1 Options for SFM/REDD+ pilots scoped and designed within the conservation landscape on at least 20,000 ha.

Determine and validate consulting requirements for REDD+ activities (with individual consultant support)

Recruitment of individual consultants under REDD+ package

Develop/confirm site selection criteria. Conduct scoping and feasibility to confirm project target area including land use and forest management practices

Support GIS and satellite imagery to establish maps and determine baseline forest cover, forest biomass carbon and biodiversity (linked to Sub-Component 1.1)

Support collaborative technical workshop to establish SFM analytical framework and assess REDD+ options, including capacity development and training for community stakeholders on SFM/REDD+ tools and good practices, institutional arrangements and benefits sharing mechanisms

Design/development of SFM/REDD+ initiative in selected target site(s) (e.g. needs assessments, consultations with indigenous communities to secure free and prior informed consent, carbon stock assessments, data gathering on biodiversity, forest cover, species diversity, government approvals and documentation etc.)

Submit management plan for approval by PPMU/DARD

Implementation of SFM/REDD program at selected target site(s), including capacity building/training, safeguards development, establishment of benefits sharing protocols for performance-based payments, forest land use planning, tenure reforms, community-based reforestation programs, development of knowledge products etc.)

Sub-component 2.3: Established Provincial forest impact/safeguard monitoring systems (linked to emerging national MRV)

Output 2.3.1 Capacity and frameworks in place for local level project/forest impact monitoring, to be piloted in one Trung Truong Sonsite (linked to 2.2 above)

Conduct rapid carbon stock assessment using appropriate methodology for project target areas (including use of remote sensing and plot level field data collection linked to 2.2.1 and 2.3.2)

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Output 2.3.2. Monitoring systems for the three provinces linked to national MRV development

Develop and implement information system with core functions which include a) content management and project registry, b) geographic information (e.g. land parcels and plots), c) carbon inventory, d) emissions calculations (which links to national system)

Convene collaborative stakeholder workshop(s) to disseminate information on MRV systems and good practices in SFM/REDD+ program implementation

Develop and implement training program on participatory, community-based MRV

Project Management

Activity

2015 2016 2017 2018 2019


Inception Mission

Preparation of Inception Report Develop and Implement Project Procurement Plan

Establish and Implement Project Performance Monitoring System

Safeguards Implementation (Environment and Social, with associated training and compliance reporting)

Develop and implement Gender Action Plan, including resettlement plan

Mid-term Evaluation

Final Evaluation

Project Completion Report

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III. PROJECT MANAGEMENT ARRANGEMENTS A. Project Implementation Organizations – Roles and Responsibilities

Project Implementation Organization Management Roles and Responsibilities Ministry of Natural Resources and Environment (MONRE) – Executing Agency

MONRE which has responsibility for overall project coordination through CPMU for the BCC project will also coordinate the Additional Financing. In particular, MONRE will be responsible for: (a) overall monitoring of the Project; (b) environmental and social safeguards; (c) gender issues; and (d) providing policy guidance on climate change.

Central Project Management Unit (CPMU) MONRE has established a CPMU responsible for the day to day coordination and management of the BCC project activities at national level. The same CPMU will be responsible for both the BCC project and the Additional Financing. Among others, the CPMU will be responsible for: (a) overall coordination and management of the Project; (b) establishment and management of imprest account; (c) recruitment of consultants as specified in the

procurement plan; (d) procurement of other goods and services as

specified in the procurement plan; (e) technical oversight; (f) monitoring and supervising activities implemented by

PPMUs (g) oversight of implementation of environmental and

social safeguards, gender issues, and community participation and development by the PPMUs to ensure compliance with applicable ADB policy/GEF/Vietnam government rules and regulations;

(h) monitoring activities conducted by PPMUs and PAMBs; and

(i) reporting to ADB. Provincial Peoples’ Committees (PPCs)

The PPCs of Quang Nam, Quang Tri and Thua Thien Hue that are in charge of implementing, managing, and monitoring all activities of the ongoing BCC project in their provinces. The PPCs will through their Vice-Chairperson in charge of the BCC Project (a) review work plans and approve budgets of the PPMU for the Additional Financing; (b) preside over inter-agency coordination meetings; and (c) coordinating DARD and DONRE under the PPMU.

Provincial Project Management Unit (PPMUs) - Implementing Agencies

The PPMUs which have been established in Quang Nam, Thua Thien Hue and Quang Tri for the ongoing BCC project will also be responsible for day to day coordination and management of project activities under the Additional Financing. Each PPMU will be led by a Director from the Department of Natural Resources and Environment (DONRE) and a Vice Director from the Department of Agriculture and Rural Development (DARD). They will lead and facilitate the integration of the Additional Financing with the BCC project and oversee

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Project Implementation Organization Management Roles and Responsibilities the implementation of the Additional Financing activities. The TOR for the Vice Director, DARD is described in para. 32 below. Among others, the PPMUs will be responsible for: (a) establishing and managing their respective imprest

account; (b) supporting the PAMBs in disbursements and

recruiting consultants as specified in the procurement plan;

(c) procurement of goods and services as specified in the procurement plan;

(d) coordinating and reporting project activities at provincial level to the respective PPC and CPMU;

(e) ensuring coordinated planning and management between activities in the PA and their buffer zones and the biodiversity conservation corridors;

(f) oversee and guide the target species planning and provincial biodiversity action planning processes;

(g) oversight of implementation of environmental and social safeguards, gender issues, and community participation and development by the PAMBs;

(h) liaising with the PAMBs and Provincial Forest Protection Agency;

(i) coordinate with the respective PPMUs in the implementation of the additional financing activities.

(j) Monitoring project inputs, outputs and impacts; and (k) Semi-annual and annual reporting on progress of the

additional financing. Department of Agriculture and Rural Development (DARD)

Provincial DARDs will play a supportive role in the Additional Financing through the role of their representative as the Vice Director of the PPMU. DARD will provide technical oversight and guidance (as part of their existing mandates) to the respective PAMBs for implementing their day-to-day responsibilities of the project. In particular, DARD will: (a) facilitate, assist and provide technical oversight to the

PA management boards in overseeing and guiding the PA investment planning;

(b) facilitate and guide PA master planning, establishment of PA management boards in two PAs;

(c) facilitate the PA Operational Management Plan (OMP) revision and preparation, and implementing priority OMP investments;

(d) facilitate and advise the establishment of two PAMBs and PA community planning teams; and

(e) support PFES planning and implementation and SFM/REDD+ pilot.

Provincial Forest Protection Departments (FPDs)

As part of their existing mandates, Provincial FPDs will play a supportive role to the Additional Financing by providing administrative oversight and guidance to the PAMBs for implementation of project activities in the PAs and their buffer zones under the Additional Financing. In particular Provincial FPDs will be responsible for: (a) reviewing and approving Investment Plans, Master

Plans and OMPs for PAs; (b) monitoring and evaluating project activities in the PA

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Project Implementation Organization Management Roles and Responsibilities and buffer zones as assigned by PPMU Deputy Directors in charge;

(c) providing technical guidance to PA management boards for project activities;

(d) making coordinated training arrangements across the PAs in the province;

(e) undertaking field visits and provide guidance for project performance improvement and adjustment;

(f) liaising with the PPMU Vice Directors in charge of PA and buffer zones in planning and oversight of project activities and selection of contract staff for PAs; and

(g) reviewing and consolidating semi-annual and annual progress reports.

District People’s Committees and Commune People’s Committees

The District and Commune People’s Committees will play a supportive role to the Additional Financing as part of their administrative mandate. The District and Commune Project Implementing Units (DPIUs and CPIUs) which have been established under the ongoing BCC Project will coordinate with the PAMB to avoid overlap in investments to be funded by the ongoing BCC Project and the Additional Financing.

Protected Area Management Boards (PAMBs) – Implementing Agencies

PAMBs will be directly involved with the planning, implementation and monitoring of project activities in the PAs and their buffer zones for the Additional Financing. In particular, PAMBs will be responsible for: (a) PA investment planning, master planning (MP) and

operational management planning (OMP); (b) planning and implementation of community

development activities (co-management, PFES implementation, SFM, livelihood programs, etc. in the protected area and selected buffer zone villages);

(c) undertaking of PA related baseline studies and surveys;

(d) monitoring of species and threats to the PAs; (e) creating a working group to strengthen the

cooperation for implementing activities in the buffer zone, comprising Director or Vice-Director of PAMP (as Chairman), representatives of District FPD , Commune Peoples Committee and community orcommunity leader;

(f) establishing a multi-disciplinary and multi-agency planning team for buffer zone conservation and development planning and implementation and recruitment of PA participatory contract person;

(g) preparing village conservation plans in buffer zones; (h) ensuing no physical displacement, loss of access to

resources or involuntary resettlement due to project activities;

(i) assisting in identifying SFM and REDD+ pilot areas; Village communities or groups The village communities or community groups will

participate in the implementation of project activities and be direct beneficiaries of project investments. As part of their involvement in project activities the village communities or community groups will be responsible for: (a) actively participating in preparation of project

community conservation and development plans,

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Project Implementation Organization Management Roles and Responsibilities including mapping of village resources, identifying threats and response to the threats, identifying conservation and livelihood activities;

(b) participating in the implementation of community conservation and development plans;

(c) participating in training programs aimed at improving resource use and livelihood development;

(d) entering into community contracts with PAMBs for sustainable use and conservation of forests and forest resources;

(e) implementing action to conserve species and habitats as part of their reciprocal commitments to conservation;

(f) ensuring sustainable use and protection of forests and forest resources;

(g) participating in monitoring of outcomes of project activities;

(h) Implementing the PFES and SFM/REDD+ pilot activities; and

(i) Establishing Village Conservation Committees (VCCs) and Executive Committees of the VCCs.

Financiers Asian Development Bank Administer the GEF-funded Additional Financing

(a) monitoring project implementation arrangements, (b) disbursement, procurement, consultant selection,

and reporting; (c) monitoring schedules of activities, including funds

flow; (d) reviewing compliance with agreed procurement

procedures; (e) reviewing compliance with Grant Covenants; (f) monitoring effectiveness of safeguard procedures; (g) monitoring project conformity with ADB anti-

corruption policies; (h) undertaking periodic review missions; (i) undertaking midterm project review jointly with the

Government; and (j) Reporting regularly to GEF on project progress and

impacts.

B. Key Persons Involved in Implementation Executing Agency MONRE Name: Dr Prof. Bui Cach Tuyen

Designation: Vice Minister

Telephone: +84 907 995 559

Email address: [email protected]

Office Address: No.10 Ton That Thuyet Str., Hanoi, Vietnam

PPC’s 1. PPC Quang Nam

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Name: Mr. Huynh Khanh Toan

Designation: Vice-Chairman of PPC Quang Nam

Telephone: +84 913 480 369

Email address: Office Address:

62 Hung Vuong, Tam Ky, Quang Nam

2. PPC Quang Tri

Name: Mr. Nguyen Quan Chinh

Designation: Vice-Chairman of PPC Quang Tri

Telephone: +84 913 485 193


45 Hung Vuong, Dong Ha, Quang Tri

3. PPC Thua Thien Hue

Name: Mr. Phan Ngoc Tho

Designation: Vice-Chairman of PPC Thua Thien Hue

Telephone: +84 993 233 171


16 Le Loi, Hue city.

CPMU /MONRE Name: Dr.Nguyen The Dong

National Project Director, MONRE

Telephone: +84 913 229 041

Email address: [email protected]

Office Address: Central Project Management Unit

C/O MONRE No.10 Ton That Thuyet, Hanoi, Viet Nam

ADB Environment, Natural Resources and Agriculture Division, Southeast Asia Department

Jiangfeng Zhang Director Telephone No.: +63 2 632 6234 Email address: [email protected]

Mission Leader Thuy Trang Dang Environment Specialist South East Asia Department Telephone No. +63 2 632 5827 Email address: [email protected]

C. Project Management Structure 27. The executing agency for the BCC Project is MONRE. MONRE has delegated responsibility for overall coordination to a Central Project Management Unit (CPMU) that is responsible for day to day activities at national level. Consistent with the Government’s desire to decentralize project implementation to the provinces, the PPCs in Quang Nam, Quang Tri, and

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Thua Thien Hue are responsible for the overall monitoring and implementation of the BCC project activities. Each PPC has established a PPMU and delegated responsibility for Project implementation. The PPMUs will also oversee the coordination of the Additional Financing. Figure 1 reflects the project organization structure. 28. Terms of Reference of CPMU. For the ongoing BCC project, the CPMU: (i) has Project Director, two Project Deputy Directors, a Project Coordinator, Accountant, and Administrator; (ii) procures goods and services (consultants) for the specific use of the CPMU and coordinates/organizes fielding of international and national consultants attached to the CPMU; (iii) provides overall policy guidance and technical support to project provinces on implementing Biodiversity Law in general, and establishment of biodiversity corridors in particular, with securing of a national decree on biodiversity corridor establishment and management; (iv) provides guidance and support to provinces on queries regarding implementation of loan projects as and when needed; (v) requests PPMUs through PPC to submit annual budgets and work plans that are endorsed / approved by PPC; (vi) consolidates all budget requests and work plans and submit loan proceed withdrawal applications to Ministry of Finance (MOF) for separate disbursements to imprest accounts with CPMU and PPMUs; (vii) receives from PPMUs six monthly progress reports and financial liquidation reports in Vietnamese and English, consolidate these and submit to MOF and ADB; (viii) conducts environmental safeguard activities through DONRE in each province and submit safeguard reports from national and international consultants to the MOF, Ministry of Planning and Investment (MPI) and ADB; (ix) conducts six monthly project site visits and prepare and submit a detailed project monitoring report based on the Design and Monitoring Framework (DMF) and the PAM; (x) follow up on reports of the Social Safeguards Consultants (national and international) and consolidate reports on subproject implementation for submission to MOF, MPI and ADB; (xi) attends GMS meetings of the WGE; prepares and provides technical reports and presentations to the WGE in English on a six monthly basis; (xii) organizes/conducts trans-boundary meetings with neighboring countries (Lao PDR and Cambodia) and enter into a Memorandum of Understanding (MoU) on joint activities and trans-boundary management and protection of biodiversity corridors; (xiii) arranges for national level policy and sharing of lessons learned on implementation of biodiversity corridors with other relevant provinces, which have common border with GMS countries; and (xiv) arranges for regular MOF, MPI, and ADB supervision visits to the project area. The CPMU under MONRE have opened an imprest account in a commercial bank and submits its financial reports and withdrawal applications to MOF and ADB. 29. The CPMU will be responsible for undertaking all of the above functions, to the extent relevant for the Additional Financing as well, including monitoring and supervising activities implemented by the PPMUs, reviewing PPMUs’ work plans for the additional financing and consolidating all work plans for submission to ADB. The CPMU will also open an imprest account in a commercial bank for the Additional Financing. To support the implementation of the additional financing, a Biodiversity and Protected Area Specialist will be recruited directly by the CMMU. The TOR of the position is in Appendix 3. 30. Terms of Reference of PPMU. For the ongoing BCC project, the PPMUs: (i) has a Project Director, Coordinator, Accountant, Accountant Assistant, and Administrator; (ii) procures goods and services (national and international consultants and firms) for the specific activities under the mandate of the PPMU and coordinates/organizes fielding of international and national consultants attached to the PPMU; (iii) conducts information and awareness meetings to inform about project at all levels; (iv) conducts multi-stakeholder, participatory consultations in the selected communes and districts to revisit priorities identified by the beneficiaries; (v) prepares detailed subprojects by component covering province or district or a group of communes on (a)

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forest restoration, non-timber forest products, and agroforestry; (b) livelihoods improvement; and (c) small scale infrastructure support; (vi) based on information from districts and communes, prepares detailed annual work plans and budgets and fund withdrawal applications (six monthly basis) to draw down loan proceeds and submit these to CPMU; (vii) receives funds in imprest account, prepares bank statements and liquidation/Statements of Expenditure (SoE) reports for submission to MOF and ADB; (viii) has established project socio-economic baselines including GIS based maps and update these at regular intervals; (ix) has undertaken preparations for implementing project activities, including disbursement of funds to district (DPIU) and communes (CDF and block grants) to start activities; (x) receives field reports and consolidate these into technical and financial reports for submission to CPMU on a six monthly basis; (xi) undertakes selective and random field checks on work design and implementation; (xii) conducts monitoring of project activities and establish a project monitoring system and database (xiii) supports/organizes field visits and supervision visits by MOF, MPI and ADB to project sites; and (xiv) prepares and support midterm and final evaluations and submit project closing reports. The PPMUs in each Province have opened an imprest account in a commercial bank to receive funds disbursed by ADB. The DPIUs of the three provinces have opened sub-accounts to receive disbursements as per approved financial plans from the PPMU. 31. In terms of the Additional Financing, the PPMUs will carry out the functions mentioned above, to the extent relevant and appropriate for implementation of the Additional Financing grant component. The PPMUs will be responsible for coordinating and monitoring and implementing the proposed Additional Financing, keeping financial records and writing technical progress reports for submission to MOF and ADB. A representative from DARD will be appointed as Vice Director of the PPMU to oversee the integration and implementation of the Additional Financing activities with that of the BCC project. The Vice Director will liaise with the PAMBs, provincial people’s committees, district and commune people’s committees, the FPD and other relevant entities in guiding and overseeing the implementation of the Additional Financing activities. Each PPMU will also open an imprest account for the Additional Financing. To support the implementation of the Additional Financing, a coordination assistant and an accounting assistant will be recruited by each of the PPMUs. Their TORs are included in Appendix 3.

32. Terms of Reference for DARD. In terms of the Additional Financing, Provincial DARDs have the most relevant mandate to implement major grant components (PA investment planning, master planning and operational management planning, community buffer zone planning and management, target species conservation and provincial biodiversity action planning, PFES planning and implementation and SFM/REDD+ design and implementation). As assigned by the PPMU Deputy Director in charge of the additional financing, they will be responsible through the respective PA management boards for implementing day-to-day responsibilities of the Additional Financing. DARD will facilitate, assist and provide technical oversight to the PA management boards in overseeing and guiding the PA investment planning, PA master planning, establishment of PA management boards in two PAs, OMP revision and preparation, implementing priority OMP investments, support the establishment of PA community planning teams, support PFES planning and implementation and SFM/REDD+ pilot. DARD will be responsible for overseeing and guiding the target species planning and provincial biodiversity action planning processes and for overall coordination with the respective PPMUs in implementation of the Additional Financing activities. 33. Terms of Reference of the PPMU Vice Director from DARD. The PPMU Vice Director from DARD will be overall responsible for overseeing, facilitating, monitoring and reporting on

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the Additional Financing activities within the respective provinces. In particular, the Vice Director will facilitate the provision of technical and financial oversight for implementation of activities in the PA and their buffer zones, facilitate the preparation and implementation of the target species action plans and the provincial Biodiversity Action Plans (BAPs) as well as coordinate and oversee the implementation of the PFES and SFM/REDD sub-components, as relevant. The Vice Director will ensure that PAMBs prepare and submit annual work plans, facilitate harmonization of BCC project and Additional Financing activities to ensure avoidance of overlap and facilitate complementarity of investments, regularly organize coordination meetings on project planning, implementation and monitoring, coordinate with the CPMU and PPMU in the recruitment of contract staff and procurement planning, facilitate coordination with other sector agencies and commune and district peoples’ committees to ensure cost effectiveness, support the acquisition of technical support from DARD and FPDs to the PAMBs for implementation of PA management and buffer zone activities, ensure the monitoring of overall Additional Financing activities, and facilitate dialogue and consultation across the three provinces to ensure learning and experience sharing. 34. The PAMBs will be responsible for the planning and implementation of day to day Additional Financing activities in their respective PAs and the surroundings. The PAMBs will establish community planning teams (in six of the eight project PAs) to plan, design and implement protected area management and benefit sharing, sustainable forest use and livelihood investment activities, plan and implement the PFES village programs (in villages/communes that have been selected for these activities) as well as support DARD in the design and implementation of the SFM/REDD+ pilot program. The PAMBs will also support participatory monitoring activities to access impact and outcomes of PA conservation and buffer zone community activities, including monitoring poaching and trapping incidents, forest regeneration in PA buffer zones and provide this information to the PPMUs and DARD in a timely fashion. The PAMBs will also be responsible for preparation of annual work plans, managing and reporting on grant proceeds provided by the Additional Financing, ensuring timely completion of activities and overall reporting to the respective DARD and PPMU on implementation issues and their resolution. Each PAMB will open an imprest subaccount for the Additional Financing under the respective PPMU. To support the implementation of the Additional Financing, a Protected Area Planning and Community Participation Facilitator will be recruited by each of the 6 existing PAMB (excluding Ngoc Linh and Ho Chi Minh Trail Nature Reserves). 35. Project implementation support. The following staff will be recruited directly by the executing agency and implementing agencies.

a. CPMU Biodiversity and Protected Area Specialist (38 person months)

36. The CPMU Biodiversity and Protected Area Specialist will be recruited directly by the CPMU. The Specialists should have: (i) demonstrated understanding of the challenges associated with biodiversity conservation and forest resource management; (ii) a bachelor’s degree or higher from a recognized university in relevant field (biological or environmental sciences, natural resource management, etc.); (iii) at least 7 years of professional experience with demonstrated capacity in applying various tools and methods in Viet Nam, particularly engaging government and NGO partners at local levels; and (iv) strong English communications skills, including written report preparation.

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37. Reporting to the CPMU, the Specialist will provide technical support and guidance for the CPMU in implementation of capacity development activities. Specifically the Specialists will:

(i) Assist in design and implementation of PA capacity development plans for candidate PAs;

(ii) Assist in preparation of Operational Management Plans (OMPs) and establishment of Protected Area Management Boards, where required;

(iii) Provide technical guidance and advice in identification of management investments for PAs;

(iv) Coordinate various inputs into the preparation of Provincial Biodiversity Action Plans (v) Support the development of biodiversity survey protocols, collection/management of

data and monitoring of project outcomes; (vi) Facilitate coordination between PA management boards and District, Provincial and

Central Government entities; and (vii) Oversee planning and implementation of community programs in buffer zones.

b. PPMU Coordination Assistants (3 positions x 38 months = 114

person-months) 38. The PPMU Coordination Assistants will be recruited directly by the three PPMUs. The Coordination Assistants should have: (i) a degree or diploma from a recognized post-secondary institution in accounting, business administration, management, environmental sciences or related field; (ii) at least 3 years of experience working with a sub-national or national government department implementing environment-related programs and projects; (iii) familiarity with government policies and processes related to environmental management; (iv) solid understanding of issues and challenges in biodiversity conservation; (v) demonstrated skills in organizing events, preparing/packaging documentation, communicating with stakeholder groups; and (vi) competence in English reading, writing and speaking. 39. Reporting to the respective PPMU, the Coordination Assistants will provide technical and administrative support. Primarily, this will be to ensure coordination and reporting related to implementation of project activities at the Provincial level. This will include facilitation of the PA planning and management activities, target species planning, provincial biodiversity action planning, the PFES and SFM/REDD+ activities, among others.

c. CPMU and PPMU Accounting Assistants (4 positions x 38 months = 152 person-months)

40. The CPMU accounting assistant will be recruited by CPMU. The PPMU Accounting Assistants will be recruited directly by the three PPMUs. Reporting to the CPMU or the respective PPMU, the Accounting Assistants will assist the CPMU or Provincial Accountants in financial management, monitoring and reporting, management of fund flows, oversight for the disbursement of village block grants, etc.

d. PAMBs Protected Area Planning and Community Participation Facilitators (6 positions x 38 months = 228 person-months)

41. The PA Planning and Community Participation Facilitators will be recruited directly by the existing PAMBs. 42. The PA Planning and Community Participation Facilitators should have the following qualifications: (i) degree or diploma from a recognized university or technical institution, with

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specialization in science, education, biology, agriculture, environmental management, communications or relevant field; (ii) at least 5 years’ experience actively promoting participation of communities and civil society organizations in biodiversity conservation programs and projects in Viet Nam; (iii) Demonstrated knowledge of various tools, methods and instruments used in protected area planning and management; (iv) keen understanding of the policy and regulatory framework which governs biodiversity conservation, particularly in sustainable forest management; (v) strong interactive and interpersonal communications skills; and (vi) high level of competence in English speaking and writing. 43. Reporting to the respective PAMB, the PA Planning and Community Participation Facilitators will work at the PA level, and provide overall support to the implementation of the village community conservation planning and implementation processes under Component 1. This will include, but not be limited to:

(i) Monitoring of project activities; (ii) Community mobilization; (iii) Mapping of natural resources and impacts; (iv) Formation of Village Conservation Committees; (v) Village planning and implementation of forest co-management and livelihood

activities; (vi) Participatory monitoring and evaluation; (vii) Implementation of Gender Action Plan; (viii) Training in participatory methodologies for PAMB staff, Provincial Governments

and local stakeholders; (ix) Contribute to project technical and management reporting; and (x) Support the implementation, monitoring and reporting of the project GAP at the

respective protected area and their surroundings.

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Figure 1. Project Organization Structure

D. Technical Considerations 44. Project Technical Framework. Overall, the Additional Financing will fill strategic, spatial and thematic gaps in the Trung Truong Son landscape, and facilitate programmatic impacts on the larger landscape between on-going conservation initiatives. It aims to integrate biodiversity conservation, climate change mitigation, climate resilience, and sustainable forest management in Trung Truong Son Landscape. Its specific objective is to strengthen the management and ecological integrity of the protected area network in the Trung Truong Son region of the country. This is to be achieved by maintaining and restoring forest biodiversity, ecosystems and related watershed processes, strengthening species conservation, enhancing forest carbon stocks and strengthening climate resilience at the landscape level,8 and actively encouraging the participation and sharing of conservation benefits with local people.

8 An unit of land that contains a mosaic of land uses, but typically would include one or more protected and their buffer zones, and connecting biological corridors (the latter including protection and production forests, agricultural and other productively used lands, and village settlements).

Central Project Management Unit (CPMU)

National Steering Committee(MONRE chair, MARD, MPII,

MOF, PPC)

Households/Beneficiaries

Ministry of Natural Resources and Environment (MoNRE)

Executing Agency

Provincial People’s CommitteesQuang Nam, Quang Tri, Thua

Thien-Hue

Forest Protection DepartmentProtected Area

Management BoardsImplementing Agencies

(6 + 2)

District People’s Committees

Provincial Project Management Units (PPMUs)

Implementing AgenciesDirector - DONRE representative

Deputy Director - DARD representative

Provincial Steering Committees

Commune People’s Committees

Department of Agriculture and Rural Development (DARD)

Department of Natural Resources and Environment

(DONRE)

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45. At the outset, the Additional Financing will be integrated into the monitoring framework of the ongoing BCC project. The specific Additional Financing activities are described below:

1. Component 1: Strengthened planning and management of the biodiversity and forests in the Protected Areas and their surroundings in the Trung Truong Son landscapes

46. The objective of this component is to strengthen planning and management of the biodiversity and forests in the PAs and their surroundings in the Trung Truong Son landscapes. The geographic placement of the eight PAs in the Trung Truong Son landscape within the north-south and the east-west biodiversity corridors provide a critical opportunity to conserve and enhance ecosystem services, including carbon rich sinks, critical watershed important to downstream users, and habitat to species of global importance. 47. The BCC project is designed to support the establishment and management of biodiversity corridors to connect important conservation areas, including the PA system. The Additional Financing will contribute important inputs to the landscape and system wide approach. It will afford opportunities to integrate (spatially and thematically) global environment benefits generated by improved PA management effectiveness and protection for forest restoration, livelihoods and income generation, carbon storage, and wider landscape management and improved connectivity between elements of the landscape. This component has four sub-components. 48. Threats to PA forests include from illegal hunting, logging, illegal livestock free-grazing and other impacts related to household and buffer-zone development and landscape pressures. The Additional Financing will aim to address these threats and weaknesses. These threats are compounded by a lack of:

(i) motivated, trained and equipped rangers implementing a defined law enforcement strategy in partnership with empowered and informed communities and other stakeholders necessary to facilitate improved protection and sustainable economic development in the landscape corridor;

(ii) an adaptive PA management plan; budget and resources. (i.e. Resources yet efficiently utilized by trained staff to achieve realistic targets);

(iii) forest connectivity, appropriate land use zonation and clearly demarcated and enforced boundaries; and

(iv) prioritized species and habitat action plans. (Lack of trained scientific and monitoring staff working with greater landscape stakeholders towards a strategic plan for area, species, forest cover, priority habitats, freshwater conservation, etc.).

a. Sub-Component 1.1 Improving Protected Area Operational Planning

and Management

49. In order to improve protected area management and operations, sub-component 1.1 will support a number of activities, namely the: (a) preparation of a PA Investment Plan (Ngoc Linh); (b) preparation of PA Master Plans (Ngoc Linh and Ho Chi Minh); (c) establishment of PAMBs for the two PAs (Ngoc Linh and Ho Chi Minh) where no management board currently exists; (d) preparation/revision of five PA operational management plans (where OMPs either do not exist or have expired); and (e) implementation of priority management interventions emanating out of the individual OMPs in all of the PAs. The specific activities under this sub-component are discussed below.

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i. Activity 1.1.1. Protected Area Investment Planning

50. Since the Ngoc Linh Nature Reserve has still not been legally established as a protected area, it requires the preparation of an investment plan. The investment plan is expected to provide the basis for the legal definition of the PA and establish the broad administrative and legislative framework for the PA, define the role of the PAMB in the management of the PA and its buffer zone, and define the measures for integration of buffer zone activities within the administrative framework of the PA management board. The TOR for the preparation of the investment plan for Ngoc Linh is provided in Appendix 3. The steps for preparation of a PA investment Plan and the outline of a PA Investment Plan are provided in Tables 3 and 4 respectively.

Table 3: Steps in Preparation of PA Investment Plan Steps Activities

1 Field surveys to update information on social, biological, economic aspects and assessment of threats

2 Preparation of draft PA Investment Proposal 3 Biological Mapping (core zone, buffer zone and PA zoning)

4 Consultation workshops at District level to facilitate preparation and investment plan revision

5 Consultation workshop at provincial level for further development of PA Investment Plan

6 Submission of Investment plant for review at national level (MARD)

7 Final revision and submission of Investment Plan to PPC for approval

8 Approval for Investment Plan and PA establishment

9 Initiation of process to the Approval of PA Management Board

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Table 4: Outline of PA Investment Plan

ii. Activity 1.1.2 Protected Area Master Planning

Executive Summary 1. Introduction 1.1 Geography, Demographics, Economics and Environment 1.2 Conservation 1.3 Global Conservation Significance of the PA 1.4 Environmental History of the Area 1.5 Management Authority 2. Site Features 2.1 Biogeography 2.2 Location 2.3 Topography 2.4 Hydrology 2.5 Geomorphology 2.6 Pedology 2.7 Meteorology 2.8 Flora Overview 2.9 Vegetation Types 2.10 Mammals 2.11 Birds 2.12 Herpetiles 2.13 Butterflies 2.14 Socio-cultural Features 2.15 Land Use 3. Evaluation 3.1 Criteria for Evaluating the Proposed Nature Reserves 3.2 Evaluation of national and Regional Biodiversity Conservation 3.3 Conservation of Threatened 3.4 Comparison with Biodiversity in Vietnam’s PA 3.5 Potential Value of the Proposed Nature Reserves 3.6 Evaluation of Management Roles, Policy and Objectives 4. Constraints on Management and Development of the Proposed Nature Reserves 4.1 Physical Factors 4.2 Biological Factors 4.3 Socio-Cultural Factors 5. Proposed Management and Development Structure 5.1 Current Infrastructure 5.2 Proposed Staffing 5.3 Nature Reserve Headquarters and Visitor Access 5.4 Incompatible Uses of the Nature Reserves 6. Recommendations for the Nature Reserves 6.1 Proposed Boundaries 6.2 Discrepancies in the Proposed Nature Reserve Boundaries 6.3 Agroforestry and Buffer Zone Recommendations 6.4 Recommended Evaluations of Management Effectiveness 6.5 Recommended Management Advisory Committee 6.6 Recommended Nature Reserve Advisory Committee 6.7 Priority Actions References

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51. The Additional Financing will support the development of PA Master Plans for Ngoc Linh Nature Reserve and Ho Chi Minh Legendary Trail. The master plans will define the overall objectives for organizing, managing, conserving and using the PA forests in a sustainable way. They will recommend measures for classifying the special use forests (area, size, boundary, etc.) and define the organizational arrangements for the management of the PA and its surroundings. They will also define the broad actions necessary to effectively organize, manage, conserve and use these PA forests and natural resources in a sustainable way. The TORs for consultant support to facilitate the preparation of PA master plans is provided in Appendix 3. The elaboration of the master plan would be the responsibility of DARD as defined in the Decree on Special Use Forest Organization and Management (No 117/2010/ND-CP) along with the organization and management of such special use forests like PAs. The procedure and the outline for a typical PA Master Plan are provided in Tables 5 and 6 below.

Table 5: Procedure for the preparation of PA Master Plan

Steps Activities

1 Collection and review of biological, social, ecological, and economic information on the protected area and assessment of threats

2 Stakeholder consultation for appraisal for the master plan objectives, targets and activities

3 Preparation of the draft PA Master Plan

4

Consultation meetings with local communities to discuss draft PA Master Plan and reach consensus of proposed objectives and activities (consultation with at least 4 communes)

5 Consultation meeting at the provincial level to discuss draft PA Master Plan

6 Master plan revision and finalization

7 Initiate process for approval of PA Master Plan

8 Preparation of detailed implementation plan and budget for PA Master Plan

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Table 6: Outline of PA Master Plan

Introduction Part I. General information and legal base for the preparation of the plan

1. Legal base 2. Sources of input information

Part II. Justification I. The Natural condition II. The status of natural habitat and biodiversity III. Social and Economic condition

1. Population and labor 2. Income and employment 3. Development issues 4. Social issues 5. Infrastructure

IV. Tourism development value 1. Tourism potential 2. The possibility of tourism development and benefits

V. the current investment for conservation and development 1. The development history of the PA 2. The planning in the PA 3. The organization and management of the PA

VI. The rationale for preparation of the master plan 1. Current conservation issue and threats 2. The necessity of the plan for the reserve

PART III. Content of the master plan I. Fundamental principals II. Objective and target

1. Objectives 2. Target

III. Planning for the nature reserve 1. Boundary and area 2. Legal basis and criteria for zoning 3. Zones and Zoning justification of the PA 4. Buffer zone zoning 5. Management Board and PA management structures 6. Infrastructure development 7. Tourism and service activities 8. Conservation planning

II. Key programs of the reserve 1. Forest and biodiversity conservation programs 2. Habitat and species recovery programs 3. Research and education programs 4. Conservation outreach programs 5. Buffer zone development programs 6. Ecosystem services programs 7. Equipment and maintenance programs

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iii. Activity 1.1.3 Establishment of Protected Area Management Boards

52. The proposed procedures for establishment of PAMBs in Ngoc Linh and Ho Chi Minh Legendary Trail to be supported under the Additional Financing are provided in the Tables 7 and 8. The Terms of Reference for consultant support to facilitate the establishment of the PA management boards is provided in Appendix 3.

Table 7: Steps in Establishment of PAMB Steps Activities

1 Review of current status and rationale for establishment of PAMB

1.1 Consultation workshop on review report and justification for establishment of PAMB

1.2 Submission of MB establishment proposal 2 Preparation of Master plan 3 Consultation workshop on Master plan 4 Preparation of OMP 5 Identification of priority activities to be

supported under Additional Financing 5.1 Conservation awareness activity (concurrent

activities) 5.2 Biodiversity and landscape survey/review

activity (concurrent activities) 5.3 Capacity building for MB such as training

and equipment supply (concurrent activities)

Outline of PA Master plan (Continued) PART IV. Plan implementation and evaluation I. implementation plan

1. Budget and investment plan 2. Implementation strategy 3. Resources mobilization plan

II. Monitoring impact and evaluation 1. The nature conservation and environment 2. Social economic 3. Scientific and education

PART V. Conclusion and recommendations

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Table 8: Procedures for establishment of Ngoc Linh nature reserve management board, Quang Nam province

iv. Activity 1.1.4 Protected Area Operational Management Planning

53. As most of the PA OMPs have either lapsed in terms of their validity and some OMPs have not been prepared, the Additional Financing will support the revision of existing OMPs and preparation of new OMPs. It will also provide technical support, staffing needs, information requirements, budgets and monitoring of OMP implementation. 54. The legal framework for preparation of OMPs is guided by Article 35 of the Decree no. 117/2010/ND-CP on Special Use forest management. All special use forest (SUF) need to prepare an OMP. Nevertheless, 5-year OMP have recently been prepared according to the requirement of Vietnam Conservation Fund, but there is no financial support from the fund, which makes implementation difficult. Also the existing OMPs have largely been prepared without full accordance to Decree 117. 55. The current status of the PA Operational Management Plans for the eight project protected areas is provided in Table 9. It also defines key considerations for the implementation on OMPs in these PAs.

Steps Activities

Estimated time

(weeks)

1 Field survey to update information on biological, social, economic and ecological aspects and assessment of threats 8

2 Preparation of investment proposal 8

3 Biological Mapping (core zone, buffer zone and PA zoning) 3

4 Consultation workshop at District level for preparation and investment plan revision) 3

5 Consultation workshop at provincial level for preparation and investment plan revision and submission to MARD for review) 3

6 Submission of investment plant for reviewing at national level (Ministry of Agriculture and Rural Development) 3

7 Final revision and submission to PPC and approval 1

8 Approval for PA establishment 2

9 Approval for Management Board of PA 6

II Post-approval support

10 Support to prepare Master plan 10

11 Support to prepare OMP 6

12 Consultation workshop on OMP at commune level and provincial level 2

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Table 9: Current Status of OMPs in the 8 PAs under Additional Financing Name of

PA OMP status Key issue for OMP Preparation and Implementation

North Huong Hoa

No OMP available

- Since there was no financial support from the VCF, no OMP was prepared

- Currently the PA is operated with uncertain direction and unclear strategy

- It is important to support the preparation of an OMP and its approval.

Dak Rong OMP partly prepared

- OMP was partly prepared with VCF support. However, the unfinished OMP was abandoned when the VCF supporting contract expired.

- It is a priority to support the completion of the OMP and its approval

Ho Chi Minh trail

No OMP available

- The PAMB has not yet established, so no OMP is available

Phong Dien

OMP prepared, but not yet approved

- OMP was prepared with VCF support, but it has not been approved by the provincial government because there is no funds available to implement the OMP

- It is necessary to support the PAMB to revise and update the OMP based on the funding available through Additional Financing

Sao La – Hue


- OMP was prepared by WWF, but it has not yet been approved by the provincial government because the Sao La Hue PA has only been recently established. The OMP needs to be submitted after the establishment of the Sao la PA

- It’s necessary to support the completion and update the OMP and get it approved

Sao La - Quang Nam


- OMP was prepared by WWF, but it has not yet been approved by the provincial government because there is no funding available to implement the OMP

- Currently the OMP is being used by WWF and Carbi project - It is necessary to support the PA to update the OMP and get it

approved Song Thanh

OMP expired

- OMP was prepared by WWF and Quang Nam FPD for period 2005-2010. This is now outdated and a new OMP needs to be prepared for period 2014-2020.

- It’s necessary to undertake a review on the implementation of the OMP 2005-2010 to generate some lessons and capture the key issues for the new OMP.

- New OMP preparation should be supported by Additional Financing

Ngoc Linh No OMP available

- The protected area has not yet been established.

56. In preparation and revision of the PA OMPs, some caution and common sense is necessary as there is no standard format and information field for OMP. The most common format used has been the one developed for the VCF program, but this format has not been approved as a standard for all PAs. Secondly, each existing OMP has a budget attached to it that gives a breakdown of detailed cost estimates for implementation of OMPs. However, the budget seems to be the key challenge in ensuring the approval on the OMPs. Most PA OMP budget estimates are unrealistic that assumes that enough funds would be available either through provincial governments or donors to implement the OMPs in full. Consequently, the lack of adequate and matching budgets for OMP implementation has resulted in the reluctance of provincial governments in approving the OMPs that have already been prepared. In preparing or

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revising OMPs, it is important to understand the budgetary constraints that operate at the provincial level and ensure that budget estimates are defined in a more realistic manner. 57. As part of the process to get OMPs approved, it is recommended that a PA OMP be developed with proposed activities, but without defined budget estimation. When the OMP is approved, the PAMB should prepare a time slice of the plan, with targets and activities and budgets, based on priorities in the OMP and within the defined budget allocation available from either the provincial government or other sources. This would be a more realistic approach that takes into consideration the budget constraints that are operating at the provincial level and hence is more likely to get implemented. 58. OMP guidelines and formats should be institutionalized and officially recognized and include specific guidance on forest co-management, benefit sharing, buffer zone development and integration of PFES revenue sharing. A conservation planning consultant (TORs provided in Appendix 3) is required to support the preparation of new OMPs or updating existing OMPs at each PA. Stakeholder consultation should be an integral part in the finalization of the OMP. The recommended format for a PA OMP is provided in Table 10.

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Table 10: Recommended Format for PA OMP Foreword 1. Background

1.1. Biodiversity values 1.2. Socio-economic issues 1.3. Management issues

2. Threats to biodiversity 2.1. Overexploitation of wildlife 2.2. Illegal wildlife trade and other conservation issue 2.3. Land use and zoning 2.4. Other threats (including mining, infrastructure development, and forest fire) 3. Objectives of the plans 4. Activities for management plan 4.1. Improving patrolling activities 4.2. Enhancing law enforcement to control wildlife trade 4.3. Demarcation and zoning 4.4. Capacity building for ranger and staff and community 4.5. Developing sustainable ecotourism for the Reserve 4.6. Buffer zone zoning and development activity

- Identifying alternative livelihoods - Income generation - Participatory forest/PA management model of Co-management and community development group

4.6. Payment for Forest Ecosystem Service - Payment mechanism - monitoring and reporting system

5. Priority activity for implementation 5.1. Surveys and update information on Biodiversity, landscape value 5.2. Short-term survey for important ecosystem/forest type or endangered and poorly known taxa 5.3. Preparing long-term monitoring for selected taxa/habitat/ecosystem 5.4. Research collaboration and cooperation 5.5. Environmental education for related stakeholders 5.6. Establishment of monitoring and payment mechanism for PFES 6. Monitoring and evaluation of OMP and priority activity 7. Implementation schedule 2014-2019 8. Allocated budget 9. References 10. Annexes

v. Activity 1.1.5: PA OMP Implementation 59. The Additional Financing will provide funding for implementation of key activities of the PA OMPs in all of the eight PAs. Some of the typical OMP activities might include, biological surveys and monitoring, capacity building, conservation awareness and education, participatory conservation and benefit sharing and livelihood improvements, boundary demarcation, forest regeneration and habitat improvement measures, community patrolling, short-term immediate threat assessment and management, and the purchase of field and survey equipment. The total cost of field and survey equipment should not exceed 15% of the OMP implementation budget.

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The following criteria should be considered in the selection of key activities for implementation under the OMP as well as implementation responsibilities, coordination and monitoring and budgets.

(i) Activity that is a priority in the OMP to address one or more of the key conservation concerns e.g. capacity building, update and revising information on biodiversity and or poorly know taxa/habitat or addressing immediate threats;

(ii) Activity that does not have any available government or provincial funding to implement;

(iii) Activity that can be completed satisfactorily within the available time frame and budget;

(iv) Activity that does not need long term financial commitment; and (v) Activity that enhances the participation of local people.

b. Sub-component 1.2: Enhanced community participation in benefit

sharing from conservation and sustainable use of biodiversity in Protected Areas and their surroundings

60. The integration of community participatory mechanisms in PA management, sustainable resource use and benefit sharing and alternative livelihoods is a key component of the Additional Financing and is aimed at providing adequate incentives for local people living in PA surroundings to change current unsustainable and destructive resource use practices. The Additional Financing will institute a participatory planning process at the village level in around 40 villages in 6 PAs and their buffer zones (within a total of 12 communes) to faciliate the integratation of a number of programs for community benefit sharing linked to conservation such as sustainable resource use of forests and natural resources, PFES revenue benefits from forest protection, SFM and REDD+ benefits and sustainable alternative livelihoods and incomes to encourage community support for conservation. To implement the participatory planning approach at the village level, the project will provide technical and participatory contract support to faciliate participatory approaches, training and capacity development for staff and communities, block grants to villages to support investments in income generation and livelihood improvement, technical support for scaling up successful PFES revenue delivery mechanisms, feasibility studies for implementation of SFM and REDD+ pilot, capacity building for sustainable resource use and implementation of community agreements for protection of forests. 61. The overall objectives of this sub-component are the following: (i) the pilot testing of participatory approaches for benefit sharing and co-management in the buffer zones of protected areas; (ii) the testing of institutional structures and mechanisms for ensuring community participation in buffer zone co-management, benefit sharing and livelihood improvement; (iii) development and testing of guidelines and principles for co-management and benefit sharing that can be more widely used elsewhere in the country; and (iv) supporting dialogue and learning that can faciliate the subsequent development of policy and practice on co-management in protected area surroundings. The participtory planning process and steps is provided in the next sections of this report.

i. Process Framework for Participation of Local Communities in Protected Areas and Buffer Zone Management and Conservation

62. The Additional Financing activities under this sub-component are expected to be defined largely through a participatory planning process at the village level involving the communities

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and all of the relevant stakeholders. The participatory planning process will be based on the understanding that improving conservation and rural livelihoods should emanate from the principle that agriculture, livestock production and management of natural resources at large, needs to undergo a transition towards more sustainable practices, safeguarding productive potential of agricultural assets for the longer-term, enhancing food sufficiency and livelihoods and improving the management of biodiversity and ecosystem functions and services. The participatory planning process aims to be an inclusive process by enabling the participation of all community households with the PAMB, and other relevant commune and district level entities to plan and define investments in, and around the PAs (including surrounding buffer zones). The Additional Financing will provide a Protected Area Planning and Community Participation Facilitator (Terms of Reference in Appendix 3) at the PA level that will guide and facilitate the planning process and promote coordination between the different local and district level agencies and entities. The participatory planning represents a process to help reach consensus and common agreement amongst the community and all relevant stakeholders to activities that would be financed in each village and the roles and responsibilities of the households, village or community development groups, PAMBs, district buffer zone management councils and other key stakeholders at the commune, district and provincial levels. 63. Another important function of the participatory planning process is to try to achieve complementarities and coordination between the various components and activities of the Additional Financing, as well as with activities supported under the on-going BCC project at the village, commune, district and provincial levels. In particular, improved coordination could ensure more cost-effective investments, help avoid overlap and duplication of efforts, facilitate coordination and complementarities between project supported investments and government and other donor financed activities, and identify opportunities for maximizing benefits of multiple investments. For example, in terms of complementarity with the biodiversity conservation corridors project, the participatory planning process would help identify locations of high pressure or disturbances that need to be secured to maintain critical ecological linkages or connectivity with biodiversity rich areas within the biodiversity conservation corridors; the location of community infrastructure investments and productive asset development to reduce dependencies on resources from within high biodiversity areas within the corridors, and the selection of areas for assisted natural forest regeneration and reforestation sites that would help improve ecological systems and habitat connectivity and enhance rural livelihoods that would overall help improve biodiversity conservation, the sustainability of investments and further enhance livelihood opportunities. 64. In the first few months of the project, the participatory planning process will be a comprehensive planning effort on raising awareness of the project, outlining the scope and mandate of the project and conducting a census of key environmental, social and economic factors that affect the conservation of biodiversity and hinder the promotion of sustainable livelihood improvement opportunities in, and around the protected areas. It would also remind beneficiaries at the village level of potential opportunities for mutually improving biodiversity conservation and livelihood benefits. Towards the end of participatory planning process, the key community asset and livelihood based issues would be prioritized, relations between community activity and biodiversity depredation are discussed and documented and project interventions to improve conservation outcomes and local productivity and livelihoods (that fall within the framework and support of the project) will be confirmed. This will lead to the preparation of a Village Conservation Plan (VCP), reflecting the prioritized project interventions, the problems it aims to resolve, the expected outcomes, when and where the interventions will be implemented, by how many households or development groups (and the households represented in each of these groups), where they will be carried out, what the inputs that would be required, and what

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the responsibilities and commitments of each of the participating communities or community development groups are. 65. The VCPs would cover a period of three years and will provide a list of proposed investments for forest conservation, income generation and livelihood improvement and a budget estimate for these activities that would be supported through the Additional Financing block grants and other sources of funding. The plan is presented, discussed and formally endorsed, after possible amendments and additions, by the PAMB and presented to the PPMU. This reflects the decentralized planning process that will guide investments that are to be made through the project. Apart from identifying and confirming the priority project interventions linked to conservation and livelihood improvement, the training needs of the community and community development groups, and other relevant user group associations would be assessed in the planning exercise to ensure technical capacity to effectively implement the planned project interventions.

66. In each PA, a Village Participatory Planning Team (VPPT) consisting of the Protected Area Planning and Community Participation Facilitator, a village leader per village and representatives of PAMB and Commune Forest Protection Unit will be constituted to provide technical and planning inputs and facilitation support for preparation of VCPs at each PA. The VPPT will receive technical support from the PPMU Community Participation and Development Specialists. The VPPT will be established and led by the PAMB. Based on the three year VCPs, annual plans will be developed each year, to be approved by the PAMB and funded through the village block grants from the Additional Financing. The progress of implementation of each annual plan would be reviewed by the VPPT at the end of each year, and this review would provide the basis for preparation of next year’s annual plans that would be funded through additional annual block grants. To the extent feasible, the VPPTs will endeavor to try to identify and channel other sources of available funding (either from provincial budgets, NGOs and other development schemes) to supplement funding available through the Additional Financing. The size of a block grant to a single VCP (for a three year investment period) would be determined by the types of activities and the number of participants or beneficiaries in the plan, but the amount of a VCP block grant will not exceed USD 10,000.

67. After the comprehensive first planning year, the second and third year will be devoted largely to project implementation. The planning in the second and third years would be largely aimed at reviewing the previous year’s project implementation, evaluation of successes and failures, and identifying additional conservation and livelihood problems not yet addressed or those that go beyond the investments that were identified for the initial eighteen month project period. A new annual plan is brought together in year two and three and discussion and endorsement by the PA management board or similar entity. In addition, the participatory monitoring and evaluation will be carried out and feed into adjustment and revision of project investments and approaches, as appropriate. In the years beyond the three year period of the VCP, the VPPT will work with the particular community to guide them in consolidating and sustaining investments that have been made during the three year VCP implementation period, although funding is not envisaged from Additional Financing after the elapse of the three year implementation period.

68. The intent of the village action planning process is two-fold: namely to build community consensus, support and participation for investment priorities; and second to prioritize specific community based conservation productivity and livelihood options and build community support for conservation.

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ii. Institutional set-up at the PA and local level for integration of biodiversity conservation and rural livelihood improvement in and around protected areas

69. For each PA, a PAMB has been constituted to provide the technical and planning input for implementation of PA OMPs. At each PA, the PAMB will be responsible for the planning and implementation in the PA and buffer zones. The VPPT will support the PAMB in the planning and implementation of the VCPs and provide overall guidance in implementation of project activities. A Provincial Participatory and Community Development Specialist will provide training and capacity development to the planning team on methodology and techniques for mobilization of communities, planning of buffer zone forest resource sharing and livelihood investment and participatory monitoring. The TOR for Provincial Participatory and Community Development Specialist is provided in Appendix 3. 70. The VPPTs’ primary responsibilities will include: (i) information dissemination, social mobilization and strengthening of local or village level institutions; (ii) the design and conduct of biological field surveys as well as social and resource utilization surveys; (iii) mapping of existing user rights and facilitation of dialogue to resolve or manage use rights; (iv) formulation of management strategies for buffer zones in conjunction with local communities; (v) implementation of habitat and forest conservation in conjunction with local communities; (vi) implementation of community development and livelihood strategies; (vii) supporting participatory monitoring of community and conservation activities; and (viii) facilitate resolution of conflicts over resource use. All management arrangements and community livelihood investments at the local level will be detailed in a legally binding Memorandum of Agreement between the local village conservation committees (VCCs – see para. 73 below) and PAMB. In addition, the VPPTs will coordinate with other development sector partners to facilitate integration of development support within the buffer zones. The VPPTs will also ensure that social and environmental screening and mitigation actions are planned and implemented at the village level and ensure that local communities have access to technical support and capacity development in the implementation of livelihood or resource management strategies. 71. In order to facilitate participation of local communities, the project will support the formation of VCCs at the village level. All households in a village will be encouraged to become members of the VCC and be responsible for nominating 3-7 members to serve as officials of the Executive Committee of the VCCs. The Executive Committees will be responsible for looking after the interests of the VCCs, seeking agreements on benefit sharing and co-management and ensuring that community interests are taken into consideration in decision making on sustainable resource use and conservation outcomes. Provisions would be made to ensure that the interests of women and disadvantaged groups are represented in the VCCs. Existing community-based organizations will be used wherever feasible in terms of their functions, composition and representativeness.

iii. Broad Framework for Planning and Implementation

72. Village planning and implementation will proceed in a staggered fashion beginning with a selected few prioritized villages and later extending to additional villages within the buffer zones around the individual PAs. A total of forty villages in 6 PAs and their buffer zones will be covered during the four year period of the Additional Financing. The intent is to undertake planning and implementation in five villages in each of three protected areas (one PA for each project province) in the first year of the project. In year two, based on experiences of the fifteen villages undertaken in the first year, the program will be extended to four additional villages in each of

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the three current PAs and four villages in each of the three remaining PAs in the project area. A total of two communes in each of 6 PAs have been prioritized based on closeness of habitations to PA boundaries, dependencies of local people on protected area resources, existing threats and pressures on the forests and species and willingness of local communities to engage in conservation related programs including PFES. Table 11 provides the list of prioritized communes.

Table 11: List of Priority Communes

Protected Area Prioritized Communes Phong Dien Nature Reserve (NR)

Phong Mỹ HồngVân

Sao La NR A Roàng Hương Nguyên

North Huong Hoa Hướng Lập Hướng Sơn

Dak Rông Húc Nghì Hải Phúc

Song Thanh NR

Tà Bhing Phước Mỹ

Sao La NR (Quang Nam/TTH)

Bha Lêê

A Vương

73. The key steps that constitute the process framework for participation of local communities in the decentralized village level annual planning process are defined in the next sections of this report:

(i) Prioritization of villages within the buffer zone: The initial step is the prioritization of villages on the basis of the extent of pressures and impacts on the PA, such as forest encroachment and swidden agriculture, over-grazing, increased demand for wood and wildlife products, and fragmentation of the forest landscape continuity with the protected area. This prioritization would enable the implementation of conservation and livelihood improvement practices in the villages that have the greatest impact on the forests, before the remaining villages are tackled. The PAMB and local commune staff and communities will use existing local knowledge and resource maps developed under the BCC project and others to rank villages in each buffer zone on the severity of the pressures or threats on the PAs and on the need for maintaining contiguity of high density conservation forests. Based on this ranking, each of the six PAs will select two communes for support under the project, and within these two communes, three to four villages will be selected for participatory planning and support under the project. This list will be recommended by the PAMBs, endorsed by the PPMU Deputy Director from DARD, and approved by PPMU. The Additional Financing will support a total of six to eight villages in each of six PAs as long as the total number of villages to be supported by the Additional Financing does not exceed 40 (excluding Ngoc Linh Nature Reserve and Ho Chi Minh Legendary Trail, both of which are new PAs where the focus will be on conservation management activities, including preparation of master plans and OMPs). Within the first twelve months of the Additional Financing, if a PPMU fails

44

to approve the list of prioritized villages in its PAs and the buffer zones based on the above criteria, funding can be reallocated to another PPMU with completed ranking.

(ii) Community orientation and mobilization: Following the identification of priority villages for investment planning, the project objectives and approach will be disseminated by the VPPTs to all the selected priority village communities in the buffer zones. In addition to dissemination of the project objectives and approach, orientation meetings would seek to more accurately identify the perceptions of the local communities and other stakeholders regarding existing resource management practices, options for their better management, opportunities for livelihood and income improvements, and identify key representatives of the community for participation in subsequent resource mapping.

(iii) Participatory natural resource mapping: Participatory mapping will be a key element and information sharing approach of the village planning process. The output it would generate is village maps that (i) are defined through an open, inclusive process, with clear defined goals and results in a collective group exercise with a map as a common output; (ii) are relevant and of importance for the needs of the local people and for resolving their natural resource based problems; and (iii) contain a wealth of local knowledge and community use and dependencies of natural resources and forests within and outside of the protected area. These maps will help identify and assign conservation values to individual components of the village landscape so as to help determine appropriate management options for these individual components. The maps would include spatial delineation of land use categories, forest degradation areas, areas of non-timber forest production and grazing, hydrology and irrigation, biodiversity rich areas that lie outside the existing PAs within the buffer zone and beyond, key dispersal corridors, locations of high pressure and vulnerability, and options for rationalization of PA boundaries to improve their ecological viability and conservation value. This mapping would provide the basis for defining options for management of resources and livelihood improvement within the village landscape in the buffer zones.

(iv) The participatory resource mapping will constitute an input to the planning of activities within the buffer zones and will help establish the baseline for future monitoring. Information generated through this participatory mapping exercise will be used to facilitate the formulation of village-level plans. The mapping will draw on participatory rural appraisal (PRA) techniques and provide social and economic information on the (a) scale and seasonality of specific forms of resource utilization within the PA and surrounding forests (e.g. swidden agriculture, grazing, hunting, fuelwood collection, etc.); (b) the number, location and circumstances of the stakeholders utilizing specific resources, and (c) customary rights and conflicts in resource use by different stakeholders within the buffer zone and protected areas. In terms of customary rights the mapping would provide information on: (i) location and size of the area and condition of resource; (ii) primary users, including those belonging to vulnerable group, that currently use or depend on these common lands; (iii) secondary users and types of uses. This would provide the basis for initiation of settlements of rights within the buffer zones on the basis of existing government legislation and regulations. Under the project, households considered dependent on the PA and critical forest

45

resources will be those who directly impact the protected area through unsustainable resource utilization, or those who are themselves impacted by the closeness of their habitation to the forest through loss of crops or livestock to wild animals.

(v) Strengthening of VCCs and other local bodies: A VCC will be formed at each village. During the orientation meetings and community mobilization process, the interest, capacity and skills of the communities and their institutions would be accessed. The project would provide training in resource mapping, natural resource management evaluation, planning, construction supervision, maintaining of minutes of community meetings and basic account keeping and monitoring of resource access restriction agreements will be provided. Basically, most training will be on the job training as well as exchange visits to other sites where relevant solutions to problems have been implemented.

(vi) Development of village level conservation and sustainable use and livelihood

strategies: Meetings will be held with individual villages to review the results of the community resource utilization mapping undertaken as a second step of this process framework and to agree on its implications regarding natural resource and conservation strategies, resource access, mitigation and/or compensatory measures, if necessary, and community participation and contributions to conservation, sustainable resource use and livelihood development activities. Activities that are selected for project support must comply with the following pre-requisites: a. All project supported investments must be based on some minimum level

of cost sharing (either in cash or kind or measurable actions for conservation) by/involving local communities;

b. Preferably, a clear and transparent linkage must exist between improving biodiversity conservation and sustainable resource use and the proposed investment, so that the village project agreements between communities and PA management board (or similar local governmental institution) support sustainable practices by creating adequate incentives for local communities to take measurable action that supports conservation of forests and natural resources and their sustainable use; and

c. All project investments, including restrictions on resource access (if any) must evolve through a common understanding and consensus amongst the local communities.

74. To be eligible for inclusion in the VCPs for funding by the village block grants, activities should comply with the following criteria:

(i) Conserve and sustainably use land and other natural resources either directly or indirectly by creating sufficient incentives to commit local people to specific, measurable actions that improve conservation of protected areas and forests and the sustainability of resource use;

(ii) Provide equitable share of benefits to local communities and mitigate any negative impacts to women, poor, indigenous and disadvantaged groups who are currently most dependent on the land;

(iii) Be socially sound, gender sensitive and institutionally feasible ensuring that associated activities are culturally acceptable and do not impose an unnecessary heavy burden on individuals, particularly on women and the poor and that local

46

institutional capacity is adequate to organize resource management, distribute benefits from common resources, provide physical maintenance, meet community agreements to resource use and access restrictions, ensure alternative livelihood benefits to affected members and monitor project impacts;

(iv) Be low cost and financially feasible so that costs are within local norms, returns are sufficient to compensate for resource use limitations, and, for all investments intended to produce cash revenue or benefits that can be monetized, market linkages are adequate, cash flow requirements are viable, and returns compare favorably with alternative investment options;

(v) Be technically feasible and innovative so that inputs and technical advice are adequate, physical conditions are suitable and the activity is technically sound;

(vi) Be environmentally sustainable in support of global environmental objectives; (vii) Be selected and owned by local communities as ensured by a budgetary

constraint mechanism, community contribution or co-financing requirement, and a commitment by the community to bear maintenance costs of any infrastructure component;

(viii) Be supported by training and capacity development for strengthening all households;

(ix) Be supplemental or incremental in nature to ensure that activities supported under the project are not a substitution for what should be supported by the government as part of their development responsibilities or not of global benefit; and

(x) Be in compliance with the social and environmental safeguards (ethnic minorities development framework, resettlement framework, and environmental review and assessment framework) and gender action plan of the Additional Financing.

(xi) Do not require any land acquisition. Activities with no resettlement impact will be prioritized.

(xii) Activities that require continuous recurring costs to operate, such as vehicles and generators, are not eligible unless cost recovery mechanisms are built in.

(xiii) The scope of work should be simple so that implementation by the community is the most practical solution.

(xiv) If community participation in procurement (CPP) is to be applied, the VCC should be authorized legally to sign a contract for procurement purposes and should follow approved procurement procedures

(xv) The community should demonstrate adequate capacity to execute or supervise the activities. If not, a capable qualified service provider will be identified following ADB’s Procurement Guidelines (2013, as amended from time to time)9.

75. Lessons learned from other participatory conservation/development initiatives has validated the importance of requiring some form of cost sharing for investments intended to benefit local people, including extremely poor households, since it builds commitment and ownership on the part of stakeholders and strengthens the likelihood of sustainability. Therefore, the project would establish clear and transparent contribution requirements. 76. The Additional Financing will establish procedures to screen requested resource development or income generating investments to ensure that they are technically feasible, have positive environmental impact and are part of a holistic approach to the local ecosystem management, likely to generate supplementary income, comply with sound social and

9 Available at: http://www.adb.org/Documents/Guidelines/Procurement/Guidelines-Procurement.pdf

47

environmental principles and are sustainable. The VPPTs will be primarily responsible for such screening. Decisions regarding the priority investments will be made by mutual consent of the planning teams, local community institutions and the community, with subsequent endorsement by the PAMBs. If required by budgetary or implementation capacity constraints, proposed activities will be prioritized based on their expected positive impact on global environmental objectives, the conservation and sustainable utilization of the forest and land and sustainable livelihood activities. The activities also need to be implemented in such a way that they create a learning situation and results that are of policy relevance. Examples of appropriate land management and livelihood activities might include : improved agricultural practices, improved livestock and pasture management, forest co-management and natural forest regeneration, community forestry, environmentally friendly minor infrastructure rehabilitation (village irrigation and drinking water supply systems, etc.), medicinal and non-timber product development, processing of agricultural practices, alternative livelihood options (handicrafts/handlooms enterprises, agricultural product processing and development, mushroom cultivation, marketing support, skills development, etc.) and natural resource conflict management.

(i) Implementation of the VCPs: The participatory village conservation plans would reflect the priority activities identified by the community to counteract the negative impacts on the protected areas and forests, enhance sustainable use of natural resources and improve livelihoods to provide incentives for conservation. Implementation of activities will be undertaken by households for individual livelihood activities and collectively by the community for community-based co-management, conservation initiatives and collective livelihood enterprises. Technical and administrative support would be coordinated through the village participatory planning team and expertise required (agriculture production, livestock improvement, product development etc.) would be solicited through other relevant district and provincial level government agencies. To the extent feasible, the village participatory planning team will try to coordinate and integrate the implementation of programs relating to PA operational management planning, buffer zone forest co-management and livelihood improvement, the VND40 million village development investment, the assisted natural forest regeneration component, REDD+ SFM program, PFES revenue sharing, and relevant programs others through the local community village level planning effort in the buffer zones of the protected areas.

(ii) Responsibility of the PAMB in implementation of the VCP. The PAMBs will (a) oversee the award of contract and signing of the contract agreement with the VCC; (b) allocate funds for each VCP; (c) monitor progress and quality of works regularly; (d) release funds to the VCC or to contractors as per schedule or stage-wise completion; (e) certify completion of the VCP implementation; (f) provide regular progress reports on implementation status and fund utilization of the VCPs to PPMUs, CPMU and ADB; (g) prepare statements of expenditures, maintain proper accounts, and conduct selective audits, and (h) provide advice to the VCC, communities, NGOs, contractors, and other groups concerned regarding ADB’s policies and guidelines, especially on procurement, indigenous people, involuntary resettlement, and gender. On completion of the contract, the VCC shall advise the PAMB who will, if required, depute a representative for inspection, to be conducted jointly with members of the VCC (and the service provider, if any). If the inspection team concludes that all activities under the VCP have been implemented satisfactorily, a completion certificate will be issued by the PAMB representative, countersigned by the contractor and the service

48

provider if any, and the VCC representative. In case of defects, the VCC or the contractor/service provider shall be provided in writing the list of defects that have to be made good. A time limit for correction of the defects should also be indicated. On final acceptance, final payments and retention money should be released with the approval of the PAMB to the VCC or the contractor/service provider as the case may be.

(iii) Operations and maintenance (O&M) issues will be prepared by the VPPTs preparing detailed feasibility studies. As far as possible, O&M functions will be devolved to the lowest possible level that is technically capable. Once an investment has been completed, and at project handover to the VCC for O&M, the PAMB should ensure that: (i) specific institutions or individuals have been designated for overseeing O&M of the asset; and arrangements for O&M have been discussed and agreed upon by local citizens. O&M arrangements will need to consider the following issues: (i) overseeing the use of the infrastructure/asset in question, assuming responsibility for its condition and usefulness, and being answerable to users; (ii) management of any resource mobilization needed for O&M, whether: collection and accounting for user fee payments; or management of cooperative labor effort (e.g. for water supply systems, for irrigation schemes, for cleaning road drains, etc.); (iii) management of any periodic procurement related to the asset (e.g. purchase of inputs for irrigation schemes, tube-well spares, cost recovery drug provision); and (iv) providing and enforcing rules about access to the asset (e.g. management of common property resources such as range land enclosures, access times for people and animals at water points). These issues apply to all types of O&M arrangements. Where local communities or user groups are unable to fulfill O&M responsibilities, and where sector departments are thus more appropriate (e.g. for health workers in health facilities), then the PAMB need to make sure that this is clearly understood and agreed – and to then monitor the sector department’s compliance with its obligations. In the event that the PAMB hands over O&M responsibilities to the VCC, hand-over will be accompanied by the signature of an agreement spelling out O&M responsibilities and obligations.

(iv) Monitoring and Evaluation of Impacts of Village Collective Actions. The PAMBs shall include implementation of the VCPs using the village block grants in its progress reports. They will monitor overall activities financed by the Additional Financing. The reports also present problems faced during the reported period, proposed remedy measures, and the expected progress for the next reporting period. The PAMBs shall also its progress reports to the PPMUs, which in turn will submit the reports to CPMU. CPMU shall consolidate reports and submit timely progress reports ADB. A monitoring system will be designed to provide for continuous learning and adjustment of approach, and will involve participatory monitoring based on self-defined indicators (by community groups, VCCs, VPPTs etc.), input and output monitoring data from the village participatory planning teams and VCCs, impact/outcome monitoring by an independent group (for mid-term review and Implementation Completion), and ADB supervision. A framework for monitoring will be developed and will include description of the institutional arrangements and processes incorporating participatory monitoring and learning systems, selection of indicators, sampling methods, interval and intensity of sampling and mechanisms for feedback and project improvement. Three areas of significance for monitoring and achievement of project objectives

49

will include: (i) the ecological aspects of field activities for biodiversity conservation and forest management; (ii) community participation in conservation, sustainable use and livelihood improvement, community compliance with conservation and resource use agreements, and outcome of livelihood activities; and (iii) institutional aspects at the PA and buffer zone levels and modalities for conflict resolution and new community-based agreements on resource use.

c. Sub-component 1.3: Strengthened conservation management of

target species

77. Three target species were identified during project preparation for support under the project that would lead to preparation of target species actions plans and some limited implementation of key activities, preferably to be located either within the project PAs or their buffer zones or biodiversity conservation corridors. The following criteria were used for the selection of key target species for preparation of action plans during the life of the project:

(i) Species that have global conservation value and listed as Endangered or Critically Endangered by IUCN or national red data book;

(ii) Species that occur in the three provinces or endemic to Trung Truong Son landscape;

(iii) Species for which an action plan has not be prepared specifically to protect it; and

(iv) Species that have a sufficiently adequate population remaining that provides a viable opportunity for its conservation.

78. Based on the above criteria, Table 12 lists the key species that have been identified as priority species for support under the Additional Financing. The TOR for consultant support for preparation of target species action plans is provided in Appendix 3. 79. The target species action plans would be developed through a participatory process involving biologists, protected area managers, community representatives, non-governmental agencies and other relevant stakeholders. The target species action plans would describe the range, habitat, behavior, breeding and other interactions of the particular species, the vulnerabilities and threats to the species, the conservation status of the species and a plan to conserve and restore the species population to the target levels. Examples of programmatic protection elements might include habitat restoration, protection of critical habitat and dispersal areas, research and monitoring, communication, education and publicity, and articulate the public and private institutions that should be responsible for implementation of the protection strategies. The Additional Financing will provide limited support for implementation of immediate actions emanating from the target species action plans, and particularly related to capacity building, monitoring and improved protection measures particularly in protected areas and their immediate surroundings.

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Table 12: Recommended Species for Target Action Planning10

Recommended species RDVN

11

Decree 32

12 IUCN

13

IUCN Species Survival

Committee (SSC) Remark

1 Crested gibbon (Nomascus spp.)

EN EN I IUCN SSC PSG Section on Small Apes

At least 2 species of crested gibbon occur in the 3 provinces. 1. Nomascus siki occurs within a small region of central Vietnam and Laos, where its range is limited by the Mekong River in the west and Vietnam’s coastal agricultural areas in the east (Geissmann et al. 2000). In Vietnam, N. siki occurs in parts of Ha Tinh, Quang Binh and Quang Tri and Thua Thien Hue Provinces. Therefore in the three provinces, N. siki occur at least in 2 provinces of Quang Triand Thua Thien Hue. Population of the species is unknown but stronghold distribution in Vietnam is believed in Quang Binh and Quang Tri provinces. 2. Nomascus gabriellae have a global distribution covering eastern Cambodia, southern Vietnam and southern Laos (Groves 2001; Geissmann et al. 2008). In Vietnam the species distributes from south of Thua Thien Hue to Binh Phuoc and Dong Nai provinces. Population of the species is unknown, but it’s believed to be the best population than any other gibbon species that exist in Vietnam. All of the two species are listed as Endangered under IUNC and national Red Data Book and strictly prohibited to use and exploit for commercial purpose by the GoV Decree no. 32 Hunting and habitat loss due to illegal logging are the principle threats to both N. sikiand N. gabriellae. The species also suffer badly from illegal animal trade as there is a high demand for private zoo collection as pet animal.

10

Decree 160/2013 will also be referenced before finalization of the priority species. 11

Red Data Book of Vietnam 2007. 12

Government Decree No. 32/2006/ND-CP regulate on the management of endangered, precious and rare forest plants and animals;

13 IUCN red list of threatened species 2013.

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Recommended species RDVN

11

Decree 32

12 IUCN

13

IUCN Species Survival

Committee (SSC) Remark

2 Red Shanked douc (Pygathryx nemaeus)

EN EN I IUCN SSC Primate working group

Red Shanked douc is one for the primate that is endemic to Annamite ranges currently found only in Centre Vietnam and Lao. There is no complete estimation of its population . However, Quang Nam is believed to be one of the key distribution strongholds. The species is listed as Endangered under IUNC and national Red Data Book and strictly prohibited to use and exploit for commercial purpose by the GoV Decree no. 32

3 Giant muntiac (Muntiacus vuquangensis)

EN EN I IUCN SSC Deer Specialist Group

Giant muntiac is one of the three ungulate that were described in late 90s of the 20 century. The muntiacis endemic to Annamite ranges currently found only in Centre Vietnam and Lao. The species is listed as Endangered under IUNC and national Red Data Book and strictly prohibited to use and exploit for commercial purpose by the GoV Decree no. 32

d. Sub-Component 1.4: Strengthened biodiversity planning and management at the Provincial level

80. The Additional Financing will provide technical support to the three Provincial governments towards integration of learning and experiences from project-related biodiversity corridor and protected area management activities into the preparation and/or revision of provincial biodiversity action plans. Project supported consultants will help to document learning and experiences from the ongoing BCC project and the Additional Financing in terms of landscape, corridor, buffer zone and protected area approaches and facilitate the integration of such approaches into the biodiversity action planning process. In particular, the experiences will focus on engagement of communities in buffer zone and corridor interventions, benefit sharing and co-management approaches, sustainable forest management and resource use, target species conservation, protected area operational planning, capacity building and PFES management. Terms of Reference for technical support for provincial biodiversity action planning is provided in Appendix 3.

e. Summary of Main Activities for Component 1 81. While the actual activities to be implemented under each OMP and within the conservation buffer zone will be defined through the planning process to be employed in preparation of OMPs and village conservation plans, a potential menu of options might include, but not be exclusively confined to the activities listed in Table 13. A summary of key responsibilities for Component 1 activities is provided in Table 14.

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Table 13: Indicative Menu of Project Activities (Component 1) Preparation of PA Investment Plan

Preparation of PA Master Plans Establishment of PA Management Boards Preparation/Revision of PA Operational Management Plan Implementation of PA Operational Management Plans

1. Training and capacity building • PA operational management • Law enforcement • Community participatory planning • Survey methodology

2. Boundary surveys and demarcation 3. Biological surveys and monitoring 4. Field and survey equipment 5. Law enforcement and protection 6. Conservation education and awareness 7. Natural assisted regeneration of degraded areas 8. Habitat improvement

Community buffer zone participatory programs

1. Village level planning 2. Forest co-management and benefit sharing agreements 3. PFES delivery (forest protection and livelihood programs) 4. SFM/REDD+ programs 5. VND 40M village development program 6. Livelihood programs

• Training in livelihood skills • Livestock improvement and new livestock programs • Agriculture improvement (new seeds, planting techniques, marketing, technical

support) • Farm and non-farm product value addition and marketing • Ecotourism

Target Species Program

• Preparation of target species action plans • Monitoring and surveys • Protection and patrolling • Environment awareness and education • Field equipment

Provincial Biodiversity Action Plans

• Technical paper on experiences of community participation and other landscape, biodiversity corridor, buffer zone, target species planning and PA management learning and experiences

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Table 14: Summary of Key Responsibilities for Component 1 Priority activity Implementation Monitoring Notes

PA Investment Plan preparation

PAMB with external support (TA) from experienced training/research institution

PPMU and FPD

PA Master plan preparation

PAMB with external support (TA) from individual consultants

PPMU and FPD

OMP preparation and revision and implementation

PAMB with external support (TA) from experienced training/research institution

PPMU and FPD

Capacity building PAMB with external support (TA) from experienced training/research institution

PPMU and FPD

Baselines on biodiversity and landscape features

PAMB with TA support from experienced research institution

PPMU and FPD

Database management for more effective conservation management

PAMB PPMU and FPD

Piloting of participatory model in buffer zone

PAMB and TA support (Participatory expert)

PPMU and FPD

PFES payment and monitoring for PA

Provincial Department of Forest Development

PPMU and DARD The Additional Financing will provide technical support for evaluating payment potential and supporting the development of payment mechanism for PA and buffer zone

2. Component 2: Landscapes conservation measures at the community level

in PAs and their surroundings providing financial sustainability and reduced GHG emissions

a. Sub-Component 2.1: Improved financial sustainability through

ecosystems service assessment and payment of forest environmental services (PFES)

82. The PA buffer zone community-based PFES procedures describe the steps in the process for implementation of PFES activities in 25 villages (preferably selected from the 40 villages selected for participatory conservation in sub-component 1.2) in the twelve communes in the buffer zones of six existing PAs with established PAMBs in the three provinces. It provides an appropriate model for SFM for engaging local communities for conservation support in the buffer zones of the selected PAs. 83. Currently PFES funds in the three provinces have been collected since 2011 and these funds are available for disbursement to local communities. However the PFES disbursement to forest owners is slow due to the lack sufficient information on forest allocation status and appropriate approach and guidelines at grassroots level such as identification of forest

54

boundaries in the field, and the large number of small beneficiary farmers who are scattered around in remote areas. 84. Quang Nam province forest owners have started application for PFES and the first PFES advance was disbursed in August 2013 to large forest owners including Forest Company, Protected Forest Management Board (PFMB), Song Tranh PA. Thua Thien Hue and Quang Tri provinces have not started application for PEFS14 and PFES funds are still held in the Provincial Forest Protection and Development Fund (FPDF) and under executive management of the Forest Agency. 85. This PA BZ community-based PFES procedure is prepared to address the local demands on increasing PFES implementation in three provinces and will be facilitated by the village participatory teams set up under sub-component 1.2. 86. The guidelines for PA buffer zone community-based PFES procedures is designed from integration of three supported sources:

(i) ADB Pilot in Quang Nam province; (ii) Government policy and regulations;15 and (iii) Local consultations in 3 provinces, 8 PAs and their BZ communes.

87. The next sections set out in more detail the approach to PFES development, identifying the sequencing of key activities in this process that builds on the experiences of the pilots in Quang Nam province. Each activity has several actions. The sequenced activities are:

i. Activity 2.1.1: PAMB signs an annual or long term Forest Management and Protection Commitment with DARD. (Reference Item 2 Article 9, Guideline 62/2012/TTLT-BNNPTNT-BTC)

88. The PAMB contacts DARD and receives the Forest Management and Protection Commitment form. The PAMB signs and seals the form (10 copies), and copies are distributed to DARD, Buffer Zone Commune Peoples Committee (where the PA has a forest protection contract with the community), Village Head, and each Household group that has forest protection contract with PAMB. Local Community signs Annual or Long Term Forest Protection Contract (FPC) (Refer to Item 2 Article 9, Guideline 62/2012/TTLT-BNNPTNT-BTC)

ii. Activity 2.1.2 Initial meetings at the commune level where the objectives, procedures and responsibilities of commune-level officials are explained to commune officials and village heads

89. The following are the key actions in this process:

(i) The Village participatory planning teams at each PA will organize meetings with local communities to agree on participatory approach in arranging Forest Protection Contract with local community. (Meeting venue: PPC office or other appropriate location).

(ii) Participants at the meeting will include: PA representatives (director/vice director, forest ranger, village participatory planning teams, CPC chair or vice chair,

14

See Annex 1: PFES Status in BZ Communes in three provinces. 15

See Annex 3: List of updated PFES Policy and Regulations.

55

commune land management officer, commune plan officer, commune forest ranger, district local forest ranger, heads of villages that will have forest protection contracts with PA, two representatives of each village with one woman invited.

(iii) Documents for the meetings are: a. Project documents related to PA and village support, including potential

village support fund, if relevant. b. Information on PFES rate defined by province to pay for each hectare of

forest protected in communes. c. List of villages nominated for FPC and PFES group formation. d. Proposal on options in FPC and PFES group formation: (i) group-based

FPC and (ii) village-based FPC (refer Table 15).

Table 15: Group Based FPCs vs Village Based FPCs (i) Group-based FPC (ii) Village-based FPC

1. They consist of households who will be actively involved in the PFES process.

1. Village commits to protect forest for protect their livelihoods

2. All households in a group will come from one village.

2. All villagers agree to have collective action on village conservation plan (VCP)

16 including forest

protection 3. The groups should have a minimum of 10

members and a maximum of all the households in a village.

3. All villagers participate in project activities they develop

4. The groups are self-selecting: they consist of households who trust each other and choose to form a group together.

4. Village establishes several interest groups: Forest Protection Group, Crop production group, Livestock feeding group, Micro credit group

5. The groups will elect a group head and a deputy head who will represent the group in relation to commune and other authorities.

5. The groups will elect a group head and a deputy head who represent the group in relation to village and other authorities

6. The groups will prepare a PFES management plan, with support from the PAMB and PA Village Participatory Planning Team where necessary, that will contain details of the group’s activities to patrol and protect the forest, the management of the forest (specifying the types and quantities of materials that group members can extract from the area they are protecting) and the use of PFES funds, including group development and livelihood activities.

6. Each group will prepare group management plan with support, with support from the PAMB and PA Village Participatory Planning Team. Where necessary, that will contain details of the groups’ activities, and consolidate to have VCP. Village will prepare VCP regulation on FPC and benefit sharing mechanism, livelihood activities and the use of PFES funds and other sources of funding that would all be agreed with the PAMBs and PA Village Participatory Planning Team.

7. Each group member will sign a FPC with the PAMB based on an agreement on the implementation of group-based PFES

7. Each member of Forest Protection Group on behalf of village will sign a FPC with the PAMB based on an agreement on the implementation of

16

In this project, the village conservation plan presented here is synonymous with the village development plan in the PFES-related regulations.

56

activities and the disbursement and management of PFES funds.

group-based PFES activities and the disbursement and management of PFES funds.

8. The groups will hold regular (at least monthly) meetings of all members to discuss group activities and resolve any problems. More regular and special meetings can be held where the group agrees they are needed.

8. The groups will hold regular (at least monthly) meetings of all members to discuss group activities and resolve any problems. More regular and special meetings can be held where the group agrees they are needed. Village will hold quarterly meetings with all groups to review VCP progress and resolve any problems.

9. The group head will prepare a report on the group meetings which will be agreed by all members and sent to the village and PA for reference.

9. Each group head will prepare a report on the group meetings which will be agreed by all members and sent to the village and PAMB and PA Village Participatory Planning Team for reference.

10. The group will hold quarterly meetings with the village head and PAMB and PA Village Participatory Planning Team to review progress and make any necessary adjustments to the management plan.

10. Village will hold quarterly meetings with all groups and PAMB and PA Village Participatory Planning Team to review progress and make any necessary adjustments to the management plan.

11. A proportion (10 - 30%) of PFES funds will be reserved for livelihood development activities selected and organized by the groups with support from Village Participatory Planning Team and other partners.

11. A proportion (10 - 30%) of PFES funds will be reserved for livelihood development activities selected and organized by the village groups with support from Village Participatory Planning Team and other partners.

d. Maps to identify the forests within the commune and villages that fall into

individual watersheds and to demark the forest plots that will be the responsibility of different PFES groups. The Maps with scale 1: 25,000 could be (i) Satellite Imagery for Forest Assessment; and (ii) administrative boundary with demarcation of PA, villages, and other partners in communes.

e. Meeting minutes of village participatory planning team that defines the agreement reached with the different partners and these minutes are signed by all participants. There are 10 copies to be sent to: PAMB, commune PC, village head, district PC and Forest Ranger, and other related bodies.

iii. Activity 2.1.3: Initial meetings at the village level where the

objectives, procedures and responsibilities of commune-level officials, village head and villagers are explained to all villagers.

(i) Village Participatory Planning Teams at PA will organize meetings with villagers

to agree on participatory approach in arranging Forest Protection Contract and Village Development Plan (Meeting venue: Village meetings hall).

57

(ii) Participants in meeting include: all villagers, village head, representatives of PAMB (BZ Implementation Working Group) and Village Participatory Planning Team.

(iii) Documents for the meetings: a. Project documents related to PA and village support, including potential

village support fund. b. Information on PFES rate defined by province to pay to each hectare of

forest in communes. c. Information on the needs for VCP (for example government New Rural

Development Plan, Prime Minister’s Decree 24/2012/QĐ-TTg on 01 June 2012 on allocating VND40 million per year to each BZ village)

d. Proposal on options in FPC and PFES group formation: (i) group-based FPC and (ii) village-based FPC (see as in 2.1.).

e. Maps to identify the forests within the commune and villages that fall into individual watersheds and demark the forest plots that will be the responsibility of different PFES groups. The Maps with scale1:25,000 could be (i) Satellite Imagery for Forest Assessment; (ii) Administrative boundary with demarcation of PA, villages, and other partners in communes/villages.

f. Meetings minutes of village that defines reached agreement and signed by all participants. There are 5 copies to be sent to: PA, commune PC, village head, district PC and Forest Ranger, and other related bodies.

iv. Activity 2.1.4: Information campaign including village-level

meetings and the distribution of materials such as leaflets and posters to inform community members of the main features and steps in the development of VCP and PFES groups

90. Several meetings with separate target beneficiaries including women, the poor, ethnic minority, knowledge farmers will be organized to discuss relevant issues. The information campaign will pay attention to ethnic minority people whose main language is dialects and have low communication in Vietnamese. Group meeting minutes shall record the meetings outcomes, with signatures of meetings participants, that will be send to village head and PAMB and Village Participatory Planning Team.

v. Activity 2.1.5: Group formation in each village, based on the

group characteristics outlined above

91. The composition of individual groups is decided locally and verified at the village level.

vi. Activity 2.1.6: VCP formation

(i) Groups sends their group plan to village head (ii) Village head and group representatives with support from Village

Participatory Planning Teams to review group plans and develop VCP. (iii) Draft PFES Village Development Plan will include villagers’ proposed

activities on forest protection, livelihood improvement as well as use of PFES and other village funds.

(iv) Organize village meetings to finalize VCP.

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(v) Village head sends VCP to commune PC, PAMB and Village Participatory Planning Team.

vii. Activity 2.1.7: Forest Protection Contracts (FPC): PFES group

members sign Forest Protection Contract with PAMB including: (i) Application form: signed by applicant and PAMB, with witness signature of

village head with support of PAMB and group head. 4 copies to send to: applicant, PAMB, village head, PFES MB.

(ii) Forest Protection Contract, with signatures of applicant and PAMB. With support of PAMB and group head. 4 copies needed to send to: applicant, PAMB, village head, PFES MB.

(iii) Map verification, where the centrally-provided map is reviewed and amended where necessary through discussion amongst knowledgeable local residents and officials. The map to define Forest allocation to group is prepared by PAMB and discussed and agreed with group members.

(iv) Forest plot allocation to individual groups based on the amended map and through agreement between the groups (represented by their heads and deputies), village leaders and commune officials in village-level meetings.

(v) Field visit to demarcate forest area allocated to group to protect. Participants are group members, village head, PA ranger, district ranger.

(vi) Document on defining and receiving local forest area to protect, that signed by PAMB, group member, PA ranger, village head. With support of PA and group head. A Copy of Individual Legal Card or Family Registration should be attached.

viii. Activity 2.1.8: Project support to PFES VCP: PAMB and

village will sign agreement on project support to implement VCP

ix. Activity 2.1.9: Making a list of all households who have

signed Forest Protection Contract (Refer Item 2 Article 9, Guideline 62/2012/TTLT-BNNPTNT-BTC)

(i) PA make list of households who signed FPC by groups. The list include full

name, address, and contact number. (ii) The copies sent to each group, village head, PAMB and Village Participatory

Planning Team.

x. Activity 2.1.10: PFES Disbursement Plan (Refer Issue d) Item 2 Article 9, Guidelines 62/2012/TTLT-BNNPTNT-BTC). PAMB is responsible for making the PFES disbursement plan

(i) Table of forest area (see Table 6 in Guideline 62/2012); and (ii) Map of forest area for PFES (scale 1/25,000) Use Management Plan.

xi. Activity 2.1.11: Submission of documents to Provincial Forest

Protection and Development Fund before 15 July (Refer Article 9, Guideline 62/2012/TTLT-BNNPTNT-BTC). Require both a hard copy and soft copy

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(i) PAMB sends prepared documents (PFC, List of forest contractor, PFES disbursement plan) to Province Forest Protection and Development Fund before 15 July of each year.

(ii) Support documentation to be attached, include: License of PA organization (decision to establish), Forest Land Use Certification, Bank account number.

(iii) PA inform PFES groups on sending documents to Province Forest Protection and Development Fund

xii. Activity 2.1.12: Monitoring and evaluation

(i) PFES groups organize regularly forest protection patrols. (ii) PEFS group head make minutes/records of each forest protection patrol. The

forest development indicators shall be checked with baseline. The visible and simple indicators shall be developed. For example number of forest fires, number and area of forest land encroachment, number of collected wildlife traps.

(iii) PA rangers conduct independent forest patrol to validate the records of PFES groups.

(iv) Organize exchange information meetings between PFES groups and PAMB.

xiii. Activity 2.1.13: Receipt and Use of PFES money (i) PAMB receives PFES from Province Forest Protection and Development Fund. (ii) PAMB informs PFES groups and village on delivery of fund and arranges time to

disburse PFES to PFES groups, or village. (iii) PFES group or village allocates the incoming PFES revenues to individual

persons who are participating in forest protection patrols or other agreed arrangement, as well as use some of the funds for livelihood activities as agreed or defined in the VCP

xiv. Activity 2.1.14: Preparation of Report on PFES progress

(i) PAMB drafts annual PFES use report. (ii) Organize village meetings between PAMB, PFES groups, village head to discuss

draft PFES report and recommendations. (iii) The PFES report finalized and sent to village head, PFES group, commune PC

and province Forest Protection and Development Fund.

b. Sub-Components 2.2 and 2.3: Improving SFM and Carbon Sequestration in forest landscape and building provincial monitoring capacity and development of impact monitoring framework linked to emerging national MRV system

92. This sub-component calls for the development of SFM/REDD+ pilot(s). To undertake this activity effectively it will require a step-wise or phased approached, to ensure that any intervention is feasible and contextually appropriate. SFM is an umbrella of activities and approaches, and it will be important to choose the right approach for each site, based on local context and needs. REDD+, for example, may be an appropriate tool in certain circumstances, but not all. And globally there are many examples of the miss-use of certain tools, like REDD+, due a lack of initial scoping and feasibility work. As such, the development of SFM/REDD+ requires scoping, feasibility assessments, detailed project design and finally implementation; as follows:

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i. Broad Framework for Implementation of SFM/REDD+

a) Phase 1: Scoping

93. The first step in developing SFM and/or REDD+ pilots will be a primarily desk-based scoping and feasibility study that would take about four months. Two communes of A Vuong and Bhalee adjacent to the Saola Nature Reserve in Tay Giang District, Quang Nam Province are proposed to be a pilot site to test the SFM/REDD+ approach. The site will be confirmed at the scoping stage. Due to budget constraint and the needs for synergies between the BCC Project and the Additional Financing, priorities of site selection will be given to current BCC Project communes that are in buffer zones of protected areas. 94. Ideally the scoping will contain some additional, primary data gathered from the field (mainly via meeting key stakeholders, like PA managers). The scoping activity will review the context and conditions in each of the three provinces, and make recommendations for an appropriate site(s) in and around one of the target eight (8) PAs. The feasibility component of the assessment will look at broad feasibility of several SFM models and approaches, based on a literature review and local, contextual analysis, and then present a range of options and an approach will be selected from the list of options, for suggested SFM development; and for this a more detailed viability assessment will be carried out. For the SFM pilot, this viability assessment or PIN (Project Idea Note) will be produced, and will induce guidance’s (a ‘roadmap’) for project development and associated work plans, log frames and budgets

b) Phase 2: Project Design/development

95. The development of an SFM project, with or without REDD+ as the funding mechanism, will require a considerable input of time and resources. This phase will involve detailed assessments of the pilot site, prior to the participatory design of the actual SFM intervention. For efficiency gains between the BCC Project and the Additional Financing, where possible the subcomponent will use the data and knowledge that is being developed through the use of the BCC Project to protect and build the integrity of forest cover and forest quality in the BCC Project area. Assessments are required for both effective project design and to act as baselines for monitoring protocols, and will include needs assessments, stakeholder analysis, opportunity costs analysis, social baselines studies (including livelihood studies), carbon assessments (if appropriate) and biodiversity/high conservation value assessments. There will also be a need here to examine the legal and policy (enabling) frameworks and ensure harmony of approaches with national and provincial laws and development plans. As part of the development phase, this sub-component would aim to trial as many of the activities as possible, to allow for iterative learning and fine tuning, before final launch/implementation. If REDD+ is chosen as a possible option for the SFM pilot, then there will also be a need to get the activities audited (validated) using a recognized, third-party standards agency prior to its registration to sell carbon credits.

c) Phase 3: Feasibility study of based on upscaling the implementation of the pilot site under the BCC Project

96. Most of the field activities in the proposed pilot site in Quang Nam, or other sites to be determined at the scoping stage, are expected to be implemented by the ongoing BCC Project. The Additional Financing will demonstrate working SFM pilot and begin gathering data on outcomes and impacts; and secondly, so that activities can be seeded, and thus operational – greatly easing access to ‘follow-on’ and sustainable PFES/carbon/investment finance. The Additional Financing will also test the feasibility and viability of seeking REDD+ support for

61

upscaling such programs, and if it is deemed viable to produce a draft project design document for the buffer zone support across a larger number of communes. 97. The pilot will facilitate capacity building and technical training in SFM guidelines to forest management units, PA authorities and local communities will support SFM/REDD+ working groups, the development of benefit sharing protocols for performance based payments, land tenure reforms (via ADB-BCC and WWF/CarBi projects), and the implementation of ecological protocols informing community-based reforestation and demonstration per targeted biome. The SFM/REDD+ pilot is to be closely linked to Project development of provincial MRV and piloting of local MRV systems (2.3 below); will underscore recent developments toward legally binding SFM curricula at the national level; and promote SFM knowledge and awareness-raising.

ii. Road Map for SFM/REDD Activities 98. The sub-component will help disseminate and expand existing SFM methodologies, training and standard operational guidelines for forest units including Watershed Protection Management Boards and forest companies (both formerly State Forest Enterprises), buffer-zone community forest smallholder plantations, and local-provincial level government forest units. Following further review during the initial stages of Phase 2 of available methodologies, including the GIZ SFM technical guidelines (5 distinct SFM guidelines established to support national SFM policy with key pilots in Kon Tum and Quang Binh Provinces), the SNV Participatory Forest Management pilots (near Phong Dien PA, Thua Thien Hue Province), and formative small holder certification work guiding WWF CarBi REDD+ efforts in the trans-boundary area region (buffer zone of Dakrong and Huong Hoa PAs, in Quang Tri), the sub-component will support on the ground training and implementation of SFM/REDD+ at sub-National and local levels within the three Province in the BCC project area. 99. The key principles of the SFM pilot component are defined as followed, by the use of:

(i) Participatory land use planning procedures; (ii) Simple, transparent and accountable payment/subsidize procedures for grass-roots

beneficiaries; (iii) Community-based forest management and protection in PA buffer zones; and (iv) Compliance with principles of sustainable, pro-poor, nature-based forest

management practices.

100. The sub-component will address key challenges under the ongoing national land allocation process through precise area measurement and clear and visible boundary demarcation in the field; complete forest land allocation dossiers (where appropriate) including Circular 38 surveys, as legal basis for benefit sharing arrangements; and forest protection finance and silvicultural training as crucial follow-up procedure of a comprehensive forest allocation process. 101. If the site is confirmed as within the BCC Project area, financial support from the BCC Project will be provided to pilot village forest protection and management teams, on the basis of approved patrolling reports, as key components of SFM. In the long-run, payments under PFES, REDD+ and/or state ‘forest protection contracts’, possibly in combination with revenue from agroforestry and improved agriculture (crop diversification and higher yields) will contribute to sustained financing after Project termination. 102. The sub-component will support a comprehensive impact monitoring system or safeguards information system (SIS), to the REDD+ vernacular. This should be established in

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the first year of the design phase. A result matrix, based on the project framework, and operational plans will form the basis for the project impact monitoring system or SIS.

iii. MRV/SIS

103. Since there is a fundamental issue with the design and implementation of three provincial MRVs, the emphasis is placed on providing capacity building to key stakeholders regarding MRV in its broadest terms, while focusing on the technical requirements for developing project, and possibly sub-national, level forest impact/safeguard monitoring. In terms of MRV capacity building, under this sub-component, the following is recommended:

(i) Content a. What is REDD+? b. What is MRV and why is it necessary? c. Types and scope of MRV:

i. National versus sub-national and project monitoring; ii. MRV for carbon; iii. MRV for co-benefits/safeguards (SIS); and iv. REDD+ Certification Standards and the Cancun Agreements/Warsaw

text (UNFCCC). d. Harmonizing with national systems & JNR. e. Technical aspects of the M, R and V.

(ii) Recipients

a. CPMU, PPMUs and high level DoNRE staff b. DARD (FPD) staff c. PAMBs d. PFMB and SFE/Cs if appropriate e. Selected community members, including:

i. Village Forest Committee representatives ii. Commune and village leaders, traditional and CPC/VPC

104. For the development of project/sub-national SIS, the SFM/REDD+ Specialist(s) will need to refer to this pre-feasibility study and engage with VNForest’s Viet Nam REDD+ Office (VRO) and UN-REDD (FAO) and FCPF technical staff to ensure harmony of approaches and best practice. The timeline for implementation of the SFM/REDD+ sub-component is provided in Table 16.

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Table 16: Timelines (Work plan) for SFM/REDD+ Activity Year 1 Year 2 Year 3 Year 4 2.2 SFM / REDD Scoping PIN X FPIC X X X X Baseline surveys (forest/carbon, biodiversity, social)

PLUP/Project Design X FLA X X Develop SFM/REDD project model, including safeguards

X X

Institutional development: Committees / VFMB

X X X

Develop benefit sharing and grievance mechanism

X

Develop sub-national MRV/SIS X Design/initiate community-based patrols/monitoring

X X

Submit Management Plan (linked to PA) or PDD for Validation

X

Further SFM/REDD+ implementation where necessary, based on activities in the buffer zones under the BCC Project

X

On-going MRV (Verification) – 5 years cycle / M&E

X

Capacity building on REDD+, MRV and SIS X Forest-carbon inventory X Development of SIS indicators X Remote sensing (procurement)/analysis (see below)

X

Activity Data - land cover change: deforestation/degradation

X

Emission Factors (carbon accounting/scenario development)

X

Design/establish Greenhouse Gas Inventory (GHG-I)

X X

Finalize MRV, in close coordination with VRO/UN-REDD/FCPF

X

Safeguards X X Launch Safeguards Information System (SIS) – sub-national

X

Launch Monitoring, Reporting and Verification (MRV) system*

X

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IV. COSTS AND FINANCING

105. The Additional Financing is estimated at $4.54 million with a grant not exceeding the equivalent of $3,794,954 from the GEF and $750,000 from the Government and no additional contribution from ADB or beneficiaries.17 The revised investment and financing plans are in Tables 17 and 18.

Table 17: Revised Investment Plan ($ million)

Item Current Amount

a

Additional Financing Total

A. Base Costc

1. Institutional and community strengthening 2.18 0.47 2.65 2. Biodiversity corridors restoration and protection 12.14 0.53 12.67 3. Livelihood and small-scale infrastructure 13.45 2.21 15.66 4. Project management and support 5.08 0.74 5.82

Subtotal (A) 32.85 3.95 36.80 B. Contingencies

d 0.55 0.59 1.14

C. Financing Charges during Implementation 0.67 0.00 0.67 Total (A+B+C) 34.07 4.54 38.61

a Refers to the original amount. Includes taxes and duties of $2.66 million to be financed from the ADB loan.

b Includes taxes and duties of $359,200, to be financed by GEF in compliance with OM H3/OP (para. 9).

c In mid-2010 prices for the ongoing BCC project and mid-2013 prices for the additional financing.

d Physical contingencies are computed at 10% for civil works and 10% for training, surveys, and studies. Price

contingencies are computed at 1.0% for 2015, 1.4% for 2016 and 2017, and 1.5% thereafter on foreign exchange costs and at 3.5% on local currency costs; include provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate.

Source: Asian Development Bank estimates.

Table 18: Revised Financing Plan

Source Currenta Additional Financing Total

Amount

($ million) Share of Total (%)

Amount ($ million)

Share of Total (%)

Amount ($ million)

Share of Total

(%) Asian Development Bank 30.00 88.05 0.00 0.00 30.00 77.70 Global Environment Facility

b 0.00 0.00 3.79 83.48 3.79 9.82

Government 2.85 8.37 0.75 16.52 3.60 9.32 Beneficiaries 1.22 3.58 0.00 0.00 1.22 3.16 Total 34.07 100.00 4.54 100.00 38.61 100.00 a

Refers to the original amount. b

Administered by ADB. Excluding agency fee of $341,546. Local transport and insurance charges are eligible under the GEF financing

Source: Asian Development Bank.

17

Local transport and insurance charges are eligible under the GEF financing.

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A. Detailed Cost Estimates by Expenditure Category

B. Allocation and Withdrawal of Grant Proceeds

GREATER MEKONG SUBREGION BIODIVERSITY CONSERVATION CORRIDORS PROJECT – ADDITIONAL FINANCING

Number Items

Amount Allocated Global Environment

Facility

($) Category

Percentage and Basis for Withdrawal from the Grant Account

1 Goods 680,000 100% of total expenditure claimed

2 Village Block Grants 400,000 100% of total expenditure claimed

3 Workshops/Training/Capacity Building 288,000 100% of total expenditure claimed

4 Consulting Services 1,734,000

100% of total expenditure claimed

5 Project Management 692,954 100% of total expenditure claimed

Total 3,794,954

(Dong Million) (US$ '000)

Local Foreign Total Local Foreign Total Exchange

I. Investment Costs

A. Goods 4,922 2,741 7,663 235 131 367

B. Village Block Grants 8,361 - 8,361 400 - 400

C. Workshops_Capacity Building 3,168 1,891 5,059 152 90 242

D. Consulting Services

D1. REDD+ Pilot 15,928 3,807 19,736 762 182 944

D2. Biodiversity and Protected Area Management 16,449 - 16,449 787 - 787

Subtotal 32,377 3,807 36,184 1,549 182 1,731

E. Project Management

Off ice and Operations 4,114 416 4,531 197 20 217

Contractual Staff 8,109 555 8,664 388 27 415

Subtotal 12,223 972 13,195 585 46 631

Total Investment Costs 61,051 9,411 70,462 2,921 450 3,371

II. Recurrent Costs

A. Government Expenses 8,777 3,436 12,213 420 164 584

Total Recurrent Costs 8,777 3,436 12,213 420 164 584

Total BASELINE COSTS 69,828 12,847 82,676 3,341 615 3,955

Physical Contingencies 3,010 1,731 4,741 144 83 227

Price Contingencies 7,246 340 7,587 347 16 363

Total PROJECT COSTS 80,085 14,918 95,003 3,831 714 4,545

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C. Detailed Cost Estimates by Financier ($ ‘000)

a Administered by the Asian Development Bank.

b Consulting services to develop a REDD+ demonstration.

c Includes government staff’s per diem, travel allowances, meeting costs, and annual auditing cost of $10,000/year,

financed by GEF. d Includes government staff’s salary.

D. Detailed Cost Estimates by Outputs/Components ($ ‘000)

Government GEF /a Total

Amount % Amount % Amount %

I. Investment Costs

A. Goods 0.0 680 680

B. Village Block Grants - - 400 100.0 400 8.8

C. Workshops_Capacity Building 0.0 - 288 100.0 288 6.3


D1. REDD+ Pilot /b 0.0 - 948 100.0 948 20.8

D2. Biodiversity and Protected Area Management - - 787 100.0 787 17.3

Subtotal 0.0 - 1,734 100.0 1,734 38.1


Off ice and Operations c/ 0.0 - 278 100.0 278 6.1

Contractual Staff - - 415 100.0 415 9.1

Subtotal 0.0 - 693 100.0 693 15.2

Total Investment Costs 0.0 - 3,795 100.0 3,795 83.5

II. Recurrent Costs

A. Government Expenses d/ 750.0 100.0 - - 750 16.5

Total Recurrent Costs 750.0 100.0 - - 750 16.5

Total PROJECT COSTS 750.0 16.5 3,795.0 83.5 4,545 100.0

Output 1 Output 2 Output 3 - Output 4

Amount % Amount % Amount % Amount % Total

I. Investment Costs

A. Goods - - 616 91 64 9 - - 680

B. Village Block Grants - - - - 400 100 - - 400

C. Workshops_Capacity Building 102 35 23 8 109 38 54 19 288


D1. REDD+ Pilot - - - - 948 100 - - 948

D2. Biodiversity and Protected Area Management 108 14 129 16 485 62 65 8 787

Subtotal 108 6 129 7 1,432 83 65 4 1,734


Off ice and Operations - - - - 18 6 261 94 278

Contractual Staff - - - - 137 33 278 67 415

Subtotal - - - 155 22 538 78 693

Total Investment Costs 210 6 768 20 2,160 57 657 17 3,795

II. Recurrent Costs

A. Government Expenses 360 48 85 11 114 15 191 26 750

Total Recurrent Costs 360 48 85 11 114 15 191 26 750

Total PROJECT COSTS 570 13 853 19 2,274 50 849 19 4,545

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E. Detailed Cost Estimates by Year ($ ‘000)

F. Contract and Disbursement S-curve

Totals Including Contingencies

2015 2016 2017 2018 Total

I. Investment Costs

A. Goods 127 166 194 194 680

B. Village Block Grants - 140 130 130 400

C. Workshops_Capacity Building 50 94 83 60 288


D1. REDD+ Pilot 34 524 276 113 948

D2. Biodiversity and Protected Area Management 125 385 191 86 787

Subtotal 159 909 467 199 1,734


Off ice and Operations 50 69 77 82 278

Contractual Staff 31 130 128 125 415

Subtotal 81 199 205 208 693

Total Investment Costs 417 1,508 1,080 791 3,795

II. Recurrent Costs

A. Government Expenses 147 186 211 206 750

Total Recurrent Costs 147 186 211 206 750

Total PROJECT COSTS 564 1,694 1,290 997 4,545

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G. Fund Flow Diagram

Figure 2: Fund flow diagram

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V. FINANCIAL MANAGEMENT A. Financial Management Assessment 106. This financial management assessment (FMA) was prepared during fact finding mission on 22–29 April 2014,18 in accordance with ADB’s Guidelines: Financial Management and Analysis of Projects19 and the Financial Due Diligence: A Methodology Note.20 This FMA incorporates financial management internal control and Risk Management Assessment as required by the Guidelines. Annex 1 to Attachment 4 presents the consolidated results of the completed FMA Questionnaires from the executing agency (EA) and three implementing agencies (IAs). This report was prepared by reviewing documents, interviewing the staff of the Government agencies, consultants, targeted project beneficiaries and other stakeholders. Risks and mitigating actions were identified together with the stakeholders. 107. The purpose of the FMA was to determine the robustness of the accounting, financial controls, external and internal audit arrangements, and the capability of the EAs and IAs to meet all the fiduciary requirements which are set out in the grant agreement and other project documents. Within this context, this FMA report presents results of a FMA of the EA and the three IAs. It includes agreed project financial arrangements, financial due diligence of the EA and its associated entities to deal with financial risks and risk management of the project. The overall assessment on the financial management risk rating is moderate-substantial. Mitigation measures have been proposed to lower the risks during the Project implementation. Detailed assessment and measures are given in Attachment 4. The EA have sufficient financial management capacity to implement the project, particularly with respect to use of imprest fund/SOE procedures. B. Disbursement 108. The GEF grant proceeds will be disbursed in accordance with ADB’s Loan Disbursement Handbook (2015, as amended from time to time),21 and detailed arrangements agreed upon between the government and ADB. After grant effectiveness, the EA will establish an imprest account in US$ at a commercial bank designated by the State Bank of Vietnam to receive the GEF grant for the Project. The three PPMUs (DONRE in Quang Nam and Thua Thien Hue, Quang Tri) will also establish imprest subaccounts in a commercial bank as mentioned above.22 In addition, eight subaccounts will be established and managed by eight PAMBs to receive the GEF grant from the relevant PPMU subaccounts. The imprest account will be used to meet national project costs including CPMU operations cost, and consulting services contracts. The PPMU subaccounts will be used to meet provincial cost such as management cost, and the PAMB subaccounts will be used for protected area cost items which is implementation of the OMP, forestry activities, VCPs (funded through village block grants), and others. The imprest account will be replenished in accordance with standard procedures outlined in the ADB's Loan Disbursement Handbook. All accounts will be audited annually by an independent auditor. The

18

FMA Report is not available for the ongoing project. 19

ADB. 2005. Financial Management and Analysis of Projects. Manila. Refer to page 14 of Knowledge Management Addendum for more information on the Financial Management Assessment.

20 ADB. 2009. Financial Due Diligence A Methodology Note. Manila. Refer to page 3 for more information on the Financial Management Assessment.

21 Available at: http://www.adb.org/documents/loan-disbursement-handbook

22 Bank charges may be financed from the GEF grant proceeds.

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imprest accountand subaccounts are to be used exclusively for ADB’s share of eligible expenditures. The CPMU who established the imprest account in its name is accountable and responsible for proper use of advances to the imprest account including advances to the subaccounts. 109. The imprest account will receive an advance amounting to an estimated 6 months of project expenditure. Funds in the imprest account will be used to establish advances in the respective subaccounts. Subaccounts are intended to provide cash resources for the operations of the PPMUs and PAMBs. PPMU and PAMBs subaccounts will be replenished upon presentation of documented liquidation to CPMU and PPMU, respectively, of expenditures as outlined in ADB's Loan Disbursement Handbook.

110. PPMUs will use subaccounts to pay project expenditure within their province. PAMBs will use subaccounts to pay the project expenditures in and around their protected areas. The payment from the subaccount will be substantiated by the full suite of documentary evidence required by ADB. The PPMUs will prepare liquidation and replenishment requests for their subaccounts. With support from the PPMUs, the PAMBs will in their turn prepare liquidation and replenishment requests for their sub-accounts. The disbursement supporting documents will demonstrate, among other things that the goods and/or service are eligible for ADB financing. The requests and the copies of supporting documents (the original documents should be kept in PPMUs) will be submitted from PPMUs to the CPMU, which will verify and consolidate the request before sending them to the Ministry of Finance. The requests and the copies of supporting documents (the original documents should be kept in PAMBs) will be submitted from PAMBs to the PPMUs, which will verify and consolidate the request before sending them to CPMU. Authorized Withdrawal Applications will be forwarded to ADB for processing and for replenishment to the imprest account. The PPMU accountants have to submit (i) Statement of Expenditures with the copies of the supporting documents; (ii) bank sub-account statement; and (iii) reconciliation of the sub account to CPMU for replenishment when expenditure reaches $100,000 or on a monthly basis, whichever comes first. The PAMB accountants have to submit (i) Statement of Expenditures with the copies of the supporting documents; (ii) bank sub-account statement; and (iii) reconciliation of the sub account to respective PPMU for replenishment when expenditure reaches $20,000 or on a monthly basis, whichever comes first. The CPMU will check documentation and replenish the PPMU subaccounts from its imprest account. The PPMU will check documentation and replenish the respective PAMB sub-accounts from their imprest subaccount. The PPMUs need to send CPMU contract awards and liquidation along with a monthly forecast of expected procurement and liquidations to enable the CPMU to manage Project cash flow risk. Similarly, PAMBs also need to send PPMU contract awards and liquidation along with a monthly forecast of expected procurement and liquidations to enable the PPMU manage Project cash flow risk. Based on the financial management manual of the ongoing Project, within a month of project effectiveness, CPMU will issue a project financial management manual for the Additional Financing. Payments made by CPMU, PPMUs, and PAMBs will be supervised at central, provincial and district levels respectively upon receipt of payment documents in compliance with the Government of Vietnam regulations. 111. Disbursement procedure of the village block grants. The village block grants will be set up at the PA level for management. Figure 2 presents the fund flow arrangement from ADB and the Government for the village block grants. Upon endorsement by the PAMBs, funds will be directly transferred from the PPMU subaccount. All payments to contractors or communities

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will be made in compliance with Government of Viet Nam regulations and procedures, as well as ADB’s Loan Disbursement Handbook (2015, as amended from time to time).23 112. The request for initial and additional advances to the imprest account prepared by CPMU should be accompanied by an Estimate of Expenditure Sheet setting out the estimated expenditures for the forthcoming six (6) months of project implementation. For every liquidation and replenishment request of the imprest account, the Imprest Account holders (CPMU) will furnish to ADB (i) Statement of Account (Bank Statement) where the imprest account is maintained; (ii) the Imprest Account Reconciliation Statement reconciling the above mentioned bank statement against the executing agency's records; (iii) signed withdrawal application; and (iv) Statement of Expenditures.

1. Direct Payment and Statement of Expenditures – the GEF grant 113. Grant proceeds may be disbursed directly to contractors and consultants by ADB in accordance with the approved contracts between the executing agency and the contractors, using direct payment procedures. For individual payments up to $100,000 equivalent, ADB's Statement of Expenditures (SOE) procedure may be used to reimburse eligible expenditures and to liquidate advances. Sample forms for withdrawal of Loan proceeds, replenishment of imprest accounts, and SOE can be downloaded from the ADB website. SOE records should be maintained and made readily available for review by ADB's disbursement and review missions or upon ADB's request for submission of supporting documents on a sampling basis, as well as for independent audit. Reimbursement and liquidation of individual payments in excess of the SOE ceiling should be supported by full documentation when submitting the withdrawal application to ADB. CPMU will be responsible for ensuring that SOEs are operated in accordance with ADB's requirement. 114. Before the submission of the first withdrawal application, the State Bank of Viet Nam shall submit to ADB sufficient evidence of the authority of the person(s) who will sign the withdrawal applications on behalf of the recipient, together with the authenticated specimen signatures of each authorized person. The minimum value per withdrawal application is US$100,000 equivalent. Individual payments below this amount should be paid (i) by the borrower and subsequently claimed to ADB through reimbursement; or (ii) through the imprest fund procedure, unless otherwise accepted by ADB.

2. Disbursement and Liquidation Procedures for Counterpart Funds 115. The items are to be financed from Government counterpart funds: (i) Government recurrent costs covering salaries of staff seconded to the Project which will be financed through the regular payroll mechanism for Government employees and any bonus adjustments as per Government rules and regulations; (ii) project full time staff and other government stakeholders participated in project activities. 116. The CPMU, PPMUs and PAMBs need to ensure that sufficient counterpart funds for Project Management are in place as activities required. The CPMU shall ensure that (i) counterpart funding is identified in all annual work plans and budgets; (ii) the agreement over the amount and use of counterpart funds from each Province and the EA clearly communicated

23

Available at: http://www.adb.org/Documents/Handbooks/Loan_Disbursement/loan-disbursement-final.pdf

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to ADB; and (iii) availability of counterpart funds are reported in all semi-annual and annual reports including both the amount and the timing of availability for each cost center. 117. Based on the financial management manual of the ongoing Project, within two months of project effectiveness, CPMU will issue a project financial management manual for the Additional Financing, subject to ADB’s and MONRE’s approval. C. Accounting 118. The CPMU, PPMUs and PAMBs will maintain separate project accounts and records that identify goods and services from loan proceeds, funding sources received, all expenditures incurred in connection with the Project and use of Government counterpart fund. Project accounts will be established and maintained in conformity to the Government accounting laws and regulations and follow international accounting principles. 119. The CPMU PPMUs, and PAMBs will be responsible for (i) preparing for disbursement projections; (ii) requesting budget allocation for counterpart funds; (iii) collecting supporting documents; (iv) collecting and verifying replenishment request from PAMBs (for the PPMUs) and from PPMUs (for the CPMU); and (v) preparing and sending Withdrawal Applications to ADB (for CPMU). 120. Directors and Chief Accountants of CPMU, PPMUs and PAMBs will be responsible and accountable to the Government and ADB for managing the budget and for all expenditures related to the projects in accordance with the conditions of the loan agreements, government and ADB regulations and other legal documents. An accounting assistant funded by the Additional Financing in each PPMU will support both PPMU and their respective PAMBs on all financial management aspects of the Project, under guidance of the PPMU chief accountants. 121. The PPMUs will review and consolidate the accounts and records of the PAMBs monthly. The CPMU will review and consolidate the accounts and records of the PPMUs monthly and have them audited annually in accordance with sound accounting practices by auditor acceptable to ADB. 122. The same accounting software for the BCC Project is to be used for Additional Financing. CPMU will provide technical support for assisting the PPMU and PAMBs financial management staff to undertake a comprehensive project management and financial systems design process. The output of the process will be used to (i) define the Projects’ requirement for software customization that should include management accounting and project implementation tracking including a contract management module that enables contract awards and liquidations to be recorded and reported in a consistent manner, and (ii) finalize reporting formats, data access, and input systems, (iii) design and deliver a training program on the resultant systems to all Additional Financing financial management staff including the provincial and protected area level staff. D. Internal control 123. Within each of the 12 Additional Financing accounting units (i.e., CPMU, PPMUs (3), PAMBs (8) internal control systems need to be established and implemented. The scope of the internal controls should include at least the following:

(i) cash controls; (ii) control of accounts at commercial banks;

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(iii) control of imprest accounts; (iv) control of counterpart fund accounts; (v) procurement controls; (vi) PPMU expenditure controls; (vii) contract management controls; and (viii) controls of receivables and payables (of which control of advance payments to

PPMU personnel are a special category). 124. The above control systems need to be supported with Project internal expenditure regulations and procedures as specified in the Project financial management manual to be issued by CPMU that are consistent across all accounting units. E. Financial and Progress Project Reporting 125. The CPMU is responsible to submit the semi-annual progress reports on overall project implementation, service provided, implementation issues, and recommended measures for improvement and submit to ADB on the 15th day of the month following the six-month period. The attachment to the semiannual report will be the information on disbursements of loan proceeds and counterpart funds details by components and contact awarded and liquidation. The CPMU also have to prepare the project consolidated reports and submit to Ministry of Planning and Investment and Ministry of Finance using the formats of these agencies. 126. The PAMBs is responsible to report to PPMUs, which will report to CPMU monthly, quarterly, and annually using the CPMU formats. The time of reporting is stipulated by the CPMU. 127. All 12 Project accounting units (i.e., CPMU, PPMUs (3), PAMBs (8) have to prepare the project financial statements and submit the relevant government agencies in conformity with the government regulations. F. Auditing and Public Disclosure 128. The CPMU will cause the detailed consolidated project financial statements to be audited in accordance with International Standards on Auditing and with the Government's audit regulations, by an independent auditor acceptable to ADB. The audited project financial statements will be submitted in the English language to ADB within six months of the end of the fiscal year by the CPMU. 129. The annual audit report for the project accounts will include an audit management letter and audit opinions which cover (i) whether the project financial statements present a true and fair view or are presented fairly, in all material respects, in accordance with the applicable financial reporting framework; (ii) whether loan and grant proceeds were used only for the purposes of the project or not; (iii) the level of compliance for each financial covenant contained in the legal agreements for the project; (iv) use of the imprest fund procedure; and (v) the use of the statement of expenditure procedure certifying to the eligibility of those expenditures claimed under SOE procedures, and proper use of the SOE and imprest procedures in accordance with ADB’s Loan Disbursement Handbook and the project documents. 130. Compliance with financial reporting and auditing requirements will be monitored by review missions and during normal program supervision, and followed up regularly with all concerned, including the external auditor.

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131. The Government, CPMU under MONRE and PPMUs have been made aware of ADB’s approach on delayed submission, and the requirements for satisfactory and acceptable quality of the audited project financial statements. ADB reserves the right to require a change in the auditor (in a manner consistent with the constitution of the borrower), or for additional support to be provided to the auditor, if the audits required are not conducted in a manner satisfactory to ADB, or if the audits are substantially delayed. ADB reserves the right to verify the project's financial accounts to confirm that the share of ADB’s financing is used in accordance with ADB’s policies and procedures.

132. Public disclosure of the project financial statements, including the audit report on the project financial statements, will be guided by ADB’s Public Communications Policy (2011).24 After review, ADB will disclose the project financial statements for the project and the opinion of the auditors on the financial statements within 30 days of the date of their receipt by posting them on ADB’s website. The Audit Management Letter will not be disclosed. 133. Audit reports, management letter, and related financial statements will be submitted to ADB in the English language not later than 6 months after the end of the fiscal year to which they relate, or the Project closing date if earlier. ADB informed the Government of its policy on submission of audited project financial statements (covering failure of submitting audited accounts and financial statements by the due date). Formal warning will be issued, and disbursements suspended, for accounts more than 6 months overdue. ADB reserves the right to verify the Project's financial accounts to confirm that the share of ADB’s financing is used in accordance with ADB’s policies and procedures. 134. Compliance with these financial reporting and auditing requirements will be monitored by review missions and during normal project supervision, and followed up regularly with all concerned, including the external auditor. ADB shall impose the following measures should the CPMU and/or the FIs fail to submit within the due date:

a. Within 6 months after the due date: Processing of requests for new contract awards and disbursement such as replenishment of imprest accounts and sub-accounts, processing of new reimbursement, and issuance of new commitment letters will be put on hold.

b. Within 12 months after the due date: Disbursement may be suspended.

24

Available from http://www.adb.org/documents/pcp-2011?ref=site/disclosure/publications

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VI. PROCUREMENT AND CONSULTING SERVICES A. General

135. All procurement will be undertaken in accordance with ADB’s Procurement Guidelines (2013, as amended from time to time)25 and all engagement of consultants will be undertaken in conformity with ADB’s Guidelines on the Use of Consultants (2013, as amended from time to time).26 Universal procurement will apply to the additional cofinancing (R29-13: Blanket Waiver of Member Country Procurement Eligibility Restrictions in Cases of Cofinancing for Operations Financed from Asian Development Fund Resources). A procurement capacity assessment was conducted and is attached in Appendix 2. The procurement risk was assessed as ‘high’ for the PPMUs and ‘average’ for CPMU. Mitigation measures include: (i) tailored training program to be delivered by the CPMU procurement specialist; (ii) CPMU/PPMUs to assign qualified and experienced staff in procurement of goods in PPMUs; (iii) a procurement specialist will be recruited for each PPMU (14 person-months each), to be funded under the ongoing Project; and (iv) ADB to provide prior review for all consulting services and prior review of the template contracts for the village grants of each of the six protected area management boards. B. Advance Contracting

136. All advance contracting will be undertaken in conformity with ADB’s Procurement Guidelines (2013, as amended from time to time) and ADB’s Guidelines on the Use of Consultants (2013, as amended from time to time). The issuance of invitations to bid under advance contracting will be subject to ADB approval. The recipient CPMU and PPMUs have been advised that approval of advance contracting and retroactive financing does not commit ADB to finance the Project. 137. For the Additional Financing, advance procurement activities may be undertaken for the recruitment of consultants and procurement of goods and works. In accordance with the agreed project readiness filter for advance action, the executing agency and implementing agencies will prepare the bidding documents and seek prior approval from ADB before issuing the bidding documents after grant negotiation and ready for contract signing after the Project is declared effective. C. Procurement of Goods and Consulting Services 138. No package for goods costing more than $100,000 is envisioned. Packages for goods valued at less than $100,000 may be procured using shopping procedures. Smaller packages for goods valued at less than $10,000 may be procured using direct contracting procedures or community participation in participation (CPP). Under sub-component 1.1 - implementation of the Protected Areas’ Operational Management Plans, these packages may include (i) imagery and maps for demarcation of the protected areas; (ii) demarcation posts and sign boards; and (iii) patrolling equipment, or field equipment as prioritized by the PAMB. Under sub-component 1.2 – enhanced community participation in benefit sharing from conservation and sustainable use of forest resources in protected areas and their surroundings, the packages of goods are determined by the communities based on their village conservation plans, to be funded through the village grants, valued at maximum of $10,000 per village. Under sub-component 2.1 –

25

Available at: http://www.adb.org/Documents/Guidelines/Procurement/Guidelines-Procurement.pdf 26

Available at: http://www.adb.org/Documents/Guidelines/Consulting/Guidelines-Consultants.pdf

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Improving financial sustainability through payment for forest environmental services, packages for goods include imagery and maps for identification of watersheds, sign boards and patrolling equipment in the village lands. Under sub-component 2.2 – improving SFM and carbon sequestration in forest landscape, procurement of imagery and maps is envisioned. 139. Before the start of any procurement, ADB and the Government will review the public procurement laws of the central and state governments to ensure consistency with ADB’s Procurement Guidelines (2013, as amended from time to time). 140. An 18-month procurement plan indicating threshold and review procedures, goods, works, and consulting service contract packages and national competitive bidding guidelines is in Section D below. 141. The CPMU and PPMUs will also recruit several individual national consultants using individual consultant selection method to assist in the implementation of the Additional Financing as specified in the procurement plan. 142. The detailed terms of reference (TOR) of the consultants are included in Appendix 3. Two teams of consultants for component 1 will be recruited through a firm, including (i) Investment Planning for Ngoc Linh Nature Reserve using Consultants’ Qualifications Selection (CQS) procedures, to be recruited by Quang Nam PPMU; and (ii) Biodiversity and Protected Area Management using Quality- and Cost-Based Selection (QCBS) procedures using a ratio of 80:20, to be recruited by CPMU. Another team of consultants for SFM/REDD+ and MRV (Subcomponents 2.2 and 2.3) will be recruited by the CPMU through a firm using Quality - and Cost-Based Selection (QCBS) procedures using a ratio of 90:10. An auditing firm has been engaged under the ongoing Project and their contract will be revised to include the scope of work of the additional financing.

143. The CPMU and PPMUs will also recruit several individual national consultants using individual consultant selection method to assist in the implementation of the Additional Financing, including: (i) two Protected Area Institutional Specialists for Quang Nam and Quang Tri PPMUs to support the establishment of the PAMBs for Ngoc Linh and Ho Chi Minh Legendary Trail Protected Areas; (ii) two Protected Area Management Specialists to support the preparation of Master Plans for the Ngoc Linh and Ho Chi Minh Trail Legendary Trail Protected Areas; and (iii) an International SFM/REDD+ Contract Design Consultant who will be hired at the start-up of Additional Financing Implementation to further develop work plans, individual consultant terms of reference, and prepare a road map and prepare the SFM/REDD+ and MRV package. The detailed terms of reference (TOR) of the consultants are included in Appendix 3.

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D. Procurement Plan

Basic Data Project Name: GMS Biodiversity Conservation Corridors Project Additional Financing Project Number: L2721-VIE Approval Number: Country: VIET NAM Executing Agency: Ministry of Natural

Resources and Environment Project Financing Amount: $4.54 million ADB Financing: Nil Non-ADB Financing:$3.79 million

Implementing Agency: Provincial Project Management Units Protected Area Management Boards

Date of First Procurement Plan 27 October 2014

Date of this Procurement Plan: 15 December 2014

1. Methods, Thresholds, Review and 18-Month Procurement Plan

a. Procurement and Consulting Methods and Thresholds

144. Except as the Asian Development Bank (ADB) may otherwise agree, the following process thresholds shall apply to procurement of goods.

Procurement of Goods and Works Method Threshold Comments

Shopping for Goods Below $100,000 Prior review for the 1st 2

contracts; post review thereafter

Direct Contracting – Goods Below $10,000 Prior review for the 1st 2

contracts; post review thereafter

Community Participation– Goods and services under Village Grants (only where suppliers for goods and services are not available)

Not exceeding $10,000 per contract

Prior review for the contract template

Consulting Services Method Comments

Quality and Cost Based Selection (QCBS) Prior Review Consultants’ Qualifications Selection (CQS) Prior Review Individual Consultant Selection (ICS) Prior Review Least Cost Selection (LCS) Prior Review

b. Consulting Services Contracts Estimated to Cost $100,000 or More

145. The following table lists consulting services contracts for which the recruitment activity is either ongoing or expected to commence within the next 18 months.

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Package Number

General Description

Estimated Value

Recruitment Method

Review (Prior / Post)

Advertisement Date

(quarter/year)

Type of Proposal

Comments

PAMS1 Biodiversity and Protected Area Management (including consultation and training costs)

505,500 QCBS (80:20) Prior Q3/2015 Biodata Technical Proposal

CPMU with participation from PPMUs

in procurement committee (advance action)

REDMR2 SFM/REDD+ and MRV development

871,320 QCBS (90:10) Prior Q4/2015 Simplified Technical Proposal

CPMU with

participation from PPMUs

in procurement committee

c. Goods and Works Contracts Estimated to Cost Less than $1 Million and Consulting Services Contracts Less than $100,000 (Smaller Value Contracts)

146. The following table groups smaller-value goods, works and consulting services contracts for which the activity is either ongoing or expected to commence within the next 18 months.

Goods and Services

Package Number

General Description

Estimated Value

Number of

Contracts

Procurement Method


Bidding Procedure

Advertisement Date

(quarter/ year)

Comments

2.1_VBG1 Village Block grants to implement village conservation plans

200,000 Multiple CPP/shopping(to be

determined as the result of

village conservation

plans)

Prior review

of template contract for each PAMB

N/A Q1/2016 PAMBs to recruit, with approval by

PPMU

1.1_OMP1

OMP priority implementation

222,000 Multiple CPP/shopping (to be

determined as the result of operational

management plans)

Prior review


N/A Q4/2015 PAMBs to recruit, with approval by

PPMU

2.1 Satellite imagery and maps (for PFES, REDD+ and MRV)

77,000 Multiple Shopping Post N/A Q2/2015 CPMU

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Consulting Services

Package Number

General Description

Estimated Value

Number of

Contracts

Recruitment Method


Advertisement

Date (quarter/

year)

Type of Proposal

s

Comments

1 PAINV-QN _

Investment Planning for

proposed Ngoc Linh

Nature Reserve

(including consultations)

60,000 1 CQS Prior Q3/2015 Biodata Technical Proposal

PPMU Quang Nam

(advance action)

2_PAIS-QN

Protected Area

Institutional Specialist (for

Ngoc Linh PAMB

establishment, including

consultation cost)

15,000 1 ICS Prior Q3/2015 N/A PPMU Quang Nam

(advance action)

3_ PAIS-QT

Protected Area

Institutional Specialist (for Ho Chi Minh Trail PAMB

establishment- including

consultation cost)

15,000 1 ICS Prior Q3/2015 N/A Quang Tri PPMU

(advance action)

4_ PAMS-QN

Protected Area

Management Specialist (for

Ngoc Linh Master

Planning, including

consultation cost)

15,400 1 ICS Prior Q3/2015 N/A Quang Nam PPMU

(advance action)

5_PAMS-QT

Protected Area

Management Specialist (for Ho Chi Minh Trail Master

Planning including

consultation cost)

15,400 1 ICS Prior Q3/2015 N/A Quang Tri PPMU

(advance action)

6_CPMU SFM/REDD+ 14,700 1 ICS Prior Q3/2015 N/A CPMU

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_REDD contract design

specialist

(advance action)

7_CPMU_AUD

Auditing 40,000 1 LCS Prior Q3/2015 N/A CPMU (contract variation

from current auditing

contract for the original

project) 8_CPMU_CTA

International Chief

Technical Advisor

60,000 1 ICS Prior Q3/2015 N/A CPMU

9_CPMU_PS

Procurement Specialist

9,000 1 ICS Prior Q3/2015 N/A Contract variation

from current contract of

procurement specialist for the original

project 10_CPMU_ME

M&E Specialist

3,000 1 ICS Prior Q3/2015 N/A Contract variation

from current contract of

M&E specialist for the original

project 11_CPMU_Species

Species Specialists including

consultations

69,700 3 ICS Prior Q3/2015 N/A

12_CPMU

External Monitoring

Entity

50,000 1 CQS Prior Q3/2015 N/A CPMU (contract variation

from current external

monitoring entity

contract for the original

project)

2. Indicative List of Packages Required Under the Project

147. The following table provides an indicative list of goods, works and consulting services contracts over the life of the project, other than those mentioned in previous sections (i.e., those expected beyond the current period).

Goods and Works Package Number

General Description

Estimated Value

Estimated Number of

Procurement Method

Review (Prior /

Bidding Procedure

Comments

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(cumulative) Contracts Post)

2.1_VBG2 Village block grants to

implement village

conservation plans

200,000 Multiple

CPP/shopping(to be determined as the result of

village conservation

plans)

Prior review


N/A PAMBs with approval by

PPMU

1.1_OMP2 OMP priority implementation

371,000 Multiple CPP/shopping (to be

determined as the result of operational

management plans)

Prior review


N/A PAMBs with approval by

PPMU

3. National Competitive Bidding

a) General

148. The procedures to be followed for the procurement of goods, non-consulting services, and works under contracts awarded on the basis of National Competitive Bidding shall be those set forth in: (a) Law on Procurement No. 43/2013/QH13 dated November 26, 2013 (“Law on Procurement”) and (b) Decree No. 63/2014/ND-CP dated June 26, 2014 (collectively, “National Procurement Laws”). Whenever any procedure in the National Procurement Laws is inconsistent with the ADB Procurement Guidelines (March 2013, as amended from time to time), the ADB Procurement Guidelines shall prevail, amongst others on the following.

b) Eligibility (i) The eligibility of bidders shall be as defined under section I of the ADB

Procurement Guidelines; accordingly, no bidder or potential bidder should be declared ineligible for reasons other than those provided in section I of the ADB Procurement Guidelines, as amended from time to time. Conditions of bidders’ participation shall be limited to those that are essential to ensure bidders’ capability to fulfill the contract in question. Foreign bidders shall be eligible to participate under the same conditions as national bidders. Foreign bidders shall not be asked or required to form joint ventures with, or be subcontractors to, national bidders in order to submit a bid.

(ii) A firm declared ineligible by ADB cannot participate in bidding for an ADB-financed contract during the period of time determined by ADB.

(iii) A bidder shall not have a conflict of interest, which term shall be defined in accordance with section 1 of ADB Procurement Guidelines.27 Any bidder found to have a conflict of interest shall be ineligible for contract award.

(iv) Government-owned enterprises in the Borrower’s country shall be eligible to participate as a bidder only if they can establish that they are legally

27

Detailed guidance on how to apply conflict of interest test is available under section 1 of ADB’s standard bidding documents for goods and works (as amended from time to time).

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and financially autonomous, operate under commercial law and are not dependent agencies of the Borrower or Sub-Borrower.

(v) National sanction lists may only be applied with approval of ADB.28

c) Preferences No preference of any kind shall be given to domestic bidders over foreign

bidders or for domestically manufactured goods over foreign manufactured goods. Unless otherwise stated in the applicable financing agreement, preferences among domestic bidders set forth in Article 14 (3) of the Law on Procurement shall not be applied.

d) Bidding Procedure

Single stage-single envelope shall be the default bidding procedure and application of other bidding procedures shall require ADB’s prior approval.

e) Time for Bid Preparation The time allowed for the preparation and submission of bids for large and/or complex packages shall not be less than thirty (30) days from the date of the invitation to bid or the date of availability of the bidding documents, whichever is later.

f) Standard bidding documents

The Borrower’s standard bidding documents, acceptable to ADB, shall be used. Bidders shall be allowed to submit bids by hand or by mail/courier.

g) Bid Opening and Bid Evaluation

(i) Bids shall be opened in public, immediately after the deadline for submission of bids, regardless of the number of bids received.

(ii) Except with the prior approval of ADB, merit points shall not be used in bid evaluation.

(iii) No price adjustments shall be made for evaluation purposes in accordance with Article 117 (6) of Decree 63 when unit rates offered by the bidder are determined to be abnormally low.

(iv) Bidders shall be given commercially reasonable time period to respond to clarification requests.

(v) Bidders shall not be eliminated from detailed evaluation on the basis of minor, non-substantial deviations.29

(vi) Except with the prior approval of ADB, negotiations contemplated under paragraphs 7 and 8 of Article 117 of Decree No. 63/2014/ND-CP shall not take place with any bidder prior to contract award.

28

For fraud and corruption cases, Section 50 of ADB’s Integrity Principles and Guidelines provides that ADB may decide that another international financial institution’s or legal or regulatory body’s determination that a party has failed to adhere to appropriate ethical standards, as defined by any established system of principles, rules, or duties, including the laws or regulations of a state, constitutes that party’s failure to maintain the highest ethical standards as required by ADB’s Anticorruption Policy. The party may be subject to remedial action in accordance with the Integrity Principles and Guidelines. http://www.adb.org/sites/default/files/integrity-principles-guidelines.pdf

29 A minor, non-substantial deviation is one that, if accepted, would not affect in any substantial way the scope, quality, or performance specified in the contract; or limit in any substantial way, the Contracting entity rights or the Bidder’s obligations under the proposed contract or if rectified, would not unfairly affect the competitive position of other bidders presenting substantially responsive bids.

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(vii) A bidder shall not be required, as a condition for award of contract, to undertake obligations not specified in the bidding documents or otherwise to modify the bid as originally submitted.

h) Rejection of All Bids and Rebidding (i) No bid shall be rejected on the basis of a comparison with the Procuring

Entity’s estimate or budget ceiling without ADB’s prior concurrence. (ii) All bids shall not be rejected and new bids solicited without ADB’s prior

approval.

i) Publication of the Award of Contract. Debriefing. (i) For contracts subject to prior review, within 2 weeks of receiving ADB’s

“No-objection” to the recommendation of contract award, the borrower shall publish in the Government Public Procurement Gazette, or well-known and freely-accessible website the results of the bid evaluation, identifying the bid and lot numbers, and providing information on: i) name of each bidder who submitted a bid; ii) bid prices as read out at bid opening; iii) name and evaluated prices of each bid that was evaluated; iv) name of bidders whose bids were rejected and the reasons for their rejection; and v) name of the winning bidder, and the price it offered, as well as the duration and summary scope of the contract awarded.

(ii) For contracts subject to post review, the procuring entity shall publish the bid evaluation results no later than the date of contract award.

(iii) In the publication of the bid evaluation results, the Borrower shall specify that any bidder who wishes to ascertain the grounds on which its bid was not selected, may request an explanation from the Borrower. The Borrower shall promptly provide an explanation of why such bid was not selected, either in writing and/or in a debriefing meeting, at the option of the Borrower. The requesting bidder shall bear all the costs of attending such a debriefing.

j) Contract Administration

The Contract Agreement, as such term is defined in the relevant bidding document, shall be applied without any modification during implementation except as otherwise agreed by ADB.

k) Fraud and Corruption A provision shall be included in all bidding documents for NCB works and goods contracts financed by ADB stating that ADB will sanction a party or its related parties, including declaring ineligible, either indefinitely or for a stated period of time, to participate in ADB-financed, administered or supported activities if it at any time determines that the party has, directly or indirectly through an agent, engaged in integrity violations as defined under ADB’s Integrity Principles and Guidelines, including corrupt, fraudulent, collusive, or coercive practices in competing for, or in executing, an ADB-financed, administered or supported contract.

l) Right to Inspect/ Audit

Each bidding document and contract financed by ADB shall include a provision requiring bidders, contractors, agents (whether declared or not), sub-contractors, sub-consultants, service providers, or suppliers and any personnel thereof, to permit ADB to inspect all accounts, records and other

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documents relating to any prequalification process, bid submission, and contract performance (in the case of award), and to have them audited by auditors appointed by ADB.

VII. SAFEGUARDS

A. Involuntary Resettlement 149. Initial review conducted during the fact finding mission confirmed that the Additional Financing is category B for IR and IP in accordance with ADB’s Safeguard Policy Statement (SPS 2009).30 This will be reconfirmed at the feasibility and detailed design phase. As villages in protected areas and their buffer zones are yet to be determined at the project processing stage and technical inputs for land use planning will be provided for executing and implementing agencies, local government units, Provincial/District/Commune Peoples Committees, relevant Ethnic Minorities Offices, and the Viet Nam Women’s Union during project implementation, no project resettlement plan (RP) has been prepared before the additional financing appraisal. The Resettlement Framework (RF) and the Ethnic Minority Development Framework (EMDF) under the existing BCC project are therefore updated in the event that any economic displacement might occur in the course of project implementation. For subcomponents with potential impacts on restriction of land use or access to natural resources, an RP will be prepared and implemented during project implementation in accordance with the updated RF. If screening reveals that affected persons involve ethnic minority peoples, a resettlement ethnic minority development plan which incorporates the RP and the Ethnic Minority Development Plan (EMDP) will be developed, in accordance with the SPS and this project’s RF and EMDF. 150. The Additional Financing will cover three provinces, eight protected areas and their buffer zones and 40 villages. Social Assessment was conducted in sample villages in the eight protected areas and/or their buffer zones in October–November 2013. Among seven sub-components of the Additional Financing, one activity of sub-component 1.1 – establishment of one new protected area (Ngoc Linh) could have minor potential impact as it might trigger restriction of land use or restriction of access to natural resources. However this can be mitigated as livelihoods of ethnic minority people/population in the area are no longer subject to the natural resources on account of the National Program of settled cultivation and resettlement for ethnic minority people. Moreover, no negative changes are anticipated in the ethnic minorities’ farming and livelihood system or their cultural practice and ancestral domains. No land acquisition as well relocation is anticipated as a result of the Additional Financing. 151. Adequate financial resources will be allocated to support the preparation, implementation, monitoring and reporting of involuntary resettlement activities in the 40 villages where the village conservation plans will be implemented. The social safeguards specialist under the BCC project will extend their function to be in charge of the Additional Financing as well. B. Environmental Safeguards

152. Much like the BCC project, the Additional Financing will also generate overwhelmingly positive environmental impacts. Biodiversity conservation in the protected areas and their buffer zones is of global significance and will support several critically endangered species through the

30

ADB. Safeguard Policy Statement. June 2009. Manila.

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conservation and restoration of habitats essential to their survival. Some of the Additional Financing activities have a potential for generating localized, manageable negative environmental impacts. These have been identified, as well as the measures to prevent or mitigate such impacts. The Additional Financing takes a sector-like approach to a number of its activities, whereby exact locations and type of activity in the 40 villages in and around protected areas will be determined during implementation by the local implementation partners within the geographical boundaries and according to the additional financing objectives. The Additional Financing has been designed to take environmental considerations into account for activities as and when they are being formulated. The environmental assessment and review framework of the ongoing BCC Project has been updated to include the scope of the Additional Financing. 153. The Project activities that might have the potential of causing negative environmental impacts include the buffer zone sustainable forestry activities, the support to livelihoods development and improvement, and the activities supported by the PFES funding. Identification and design of all of these activities will be finalized during implementation. All Additional Financing activities that will be defined during implementation will be subject to review for environmental impact during the planning stage and further if and as required during detailed design, implementation and operation. The design, location and other characteristics of the project activities will be amended to minimize any negative environmental impact. The activities will cover the costs for required environmental monitoring and mitigation measures. Proposed activities with significant environmental impacts that might alter the environmental classification of the project are not admissible. In addition to sub-component monitoring, there will be regular monitoring of the overall environmental performance of the Additional Financing as a whole, in line with the ADB SPS 2009. Activities will comply with the prevailing environmental safeguarding regulations of Viet Nam. 154. The ongoing BCC project and the Additional Financing are collectively classified as a Category B for environment in accordance with the ADB SPS 2009. Activities that would cause significant environmental impacts and require an environmental impact assessment category A for environment according to ADB SPS 2009 will not be accepted. C. Ethnic Minority Development Framework 155. The Additional Financing aims at providing incentives, funding, and technical assistance enabling local people to sustainably utilize forest and other natural resources, improve livelihood alternative income opportunities, grow trees of their choice in their homestead plantations and community forests for subsistence needs as well as for fuelwood consumption and construction and use. The establishment of management regimes in the buffer zones will likely create income generating opportunities for local people. Livelihood systems of ethnic minorities communities will not be impacted by the activities under the Additional Financing. 156. The EMDF has been updated as a result of some activities of the additional financing and an EMDP in conjunction with the village conservation plans will be prepared if impacts on ethnic minorities are established. If screening reveals that persons affected by resettlement involve ethnic minority peoples, a resettlement ethnic minority development plan which incorporates the RP and EMDP will be developed, in accordance with the SPS and this project’s RF and EMDF. Given that the project area for the BCC project and additional financing are the same, the SIA provides the basis for the Additional Financing as well. There will be no relocation of ethnic minorities in any new project areas. Adequate financial and human resources will be allocated to support the preparation, implementation, monitoring and reporting of the EMDP.

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VIII. GENDER AND SOCIAL DIMENSIONS 157. The GEF Additional Financing interventions are classified as effective gender mainstreaming (EGM). The project supports women’s voice and participation in all activities related to forest conservation, use of forest resources, benefit sharing and in alternative livelihood activities. A gender action plan has been prepared and includes among others, the following: (i) target of 30% female participants representing community stakeholders at the various multi-stakeholder consultations, workshops and awareness raising activities to prepare the Operational Management Plans and identify priority actions; (ii) all PPMU and PAMB staff will be sensitized on gender issues in forest conservation and sustainable use; (iii) Village Conservation Committees (VCC) will accept membership registrations from both husband and wife – 50% target for each and 30% of the members of the Executive Committee of the VCC will be women; (iv) 40% of the community facilitators in village participatory planning teams will be women; (v) target of 50% women beneficiaries in all activities, training and assistance related to livelihood/income generation on forest conservation and resource use; (vi) the recruitment of a gender specialist in the Project implementation consulting team to address gender issues at the Central level and recruitment of participatory community development specialist in each PPMU with responsibility to guide GAP implementation; and (viii) inclusion of gender indicators in project M&E system and the collection of sex-disaggregated data in reporting access to all activities and benefits. The gender action plan for the additional financing is included in Table 19 below.

158. Implementation arrangements. The overall oversight for the implementation of the Gender Action Plan (GAP) will be the responsibility of MONRE as executing agency. The responsibility for implementing the GAP in each protected area (PA) will be with each PPMU. A social focal point has been appointed in each PPMU under the ongoing BCC Project and will coordinate the implementation of the GAP. The Social Safeguard Specialist who is based at the Central Project Management Unit will support the executing agency and guide and coordinate the implementation of the GAP at each PPMU level. One Community Participation and Development Specialist will be recruited in each of the three PPMUs who will be responsible for guiding the implementation, monitoring and reporting of the GAP. Each of the six existing PAMB will also be supported by a Protected Area Planning and Community Participation Facilitator who will support the implementation, monitoring and reporting of the GAP at the protected area level. All PPMU and PAMB staff will receive sensitization on gender issues. The project M&E framework will include gender indicators. The project will report sex disaggregated data on all activities and monitoring of benefits. All semi-annual reports to ADB will include progress update on GAP implementation.

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Table 19. Gender Action Plan

Outputs Gender Design features/Activities Output 1: Institutions and communities strengthened in protected areas and biodiversity corridor management and species conservation

- Members of the newly established PAMBs will be trained/briefed on gender issues in sustainable forest/biodiversity protection, conservation and use.

- 100% female staff in 8 protected areas will be trained relevant to their technical roles in aspects of operational management planning and facilitation of stakeholder participation (Baseline: Currently 12.25% of protected area staff in technical and finance/ accounting positions in Quang Tri (Dakrong & Huong Hoa); Thua Thien Hue (Sao La, Phong Dien) and Quang Nam (Sao La & Song Thanh are female).

Output 2: Biodiversity corridors restored and protected areas managed with ecosystem services protected and maintained

- The preparation of protected area OMPs will be informed by knowledge on the different uses of the forest by the various resource dependents, including the poor, the marginalized men and women.

- All protected area OMPs will emphasize strategies for women’s participation in all activities related to forest conservation, use of forest resources, benefit sharing and in alternative livelihood activities.

- 30% of the participants representing community stakeholders at the various multi-stakeholder consultations, workshops and awareness raising activities to prepare the above Plans and identify priority actions, will be women.

Output 3: Landscapes conservation measures at the community level in Payment Ecosystem Services and their surroundings providing financial sustainability and reduced greenhouse gas emissions

VCC will accept membership registrations from both husband and wife – 50% target for each. - Of the 3-7 member officers of Executive Committee of the VCC, at

least 30% will be women. - At least 40% of community facilitators in village participatory planning

teams will be women. - Participatory planning process will assess the various types and

degree and the impact of the resource dependencies of the various users, including the poor and marginalized men and women.

- Women (as household members and/or female headed households) will be 50% of the participants in: (i) identifying options for sustainable forest use, benefit sharing and

in alternative livelihoods; (ii) decisions regarding resource use and restrictions on their use; (iii) training and livelihood/ income generation related activities on

forest conservation and resource use; (iv) local planning meetings on minor infrastructure rehabilitation and

their O&M, e.g. irrigation, water supply systems. - At least 30% PFES beneficiaries will be women.

- Livelihood support/extension services will include specific services/ inputs/training identified by women farmers on enhancing productivity, diversification of produce, livestock management, medicinal and non-timber product development, etc.

- All women beneficiaries supported to set up enterprises will be provided training on business start–up, basic finance and accounting and information on accessing local markets. This should be part of standardized training package.

Project Management

- The Social Safeguard Specialist who is based at the Central Project Management Unit will support the executing agency and guide and coordinate the implementation of the GAP at each PPMU level.

- One Community Participation and Development Specialist will be recruited in each PPMU who will be responsible for guiding the implementation of the GAP.

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Outputs Gender Design features/Activities - All PPMU and PAMB staff will receive sensitization on gender issues. - The project M&E framework will include gender indicators. - The project will report sex disaggregated data on all activities and

monitoring of benefits. Implementation Arrangements The overall oversight for the implementation of the Gender Action Plan (GAP) will be the responsibility of MONRE as executing agency. The responsibility for implementing the GAP in each protected area (PA) will be with each PPMU. A social focal point has been appointed in each PPMU under the ongoing BCC Project and will coordinate the implementation of the GAP. The Social Safeguard Specialist who is based at the Central Project Management Unit will support the executing agency and guide and coordinate the implementation of the GAP at each PPMU level. One Community Participation and Development Specialist will be recruited in each of the three PPMUs who will be responsible for guiding the implementation, monitoring and reporting of the GAP. Each of the six existing PAMB will also be supported by a Protected Area Planning and Community Participation Facilitator who will support the implementation, monitoring and reporting of the GAP at the protected area level. All PPMU and PAMB staff will receive sensitization on gender issues. The project M&E framework will include gender indicators. The project will report sex disaggregated data on all activities and monitoring of benefits. All semi-annual reports to ADB will include progress update on GAP implementation. ADB = Asian Development Bank; BCC = biodiversity conservations corridor; GAP = gender action plan; M&E = monitoring and evaluation; MONRE = Ministry of Environment and Natural Resource; O&M = operation and maintenance; OMP = operational management plans; PAMBs = protected area management boards; PPMU = provincial project management units; VCC = village conservation committees. Source: Asian Development Bank.

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IX. PERFORMANCE MONITORING, EVALUATION, REPORTING AND COMMUNICATION

A. Project Design and Monitoring Framework

Impacts the Project is Aligned with

Current project Climate resilient sustainable forest ecosystems in the Central Annamite landscape benefiting local livelihoods and downstream users (National Strategy on Biodiversity to 2020 and Vision to 2030)

Overall project “Unchanged”

Results Chain Performance Indicators

with Targets and Baselines Data Sources and

Reporting Risks Outcome Current project Biodiversity conservation corridors established in Quang Nam, Quang Tri, and Thua Thien Hue with enabling policy, regulatory framework and management regimes

Current project a. By 2019, biodiversity corridor pilot provincial policies including management plans are in place covering at least 530,000 ha of forest in 35 communes of Quang Nam, Quang Tri and Thua Thien Hue provinces

b. By 2019, BCC mapped to support management plans

c. By 2019, increase in income and/or assets for target households by 50% compared to 2011

d. By 2019, forest management improved for 10,000 ha of community forests

a. Text of Biodiversity Corridor Decree or regulatory instrument presenting policy measures to promote and maintain the biodiversity functions of the corridor b. National Databases of MONRE/MARD c. Household and commune socio-economic survey/reports

d. Performance monitoring survey/reports

Sector development plans in Viet Nam not conducive to promotion and consolidation of biodiversity corridor/landscape approaches

Other external direct foreign investments negatively affect current and planned

Project activities in the conservation landscape

Overall project Sustainably managed biodiversity conservation landscapes in Quang Nam, Quang Tri, and Thua Thien Hue provinces

Overall project The above targets are unchanged with additional target: e. By 2019, management effectiveness of eight existing and proposed protected areas covering 231,000 ha increased by 25% over 2013 baseline

e. Protected Areas Management Effectiveness tracking tools

Outputs Output 1 1a. Current project Institutions and communities strengthened in biodiversity corridor management

Overall project Institutions and communities strengthened in conservation of the Central Annamite landscape

Current project By 2015, mapping of 530,000 ha of Biodiversity Corridor Overall project: “Unchanged”

1b. Current project By 2013, PLUPs and CIPs prepared in 35 communes (completed) Overall project: “Unchanged”

1c. Current project By 2018, at least 40 village forest management boards established, operational

1a. Corridor maps approved by Provincial People’s Committee

1b. PLUPs with maps for 35 communes and revised CIPs of 35 communes

1c. CFM certificates

1d. Household Land Use Certificates

1e-f. CPMU reports

1g. Decision to

Executing and implementing agencies do not have adequate staffing, capacity and counterpart funding for protected areas Stakeholders are not willing to participate in conservation and protection

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Reporting Risks

Output 2 Current project Biodiversity corridors restored, and ecosystem services protected and maintained

Overall project Biodiversity conservation landscape managed with ecosystem services protected and maintained

and receive land use right certificates for 10,000 ha of community forest Overall project “Unchanged”

1d. Current project By 2018, at least 2,000 land use right certificates issued to individual households for 6,000 ha of reforestation Overall project: “Unchanged”

1e. Current project By 2018, 8,000 project staff, and community members participate in training on project activities; at least 40% of trainees are female with large portion from ethnic minorities (ongoing); Overall project “Unchanged”

1f. Current project By 2018, at least 30% of the commune/village level forest management committee members are women Overall project: “Unchanged”

Overall project (added)

1g. By 2016, one new protected area covering 17,000 ha of land legally established

1h. By 2016, two new PAMBs established

1i. By 2017, members of all eight PAMBs trained on gender issues in sustainable biodiversity protection, conservation and use 2a. Current project By 2018, at least 10,000 ha of community forests have management plans and demarcation completed Overall project: “Unchanged”

2b. Current project By 2018, a system of effectively patrolling by community-based patrolling units in place protecting 10,000 ha of community forests Overall project: “Unchanged”

2c. Current project By 2018, management plans for over 10,000 ha of community forests implemented (target date moved to 2018) Overall project: “Unchanged”

Overall project (added) 2d. By 2018, at least 30% participants to the implementation of the CFM plans are women

2e. By 2018, eight Protected Area Operational Management plans under implementation

establish Ngoc Linh protected area

1h. Decisions to establish Ngoc Linh and Ho Chi Minh Legendary PAMBs 1i. CPMU reports 2a. CFM plans; CPMU reports

2b. Reports of forest poaching and trapping incidents; reports of forest department on protection and illegal activities

2c-2d. CPMU reports

2e-f. Reports on implementation of species management plans

Other developmental activities (commercial plantations, mining, settlements, roads etc.) create further fragmentation of forest ecosystem and hamper landscape approaches

Overlapping institutional responsibilities and mandates

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Reporting Risks Output 3 Current project Livelihoods improved and small-scale infrastructure support provided in target communes

Overall project Livelihoods improved, small-scale infrastructure support provided and financial sustainability obtained in target villages with reduced greenhouse gas emissions Output 4 Current project Project management and support services provided

2f. By 2018, three globally important species management plans developed and under implementation 3a. Current project By 2016, at least 900 households receive cash and technical support to improve agricultural productivity and income from home gardens, agriculture/animal production Overall project: “Unchanged”

3b. Current project By 2016, at least 1,200 ha of forest-based livelihood plantations established Overall project: “Unchanged”

3c. Current project By 2015, 35 communes receive financial resources through CDFs to improve livelihoods Overall project CDF regulations approved, to receive funding and training in 2016

3d. Current project By 2016, 35 communes receive small scale infrastructure support to enhance accessibility to water, production, markets, and services with capacity building in O&M and business models Overall project: “Unchanged”

3e. Current project At least 30% members of each CDF management committee are women Overall project: “Unchanged”

Overall project (added) 3f. By 2018, at least 40 villages within and outside protected areas practising forest co-management and deriving nontimber forest products, PFES (within 25 of the 40 villages) and livelihood benefits

3g. By 2018, 50% of beneficiaries of livelihood activities are women

3h. By 2016, options for SFM/REDD+ pilots scoped and designed within the conservation landscape on at least 20,000 ha

3i. By 2018, forest impact monitoring/ safeguard information systems piloted

4a. Current project By March 2011, CPMU and PPMUs operational (completed) Overall project

3a. Household and commune socio-economic surveys and reports

3b-3d. CPMU reports

3e. CDF committee establishment decisions

3f. PFES records and commune records

3g. CPMU reports

3h. Land use surveys and forest cover assessments/remote sensing (RapidEye, Landsat 7/8 and/or SPOT 5); forest (biomass) carbon inventory/baseline (emission data) and deforestation rate (activity data)

3i. Before and after estimates of social, biodiversity and carbon values, related to baselines surveys and ongoing monitoring protocols, to ensure and measure net positive impact, while avoiding negative impacts and upholding safeguards 4a. CPMU reports

4b-f. Performance monitoring survey/reports

Conflict between conservation and local community needs

Inadequate government staff and facilities assigned to project

Counterpart funding

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Reporting Risks

Overall project ”Unchanged”

By March 2011, CPMU and PPMUs operational and by November 2015, PAMBs operational

4b. Current project By June 2011, all advance actions regarding procurement of vehicles, equipment and consultants (completed) Overall project By December 2015, all advance actions regarding procurement of vehicles, equipment and consultants are completed

4c. Current project By August 2012, first tranche of loan received in imprest accounts (completed) Overall project By August 2012, first tranche of loan received in BCC imprest accounts and by December 2015, first tranche of GEF additional financing grant received in GEF imprest account

4d. Current project By 2012, 1,000 officials and project staff will be trained on procurement, management, financial controls, monitoring and report (completed) Overall project: “Unchanged”

4e. Current project Timely semi-annual (June/Dec) technical and financial reports produced in Vietnamese and English by PPMUs and consolidated by CPMU (ongoing) Overall project: “Unchanged”

4f. Current project PPMS established by early 2012 (completed) Overall project PPMS established by March 2016

4g. Current project Timely submission of financial liquidation and withdrawal applications (ongoing) Overall project: “Unchanged”

4g. Withdrawal applications

not released in timely and adequate manner

Inadequate integration of the additional financing activities within the BCC project

Key Activities with Milestones

1. Current Project activities remain with updated target dates as follows: 1.1 Strengthen policy framework for biodiversity corridor establishment and implementation (2018) 1.2 Raise awareness and build technical capacity at MONRE and in three participant provinces to replicate model of

biodiversity corridors in Viet Nam (2012–2018) 1.3 Participate and share knowledge on biodiversity conservation in the GMS (2012–2018) 1.4 Strengthen capacity on land use planning, zoning, demarcation across landscapes (2012–2015) 1.5 Strengthen the capacity of district officials and key provincial level staff involved in protected areas management

and CFM (2012–2018) 1.6 Strengthen village/commune level capacity for managing CDF (2015–2018) 1.7 Strengthen the capacity of villagers to manage and protect forest and natural resources in the corridors and move

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Key Activities with Milestones

toward effective community-based natural resource management (with co-management of some parts of the protected areas/protection forests) (2014–2018)

1.8 Zone and map at provincial level biodiversity corridor delineation and demarcation (2015) 1.9 Secure recognition of biodiversity corridors through provincial level policy and regulations/decisions/decrees and

implement management plans (2018) 1.10 Complete investment plan in one protected area (added) 1.11 Establish two PAMBs and prepare master plans for two protected areas (added)

2. Current Project activities remain with updated target dates as follows: 2.1 Develop participatory village land use plans for target villages and communes (2015) 2.2 Select sites for CFM through the village land use planning process (2015) 2.3 Conduct participatory forest inventory (2015–2016) 2.4 Issue land use right certificates (red books) to the communities (2015–2017) 2.5 Develop village forest protection and development regulations (2015–2018) 2.6 Establish village-based forest management organizations (2015–2018) 2.7 Develop 5-year forest management plan and annual operational plan (2015–2018) 2.8 Implement CFM plans and monitor its implementation (2015–2018) 2.9 Develop/upgrade eight operational management plans (2016–2017; added) 2.10 Prepare three target species action plans and implement priority investment activities (2017–2018; added) 2.11 Support preparation of three provincial biodiversity actions plans (2016–2018; added)

3. Current Project activities remain with updated target dates as follows: 3.1 Update village/commune level data on socio-economic status and poverty mapping/monitoring (2014) 3.2 Provide support to promoting agriculture/agroforestry based livelihood improvements (2012–2018) 3.3 Provide seed capital for CDF, monitor fund use and its impact on forest (2015) 3.4 Provide investment support to prioritized small scale infrastructure (2015–2018) 3.5 Build/improve O&M capacity for maintaining infrastructure (2015–2018) 3.6 Mobilize village communities in protected area buffer zones and effectively implement sustainable forest benefit

sharing mechanisms and alternative income programs (2016–2018; added) 3.7 Scope and design SFM/REDD+ pilots (2017; added) 3.8 Establish forest impact monitoring/safeguard information systems in pilot REDD+ site (2018; added) 3.9 Strengthen capacity and institution for carbon stock and forest monitoring (2017–2018; added)

4. Project Management Activities 4.1 Establish CPMU and PPMUs (2011; completed) 4.2 Establish financial accounts and internal audit controls (2011; completed ) 4.3 Open project accounts, secure monthly statements (2012–2018) 4.4 Draw up annual work plans, personnel scheduling, budgets and procurement plans and seek approvals 4.5 Prepare statement of expenditure and liquidation documents 4.6 Submit six monthly financial and technical progress reports 4.7 Recruit support staff and consultants for the additional financing (2015–2016; added)

Inputs

ADB Loan $30,000,000(current) $0 (additional) $30,000,000 (overall)

Global Environment Facility Grant

$0(current) $3,795,000 (additional) $3,795,000 (overall)

______________________

Government and Beneficiaries

$4,070,000 (current) $750,000 (additional) $4,820,000 (overall)

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Assumptions for Partner Financing (Not applicable)

ADB = Asian Development Bank; BCC = biodiversity corridors conservation; CDF = community development fund; CFM = community forest management; CIP = commune investment plan; CPMU = central project management unit; GMS = Greater Mekong Subregion; ha = hectares; MARD = Ministry of Agriculture and Rural Development; MONRE = Ministry of Natural Resources and Environment; O&M = operations and maintenance; PAMB = Protected Area Management Board; PFES = payment for forest environmental services; PLUPs = participatory land use plans; PPMU = provincial project management unit; REDD+ = reducing emissions from deforestation and forest degradation; SFM = sustainable forest management. Source: Asian Development Bank.

B. Monitoring 159. As the Additional Financing is designed and approved as an integral part of the BCC project, all monitoring aspects relating to the Additional Financing will be fully integrated and managed as part of the parent project. The schedule of monitoring for the Additional Financing will be in accordance with the schedule of monitoring for the BCC project. Details of the monitoring should be referred to in the BCC project PAM.

1. Project performance monitoring

160. A Project monitoring and evaluation (M&E) system for the ongoing BCC Project will be developed by the CPMU with assistance from the M&E consultant. The system is based on measurable inputs, outputs and outcomes to be collected during baseline survey/reports and throughout project implementation. The BCC project provides data inputs towards development and operationalization of the National Biodiversity Database in the Vexecuting agency under MONRE. This is the context of technical support that helped design project monitoring and information system, equipment and networking facilities to link with the participating provinces and districts and training in planning and system for BCC project. The same M&E system will capture project performance of the Additional Financing.

2. Compliance monitoring

161. The Government and MONRE have agreed with ADB on certain covenants for the BCC Project, which are set forth in the Loan and project agreements including the following:(i) only investments that have been pre-screened either during preparation or by an approved specialist and subsequently approved by ADB shall be financed by Additional Financing; (ii) the Government will ensure that adequate funds are allocated for the periodic maintenance of infrastructure developed under the Project through provincial budgets to maintain the infrastructure in functional order; and (iii) the Government will also ensure that a grievance mechanism is established for affected people in the participating communes/districts. ADB will monitor compliance with those covenants throughout project effectiveness and implementation via regular review missions, half-yearly progress reports submitted by the CPMU, and review of project accounts and procurement procedures. The Additional Financing will follow the same procedures that are being applied to the ongoing BCC project.

3. Safeguards monitoring

162. There will be two monitoring mechanisms: internal monitoring and external monitoring that will determine if the EMDP is being carried out in accordance with the EMDF. The

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implementing agency shall conduct the supervision and in-house monitoring of implementation of the EMDP. The procedure for monitoring will be guided by the monitoring, evaluation, and reporting arrangements set forth in the EMDP. An external monitoring organization (EMO) will verify internal monitoring reports. Prescribed indicators for internal and external monitoring are presented in Appendix 2. 163. Under the BCC Project, external monitoring will be commissioned by the CPMU to undertake independent external monitoring and evaluation. The EMO for the Project will be either a qualified individual or a consultancy firm with qualified and experienced staff. The Terms of Reference for the EMO shall be prepared by the CPMU, covering scope of work of both the ongoing BCC Project and the Additional Financing, which shall be acceptable to ADB prior to engagement. The CPMU is responsible for the engagement of the EMO and ensures that funds are available for monitoring activities, and submits monitoring reports to the ADB. 164. Specifically, the activities of the EMO are as follows:

(i) verify results of internal monitoring; (ii) coordinate with the Ethnic Minorities Office and People's Party regarding the

monitoring and evaluation of the situation of affected ethnic minorities; (iii) verify and assess the results of the Project IEC for ethnic minorities; (iv) assess efficiency, effectiveness, impact and sustainability of EMDP

implementation; (v) suggest modification in the implementation procedures of the EMDP, if

necessary, (vi) to achieve the principles and objectives of this EMDF; and (vii) review of the handling of compliance and grievances cases.

C. Evaluation

165. ADB will conduct regular (at least twice per year) reviews of the Additional Financing as part of its review of the BCC project. Reviews throughout project implementation would be undertaken to assess implementation performance and achievement of project outcomes and objectives, examine financial progress, and identify issues and constraints affecting the Project and work out time-bound action plans for their resolution. It would also review the extent to which BCC project and additional financing activities are being well integrated and managed to ensure complementarity and coordination. 166. The Midterm Review of the Additional Financing will be undertaken within 24 months of grant effectiveness. This review will include a comprehensive evaluation of project implementation arrangements, detailed evaluation of the scope and implementation process and progress of activities, feedback from the M&E system, performance of consultants, capacity building progress, and possible reallocation of grant proceeds. During this more significant review, the impact from the initiatives for community benefit sharing and co-management will be assessed as will the improvement of conservation outcomes. 167. Within 6 months of physical completion of the BCC Project (including the additional financing), ADB will conduct a project completion mission to carry out a preliminary assessment of the success of the Project to achieve its physical, and socio-economic developmental objectives, as well as to review compliance with ADB requirements and loan covenants.

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D. Reporting 168. As with the BCC project, the CPMU will provide ADB with (i) half-yearly progress reports in a format consistent with ADB's project performance reporting system; (ii) consolidated annual reports including (a) progress achieved by output as measured through the indicator's performance targets, (b) key implementation issues and solutions; (c) updated procurement plan and (d) updated implementation plan for next 12 months; and (iii) a project completion report within 6 months of physical completion of the Project. To ensure the project continues to be both viable and sustainable, project accounts and the executing agency AFSs, together with the associated auditor's report, should be adequately reviewed.

E. Stakeholder Communication Strategy

169. The umbrella consultation and participation table below provide guidance to the consultation and participation process. Upon selection of the villages to participate in the buffer zone program, a detailed participation plan will be developed following ADB’s Guide to Participation.31

Table 20: Main stakeholders for the Preparation and Implementation of the Village Conservation Plans:

Government officials Ministry of Environment and Natural Resources

Executing Agency Staff of Central Project Management Unit

Participating provinces: Quang Nam, Quang Tri, Thua Thien Hue

- Vice Chairmen of Provincial People’s Committees cum Chairmen of the Provincial Project Steering Committees

- Staff of Provincial Project Management Units (PPMUs) under Department of Environment and Natural Resources - Implementing Agencies

- Departments of Agriculture and Rural Development (DARDs)

- PPMU Community Participation and Development Specialists

Participating Protected Areas: Phong Dien, Sao La Quang Nam, Sao La Thua Thien Hue, North Huong Hoa, Dak Rong, Song Thanh

- 6 Protected Areas Management Boards (PAMBs) – Implementing Agencies

- Village Participatory Planning Team (VPPT) consisting of the Protected Area Planning and Community Participation Facilitator (Project staff), a village leader per village and representatives of PAMB and Commune Forest Protection Unit, guided by PPMU Community Participation and Development Specialists

Representative Assemblies and Committees Village Conservation Committees (VCC) All households in a village will be encouraged to

become members of the VCC Executive Committee of the VCCs The VCC will nominate 3-7 members to serve as

31

ADB Guide to Participation can be downloaded at http://www.adb.org/sites/default/files/institutional-document/33349/files/strengthening-participation-development-results.pdf. The guide is also available in Vietnamese at http://www.adb.org/sites/default/files/institutional-document/33767/files/strengthening-participation-development-results-vn.pdf

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officials of the Executive Committee of the VCC. Beneficiaries/Poor and Vulnerable Groups Ethnic Groups Viet/Kinh advantaged ethnic group

Mainstream groups usually do not require support to participate. However, because they belong to the poor group in remote areas (see below), in this project they will likely require support to participate.

Disadvantaged ethnic groups (Bru, Van kieu, Co’ Tu, Ta-oi, Pa-co, Pa-hy, Gie-trieng)

Of the total beneficiaries, 73% are ethnic minorities. Quang Nam has the greater number of ethnic minorities (94.8%) compared to the other two provinces with Quang Tri next (84.2%) and Thua Thien Hue (42.8%). All ethnic minority groups within project sites belong to the Mon Khmer language group. Marginalized and ethnic groups require support to participate.

Geography All villages around protected areas are remote Villagers are likely to require support to participate Economic Status Poor households of total households in 3 participating provinces (32%)

Require support to participate

Poor ethnic minority households from total households in 3 participating provinces (28%)

Require support to participate

Gender Men Do not require support to participate Women Require support to participate Civil Society Organizations Most notably WWF An NGO working in the project area

170. Key stakeholder groups. Stakeholders to participate in the preparation and implementation of village conservation plans include government officials, members of representative bodies, mainstream beneficiaries, potentially disadvantaged groups, and CSOs. 171. Objectives of participation. The project is conceptualized as highly participatory and aims to build users’ capacity to ultimately own the village conservation plans and be responsible for the implementation of the plans. Overarching objectives include:

(i) Ensuring local ownership; (ii) Including all types of user stakeholder groups in participation processes and

benefit distribution; and (iii) Disseminating results and lessons learned to the wider community, including

government and CSOs. 172. Dimensions of participations. Participation involves training, participatory decision making, and where applicable, provision of labor to implement the implementation of the village conservation plans in the following:

(i) Selecting members of village conservation committees; (ii) Selecting executive committees of village conservation committees; (iii) Dissemination of the project objectives and approach through orientation

meetings; (iv) Ensuring sustainable forest management through benefit sharing with

communities;

98

(v) Agreeing on priorities to be included in village conservation plans based on Project criteria;

(vi) Agreeing on how to implement village conservation plans; (vii) Ensuring representation from disadvantaged groups in training, and village

conservation committees and executive committees of village conservation committees; and

(viii) Ensuring meaningful participation in all meetings, groups and activities above.

Table 21: Participation Plan Stakeholder group

Objective of their Intervention

Approach to Participation and Depth

Participation Methods Timeline Cost estimate

Why included Method Who is responsible

Start date

End date

PPMUs, DARDs

Representatives of implementing agencies responsible for project implementation

Partnership (high)

Monitoring and supervision of preparation and implementation of village conservation plans Approval of village conservation plans Monitoring of impact of village conservation plans on conservation

PPMUs Project start date

September 2019

Included in Community Participation and Development Specialist staff time and travel costs, estimated at 36,000 USD/province

PAMBs Representatives of implementing agencies responsible for project implementation

Partnership (high)

Selection of executive committees of village conservation committees Endorsement of village conservation plans Overseeing the use of village block grants (see para. 76)

PAMBs Project start date

September 2019

Included in Protected Area Planning and Community Participation Facilitators staff time and travel costs, estimated at $34,700/protected area

Executive Committees of Village Conservation Committees Village Participatory

Representatives of beneficiaries Technical assistance

Partnership (high)

Preparation of village conservation plans based on project criteria Implementing the village

Village Participatory Planning Team

Project start date

September 2019

Same as above since Village Participatory Planning Team consisting of the Protected Area Planning and Community

99

Stakeholder group

Objective of their Intervention

Approach to Participation and Depth

Participation Methods Timeline Cost estimate

Why included Method Who is responsible

Start date

End date

Planning Team conservation plans

Participation Facilitator, a village leader per village and representatives of PAMB and Commune Forest Protection Unit, guided by PPMU Community Participation and Development Specialists

Beneficiaries/Poor and Vulnerable Groups

Beneficiaries and ultimately owners of the village conservation plans (and the associated village block grants)

Partnership (high)

Participating in preparation of village conservation plans based on project criteria Participating in implementation of the village conservation plans

Village Participatory Planning Team

Project start date

September 2019

Included in community training, estimated at $37,800

Civil Society Organization

Expertise in community-based conservation

Collaboration (medium)

Participate in preparation of village conservation plans

PPMUs, PAMBs

Project start date

September 2019

No cost

100

X. ANTICORRUPTION POLICY 173. ADB’s Anticorruption Policy (1998, as amended to date) was explained to and discussed with MONRE. Consistent with its commitment to good governance, accountability, and transparency ADB reserves the right to investigate, directly or through its agents, any violations of the Anticorruption Policy relating to the Project.32 All contracts financed by ADB shall include provisions specifying the right of ADB to audit and examine the records and accounts of the executing agency and all Project contractors, suppliers, consultants and other service providers. Individuals/entities on ADB’s anticorruption debarment list are ineligible to participate in ADB financed activity and may not be awarded any contracts under the Project.33 174. To support these efforts, relevant provisions of ADB’s Anticorruption Policy are included in the loan regulations and the bidding documents for the Project. In particular, all contracts financed by ADB in connection with the Project shall include provisions specifying the right of ADB to audit and examine the records and accounts of MONRE/CPMU, PPMU, and PAMBs, as well as all contractors, suppliers, consultants, and other service providers as they relate to the Project. Individuals/ entities on ADB’s anticorruption debarment list are ineligible to participate in ADB-financed activity and may not be awarded any contracts under the Project.34 The project design and implementation arrangements provide for mitigation of corruption risks. Risks associated with project management, including procurement and disbursement, will be mitigated by the engagement of LIC (through the BCC project) advise and assist in the procurement of goods and services, and the engagement of other consultants. The Government will disclose through MONRE website accessible by the general public, information about various matters concerning the Project, including general project information, procurement, project progress, and contact details in the English and in Vietnamese. The website will also provide a link to ADB's Integrity Unit (http://www.adb.org/Integrity/complaint.asp) for reporting to ADB any grievances or allegations of corrupt practices arising out of the Project and Project activities. With regard to procurement, the website will include information on the list of participating bidders, name of the winning bidder, basic details on bidding procedures adopted, amount of contract awarded, and the list of Goods, Works and Consulting Services procured.

32

Available at: http://www.adb.org/Documents/Policies/Anticorruption-Integrity/Policies-Strategies.pdf 33

ADB's Integrity Office web site is available at: http://www.adb.org/integrity/unit.asp 34

ADB's Integrity Office web site is available at: http://www.adb.org/integrity/unit.asp

101

XI. ACCOUNTABILITY MECHANISM 175. People who are, or may in the future be, adversely affected by the project may submit complaints to ADB’s Accountability Mechanism. The Accountability Mechanism provides an independent forum and process whereby people adversely affected by ADB-assisted projects can voice, and seek a resolution of their problems, as well as report alleged violations of ADB’s operational policies and procedures. Before submitting a complaint to the Accountability Mechanism, affected people should make a good faith effort to solve their problems by working with the concerned ADB operations department. Only after doing that, and if they are still dissatisfied, should they approach the Accountability Mechanism.35

XII. RECORD OF PAM CHANGES 176. All revisions/updates during course of implementation should be retained in this Section to provide a chronological history of changes to implemented arrangements recorded in the PAM.

June 2015. Separate Project Administration Manual for the Additional Financing.

35

For further information see: http://www.adb.org/Accountability-Mechanism/default.asp.

102 Appendix 1

PROJECT READINESS FILTER As of May 2015

* Denotes a filter in accordance with Vietnamese Laws + ADB best practices

Filters Stage 1 Draft Concept Paper

Stage 2 Fact Finding

Stage 3 Before SRM

Stage 4 Grant Negs

CORE ADVANCE ACTIONS + Advance actions reflected in the ADB project documents For additional

cofinancing, the concept paper is not required

Included in procurement plan in PAM

Advance actions to be highlighted in the issues paper

+ National consultant hired to help the executing agency drafting the PO

For additional cofinancing, the concept paper is not required

The PPTA amount is limited. Government has agreed to prepare the PO

* Final draft PO and F/S agreed between ADB and Government Draft PO under preparation

Advance actions to be included in FS

* Preparation of REOI, RFP and 1st year bidding documents by the

executing agency Pending PO approval

* Line Ministry/PPC officially approves PMU establishment PPMU already established under the ongoing project. For the additional financing PPMU Deputy Director from DARD to be appointed

* Procurement plan, bidding documents, ToRs and RFPs are reading in a final draft

Pending PO approval

* Resettlement Policy Framework is approved Confirmed * Line Ministry/PPC approves the procurement plan. PMU issues bidding documents and REOIs

PROCUREMENT/CONSULTING + PPTA procurement consultant ToR includes preparation of procurement assessment, procurement plan, potential SOE issues and advance actions

The PPTA amount is limited (150,000 USD). Support was received by VRM associate procurement analyst

+ Procurement assessment ready Shared with VRM procurement staff for comments

+ NCB Annex is explained to the PMU NCB Annex is included in the PAM

Appendix 1 103



Stage 3 Before SRM

Stage 4 Grant Negs

+ Small consulting packages to be funded by counterpart funding (to avoid time-consuming ADB reviews)

Reflected in the procurement plan

+ Consulting services and procurement are packaged into few and large packages (to avoid splitting)

Reflected in the procurement plan

+ Single-stage single-envelope bidding procedure applied for small works contracts

Only direct contracting, shopping and community participation in procurement will apply for small works

PROJECT MANAGEMENT + Project start-up consultant ToR (2 individuals) funded by PPTA to help advertising grant implementation consulting firm and 1

st year

bidding documents

Not applicable due to limited PPTA funding

+ PPTA period must cover the period until at least grant effectiveness

Not applicable due to limited PPTA funding

+ Maximum 5 participating provinces in the project, unless the project is a national target program

Confirmed – only 3 participating provinces

+ Competitive mechanisms are developed to allow implementing agencies to compete for unallocated funds and loan savings (MPI attaches great importance to this filter).

Mechanism developed in PAM

Mechanism to be mentioned in issues paper

+ ADB will approve CVs of key executing agency and/or implementing agency staff before effectiveness or as a grant condition. This includes as a minimum: (i) an English-speaking CPMU procurement officer (ii) English-speaking CPMU technical deputy project director (iii) Chief accountant in CPMU

Not applicable since this is additional financing and the project staff are already on board.

* Selection of permanent CPMUs/PPMUs with staff who have prior exposure to ADB and have a permanent structure

Not applicable since this is additional financing and the project staff are already on board.

+ Project director must be young enough to complete the project before his/her retirement (F: 55y; M:60y)

Confirmed

+ Prepare memo for VP for early approval of advance actions To be finalized ENGINEERING + PPTA ToRs include preparation of detailed engineering design (technical design)

Not applicable since the works are to be defined as part of the participatory planning process

+ Determine if detailed engineering design (technical design) will be completed before grant approval. If yes, identify the source (counterpart, PPTA, PPSSF, etc.)

Not applicable since the works are to be defined as part of the participatory planning process. Works if

104 Appendix 1



Stage 3 Before SRM

Stage 4 Grant Negs

any will be part of a village block grant and will not exceed US$10,000 per village

+ Designs and cost estimates are agreed with executing agencies Works if any will be part of a village block grant and will be very small (US$10,000/village)

FINANCIAL MANAGEMENT + Financial management assessment ready Shared with SEOD FM

and VRM staff

+ Project specific financial management manual developed PAM shared with SEOD FM and VRM staff

* Standard audit ToR for ADB-funded projects in Viet Nam is used. Only eligible audit firms can be awarded contracts

Not applicable because the same auditor of the ongoing project will support the additional financing

RESETTLEMENT + PPCs/District PCs are aware of the project The same resettlement

framework of the ongoing Project will apply.

+ Land acquisition and resettlement issues identified The same resettlement framework of the ongoing Project will apply.

+ Preparation of Resettlement Policy Framework and a model sub-project resettlement plan by the PPTA

The same resettlement framework of the ongoing Project will apply.

Appendix 2 105

PROCUREMENT CAPACITY ASSESSMENT 1. Agencies Responsible for Procurement The Central Project Management Unit (CPMU) will be responsible for procuring two consulting packages for the additional financing and overseeing procurement of goods and works conducted by three Provincial Project Management Units (PPMUs). PPMUs of the three project provinces will be responsible for recruiting several individual consultants, infrastructure design consultants and procuring small civil works contracts.

2. Procurement Capacity Assessment 2.1. Methodology. The assessment of procurement capacity of CPMU and three PPMUs is based on the completed questionnaires and attached hereto as Annex 1. Due to limited resources, the interviews with CPMU and PPMUs could not be conducted. 2.2. Key Findings

a. Capacity in recruitment of consultants:

(i) CPMU. Under the ongoing GMS Biodiversity Conservation Corridors (BCC) Project, CPMU was responsible for recruiting 10 consulting packages (1 QCBS, 2 CQS and 7 ICS). The former Project coordinator1 was in charge of recruiting most of the consultants until the consultant specialist was recruited in December 2013. Both the coordinator and the procurement consultant are fluent in English and familiar with ADB’s recruitment procedure. The procurement specialist will also support procurement for the additional financing. As such, the risk on procurement capacity in recruitment of consultants by CMPU is considered “Average”.

(ii) PPMUs. Under the ongoing project, each of the PPMUs has recruited an accountant, and two field coordinators using ICS. PPMU’s experience in ADB’s recruitment procedure and their command of English is limited. Each PPMU has been recruiting one CQS package for infrastructure design consultants. After over a year, only one PPMU has completed submission 4 and the other two PPMUs (Quang Nam and Thua Thien Hue) have only reached submission 1. Recently in the Project midterm review, ADB has proposed to strengthen PPMUs’ procurement capacity by adding a procurement specialist for 14 person-months to each PPMU, subject to approval of the loan budget reallocation. Risk related to recruitment capacity of the three provinces is rated as “High”.

b. Capacity in procurement of goods:

(i) CPMU. Under the ongoing BCC project, CPMU procured 5 goods packages, including 1 NCB, 1 direct contracting and 3 shopping packages. The former Project coordinator2 was in charge of procurement of goods until the consultant specialist was recruited in December 2013. Both the coordinator and the procurement consultant are fluent in English

1 The Project coordinator has resigned and the new coordinator was mobilized in August 2014.

2 Ibid.

106 Appendix 2

and familiar with ADB’s recruitment procedure. The procurement specialist will also support procurement for the additional financing. As such, the risk on procurement capacity is considered low. The risk on procurement capacity is in procurement of goods is considered “Average”.

(ii) PPMUs. Under the ongoing project, each of the PPMUs has procured 2 goods packages, including 1 shopping and 1 direct contracting. PPMU’s experience in ADB’s procurement procedure and their command of English is limited. The procurement has been supported by CPMU. Recently in the Project midterm review, ADB has proposed to strengthen PPMUs’ procurement capacity by adding a procurement specialist for 14 person-months to each PPMU, subject to approval of the loan budget reallocation. Risk related to procurement capacity of the three provinces is rated as “High”.

c. Capacity in procurement of civil works: No civil work contracts have been

awarded in all the three participating provinces under the ongoing Project. No civil works will be procured for the additional financing.

3. Summary of Risk Assessment and Recommendations

a. Summary of Risk Assessment

No EA/IA Risk relating to Capacity Overall Risk Assessment 1 Quang Nam (IA) High

High

2 Quang Tri (IA) High High 3 Thua Thien Hue (IA) High High 4 CPMU (EA) Average Average

b. Recommendations

Risk Mitigation Measures Action taken by

Capacity Constraint

1. Tailored training program to be designed based in part on deficiencies identified in the BCC Project

CPMU Procurement Specialist

2. CPMU/PPMU confirmation that qualified and experienced staff will be involved in procurement of goods in PPMUs

CPMU and PPMUs

3. Recruitment of a procurement specialist for each PPMU (14 person-months)

PPMUs

4. ADB prior review of all consultants and ADB prior review of the template contracts for village grants of all three provinces

ADB

Appendix 2 107

Annex 1: PROCUREMENT CAPACITY ASSESSMENT Questionnaire

Risk Ratings Extremely High High Average Low

I. Specific Assessment and Ratings

Question Answer/Finding Risk

A. ORGANIZATIONAL AND STAFF CAPACITY A.1. How many years of experience does the head of the procurement department/unit have in a direct procurement role?

5 years (for BCA) and tens of year (for VEA)

Average

A.2. How many staff in the procurement department/unit are:

Low

i. Full Time? 01 ii. Part Time? 08 iii. Seconded? 01

A.3. Does the procurement staff have English language proficiency?

Yes Low

A.4. Are the number and qualifications of the staff sufficient to undertake the additional procurement that will be required under the proposed project?

Yes Low

A.5. Does the unit have adequate facilities, such as PCs, internet connections, photocopy facilities, printers, etc., to undertake the planned procurement?

Yes Low

A.6. Does the agency have a procurement training program?

Yes Low

A.7. Does the agency have a Procurement Committee that is independent from the head of the agency?

No Average

A.8. Does the agency have a procurement department/unit, including a permanent office that performs the function of a Secretariat for the Procurement Unit, and which serves as the main support unit of the Procurement Committee??

No Average

A.9. If yes, what type of procurement does it undertake?

A.10. At what level does the department/unit report (to the head of agency, deputy etc.)?

Minister and VEA leaders

Low

A.11. Do the procurement positions in the agency have job descriptions, which outline specific roles, minimum technical requirements and career routes?

Yes Low

A.12. Is there a procurement process manual for goods and works?

Yes Average

A.13. If there is a manual, is it up to date and does it cover foreign-assisted projects?

No

A.14. Is there a procurement process Yes

108 Appendix 2


manual for consulting services? A.15. If there is a manual, is it up to date and does it cover foreign-assisted projects?

No

A.16. Are there standard documents in use, such as Standard Procurement Documents/Forms, and have they been approved for use on ADB funded projects?

Yes

A.17. Does the ToR follow a standard format such as background, tasks, inputs, objectives and outputs?

Yes

A.18. Who drafts the procurement specifications?

The Project Coordinator and Procurement Specialist

Average

A.19. Who approves the procurement specifications?

VEA leaders

A.20. Who drafts the bidding documents? The Project Coordinator and Procurement Specialist

A.21. Who manages the sale of the bidding documents?

The Project Coordinator, Procurement Specialist Procurement Specialist and Project Director

A.22. Who identifies the need for consulting services requirements?

The Project Coordinator and Project Director

Average

A.23. Who drafts the terms of reference (ToR)?

Based on the PAM and with the consultation with LIC

A.24. Who prepares the request for proposals (RFPs)?

The Project Coordinator and Procurement Specialist

B. INFORMATION MANAGEMENT B.1. Is there a referencing system for procurement files?

No Average

B.2. Are there adequate resources allocated to record keeping infrastructure, which includes the record keeping system, space, equipment and personnel to administer the procurement records management functions within the agency?

No Average

B.3. For what period are records kept? N/A Average B.4. Are copies of bids or proposals retained with the evaluation?

Yes Low

B.5. Are copies of the original advertisements retained with the pre-contract papers?

Yes Low

B.6. Is there a single contract file with a copy of the contract and all subsequent contractual correspondence?

Yes Low

B.7. Are copies of invoices included with the contract papers?

Yes Low

C.PROCUREMENT PRACTICES Goods and Works C.1. Has the agency undertaken foreign-assisted procurement of goods or works recently (last 12 months, or last 36 months)? (If yes, please indicate the names of the development partner/s and

Yes – The Asian Development Bank (ADB) Project BCC

Average

Appendix 2 109


the Project/s.) C.2. If the above answer is yes, what were the major challenges?

The hiring of qualified Procurement Specialist

C.3. Is there a systematic process to identify procurement requirements (for a period of one year or more)

No Average

C.4. Is there a minimum period for preparation of bids and if yes how long?

Yes ( a month) Low

C.5. Are all queries from bidders replied to in writing?

Yes

C.6. Does the bidding document state the date and time of bid opening?

Yes Low

C.7. Is the opening of bids done in public? Yes Low C.8. Can late bids be accepted? No C.9. Can bids be rejected at bid opening? No C.10. Are minutes of the bid opening taken?

Yes Low

C.11. Who may have a copy of the minutes?

Bidders and participants

C.12. Are the minutes free of charge? Yes C.13. Who undertakes the evaluation of bids (individual(s), permanent committee, ad-hoc committee)?

Ad-hoc committee Low

C.14. What are the qualifications of the evaluators with respect to procurement and the goods and/or works under evaluation?

They obtained the Bidding certificate according to the National Bidding Law requirement

Low

C.15. Is the decision of the evaluators final or is the evaluation subject to additional approvals?

The evaluation subject to additional approvals

Low

C.16. Using at least three real examples, how long does it normally take from the issuance of the invitation for bids up to contact effectiveness?

Consulting services (CQS) 8 months Shopping for goods: 3 months

High

C.17. Are there processes in place for the collection and clearance of cargo through ports of entry?

No/NA cause the goods that purchased mostly is domestic products

Low

C.18. Are there established goods receiving procedures?

Yes Low

C.19. Are all goods that are received recorded as assets or inventory in a register?

Yes Low

C.20. Is the agency/procurement department familiar with letters of credit?

Yes Low

C.21. Does the procurement department register and track warranty and latent defects liability periods?

No Average

Consulting Services C.22. Has the agency undertaken foreign- assisted procurement of consulting services recently (last 12 months, or last 36 months)? (If yes, please indicate the names of the development partner/s and the Project/s.)

Yes- The Asian Development Bank – The BCC Project

Average

110 Appendix 2


C.23. If the above answer is yes, what were the major challenges?

The approval and submission time frame

C.24. Are assignments and requests for expressions of interest (EOIs) advertised?

Yes Low

C.25. Is a consultants’ selection committee formed with appropriate individuals, and what is its composition (if any)?

Yes Low

C.26. What criteria is used to evaluate EOIs?

Management competence, Technical competence and Geographical capacity

Low

C.27. Historically, what is the most common method used (QCBS, QBS, etc.) to select consultants?

CQS Low

C.28. Do firms have to pay for the RFP document?

No Low

C.29. Does the proposal evaluation criteria follow a pre-determined structure and is it detailed in the RFP?

Yes Low

C.30. Are pre-proposal visits and meetings arranged?

No Low

C.31. Are minutes prepared and circulated after pre-proposal meetings?

Yes

C.32. To whom are the minutes distributed?

Bidders and Participants

C.33. Are all queries from consultants answered/addressed in writing?

Yes Low

C.34. Are the technical and financial proposals required to be in separate envelopes?

Yes Low

C.35. Are proposal securities required? Yes Low C.36. Are technical proposals opened in public?

Yes Low

C.37. Are minutes of the technical opening distributed?

Yes

C.38. Do the financial proposals remain sealed until technical evaluation is completed?

Yes Low

C.39. Who determines the final technical ranking and how?

The Chairman of Evaluation Committee based on the average mark of all members

C.40. Are the technical scores sent to all firms?

Yes

C.41. Are the financial proposal opened in public?

Yes Low

C.42. Are minutes of the financial opening distributed?

Yes

C.43. How is the financial evaluation completed?

Check the commercial terms in the proposal comply with the RFP requirements Correct

Low

C.44. Are face to face contract negotiations held?

Yes

C.45. How long after financial evaluation is negotiation held with the selected firm?

a month

C.46. What is the usual basis for negotiation?

The bidding document that submitted by the Bidder and the financial evaluate result

Appendix 2 111


C.47. Are minutes of negotiation taken and signed?

Yes

C.48. How long after negotiation is the contract signed?

a month Average

C.49. Is there an evaluation system for measuring the outputs of consultants?

Yes Low

Payments C.50. Are advance payments made? Yes Low C.51. What is the standard period for payment included in contracts?

20 days after receive sufficient documents as the requirements stated on the Signed Contract

Low

C.52. On average, how long is it between receiving a firm’s invoice and making payment?

a month

C.53. When late payment is made, are the beneficiaries paid interest?

No

D. EFFECTIVENESS D.1. Is contractual performance systematically monitored and reported?

No Average

D.2. Does the agency monitor and track its contractual payment obligations?

Yes Low

D.3. Is a complaints resolution mechanism described in national procurement documents?

Yes Low

D.4. Is there a formal non-judicial mechanism for dealing with complaints?

Yes Low

D.5. Are procurement decisions and disputes supported by written narratives such as minutes of evaluation, minutes of negotiation, notices of default/withheld payment?

Yes Low

E. ACCOUNTABILITY MEASURES E.1. Is there a standard statement of ethics and are those involved in procurement required toformally commit to it?

Yes Low

E.2. Are those involved with procurement required to declare any potential conflict of interest and remove themselves from the procurement process?

Yes Low

E.3. Is the commencement of procurement dependent on external approvals (formal or de-facto) that are outside of the budgeting process?

Yes Average

E.4. Who approves procurement transactions, and do they have procurement experience and qualifications?

- Department of Planning and Finance, VEA - Yes

Low

E.5. Which of the following actions require approvals outside the procurement unit or the evaluation committee, as the case may be, and who grants the approval?

Low

a) Bidding document, invitation to pre-qualify or RFP

Yes, Donor and VEA

112 Appendix 2


b) Advertisement of an invitation for bids, pre-qualification or call for EOIs

Yes, Donor and VEA

c) Evaluation reports Yes, Donor and VEA d) Notice of award Yes, CPMU e) Invitation to consultants to

negotiate Yes, CPMU

f) Contracts Yes, Donor E.6. Is the same official responsible for: (i) authorizing procurement transactions, procurement invitations, documents, evaluations and contracts; (ii) authorizing payments; (iii) recording procurement transactions and events; and (iv) the custody of assets?

CPMU but different staffs Low

E.7. Is there a written auditable trail of procurement decisions attributable to individuals and committees?

Yes Low

II. General Ratings

Criterion Risk A. Organizational and Staff Capacity Average B. Information Management Average C. Procurement Practices Average D. Effectiveness Average E. Accountability Measures Low OVERALL RISK RATING Average

Appendix 3 113

DRAFT TERMS OF REFERENCE OF CONSULTANTS

B. Background 1. The ongoing Project. The Board of Directors of the Asian Development Bank (ADB) approved a loan in various currencies equivalent to nineteen million one hundred sixty-two thousand Special Drawing Rights (SDR19,162,000) from the Asian Development Fund resources to the Socialist Republic of Viet Nam for the BCC Project on 10 December 2010. The loan agreement was signed on 5 May 2011, and became effective on 9 August 2011. The BCC Project’s expected impact is climate resilient sustainable forest ecosystems in the Central Annamites (Trung Truong Son) benefiting local livelihoods and downstream users while the intended outcome is sustainably managed biodiversity corridors in Quang Nam, Quang Tri and Thua Thien Hue provinces. The BCC Project has four outputs: (i) institutions and communities strengthened in biodiversity corridor management; (ii) biodiversity corridors restored, ecosystem services protected and maintained; (iii) livelihoods improved and small-scale infrastructure support provided to target communities; and (iv) project management and support services operational. 2. The Additional Financing. An additional financing to the ongoing BCC Project, to be funded under the Global Environment Facility (GEF) (hereinafter the Additional Financing) is proposed to address the on-going fragmentation of the forest landscape and its ability to provide critical ecosystem services such as carbon storage, sustain biodiversity and local livelihoods. Recent expansion of the regional economy has been based on the harnessing of natural capital, natural resources and ecosystem services, which is undermining critical natural habitats and life-support ecosystem services delivery functions. The forests in the region are reported to provide enormous socio-economic wealth, climate moderation, erosion control, water regulation and ecotourism.

3. The Greater Annamite eco-region has been recognized as a priority landscape for its outstanding global biological value, high level of threat and great need for conservation action. The Central sub-region of the Greater Annamite region, which is known locally in Viet Nam as the Trung Truong Son landscape, extends from Lao PDR in the West into central Viet Nam, and is an area that existed as continual forest despite the previous climatic fluctuations. This has encouraged high degrees of speciation and endemism. A significant number of species of global importance, including the critically endangered grey-shanked douc langur (Pygathrix nemaeus cinerea), black-crowned barwing (Actinodura sodangorum) and the conifer Amentotaxus poilanei are known only within the Trung Truong Son Landscape.

4. Protecting and maintaining as much as possible of the remaining natural forests and restoring and expanding habitats is considered essential to conserve the remaining rich and globally important biodiversity in the region. Within the Trung Truong Son landscape most of the natural forests remains within the protected areas and their immediate surroundings, which are also under serious threat from the expanding economy. The Additional Financing will therefore target critical gaps in the protection, management and restoration of eight protected areas and the forest and agricultural landscapes between them with the intent of maintaining and consolidating the biological and ecological viability and vitality of the Trung Truong Son landscape. In particular, the Additional Financing will link the protected areas and their buffer zones and intervening biological corridors as an effective and extensive large landscape that continues to protect and maintain the rich biodiversity, ecosystem services, watershed process, enhance carbon stocks and strengthen climate resilience at the landscape level.

114 Appendix 3

5. The Additional Financing will directly and indirectly benefit over 126,000 people living in and around the Protected Areas (PAs)1 in the project area who are largely occupied with subsistence farming through a practice of a mix of rotational swidden agriculture and wet-rice cultivation. Nearly 80% of the inhabitants of the buffer zone belong to one of the many ethnic minorities such as: Van Kieu, Ta Oi, Gie Trieng, Ca Dong, Mnong. The indigenous people living in the area are poor and their livelihood is dependent on agriculture and forest ecosystem services and products. Project activities such as assisted natural regeneration, alternative livelihood development, Payment for Forest Environmental Services (PFES), and sustainable forest management (SFM) and use and forest resource benefit sharing can provide improved access to forest resources by the ethnic minorities, improve their production systems, receive monetary benefits from forest protection and improve the health and wealth of their forests which are intricately linked with their well being. 6. Overall, the Additional Financing aims to integrate biodiversity conservation, climate change mitigation, climate resilience, and sustainable forest management in Trung Truong Son Landscape. Its specific objective is to strengthen the management and ecological integrity of the protected area network in the Trung Truong Son region of the country. This is to be achieved by maintaining and restoring forest biodiversity, ecosystems and related watershed processes, strengthening species conservation, enhancing forest carbon stocks and strengthening climate resilience at the landscape level,2 and actively encouraging the participation and sharing of conservation benefits with local people. The project supports a unified approach for development of regional ecosystem connectivity, addressing forest land degradation, filling gaps in capacity required for sustainable forest management, and supporting climate mitigation, habitat restoration, and biodiversity protection3 within and outside PAs. Table A3.1 below provides a cross reference between the ongoing BCC project outputs, and the Additional Financing sub-components. TableA3.1. Ongoing BCC project outputs and GEF Additional Financing sub-components BCC outputs Overall project (BCC outputs

and Additional Financing) GEF Additional Financing Sub-

components (i) institutions and communities strengthened in biodiversity corridor management

(i) Institutions and communities strengthened in conservation of the Central Annamite landscape

Sub-component 1.1. Improving PA Operational Management (establishment of one new protected area and establishment of two new Project Area Management Boards - PAMBs) Sub-component 1.4: Strengthened biodiversity planning and management at the Provincial level

(ii) biodiversity corridors restored, ecosystem services protected and

(ii) Biodiversity conservation landscape managed with ecosystem services protected and maintained

Sub-component 1.1. Improving PA Operational Management (development and implementation of 8 Operational Management Plans)

1 Protected Areas in Vietnam are categorized as Special Use Forests that are established because they have

special value for nature conservation, scientific research and protection of historical and cultural relics and landscapes and for recreation and tourism purposes. Special Use Forests consists of Nature Reserves, Nature Conservation Areas, Landscape Protected Areas and Scientific Research and Experiment Forest Areas.

2 A unit of land that contains a mosaic of land uses, but typically would include one or more protected and their

buffer zones, and connecting biological corridors (the latter including protection and production forests, agricultural and other productively used lands, and village settlements).

3 A mandate shared by MARD (i.e. for forests and PAs) and MONRE (i.e. for biodiversity coordination).

Appendix 3 115

BCC outputs Overall project (BCC outputs and Additional Financing)

GEF Additional Financing Sub-components

maintained Sub-component 1.3: Strengthened conservation management of target species

(iii) livelihoods improved and small-scale infrastructure support provided to target communities

(iii) Livelihoods improved, small-scale infrastructure support provided and financial sustainability obtained in target villages with reduced greenhouse gas emissions

Sub-component 1.2: Enhanced community participation in benefit sharing from conservation and sustainable use of biodiversity in Protected Areas and their Buffer Zones

4

Sub-component 2.1. Improved financial sustainability through ecosystem services and payment for forest environmental services (PFES) Sub-component 2.2 Improved SFM and carbon sequestration in forest landscapes Sub-component 2.3: Established Provincial Monitoring, Reporting and Verification (MRV) systems

7. Consulting services through organizations and individual consultants will be procured to support the delivery of the additional financing, as outlined in sections B and C below.

C. CONSULTANTS TO BE RECRUITED THROUGH FIRMS

1. Package 1. Investment Planning for proposed Ngoc Linh Nature Reserve

8. Objective. The objective of this assignment is to develop an investment plan to fulfill the condition to establish Ngoc Linh Nature Reserve. The assignment will support Subcomponent 1.1 of the additional financing. The package is to be procured by the Provincial Project Management Unit (PPMU) of Quang Nam Province as an implementing agency of ongoing BCC Project and the additional financing, using consultants’ qualification selection method in accordance with ADB’s Guidelines on the Use of Consultants (2013, as amended from time to time). Interested organizations can be a firm, a domestic university, or a research institute with sufficient personnel and resources to provide all necessary professional, technical and expert services required. The organization must have a proven-track record in developing investment plans for protected areas and special use forests in Viet Nam with at least one investment plan for a protected area approved. The assignment will be completed within 7 months from mobilization, and will be performance-based (lump-sum contract). 9. Team composition. The team should provide expertise in conservation, flora and fauna, planning, socio-economic survey and mapping. The team will be led by a team leader who has overall responsibility of the deliverables. This team leader will report directly to Quang Nam PPMU, in particular the PPMU Deputy Director from the Department of Agriculture and Rural



116 Appendix 3

Development (DARD) in charge of the additional financing. Interested organizations can propose the positions, their inputs and schedule as long as the results are delivered. 10. Qualifications. Experts in the team must have: i) empirical understanding of the challenges associated with sustainable financing mechanisms in biodiversity conservation, ii) degree from a recognized university in relevant field (natural resource management, business administration etc.); (iii) at least 7 years of professional experience with demonstrated capacity in applying various tools and methods Viet Nam, (iv) experiences with PA investment plan preparation with at least one approved investment plan approved in the record; and v) strong English language communications skills, including written report preparation. 11. Scope of work. The organization will undertake the following tasks:

(i) Review all relevant national and provincial legal frameworks and guidelines on protected area management and planning, especially refer to Decree 117/2010/ND-CP and its guiding circulars;

(ii) Prepare the investment plan for the establishment of the Ngoc Linh Nature Reserve following a standard form and format which is currently used;

(iii) Identify objectives of the protected area and its values and a system for relating management decisions to that value system;

(iv) Identify the key activities for the Protected Area Management Board to operate and plan to ensure that the biodiversity and nature value within the Ngoc Linh Nature Reserve will be secured and sustainably managed;

(v) Define effective measures to ensure integration with other departments, local authority and organizations in implementation of Ngoc Linh Nature Reserve priority activities;

(vi) Undertaking necessary consultation meeting on the preparation of the investment plan with MARD, DARD, Department of Home Affairs and other provincial agencies and stakeholders;

(vii) Undertake necessary consultation workshop on the investment plans with local community and relevant stakeholder in the buffer zone surrounding the proposed Ngoc Linh Nature Reserve; and

(viii) Assist and facilitate consultation meeting on the investment plan before its finalization.

12. Deliverables. The following outputs are expected from the organization:

(i) A work plan and personnel schedule within 4 weeks since mobilization; (ii) A draft investment plan for review by MARD, and Quang Nam PPMU and DARD

within 16 weeks since mobilization (including necessary description, PA location, biodiversity, boundary, zoning, threats maps etc.);

(iii) A final investment plan for Ngoc Linh Nature Reserve incorporating comments (through consultation and workshops) by MARD, and Quang Nam PPMU and DARD within 20 weeks since mobilization;

(iv) A draft buffer zone management and forest co-management plan through consultation with stakeholders including the communities within 24 weeks since mobilization; and

(v) Final buffer zone management and forest co-management plan incorporating comments (through consultation and workshops) by MARD, and Quang Nam PPMU and DARD within 28 weeks since mobilization.

2. Package 2. Biodiversity and Protected Area (PA) Management

Appendix 3 117

13. Objective. The objective of this assignment is to support the Executing Agency and the Implementing Agencies of the additional financing to deliver the outcome and outputs of the additional financing. More specifically, this assignment will support the delivery of Subcomponents 1.1 to 1.4 and Subcomponent 2.1 of the additional financing. 14. Selection method. The package is to be procured by the Central Project Management Unit within the Ministry of Natural Resources and Environment as the Executing Agency of the ongoing BCC Project and the additional financing, using Quality- and Cost-Based (80:20) selection method in accordance with ADB’s Guidelines on the Use of Consultants (2013, as amended from time to time). Interested organizations can be a firm, a non-governmental organization, a domestic university, or a research institute. 15. The organization must have a proven-track record in supporting multilateral or bilateral funded biodiversity conservation projects in Viet Nam and the region. The organization must have sufficient personnel and resources to provide all necessary professional, technical and expert services required. 16. The consulting services will include national specialists and undertake the tasks outlined here. All national specialists in this package will report to a Chief Technical Advisor (CTA) to be recruited by CPMU using individual consultant selection5. . 17. The inputs of the consultants are shown in the Table A3.2 below.

Table A3.2: Consulting Services Inputs Expertise (National consultants) Person

months a. PA Management Specialist (for Quang Tri

province)/Deputy Team Leader 20

b. Biodiversity and Protected Area Specialists (3 positions x 36 months)

108

c. Community Participation and Development Specialists (3 positions x 20 months)

60

d. PA Management Planning Specialists (2 positions: 6 months for Quang Nam 4 months for

Thua Thien Hue)

10

e. Product Development Specialist 14

Total 212

a. Protected Area Management Specialist (for Quang Tri province) and Deputy Team Leader (20 person-months)

18. The PA Management Specialist/Deputy Team Leader will assume responsibility of both a protected area management specialist for Quang Tri province, and deputy team leader of Package 2. The incumbent should have: (i) demonstrated understanding of the challenges associated with biodiversity conservation; (ii) degree from a recognized university in relevant field (biological or environmental sciences, natural resource management, etc); (iii) at least 7

5 To ensure integrity of the current BCC Project and the additional financing, CPMU will consider extending the role

of the Team Leader of the BCC Project to cover the scope of work of the additional financing.

118 Appendix 3

years of professional experience with demonstrated capacity in applying various tools and methods for protected area management;(iv) at least 5 years of experience in project management, preferably for multilateral and bilateral funded projects; and (v) strong English language communications skills, including written report preparation. 19. As the Protected Area Management Specialist for Quang Tri province, the incumbent will report to the CTA, and provide technical support for preparation/update of PA Operational Management Plans for Quang Tri province, specifically to:

(i) review all relevant national and provincial legal frameworks and guidelines on PA planning and management;

(ii) review PA existing master plan and OMP (if any) and make necessary suggestion for their revision, identifying gaps and opportunities, in particular for integration of benefit sharing with community living in the buffer zones;

(iii) identify critical management issues, socio-economic staffing and financial constraints for effective PA management;

(iv) identify any potential land use and zoning constraints to PA management and make suitable recommendations for their management;

(v) provide technical support and develop guideline for OMP preparation with participatory consultation with relevant stakeholder;

(vi) provide recommendations for improving patrolling, law enforcement, control of wildlife trade, sustainable tourism, etc.;

(vii) define capacity building measures to improve staff capacity and skills; (viii) define participatory forest and benefit sharing models for co-management in the

buffer zones of the PAs, including income generating activities; (ix) work with PA and participatory specialist to prepare and finalize PA OMP that

would identify management interventions, staffing and financial resources; (x) identify priority activity and prepare a work plan to implement key activities under

the Additional Financing component for each PA; (xi) define processes and mechanisms for integrating PFES programs in PA buffer

zones, including monitoring of payment mechanisms and monitoring and reporting;

(xii) identify priority activities for implementation, time frame and financial resources and implementation mechanisms for biological surveys, long-term monitoring of key taxa, habitats and species, research collaboration, environmental awareness etc.;

(xiii) conduct stakeholder consultations to reach agreement and consensus of PA OMPs

(xiv) assist PAMBs in the process of submission OMPs for approval; and (xv) define a timetable and implementation arrangement for implementation of PA

OMPs. 20. As the Deputy Team Leader, the incumbentwill report to the CTA, and in the absence of the CTA, will act as the Team Leader for Biodiversity and Protected Area Management support team (package 2). More specifically, the Deputy Team Leader will:

(i) assume overall responsibility for the preparation and implementation of annual work plans for the additional financing

(ii) in the absence of the CTA, provide team leadership, coordination, financial management and administrative input for the additional financing

(iii) in the absence of the CTA, manage the Biodiversity and Protected Area Management Consultant Team (Package 2) and ensure coordination with the SFM/REDD+ Team Leader of Package 3 to provide integrated technical support

Appendix 3 119

to the executing agency and implementing agencies to implement the additional financing

(iv) assist the CTA in ensuring that all consultants are fully briefed on local situation and their tasks

(v) assist the CTA in reviewing, and modifying when necessary all consultant terms of reference in consultation with the National Director and the ADB Project Officer

(vi) assist the CTA in preparing a capacity development plan to deliver Subcomponents 1.1 to 1.4 and Subcomponent 2.1 of the additional financing, and overseeing its implementation

(vii) assist the CTA in monitoring progress against project implementation schedule (viii) assist the CTA in collating and coordinating preparation and submission of

periodic progress reports and technical reports on project findings and experience.

(ix) in the absence of the CTA, collate and coordinate preparation and submission of periodic progress reports and technical reports on project findings and experience.

(x) assist the CTA in assessing any existing technical guidelines for the implementation of Subcomponents 1.1 to 1.4 and Subcomponent 2.1 of the additional financing

(xi) assist the CTA in the preparation of technical guidelines if necessary for Subcomponents 1.1 to 1.4 and Subcomponent 2.1 of the additional financing

(xii) provide any other relevant input as required by the CTA

b. Biodiversity and Protected Area Specialists (3 positions x 36 months = 108 for PPMUs)

21. The Specialists should have: (i) demonstrated understanding of the challenges associated with biodiversity conservation and forest resource management; (ii) a bachelor’s degree or higher from a recognized university in relevant field (biological or environmental sciences, natural resource management, etc); (iii) at least 7 years of professional experience with demonstrated capacity in applying various tools and methods in engaging government and NGO partners at local levels in conservation; and (iv) strong English communications skills, including written report preparation. 22. Reporting to the CTA, 3 Specialists will work in the context of the PPMUs. The Specialists will provide technical support and guidance for respective PPMU in implementation of capacity development activities. Specifically the specialists will:

(i) Assist in design and implementation of PA capacity development plans for candidate PAs;

(ii) Assist in preparation of Operational Management Plans (OMPs) and establishment of Protected Area Management Boards, where required;

(iii) Provide technical guidance and advice in identification of management investments for PAs;

(iv) Coordinate various inputs into the preparation of Provincial Biodiversity Action Plans;

(v) Support the development of biodiversity survey protocols, collection/management of data and monitoring of project outcomes;

(vi) Facilitate coordination between PA management boards and District, Provincial and Central Government entities; and

(vii) Oversee planning and implementation of community programs in buffer zones.

120 Appendix 3

c. Community Participation and Development Specialists (3 positions x 24 months = 72 person-months)

23. The Community Participation and Development Specialists should possess: i) a degree or diploma from a recognized postsecondary institution in social sciences, natural resource management or relevant field, ii) at least 5 years’ experience with community mobilization related to implementation of capacity-building and training in natural resources management, iii) solid technical understanding of biodiversity conservation and sustainable forest management, including financing mechanisms, and iv) strong interpersonal and English language communications/writing skills. 24. Reporting to the CTA, and working in the context of the PPMUs, the Specialists will provide technical guidance and training to Provincial Governments, PA managers and other stakeholders in planning and implementation of buffer zone participatory programs. The Specialist will be required to:

(i) work collaboratively with the Biodiversity and Protected Area Specialists for preparation and implementation of Additional Financing work plans, and provide team leadership, and coordination for implementation of the participatory village action planning program in the buffer zone of the PAs;

(ii) cooperate with the PA Planning and community participation facilitators and PA management in guiding and overseeing the implementation of benefit sharing, livelihood improvement and PFES programs in PA buffer zone villages;

(iii) develop the methodology and guidelines for instituting a participatory planning process in the PA buffer zones for the defined activities, guide and advise the PA Planning and community participation facilitators in setting up Village Conservation Committees (its constitution and rules), village action planning, participatory monitoring and grievance redress;

(iv) provide training to the PA Planning and community participation facilitators in community mobilization, resource survey methodology, village action planning, procedures for benefit sharing and livelihood improvement;

(v) ensure that all PPMU staff and consultants and involved stakeholder of the project are fully briefed on local situation and their tasks;

(vi) review, and modify when necessary all aspects related to community development and participation;

(vii) identify opportunities and programs that are complementary to the project activities and initiate dialogue with other agencies and sectors to ensure that these programs can be channeled for benefit to PA and buffer zone communities;

(viii) support the Biodiversity and Protected Area Specialists in preparation of periodic progress reports and technical reports on project findings and experience and submit to PPMU and technical oversight Provincial Department;

(ix) train and support the PA community facilitation process at the PA level and oversee the project planning and implementation in the PAs and buffer zones;

(x) promote women's participation and leadership in buffer zone participatory programs to achieve gender targets and implement gender actions specified in the project GAP; and

(xi) support the implementation, monitoring and reporting of the project GAP.

Appendix 3 121

d. Protected Area (PA) Management Planning Specialists (2 positions: 6 person-months for Quang Nam and 4 person-months for Thua Thien Hue)

25. The PA Management Planning Specialists should have: (i) demonstrated understanding of the challenges associated with biodiversity conservation; (ii) degree from a recognized university in relevant field (biological or environmental sciences, natural resource management, etc.); (iii) at least 7 years of professional experience with demonstrated capacity in applying various tools and methods in protected area management; and (iv) strong English language communications skills, including written report preparation. 26. Reporting to the CTA, the Specialists will provide technical support for preparation/update of PA Operational Management Plans, specifically to:

(i) review all relevant national and provincial legal frameworks and guidelines on PA planning and management;

(ii) review PA existing master plan and OMP (if any) and make necessary suggestion for their revision, identifying gaps and opportunities, in particular for integration of benefit sharing with community living in the buffer zones;

(iii) identify critical management issues, socio-economic staffing and financial constraints for effective PA management;

(iv) identify any potential land use and zoning constraints to PA management and make suitable recommendations for their management;

(v) provide technical support and develop guideline for OMP preparation with participatory consultation with relevant stakeholder;

(vi) provide recommendations for improving patrolling, law enforcement, control of wildlife trade, sustainable tourism, etc.;

(vii) define capacity building measures to improve staff capacity and skills; (viii) define participatory forest and benefit sharing models for co-management in the

buffer zones of the PAs, including income generating activities; (ix) work with PA and participatory specialist to prepare and finalize PA OMP that

would identify management interventions, staffing and financial resources; (x) identify priority activity and prepare a work plan to implement key activities under

the Additional Financing component for each PA; (xi) define processes and mechanisms for integrating PFES programs in PA buffer

zones, including monitoring of payment mechanisms and monitoring and reporting;

(xii) identify priority activities for implementation, time frame and financial resources and implementation mechanisms for biological surveys, long-term monitoring of key taxa, habitats and species, research collaboration, environmental awareness etc.;

(xiii) conduct stakeholder consultations to reach agreement and consensus of PA OMPs

(xiv) assist PAMBs in the process of submission OMPs for approval; and (xv) define a timetable and implementation arrangement for implementation of PA

OMPs.

e. Product Development Specialist (14 person-months)

27. The Product Development Specialist should have: (i) a bachelor’s degree or higher from a recognized university in Forestry, Business Administration, Marketing or relevant areas, (ii) and at least 5 years of professional experience in product development, agroforestry,

122 Appendix 3

agricultural business, and community-based business operations; (ii) excellent research and writing skills; (iii) Good interpersonal and communication skills; (iv) Good English command; and (v) Ability to work with minimum supervision, and maintain composure under pressure.

28. Reporting to the CTA, the Specialist will provide technical support for the development and implementation of the village conservation plans, specifically to:

(i) provide technical inputs and guidelines for identification, training and hand-holding to build sustainable capacities among farmers and local communities for entering into new value chains or improving existing value chains, in agriculture, forestry, livestock and other income generation sectors;

(ii) help identify partnerships with appropriate, private entities and businesses to help farmers improve product development and marketing and value addition and processing of products;

(iii) provide technical support for developing new and/or strengthening of existing facilities like collection/aggregation centers, storage/ preservation units, agriculture/animal husbandry and forestry based activities, etc. value added processing units to demonstrate efficient scientific sustainable practices of various post-harvest activities;

(iv) identify available financing mechanisms with banks, institutions to provide working capital and insurance to farmers through micro-financing & other schemes;

(v) conduct training and extension for specific product identification, development and improvement and support local farmer pilots to sensitize people and get maximum coverage; and

(vi) design field manuals related to market access and livelihood from different farm & non-farm products, as appropriate.

3. Package 3. REDD+ and MRV

29. Objective. The objective of this assignment is to support the Executing Agency and the Implementing Agencies of the additional financing to deliver the outcome and outputs of the additional financing. More specifically, this assignment will support the delivery of Subcomponents 2.2 and 2.3 of the additional financing. 30. Selection method. The package is to be procured by the Central Project Management Unit within the Ministry of Natural Resources and Environment as the Executing Agency of the ongoing BCC Project and the additional financing, using Quality - and Cost-Based (90:10) selection method in accordance with ADB’s Guidelines on the Use of Consultants (2013, as amended from time to time). Interested organizations can be a firm, a non-governmental organization, a university, or a research institute. 31. The organization must have a proven-track record in supporting multilateral or bilateral funded REDD+ and MRV related projects in Viet Nam and the region. The organization must have sufficient personnel and resources to provide all necessary professional, technical and expert services required. 32. The consulting services will include international and national specialists and undertake the tasks outlined here. The SFM/REDD+ Team Leader will report directly to the CPMU.

Appendix 3 123

33. The inputs of the consultants are shown in the Table A3.3 below. The input and TORs of the consultants may be revised based on recommendations of the International REDD+/MRV Contract Design Specialist (see Section C below).

Table A3.3: Consulting Services Inputs

Expertise Person-months

I. International Consultants 21 a. SFM/REDD+ Team Leader 17

b. Remote Sensing and Inventory Specialist (for MRV) 3

c. Final evaluation 1 II. National Consultants

89

a. REDD+/SFM Specialist 18 b. Biodiversity Specialist 7

c. Socio-economic/Livelihood Specialist 9

d. Carbon inventory specialist 7

e. Free Prior and Informed Consent (FPIC) Participation Specialist 18

f. Forest Carbon/REDD+ Specialist (for MRV) 18

g. Remote Sensing and Ground Truthing Specialist (for MRV) 12 a. SFM/REDD+ Team Leader (17 person-months) 34. The SFM/REDD+ Team Leader should have: (i) relevant advanced (MSc) degree in forestry, economics or environmental science; (ii) at least five years work experience in the development and management of projects involving forestry, SFM and/or forest carbon /REDD+; (iii) experience in carrying out SFM or REDD+ feasibility studies, forest carbon inventories, with specific reference to the activity of “conservation of forest carbon stocks” and promotion and assessment of biodiversity co-benefits ; (iv) knowledge of carbon markets and associated requirements for project development; (v) excellent track record of producing feasibility studies, plans and proposals for projects with conservation, social and commercial objectives; and (vi) experience working in South East Asia, particularly on forest carbon projects. 35. The main responsibility of the SFM/REDD+ Specialist will be to ensure the technical development and implementation of the carbon components of a series of REDD+ activities, potentially three, together with the design and implementation of site-based impact monitoring tools and provincial level capacity building for MRV and SIS. The Specialist will support the Executing Agency and the Implementing Agencies in the following tasks: 36. Oversight of forest carbon technical activity development and implementation:

(i) development and implementation of the carbon components in the REDD+ activities, including undertaking and overseeing project feasibility assessments, development of baseline/reference and project scenario forecasts, implementing field-based forest carbon stock assessments, undertaking project risk assessments;

(ii) design and implementation of workplans and budgets for REDD+ technical activities;

(iii) interpret and implement UNFCCC guidance and IPCC guidelines in a manner fitting local jurisdictional requirements and local needs in the field;

(iv) procurement and engagement of external expert consultants (as applicable) for forest carbon aspects of REDD+ activities implementation, and provide technical

124 Appendix 3

oversight and quality assurance of proposed survey designs; (v) develop and manage consultancy ToRs, for technical outputs, such as baseline

analysis and remote sensing data analysis; (vi) carbon data compilation and analysis; (vii) development of relevant project documentation, supporting evidence and quality

control procedures appropriate for third party auditing of REDD+ technical activities, in particular reporting of project activities and ex-ante and ex-post emission reduction estimates to the provincial and national levels;

(viii) relate carbon components to other important aspects of the REDD+ project portfolio, including biodiversity and community components.

37. Focal point for carbon learning and knowledge exchange:

(i) provide institutional advice on the current and future strategic implementation of REDD+ technical activities, with specific reference to REDD+ activities implemented in protected areas (activity of “conservation of forest carbon stocks”) and buffer zones (activity of “sustainable management of forests”) and biodiversity co-benefit promotion and assessment;

(ii) design and deliver training, and facilitate capacity building for provincial staff and partners on carbon and biodiversity aspects of REDD+ implementation and MRV/SIS;

(iii) ensure key issues and lessons learned are shared between projects to increase (iv) efficiency of implementation, and that issues arising are quickly flagged to avoid

potential pitfalls; and (v) integrate approaches, lessons learned, key findings into key relevant national

and international fora (as applicable to the activity), including regular and coordinated communication with VNForest/VRO,UN-REDD and FCPF.

b. International Remote Sensing and Inventory Specialist for MRV Program (3 person-months) 38. The Remote Sensing and Inventory Specialist should have (i) relevant advanced (MSc) degree in remote sensing or forestry; (ii) experience in satellite technology for land cover analysis (e.g. LandSat, SPOT, RapidEye, etc.) and in procurement of satellite images /tiles; (iii) three years’ working experience in forest carbon surveys and accounting for REDD+; and (iv) experience in carrying out REDD+ feasibility studies and forest carbon inventories. 39. Reporting to the International SFM/REDD+ Team Leader, the Specialist will support the Executing Agency and the Implementing Agencies to develop a baseline landuse land cover (LULC) map and conduct an assessment of the historical rate and location of deforestation and forest degradation over the past 10 - 15 years, across project sites. As part of this work, he/she will undertake a current LULC classification of the project sites using supervised classification techniques on current high to medium resolution imagery, and a historical analysis of the project sites across the specified time. Activities should be completed in this priority order, in order to produce a representative baseline LULC layer as soon as possible. 40. Specifically, the Specialist shall follow the below guidance:

(i) acquire and process satellite imagery of the entire Project Area of Interest for the following specific time periods: a. High to medium resolution (<30m) imagery captured as recently as

possible (not older than 2 years); b. High to medium resolution (<30m) captured 2-5 years before (a);

Appendix 3 125

c. High to medium resolution (<30 m) captured 6-9 years before (a); d. High to medium resolution (<30 m) captured 10-15 years before (a);and e. One high resolution (<5 m) remotely sensed image that is less than 5

years from (a) (ii) images shall have a maximum cloud cover of 20%; (iii) classify the images into the six land use categories identified by the IPCC

Guidelines; further stratify the Forest Land category into more detailed categories following guidance from the National REDD+ Office and/or FIPI and/or sub-DOF. The overall classification accuracy shall be no less than 80%, with accuracy for the Forest Land category (forest sub-categories combined) no less than 85%;

(iv) produce a land use transition matrix from the interpreted satellite images, using Approach 3 from the IPCC Guidelines, for each temporally adjacent pair of land use category maps and one from the pair of most recent and oldest land use category maps;

(v) make recommendations on spatial location(s) in the Project Area of Interest that should be prioritized for field sampling, for the purposes of increasing the accuracy of the LULC classification of the most recent image;

(vi) analyze the trends in land use changes from the transition matrices and, in close cooperation with the National Socio-Economic/Livelihood Specialist, derive reference emission levels for (a) deforestation; and (b) forest degradation; throughout the Project Area of Interest. In addition, prepare a reference level for areas that are naturally regenerating in the Project Area of Interest;

(vii) all steps in the process will be fully documented in a report; and all data used at any processing step (i.e. satellite imagery, ancillary data, choice of parameters, etc.) will be delivered in a format that makes reproduction of the entire process feasible.

(viii) coordinate with forest carbon field teams who will be concurrently conducting field work during the period of assignment. Any field measurements that need to be collected to guide the LULC classification and assess the representation accuracy can be obtained during the period of consultancy.

c. National REDD+/SFM Specialist (18 person-months) 41. The national REDD+/SFM Specialist will require: (i) relevant advanced (MSc) degree inforestry, economics or environmental science; (ii) at least five years working experience in the development and management of projects involving forestry, SFM and/or forest carbon /REDD+; (iii) experience in carrying out SFM or REDD+ feasibility studies, forest carbon inventories, with specific reference to the activity of “conservation of forest carbon stocks” and promotion and assessment of biodiversity co-benefits; (iv) knowledge of carbon markets and associated technical carbon requirements for project development; (v) track record of producing feasibility studies, plans and proposals for projects with conservation, social and commercial objectives; and (vi) experience working in Viet Nam preferably with multilateral or bilateral donors, particularly on forest carbon projects. 42. Reporting to the international SFM/REDD+ Team Leader, the national REDD+/SFM Specialist will support the Executing Agency and the Implementing Agencies in SFM pilot design in relation to carbon inventory and accounting procedures, design and lead inventory surveys, coordinate and lead on the procurement and analysis of remote sensing images/carbon accounting and provide coordination support and guidance on developing sub-

126 Appendix 3

national MRV and/or basic forest monitoring systems that are compatible/‘nestible’ with that being developing under UN-REDD Phase II at the national level. The Specialist with liaise withlocal government agencies and community groups in implementation and monitoring and ensure continuity and maintain quality. Training of national staff on inventory methodology, remote sensing carbon accounting etc. The Consultant shall:

(i) under Sub-component 2.2 Establishing SFM/REDD+ pilot(s): a. Review available SFM methodologies and status in Vietnam; b. Based on this review, consult and work closely with the Vietnam REDD+

OFP, located in the Department of Science, Technology and Environment, MARD;

c. Work closely with provincial level partners and developing Provincial SFM/REDD+ working groups to identify, rationalize and design of an SFM/REDD+ pilot, with components at sub-National and local levels within the three Province ADB-BCC project area;

d. Ensure linkage in design of the 3 SFM/REDD+ pilots to Project development of provincial MRV and piloting of local MRV systems (2.3 below);

e. Recommend a plan in line with GoV intentions promoting SFM and REDD+ knowledge and awareness raising;

f. Help to ensure continuity is maintained via ongoing dialogue and building upon contributions of national pilot programs, via the National REDD+ Operational Focal Point office, Vietnam Administration of Forests (VAF) and the developing SFM/REDD+ management units of the three target provinces;

g. Help to develop accurate assessment of carbon sequestered; h. Recommend/gather other project baseline-monitoring indicators; and i. Undertake SFM/REDD+ tracking tool, link to MRV below.

(ii) Under Sub-component 2.3 Establishing Provincial measurement and reporting protocols and impact monitoring tools that are compatible with the national and sub-national Monitoring, Reporting and Verification (MRV) systems: a. Develop MRV Regional and local MRV systems linked to SFM/REDD+

pilots above; b. Review and consider application of the methodologies promoted in the

GEF Carbon Benefits Project (CBP); c. Consult and work closely with the National REDD+ OFP, the WB FCPF

(focused on the Central Highlands on SFM and REDD readiness work), Phase II UNREDD programme and others;

d. Recommend training, capacity building and ToRs supporting project implementation;

e. Recommend awareness raising on SFM/REDD+ and link to the three proposed Project SFM/REDD+ implementation pilots (2.2, above);

f. Detail the method the project will use to monitor carbon; and g. Undertake CCM tracking tool and other baseline information.

d. National Biodiversity Specialist (7 person-months) 43. The Biodiversity Survey Specialist should have: (i) demonstrated understanding of the challenges associated with biodiversity conservation; (ii) a bachelor’s degree or higher from arecognized university in relevant field (biological or environmental sciences, natural resource management, etc); (iii) at least 7 years of professional experience with demonstrated capacity in applying various tools and methods; (iv) experience in the conduct of biophysical surveys and

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resource assessments based on accepted methodologies; (v) good understanding the CCB and the Plan Vivo Standards and requirements, and the HCVF toolkit (for which there is a Vietnamese National Interpretation; (vi) superior analytical and English language communications/writing skills. 44. Reporting to the international SFM/REDD+ Specialist, the Specialist shall support the Executing Agency and the Implementing Agencies to:

(i) review existing biodiversity survey work for the sites; (ii) establish/finalize biodiversity baseline, based on the HCVF system, for

demonstrating project values; supporting Biodiversity Impact Assessment; and facilitating the design of monitoring protocols; and

(iii) assist in building capacity of local partners in the conduct of biodiversity monitoring.

45. More specifically, the Specialist shall conduct the following activities to ensure compliance with a CCB and/or Plan Vivo PDD :

(i) analyze any existing camera trap data and/or reports from any previous surveys in the PAs and/or BZs;

(ii) provide ‘on the job’ training to local PA staff on basic survey technique, cameratrap photo ID and analysis;

(iii) undertake the following biodiversity baseline survey in line with HVC requirements survey activities;

(iv) identify key local hunters, their hunting zones and target species, and discuss hunting history and wildlife catch/observation trends over time, in the three SFM /REDD+ pilot forest sites;

(v) describe wildlife habitats and ecosystems, and associated threats levels of disturbance by hunters/farmers/loggers;

(vi) design, test and implement the biodiversity survey (around CCB Gold Standard/HCVF requirements) – methods should include, but are not limited to: camera-trapping for presence/absence and line-transect sampling for estimation of relative abundance for key species, as well as methods to identify key habitats and ecosystems. This activity includes the design, testing and use of the wildlife field data sheets. Note: Not all taxa need be included in the biodiversity survey, but the survey must be full/rigorous enough to fulfill the requirements of the PPDs/audits. Large mammals must be included but other taxa/species for inclusion will be decided by the consultant, but with the LIC Team Leader and ADB/GEF approval prior to implementation of field work.

(vii) enter and analyze data, and present survey findings (in a report); (viii) facilitate positive interaction between hunters and SFM/REDD+ project team in

the communities for the survey period and thereafter; (ix) document conditions and human impacts as part of a threat assessment that

will provide information necessary to produce a “’without project/no formal biodiversity projection or scenario”;

(x) identify potential negative offsite biodiversity impacts that the project is likely to cause. (At the PDD stage the Project will need to evaluate likely unmitigated negative offsite biodiversity impacts against the biodiversity benefits of the project within the project boundaries, to justify and demonstrate that the net effect of the project on biodiversity is positive); and

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(xi) make suggestions for selecting biodiversity variables/indicators to be monitored and the frequency of monitoring and reporting to ensure that monitoring variables are directly linked to the project’s biodiversity objectives and to anticipated impacts (positive and negative). The work undertaken by the consultant here should be tailored to helping the LIC Team Leader/CTA in the design of biodiversity monitoring plans, including data collection methods for indicators: “Monitoring Plan”.

e. National Socio-Economic/Livelihood Specialist (9 person-months)

46. The Socio-Economic/Livelihood Specialist should have : (i) a postgraduate degree in agribusiness, development studies, economics, or other related field; (ii) at least 5 years of work experience in designing, managing/coordinating, and implementing livelihood promotion programs and projects, preferably of which a part has been gained in the landscapes and/or protected areas of East Asia; (iii) strong socio-economic research and analysis skills, with an emphasis on participatory approaches, including: (a) PRA – e.g. wealth ranking; livelihood ranking; project impact identification and ranking; (b) PRA mapping – e.g. tenure; boundaries; resource/land use and livelihoods; project impact zoning; (c) Focus groups (defined by age, gender, status or profession); (d) Questionnaires (written or spoken) to gather baseline socio-economic data; (e) Interviews with elders, chiefs and other key figures; and (f) SBIA/SIA/Theory of change; (iv) demonstrated expertise and experience with multi-stakeholder engagement and public-private partnership development to achieve conservation goals; (v) ability to work in an interdisciplinary team in a regional context and to travel to field sites in forest landscape areas; and (vi) strong English language communications skills, particularly writing. 47. Reporting to the International SFM/REDD+ Team Leader and supporting the Executing Agency and the Implementing Agencies, the Specialist shall be responsible to carry out a range of specific interventions, including FPIC, socio-economic baselines studies, design of benefit sharing and grievance mechanisms, and opportunity costs analysis, as well as the design and facilitation of a program of highly inclusive and participatory project design, including the use of ‘theory of change’ and social impact tools to ensure that the project is co-designed by the local community, maximizes the benefits to the community, in terms of securing tenure/rights and livelihoods, and ensures that safeguards are identified, upheld and monitored. 48. Background: The Social & Biodiversity Impact Analysis (SBIA). Research undertaken under these terms of reference will be used to complete the following steps/actions under the SBIA:

(i) describe socio-economic conditions at project start (baseline); identify all stakeholder groups (and biodiversity values) that might be affected by the project: “Starting conditions (social baseline) study and stakeholder identification”;

(ii) project social conditions and impacts assuming there is no project and focusing on the variables and outcomes most likely to be affected by project activities: “’Without project’ social (and biodiversity) projection/scenario”;

(iii) describe how social objectives will be achieved, and identification of key assumptions between the project outputs, outcomes, and impacts: “Project design and “with project” social and biodiversity projections”;

(iv) analyze possible negative social impacts and define mitigation measures: “Negative impacts, risks and mitigation measures”;

(v) identify monitoring indicators to measure progress in achieving the desired social outcomes and objectives: “Identification of indicators”;

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(vi) design community monitoring plans, including data collection methods forindicators: “Monitoring plan”; and

(vii) Collect, analyze, and report data, including validating these results with local stakeholders: “Data collection, analysis, and reporting”.

49. Based on observations and interviews in the field, including anecdotal observations/interviews, as well as expert knowledge of agricultural conversion in the SE Asia region, provide the following:

(i) describe each different agricultural cropping system present within and around the project area. List and describe all agricultural land uses and/or crop types within and around the project area. For example, the crop species, length of time cropped, type of crop production system etc. and cycles and stages of production

(ii) draw distinction between temporary slash and burn (rotational cropping) and permanent conversion for agricultural cropping and/or land uses. Estimate theincome derived (e.g. value per hectare) and yield for each agricultural land use identified;

(iii) describe in detail the drivers of conversion for agriculture within and around the project area. Identify and describe the agents of deforestation/degradation that result in agriculture conversion of forest land to crop-land and/or cattle grazing in forest land. Note: An agent of deforestation/degradation is defined as a social group, community, or other entity involved in deforestation or forest degradation;

(iv) describe underlying factors that cause agricultural conversion within and around the project area. Identify and describe the relationship that key factors have with agricultural conversion of forest land to crop-land and/or cattle grazing within/around forests. Use Table 2 below as a template;

(v) identify and describe potential opportunities for sustainable intensification of agriculture within and around the project area. List and describe potential activities that could increase productivity and agricultural yields on existing cropland and/oranimal stocking rates on grazing lands;

(vi) suggest ways or methods by which these activities could be best implementedwithin and around the project area. For example: a. sponsoring pilot and demonstration studies on sustainable agriculture

and agro-forestry; b. strengthening the relations with local agricultural extension services,

colleges and universities; c. establishing a system of small grants or micro-financing for local farmers

to invest into agricultural equipment, infrastructure, seeds, or fertilizer; d. estimate the relative increases in agricultural yields that could be

achieved (as applicable); and e. estimate the maximum possible adoption rate of the project activity in the

future (0 – 100%), based on the willingness of potential project participants to change their practices

Note: An adoption rate of 100% indicates that the project activity would be 100% effective in reducing deforestation or forest degradation drivers that currently result in agricultural conversion and/or cattle grazing.

(vii) provide any recommendations on relevant studies, literature, data or programsrelevant to the above; and

(viii) facilitate implementation of GAP activities and achievements of GAP targets in the relevant component 2.

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f. National Carbon Inventory Specialist (7 person-months)

50. The National Carbon Inventory Specialist should possess: (i) a postgraduate degree in forest science, natural resources management of related field; (ii) at least 3 years working experience in forest resources management, forest inventory monitoring and assessments; (iii) land use change mapping; (iv) solid technical understanding of forest carbon assessment, land use and land use change monitoring using various mapping, modeling and other techniques; and (v) ability to work with a team, with strong English language communications skills. 51. Reporting to the International SFM/REDD+ Team Leader and supporting the Executing Agency and the Implementing Agencies, the National Carbon Inventory Specialist will work closely with the National REDD+/Carbon Specialist and the Remote Sensing specialist in undertaking carbon inventory and accounting procedures. The Specialist will help design and then lead inventory surveys, in the field, and support on the procurement and analysis of remote sensing images and training of staff on these techniques. In general, the specialist shall:

(i) cultivate understanding of relevant forestry/forest carbon/biomass survey methodologies;

(ii) work closely with the national SFM/REDD+ specialist and carbon inventory specialist on the design and lead the implementation of forest carbon inventories and ground truthing work, in the field; and

(iii) assist in build capacity of local practitioners and partners. 52. More specifically, the Specialist will:

(i) support the Remote Sensing Specialist (national) on the design forest carbon data collection;

(ii) lead on forest (biomass) inventory surveys, feeding results to the Remote Sensing Specialist (national) and Remote Sensing and Inventory Specialist (International);

(iii) lead on ground truthing activities, in close communication with relevant specialists

(iv) (see point above) to ensure that land cover and land use change maps are accurate (within the accepted margin of error, as per the chosen standard and methodology); and

(v) provide capacity building support for staff and partners, especially around forest carbon/biomass measurements (with a view to future monitoring of forest carbon) and survey design, and for the design of the provincial MRV, if/where required.

g. National Free Prior and Informed Consent (FPIC) Participation Specialist

(18 person-months) 53. The FPIC Participation Specialist should have: (i) degree or professional certificate innatural sciences, geography, mass communications, environmental law, or related field; (ii) atleast 3 years’ experience mobilizing communities to participate in biodiversity conservation programs or projects; (iii) proven experience in design and conduct of participatory social/environmental assessments and surveys; (iv) familiarity with UNFCCC, SFM/REDD+ policies, guidelines and issues, in particular the protocols related to Free and Prior Informed Consent (FPIC) activities; (v) ability to work with a team to deliver desired outputs; and (vi) strong communications and presentation skills in English.

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54. Reporting to the International SFM/REDD+ Team Leader and supporting the Executing Agency and the Implementing Agencies of, the specialist shall be responsible for the following:

(i) Component 1: FPIC elements (indicative) a. Explain who all project developers/partners are and their role in the

Project; b. Describe how sustainable management of the forest will influence local

lives (by preserving and sharing benefits from the forest); c. Discuss the planned geographical scope of the Projects (site by site), and

decide together on communities that are likely to be affected; d. Explain the project activities:

1. What it will do (socio-economic and biodiversity assessment, forest mapping, capacity building, establish forest patrols, exploring livelihoods and livelihood improvements, road improvements (small scale) and increase river crossing safety, where appropriate;

2. Who will be involved (communities themselves, PAMB, other GoV staff and consultants;

3. Potential project impacts (e.g. land ownership/tenure, access to resources, affected users, and potential risks-cultural/sacred area) to be explored through discussion, SWOT and PRA; and

4. Potential benefits for the people (employment, capacity building, knowing the forest and documenting it to add value to it, studying the importance of the forest to community and documenting it to promote respect of forest by communities, opportunity to be known supported at national and international level);

e. Discuss benefit sharing: Should benefits flow to the community as a whole or to households or individuals, or some combination? How should benefits be shared between villages, communes, district(s), provinces, other with the provinces and GoV at the national level? Should distribution be based on proportional size of assets/land owned or based on need/poorest; distant to forest/resources/road/Should payments be cash or in-kind support/services? 1. Explore existing/traditional institutional structures, relating to

decision making and benefit distribution, and discuss what structure is required for benefit distribution schemes (e.g. traditional rulers, elites, local government/village/commune officials, etc.);

2. Explain to communities that stakeholders affected by the project will have an opportunity to evaluate impacts and raise concerns about potential negative impacts, express desired outcomes and provide input on the project design, both before the project design is finalized and during implementation (as part of on-going FPIC at every step of the projects and the establishment of a grievance redress mechanism); and

3. Document all consultations, including the reasons for the consultation (the where, why and who) and the outputs (minutes, discussions, decisions etc.), and record how communities and other stakeholders potentially affected by the project activities have been identified and engaged.

(ii) Component 2: SBIA – Social baseline elements (indicative)

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a. identify communities in project sites (close to or in the project forests) and project zone (outside the forest but near enough to still be impacted in some way) and identify the representative institutions/individuals of the local population of each;

b. describe the project areas (sites), stating geographical, topographical and population data;

c. describe the project zone, stating topographic, geographic and population data;

d. describe the existing socio-economic and cultural conditions that show the diversity existing in the project area. Description should include such information as ethnicity, age, gender, religious beliefs, education, wealth, etc.;

e. state the existing capacity (education, skills, technical knowledge) of communities in the project areas;

f. describe the current land-use and livelihoods of the forest in the community farming, fishing, hunting, logging, mining, fuel-wood collection, herbs gathering,etc.;

g. describe the most likely future land use scenario in the absence of the REDD+ project, clearly stating the reason you are suggesting this scenario (e.g. statements from community leaders);

h. describe how community will be impacted if the above mention scenario is followed;

i. state any additionally that will arise exclusively as a result of the project, explaining how existing patterns in other areas justify that the benefits being claimed by the project are truly ‘additional’ and is unlikely to occur in the absence ofthe project (e.g. economic benefits with intact forest; peaceful coexistence and use of natural resources);

j. describe the customary and or legal property rights in the communities that arepart of the project area, mentioning existing and or past (last 10 years) conflicts around land;

k. State any activity – legal or illegal - by communities that could potentially affect the long-term goals of the project, mentioning ways in which these threats can be alleviated;

l. state any area that is of sacred value to the community and how project can possibly help to maintain the conditions at this site;

m. carry out wealth ranking in the area (e.g. discuss the attributes of “rich”, “average”, “poor” and “very poor” people in the selected area, come up with indicators and classification per community);

n. carry out landscape analysis to understand the ways in which the resources have been used by community members (e.g. ownership and access to forest, tree off-farm, farmland, etc.);

o. record a short history of the community against which to project a picture ofchanges in forest resources, in agriculture, in local livelihood strategies and insources of income;

p. discover the extent of cash and subsistence reliance on forest resources and the proportion of the total annual livelihood (from all sources) that comes from forest resources;

q. identify and rank the main forest problems, and suggest potential solutions (e.g. problems of law, policy, tenure and access etc.);

r. rank forest products by importance, for cash and/or for subsistence uses;

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s. show the contribution of forests to the achievement of the MDGs (e.g. eradicate extreme poverty and hunger, achieve universal primary education, promote gender equality+empower women, improve maternal health,ensure environmental sustainability, etc.);

t. express the contribution of forestry in monetary terms (e.g. mean income for the country, district, area); and

u. use the data and consultations to facilitate the exploration ideas around local problems/needs and possible solutions using a theory of change method (participatory project design).

h. Forest Carbon/REDD+ Specialist for MRV program (18 person- months)

55. The Forest Carbon/REDD+ Specialist will require: (i) postgraduate degree in forest science, natural resources management of related field; (ii) at least three years’ working experience of projects involving forest carbon surveys and accounting for REDD+; (iii) experience in carrying out REDD+ feasibility studies, forest carbon inventories, development of PDDs for Plan Vivo, VCS and CCB; (vi) relevant experience in the design and implementation of carbon M&E and/or REDD+-specific MRV, at any scale; (v) awareness and understanding of UNFCCC/SBSTA negotiations, progress and current context, especially with regard to REDD+ MRV and NAMAs; (vi) experience with the audit (validation) process of a REDD project; and (vii) strong English language communications (especially written) skills. 56. Reporting to the SFM/REDD+ Team Leader, working in close collaboration with other forest carbon consultants, and supporting the Executing Agency and the Implementing Agencies, the Specialist will ensure the technical development and implementation of cost effective monitoring and evaluation systems for carbon measurements and verification of forest mapping, as well as systems of accounting accuracy and reliability related to emissions reductions components of the pilot SFM/Reduced Emissions from Deforestation and Degradation (REDD+) project, together with the design of site-based MRV and provincial level capacity building for MRV and SIS. 57. In general, the specialist will:

(i) assist the national SFM/REDD+ Specialist to design, implement and ensure best practice around forest carbon/REDD+ technical activity; and

(ii) build capacity of local partners through carbon learning and knowledge exchange, especially in the fields of carbon accounting, carbon M&E/MRV and participatory carbon monitoring.

58. More specifically, the specialist will:

(i) Support the development and implementation of the carbon components in the REDD+ pilot including helping to undertaking project feasibility assessments, development of baseline/reference and project scenario forecasts, implementing field-based forest carbon stock assessments, undertaking project risk assessments;

(ii) Input to the design and implementation of workplans and budgets for REDD+ technical activities;

(iii) Support the implementation CCB/Plan Vivo/VCS methodologies (as appropriate) in a manner fitting local jurisdictional requirements and local needs in the field;

(iv) Work with other team specialists on carbon data compilation and analysis; (v) Help with the development of relevant project documentation, supporting

evidence and quality control procedures appropriate for third party auditing of

134 Appendix 3

REDD+ technical activities, in particular VCS project document preparation and writing;

(vi) Support the Team Leader and senior specialists with the validation/verification process at the/each project site;

(vii) Follow relevant international developments including standards and compliance markets, to provide institutional advice on the current and future strategic implementation of REDD+ technical activities;

(viii) Support the design and lead on the delivery of training, and facilitate capacity building, for provincial staff and partners on carbon aspects of REDD+ implementation and MRV/SIS;

(ix) Help to ensure key issues and lessons learned are shared between projects to increase efficiency of implementation, and that issues arising are quickly flagged throughout the network of Project Development Teams to avoid potential pitfalls;

(x) Work with the other REDD+ specialists on the team, but take a leading role in the design of site (project) level and/or sub-national MRV development, as required, ensuring close coordination and harmonising with similar developments taking place under the auspices of UN-REDD, through regular communication with key staff ofUN-REDD and the VRO (within VNForest); and

(xi) Support the senior specialists to integrate approaches, lessons learned, key findings from FFI REDD+ technical activities into key relevant national and international fora (as applicable to the activity), including regular and coordinated communication with VNForest/ VRO, UN-REDD and FCPF.

i. National Remote Sensing Specialist for MRV program (12 person-months)

59. The Remote Sensing Specialist should have: (i) relevant advanced (MSc or PhD) degree in forestry or related subject; (ii) experience in satellite technology for landcover analysis (e.g. LandSat, SPOT, RapidEye, etc.) and in procurement of satellite images /tiles; (iii) at least three years working experience in forestry surveys and accounting for REDD+; (iv) experience in carrying out ground truthing, linked to remote sensing and the production ofland cover and land use change maps; (v) proven skills in forestry and specifically in biomass surveys, their design and implementation; (vi) solid skills in data analysis, related toforestry/biomass calculation; (vii) ability to understand/use GIS and RS software; (viii) knowledge of Allometric (forest carbon) equations; and (ix) strong English language communications skills. 60. Reporting to the SFM/REDD+ Team Leader and supporting the Executing Agency and the Implementing Agencies, the Specialist will play a leading role in theforest inventory and data collection, developing methodology for deciding the number, extentand location of plots, methodology to use and assures the accuracy of the information implementing forest carbon inventory, provisional analysis of data to facilitate REDD+/carbonpilot. 61. In general the Specialist will:

(i) promote understanding of relevant REDD principals, standards/requirements, project concepts and processes;

(ii) work closely with the national SFM/REDD+ specialist and carbon inventory specialist on the design and implementation of forest carbon inventories and ground truthing; and

(iii) assist in build capacity of local practitioners and partners.

62. More specifically, the Specialist will carry out the following activities: (i) review existing REDD+/carbon Standard Operating Procedures and

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revise/design context specific guidelines for the project and staff to follow; (ii) design forest carbon data collection, including the number, selection and type of plot, as well as a methodology for ground trothing; (iii) lead on forest (biomass) data analysis, feeding results to the Remote Sensing

and Inventory Specialist (International); (iv) eork closely with the Carbon Inventory Specialist (national) to plan, coordinate

and implement both the ground trothing work (land cover map validation(s)) and forest carbon surveys (as above); and

(v) provide capacity building support for provincial MRV, where required. D. INDIVIDUAL CONSULTANTS

63. The following consultants have well-defined tasks within a limited period of time and will be recruited using individual consultant selection method in accordance with ADB’s Guidelines on the Use of Consultants (2013, as amended from time to time).

a. International Chief Technical Advisor (4 person-months)

64. Ideally the LIC Team Leader should assume the role of the Chief Technical Advisor (CTA) for the additional financing to ensure (i) integration of the current BCC Project and the additional financing; and (ii) project management efficiency. If the LIC Team Leader is not selected as the CTA, the CTA will closely coordinate with the LIC Team Leader for all activities of the current BCC project and the additional financing. The CTA will lead consultants’ technical support to Subcomponents 1.1 to 1.4 and Subcomponent 2.1 of the additional financing, and where applicable will closely coordinate with the SFM/REDD+ Team Leader of Subcomponents 2.2 and 2.3 (Package 3) of the additional financing. 65. The CTA should have: (i) relevant advanced (MSc) degree in forestry, economics or environmental science; (ii) at least ten years’ work experience in the development and management of projects involving biodiversity and protected area management; (iii) experience in community forest management; (v) excellent track record of managing multilateral or bilateral funded forestry projects; and (iv) experience working in Viet Nam, particularly on biodiversity, protected area and sustainable forest management projects. Experience as a Team Leader in ADB-funded is a valuable asset. 66. Reporting to the CPMU Director, the CTA will:

(i) assume overall responsibility for implementing the technical support, including preparation and implementation of overall work plan for the additional financing

(ii) provide team leadership, coordination, financial management and administrative input for the additional financing;

(iii) set up and obtain approval by the CPMU Director of a system in which consultant teams of the current BCC project and the additional financing are working together to ensure integration of the BCC project, including the current project and the additional financing;

(iv) manage the Biodiversity and Protected Area Management Consultant Team (Package 2) and ensure coordination with the SFM/REDD+ Team Leader of Package 3 to provide integrated technical support to the executing agency and IAs to implement the additional financing;

(v) ensure that all consultants are fully briefed on local situation and their tasks; (vi) review, and modify when necessary all consultant terms of reference in

consultation with the National Director and the ADB Project Officer;

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(vii) with input from the team, develop a comprehensive capacity development plan to deliver Subcomponents 1.1 to 1.4 and Subcomponent 2.1 of the additional financing, and oversee its implementation;

(viii) set up a monitoring and reporting system for implementation by the consultants team;

(ix) monitor progress against project implementation schedule and collate and coordinate preparation and submission of periodic progress reports and technical reports on project findings and experience;

(x) assess any existing technical guidelines for the implementation of Subcomponents 1.1 to 1.4 and Subcomponent 2.1 of the additional financing; and

(xi) advise on the preparation of technical guidelines if necessary for Subcomponents 1.1 to 1.4 and Subcomponent 2.1 of the additional financing. b. International SFM/REDD+ Contract Design Specialist (0.5 person-

months)

67. The International SFM/REDD+ Contract Design Specialist will be recruited by the CPMU. The SFM/REDD+ Contract Design Specialist should have: (i) a postgraduate degree in forest science, natural resources management of related field; (ii) at least 10 years working experience in forest resources management, forest inventory monitoring and assessments;(iii) land use land cover change mapping in East Asia;(iv) solid technical understanding of UNFCCC, SFM/REDD+ policies, guidelines and safeguards, as well as forest carbon markets; (v) demonstrable experience in design and implementation of REDD+ and “REDD-readiness” projects in East Asia; and (vi) significant supervisory and contract development and administration experience. 68. Reporting to the CPMU, the Consultant will be responsible for development and coordination of specialist contracts related to SFM/REDD+ activities in Subcomponents 2.2 and 2.3, in consultation with MONRE and project implementation team:

(i) Review overall work plan and re-affirm requirements for individual consultants under SFM/REDD+ and MVR;

(ii) Define skills requirements, desired qualifications, scope of work, period of performance for each position;

(iii) Develop full TOR documentation for each consultant and the Request for Proposal for the SFM/REDD+/MRV package (package 3 above);

(iv) Assist in preparation of contract packages and bid documents, for consultants, as needed;

(v) Assist in selection process, in particular to review qualifications and experience of short-listed candidates and provide inputs, as required;

(vi) Assist in drafting of consultant contracts, as needed; and (vii) Outline a roadmap for the SFM/REDD+ sub-component of the Additional

Financing that details the sequence of steps, activities, roles and responsibilities and expected outcomes. c. National Protected Area Institutional Specialists (2 positions x 3

months = 6 person-months for Quang Nam and Quang Tri) 69. The National Protected Area Institutional Specialists will be recruited by Quang Nam and Quang Tri PPMUs.

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70. The PA Institutional Specialists should have: (i) demonstrated understanding of the challenges associated with institution and capacity building for biodiversity conservation; (ii) a bachelor’s degree or higher from a recognized university in relevant field (biological or environmental sciences, natural resource management, etc); (iii) at least 7 years of professional experience with demonstrated capacity in applying various tools and methods in Vietnamese context; and (iv) strong English language communications skills, including written report preparation. 71. Reporting to the respective PPMU and DARD, the Specialists will provide technical support and guidance to facilitate the process for establishment of Protected Area Management Boards in Ngoc Linh and Ho Chi Minh Trail (respectively). The Specialists will:

(i) review all relevant national and provincial legal frameworks and guidelines on PAMB establishment and staffing;

(ii) prepare the plan for the establishment of the Ngoc Linh and Ho Chi Minh legendary trail nature reserves following a standard form and format which is currently used

(iii) define the PAMB structure and staffing requirements to operate the reserve; (iv) identify the key role and relation, reporting, financing system for the PAMB to

operate and plan to ensure that the biodiversity and nature value within the PA will be secured and sustainably managed;

(v) define effective measures and monitoring system to ensure the PAMB will successfully work with departments, local authority and organizations in implementation of PA priority activities;

(vi) undertake necessary consultation meeting on the preparation of the plan with MARD, DARD, Department of Home Affairs and other provincial agencies and stakeholders;

(vii) undertake necessary consultation workshop on the plans with local community and relevant stakeholder in the buffer zone surrounding the proposed PA; and

(viii) assist and facilitate consultation meeting on the plan before its finalization.

d. National Protected Area Management Specialists (2 positions x 4 months = 8 person-months for Quang Nam and and Quang Tri)

72. The National Protected Area Management Specialists will be recruited by Quang Nam and Quang Tri PPMUs. 73. The PA Management Specialists should have: (i) demonstrated understanding of the challenges associated with biodiversity conservation; (ii) a bachelor’s degree or higher from a recognized university in relevant field (biological or environmental sciences, natural resource management, etc.); (iii) at least 7 years of professional experience with demonstrated capacity in applying various tools and methods in a Viet Nam context; and (iv) strong English language communications skills, including written report preparation. 74. Reporting to the respective PPMU and DARD, the Specialist will support the preparation of Master Plans for the Ngoc Linh and Ho Chi Minh Trail Legendary Trail Protected Areas. Specifically, the Specialists shall:

(i) review all relevant national and provincial legal frameworks and guidelines on PA management and planning – especially refer to Decree 117/2010/ND-CP and its guiding circulars;

(ii) prepare the master plan with period of 10 year and vision for 20 year following a standard form and format which is currently used;

138 Appendix 3

(iii) define a mechanism for management and regulation of activities within the PA and its buffer zones;

(iv) define a means by which policies, intentions and management decisions are open negotiation and discussion with PA and buffer zone inhabitants;

(v) identify coherent statement of objectives and the steps in achieving the objectives of the PA and its values and a system for relating management decisions to that value system;

(vi) define the PA environment, and in particular, its biodiversity values, the conservation priorities of the PA and the ways in which these values can be safeguarded and protected;

(vii) identify the basis for attracting local, national and external resources for management of the PA;

(viii) define effective measures to ensure integration with other departments and organizations in implementation of PA priority activities;

(ix) define the ways in which the management board organize to carry out the activities outlined in the master plans;

(x) undertaking necessary consultation meeting on the preparation of the master plan with MARD, DARD and other provincial agencies and stakeholders;

(xi) undertake necessary consultation workshop on the Master plans with local community and relevant stakeholder in the buffer zone surrounding the proposed PA; and

(xii) assist and facilitate consultation meeting on the master plan before its finalization.

e. Target Species Conservation Specialists (3 positions x 6 months =

18 person-months) 75. The Target Species Conservation Specialists should have: (i) post graduate degree in zoology, biology, natural science or relate field;(ii) at least 7 years’ experience with implementation of terrestrial biodiversity conservation projects; (iii) demonstrated skills in design and execution of biological surveys, data collection, monitoring and analysis; (iv) solid technical understanding of international and national policies and regulations related to wildlife protection and management, especially in Viet Nam; (v) familiarity with the institutional framework for biodiversity conservation, and the tools and methods advocated by such organizations as the IUCN, (vi) strong English language communications skills, including preparation of technical reports. 76. Reporting to the CTA, and working closely with the Provincial Development of Agriculture and Rural Development (DARD), the Specialists shall provide technical support for preparation of provincial species action plans (one specialist/target species). This will involve:

(i) teview all relevant information on target species (population, distribution, threats, conservation issue and current actions) in the 8 NRs;

(ii) based on this review prepare a review report the individual target species conservation that outlines key pressures and options for their management and protection;

(iii) prepare three species conservation action plan for the GEF project sites; (iv) prepare a detail implementation plan to ensure that the staff of the protected area

will be train and the target species will be well monitored, reported with appropriate conservation action;

Appendix 3 139

(v) identify they key budget sources to ensure that the plans will be effectively implemented and monitored at individual PA and at the province where the project will be implemented;

(vi) prepare a monitoring and evaluation plan and mechanism to ensure that the key conservation and monitoring activity will be implemented and report during the project implementation with appropriate indicators;

(vii) lead and undertake necessary consultation on Action plan with relevant stakeholder; and

(viii) undertake necessary revision and finalize the action plan.

f. Procurement Specialist (6 person-months)

77. The procurement specialist for the additional financing will be the same procurement specialist under the current BCC Project. The scope of work of the procurement specialist will be extended to include that of the additional financing. More specifically, the procurement specialist will:

(i) setup the procurement system following the guidelines of the ADB and relevant government provisions for the procurement of goods and services;

(ii) assist the project for the preparation of detailed specifications and tender documents for the procurement of goods and services including local shopping, National Competitive Bidding or International Competitive Bidding, community services contracts;

(iii) set up a procurement and contract management system for the project to handle all local competitive bidding and local shopping procurements of goods and civil works undertaken by the implementing authorities and for provinces and districts to handle service contracts with communities;

(iv) establish a system of block grants and service contracts or seed capital disbursement to communities for services and investments;

(v) assist Project Director in recruiting prequalified institutions, commercial organizations, NGOs or private individuals to provide services for developing proposed subprojects into feasibility studies for consideration for project funding;

(vi) assist the Project Director in all procedures relating to procurement of equipment and vehicles in accordance with the methods to be used for the purchase of supplies for the Project, ensuring that both Asian Development Bank (ADB) and Government requirements are followed; and

(vii) provide on the job training in procurement and contract management to the procurement officer at national and provincial levels and other concerned staff.

g. M&E Specialist (2 person-months)

78. The M&E specialist for the additional financing will be the same M&E specialist under the current BCC Project. The scope of work of the M&E will be extended to include that of the additional financing. Reporting to the National Project Director, the M&E specialist will:

(i) critically review the project design and monitoring framework shown in the PAM of the additional financing paying particular attention to the targets, indicators, sources of verification, and risks and assumptions, and comment upon any revisions necessary to ensure that the activities and targets match the project goals;

(ii) review existing BCC monitoring framework indicator baselines and all baseline field data related to socio-economic status, forest status and biodiversity within

140 Appendix 3

the project area. Ensure that any data gaps will be addressed during the design of the comprehensive monitoring system;

(iii) design an overall project M&E system describing objectives, methodology for data collection and analysis, implementation arrangements, expected deliverables, and a total budget split into annual amounts, following requirements by ADB and GEF;

(iv) monitor all project activities, expenditures and progress towards achieving the project output;

(v) monitor and evaluate overall progress on achievement of results; (vi) supervise implementation of the M&E system across the project provinces and

liaise with the Ethnic Minorities Office, Social and Environment Safeguards project consultants and the executing agency and IAs to ensure consistency of approach and quality control of data;

(vii) collect M&E data of the whole project and develop a data system of project activities and outcomes;

(viii) analyze all data and prepare monitoring and evaluation reports highlighting the impact of the project on income levels of participating households, gender and ethnic minority mainstreaming, forest condition, watershed function and biodiversity richness;

(ix) liaise with ADB concerning key issues to prioritize during ADB Review, mid-term and project completion evaluation missions;

(x) undertake ‘training of trainer’ (ToT) sessions for selected project staff; (xi) host annual M&E workshops to disseminate findings; (xii) make recommendations for improvements to the M&E system (both impact

monitoring and forest/biodiversity, socio-economic monitoring); and (xiii) perform other duties as required.

Appendix 4 141

FINANCIAL MANAGEMENT ASSESSMENT

I. INTRODUCTION

1. This financial management assessment (FMA) was prepared during fact finding mission on 22 to 29 April 2014,1 in accordance with ADB’s Guidelines: Financial Management and Analysis of Projects2 and the Financial Due Diligence: A Methodology Note.3 This FMA incorporates financial management internal control and Risk Management Assessment as required by the Guidelines. Annex 1 to Appendix 4 presents the consolidated results of the completed FMA Questionnaires from the executing agency (executing agency) and three implementing agencies (IAs). This report was prepared by reviewing documents, interviewing the staff of the Government agencies, consultants, targeted project beneficiaries and other stakeholders. Risks and mitigating actions were identified together with the stakeholders.

2. The purpose of the FMA was to determine the robustness of the accounting, financial controls, external and internal audit arrangements, and the capability of the executing agencys and IAs to meet all the fiduciary requirements which are set out in the grant agreement and other project documents. Within this context, this FMA report presents results of a FMA of the executing agency and the three IAs. It includes agreed project financial arrangements, financial due diligence of the executing agency and its associated entities to deal with financial risks and risk management of the project.

II. EXECUTIVE SUMMARY OF FINDINGS AND CONCLUSIONS

A. Project Description

3. The Global Environment Facility (GEF) Additional Financing (the Project) will support complementary and essential activities to the ongoing BCC Project by filling thematic and spatial gap to (i) build PA management capacities and stakeholder collaboration to reduce threats to the PAs and the their surroundings; (ii) improve incentives for local community to engage in conservation; (iii) establish one new PA and two new PA Management Boards (PAMB); (iv) create benefit sharing mechanisms with the local communities through support to establishment of payment for forest ecosystem services (PFES); (v) establish a sustainable forest management (SFM)/reducing emissions from deforestation and forest degradation (REDD+) pilot to improve forest protection, land use practices and reducing deforestation and land degradation pressures; and (vi) build provincial monitoring capacity and develop an impact monitoring framework linked to emerging national carbon stock measurement, reporting and verification (MRV) system. B. Risk Assessment

4. The following are key anticipated risks: (i) potential slow implementation due to constrained capacity to formulate innovative policy and mobilize inter-agency coordination from national to village level; (ii) decreasing stakeholders commitment to the program due to perception of weak short term benefits and outcomes by line agencies, and (iii) the institutional

1 FMA Report is not available for the ongoing project.

2 ADB. 2005. Financial Management and Analysis of Projects. Manila. Refer to page 14 of Knowledge Management

Addendum for more information on the Financial Management Assessment. 3 ADB. 2009. Financial Due Diligence A Methodology Note. Manila. Refer to page 3 for more information on the

Financial Management Assessment.

142 Appendix 4

changes may not translate into more sustainable livelihoods for the rural poor households, key targeted beneficiaries; (i) low capacity of the Protected Area Management Boards (PAMBs), to implement the Project at community level, since PAMBs were just newly established; (ii) lack of viability and sustainability of village-based community groups due to limited budget allocation and lack of potential supports after the project closing date; (ii) inadequate progress broadening and deepening ownership of Viet Nam’s REDD++ agenda due to the complexity of this program and lack of resources to maintain investment sustainability.

C. Implementation Requirements

5. MONRE has experienced in managing many projects funded by various international financiers including the World Bank, ADB, JICA, GEF, DANIDA, etc. The projects financed by these institutions include agriculture, forestry and livelihood improvement projects. Following the ongoing implementation arrangement, MONRE will delegate day-to-day project implementation responsibilities to the established Central Project Management Unit (CPMU), led by a part time project director and deputy project director, and a full time Project coordinator who is responsible for day to day implementation of national level activities. CPMU will be supported by provincial PMUs that have been established in the three participating provinces. The Government through CPMU and PPMUs will finance minimal operation costs and salaries of staff seconded to the Project from the counterpart funds, while the GEF additional financing will finance all other Project-related expenditures.

D. Conclusion

6. The assessments indicate that the prevailing government financial, accounting, and auditing rules and systems meet the generally acceptable international accounting and auditing standards. The Government has adequate internal control systems and financial reporting arrangements. The executing agency and IAs have worked in the past with ADB and are implementing the ongoing ADB funded BCC project. More intensive monitoring and guidance are required to improve the overall performance of executing agency/IAs in implementing financial management the project.

III. DETAILED FINDINGS

A. The Proposed Project

7. Impact, Outcome and Outputs. The Project will integrate biodiversity conservation, climate resilience and sustainable forest management in the Central Annamites4 landscape of Viet Nam. As such, it is nested within the impact of the overall BCC Project,5 which will remain unchanged. However, the outcome of the ongoing BCC project will be expanded to sustainably managed Annamites conservation landscape in Quang Nam, Quang Tri and Thua Thien Hue provinces, including both the PAs and the biodiversity corridors between them. Incrementally the Additional Financing will support improved management of 231,000 hectares of high biodiversity lands within the PAs and directly benefit about 6.000 people from 40 villages in 12

4 Known locally as the Trung Truong Son landscape.

5 Sustainable, climate resilient forest ecosystems benefiting local livelihoods and downstream users in the Central

Annamites of Viet Nam.

Appendix 4 143

communes6 in the three participating BCC provinces. Together, the ongoing BCC Project and the Additional Financing will indirectly benefit 126,000 people in the landscape through enhanced ecosystem services, improved carbon stocks and enhanced resilience to climate change, sustainable forest benefit sharing and improved conservation based livelihoods. The ongoing BCC Project’s design and monitoring framework has been revised to incorporate the GEF-financed activities. Outputs 1, 2 and 3 of the ongoing BCC Project will be extended to include scope of the Additional Financing in 7 existing PAs and one PA to be established, and their surroundings.7 Output 4 of the ongoing BCC Project on project management will be strengthened with support from the Additional Financing.

8. Investment and Financing Plans. During the preparation of the ongoing BCC project, consultations were undertaken and consensus was reached with the GMS governments to apply for a grant from GEF to support complementary activities to the GMS BCC Project. A Program Framework Document for the GMS Forests and Biodiversity Program was prepared and approved by the GEF Council in November 2011. The program comprises a set of national projects, including an allocation of $3.94 million for Viet Nam. On 31 August 2012, the government requested GEF's financial assistance of $0.15 million for preparation of the use of the remaining $3.79 million investment. On 23 October 2014, GEF endorsed a grant equivalent to $3.79 million as additional financing to the BCC project to accommodate its modified scope. The grant will be administered by ADB with a $0.75 million contribution from the government and no additional contribution from ADB or the beneficiaries. Expenditures under the additional financing will be in parallel with those of the ongoing project, and a separate imprest account for the additional financing will be established in the executing agency. The financial management arrangements as defined in the project administration manual of the additional financing are considered adequate. The revised investment and financing plans are in Tables A4.1 and A4.2.

Table A4.1: Revised Investment Plan ($ million)

Item Current Amount

a

Additional Financing

b Total

A. Base Costc

1. Institutional and community strengthening 2.18 0.47 2.65 2. Biodiversity corridors restoration and protection 12.14 0.53 12.67 3. Livelihood and small-scale infrastructure 13.45 2.21 15.66 4. Project management and support 5.08 0.74 5.82

Subtotal (A) 32.85 3.95 36.80 B. Contingencies

d 0.55 0.59 1.14

C. Financing Charges during Implementation 0.67 0.00 0.67 Total (A+B+C) 34.07 4.54 38.61

a Refers to the original amount. Includes taxes and duties of $2.66 million to be financed from the ADB loan.

b Includes taxes and duties of $359,0, to be financed by GEF in compliance with OM H3/OP (para. 9).

c In mid-2010 prices for the ongoing BCC project and mid-2013 prices for the additional financing.

d Physical contingencies are computed at 10% for civil works and 10% for training, surveys, and studies. Price

contingencies are computed at 1.0% for 2015, 1.4% for 2016 and 2017, and 1.5% thereafter on foreign exchange costs and at 3.5% on local currency costs; includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate.

Source: Asian Development Bank estimates.

6 Some of the 12 communes may overlap with the ongoing BCC Project communes. The selection of the communes

and villages will follow a participatory process using the selection criteria during the inception of the Additional Financing.

7 The list of protected areas can be found in Appendix 3 - GEF Request for CEO endorsement.

144 Appendix 4

Table A4.2: Revised Financing Plan

Source Currenta Additional Financingb Total

Amount ($ million)

Share of Total (%)

Amount ($ million)

Share of Total (%)

Amount ($ million)

Share of Total (%)

ADB 30.00 88.05 0.00 0.00 30.00 77.70 GEFb 0.00 0.00 3.79 83.48 3.79 9.82 Government 2.85 8.37 0.75 16.52 3.60 9.32 Beneficiaries 1.22 3.58 0.00 0.00 1.22 3.16 Total 34.07 100.00 4.54 100.00 38.61 100.00 a

Refers to the original amount. b

Administered by ADB. Excluding agency fee of $341,546. Local transport and insurance charges are eligible under the GEF financing.

Source: Asian Development Bank and the Government staff estimates.

B. Country FM Issues and Progress

9. Public Financial Management. Over the past decade, Vietnam has made strides in establishing a sound public financial management system. With the adoption of the first organic budget law in 1996 and its revision in 2002, a legal framework for public resource management has been put in place. A centralized treasury system is being set up with branches extending from the center to all provinces and districts to provide basic essential financial services to all government agencies. Steady progress has been achieved in making the budget more predictable and pro-poor, and the budgeting process more transparent and participatory. Substantial efforts have also been made in recent years to improve transparency in the use of public resources through disclosure of information on detailed government spending as well as expenditure policies, regulations and procedures.

C. Risk Analysis and Mitigation Measures 10. From the project preparation activities and considering the experience from the ongoing project, the following are assessed to be risks associated with financial management (FM) aspects of the additional financing and proposed mitigation. The overall potential risks8 for the GEF additional financing here is qualified as being “medium”, and will be improved to “Low” i.e. after mitigation measures. The following risk assessments are based on existing circumstances, staffing and procedures, and include recommendations for risk mitigation measures.

8 H = High, S = Substantial, M = Moderate, N = Negligible or Low.

Appendix 4 145

Table A4.3: Financial Due Diligence Based - Risk Analysis and Mitigation Measures Potential Risks Assessment

without Mitigation

Management Plan or Measures Assessment with

Mitigation A. Key Risks low capacity and lack of experience of eight PAMBs to implement the project

medium The GEF Additional Financing will allocate adequate incremental costs and capacity building to empower the PAMBs, as the entry points, to implement the project, and coordinate activities from the province and village levels. PPMUs will also recruit additional full time one Accountant Assistant and Coordinator in PPMU

low

Duplication of efforts regarding SFM/REDD+ and MRV.

medium Project design; inception meetings; working planning and implementation; harmonized updates provided through national focal points, provincial management units and ongoing consultation.

low

Limited implementation capacities in the provinces and lower levels to meet all project requirements and guidelines set by ADB and the Government

medium Ensure that qualified persons are selected to manage CPMU and PPMUs and that capacity building investments are included in the consulting services; equipment and vehicles and/or adequate travel allowance are budgeted in the project.

low

B. Financial Management Government provision of qualified staff and counterpart funds is inadequate and untimely.

medium The project will strengthen the role PPCs to increase their responsibility in financing and monitoring project investments. Complementarities between investments funded by the ongoing BCC and the GEF financing will be further enhanced.

low

PFES revenues may not reach the right beneficiaries and small farmers in remote areas may not be able to access these revenues for lack of awareness and capacity.

medium Project participatory planning framework will facilitate farmers to organize into groups and develop capacity to prepare proposals and forest protection contracts as pre-requisite to access and use available and new PFES revenues.

low

Potential misuse of block grants

medium Block grants will flow after village-based work plans are endorsed by PAMBs and PPMUs, be paid by implementation progress and be monitored. Database system; community-based institutions will be strengthened through capacity building to take over such function; avoid overlapping from other funds such as CDF, and prepare proper guidance before using the funds.

low

C. Procurement Procurement plan has not been well

medium Procurement plan for GEF will be revisited. ADB staff will work closely with CPMU, PAMBs

low

146 Appendix 4

Potential Risks Assessment without

Mitigation

Management Plan or Measures Assessment with

Mitigation prepared the existing three PPMUs, and other key

stakeholders to interlink the procurement plan between the ongoing BCC and the GEF Additional Financing; and monitor procurement process accordingly.

Lack of understanding on procurement procedures

medium Procurement guidelines both from ADB and the Government are disseminated to bidders, suppliers, contractors, and consultants. The project will observe the highest standards of ethics in procurements and execution of contracts. Sanctions will be applied if fraud and corruption are discovered.

Low

D. Anticorruption and Other Matters Poor coordination between CPMU, DONREs, DARDs and other agencies at provincial to lower levels

medium This should be minimized in the design through the appointment of one PPC vice-chairman to assume responsibility for provincial agency coordination, rather than the more complex steering committee; PAMBs will be empowered to coordinate various stakeholders.

low

Poor coordination between the ongoing BCC project and GEF Additional Financing

medium Encourage CPMU to work closely with three PPMUs and other stakeholders to improve the complementarities between the BCC project and GEF Additional Financing

low

Potential misused of funds, including bribery on various contracts

medium All information on procurement of goods and services will be posted on the project's website. Transparency will be ensured in the bidding procedures and bidding selection criteria, and an experienced evaluation committee will be appointed. All contracts financed by ADB and other financiers will include a provision specifying the right of ADB to audit and examine the records and accounts of executing agencies, implementing agencies, the contractors, suppliers, consultants, and other service providers. Mass media will be used for bidding announcements. Limited bidding and/or restriction of the number of tender documents for sale will be avoided. The process of bidding evaluation and selection will be monitored, including the process of tender evaluation and selection. Training will be provided to contractors, CPMU and PPMUs explaining the repercussions of bribery.

low

Overall Medium Low ADB = Asian Development Bank, BCC = Biodiversity conservation corridors, CPMU = central project management unit, GEF = global environmental facilities, PAMBs = Protected Area Management Boards, PFES = payments for forest environmental services, PPC = provincial people’s committee, PPMU = provincial project management unit, REDD = Reducing emissions from deforestation and forest degradation. Source: Asian Development Bank and technical assistance estimates.

Appendix 4 147

IV. FUND FLOW AND DISBURSEMENT ARRANGEMENT

A. Grants from ADB and Other Financiers 11. The following chart show the project organization structure and fund flow mechanisms:

Figure 2. Funds Flow Diagram

B. Disbursement and Liquidation Procedures for Counterpart Funds

12. Only one item is to be financed from Government counterpart funds: Government recurrent costs covering salaries of staff seconded to the Project which will be financed through the regular payroll mechanism for Government employees and any bonus adjustments as per Government rules and regulations. 1. Accounting 13. The executing agency, PPMUs and PAMBs will maintain separate project accounts and records by funding sources, including the counterpart fund for all expenditures incurred in connection with the Project. Project financial statements will follow international accounting principles.

148 Appendix 4

2. Auditing 14. The CPMU will cause the detailed consolidated project financial statements including the counterpart fund to be audited in accordance with international standards on auditing by an auditor acceptable to ADB. The audited project financial statements will be submitted in the English language to ADB within 6 months of the end of the fiscal year by the executing agency. ADB reserves the right to verify the project's financial statements to confirm that the share of ADB’s financing and other sources including the counterpart fund is used in accordance with the agreed policies and procedures. 15. The Government and the CPMU have been made aware of ADB’s policy on delayed submission, and the requirements for satisfactory and acceptable quality of the audited project financial statements. In case of delays in submission of audited account and financial statements, a formal warning will be issued, and disbursements may be suspended, for accounts more than 6 months overdue.

V. ACCOUNTING, REPORTING, PUBLIC DISCLOSURE AND ANTICORRUPTION A. Accounting Policies/Procedures and Public Disclosure

1. Accounting and Reporting

16. MONRE, the executing agency through its CPMU, and the three provinces of Quang Nam, Quang Tri, and Thua Thien which are the IAs through their respective PPMUs will maintain separate books and records by funding source for all expenditures incurred on the project. The CPMU will prepare consolidated project financial statements in accordance with the government's accounting laws and regulations which are consistent with international accounting principles and practices.

2. Auditing and Public Disclosure

17. The CPMU will cause the detailed consolidated project financial statements to be audited in accordance with International Standards on Auditing and with the Government's audit regulations, by an independent auditor acceptable to ADB. The audited project financial statements will be submitted in the English language to ADB within six months of the end of the fiscal year by the executing agency. The terms of reference of auditor is given in Annex 2. The CPMU will discuss the updated TOR with MOF and ensure that the Project will allocate adequate budget for the external auditing. 18. The annual audit report will include an audit management letter and audit opinions which cover (i) whether the project financial statements present a true and fair view or are presented fairly, in all material respects, in accordance with the applicable financial reporting framework; (ii) whether loan and grant proceeds were used only for the purposes of the project or not; (iii) the level of compliance for each financial covenant contained in the legal agreements for the project; (iv) compliance with the imprest account/sub account procedure; and (v) compliance with use of the SOE procedure certifying (a) to the eligibility of those expenditures claimed under SOE procedures, and (b) proper use of the procedure in accordance with ADB’s Loan Disbursement Handbook and the project documents.

Appendix 4 149

19. Compliance with financial reporting and auditing requirements will be monitored by review missions and during normal program supervision, and followed up regularly with all concerned, including the external auditor. 20. The Government of Viet Nam, MONRE and the three participating provinces have been made aware of ADB’s approach to delayed submission, and the requirements for satisfactory and acceptable quality of the audited project financial statements. ADB reserves the right to require a change in the auditor (in a manner consistent with the constitution of the borrower, or for additional support to be provided to the auditor, if the audits required are not conducted in a manner satisfactory to ADB, or if the audits are substantially delayed. ADB reserves the right to verify the project's financial accounts to confirm that the share of ADB’s financing is used in accordance with ADB’s policies and procedures. 21. Public disclosure of the project financial statements, including the audit report on the project financial statements, will be guided by ADB’s Public Communications Policy (2011).9 After review, ADB will disclose the project financial statements for the project and the opinion of the auditors on the financial statements within 30 days of the date of their receipt by posting them on ADB’s website. The Audit Management Letter and the Audited Financial Statements will not be disclosed. B. Anticorruption

22. ADB’s Anticorruption Policy (1998 as amended to date) was explained to and discussed with the executing agency and IAs’ staff and other stakeholders. The ADB support to improve sector governance through improvement in the financial management and procurement systems, implementation of Risk Assessment and Risk Management Plan (RARMP) at the project level, and improve local accountability through support for decentralization initiative is expected to further improve governance environment. 23. The primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and with management. It is important that management, with the oversight of those charged with governance, place a strong emphasis on fraud prevention, which may reduce opportunities for fraud to take place, and fraud deterrence, which could persuade individuals not to commit fraud because of the likelihood of detection and punishment. It is the responsibility of those charged with governance of the entity to ensure, through oversight of management, that the entity establishes and maintains internal control to provide reasonable assurance with regard to reliability of financial reporting, effectiveness and efficiency of operations and compliance with applicable laws, regulations and funding agreements. To do that, management is responsible for establishing a control environment and maintains policies and procedures to assist in achieving the objectives of ensuring the orderly and efficient conduct of the entity’s operation.

9 Available from http://www.adb.org/documents/pcp-2011?ref=site/disclosure/publications.

150 Appendix 4

Annex 1: Completed FMA Questionnaire

Topic MONRE-executing agency

3 Provinces Remarks

1. Executing/Implementing Agency

1.1 What is the entity’s legal status / registration?

Government’s department

Provincial people committees

1.2 Has the entity implemented an externally-financed project in the past (if so, please provide details)?

Yes No

1.3 What are the statutory reporting requirements for the entity?

Monthly, Quarterly, and Yearly

Monthly, Quarterly, and Yearly

1.4 Is the governing body for the project independent?

No – under central government

No – under provincial governments

1.5 Is the organizational structure appropriate for the needs of the project?

Revisit the ongoing project

Revisit the ongoing project

2. Funds Flow Arrangements

2.1 Describe (proposed) project funds flow arrangements, including a chart and explanation of the flow of funds from ADB, government and other financiers.

See Chart in draft PAM See Chart in draft PAM

2.2 Are the (proposed) arrangements to transfer the proceeds of the grant (from the government/Finance Ministry) to the entity satisfactory?

Satisfied

Satisfied

2.3 What have been the major problems in the past in receipt of funds by the entity?

Lack capacity at districts

Lack capacity at districts

2.4 In which bank will the Imprest Account be opened?

Commercial bank acceptable to State Bank of Viet Nam

Commercial bank acceptable to MOF and ADB

2.5 Does the (proposed) project implementing unit (PIU) have experience in the management of disbursements from ADB?

Yes No

2.7 Does the entity have/need a capacity to manage foreign exchange risks?

NA NA

2.8 How are the counterpart funds accessed? The counterpart funds was granted by providing estimate cost to project implementing unit

The counterpart funds was granted by providing estimate cost to project implementing unit

Appendix 4 151


3 Provinces Remarks

2.9 How are payments made from the counterpart funds?

State treasury or provincial treasury will take care of this by creating an account for the project

State treasury or provincial treasury will take care of this by creating an account for the project

2.10 If part of the project is implemented by communities or NGOs, does the PAMBs have the necessary reporting and monitoring features built into its systems to track the use of project proceeds by such agencies?

NA Village grants will be transferred from PAMBs

2.11 Are the beneficiaries required to contribute to project costs? If beneficiaries have an option to contribute in kind (in the form of labor), are proper guidelines formulated to record and value the labor contribution?

No No

3. Staffing

3.1 What is the (proposed) organizational structure of the accounting department? Attach an organization chart.

See in PAM See in PAM

3.2 Identify the (proposed) accounts staff, including job title, responsibilities, educational background and professional experience. Attach job descriptions and CVs of key accounting staff.

In the ongoing project, an accountant (contractual staff) is available in CPMU. An accountant assistant will be recruited for the GEF additional financing at the central level. TOR can be found in Appendix 3 to the PAM

In the ongoing project, an accountant (contractual staff) is available in each PPMU. An accountant assistant will be recruited for the GEF additional financing at each PPMU. TOR can be found in Appendix 3 to the PAM

3.3 Is the project finance and accounting function staffed adequately?

Adequate Lack of accounting in districts

3.4 Is the finance and accounts staff adequately qualified and experienced?

Yes Yes

3.5 Is the project accounts and finance staff trained in ADB procedures?

Yes Yes

3.6 What is the duration of the contract with the finance and accounts staff?

One year One year

152 Appendix 4


3 Provinces Remarks

3.7 Indicate key positions not contracted yet, and the estimated date of appointment.

No have Accounted in districts will be recruited in 2015

3.10 Does the project have written position descriptions that clearly define duties, responsibilities, lines of supervision, and limits of authority for all of the officers, managers, and staff?

Yes Yes

3.11 At what frequency are personnel transferred?

One year One year

3.12 What is training policy for the finance and accounting staff?

Annual training by ADB and MOF

Annual training by ADB and MOF

4. Accounting Policies and Procedures

4.1 Does the entity have an accounting system that allows for the proper recording of project financial transactions, including the allocation of expenditures in accordance with the respective components, disbursement categories, and sources of funds? Will the project use the entity accounting system?

Yes Yes

4.2 Are controls in place concerning the preparation and approval of transactions, ensuring that all transactions are correctly made and adequately explained?

Yes Yes

4.3 Is the chart of accounts adequate to properly account for and report on project activities and disbursement categories?

Yes Yes

4.4 Are cost allocations to the various funding sources made accurately and in accordance with established agreements?

Yes Yes

4.5 Are the General Ledger and subsidiary ledgers reconciled and in balance?

Yes Yes

4.6 Are all accounting and supporting documents retained on a permanent basis in a defined system that allows authorized users easy access?

Yes Yes

Segregation of Duties

4.7 Are the following functional responsibilities performed by different units or persons: (i) authorization to execute a transaction; (ii) recording of the transaction; and (iii) custody of assets involved in the transaction?

Yes Yes

4.8 Are the functions of ordering, receiving, accounting for, and paying for goods and services appropriately segregated?

Yes Yes

Appendix 4 153


3 Provinces Remarks

4.9 Are bank reconciliations prepared by someone other than those who make or approve payments?

Bank reconciliations prepared by project accountant

Bank reconciliations prepared by project accountant

Budgeting System

4.10 Do budgets include physical and financial targets?

Yes Yes

4.11 Are budgets prepared for all significant activities in sufficient detail to provide a meaningful tool with which to monitor subsequent performance?

Yes Yes

4.12 Are actual expenditures compared to the budget with reasonable frequency, and explanations required for significant variations from the budget?

Yes Yes

4.13 Are approvals for variations from the budget required in advance or after the fact?

In advance In advance

4.14 Who is responsible for preparation and approval of budgets?

Executing agency Executing agency

4.15 Are procedures in place to plan project activities, collect information from the units in charge of the different components, and prepare the budgets?

Yes Yes

4.16 Are the project plans and budgets of project activities realistic, based on valid assumptions, and developed by knowledgeable individuals?

Yes Yes

Payments

4.17 Do invoice-processing procedures provide for: (i) Copies of purchase orders and receiving reports to be obtained directly from issuing departments? (ii) Comparison of invoice quantities, prices and terms, with those indicated on the purchase order and with records of goods actually received? (iii) Comparison of invoice quantities with those indicated on the receiving reports? (iv) Checking the accuracy of calculations?

Yes Yes

4.18 Are all invoices stamped PAID, dated, reviewed and approved, and clearly marked for account code assignment?

Yes Yes

4.19 Do controls exist for the preparation of the payroll and are changes to the payroll properly authorized?

Yes Yes

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3 Provinces Remarks

Policies And Procedures

4.20 What is the basis of accounting (e.g., cash, accrual)?

Apply mode of Vietnamese accounting: Accrual

Apply mode of Vietnamese accounting: Accrual

4.21 What accounting standards are followed? Vietnam Accounting Standards (still under the process of harmonization)

Vietnam Accounting Standards (still under the process of harmonization)

4.22 Does the project have an adequate policies and procedures manual to guide activities and ensure staff accountability?

Yes Yes

4.23 Is the accounting policy and procedure manual updated for the project activities?

Yes Yes

4.24 Do procedures exist to ensure that only authorized persons can alter or establish a new accounting principle, policy or procedure to be used by the entity?

Yes Yes

4.25 Are there written policies and procedures covering all routine financial management and related administrative activities?

Yes Yes

4.26 Do policies and procedures clearly define conflict of interest and related party transactions (real and apparent) and provide safeguards to protect the organization from them?

No No

4.27 Are manuals distributed to appropriate personnel?

Yes Yes

Cash and Bank

4.28 Indicate names and positions of authorized signatories in the bank accounts.

Dr. Nguyen The Dong Dr. Nguyen Vien (PPMU Quang Nam); Dr. Nguyen Truong Khoa (PPMU Quang Tri); Dr. Nguyen Huu Quyet (PPMU Thua Thien – Hue)

4.29 Does the organization maintain an adequate, up-to-date cashbook, recording receipts and payments?

Yes Yes

4.30 Do controls exist for the collection, timely deposit and recording of receipts at each collection location?

Yes Yes

4.31 Are bank and cash reconciled on a monthly basis?

Yes Yes

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3 Provinces Remarks

4.32 Are all unusual items on the bank reconciliation reviewed and approved by a responsible official?

Yes Yes

4.33 Are all receipts deposited on a timely basis? Yes Yes

Safeguard over Assets

4.34 Is there a system of adequate safeguards to protect assets from fraud, waste and abuse?

Yes Yes

4.35 Are subsidiary records of fixed assets and stocks kept up to date and reconciled with control accounts?

Yes Yes

4.36 Are there periodic physical inventories of fixed assets and stocks?

Yes. Periodic physical inventories of fixed assets according to the annual

Yes. Periodic physical inventories of fixed assets according to the annual

4.37 Are assets sufficiently covered by insurance policies?

Not fully Not fully

Other Offices and Implementing Entities

4.38 Are there any other regional offices or executing entities participating in implementation?

Yes, three provinces Yes, 6 districts

4.39 Has the project established controls and procedures for flow of funds, financial information, accountability, and audits in relation to the other offices or entities?

Yes Yes

4.40 Does information among the different offices/implementing agencies flow in an accurate and timely fashion?

Yes Yes

4.41 Are periodic reconciliations performed among the different offices/implementing agencies?

Yes Yes

Other

4.42 Has the project advised employees, beneficiaries and other recipients to whom to report if they suspect fraud, waste or misuse of project resources or property?

No No

5. Internal Audit

5.1 Is there an internal audit department in the entity?

No, there isn’t No, there isn’t

5.2 What are the qualifications and experience of audit department staff?

NA NA

5.3 To whom does the internal auditor report? NA NA

5.4 Will the internal audit department include the project in its work program?

NA NA

5.5 Are actions taken on the internal audit findings?

NA NA

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6. External Audit

6.1 Is the entity financial statement audited regularly by an independent auditor? Who is the auditor?

Yes – Kreston ACA Company

Yes – Kreston ACA Company

6.2 Are there any delays in audit of the entity? When are the audit reports issued?

Yes - within 9 months of next financial year

Yes - within 9 months of next financial year

6.3 Is the audit of the entity conducted according to the International Standards on Auditing?

Yes Yes

6.4 Were there any major accountability issues brought out in the audit report of the past three years?

No No

6.5 Will the entity auditor audit the project accounts or will another auditor be appointed to audit the project financial statements?

Audit work is performed by team auditors

Audit work is performed by team auditors

6.6 Are there any recommendations made by the auditors in prior audit reports or management letters that have not yet been implemented?

Yes Yes

6.7 Is the project subject to any kind of audit from an independent governmental entity (e.g., the supreme audit institution) in addition to the external audit?

State Audit or Government Inspector carry out audits to check with compliance of instructions and tax obligations

State Audit or Government Inspector carry out audits to check with compliance of instructions and tax obligations

6.8 Has the project prepared acceptable terms of reference for an annual project audit?

Yes Yes

7. Reporting and Monitoring

7.1 Are financial statements prepared for the entity? In accordance with which accounting standards?

Yes. The financial statements are prepared in compliance with Vietnam accounting standards in accordance with international accounting standards

Yes. The financial statements are prepared in compliance with Vietnam accounting standards in accordance with international accounting standards

7.2 Are financial statements prepared for the implementing unit?

Yes Yes

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3 Provinces Remarks

7.3 What is the frequency of preparation of financial statements? Are the reports prepared in a timely fashion so as to useful to management for decision making?

(i) Quarterly, (ii) annually

(i) Quarterly, (ii) annually

7.4 Does the reporting system need to be adapted to report on the project components?

Yes Yes

7.5 Does the reporting system have the capacity to link the financial information with the project's physical progress? If separate systems are used to gather and compile physical data, what controls are in place to reduce the risk that the physical data may not synchronize with the financial data?

Not really, some training and guidelines are required

Not really, some training and guidelines are required

7.6 Does the project have established financial management reporting responsibilities that specify what reports are to be prepared, what they are to contain, and how they are to be used?

Yes Yes

7.7 Are financial management reports used by management?

Yes Yes

7.8 Do the financial reports compare actual expenditures with budgeted and programmed allocations?

Yes Yes

7.9 Are financial reports prepared directly by the automated accounting system or are they prepared by spreadsheets or some other means?

Some financial statements are prepared by the automated accounting system. Others are prepared in excel.

Some financial statements are prepared by the automated accounting system. Others are prepared in excel.

8. Information Systems

8.1 Is the financial management system computerized?

Not fully Not fully

8.2 Can the system produce the necessary project financial reports?

Yes Yes

8.3 Is the staff adequately trained to maintain the system?

No, further training is required

No, further training is required

8.4 Does the management organization and processing system safeguard the confidentiality, integrity and availability of the data?

No, some improvements are required

No, some improvements are required

158 Appendix 4

Annex 2: Template for Standardized Terms of Reference (TOR) for External Financial Audit Services (Auditor)

of Annual Project Financial Statements (APFS)1

A. Background of the Project

1. Please refer to Annex 1 (attached to this TOR), the following information:

a. The Background of Project

b. Project Description

c. The Executing and the Implementing Agencies

B. Accounting and Financial Management

2. A financial management manual will be developed in the inception phase of the Additional Financing.

C. Objective 3. The objective of audit assignment is to ensure that ADB, on an annual basis, is provided with the following reliable, comprehensive, and timely information: (i) Audited Project Financial Statements (APFS); (ii) Specific additional audit opinions; and (iii) Management Letter. ADB requires these documents to be provided in English.

D. Scope of Work2

1. APFSs: Financial Statement to be audited3

4. The executing/implementing agencies are responsible for preparation and consolidation of APFSs. The Auditor is to express an opinion on the accompanying statements based on the audit. The accounting standard adopted should be specified in the annual audited financial statements. The content of the financial statements is expected to include, as a minimum (refer to Annex 3, attached to this TOR for a sample list of requested document.):

a. A Summary of all sources of funds, as well as expenditures against a classification system that is responsive to the project’s objectives both for the current fiscal year and cumulative to date, showing ADB funds and counterpart fund and funding from other sources separately;

1 This template of TOR is appropriate for APFS audit. It should be completed by the borrower, Executing Agency

(executing agency) or Implementing Agency (IA) and provided to ADB for comments before implemented. This template can be applied to the audit of either a revenue-earning or non-revenue-earning project.

2 The auditor should be sufficiently clear with the scope of the audit to properly define what is expected of the

auditor. The executing agency should not restrict the audit procedures or the techniques the auditor may wish to use to form an opinion. The TOR will not generally have to be customized to a particular audit situation. The list of issues outlined in the TOR is not exhaustive, nor should all matters be addressed in every project. The scope and detail of an audit are likely to be unique for each project.

3 The form of the APFS and supporting documentation that will be supplied to the auditor, and on which they are to

give an opinion and a report, should be specified. In practice, the form and content of APFS will vary among countries and projects. For instance, the APFS may comprise a Statement of Receipts and Payments only on project transactions. Other schedules may include cumulative work-in-progress, assets and inventories, and summarized bank reconciliation. The estimated time for providing these documents to the auditor should be stated (e.g., one month after financial year-end). This schedule helps the auditee and the auditor plan for the financial statements-preparation and the audit process

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b. A Summary of Expenditures shown under the main project components and by main categories of expenditures, both for the current fiscal year and accumulated to date; and

c. Supporting schedules to the financial statements which at least include: (i) a reconciliation of the amounts shown as “received by the project from the ADB” with those shown as being disbursed by ADB; and (ii) Statement of Expenditures (SOE) procedure (if applicable) listing individual SOE withdrawal applications by specific reference number and amount.

5. In addition to the audit of the project financial statements, the Auditor is required to audit all SOEs as the basis for the submission of the Withdrawal Applications to ADB. The Auditor should apply such tests and controls as the Auditor considers necessary under the circumstances. These expenditures should be carefully compared for project eligibility with the relevant loan agreement for guidance when considered necessary. Where ineligible expenditures are identified as having been included in Withdrawal Applications and reimbursed against, these should be separately noted by the Auditor. A note to the Project Financial Statements should be a schedule listing individual SOE withdrawal applications by specific reference number and amount. The total withdrawals under the SOE procedure should be part of the overall reconciliation of ADB disbursements described above.

6. Imprest Account/Sub Account statement showing movement and reconciliation with the bank statements. The Auditor is also required to audit the activities of the Imprest Accounts/Sub Accounts associated with the Project that usually comprise of:

a. Deposits and replenishments received from ADB; b. Payments substantiated by withdrawal applications; c. Interest that may be earned from the balances and which belong to the Borrower;

and d. The remaining balances at the end of each fiscal year.

7. The Auditor must form an opinion as to the degree of compliance with ADB’s procedures and the balance of the executing agencies at year-end. The audit should examine the eligibility and correctness of financial transactions during the period under review and fund balances at the end of such a period, the operation and use of the IAs in accordance with the financing agreement, and the adequacy of internal controls for this type of disbursement mechanism. 8. The Accounting Policies adopted and Explanatory notes. A Management Assertion that ADB funds have been expended in accordance with the intended purposes. Request for form of Annual Project Financial Statements (extracted from PAI 5.07 revised on June 2012) including, but not limited to:

a. Annual project financial statements should normally be presented in the local currency, with the basis for conversion of any foreign exchange transactions or commitments explicitly stated;

b. The annual project financial statements should be presented in the English language and should reflect the operations supported by ADB financing, including ADB-administered funds.

c. The project expenditures should be presented following the expenditure categories contained in the legal agreement and/or the PAM, and revisions thereto;

d. The annual project financial statements should include comparative figures for the preceding reporting year and cumulative figures from the loan effectiveness date to the end of the current reporting year. For projects that receive funding

160 Appendix 4

from other sources, the annual project financial statements should include all sources of funds (both ADB-provided and otherwise);

e. The accompanying Notes to Financial Statements should provide sufficient explanation and information on the financials in narrative form or appropriate supporting schedules, including description of key financial reporting policies;

f. For projects where separate and distinct components are being administered by the executing agency and/or several implementing agencies (IAs) each agency should prepare separate project financial statements reporting on the funds they are administering;

g. Financial statements should be prepared in accordance with accrual based financial reporting standards; and

h. The agreed financial reporting and auditing arrangements will be set forth in the legal agreement and detailed in the PAM.

2. Specific additional audit opinions

9. The auditors are engaged to provide an independent and objective opinion on whether the financial statements present a true and fair view, in all material respects, in accordance with the applicable financial reporting framework. The auditors should also form an opinion from the audit evidence obtained, and clearly express that opinion through a written report. The auditor’s opinion is necessary to establish the credibility of the project financial statements. The objective of the audit of the annual project financial statements (APFS) is to enable the auditor to provide opinion(s) covering:

a. Use of loan proceeds - to confirm whether the borrower or executing agency has utilized all proceeds of ADB’s loan or grant only for purposes of the project;

b. Compliance with financial covenants: (Please refer to Annex 4 attached to this TOR, where applicable) - to confirm or otherwise, that the borrower or executing agency was in compliance with the financial covenants of the loan or grant agreement;

c. Compliance with the imprest fund procedure which includes imprest account(s) and sub-account(s) (where applicable) - to confirm or otherwise, whether the imprest account (and sub-accounts) gives a true and fair view of the receipts collected and payments made and supports imprest and sub-account - liquidations and replenishments during the year; and

d. Compliance with the Statement of Expenditure (SOE) procedures (where applicable) – to confirm or otherwise, whether adequate supporting documentation has been maintained to support claims to ADB for reimbursement of expenditures incurred and that the expenditures are eligible for financing under the loan or grant agreement.

3. Management Letter

10. ADB requires the executing agency/IAs to provide a copy to provide a copy of the auditor’s Management Letter, together with the APFS/AFS. At the minimum, this should include:

a. a general overview of the internal control systems of the project and the executing agency, or an opinion on the management systems;

b. an identification of material deficiencies or weaknesses in the project or executing agency/IAs’ internal controls over financial reporting or on the overall system of internal control;

c. the auditor’s recommendations for improvements or for rectification of identified weaknesses;

Appendix 4 161

d. the client’s comments on the findings and recommendations; and e. follow-up action/s or status to previously identified issues and findings, if any.

11. In cases where a management letter is not received for the entity as a whole, then a management letter covering internal controls and procedures associated with the preparation of the project financial statements is required and should be submitted together with the APFS. When significant weaknesses come to attention of the auditor during the course of audit that are not reflected in the audit opinion, they should be reported in a management letter as follows;

a. A description of specific internal control weaknesses noted in the financial management and recommendations to resolve/eliminate the internal control weaknesses;

b. Inappropriate accounting policies and practices and effectiveness of the accounting

c. records system in providing useful and timely information for proper management of the program/and project;

d. Issues regarding general compliance with broad covenants on each financing agreement and give comments, if any, on internal and external matters affecting such compliance;

e. Report significant matters raised in previous reports which have not been dealt with effectively;

f. Any other matters that the auditor considers should be brought to the attention of the borrower; and

g. A time bound actions plan that have been agreed with the management to address each of the individual issue, including date of completion, and person(s) responsible for implementation of the action plan.

E. Locations to be Audited

12. ADB funded projects in Viet Nam often include central level, provincial and even lower levels. The auditors may have to travel to all lower levels to do the audit. If it is the case, the TOR should specify the provinces where Auditors must visit.

F. Phasing of the Audit

13. The TORs must specific in the following table when the report will be submitted in draft and in final format:

Month of fiscal year (FY) and report submission

Period FY start FY End Report Submission Remarks

1

2 14. Although the auditing firm will be contracted for the mentioned audit phases (maximum three years per contract), it must submit the financial proposal in US$ in a format indicating the amount for each financial year independently: (i) If performance is not satisfactory in one year then the client will not be bound for subsequent year’s audits; and (ii) If the performance is satisfactory, the auditor may participate in bidding process for the next fiscal years, but the total assignment should be up to 6 years for one project.

162 Appendix 4

G. Auditing Requirements 15. The audit will be carried out in accordance with International Standards of Auditing including:

a. planning and conducting the audit in accordance with a risk based framework with a detailed audit work program which is sufficiently extensive in its coverage of the project’s FS to support the opinion given;

b. the auditor will gather evidence and prepare working papers to properly documents the evidence seen in support of the opinion given, sufficient audit evidence will be gathered to substantiate in all material respects the accuracy of the information contained in supporting schedules attached to the FS;

c. the auditor will review and evaluate the system of internal controls in effect, including internal audit procedures, to determine the degree of reliance that may be placed upon them and to determine the extent of testing of actual transactions needed to assure the auditor of the accuracy of the accounting records;

d. the audit coverage will consider the risk of material misstatement(s) as a result of fraud or error. The audit program should include procedures that are designed to provide reasonable assurance that material misstatements (if any) are detected; and

e. the auditor must obtain an understanding of the design and operation of internal control over compliance with requirements that could have a direct and material financial effect on the funding agreements. The auditor’s work in this area is in addition to the consideration of internal control over financial reporting that is part of the FS audit. Specifically, the auditor must obtain an understanding of the internal control over compliance that is sufficient to plan the audit to support a low assessment level of control risk for donor program. The auditor needs to test the internal control unless the internal control is likely to be ineffective in preventing or detecting noncompliance.

16. The auditor need also review the following: a. ADB financing (and expand to all external financing where ADB is not the only

financier) shall be used in accordance with the conditions of the relevant financing agreement, with due attention to economy and efficiency, and only for the purposes for which the financing was provided, as detailed in the supporting documents;

b. Counterpart funds shall be provided and used in accordance with the relevant loan agreements, with due attention to economy and efficiency, and only for the purposes for which they were provided;

c. Goods, works and services financed shall be procured in accordance with the relevant financing agreements including specific provisions of the ADB Procurement Guidelines (2013, as amended from time to time) and relevant laws of Borrower. However, in case there are conflicts between ADB Procurement Guidelines and Borrower’s relevant laws, ADB Procurement Guidelines will prevail. Fixed assets procured by all financiers shall be reviewed;;

d. The expenditures submitted to ADB shall be eligible for financing and all necessary supporting documents, records, and accounts in support of credit withdrawals have been adequately maintained with clear linkages between the books of account and reports presented to ADB;

e. Funds disbursed through SOEs shall be utilized for the purposed defined in the funding agreements. Where ineligible expenditures are identified as having been

Appendix 4 163

included in withdrawal applications and reimbursed against, these should be separately noted by the auditor; and

f. Imprest Accounts and sub-accounts, (if used) shall be maintained in accordance with the provisions of the relevant financing agreements and funds disbursed out of the account were used only for the purpose intended in the financing agreement and other supporting documents.

H. Accounting Policies and Changes

17. The auditor should comment on the project’s accounting policies, and confirm the extent to which the agreed project accounting policies have been applied. In particular, the auditor should note the impact on the APFS arising from any material deviations from the agreed accounting standards. The auditor should also comment on any accounting policy changes, either during a financial year, or from one year to another.

I. Compliance with laws, regulations and funding agreements

18. The auditor should be aware of the unique characteristics of the compliance auditing environment. Governments and not-for-profit organizations differ from commercial enterprises in that they may be subject to diverse compliance requirements including its compliance with financial covenants and financial assurances.

19. Management is responsible for ensuring compliance with relevant laws, regulation and funding agreements. That responsibility encompasses the identification of applicable laws, regulations and funding agreements and the establishment of internal control designed to provide reasonable assurance that the auditee complies with those laws, regulations and funding agreements.

20. In addition to the opinion on the financial statements, the auditor should provide an opinion on whether the auditee complied with laws, regulations and provision of contracts and funding agreements that have a direct and material financial effect on the project financial statements. The auditor should prepare a report with separate schedule of findings and questioned costs. The scope of the audit should also refer to compliance with the Procurement procedures as set out in the funding agreements.

J. Responsibility to Consider Fraud in an Audit

21. The primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and with management. It is important that management, with the oversight of those charged with governance, place a strong emphasis on fraud prevention, which may reduce opportunities for fraud to take place, and fraud deterrence, which could persuade individuals not to commit fraud because of the likelihood of detection and punishment. It is the responsibility of those charged with governance of the entity to ensure, through oversight of management, that the entity establishes and maintains internal control to provide reasonable assurance with regard to reliability of financial reporting, effectiveness and efficiency of operations and compliance with applicable laws, regulations and funding agreements. To do that, management is responsible for establishing a control environment and maintains policies and procedures to assist in achieving the objectives of ensuring the orderly and efficient conduct of the entity’s operation. 22. Therefore, in order to ensure that those assertions are addressed in the audit of the entity, it is important that auditors must follow International Standards of Auditing (ISA 240) “The Auditor’s Responsibility to consider Fraud in an Audit of Financial Statements.

164 Appendix 4

K. Audit Report

23. The auditor should become familiar with the following documents: Guideline for the financial governance and management of investment projects financed by the Asian Development Bank; and the Loan Disbursement Handbook. The Auditor’s reports on the projects financial statements should be prepared in 08 copies (04 in English and 04 in Vietnamese)4 and mentions the following matters:

a. A title identifying the person or persons to whom the report is addressed; b. An introductory paragraph identifying the financial statements audited; c. Separate sections, appropriately headed dealing with respective responsibilities

of directors (or equivalent persons), d. The basis of the Auditor’s opinion, e. The Auditor’s opinion on the financial statements, SOEs and IAs/SAs; f. The manuscript or printed signature of the Auditor; and g. The date of the Auditor's report.

24. The audit report is required to include separate audit opinions on the Financial Statements (as described in part D. the Scope). This would include at least the following:

a. the audit report will state the purpose of the report and its intended use; b. the audit report will state which/whose generally accepted accounting standards

have been applied and indicate the effect of any deviations from those standards; c. the audit report will state that the audit was conducted in accordance with ISAs; d. the audit opinion will cover the current period; e. the audit opinion will state whether or not the financial statements presents fairly

in accordance with the adopted accounting policies for the project and that the funds were utilized for the purposes defined by the funding agreements;

f. the audit opinion will cover in all material respects the supporting schedules; g. the auditor should provide an opinion on whether the Project complied with

applicable laws, regulations and the Procurement procedures and other provisions of the funding agreements that have a direct and material financial effect on the Project’s financial report; and

h. the auditor should provide an opinion on the effectiveness of internal control over compliance with requirements that could have a direct and material financial effect on the financial statements as well as internal control over financial reporting.

L. Available Information and Services to be Provided to the Auditor:

25. Please refer to Annex 4 attached to this TOR for a sample list of requested documents by Auditor. These include:

a. The auditor should have access to all legal documents, correspondences, and any other information associated with the project and deemed necessary by the auditor. The auditor will also obtain confirmation of amounts disbursed and outstanding at ADB. Available information should include copies of the relevant:

4 The auditing firm must take note that audited financial statements, audit report and the management letter

prepared by the Auditor, should be received by ADB no later than six months after the end of the accounting period (ie., normally no later than June 30). The Auditor should therefore submit, on a timely basis, audit report, management letter and the relevant documentation to the executing/implementing agencies to meet this requirement. The executing/implementing agencies will be responsible for forwarding two copies of the audited project financial statements, audit report and management letter to the ADB.

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project appraisal document; financing agreement; financial management assessment reports; supervision mission reports and implementation status reports;

b. The Auditor shall have the right of access to banks and depositories, consultants, contractors and other persons or firms engaged by the project. In case access has been restricted, the auditor must note this in the management letter; and

c. ADB can request access to the auditors unedited audit working papers. If necessary, the auditing company can be requested, free of charge, to participate in a wrap-up session for the Ministry of Finance (MOF), the executing agency/IAs and ADB to share common findings across projects being audited and provide recommendations for addressing bottlenecks in preparation for the next audit.

M. Services to be Provided to the Auditor

26. The following services will be provided by the executing agency/IAs without cost to the Auditor. The PCU should coordinate with the executing agency/IAs and the Auditor to ensure the following services are adequately and timely provided to the Auditor:

a. Data. Provide the Auditor with access to all available data, information, legal documents, correspondence and any other information considered necessary by the Auditor and shall be returned at the completion of the assignment or earlier, or as may be requested by the executing agency/IAs; and

b. Access. The PCU and the executing agency will arrange for access by the Auditor to the sites which the Auditor deems necessary to visit and conduct investigations in connection with performing their duties. Access to the key officials in the Government, the project provinces and agencies concerned with subjects related to the assignment will also be arranged by the executing agency/IAs, as appropriate.

N. Auditor Qualification

27. Please refer to: “Guidelines on the Use of Consultants by Asian Development Bank and Its Borrowers” - Part 1: Introduction and Policies for further instruction on general consultant qualification. The following are the requirements on the qualification of auditing firms for auditing ADB funded projects in Viet Nam. It must be authorized to practice in Viet Nam and be capable of applying the agreed auditing standards. The detailed requirements on the qualification of auditing company are:

a. Be a legal entity with business license granted by the competent authority, as requested by Vietnamese law;

b. Must be impartial and independent from all aspects of management or financial interests in the executing agency/IA being audited;

c. Be included in the most updated list of authorized auditing companies and auditors which is approved by Ministry of Finance and published on website: www.mof.gov.vn;

d. Have adequate staff, with appropriate professional qualifications and suitable experience in finance/financial management in Official Development Assistance (ODA) funded projects or Government projects/ programs, including experience in auditing the Enterprise Financial system (EFS) comparable in nature, size and complexity to the entity whose audit they are to undertake;

e. Notify and get written endorsement of the executing agency every time a staff member is substituted; and

f. Subcontracting of audit services is not permitted.

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28. The following are the requirements on the qualification of Individual auditor for each proposed position in the firm. The TOR must indicate clearly how many international and national experts the assignment will include. General requirements on the Qualification of Individuals are as follows: Auditors shall hold relevant professional qualifications with in-depth experience in conducting audits of project financial statements. Auditors should hold a fair opinion on, and be independent of, control of the submitting entity and the employer by whom they were appointed. The auditor should follow procedures and methodology that conform to International Standards on Auditing (ISA). The following are the outline TOR of each position:

1. Audit Director (AD)

As head of the audit team, the Director will be responsible for: a. Keeping lines of communication open with staff and clients; b. Ability to manage within budgetary and time constraints while providing a high-

level of client satisfaction; c. Anticipating and addressing client concerns and escalating problems as they

arise; d. Keeping abreast of latest developments as they affect GAAP and the Firm’s

standards and policies; and e. Developing an understanding of client’s business and becoming a ''functional

expert'' in the area.

Minimum Qualifications/Experience a. A university graduate (preferably with a post–graduate degree) in Accounting,

finance, Certified auditor certificate by the MOF or international certificate (ACCA or other recognized international accounting/ auditing certificate);

b. At least 15 years or above experience working in auditing services; At least 4 year experience in management of auditing teams; and at least 8 years actual working years in auditing since being granted with Vietnamese or international auditor certificate;

c. Should have worked as Audit Director for at least 3 audit contracts on ADB, the World Bank or other international donors funded projects;

d. Fluent English is compulsory; and e. Experience working for a Big 4 or large regional accounting firm is a plus.

2. Audit Managers (AM)

The Manager will be responsible for: a. Receive the instructional directives from Directors and give detailed guidance to

all team members; b. Monitor the audit fieldwork of engagement team, reviews staff work and ensure

that it meet professional standards and the internal audit department's guidelines; c. Take responsibility for the quality of the audit before submitting to Director; d. To be the contact point with Client’s Management and Chief Accountant

regarding key issues identified, audit adjustments; and e. Monitor the progress of the audit and monitor the adherence to the deadline

committed with Client.

Minimum Qualifications/Experience a. A university graduate (preferably with a post–graduate degree) in Accounting,

finance, Certified auditor certificate by the MOF or international certificate (ACCA or other recognized international accounting/ auditing certificate);

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b. At least 10 years or above experience working in auditing services; Audit seniors who are the team leader shall have 5 years’ experience in their profession;

c. Audit experience for ADB/World Bank funded projects in Vietnam would be an advantage;

d. Ability to work within budgetary and time constraints while providing a high-level of client satisfaction; and

e. Certified auditor certificate by the MOF or international certificate (ACCA or other recognized international accounting/ auditing certificate).

3. Senior Auditors/ Team leaders (SA/TL)

The Senior Auditors will be responsible for:

a. Follow the instructions from Director and Engagement Manager; b. Keep AD and AM being updated with the key issues or key audit adjustments

day to day; c. Being responsible for the audit quality of the whole team in front of AM; d. Being responsible for the compliance with auditing firm quality standards; and

procedures and with the requirements of Clients/Projects.

Minimum Qualifications/Experience a. Senior Auditors are required to be graduates of a recognized university in the fields

of Commerce, Economics, Accounting and Auditing or equivalent; b. At least 05 years or above experience working in auditing services; c. Preferably to whom holding Certified auditor certificate by the MOF or international

certificate (ACCA or other recognized international accounting/ auditing certificate); d. Preferably should have worked as Auditor for audit contracts on ADB’s, the World

Bank’s on other international donors’ funded projects; and e. English proficiency would be preferable.

4. Auditor

The Auditors will be responsible for: a. Implementing professional work, auditing assigned sections in the agencies, be

responsible for the data and issues related to the auditing activities. b. Supporting to release the official report; draft minute of audit; report to the Team

leader of the rising issues related to the audit in the agencies.

Minimum Qualifications/Experience a. A university graduate (preferably in recognized university in the fields of

Commerce, Economics, Accounting and Auditing or equivalent); b. At least 03 years or above experience working in auditing services Preferably to

whom holding Certified auditor certificate by the MOF or international certificate (ACCA or other recognized international accounting/ auditing certificate);

c. Should have worked as Auditor for audit contracts on ADB’s, the World Bank’s on other international donors’ funded projects would be preferable); and

d. English proficiency would be preferable.

O. Involvement of Technical Experts

29. Depending on the complexity of procurement activities, the auditor may consider involving technical experts during the audit engagement. In cases where such experts are involved, the auditor is expected to comply with provisions of International Standard on Auditing

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620: Using the Work of an Expert. Consideration to use of the work of experts should be brought to the early attention of the borrower and the ADB for mutual agreement and appropriate guidance.

P. Reporting Relationships

30. The audit services will be contracted by executing/implementing agencies or project management units. The Auditor shall report to: the Project manager and Chief Accountant. The Auditor should maintain and file the work papers and provide them to ADB and/or the Government when required.

Appendix 4 1169

Annex 2 – Attachment 1: Project Background, Executing and Implementing Agencies

A. The Project to be Audited

1. Project No: 2. Grant No: 3. Project Name: 4. Executing Agency: 5. Implementing Agencies: 6. Total Project Costs: (from all financiers)

B. Project Description

Describe the project here, in the context of its contribution to achievement of the executing

agency’s economic goals. The auditor must understand the "purpose for which the funds are intended" in the context of the broad project objectives as well as in terms of the specific project budget.

C. The Executing and the Implementing Agencies

A detailed description—both legal and generally informative—should be provided here to enable the auditor to understand fully the nature, location and objective of the executing and implementing arrangements among agencies (executing/implementing agencies), and the entities under audit. Geographic characteristics should be described, together with organization charts; names of senior managers.

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Annex 2 – Attachment 2: Financial Management Manual (FFM)

A. General Framework for Financial Management 1. Objectives of the FMM. (i) To enhance the transparency in project financial management procedures to ensure the proper and effective use of project resources; (ii) Provide guidelines concerning the financial management procedures and project systems facilitating the monitoring and evaluation tasks required by ADB and relevant government agencies; (iii) Provide clear requirements, processes and project management procedures to facilitate project implementation; (iv) Define financial roles and responsibilities of relatives agencies/organization (such as the Central Bank of Cambodia, MEF, State Treasury, Service banks, Project coordination Units (PCU); and (v) Define detailed responsibilities and qualification of each personnel in finance management team, such as functional and duties: Director, Internal controller, Accountant, Chief accountant, Cashier, etc. B. Project Planning and Budgeting 2. Description of how to develop and control planning and budgeting; Summary responsibilities of involved parties in the project; Description of forms for planning and supervising purposes, such as general project implementation, procurement, disbursement etc. C. Disbursement process 3. Based on ADB Disbursement guidelines (Loan Disbursement Handbook); Disbursement process: responsibilities of each involved parties in the process, disbursement types and applicable disbursement procedure (such as statement of expenditure) in the project, fund-flow illustration etc. D. Project Accounting System Reporting and Liquidation

4. General regulation, basic accounting policy, financial reporting, and project accounting (indicate clearly which accounting policy is used) and reporting system (list all reports, names, contents, prepared by whom, deadline to submit, etc.). E. Internal control (IC) 5. IC Objectives. The IC forms part of the financial and accounting policies for the management of the Project. The objectives of the internal controls are to:

a. ensure adherence to Government’s and donors' regulations and guidelines, project policies and procedures;

b. achieve clear and transparent financial practices; c. promote operational efficiency; d. provide controls to safeguard the project assets; and e. facilitate the early detection of errors and problems.

6. IC Principles. The basic principles of the internal controls are as follows: a. monitoring, checking and approving, by an upper level, of expenditures and

procurements executed by the lower level; b. defining responsibilities of project staff commensurate with position and level of

authority; c. separating specific responsibilities of staff;

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d. using appropriate method to ensure proper custody of assets; e. ensuring full and appropriate documentation; f. using internal procedures for cross-checking of accounts, payments and

transaction entries for timely detection of errors; and g. preparing annual inventory of assets.

7. IC Requirement. Key internal controls to be implemented by PCU/PMU must satisfy the below requirements:

a. Competent and Reliable Personnel. The internal control system relies on the people running it. Employees should be adequately trained and properly supervised to enable them to carry out their duties and responsibilities effectively.

b. Separation of Functional Responsibilities. A person should not have complete control of a transaction from beginning to end. There should be clear understanding as to who will approve, what is to be approved and the limitations of authorisation. The approving officers should not have responsibility for posting or the ability to change accounting records.

c. Assignment of Responsibility for Every Function. Employee responsibilities should be clearly defined to avoid overlapping or unassigned areas of responsibility (e.g. an organization chart should be prepared). Staff must know their responsibilities and whom they report to.

d. Separation of Asset Custodianship and Accounting. The accounting function should be separated from the custody of assets (e.g. an employee who is entrusted to receive cash should not have access to the cash journals or ledgers).

e. Security Measures. Techniques, procedures and measures should be employed to protect assets and ensure reliable accounting data and reports (e.g. use of mechanical devices such as vaults and cash registers; use of control accounts and subsidiary ledgers).

f. Supervision. Internal regulations should include the supervision of staff. For example, the supervision of the director or manager of a DPMU for example on setting up of annual estimated expenditures, approving of the annual reports, or the supervision of chief accountant to the process of setting, recording of transactions made by assistants, and the preparation of financial statements.

g. Regular Independent Review. Internal auditors should regularly review and evaluate the system of internal controls to determine whether it is functioning effectively as planned (e.g. internal auditors' findings and recommendations should be submitted to senior management for action).

h. Control of Transactions. Every transaction should be authorized, approved, executed and recorded according to prescribed procedures (e.g. staff are not free to procure without the approval of the manager).

i. Serially Numbered Documents. Organization documents should be serially numbered to check completeness of transactions (e.g. checks, invoices and vouchers should be serially numbered).

j. Sequencing. Accounting control system should be set up in such a manner that proper sequencing is followed with regards to payments, posting of transactions to ledgers etc. For example payments should not be authorized or made before the goods or services for which the payment relates to has been received by the project.

k. Duration of documentation archiving: Full documentation of project transactions will be managed and recorded in accordance with existing regulations. The records should be kept for 10 years in good condition to avoid

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damage and ensure easy access when needed. Document disposal (if necessary) shall be done with prior approval of competent authority.

8. Content of IC. Content must ensure that the FMM covers all important IC matters such as cash control, bank account control, procurement, assets management, contract management and receivables, payables, etc. 9. IC System. The auditor shall assess the adequacy of the project financial management systems, including internal controls. The assessment includes whether:

a. proper authorizations are obtained and documented before transactions are entered into;

b. accuracy and consistency are achieved in recording, classifying, summarizing and reporting transactions;

c. reconciliations with internal and external evidence are performed on a timely basis by the appropriate level of management;

d. balances can be confirmed with external parties; e. adequate documentation and an audit trail is retained to support transactions; f. transactions are allowable under the agreements governing the project; g. errors and omissions are detected and corrected by project personnel in the

normal course of their duties, and management is informed of recurring problems or weaknesses;

h. management does not override the normal procedures and the internal control structure; and

i. assets are property accounted for, safeguarded and can be physically inspected.

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Annex 2 – Attachment 3: A Sample for List of Required Documents

A. General Project Documents 1. Report and Recommendations of the President 2. Loan Agreement 3. Project Administration Manual 4. Documents on appointments of Project Management Units (Director, Deputy Director,

Chief Accounts) and delegation of authorities 5. Documents on registration of VAT codes with local authorities 6. Documents on registration of authorized signatories with the banks 7. Annual budget and work plans, including all revisions, if any 8. Annual procurement plans, if any 9. Quarterly and annual progress reports 10. Comparison between actual expenses and budgets, if any, prepared by Project

management, 11. A summary of key financial covenants as indicated in the Loan/Financing Agreements

and the self-assessment of the Project management on these financial covenants 12. Copies of all meeting minutes of Project Steering Committee and Project management

unit, if any 13. Internal audit reports, prior year audited reports and management letter, if any external

review reports. B. Accounting Books/Records 1. Annual Financial Statements for the year subject to audit, including the financial

statements of the Central PMU and all PPMU (Summary sources of funds, Summary of expenditures, Balance sheet, IA statement, etc).

2. Accounting books and all original supporting documents (hard and soft copies) 3. Confirmations of fund received from the ADB during the year 4. Disbursements and payment vouchers with original supporting documentation 5. Bank statements, cash count minutes, periodic bank reconciliation documents (signed

by authorized personnel of the Project) 6. Reports and supporting documents for counterpart expenditure for the year subject to

audit 7. Documents on monthly VAT declaration and periodic VAT refund claims, if any 8. List of outstanding advances at the year end and the related aging report, if any. The

total of this list should be reconciled to the advances of the balance sheet 9. Summary of procurement contracts signed and ongoing during the year 10. Bidding documents (if any) 11. Consultant contracts (local and international), minutes of evaluation board, consultant

reports (if any) 12. Record of training courses, attendance lists and course evaluations (if any) 13. Fixed asset registers 14. Minutes recording annual physical checking of equipment (including all minutes

completed by PPMU) 15. Logbooks for vehicles (if any) 16. Access to Program’s/Projects’ computers and other office equipment under the

supervision of responsible Program/Project personnel (strictly for audit purposes only)

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C. Personnel 1. List of all Project’s contracted staff and their related recruitment documents, personnel

records 2. Documents on PIT, Social Insurance and Health Insurance calculations and monthly

declaration and payments

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Annex 2 – Attachment 4: Financial Covenants, Financial Assurances and How to Confirm the Compliance?

1. Financial Covenants. The financial covenants that are applicable to projects are included in loan agreements. The Auditor should list, describe and fully reference all applicable financial covenants, review and comment on the compliance. 2. Compliance with Financial Covenants. The auditor will confirm compliance with each financial covenant contained in the project legal documents. Where present, the auditor should indicate the extent of any noncompliance by comparing required and actual performance measurements for each financial covenant for the financial year concerned. 3. Financial Assurances Applicable to Projects. The financial assurances that are applicable to the executing agency—such as a commitment to employ suitably-qualified accounting personnel—will be included in project legal documents. The auditor should list, describe and fully reference all applicable financial assurances, review and comment on the compliance.

4. Compliance with Financial Assurances. The auditor will confirm compliance with all financial assurances contained in the project legal documents. Where present, the auditor should indicate the extent of any noncompliance by comparing required and actual performance of the borrower in respect of these ADB requirements for the financial year concerned.

Procurement Mode and requested document to be submitted by Audit firms 1. The procurement method agreed for auditor recruitment will follow ADB’s Guidelines on the Use of Consultants by Asian Development Bank and Its Borrowers (2013, as amended from time to time).1 The contract will be on lump sum in accordance with annual based performance. In order to meet with the working plan and schedule report delivery as requested, the auditing firm must submit a Description of Approach, Methodology and Work Plan for Performing the Assignment including:

a. Technical Approach and Methodology: explain the understanding of the objectives of the assignment, approach to the services, methodology for carrying out the activities and obtaining the expected output, and the degree of detail of such output. Should also highlight the problems being addressed and their importance, and explain the technical approach would adopt to address such problems. Explain the methodologies you propose to adopt and highlight the compatibility of those methodologies with the proposed approach.

b. Work Plan. Propose the main activities of the assignment, their content and duration, phasing and interrelations, milestones (including interim approvals by the Client), and delivery dates of the reports. The proposed work plan should be consistent with the technical approach and methodology, showing understanding of the TOR and ability to translate them into a feasible working plan. A list of the final documents, including reports, drawings, and tables to be delivered as final output, should be included here. The work plan should be consistent with the Work Schedule.

1Available at: http://www.adb.org/documents/guidelines-use-consultants-asian-development-bank-and-its-borrowers

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c. Organization and Staffing. Propose the structure and composition of your team. Should list the main disciplines of the assignment, the key expert responsible, and proposed technical and support staff.

2. Submitted Document must indicate: How many Team Leaders and Senior auditors/auditors allocated for the assigned audit with suitable qualification and experience by each position. For each audit period, how many are expected person-months to fulfill auditing works of each auditor position; for example Audit Director: (how many) person-months; Team Leader: (how many) person-months, etc. 3. The person-months are only as an estimate since the auditing company will be recruited on lump sum based performance for each annual package. The auditing company should provide to the Government project management unit details in the followings: working schedule, management and execution method together with allocated man power implementing auditing activities in project’s financial reports for a good contract performance.