Project Appraisal Document - documents.worldbank.orgdocuments.worldbank.org/.../746000PAD0P1270estation0… · Web viewdocument of. the world bank. for official use only. report

Document ofThe World Bank

FOR OFFICIAL USE ONLY

Report No: 74600-BD

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED GRANT

IN THE AMOUNT OF US$33.8MILLION

TO THE

PEOPLE’S REPUBLIC OF BANGLADESH

FOR THE

CLIMATE RESILIENT PARTICIPATORY AFFORESTATION AND REFORESTATION PROJECT

UNDER BANGLADESH CLIMATE CHANGE RESILIENCE FUND (BCCRF)

February 05, 2013

Sustainable Development DepartmentEnvironment and Water Resources UnitSouth Asia Region

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

CURRENCY EQUIVALENTS

(Exchange Rate Effective {November 11, 2012}) Currency Unit = Bangladesh Taka (BDT.)

81.2500 BDT = US$1

FISCAL YEARJuly 1 – June 30

ABBREVIATIONS AND ACRONYMS

ADBADPAFAIGAAIGGARCSBCCRFBCCSAP

BDTBFDCASCBACCFCFCMOCMCCPGsC&AGDFODPsEMFEMPFAPADFAOFDGsFMFMSFUGFYGEFGISGoBGRMIBRD

ICDPs

ICRIDAIFR

Asian Development BankAnnual Development ProgramArannayk FoundationAlternative Income Generation ActivitiesAlternative Income Generating GroupsAudit Report Compliance SystemBangladesh Climate Change Resilience FundBangladesh Climate Change Strategy and Action PlanBangladesh Currency (Taka)Bangladesh Forest DepartmentCountry Assistance StrategyCost-Benefit AnalysisChief Conservator of ForestsConservator of ForestsCommunity Mobilization OfficerCo Management CommitteeCommunity Patrolling GroupsComptroller & Auditor GeneralDivisional Forest OfficeDevelopment PartnersEnvironmental Management FrameworkEnvironmental Management PlanForeign Aided Project Audit DirectorateFood and Agriculture OrganizationForest Dependent GroupsFinancial ManagementFinancial Management SpecialistForest Users’ GroupFiscal YearGlobal Environment FacilityGeographic Information SystemGovernment of BangladeshGrievance Redress MechanismInternational Bank of Reconstruction and DevelopmentIntegrated Conservation and Development ProjectsImplementation Completion Report International Development AssociationInterim Financial Report

IPIPCCIRRIURFsLDCFMDBsMoEFMoFMTRM&ENAPANGONPVOMOPORAFPDPDOPICPIUPMPPMR

PSPSCRIMSRFPRPFRSSASOESFSIASIMFTPDPTSSUNDPUS$VCF

Indigenous PeopleIntergovernmental Panel on Climate ChangeInternal Rate of ReturnUn-audited Financial ReportsLeast Developed Countries FundMultilateral Development BanksMinistry of Environment and ForestsMinistry of FinanceMid Term ReviewMonitoring and EvaluationNational Adaptation Program for ActionNon Government OrganizationNet Present ValueOperational ManualOperational PolicyOperational Risk Assessment FrameworkProject DirectorProject Development ObjectivesProject Implementation CommitteeProject Implementation UnitProject ManagerProcurement Performance MonitoringReportProcurement SpecialistProject Steering CommitteeResource Information Management SystemRequest for ProposalResettlement Policy FrameworkRemote SensingSocial AssessmentStatement of ExpendituresSocial ForestrySocial Impact AssessmentSocial Impact Management FrameworkTribal People’s Development PlanTargeting and Selection StrategyUnited Nations Development ProgrammeUnited Sates of America CurrencyVillage Conservation Forum

Regional Vice President: Isabel M. Guerrero Country Director: Salman Zaheer Sector Director: John Henry Stein Sector Manager: Herbert Acquay Task Team Leader: Shakil Ahmed Ferdausi

PEOPLE’S REPUBLIC OF BANGLADESHClimate Resilient Participatory Afforestation and Reforestation Project

TABLE OF CONTENTS

Page

I. STRATEGIC CONTEXT................................................................................................1

A. Country Context...........................................................................................................1

B. Sectoral and Institutional Context................................................................................1

C. Higher Level Objectives to which the Project Contributes..........................................4

II. PROJECT DEVELOPMENT OBJECTIVES...............................................................5

A. PDO..............................................................................................................................5

B. Project Beneficiaries....................................................................................................5

C. PDO Level Results Indicators......................................................................................6

III. PROJECT DESCRIPTION.............................................................................................6

A. Project Components.....................................................................................................6

B. Project Financing........................................................................................................11

C. Lessons Learned and Reflected in the Project Design...............................................12

IV. IMPLEMENTATION....................................................................................................14

A. Institutional and Implementation Arrangements........................................................14

B. Results Monitoring and Evaluation............................................................................16

C. Sustainability..............................................................................................................17

V. KEY RISKS AND MITIGATION MEASURES.........................................................18

A. Risk Ratings Summary Table.....................................................................................18

B. Overall Risk Rating Explanation................................................................................18

VI. APPRAISAL SUMMARY.............................................................................................19

A. Economic and Financial Analyses.............................................................................19

B. Technical....................................................................................................................20

C. Financial Management...............................................................................................22

D. Procurement...............................................................................................................23

i

E. Social (including Safeguards)....................................................................................23

F. Environment (including Safeguards).........................................................................25

Annex 1: Results Framework and Monitoring........................................................................26

Annex 2: Detailed Project Description.....................................................................................33

Annex 3: Implementation Arrangements.................................................................................44

Annex 4: Operational Risk Assessment Framework (ORAF)...............................................77

Annex 5: Implementation Support Plan..................................................................................82

Annex 6: Governance and Accountability Action Plan (GAAP)...........................................85

Annex 7. Economic and Financial Analyses............................................................................96

Annex 8. Lessons learned for Alternative Livelihoods to Support Forest Communities component.................................................................................................................................113

Annex 9. Recommended Plantation Types, Common Species and Rotation Period..........121

Map

ii

PAD DATA SHEETBangladesh

Climate Resilient Participatory Afforestation and Reforestation Project (P127015)

PROJECT APPRAISAL DOCUMENT.

SOUTH ASIA

SASDI

Basic InformationDate: 05-Feb 2013 Sectors: Forestry (100%)

Country Director: Salman Zaheer Themes: Climate change (65%), Biodiversity (20%), Environmental policies and institutions (15%)Sector Manager/Director: Herbert Acquay/John Henry

Stein

Project ID: P127015 EA Category: B - Partial Assessment

Lending Instrument: Specific Investment Loan

Team Leader(s): Shakil Ahmed Ferdausi

Joint IFC: No.

Borrower: Economic Relations Division, Ministry of Finance

Responsible Agency: Bangladesh Forest Department

Contact: Mr. Md. Yunus Ali Title: Chief Conservator of Forests

Telephone No.: (880-2) 818-1737 Email: [email protected]

Responsible Agency: Arannayk Foundation (AF)

Contact: Mr. Farid Uddin Ahmed Title: Executive Director

Telephone No.: +880-2-9873275 Email: [email protected].

Project Implementation Period: Start Date: 15-Mar-2013 End Date: 31-Dec-2016

Expected Effectiveness Date: 15-Mar-2013

Expected Closing Date: 31-Dec-2016.

Project Financing Data(US$M)[ ] Loan [X] Grant [ ] Other

[ ] Credit [ ] Guarantee

For Loans/Credits/OthersTotal Project Cost (US$M): 35.00

Total Bank Financing (US$M): 0.00.

Financing Source Amount(US$M)Borrower 1.20

BCCRF (Bangladesh MDTF for Climate Change) 33.80

Total 35.00

iii

.

Expected Disbursements (in USD Million)Fiscal Year FY13 FY14 FY15 FY16 FY17

Annual 0.9 8.5 12.45 9.4 2.55

Cumulative 0.9 9.4 21.85 31.25 33.8.

Project Development Objective(s)The project development objective is to reduce forest degradation and increase forest coverage through participatory planning/monitoring and to contribute in building the long-term resilience of selected communities in coastal and hilly areas to climate change..

Components

Component Name Cost (USD Millions)Afforestation and Reforestation Program 22.0

Alternative Livelihoods to Support Forest Communities 4.00

Capacity Development for Forest Resource Planning and Management 5.50

Project Management 3.50.

CompliancePolicyDoes the project depart from the CAS in content or in other significant respects? Yes [ ] No [ X ]

Does the project require any waivers of Bank policies? Yes [ ] No [ X ]

Have these been approved by Bank management? Yes [ ] No [ X ]

Is approval for any policy waiver sought from the Board Yes [ ] No [ X ]

Does the project meet the Regional criteria for readiness for implementation? Yes [X] No [ ].

Safeguard Policies Triggered by the Project Yes NoEnvironmental Assessment OP/BP 4.01 XNatural Habitats OP/BP 4.04 XForests OP/BP 4.36 XPest Management OP 4.09 XPhysical Cultural Resources OP/BP 4.11 XIndigenous Peoples OP/BP 4.10 XInvoluntary Resettlement OP/BP 4.12 XSafety of Dams OP/BP 4.37 XProjects on International Waterways OP/BP 7.50 XProjects in Disputed Areas OP/BP 7.60 X.

Legal CovenantsName Recurrent Due Date Frequency

Subsidiary Agreement Before Effectiveness

iv

Description of Covenant

The Recipient shall make part of the proceeds of the Grant available to the Project Implementing Entity under a subsidiary agreement between the Recipient and the Project Implementing Entity under terms and conditions approved by the World Bank.Name Recurrent Due Date Frequency

Project Steering Committee Effective Date


The Recipient shall establish and thereafter maintain, throughout the period of Project implementation, a Project Steering Committee responsible for providing advice and guidance on Project implementation and for providing policy guidance.Name Recurrent Due Date Frequency

Project Implementation Committee

Effective Date


The Recipient shall establish and thereafter maintain, throughout the period of Project implementation, a Project Implementation Committee at BFD.Name Recurrent Due Date Frequency

Project Implementation Unit Effective Date


The Recipient shall establish and thereafter maintain, throughout the period of Project implementation, a Project Implementation Unit at BFD.Name Recurrent Due Date Frequency

Procurement Officer at BFD Effective Date


The Recipient shall assign a procurement officer at BFD as procurement focal point.

Name Recurrent Due Date Frequency

Procurement Consultant March 15, 2013


The Recipient shall engage the services of a procurement consultant with qualifications and terms of reference satisfactory to the World Bank.


Reports on Procurement Performance

X Semi-Annual


The Recipient shall submit semi-annual reports on the Procurement Performance Monitoring Report in a format acceptable to the World Bank.


Project Office Effective Date


The Project Implementing Entity shall establish and thereafter maintain, throughout the period of Project implementation, a Project office responsible for the day-to-day implementation of Part 2 of the Project.

v


Implementation Manual Effective Date


The Recipient and Project Implementing Entity shall prepare and adopt an Implementation Manual, satisfactory to the World Bank, for the implementation of activities under the Project.Name Recurrent Due Date Frequency

Sub-grant Agreements X


The Project Implementing Entity shall make Sub-grant(s) to Forest Dependent Group(s) under a Sub-grant Agreement on terms and conditions approved by the World Bank.Name Recurrent Due Date Frequency

Procurement Focal Point Effective Date


The Project Implementing Entity shall assign a procurement focal point with qualifications and terms of reference satisfactory to the World Bank.


Grievance Redress Mechanism March 31, 2013


The Recipient shall establish and thereafter maintain, throughout the period of Project implementation, a grievance redress mechanism as required by and in accordance with the Social Management Framework.


Retroactive Financing N/A


No withdrawal shall be made for payments made prior to the date of the Grant Agreement except that withdrawals up to an aggregate amount not to exceed US$200,000 equivalent may be made for payments made prior to this date but on or after August 31, 2012 for Eligible Expenditures under Category (1)(a).

vi

.

Team CompositionBank Staff

Name Title Specialization Unit

Shakil Ahmed Ferdausi Senior Environment Specialist Team Lead SASDI

Junxue Chu Senior Finance Officer Disbursement CTRLN

Cecilia Belita Senior Program Assistant Operational Support SASSD

Suraiya Zannath Senior Financial Management Specialist

Financial Management SARFM

Ranjan Samantaray Senior Natural Resources Management Specialist

Natural Resources Mgmt. SASDA

Arvind Prasad Mantha Financial Management Analyst Financial Management SARFM

Anna C. O'Donnell Social Development Specialist Social Development & Documentation

SASDS

Marghoob Bin Hussein Senior Procurement Specialist Procurement SARPS

Klas Sander Senior Natural Resource Economist

Forest Economics SASDI

Dora Nsuwa Cudjoe Environmental Specialist Forestry SASDI

Jose Ramon R. Pascual IV Counsel Counsel LEGES

Sabah Moyeen Social Development Specialist Social Safeguard SASDS

Janet Bably Halder Program Assistant Program Support SASDO

Marie Florence Elvie Program Assistant Program Support SASDO

Syed Khaled Ahsan Public Sector Specialist Governance SASGP

Nadia Sharmin Environment Specialist Environmental Safeguard SASDI/SASDC

Ishtiak Siddique Procurement Specialist Procurement SARPS

Non Bank Staff

Name Title Office Phone City

Prof. N H Ravindranath Consultant – Climate Change, Forest Resource Planning and

Capacity Development

+91-80-23341838 Bangalore

James Carle Consultant – Silvi-culture & Forestry Inventory

+64-7-5749446 Mount Maunganui, Bay of Plenty

Teen Kari Barua Consultant- Social Safeguard +880-1758-250015 Dhaka

Asyl Undeland Consultant- Community Development and Livelihoods

Dhaka/Colombo

Lelia Croitoru Consultant – Economist +1- 202-458-8455 Washington D.C.

Aminur Rahman Chowdhury Consultant - Financial Management

+880-2-8159001/Ext. 4320 Dhaka

Md. Bazlul Kadir Consultant – Procurement +880-2-8159001/Ext. 4329 Dhaka

Junaid Kabir Choudhury Consultant – Forestry +880-1711-270739 Dhaka.

Locations

Country First Administrative Division

Location Planned Actual Comments

Bangladesh Chittagong & Borishal Cox’s Bazar, Chittagong, Noakhali, Laxmipur, Feni, Barisal, Patuakhali, Barguna and Bhola

X

vii

I. STRATEGIC CONTEXT

A. Country Context

1. Bangladesh is a low-lying, riparian country with highly fertile alluvial floodplains that drain into the Bay of Bengal through a constantly changing network of estuaries, tidal creeks and an active deltaic coastline. The lower part of the country adjoining the Bay of Bengal is known as the “coastal zone” and characterized by a delicately balanced natural morphology of an evolving delta. Its west zone includes the ecologically important Sundarbans mangrove forest area.

2. Tropical cyclones, storms and surges are major features of the coastal zone’s climate. These storms have a significant negative impact on the area and its growing population of about 16 million people. As a result of its historically large population and geography, the coastal area has suffered significantly from cyclone landfalls. Records of cyclones and surges go back more than four hundred years, and show that in the last two hundred years, the coastal zone has been affected by at least seventy severe cyclones, of which forty have occurred since 1948. The most deadly ones occurred in 1970 and 1991, causing over 350,000 and 140,000 fatalities, respectively.1 Available climate change models suggest that the intensity of super cyclonic events will increase over the coming decades, while declining forest cover will offer less protection against winds and storm surges. A thick forest belt along the coastline has a high potential as a buffer zone to reduce future climate change-induced threats, particularly the impacts of cyclones and storm surges. Forest ecosystems and biodiversity are also vulnerable to current climate risks and future climate change.

3. Bangladesh is among the most densely-populated countries in the world, already vulnerable to natural disasters and now becoming highly-affected by climate change. In addition to natural disasters and climate change impacts, the pressure on natural resources in Bangladesh is very high. Two-thirds of the land area is under crops, the highest proportion in South Asia, and cropping intensity is also the highest in the region, having increased by 25% over the last thirty years. Available evidence shows an imbalanced use of agricultural inputs and nutrient depletion. The share of land under forest cover is the second lowest in the region, with natural forest cover accounting for only half of that in the 1960’s. Moreover, degraded forests and ecosystems are more vulnerable to climate change. In this context, participatory afforestation and reforestation in coastal and hilly areas will be a key contributor in meeting the challenge of climate change vulnerability and depleting forest resources.

B. Sectoral and Institutional Context

Forestry Sector in Bangladesh

4. Forests are very important renewable resources in Bangladesh and play a crucial role for the livelihoods of communities, providing them with fuel wood for cooking, timber and pulp for construction and industrial purposes, non-timber products, including fibers, fruits, nuts, honey, as well as various compounding materials for gums, incenses, latexes, oils, resins, shellacs and 1Riaz, Ali, 2011. “Bangladesh” in Climate Change and National Security: A Country-Level Analysis. Ed. Daniel Moran. Washington, DC: Georgetown University Press. 103

1

tanning. It also controls or reduces the intensity of the cyclones and tidal surges in the coastal areas. It is estimated that at least 400,000 people are involved in the trade of forest products. Non-timber forest products contribute significantly to supporting the economic activities of at least 600,000 people.2 In addition, forests provide valuable ecosystem services: they maintain local climate and strongly influence global fluxes of oxygen and carbon dioxide; protect top soil and hold important nutrients; and act as a stabilizing force for top soil to prevent erosion in hilly areas. Forests also harbor tremendous biological diversity of flora and fauna, including unique species, such as the Royal Bengal Tiger in Sundarbans.

5. The past several centuries witnessed significant deforestation in Bangladesh, largely driven by illegal and unsustainable logging and harvesting, slash and burn agriculture, conversion of forested areas into non-forest land, including settlements, pastures, croplands, wastelands, or land used for recreational or industrial purposes.3 As a result, it is estimated that Bangladesh’s forest cover has been declining by 2.1 percent annually in the last three decades alone4. Today, forest cover is estimated to be around 2.56 million hectares (m ha),5 or 17.8 percent of Bangladesh’s total land area.

6. Global climate change models show that declining and deteriorating forest cover significantly reduces the opportunity to mitigate climate change. Thus, if total forest cover continues to decline in Bangladesh, the potential for forests’ carbon sequestration will be reduced in coming years. Further, climate change could adversely affect forest ecosystems, biodiversity and even mitigation potential of forests.

7. Since 1960, the Bangladesh Forest Department (BFD) has implemented afforestation programs on the coastal embankments, newly accreted coastal char lands and offshore islands, along the 710 kilometer (km) of coastline. To date, planted mangrove forests cover more than 0.17 m ha of embankments, chars and islands and represent a unique greenbelt along the coastline.6 Afforestation of foreshore and of tidal areas outside embankments proved to be a cost-effective method to dissipate wave energy and reduce embankment flooding during storm surges. For example, Cyclone Sidr in 2007 and Cyclone Aila in 2009 caused less damage to property and fewer life losses in Chokoria and surrounding areas compared to the devastating results of the cyclone in 1991. This was due to afforestation on the foreshore of embankments, which substantially broke the storm surge velocity.7

8. The Government of Bangladesh (GoB) has recently approved an afforestation project to establish plantations of mangrove (12,355 ha), non-mangrove (400 ha) and strip (678 km) in coastal areas. UNDP is also supporting the Community-Based Adaptation to Climate Change 2Junaid K. Choudhury and Md. Abdullah Abraham Hossain. Bangladesh Forestry Outlook Study. FAO, 20113Kricher, J. A Neotropical Companion. Princeton University Press, 1997.4 Global Forest Resources Assessment 2010 of FAO reports annual change in extent of forest in forest department lands is -0.18% during 1990-2005.5This includes all classified (1.49 m ha) and unclassified (0.73 m ha) state owned forestland, village forest lands or homestead forestry (0.27 m ha), tea estates and rubber gardens (0.07 m ha). The classified forest includes hill forests (43.8%), natural mangrove forests (39.2%), mangrove plantations (9.2%) and sal forests (7.8%). The unclassified forest mainly concentrates in the Chittagong Hill Tracts, and cover about 29% of the country’s total forest land. (An Overview of Social Forestry in Bangladesh, Bangladesh Forests Department and University of Chittagong, 2004).6The species planted under the afforestation programs include Sundri (Heritieraformes), Gewa (Excoecariaagallocha), Keora (Sonneratiaapetala) and Passur (Xylocarpusmekongensis).7Cyclone Sidr in Bangladesh: Damage, Loss and Needs Assessment for Disaster Recovery and Reconstruction, Government of the People’s Republic of Bangladesh 2008.

2

through Coastal Afforestation in Bangladesh as a follow-up of the National Adaptation Program for Action (NAPA). It may be noted that the government plans establishing 500 meter width mangrove afforestation as a cost effective method to protect embankments in front of sea-facing polders. Currently, approximately 60 km of the total 957 km of embankments along sea facing polders are protected by mangrove forests. These include some forest belts that are degraded.8

This indicates the need of afforestation program for the coastal areas of Bangladesh.

9. While the Government is planning to increase the afforested and reforested areas, the major challenge remains in ensuring proper management and monitoring of existing forest resources. The improvement of existing forest resources management requires significant capacity building and sector reform. The specific sector reform activities in forestry include analytical inputs such as revise of forestry sector plan, establish forestry inventory and monitoring, ensure local communities participation and institutional strengthening for better planning and management. These activities are critical because most reforms are well-designed but proven to be difficult to implement in Bangladesh. Reforms without sector investment also do not normally get adequate attention in the government system. If investments are not continued for afforestation and reforestation, Bangladesh may not retain the existing deforested land for future plantation. Delay in afforestation and reforestation will increase the climate vulnerability and further reduce the potential for carbon sequestration. As such, afforesting and reforesting accompanied by improved forest management and participation of forest dependent communities is critical for addressing the challenges of vulnerability to climate change in Bangladesh and also preparing the BFD to mainstream climate change in planning and management of future forestry investments.

Institutional Context

10. Forest legislation in Bangladesh dates back to 1865, when the first Indian Forest Act was enacted by the British Raj. It provided for protection of tree, prohibition of cultivation, and grazing in forest areas. A comprehensive Indian Forest Act was formulated in 1927. It aimed at progressive commercialization of forest use for revenue maximization and expansion of agricultural land at the expense of forests for commercial farming, ignoring traditional rights of local communities over forest resources.9 Following Bangladesh’s independence in 1971, an amendment of the Forest Act of 1927 was drafted in 1987 and approved in 1989. The Forest Act was further amended in 2000 and some major changes have been brought in the Act. In addition, Bangladesh adopted the first National Forest Policy in 1979 with the objective of providing greater protection to forests, and placing more emphasis on conservation of the country’s forests, whilst developing its rural and industrial economies. However, this policy had largely remained unenforced, resulting in little changes from the traditional colonial-industrial approach.

11. In 1994, BFD under the Ministry of Environment and Forests (MoEF) introduced a new policy that represented a marked shift in the approach to forest management. Its stated objectives are to contribute to sustainable development and poverty alleviation through people’s participation in forest protection and management, and support for forestry development from a

8Economics of Adaptation to Climate Change, Bangladesh Country Study. The World Bank Group 2010.9Forests and Forestry” in Bangladpedia, The Encyclopedia of Bangladesh (accessed April 28, 2012 at http://www.banglapedia.org/httpdocs/HT/F_0158.HTM)

3

broader sector of society. Social Forestry (SF), a unique benefit sharing mechanism for the community was introduced to share forest based resources (for both non timber forest products and major forest products) through Forest (Amendment) Act 2000 and the Social Forestry Rules (approved in 2004 and amended in 2010 and 2011). In addition to the income and employment generation, SF introduced temporary community rights which are essential for sustaining local community interest to protect the forest and to optimize the multiple use values as standing forests rather than clearing it for other land uses. However, existing guiding principles and policies on forest management and overall forest sector planning are not in harmony with new incentive mechanisms that are being adopted in social forestry around the world for securing local community participation in sustainable forest management.

12. In the broader context, forest management in Bangladesh has lacked a consistent plan or framework demonstrated by weak adoption of Forestry Master Plan and subsequent Forest Management Plans. For example, the current Forestry Sector Master Plan for the period 1995-2015 has not gained substantive traction as a guidance tool for managing the forest sector. The Master Plan which was to provide the road map/framework for optimizing the forestry sector’s contribution to stabilize environmental conditions and assist economic and social development has not been reviewed or updated routinely to reflect the new and emerging dimensions of forest management. As a result, the Plan does not cover new and changing paradigms for social and participatory forestry, climate change impacts, water resource management, biodiversity and wildlife conservation, institutional and capacity needs, new financing for forest management such as carbon financing, REDD and REDD+, etc. Also the absence of a systematic and routine inventory and monitoring of forest resources weakens the baselines data for proper forest sector planning. Data when exist, are often scanty, outdated or unreliable 10. Forest inventory and assessments have been undertaken on an ad hoc basis with no formal and regular resource monitoring and assessment capability within the Forest Department.11 Existing data on forest growth rate, forest area, rate of forest loss, forest density are inconsistent or have significant margins of error. Hence obtaining reliable information on the country’s progress with slowing deforestation and forest degradation is severely impaired.

13. Considering that coastal and hilly areas are ecologically sensitive and extremely vulnerable with climate change already manifesting, adhering to a structured approach to development planning and disaster management is essential. Uncoordinated and disparate development interventions for afforestation could potentially lead to net degradation of coastal natural resources with the risk of excluding poor and vulnerable sections of local communities’ from accessing natural resources to support their livelihoods.12

C. Higher Level Objectives to which the Project Contributes

14. The project is aligned with the Bangladesh Sixth Five Year Plan (FY2011-FY2015) with the specific tasks of conducting climate resilient afforestation and reforestation of hill forest land, coastal areas and plain land forest and creating the Coastal Green Belt and enhancing

10 Forest data sources are disparate with varying levels of reliability. Systematizing forest data will help solve the problem with stove piping.11For example, a detailed assessment of coastal forests was carried out during 1984-85 with no follow-up resource assessment and monitoring. The Food and Agriculture Organization (FAO) supported another assessment of the national forest and tree resources during 2005-2007 by using a sampling method and focusing mainly on village forestry. 12 Especially with integrating fisheries and forest management

4

access to input materials, including seeds and seedlings to prevent the extent of damage by cyclones and tidal surges. In addition, the project supports the Bangladesh Climate Change Strategy and Action Plan (BCCSAP) of 2009, which integrates climate constraints and opportunities for economic and social development of the country and based on six pillars.13

15. The proposed project will be implemented with grant funding from the Bangladesh Climate Change Resilience Fund (BCCRF), which was established in 2010 to implement programs in line with the Bangladesh Climate Change Strategy and Action Plan (BCCSAP).

16. The project is also in line with the second pillar of the World Bank’s Country Assistance Strategy 2011-2014 (CAS)14: Reduce Environmental Degradation and Vulnerability to Climate Change and Natural Disasters.

II. PROJECT DEVELOPMENT OBJECTIVES

A. PDO

17. The project development objective is to reduce forest degradation and increase forest coverage through participatory planning/monitoring and to contribute in building the long-term resilience of selected communities in coastal and hilly areas to climate change.

18. The project development objective will be achieved by: (i) establishing newly afforested and reforested areas using climate resilient species to work as windbreak against cyclones; (ii) strengthening and diversifying alternative livelihoods of forest-dependent communities; and (iii) improving the institutional capacity of the forest department to sustainably manage forest resources in the face of the climate change.

B. Project Beneficiaries

19. The primary beneficiaries of the project are the communities living close to the target areas, as the afforestation and reforestation will work in the long-run as the natural green belt (wind breaker) against cyclones and contribute in stabilizing denuded land. Participating communities will be selected based on clear criteria, such as proximity to areas to be afforested and reforested, poverty level and degree of impact from climate changes. The project will directly support the communities by creating around 3.18 million work days in the afforestation/reforestation program and rehabilitation/reconstruction of office infrastructure. Around 6,000 poor and forest dependent households in 200 communities will participate in the alternative livelihoods support program to reduce their dependence on forest resources. These households will be identified on the basis of participatory wealth ranking and their dependence on forest resources. Women headed households and other vulnerable groups will be given priority. The communities close to buffer zone and strip plantation will benefit through their direct participation in the social forestry program. Around 15,000 forest dependent people will receive training on participatory forest management, climate change risks and potential benefits,

13 The six pillars: (i) Food security, social protection and health; (ii) Comprehensive disaster management; (iii) Infrastructure development; (iv) Research and knowledge management; (v) Mitigation and low-carbon development; and (vi) Capacity building and institutional development. The project address most pillars of the project. 14 Report No. 54615-BD; Bank Board Date 8 July, 2010

5

basic entrepreneurial and business management skills. Finally, the project will develop the capacity of BFD for better planning and managing the forest resources and 397 staff will receive direct capacity building support.

C. PDO Level Results Indicators

20. The following outcome indicators are proposed. The indicators marked (*) are core sector indicators. The results framework is in Annex 1.

a. Area restored or re/afforested (ha) (*);b. Forest users trained (#) (*);c. Increased household income of beneficiaries participating in alternative income-

generating activities; d. Reforms in forest policy, legislation or other regulations supported (Yes/No) (*); e. Government institutions provided with capacity building support to improve

management of forest resources. (#) (*); andf. Direct project beneficiaries (number), of which female (percentage) (*).

III. PROJECT DESCRIPTION

A. Project Components

21. The project will focus on enhancing resilience of forest ecosystem and communities in nine coastal and hilly districts.15 The project will have four components i) afforestation and reforestation program; (ii) alternative livelihoods to support forest communities; (iii) capacity development for forest resource planning and management; and (iv) project management. The project components are designed to complement and support each other.

Component 1: Afforestation and Reforestation Program (US$22.0 million):

22. The objective of this component is to increase the afforested/reforested areas through participatory forestry and co-management approach in the degraded forestland, marginal, fallow and newly accreted land in coastal and hilly areas. In achieving the target of participatory afforestation and reforestation, the component will also support the rehabilitation/ reconstruction of the existing field offices of the Bangladesh Forest Department (BFD).

(i) Participatory Afforestation and Reforestation(approximately US$19.0 million)

23. This subcomponent will contribute to afforestation and reforestation of total 17,000 ha land and 1,672 km roadside plantation and include two types of forestry technologies (i) treatment and reclamation of coastal mangrove land, and (ii) treatment of the undulating terrain

15In coastal region, target geographic area will cover nine coastal districts out of the nineteen coastal districts of Bangladesh. These coastal districts are Cox’s Bazar, Chittagong, Noakhali, Laxmipur, Feni, Barisal, Patuakhali, Barguna and Bhola. In the hilly area, the project will target the core and buffer zones of the Reserved Forest Land of Chittagong District and Cox’s Bazar District. The BFD administrative divisions are different from the administrative districts and the above districts are divided in ten Divisional Forest Offices.

6

within 20 km radius of coastal zone. Both types of land are affected by frequent cyclones. The proposed afforestation/reforestation is not a conventional forestry plantation work – rather an initiative with a clear climate change related productive purpose. The project will plant around 7,000 ha as part of stabilizing the newly accreted land (a type of delta formation), which are subject to increasing incidence of cyclone and also extremely critical for ensuring a sustainable mangrove succession process. This will subsequently reduce the impact of the cyclones. The remaining around 10,000 ha afforestation and reforestation are selected for two districts that fall between 15 and 20 km of coastline and are frequently affected by cyclones. The afforestation and reforestation will provide livelihood options for local communities, which will help to restore degraded natural forests and increase their resilience to climate change. The project will promote locally proven nursery and plantation techniques with international best practices for ensuring quality planting stock and successful plantation establishment. For nursery techniques, the project has proposed specific “Sonneratia Appetala” practice, which is quite common in mangrove forest, in both India and Bangladesh proven to help in stabilizing Char mangrove lands. A nursery and plantation manual will guide the overall afforestation and reforestation program. Special attention will be provided in careful selection of species to enhance resilience.

24. The afforestation and reforestation will be undertaken on available lands that are not yet covered by other planned and on-going projects of BFD. The lands are already identified and available to BFD. This component will support nursery raising, tree planting, 2 years of maintenance, beneficiaries’ selection, and monitoring and evaluation of the plantation program.

25. Community engagement in the core and buffer forests in the hilly areas is critical to the sustainability of the program. The project will engage local communities in afforestation and reforestation activities throughout the project cycle. BFD will prepare a list of initial participants (preferably with voter ID number) who are willing to work as laborer in plantation program on daily wage basis. This list will be prepared through participatory process and each participant will have a code number, which will be used as a reference number for payment. The project will also pilot an open, inclusive and transparent process of participant selection of social forestry program. Instead of selecting at the Upazila Office, the participants will be selected consultative process with engagement of local governments and community institutions in the identification, selection and affirmation processes at Union level. The criteria for the participant selection are defined in the social forestry rules 2004 (amended in 2010 and 2011).16 These participants in a group will be recipients of the direct benefit of final harvest and will enter into an agreement with BFD for maintaining the afforested/reforested areas.

(ii) Rehabilitation/Reconstruction of Forest Department Field Infrastructure (US$3 million)

26. The objective of the subcomponent is to rehabilitate and/or reconstruct the existing field level offices in the project area to ensure proper operation of BFD. The subcomponent will follow the design and construction practices and that have no or little residual impacts on the biological, physical and natural environment that could potentially support forest biodiversity

16(i) Landless, including those who may only have homestead land (vita) or who own less than 0.2 ha (50 decimals) of land, other than the homestead land; (ii) destitute women (widows, deserted by husband and the like, who are living in poverty); (iii) socially backward/ disadvantaged in terms of socioeconomic condition, etc.; (iv) poor households belonging to the small ethnic groups; (v) poor forest villagers, who have been living within the forests and deforested lands; and (vi) Insolvent freedom fighters, or their insolvent heirs.

7

conservation by (i) minimizing and mitigating adverse impacts of infrastructure through appropriate site selection and construction methods; and (ii) remediating and compensating for any residual damage to have a net positive impact. The design options will consider solar power system and rainwater harvesting. 43 field offices will be rehabilitated and/or reconstructed under this component. It is anticipated that the civil works will generate local employment of about 0.18 million work days.

Component 2: Alternative Livelihoods to Support Forest Communities (approximately US$4.0 million)

27. The objective of this component is to improve and diversify non forest-based livelihood opportunities of poor forest dependent households in selected forest communities. Scientists have projected that the frequency of climate change event in Bangladesh is likely to impact all natural resources and food security systems in the coming decades. There is realization at the national level on the need for increasing the climate resilience efforts at the community level particularly in degraded forest areas. The livelihood interventions under this project have been designed as part of the resilience strategy at the community level. 200 community based groups will be formed in project areas to demonstrate alternative livelihoods options that not only conserve the newly planted areas but also help demonstrate reducing the dependency on forest resources. Piloting such resilience approaches in project areas is critical to mitigate climate change in a cost-effective way while providing multiple socio-economic and environmental co-benefits.

28. The success of such resilience approach is mainly determined based on the type of catalytic organization involved in community mobilization and institution building. Arannayk Foundation (AF)17 will act as the key catalytic organization to provide such support to the project since it has proven experience with the improvement of livelihoods of the forest communities.

29. Third party monitoring and evaluation of AF’s work conducted in 2011 showed a significant reduction of harvesting of forest resources among projects’ beneficiaries, with a 70% reduction in logging and a 50-60% reduction in collection of fuel wood, 50-70% collection of bamboo and canes, and up to 90% reduction of Jhum cultivation. Indigenous communities participating in the projects almost fully stopped slash and burn practices. Data also shows reduction of harvesting forest resources by 25% in participating communities in general. Overall dependency on forest resources of poor households participating in their livelihood programs has been reduced by three times. This livelihood initiative reduces pressure on natural forests that can strengthen their resilience to climate change.

17AF (also known as the Bangladesh Tropical Forest Conservation Foundation) is a not-for-profit making company (limited by guarantee and not having a share capital). It was established in 2003 by the joint initiative of the Governments of the People's Republic of Bangladesh and the United States of America based on the provisions of the US Tropical Forest Act of 1998, which seeks to contribute to the conservation of biodiversity assets of tropical forests. AF’s mandate is to promote conservation and restoration of tropical forests and forest biodiversity through promoting alternative income-generating activities (AIGAs). It has Board of Directors with representatives of civil society, and of Bangladesh and US Governments. Its Secretariat is comprised of eight people, including four technical experts. It has started grant giving activities in 2006 and by January 2012 it awarded more than 60 grants to organizations (i.e. NGOs, Universities, local government agencies) to implement field-based projects in or around forests and protected areas. The average grant size provided to partner NGOs is around US$100,000, with some grants higher than US$500,000.

8

30. The design of the component builds on the proven approach of AF to improve alternative livelihoods in forest communities. This approach is further supplemented by additional mechanisms and arrangements to enhance sustainability of project results in decreasing the pressure on forest resources and improving alternative livelihoods. These changes include better targeting and selection of communities, a more inclusive selection process of beneficiaries, and strengthening of livelihood activities by proactively channeling them towards value-added economic activities with higher returns than from forest based activities.

31. This component will target 6,000 households comprising no less than 25,000 people in 200 forest communities in 9 project districts with a clear and sound selection method. In the first year, funds will be channeled to promote small-scale AIGAs at the household level (e.g. goat and poultry rearing, vegetable cultivation, small scale trade). In the second year, the project will identify the activities which have potential for being expanded at the community level (e.g. establishing cooperatives for improving marketing channels for local products, community based eco-tourism, making energy efficient cooking stoves, and agricultural firms). The component will also improve linkages with BFD through mobilizing the targeted communities into Forest Dependent Groups (FDGs). These FDGs will benefit from AIGA and will also participate in social forestry and afforestation works. These groups are expected to work closely with BFD and play an important role in protecting forest resources.

32. The component will finance i) development of major guidelines and information materials, selection of communities and beneficiaries, developing work plans and budgets; ii) social mobilization, FDG formation, organizational development and capacity building at the community and Union Parishad level, formulation of livelihood plans and establishing mutual rotating and saving funds; iii) livelihood capacity building and implementation of livelihood activities; iv) identification of potential economic activities for scaling up and value adding, support to value adding activities; v) alternative income generating activities that diversify livelihoods and reduce exposure to climate risks; and vi) component management, monitoring and evaluation, and reporting.

Component 3: Capacity Development for Forest Resource Planning and Management (US$5.5 million)

33. The objective of the component is to improve the technical knowledge base on forest resource assessment, program monitoring and long-term planning for the sustainable development of the forest sector. This component aims to improve forest management practices through three specific interventions: (i) improving the current management practices backed by technological interventions; (ii) building the capacity of the department not only by deploying appropriate manpower and training plans, but also by proper resource planning, resource management and human resource (HR) assessment. Such capacity development plan would also include specific requirements keeping in mind the climate variables evident in Bangladesh for both mitigation and adaptation; and (iii) reviewing and revising the existing forest master plan with evolving trend in forestry practices, socioeconomic, livelihood and climate resilience attributes, increasing land use change pressures and new policies/strategies. This component would ensure that subsequent forestry subsectors plans can be realistic and within the available

9

budget envelop and potential additional financing. These three interventions will require extensive technical assessment, studies and stakeholder consultations.

34. The project will establish a forest resource assessment and monitoring system at BFD with the use of Remote Sensing (RS) and Geographic Information System (GIS) technologies. The system will be strengthened through cross field verification. This system will provide BFD with (i) scientific and comprehensive data and information on existing resources in coastal and hilly areas; and (ii) baseline for determining future afforestation/reforestation needs, thereby contributing to better planning. The assessments will be carried out in the first and last year of project implementation. They will determine the extent of changes in plantation cover or forest density that have occurred during the project timeframe. In addition, the subcomponent will help BFD to strengthen its overall monitoring system by formulating guidelines for quality assurance of data, results, mapping and assessment of change in forest. This will be tested at the pilot level as a demonstration in the application of new scientific knowledge and technology in monitoring and assessment of forest resources. Furthermore, this component will also help BFD in disclosing and disseminating the project related information in the website and print media.

35. The project will support the review and update of the existing Forestry Sector Master Plan (1995-2015). It will be done by adopting a consultative and inclusive process to prioritize the relevant issues and challenges. The update will include contemporary issues of climate change impacts, adaptation measures and carbon sequestration. The analytical studies such as economic cost-benefit of afforestation/reforestation investment, impacts of climate change, improved water management in hilly areas, land tenure issues in accreted afforested areas, policy, institutional and governance structure of BFD for participatory approach and improved forest management practices will be carried out to strengthen the knowledgebase and contribute to the relevance of the master plan. The updated master plan will also highlight the importance of other biota like fish and wildlife of the forest for their sustainable harvest and conservation. It will explore potential financing support through bio-carbon financing for sustainable forest sector planning and management. The plan will include a section on short, medium and long term investment requirements.

36. The project will also strengthen the capacity of BFD and targeted communities to better manage forest resources in confronting with climate change risks. This component will be implemented in close coordination with the training circle of BFD and will support capacity assessment and provide a strategy for capacity development. Some BFD officials and staff will receive long-term training (i.e., one year masters/diploma program for seven officials18 and two to three months training for twenty officials), while another 370 officials and staff will benefit from short-term training on impacts of climate change on bio-diversity and forests, community mobilization and participatory process, land use planning, methods to design and implement policy, programs and projects in coastal and hilly areas. Special attention will be given to quality assurance, RS, GIS, management information systems, performance management/ monitoring and evaluation. The targeted beneficiaries also will receive training on forest conservation, common resource management and climate risk mitigation.

18 Five BFD officials and two MoEF officials

10

Component 4: Project Management (US$3.5 million):

37. This component will support the establishment of a Project Implementation Unit (PIU) in BFD for implementation of component 1 and 3. The PIU will provide necessary support for financial management, social and environmental safeguards, communication and procurement to AF. The budget will cover consultancy fees, routine monitoring, travel, purchase of office equipment and vehicles (including small water vessels), emergency maintenance works, meeting costs, audits and other operating costs necessary for project implementation and reporting.

B. Project Financing

Lending Instrument

38. The project will be funded through a grant provided by the Bangladesh Climate Change Resilience Fund (BCCRF) and envisages a combination of technical assistance to forest conservation and investments in increasing the afforestation and reforestation area. The Bank's investment lending instrument selected for the proposed project is a Specific Investment Loan (SIL).

Project Cost and Financing

39. Total project costs are estimated at US$35 million. BCCRF’s projected contribution is US$33.8million. GoB will provide US$1 million in-kind contribution to the project to cover the salaries of existing and deputed government staff who will work on the project and the cost of the office space and existing logistics. AF will contribute US$0.2 million in cash for Component 2. The table below provides detailed costs estimates, while Annex 2 contains a detailed cost table.

Component Indicative Costs

(US$M)

% of Total

BCCRF (US$M)

% Financing by BCCRF

GoB (US$M)

Kind

AF (US$M)

Component 1: Afforestation and Reforestation Program

20.9 59.71 20.9 100.00 0.00 0

Component 2: Alternative Livelihoods to Support Forest Communities

3.8 10.86 3.61 95.00 0.00 0.19

Component 3: Capacity Development for Forest Resource Planning and Management

5.225 14.93 5.225 100.00 0.00 0

Component 4: Project Management 3.375 9.64 2.375 70.37 1.00 0

Total Baseline Cost 33.3 32.11 1.00 0.19

Price Contingency (5%) 1.7 4.97 1.69 99.41 0.00 0.01

Grand Total 35 100.00 33.8 96.57 1.00 0.20

C. Lessons Learned and Reflected in the Project Design

40. The Bank’s past experience with Forestry Sector in Bangladesh: IDA supported the forestry sector in Bangladesh through funding of three forestry projects between 1980 and 2001.

11

The first project was Mangrove Afforestation Project (Cr. 1042-BD; Credit Amount US$11 million, implemented between 1980 and 1986), which established about 30,500 ha of new plantations and demonstrated the value of remote sensing (RS). Key lessons learned were: (i) flexible rotation period for mangrove should be considered since growth is rapid up to 8-10 years and stops thereafter (presently assumed 18-20 years); and (ii) coordination among land use agencies in the coastal areas should be established to prevent allocation of some mangrove areas for use in other activities before the plantations are mature.

41. Upon project completion, IDA provided support to the sector by financing the Second Forestry Project (Cr. 1634-BD; Credit Amount US$28.0 million) between1986 and1992. The project’s principal objective of expanding the forest resource base was successfully met. The main lessons were: (i) a five-year project period was too short, particularly in the absence of annual monitoring; (ii) greater prominence needed to be given to people's participation in project design and execution; (iii) new staffing and recruitment policies needed to be agreed at the start of the project; and (iv) a clear institutional mechanism to allocate reclaimed coastal lands to their most appropriate long-term use consistent with environmental protection.

42. The Forest Resources Management Project (Cr. 2397-BD; Credit Amount US$53.23 million) was implemented between 1992 and 2001, with satisfactory achievement. It established the basis for an improved forest management system. The project also established 33,570 ha mangrove forests and 36,500 ha of industrial plantation. The key lessons were: (i) effective plantation management and achievement of optimal forest products yields require adequate and timely provision of funds; (ii) sustainable management of mangrove plantations depends on having a sound legal basis for tenure, within an agreed policy for disposition of the mangroves and accreted land to their best land use;19 and (iii) effective development and management of forests and protection of wildlife and protected areas must consider the needs and possible involvement of marginal and landless people adjacent to the forests.

43. Lesson Learned used in Project Design: One of the major lessons learned from earlier projects is to involve the forestry community in plantation process. The proposed project design does involve the forest communities throughout the planning process and includes a dedicated component to support alternative livelihoods to reduce their dependency on forest resources. The technical studies under the component 3 takes into account lesson relating to staffing and institutional mechanism to develop long-term sustainable plan to ensure efficient allocation of project funds, strengthen design and implementation framework and enhance opportunities for sustaining project outcomes.

44. The GoB instituted arrangements for reclaiming and stabilizing char/newly accreted lands and BFD is in control of newly accreted lands for a minimum of 20 years during which natural and artificial colonization of vegetation is encouraged over the char land to stabilize while increasing its height above sea-level to make it habitable and or arable for agriculture and other land uses. Coastal afforestation programs are guided by the principle that 50% of forested accreted lands will remain under forest cover in reserve forest status even after the twenty year forestation and soil stabilization cycle. The remaining 50% would be returned to the Ministry of Lands to demarcate for other land uses. This ‘50-50’ arrangement is to ensure that the protective attributes of forest shelter belt system and the land stability in the coastal area are not 19Such as protective belt, wood production, or conversion to agricultural or grazing use.

12

compromised after the 20 year period. The project has considered afforestation and reforestation only in areas which are already under the forest department. In addition, the project design includes organizing district level project launching meeting to improve the field level coordination among different stakeholders.

45. BFD has already adopted a flexible approach about the rotation period especially in buffer zone. Although even a five-year afforestation and reforestation project is very challenging from implementation point of view, the project is designed only for around four years considering the current grant agreement between the World Bank and the Government for BCCRF. BFD has ensured proper maintenance and monitoring work beyond the project period.

46. The Bank’s recent engagement with Forest Sector in Bangladesh: In FY11, IDA approved an Adaptive Program Loan on ‘Strengthening Regional Cooperation for Wildlife Protection in Asia.’ Bangladesh received an IDA credit of US$36 million (Cr. 4909-BD) for: (i) capacity building to address illegal wildlife trade through regional cooperation; and (ii) habitat protection and management to generate regional conservation benefits and address the human-wildlife conflict, thereby ensuring the conservation of wildlife in increasingly fragmented habitats. In addition, the Bank is carrying out a non-lending technical assistance activity on the Bangladesh Sundarbans that would enable GoB to develop an action plan in that area to address climate change adaptation, biodiversity conservation, income growth and poverty reduction.

47. Lesson learned from projects aimed at development of alternative livelihoods activities in forest communities: The Alternative Livelihoods to Support Forest Communities component draws on the experience of projects in Bangladesh and the South Asian region (see Annex 8 for detailed report on lessons learned). Experience was gleaned and assessed in consultations with development partners, BFD officials at the national and local level, NGOs and community representatives. The key lessons learned and incorporated in the design of the proposed component include:

a) Engaging communities and inclusion. A key element for targeting poor and marginalized persons is the creation of resource users’ groups in conservation and protection of natural resources. When successful, these groups overcome gaps in social capital and reinforce positive dynamics in building trust, increasing useful feedback mechanisms with external entities like BFD, mutual assistance, and implementation of sustainable forestry practices. For livelihood improvement purposes, these consist of households which mostly depend on illegal and informal extraction of forest resources for subsistence and limited surplus trade.

b) Viability and sustainability of alternative income generation activities. Targeted beneficiaries are poor, vulnerable households who lack education, and often knowledge and skills about activities besides forest extraction. These households are vulnerable to various shocks and natural calamities. The most frequent livelihood activities in current and past projects relate to agriculture, such as cropping and gardening on homestead or leased lands, goat and poultry rearing, cattle fattening, fish cultivation; small scale trade and services, such as establishment of small shops, providing rickshaw services, various cottage production, such as sewing, embroidering,

13

making cloth, weaving, making bamboo baskets, mats and furniture. While such activities are low risk and do not require substantial inputs and knowledge, they might not bring high returns to compensate from forest extraction livelihood activities. Thus, empowering participating households through trainings and skill development is a very important factor for sustainability of their alternative livelihoods activities. Business skills and traits are not easy to locate in rural areas and local NGOs often lack knowledge and expertise in development of income generating activities, especially of value-added activities.

c) Financing arrangements. Group savings allow individual households to obtain funds on conditions that are favorable for the start-up of small scale enterprises. There have been many successful examples in Bangladesh with mutual rotating and saving funds established and managed by groups, and repayment rates have been very high. AF has successfully implemented all its projects based on that scheme.

IV. IMPLEMENTATION

A. Institutional and Implementation Arrangements

48. BFD will be responsible for the overall execution and implementation of the project. AF will implement Component 2. BFD has past experience in implementing World Bank- funded projects and successfully completed three forestry sector projects between 1980 and 2001. BFD is currently implementing the APL for Strengthening Regional Cooperation for Wildlife Protection in Asia. However, BFD staff needs training in Bank requirements and processes, since most of the mid-level officials (Divisional Forest Officer responsible for field level implementation) are not experienced with implementation of Bank supported operations.

49. BFD will establish a full-fledged PIU headed by a Project Director (not below the rank of the Deputy Conservator of Forests). The PIU will be equipped with relevant qualified specialists who will receive market-based compensation. The PIU will support AF in implementing Component 2. A Project Manager will be hired to coordinate day-to-day managerial activities and provide technical guidance and input for different components. BFD officials will work closely with specialists and will receive appropriate on-the-job training to develop individual and institutional capacity to implement large scale projects. A Project Implementation Committee (PIC) at BFD with AF representation will also be formed to ensure overall coordination of project implementation. The PIC, chaired by the Chief Conservator of Forests (CCF), will be responsible for: (i) reviewing the quarterly and annual progress of the project based on reports prepared by the PIU and AF; (ii) guiding the PIU and AF on implementation; (iii) reviewing and approving updated procurement plans and interim un-audited financial reports (IUFRs); and (iv) making independent field visits to the project areas to assess field implementation.

50. BFD’s ten Divisional Forest Offices, headed by the Divisional Forest Officers (DFOs), will be responsible for implementing activities on the ground. Assistant Conservator of Forests, Range Officers, Beat Officers and accounts/admin staff assist the DFO in implementing the

14

field level activities. Each DFO will be supported by one Community Mobilization Officer (Junior Consultant) and one Account Officer (Junior Consultant) through project financing.

51. A high-level Project Steering Committee (PSC) will be formed by the Ministry of Environment & Forests (MoEF) and the Secretary of MoEF will chair the PSC. The PSC will comprise relevant Government Officials (MoEF, other relevant Ministries, Economic Relation Division, Planning Commission, Implementation Monitoring and Evaluation Division, Bangladesh Forest Department etc.), Executive Director of AF and a representative from the World Bank. The PSC can co-opt additional members from civil society organizations having relevant experience. The committee will meet at least once a year and if possible twice a year to take stock of progress of the project and provide implementation advice and guidance and policy directions.

52. AF, the primary implementing agency for Component 2. AF will develop the project concept for the component, issue Request for Proposals (RFP) and advertise in mass media. Using World Bank procurement guidelines, AF will competitively recruit specialized partner NGOs to implement the component in the project areas. Selected NGOs will establish Project Sites to reach about 200 communities and to establish 200 Forest Dependent Groups (FDGs).

53. AF will recruit a full time Project Coordinator and livelihood and business development specialists on a short term basis. AF will ensure quality supervision of all Component 2 activities. It will conduct periodic monitoring of project implementation along established indicators and review progress against work plans, budgets and other terms and conditions of the BCCRF grant agreement. The partner NGOs will submit quarterly, annual progress reports and completion report to AF Secretariat.

54. AF will submit all project guidelines, consolidated implementation quarterly and annual reports, as well as monitoring reports to IDA for review and approval.

55. Financial Management. The PIU will have a financial management section headed by a Financial Management Specialist (FMS). The FMS will report to the Project Director and will be assisted by one Accountant (Consultant) in the PIU, ten Accountants (Junior Consultant) based in the Divisions and required support staff. The existing Finance Manager of AF will be responsible for overall FM management in component 2.

56. Procurement Arrangements. The PIU will have a Procurement Specialist (PS) who will lead the procurement activities under this project and will report to the Project Director. PS will work closely with 2 (two) procurement focal points assigned by 2 (two) implementing agencies. Information on the procurement guidelines, planning, particular methods of goods, works, consultancy, non-consultancy services, prior/post review requirements are included in the Procurement Plan, which will be updated at least semi-annually, as mentioned in the Procurement section.

57. Environmental and Social Safeguards Management. An Environmental Management Framework (EMF) and a Social Management Framework (SMF) have been developed because design and site selection of the specific activities under components 1 and 2 will be undertaken during the implementation. Specific screening/assessment and mitigation plans will be prepared

15

and implemented. Assistant Conservator of Forests (ACF) based at each division level along with Community Mobilization Officer (CMO) will monitor the social and environmental safeguard issues and ensure the successful implementation of the environmental code of practice, execution of social and environmental assessment and management plan.

58. Implementation plan. BFD and AF will jointly prepare an implementation plan in addition to the procurement plan. This plan will serve as a living document, which will be routinely updated to accommodate ongoing implementation changes. BFD and AF will have detailed Implementation Manual, which will be approved by the PIC and the World Bank before inception of the project.

B. Results Monitoring and Evaluation

59. The project will have a comprehensive monitoring and evaluation framework based on qualitative and quantitative indicators for each sub-component. These include: plantation coverage, income, employment, participatory management, capacity building indicators. Annex 1 presents the Results Framework and Monitoring to measure achievement of the PDO. It may be noted here that the project has adopted the definition of ‘Resilience’ from the recent report ‘Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation’ published by Intergovernmental Panel on Climate Change (IPCC). ‘Resilience’ is defined as the ability of a system and its component parts to anticipate, absorb, accommodate, or recover from the effects of a hazardous event in a timely and efficient manner, including through ensuring the preservation, restoration, or improvement of its essential basic structures and functions.

60. Component 3 will contribute to improving BFD’s data quality assurance and monitoring system. Forest inventory, socio-economic survey, RS and GIS will provide baseline and change monitoring of increases in afforested and reforested area and impacts of the project on resilience of forests and livelihoods of local communities.

61. The PIU will produce the quarterly and annual progress reports in an appropriate format to the Bank no later than 15 days after the end of each quarter. The Project Director of PIU and Executive Director of AF will be responsible for the preparation of quarterly reports on overall progress, site specific progress, major issues, expected completion dates for civil works, implementation of SMF and EMF, training, technical studies, procurement, and FM issues. The reports will include: (i) comparison of actual physical outputs and disbursement with updated forecasts; (ii) financial statements; and (iii) procurement report showing status and contract commitments.

62. Monitoring and evaluation (M&E) for component 2 on alternative livelihoods will be based on a relevant and clear-cut strategy and plan developed by AF. AF operates on the basis of its specific rules regarding monitoring and evaluation.20 For this project, AF will develop an M&E strategy and plan and train partner NGOs for implementation, starting from the base line survey. M&E strategy and plan will also include arrangements and formats, as well as indicators for monitoring of implementation processes and progress, the methodology for

20The rules can be found in Arannayk Foundation. 2011. Competitive Grant Making Procedure. January 2011. www.arannayk.org

16

http://www.arannayk.org/

evaluation intermediate and final outcomes, as well as impacts. The baseline study will implement a difference-in-difference approach for comparison between treatment (project beneficiaries) and control (non-beneficiaries) groups before and after project activities. AF Secretariat will carry out periodic monitoring of project implementation and review progress by undertaking field visits. The implementing partner NGOs will submit quarterly and annual progress reports to AF Secretariat.

63. To monitor project progress, two full implementation support missions will be undertaken annually by the Bank. Additionally, the Bank will monitor implementation throughout the year. A mid-term review of the project will be carried out by September 2015. An Implementation Completion Report (ICR) will be submitted to the Bank no later than six months after the closing date. Additional detail on the World Bank’s support to project implementation and monitoring can be found in Annex 5.

64. For an independent assessment on quantitative and qualitative performance of implementation, third party monitoring is proposed for the project. In addition, BCCRF secretariat will develop separate monitoring system for the projects to be funded under the trust fund.

C. Sustainability

65. The afforestation and reforestation is one of the key priorities of the GoB, which is reflected in the National Strategy, Bangladesh Sixth Five Year Plan (FY2011-FY2015) and BCCSAP. The project will contribute toward achieving the national targets on afforestation and reforestation and will complement on-going and future programs of the government. In addition, the project would contribute to the sustainability of the forestry sector by: (i) updating the Forestry Sector Master Plan to allow systematic and sustainable investment in the forestry sector in near future; (ii) strengthening the participatory forest management through transparent beneficiaries selection and capacity building of the Forest Department and its officials; (iii) creating alternative employment generation and reduce dependence on forest resources; and (iv) improving BFD’s system of data collection and monitoring and forest resource assessment.

66. At the end of each rotation period, the project beneficiaries from social forestry will get a share of the timber products and a set percentage will be invested for new plantation as per the existing rules.

67. However, there is still a risk of people continuing unsustainable forest harvesting, especially after the Project completion. The project intends to mitigate this risk by seeking to change the incentive structure that leads to illegal and unsustainable harvesting in several ways. First, beneficiaries will be participating in SF program of the project and will monitor own afforested plots. Second, all livelihood activities to be approved must show reasonable chance of obtaining a significantly higher return to the households than illegal forest harvesting. The Project also introduces a system of successive tranches to incentivize creation of value and higher returns through the livelihoods activities. Third, enforcement against illegal logging must come through a realignment of the incentive structure that abets this behavior. The project will aim to raise social pressure on beneficiaries’ illegal and unsustainable forest based activities. Communities will be empowered through conservation awareness program as well as

17

be engaged in community forest use monitoring to be piloted under component 3. Finally, mechanisms for social accountability among stakeholders will be prominent. There will be enhanced transparency in the selection of beneficiaries through involvement of the community and local government and holding of public decision meetings. Third party monitoring will be employed to track the implementation of project activities, with particular emphasis on inclusion and participation. A grievance Redress Mechanism established at the Forest Divisional Offices would provide avenue for complaints and verification of project related information. As an organizational mandate, AF will continue to work with communities to protect the forest and biodiversity after the project has closed.

V. KEY RISKS AND MITIGATION MEASURES

A. Risk Ratings Summary Table

Risk Rating Risk Rating

Stakeholder Risk S 1. Project Risk

Implementing Agency Risk S 2. - Design L

- Capacity S 3. - Social and Environmental H

- Governance S 4. - Program and Donor L

Project Risk - Delivery Monitoring and Sustainability S

5. 6. 7. - Other (Optional)

- Other (Optional)

Overall Implementation Risk S

B. Overall Risk Rating Explanation

68. The overall risk rating of the proposed project is substantial. The key risks to achieving the PDO fall under two main categories: project specific risks and risks in overall governance in the country and in the sector. The first category includes risks mainly associated with insufficient capacity of the implementing agencies in terms of logistics and adequate human resources to manage a large scale project in remote locations, and weak financial management system. To address these risks, the Project will recruit consultants for the PIU to undertake FM and procurement trainings, and will provide training to the relevant BFD staff on Bank processes and requirements, as well as monitoring and reporting systems. Control exercised by the DFOs, selected for project implementation will be strengthened through collaboration between the division’s own FM and the project resources. Other project-related and sector-related potential risks include: (i) delays in procurement and other approval processes; (ii) poor quality saplings and natural hazards; (iii) illegal deforestation; (iv) political and/or other influence on beneficiaries’ selection; (vi) lack of accountability and oversight within the BFD; and (vii) opposition and criticism from civil society and NGOs. The risk for implementation (before mitigation) is substantial.

69. The second category of key risks relate to the overall weak governance in the country and in the sector, including inefficient funding allocation for institutional development of BFD,

18

weak internal accountability and integrity mechanisms and insufficient citizen oversight. It may be noted that some members of civil society and NGOs in Bangladesh expressed earlier their concerns in regards to weak governance and accountability system in the BFD to implement effectively conservation projects. In this regard, the Bank may be criticized for being associated with the BFD in supporting and implementing this project. The detailed risk assessment is presented in Annex 4: Operational Risk Assessment Framework (ORAF). Governance related risks are presented in Governance Assessment and Action Plan in Annex 6. Several measures have been suggested to mitigate the risks. These are: (i) strengthening the oversight function: Bank review of audit reports and follow-up on actions taken by BFD to address audit recommendations; (ii) apply RS and GIS technologies to understand the plantation coverage under project; (iii) use independent third party monitoring for verification of project activities; (iv) random spot checking etc.

VI. APPRAISAL SUMMARY

A. Economic and Financial Analyses

70. Economic analysis. An integrated Cost-Benefit Analysis (CBA) of the project’s Components 1 and 2 shows an Internal Rate of Return (IRR) of 15 percent. When Component 3 is also integrated in the analysis, the economic IRR becomes 12 percent – a very conservative estimate, because of the difficulty to measure the component's benefits.21 To account for the climate change benefits of the project, the analysis covers a 30-year time horizon. It captures a wide range of benefits, varying from tangible goods (e.g. timber, non-timber forest products) to services provided on the coast (e.g. averted life and house damages from storm surges) and in hilly areas (e.g. protection against landslides). The CBA includes both direct costs (e.g. afforestation, rehabilitating field offices, monitoring, alternative income generating activities, AIGAs) and indirect costs (e.g. opportunity cost of land).

71. The analysis highlights that the project’s success depends on: i) the ability to maintain the forests during and after the end of the project; (ii) adopting coastal mangroves under certain technical parameters, such as minimum width; and (iii) adopting appropriate species on hilly areas that are able to provide good protection against landslides and erosion. Thus, the CBA is followed by sensitivity analyses to uncertain parameters such as deforestation and profitability rate of AIGAs.

72. Financial analysis. This section discusses the financial viability of the project, to ensure that afforested lands will be maintained beyond the end of the project. First, the viability depends on BFD’s ability to cover the costs related to the afforested areas (maintenance) after the end of the project. An analysis at BFD level indicates a financial IRR of 36 percent. It is expected that BFD and beneficiaries from the buffer and strip plantations will monitor and maintain the forests after the project ends.

21 For example, strengthened institutional capacity for monitoring, etc.

19

73. Secondly, the project’s financial viability depends on its ability to provide co-benefits (e.g. through AIGAs grants) that would reduce pressure on forests. A crude analysis of AIGAs' beneficiaries indicates that net returns from AIGAs exceed the forgone benefits from forests. This is the minimum requirement towards maintaining the project’s forests. The experience of Integrated Conservation and Development Projects (ICDPs) has shown that offering profitable alternative activities may not be enough to prevent households from continuing environmentally damaging activities22. To avoid these problems, the project will incorporate lessons drawn from the experience of other projects.23

B. Technical

74. The design of the project objectives, components and activities benefited from the contribution of the government, communities, development partners, NGOs, and a cross-sectoral IDA team. The proposed project would build upon the successful experience of IDA forestry projects between 1980 and 2001 and recent experience of afforestation and reforestation projects financed by the GoB and other development partners (DPs). Component 2 draws on the experience of similar types of projects in Bangladesh and in other South Asian countries. The project supports second generation interventions to empower the forest dependent communities to organize themselves, move towards sustainable livelihood options and to involve communities proactively in forest management.

75. The objective of the project aligns with five24 of the six pillars of the BCCSAP and the BCCRF Trust Fund which aims to ensure that citizenry are protected from climate induced adverse impacts. The project scope highlights key issues confronting forest contribution to mitigating and adapting to climate change in Bangladesh. First, climate vulnerability and climate change would have multi-dimensional implications on i) vulnerable ecosystems including the coastal and hilly zones; ii) poor and ultra-poor communities especially living in fragile landscapes; and iii) reversing trends in economic growth and efforts to reduce poverty. Second, forests have proven beneficial as biological shields in extreme climate events and for supporting rural livelihoods but, pressure on forest lands for other land uses such as agriculture, housing, industry and infrastructure are continuing to increase. However, the declining forest quality and cover cannot be assessed in the absence of reliable forest inventories. Lack of research, sector and forest management plans, and coupled with scarcity of funding, poor logistics and weak capacity of BFD field staff have resulted in unsustainable forest management.22This is because households may well undertake both, thus gaining the benefits of the alternative activity without forgoing those of the damaging activity. Moreover, there may be a timing problem if the profitability of AIGAs is delayed.23For example, the Bolsa Floresta Program in the Brazilian state of Amazonas adopted an approach based on conditionality: households that commit not to deforest receive both assistance in establishing sustainable production systems in agricultural areas and a nominal monthly payment, conditional on complying with the no deforestation rule.24The project hinges on five of the six priority pillars of the BCCSAP through its focus on i) ensuring food security, employment and access to basic services for the poorest and most vulnerable; ii) strengthening capacity of government and communities to manage natural disasters and through establishment of natural shelter belts; iii) contributing to research and knowledge to predict likely impacts on ecosystems in including the forest sector and rural economy; iv) expanding social forestry program on government and community lands and expanding the “greenbelt” coastal afforestation program with mangrove planting along the shoreline; and v) capacity building and institutional strengthening to enhance government agencies (this case Forest Department), civil society and forest fringe communities to handle and mainstream climate change control measures into development planning.

20

76. Recognizing these challenges, the proposed operation adopts a holistic approach that draws on improving afforestation and reforestation techniques using scientific nursery and tree out-planting methodologies involving communities; updating an integrated forest sector planning and divisional forest management plans to guide both Government and private sector forest investments; modernizing the capacity and institutional arrangements of BFD to implement and sustain project outcomes; and supporting implementation of the social forest policy.

77. While the focus will be on the coastal and hilly areas, the project interventions will cumulatively tackle underlying weak capacity, research and forest inventory gaps that are critical for sustainably managing the nation’s dwindling forests. The innovative design and implementation approaches would generate replicable lessons in terms of using open, transparent and inclusive project beneficiary selection process and integrating participatory forest management arrangements with alternative livelihoods generation. The project outcomes will lay the basis for follow up investments to sustain funding for this sector.

78. Component 1 is designed based on a detailed assessment of the availability of land, species and costing for different kinds of plantation at different stages (seedlings raising, site preparation, sapling planting, maintenance etc.) including transportation. An annual and division-based wise broad plantation plan has been prepared. An implementation manual with technical specifications of the plantation is under preparation and will be ready before project launch. The manual will guide for proper site selection, site-species selection, site preparation, quality control of planting materials, maintenance and protection.

79. Based on the experience of similar projects, component 2 will ensure the following aspects: establishment of partnerships among local governments, BFD , local NGOs, private sector and communities in afforestation, reforestation and livelihood development activities for promotion of forest co- management and sustainability of efforts; mobilization of poor forest dependent households into self-help groups and their empowerment through alternative income generating activities for conservation and sustainable use of forest resources.

80. Component 3 focuses on improving forest management practices through specific policy, planning and institutional interventions. This component will contribute in strengthening the existing planning and monitoring system of BFD. The sector, policy and institution specific studies to be carried out under Forestry Master Plan update will lead to a sectoral dialogue to identify the major challenges to the existing forest management. The study will also provide recommendations and action plans to address those challenges. The updated master plan is expected to create an opportunity for BFD to design a sustainable forestry sector program in the near future. Forest monitoring will be undertaken to establish a baseline and demonstrate change achieved through the project. The methods will adopt new inventory approaches, technologies and tools for ground survey of forest and tree resources, socio-economic survey and remote sensing to monitor and map land-use and land-use change. The techniques piloted within the project will provide the basis for planning a national forest inventory.

21

C. Financial Management

81. Financial Management Risk. The Financial Management assessment was carried out in accordance with the Financial Management Manual for IDA-financed investment operations issued by the Financial Management Sector Board on March 01, 2010. The objective of this assessment was to determine whether the two implementing agencies (i) Bangladesh Forest Department (BFD) under the Ministry of Environment and Forest (MoEF); and, (ii) Arannayk Foundation (AF) responsible for the overall implementation, management and monitoring of the Project have adequate financial management capacity in place to execute this Project.

82. IDA conducted a financial management (FM) assessment in accordance with OP/BP 10.02 Financial Management and the FM Manual and prepared recommendations for the FM system for this project (details of Project FM arrangements are in Annex 3). The project is complex in terms of FM and the overall FM risk rating is substantial, considering the limited experience of BFD in managing Bank-funded projects and the complex flow of funds to a large number of people under the afforestation/reforestation program as payments for labor, as well as for the transfer of grants under the alternative livelihoods program. AF will be responsible for implementation of component 2. They have their own financial management, monitoring and reporting system, which is considered as performing well. It has carried out similar projects in the past and has adequate FM arrangements to support implementation of this project. However, because AF has never worked with Bank-funded operations and the amount of this project is relatively large compared with to the average size of projects managed by AF, the trainings to existing AF FM staff will be essential to ensure that financial management is carried out in accordance with WB requirements.

83. FM and Disbursement Arrangements. BFD, as the major implementing agency responsible for coordination, monitoring and consolidation of financial reporting, will require support in establishing proper FM system for this project. BFD will recruit qualified FM and accounting staff for the project; financial management and reporting software will be installed and adapted for the project; there will be arrangements made for regular monitoring by independent monitoring organization and for annual audit of all project accounts to be conducted by the Foreign Aided Project Audit Directorate (FAPAD).

84. The project funds will be disbursed to the designated bank accounts of BFD-PIU and AF. PIU will further transfer funds into the bank accounts of DFOs in the Project sites. BFD and AF will maintain accounts and records and prepare quarterly Interim Financial Reports (IFR) and annual project financial statements for submission to the Bank.

D. Procurement

85. IDA assessment of procurement arrangements and capacity of BFD concluded that its procurement management system and capacity are weak (details of procurement management arrangements are in Annex 3). There are several factors attributing to the weakness: (i) no procurement staff within the agency, inexperience of present staff with the World Bank-financed projects and with administering of large and complex contracts; (ii) lack of arrangements for information dissemination; iii) lack of system for monitoring delivery and

22

execution of contracts; and iv) lack of processes for handling complaints. In addition, there are other potential risks for project’s procurement management, associated with vested interests and political interventions. BFD will have to handle relatively large contracts and considering these weaknesses, the risk for project procurement operations and contracts administration is rated as “High”. Mitigation/improvement measures for the efficient procurement management of the project have been developed and agreed with BFD.

86. Detailed procurement assessment of AF showed that although AF has no dedicated procurement specialist, its process of recruitment and contracting of implementing partner NGOs is adequate. This process is stipulated in AF’s Operating Manual (OM), which describes the principles and processes for accountability, responsibilities and delegation of authority. It includes process for handling contracts, monitoring and verification through NGOs’ quarterly progress report, AF field visits and physical verifications.

87. However, AF has no experience in working with the World Bank-financed projects and the sizes of its previous operations are significantly smaller than the amount to be managed under the Component 2 (maximum contract size of contract for implementing NGO was US$600,000). In participating communities, procurement of goods, works and services for livelihood micro projects will be responsibility of the groups/individuals. AF will be provided with the training on its requirements and processes.

88. Procurement for the project will be carried out in accordance with the World Bank/IDA Procurement Guidelines and Consultant Guidelines dated January 2011. Procurement plans will be reviewed and approved semi-annually by IDA. Quarterly progress reports on procurement activities will be submitted to IDA.

89. Several measures have been taken to reduce the procurement risks. These are: (i) Procurement Performance Monitoring Reports (PPMRs) will be prepared by BFD on a semi-annual basis with indicators aimed at managing procurement-related risks; (ii) Qualified Procurement Specialist will be recruited at PIU level to support both BFD and AF; and (iii) IDA will monitor implementation progress through standard supervision and focused capacity building based on reviews and PPMR findings.

E. Social (including Safeguards)

90. During preparation of the project, a thorough social assessment (SA) was conducted. The project is expected to bring important opportunities and positive socioeconomic impacts through creation of jobs, transfer of knowledge and skills, and expanding income opportunities for the people living in the subproject areas. Component 2 will empower and strengthen social capital of poor, women, vulnerable and marginalized members of forest dependent groups. However, SA concluded that potential risks related to social issues are also high. These risks are mostly associated with the following three issues: i) elite capture in process of selection of beneficiaries for social forestry program and afforestation/reforestation activities, as well as of beneficiaries for alternative livelihoods support program; and ii) continuation of illegal and unsustainable harvesting of forest resources; and iii) issues related to resettlement and indigenous people.

23

91. Project interventions aimed at community forestry are often prone to elite capture. To guard against such elite capture, the project will develop beneficiaries’ selection process decentralized to the Union Parishad level, with engagement of communities and local government in open, transparent and inclusive selection and decision making process. If successful, this approach will be institutionalized through modification of Social Forestry Rules. Improved selection process and strengthened capacity of local governments, NGOs and community members will have positive impacts in the process of pro poor decision making and resource allocation.

92. While influential and richer people are often responsible for deforestation, it is also widely documented that the poorest living in and around the forests often depend on forest-degrading livelihood activities like collection and selling of fuel woods and other forest products. These risks will be addressed through capacity building and awareness program, as well as community run patrolling of forests.

93. Social Safeguards. Although project components do not involve involuntary land acquisition by the BFD or AF, the project has been triggered the World Bank’s OP 4.12 on Involuntary Resettlement. BFD has prepared a Social Management Framework (SMF) to address any social safeguard issues that may arise due to the activities implemented under the individual subprojects (details of SMF are in Annex 2). BFD and AF will undertake social screening of all subprojects to identify potential social safeguard issues using guidelines and screening, and adopt and implement impact mitigation measures as suggested in SMF. Information on all subprojects will be consolidated and sent to the PIU. PIU will share this information with the MoEF and World Bank on a quarterly basis. BFD will establish a grievance redress mechanism (GRM) for all subprojects undertaken to address complaints and grievances about any irregularities in application of the SMF guidelines for community consultation, impact assessment and mitigation, beneficiary selection, plot size and quality, eviction from public lands, and other related concerns.

94. The Project also triggers OP 4.10 on Indigenous Peoples (IPs). In the context of Bangladesh, indigenous people are referred to as Tribal People. Accordingly BFD developed the framework of Tribal Peoples’ Development Plans (TPDPs) as part of the SMF for the subprojects that are to be undertaken in areas and localities inhabited by tribal people. It is likely that projects sites in Cox’s Bazaar and Patuakhali might have limited number tribal people living in settlements among the mainstream peoples. The project will follow the Tribal Development Framework including a consultative process and appropriate documentation to ensure “free, Prior and informed consultation leading to a broad based community support”.

F. Environment (including Safeguards)

95. The proposed project’s interventions anticipate positive long-term contributions to the environment by protecting against soil and water erosion, working as a barrier during cyclone and storm surge, reducing atmospheric pollution, and providing habitat for flora and fauna. Other interventions include: (i) rehabilitation/reconstruction of field level offices; (ii) alternative income livelihoods; and (iii) technical studies and capacity building. The project has been categorized as ‘Category B’ project considering risk associated with the site clearance of plantation, species selection, use of fertilizer/pesticides/herbicides in the plantation program,

24

minor construction related disturbance and community level livelihood options. Related negative impacts are expected to be largely on-site and can easily be mitigated with proper planning and sound environmental practices. It has been agreed that no pesticides or herbicides will be used during plantation development. The Project has trigger three environmental safeguard policies for environmental assessment (OP/BP 4.01), Natural Habitats (OP/BP 4.04), and Forests (OP/BP 4.36).

96. BFD and AF have experience with conservation and exercise due diligence on environmental issues. However, both BFD and AF need strengthening on the World Bank’s environmental safeguard policies. The capacity weakness has been overcome by hiring environmental consultant during preparation phase. An Environmental Management Framework (EMF) has been prepared by BFD and AF based on consultations with the stakeholders and community representatives. EMF describes general baseline condition and typical environmental impacts from different types of activities during preparation, design, construction and operation. It provides the guidelines to comply with national legislation and World Bank safeguards policies, and defines the environmental requirements needed for reconstruction/rehabilitation of infrastructure in the forest. In addition, EMF has laid out the procedures for simple screening of the co-operative level AIG activities and environmental code of practice for various project activities. The draft EMF and SMF have been disclosed on BFD and AF websites (http://www.bforest.gov.bd/ and http://www.arannayk.org/otherdoc.php) for public comments on May 17, 2012. The field level forest officials with the assistance of the community mobilization officer will ensure proper implementation of the EMF and SMF. The Third party monitoring firm will also crosscheck the EMF and SMF implementation.

25

http://www.arannayk.org/otherdoc.php

http://www.bforest.gov.bd/

Annex 1: Results Framework and MonitoringBangladesh: Climate Resilient Participatory Afforestation and Reforestation Project (P127015)

Results Framework.

Project Development Objectives.

PDO Statement

The project development objective is to reduce forest degradation and increase forest coverage through participatory planning/monitoring and to contribute in building the long-term resilience of selected communities in coastal and hilly areas to climate change..

Project Development Objective Indicators

Cumulative Target Values Data Source/

Indicator Name Core Unit of Measure Baseline YR1 YR2 YR3 YR4 End

Target Frequency Methodology

Area restored or re/afforested Hectare(Ha) 0.00 1500.00 8750.00 17000.00 17000.00 17000.00

Annually, Comparison of satellite data at project inception and closing

Progress Report, 3rd party verification, Remote sensing and GIS mapping

Area re/afforested (sub-indicator) Hectare(Ha) 0.00 1500.00 8750.00 17000.00 17000.00 17000.00


Progress Report, 3rd party verification, Remote sensing and GIS mapping

Forest users trained Number 0.00 0.00 3000.00 9000.00 15000.00 15000.00 Six Monthly

Six Monthly Progress Report, 3rd Party Verification

Forest users trained – Female(sub-indicator)

Number 0.00 0.00 1200.00 4000.00 7500.00 7500.00 Six Monthly

Six Monthly Progress Report, Training Completion Report, 3rd Party Verification

Forest users trained - Ethnic minority/indigenous people (sub-indicator)

Number 0.00 0.00 250.00 800.00 1500.00 1500.00 Six Monthly Six Monthly Progress Report, Training Completion

26

Report, 3rd Party Verification

Increased household income of beneficiaries participating in alternative income-generating activities

Percentage 0.00 5.00 10.00 30.00 40.00 70.00

At baseline, MTR and at the end of the project

Implementation Monitoring Reports and 3rd Party Verification

Reforms in forest policy, legislation or other regulations supported

Yes/No No No No No Yes Yes Annually BFD

Government institutions provided with capacity building to improve management of forest resources

Number 0.00 0.00 1.00 2.00 2.00 2.00 Annually Progress Report

Direct project beneficiaries Number 0.00 3000.00 15000.00 38000.00 43000.00 46000.00 Six Monthly

Six Monthly Progress Report, 3rd party Verification

Female beneficiaries (sub-indicator)

Percentage 0.00 20.00 22.00 25.00 27.00 30.00 Six Monthly

Six Monthly Progress Report, 3rd party Verification

27

Intermediate Results IndicatorsCumulative Target Values Data Source/

Indicator Name Core Unit of Measure Baseline YR1 YR2 YR3 YR4 End

Target Frequency Methodology

Increase in forest coverage (km) for strip plantation in target areas

Kilometers 0.00 124.00 826.00 1672.00 1672.00 1672.00


Progress Report, 3rd party verification, RS and GIS mapping

Community jobs (million days) created through afforestation/reforestation program.

Days 0.00 0.23 1.54 2.40 3.00 3.00 Annually

Progress Report and 3rd Party Verification

At least 200community groups have been targeted by the Project through capacity building program and small grant funding, with at least 80% of their members being poor and at least 50% women

Number 0.00 20.00 50.00 150.00 200.00 200.00 Annually

Implementation and Monitoring Reports; 3rd Party Verification

Guidelines for program monitoring developed

Yes/No No No No Yes Yes Yes Annually

Progress Report; Approved Guidelines/Tools

Forest Master Plan Revised Yes/No Yes No No No Yes Yes Annually

Monitoring Report; Master Plan

28

Forest Department Official and MoEF trained on participatory process, co-management, climate change impact on forest, biodiversity etc.

Number 0.00 0.00 50.00 125.00 275.00 397.00 Annually Monitoring Reports

The number of cases of non-sustainable and illegal use of forest resources has been reduced by 30% in and around the Project area through project interventions.

Percentage 10.00 10.00 15.00 15.00 25.00 30.00 Annually

Implementation Monitoring Report; Forest Department Offense Registry Records

Number of Forest field offices rehabilitated/Reconstructed

Number 0.00 0.00 0.00 10.00 35.00 43.00 Annually

Progress Report and 3rd party verification

.

Bangladesh: Climate Resilient Participatory Afforestation and Reforestation Project (P127015).

Results Framework.

Project Development Objective IndicatorsIndicator Name Description (indicator definition etc.)Area restored or re/afforested This indicator measures the land area targeted by the Bank intervention that has been restored or

reforested/ afforested.

Area re/afforested This is a sub-indicator of the above indicator, which also measures the land area.

Forest users trained This measures the number of forest users and community members that have received capacity building through training as a result of the project. The baseline value is expected to be zero.

Forest users trained - Female This is sub-indicator of the above indicator, which measures numbers of women members of forest users and community have received capacity building through training as a result of the project.

Forest users trained - Ethnic minority/indigenous people This is sub-indicator of the above indicator, which measures numbers of ethnic

29

minority/indigenous people of forest users and community have received capacity building through training as a result of the project.

Increased household income of beneficiaries participating in alternative income-generating activities

This indicator measures the percentage of households who have been able increase their average monthly income by at least 30% from non-forest related activities.

Reforms in forest policy, legislation or other regulations supported

This indicator indicates whether the project supports any forest policy, legislation or other regulations. In this case, this will be updating forest policy and strengthening monitoring system

Govt institutions provided w/ capacity building to improve mgt of forest resources

This indicator measures the number of government institutions received the capacity building to improve forest resource management. In this case, the institutions are BFD and MoEF.

Direct project beneficiaries Direct beneficiaries are people or groups who directly derive benefits from an intervention. This includes the people who are employed as labor to the afforestation and reforestation program, received training and AIG support. However, the beneficiaries of the climate change adaptation benefit are not included here since it will be a long-term benefit.

Female beneficiaries Based on the assessment and definition of direct project beneficiaries, this sub-indicator includes percentage of the beneficiaries are female.

.

Intermediate Results IndicatorsIndicator Name Description (indicator definition etc.)Increase in forest coverage (km) for strip plantation in target areas

This indicator measures the length of the road targeted by the project that has been brought under strip plantation

Community jobs (million days) created through afforestation/reforestation program.

The indicator measures number of man-day work generated for poor vulnerable people as daily labor in afforestation/reforestation program and rehabilitation/reconstruction of field offices

At least 200 community groups have been targeted by the Project through capacity building program and small grant funding, with at least 80% of their members being poor and at least 50% women

This indicator measures the numbers of forest depended forest groups formation with agreed criteria.

Guidelines for program monitoring developed This indicator identifies whether forest resource monitoring tools based on participatory techniques and also using RS/GIS.

Forest Master Plan Revised This indicator checks the completion of revision of forestry sector master plan through consultative process

Forest Department Official trained on participatory process, co-management, climate change impact on forest, biodiversity etc.

Numbers of BFD officials received long-term and short term training both locally and internationally reputed institutions.

The number of cases of non-sustainable and illegal use of forest resources has been reduced by 30% in and around the Project area through project interventions.

The examination of official and unofficial record on illegal and non-sustainable forest resources extraction issues.

Number of Forest field offices rehabilitated/Reconstructed The field level forest offices rehabilitated or reconstructed to provide better facilities to field level staff for forest management

.

30

31

Annex 2: Detailed Project Description

1. The project is aimed at reducing forest degradation and increasing forest coverage through participatory planning/monitoring and contributing in building the long-term resilience of selected communities in coastal and hilly areas to climate change. It comprises four components: i) Afforestation and Reforestation Program; ii) Alternative Livelihoods to Support Forest Communities; iii) Capacity Development for Forest Resource Planning and Management; and iv) Project Management. The project will be implemented in nine districts of Bangladesh: Cox’s Bazar, Chittagong, Noakhali, Lakshimipur, Barisal, Pakuakhali, Barguna, Bhola, and Feni.

Component 1: Afforestation and Reforestation Program (US$22.0 million):

2. The objective of this component is to increase the afforested/reforested areas through participatory forestry and co-management approach in the degraded forestland, marginal, fallow and newly accreted land in coastal and hilly areas. While achieving the target of the participatory afforestation and reforestation, the component will also support the rehabilitation/reconstruction of the existing field offices of the Bangladesh Forest Department.

(i) Participatory Afforestation and Reforestation (approximately US$19.0 million)

3. The afforestation and reforestation are expected to contribute in better protecting lives and property against cyclones and tidal surges in coastal and hilly areas. This will improve soil stability and water retention in hilly areas. The afforestation and reforestation will be undertaken in areas that are not yet covered by other planned, on-going and completed projects of BFD or other development partners. Different types of afforestation with cyclone and surge adapted species like mangrove plantation, Jhaw plantation, Golpata plantation, enrichment plantation and strip plantation are planned for the coastal areas. The hilly areas will cover core zone plantation, buffer plantation, and non-mangrove buffer plantation designed to reduce livelihood pressures on degraded natural forests to allow restoration. Afforestation/reforestation will cover around 6,767 ha of lands and 1,672 km of roadside area in coastal zone and 3,878 ha of land in forests’ core zones and 6,352 ha of land in buffer zones in hilly areas.

4. The subcomponent will include two types of forestry technologies (i) treatment and reclamation of coastal mangrove land; and (ii) treatment of denuded forest lands on undulating terrain within 20 km radius of coastal zone. Both areas are affected by frequent cyclones. The proposed afforestation/reforestation is not a conventional forestry plantation work rather an initiative with a clear climate change adaptation and mitigation purpose. The project area includes newly accreted land in coastal areas, which are subject to increasing incidence and impact of cyclones and also extremely critical for ensuring a sustainable mangrove succession process. This will subsequently reduce the impact of cyclones on coastal communities. The other parts of the project area in two hilly districts also fall within the 15 to 20 km range of the coastal zone and are also frequently affected by cyclones. The project will promote locally proven seed collection, nursery and plantation techniques in accordance with international best practices for ensuring improved site-species matching, quality planting stock, site preparation and successful plantation establishment, tending and protection. For the nursery technique, the project has proposed specific “Sonneratia Appetala” practice, which is quite common in

32

mangrove forests, in both India and Bangladesh. This is proven to help in stabilizing Char mangrove lands. A nursery and plantation manual will guide the overall afforestation and reforestation program in both coastal and hill forests.

5. Table 2.1 presents types of plantations proposed under the project. This component will support nursery raising, plantations, maintenance, cost of beneficiaries’ selection, and monitoring and evaluation of the plantation program.

Table 2.1: Plantation types and areas for afforestation and reforestation

Plantation Type Areas to be PlantedHa Km

Mangrove Afforestation 5,700 0Mound Plantation 427 0Jhaw Plantation 410 0Golpata Plantation 635Enrichment Plantation 260 0Strip Plantation 0 1,037Core Zone Plantation 3,878 0Buffer Zone Plantation 5,925 0Non mangrove (Buffer) Plantation 400 0Total 17,000 1,672

6. There are over 300 indigenous species that are common in the natural terrestrial forests of Bangladesh. Though each of these species is important and valuable for biodiversity, only a few selected species that exhibited better performance will be used for the purpose of afforestation/reforestation. The species that have demonstrated climate change resilience and adapted to proposed afforestation and reforestation sites and meet the required objectives are to be used in the project. The selection of plantation types and species will be based on technical expertise and through community consultations. The ten different types of plantation that will be raised under the project can broadly be divided into two major groups, namely mangroves and non-mangroves.

7. Out of the 68 species of mangroves that are found in Bangladesh, only a few will be recommended for the plantations. Most of these species are indigenous and well adapted coastal species.

8. In non-mangrove hilly areas, two types of plantations will be raised: long rotation plantations in ‘Core Zone’ area and short rotation plantations in ‘Buffer Zone’ area. The rotation period in the Core Zone area will be 40 to 60 years. The species that yield valuable timber as wood and those that will grow in the given areas will be used in raising plantations in the core zone area. All are indigenous except Teak. The proportion of teak will not be over 10%. The rotation period in the buffer zone area will be about 10 to 18 years. Fast growing timber species will be used in raising plantations in buffer zone areas. All are indigenous, except Acacia. Acacia species have been planted by BFD for more than 30 years and are highly recommended by participating communities.

33

9. The available degraded forest land in project areas is already identified for project interventions, GPS surveying is done, maps are prepared (manually) and site species matching for the first year of plantation is already completed. Mixed species plantings (with age classes and rotation lengths and varying end uses) will be promoted to strengthen resilience and spread climate change and market risk. Preference will be given for planting indigenous species, but a proportion of exotic species will also be planted to meet livelihoods and other local needs. Timing and duration of seed collection and nursery practices vary markedly throughout the year depending upon species, site conditions, purpose and season. Seeds from good standing stock will be collected between January/February and September/October.

10. Nurseries in close proximity to the afforestation/reforestation sites will be promoted (sown in September/October) to provide quality seedlings for planting from May to August, depending on the monsoon season. As part of the silvi-cultural practices, weeding will be undertaken in years 1 (3 times), 2 (twice) and 3 (once). The scheduling and technical specifications for seed collection, nursery practices, site preparation, planting, tending and other necessary silvi-culture practices is outlined in the “Nursery and Plantation Manual”. This will include traditional and new scientific knowledge base and available technologies. BFD, Arrannayk Foundation, NGOs and local communities will be engaged in participatory planning and implementation of afforestation and reforestation.

11. The project will engage local communities throughout the project cycle, starting from the planning phase. A new approach for selection of beneficiaries for the SF program will be developed and tested to ensure inclusion of poor, vulnerable and marginalized groups. This process will be decentralized to the Union Parishad level with engagement of communities and local governments in selection, decision making and affirmation process. The implementation manual describes the beneficiary selection process for the SF program. The selected beneficiaries and other poor people living in the target geographic areas will be employed as daily labor by BFD in nursery raising and plantation establishment. BFD will prepare an initial participant list (preferably with voter ID number) of those shown their willingness to work in plantation program on daily wage basis. This list will be prepared through participatory process and each participant will have a code number, which will be used as a reference number for payment arrangements. It is estimated that this will generate around 3.0 million work days. The beneficiaries selected for maintaining the plantations will receive benefits from the earnings of the afforestation/reforestation program. The key results section provides specific targets on afforestation/reforestation.

12. The afforestation and reforestation program will also test innovative new approaches and technologies. These may include: i) refining site-species matching; ii) broadening the climate change resistant species to be used for afforestation/reforestation; iii) non-mangrove species succession following siltation of coastal mangrove plantations; iv) improved seed sources for key plantations species; v) improved nursery practices to provide quality seedlings; vi) alternative planting mechanisms in different habitats; vii) improved silvi-culture (particularly thinning) in productive plantations to balance volume/value for beneficiaries; viii) alternatives to improve benefits to beneficiaries in social forestry mechanisms; and ix) new NTFPs (apiculture, oil extracts, dyes) from afforestation species.

34

(ii) Rehabilitation/Reconstruction of Forest Department Field Infrastructure (US$3 million)

13. The objective of the subcomponent is to rehabilitate and/or reconstruct the existing field level offices in the project area to ensure proper operation of BFD. The field assessment of the during the project preparation showed that most of the field offices are in poor condition due to lack of regular maintenance budget. The subcomponent will consider the rehabilitation of the existing infrastructure and if the structural condition does not permit the rehabilitation, reconstruction will be considered in the same location. Since the areas are vulnerable to cyclones, the field office should also function as a cyclone shelter for the field level staff in remote areas. The following are some criteria proposed for new field infrastructure: (i) the building should be circular in shape; (ii) the plinth should be at least 8 feet above the ground on pillars; (iii) floor area should be about 200 square meters; (iv) it should have a doom shaped roof; (v) it should accommodate at least 4 or 5 BFD staff; and (vi) it should have one common toilet and a common cooking area.

14. In addition, the subcomponent will follow the design and construction practices that have no or little residual impacts on the surrounding biological, physical and natural environment and could potentially support forest biodiversity conservation by (i) minimizing and mitigating adverse impacts of infrastructure through appropriate site selection and construction methods; and (ii) remediating and compensating for any residual damage to have a net positive impact. The design will consider solar power and rainwater harvesting system.

15. A Design, Supervision and Monitoring (DSM) consultant will be hired by BFD for design and construction supervision under the subcomponent. The physical works will be divided into 5 contracts, which will be managed through PIU with local DFO involvement. Although there is huge demand in the field level for the rehabilitation/reconstruction of the field level offices, the project will support only 43 offices, which are divided into ten divisional forest offices as (i) Patuakhali Coastal Afforestation Division – 8 offices; (ii) Bhola Coastal Afforestation Division – 7 offices; (iii) Noakhali Coastal Forest Division – 6 offices; (iv) Chittagong Coastal Afforestation Division – 6 offices; (v) Chittagong North Forest Division – 3 offices; (vi) Chittagong South Forest Division – 3 offices; (vii) Cox's Bazar North Forest Division – 3 offices; (viii) Cox's Bazar South Forest Division – 3 offices; (ix) Barisal Social Forestry Division – 2 offices; and (x) Feni Social Forestry Division – 2 offices. It is anticipated that the civil works will generate local employment of about 0.18 million work days.

Component 2: Alternative Livelihoods to Support Forest Communities (approximately US$ 4.0 million)

16. The objective of this component is to reduce forest dependence and enhance resilience of selected communities to climate change through the introduction of alternative and diversified livelihood opportunities. This will reduce pressure on forests, thereby improving its sustainable use, conservation and protection. The Arannayk Foundation (AF), also known as the Bangladesh Tropical Forest Conservation Foundation, is a non-profit company (limited by guarantee and not having a share capital) that seeks to contribute to the conservation of biodiversity assets of tropical forests. AF’s mandate is to promote conservation and restoration of tropical forests and

35

forest biodiversity through promoting alternative income-generating activities (AIGAs). In 2006, AF developed an approach to support AIGAs for community-based organizations through USAID-financed-grants, such as vegetable cultivation, small scale businesses, poultry rearing, and handicrafts. Grants are typically given to communities to be channeled through AIGAs at the household level, and are often supplemented by participatory savings. By 2010, AF was actively supporting 27 projects, for a total of US$14 million. The approach proved successful, with net returns up to two times the investment value.

17. AF will use the same approach in this component by targeting 6,000 households in 200 forest communities located mainly in forest buffer zones. The following criteria will be used in selecting 200 forest depended communities:

• proximity to proposed afforestation/reforestation site (for instance, scoring will be based on the range of distance from the site: 0-2km, 2-4; 4-5, and more than 5 km);

• proximity to natural forest (this is important indicator for defining forest dependent communities and would use similar indicators for scoring: 0-2km, 2-4; 4-5, and more than 5 km);

• level of current and potential impacts of climate change (proposed indicators are occurrence of soil erosion/landslides, water retention, probability of tidal surges, and salinity. They need to be further developed and properly ranged);

• size of area to be afforested/reforested (the minimum size of afforestation land close to community should not be less than 25 acres= 10 ha to include 30 beneficiaries for ALSFC component); and

• level of poverty based on the most updated statistical data, such as Poverty Map of Bangladesh of 2009 and Union Parishad data on village poverty level.

18. In the first year, funds will be channeled to promote small-scale AIGAs at the household level (e.g. goat and poultry rearing, vegetable cultivation, and small scale trade). In the second year, the project will identify the activities which have potential for being expanded at the community level (e.g. establishing cooperatives for improving marketing channels for local products, community based eco-tourism, making energy efficient cooking stoves, and agricultural firms). The component will also improve linkages with BFD through mobilizing the targeted communities into Forest Dependent Groups (FDGs). These FDGs will benefit from AIGA and will also participate in social forestry and afforestation works and to jointly protect forest resources. Component 2 will link closely with component 1, to ensure improved linkages between targeted communities and the social forestry program.

19. Specific activities include:

a) Project preparation activities. At the initial stage of project implementation, AF will develop an Implementation Manual for the Component, a Targeting and Selection Strategy (TSS), an M&E Strategy and Plan, and Mutual Rotating Saving and Loan Fund guidelines. Based on the extent and location of the areas to be afforested, the

36

project area will be divided into ten or more project sites along the administrative forest divisions. These project sites will be grouped into two clusters with an average of four to five project sites in each forest division. AF will recruit at least two NGOs to implement projects at the clusters’ level. The procurement of NGO services will be carried out as per World Bank guidelines. The AF in cooperation with BFD and PIU will provide an initial training for selected partner NGOs on all developed component guidelines, including social and environmental safeguards, financial management and reporting.

b) Social mobilization. Project resources will be targeted to communities most affected by climate change, those located in fragile forest and wetland ecosystems, and poor communities. AF will develop a TSS, which will stipulate requirements and content for awareness campaign and materials to be disseminated in project areas, criteria for selection of communities, such as proximity to forest land, condition of forest and wetland resources, climate change trends, size of area to be affected by plantations, and poverty levels. Special provisions will be made to inform and engage communities of indigenous people. The TSS will also stipulate the approach and selection process as well as eligibility criteria of beneficiaries for alternative livelihoods support. Priority will be given to already established grass-root level forest users’ organizations or self-help groups. If there are no such groups established in selected areas, the Project will form community level FDGs. All beneficiaries will be selected along the clearly defined eligibility criteria using a scoring system, such as poverty and well-being level, level of dependency on forest resources, commitment to participate in Project activities etc. Female-headed households will have a priority. Each FDG should not exceed 30-40 members. A list of selected members will be affirmed by communities to verify eligibility to avoid elite capture and misuse of selection procedures. In addition, all selected beneficiaries will be interviewed in the course of the baseline survey and results will be used for monitoring purposes, as well as for cross verification of eligibility of selected participants.

The Project will facilitate creation of informal Community Patrolling Groups (CPGs) with members of FDGs to organize and undertake community surveillance for protection of natural and plantation forests under the supervision of BFD.

c) Supervision of component implementation and back- up support. AF will review and approve work-plans prepared by partner NGOs. It will provide back up support and ensure monitoring of component implementation. AF will recruit one additional staff at the national level – a Project Coordinator and three existing officials will provide a fixed time in each month to supervise and support implementation and undertake field visits. AF will recruit specialized experts on a short term basis when needed.

d) Development and implementation of M&E strategy and plan. AF will develop a simple Monitoring and Evaluation (M&E) Strategy and Plan. It will be based on AF’s own M&E approach, but be consistent with the monitoring to be undertaken by BFD for forest status and change as detailed in Component 3. It will include

37

monitoring arrangements and survey formats, as well indicators for monitoring of implementation processes and progress, intermediate outcomes, and final survey at the completion stage for impact evaluation. Partner NGOs will implement baseline study collecting profile of the project area, information on households, existing livelihood practices, and poverty, etc. AF Secretariat will carry out periodic monitoring of project implementation and review progress by undertaking field visits. NGOs will submit quarterly and annual progress reports to the AF Secretariat. AF Secretariat will submit consolidated reports to PIU and IDA.

e) Identification of livelihood opportunities and capacity building. This activity will explore the potential for alternative livelihoods activities of the poor and extremely poor, depending on the existing livelihood practices, traditions, agro-ecological conditions, marketing opportunities in the project area. Groups will be provided with intensive awareness and capacity building program on issues of (i) conservation and protection of forest and wetland ecosystems; (ii) climate change adaptation; (iii) group organizational development and management of mutual rotating saving and loan fund; (iv) basic financial management and accounting with special program for illiterate members of the groups; and (v) livelihood training on selected alternative livelihoods activities (participants will be able to attend different skills trainings for selecting the appropriate one and for diversification of their livelihood economic activities). The alternative livelihoods activities will primarily focus on income activities outside the forest sector, but will also consider non-extractive forest based activities.

f) Value adding economic activities support. In the second year of implementation, after groups have undergone training, AF will announce competition for selection of organizations and/or individuals to provide support in value adding economic activities that enhance rural livelihoods and have potential for scaling-up and replication. The Project will provide resources to engage private and/or public sector organizations or individuals, who in turn will assist the FDGs to access better market information and latest technology, obtain higher returns for their produce, and help the communities better align their produce with market demand.

Specific value adding economic activities envisaged under this direction include support for eco-tourism, production and marketing of energy efficient stoves, collective marketing of agricultural and handicraft products, and development of cooperatives. This support will be provided with project financing and through specific capacity building, counseling, providing market linkage support, establishing public-private partnerships. Selection of activities will be carried out to prevent additional pressure on forest ecosystems based on an IDA- approved environmental safeguard checklist for non-eligible activities. These activities will aim to develop and support effective partnerships with the private sector, public sector, and civil society.

g) Set up and management of funds. The project will provide finances to the mobilized groups for development of alternative livelihoods options to reduce their dependence

38

on forest and strengthen the participatory forest management. Project financing to FDGs will be provided in two tranches. The first tranche will be allocated as soon as groups have been formed and have undergone relevant training, developed own Rules and Regulations on Management of Mutual Rotating Saving and Loan Program (MRSLP), selected management group for the program and established own saving fund. AF and partner NGOs will develop general strategy for the MRSLP, which can be adopted and modified by FDGs. To ensure that the funds are used properly, partner NGOs will provide close monitoring and ensure that formal and informal grievance redress mechanisms are well developed and disseminated to mitigate/capture problems at an early stage. The second tranche will be provided in the second year to those groups which have proposals to scale up potentially viable value adding economic activities.

h) Raising awareness. Within the first 6 months, a workshop will be organized to share the project activities and expected output with community members, social elite, local government and other stakeholders. In the following project years, periodic workshops and meetings will be organized to demonstrate the results on the ground. Communication materials (e.g. photographs, posters, leaflets) will be prepared and distributed at workshops and other meetings for raising awareness. Use of national and regional print and electronic media, as well as video shows at the community level should also be included in awareness program.

Component 3: Capacity Development for Forest Resource Planning and Management (US$5.5 million)

20. Monitoring systems in forestry practices can be segregated into two distinct types, one is the activity monitoring, which includes monitoring of the quantity and quality of forest management actions such as seed collection, nursery practices, plantations establishment, silvi-cultural practices and forest protection and another is resource monitoring, which largely monitoring of baselines status and change in key biophysical parameters of the forest and tree resources. The present standard practices of BFD for activity monitoring will be strengthened to improve the scope of the existing data and information collection, database management and reporting. However, BFD does not have any long-term or formal and regular resource monitoring and assessment system. The past assessments were done on ad hoc basis based on the availability of funds and specific needs of the time. The present monitoring system lacks time series assessment data, which should be used as a baseline for the subsequent assessment. BFD recognizes that the monitoring system of the forest resources should be strengthened along with routine and periodic resource assessment/inventory.

21. The objective of the component is to improve the technical knowledge base on forest resource assessment, program monitoring and long-term planning for the sustainable development of the forest sector. This component aims to improve forest management practices through three specific interventions: (i) improving the current management practices backed by technological interventions; (ii) build the capacity of the department not only by deploying appropriate manpower and training plans, but also by proper resource planning, resource management and human resource (HR) assessment. Such capacity development plan would

39

include specific requirements keeping in mind the climate variables evident in Bangladesh for both mitigation and adaptation; and (iii) review and revise the existing forest master plan in light of the changing forestry practices and new policies/strategies and the available budget envelop. These three interventions will require extensive technical assessment and stakeholder consultations.

22. The component will help in improving the present knowledge on the climate projections, impacts of climate change and vulnerability of the forest ecosystem as well as the vulnerability of the coastal and hilly communities and their settlements in the context of climate risks. This will lead to incorporation of adaptation strategies in future climate resilient coastal and hilly region green belt program. It will include the non-timber forest product (NTFP) management as an adaptation strategy along with a benefit sharing mechanism to ensure that the forest dependent communities are insulated from the climate change related risks. The component will also support development of a system in BFD to estimate carbon mitigation potential from the coastal and hilly areas afforestation/reforestation.

23. The project will establish a forest resource assessment and monitoring system at BFD with the use of Remote Sensing (RS) and Geographic Information System (GIS) technologies. The system will be strengthened through cross field verification. This system will provide BFD with (i) scientific information on existing resources in coastal and hilly areas that are to be covered by afforestation/reforestation; (ii) future afforestation/reforestation needs, thereby contributing to better planning. The assessment will be carried out in the first and last year of the project. Comparison between the two assessments will reflect the changes in the forest growth expected to take place during the project timeframe. In addition, the component will help BFD to strengthen its overall monitoring system by formulating guidelines for quality assurance of data, results, mapping and assessment of changes in forest areas. This will be tested at the pilot level. The capacity strengthening in monitoring system will include the review of the existing datasets, staff, infrastructure of the resource information management system (RIMS) unit of BFD and its effectiveness in forest report mapping and land use planning for appropriate forestry practices. RIMS unit will be strengthened as one of the key entity for preparing spatial and temporal maps that will be used in regular monitoring plan. Furthermore, this component will also help BFD in disclosing and disseminating project related information through website and print media. BFD will procure services of firm/research institute/joint-venture to support in carrying out the activities.

24. The project will support to review and update of existing Forestry Sector Master Plan (1995-2015). ADB-funded the preparation of a Master Plan for the Forestry sector. A team of 26 national and international consultants worked from October 1991 to May 1993 and prepared the 20-year Forestry Master Plan, which will expire in 2015. This plan provided a frame work for forestry sector policy guidelines on activities relating to environmental as well as socio-economic development. For implementing this master plan, roughly BDT. 80,000 million was to be allocated during this 20 year period starting from 1995. Though various development projects have been implemented since 1995, there was no systematic approach to implement the Forestry Master Plan. The proposed update will include contemporary issues such as climate change impacts, adaptation measures and carbon sequestration. The analytical studies such as economic cost-benefit of afforestation/reforestation investment, impacts of climate change, improved water

40

management in hilly areas, land tenure issues in accreted afforested areas, policy and institutional structure of BFD for participatory approach and better forest management will be carried out to strengthen the present knowledge base and contribute to the master plan. The updated master plan will also highlight the importance of conservation and sustainable management other biota like fish and wildlife. It also will explore potential financing support through bio-carbon financing for sustainable forest sector planning and management. The plan will include a section on short, medium and long term investment requirements.

25. The project will strengthen the capacity of BFD and targeted communities to better manage forest resources in order to confront climate change risks. This component will support capacity assessment and will provide a strategy and framework for capacity development. This will propose institutional restructuring needed within BFD. Under the project’s capacity building program, some BFD officials and staff will receive long-term training (one year masters/diploma program for 7 officials25 and two to three months training for 20 officials), while another 370 officials and staff will benefit from short-term training on climate change impact on bio-diversity and forests, community mobilization and participatory process, methods to design and implement policy and programs/projects in coastal and hilly areas. Special attention will be given to quality assurance, Financial Management (FM), RS, GIS, management information systems, performance management/monitoring and evaluation. The targeted beneficiaries also will receive training on forest conservation, common resource management and climate risk mitigation. The component will support a general awareness campaign on forest conservation.

Component 4: Project Management (US$3.5 million):

26. This component will support the establishment of a Project Implementation Unit (PIU) at BFD for managing the component 1 and 3. The PIU also will provide necessary support for FM, social and environmental safeguards, communications and procurement to AF. The budget will cover consultancy fees, routine monitoring, office equipment and vehicles (including small water vessels), emergency maintenance, travel and meeting costs, audits and other operating costs necessary for project implementation and reporting. The government will contribute $1 million in kind contribution for the project management. This contribution will include salaries of the Project Director and other existing and deputed government officials working in PIU and field level forest offices. The cost of the field level offices and available logistics will be included in the kind contributions. The responsibilities and membership of different committees have been explained in the implementation arrangement.

25 5 BFD officials and 2 MoEF officials

41

Table: Detailed Project CostComponent Component Description Unit Quantity Indicating

Costs (US$M)

% of Total BCCRF (US$M)

% Financing by BCCRF

GOB (US$M)

Kind

AF (US$M)

Component- 1 Afforestation and Reforestation Program:

Forestation in the Coastal Areas(Block Plantation) Hectare 7197 5.03 14.36 5.03 100 0 0

Forestation in the Coastal Areas (Strip Plantation) Km 1672 2.96 8.45 2.96 100 0 0

Forestation in the Hilly Areas (Block Plantation) Hectare 9803 8.95 25.57 8.95 100 0 0

Participant Selection Procedural Cost Nos. 500 0.14 0.41 0.14 100 0 0

Monitoring Cost LS LS 0.97 2.78 0.97 100 0 0

Rehabilitation and Restoration of FD Field Camp Office Building 43 2.71 7.74 2.71 100 0 0Design, Supervision & Monitoring Consultancy Contract Sum 0.14 0.41 0.14 100 0 0

Component- 2 Alternative Livelihoods to Support Forest Communities

Program Monitoring - Arannayk Foundation MM 81 0.25 0.71 0.25 100 0 0

AIG Support through NGO LS LS 2.57 7.34 2.57 100 0 0

LS LS 0.93 2.65 0.74 80 0 0.19AIG& other Consultant MM 10 0.04 0.11 0.04 100 0 0

Component 3 Capacity Development for Forest Resources Planning and Management by the FD:Technical Study for Land use mapping, assessment and monitoring of proposed afforestation and reforestation

Contact 1 0.40 1.14 0.40 100 0 0

Technical Study for strengthening RIMS and development of Forest Resource Assessment and Monitoring protocol

Contract 1 0.40 1.14 0.40 100 0 0

Technical Study for developing communication strategy, awareness campaign and web-based information dissemination system

Contract 1 0.15 0.43 0.15 100 0 0

Third party monitoring Contract 1 0.35 1.00 0.35 100 0 0

Technical Study for Review Forest Master Plan and different sectoral studies for Forestry Master plan updating

Contract 1 0.70 2.00 0.70 100 0 0

Technical Study for developing strategy and time specific investment plan

Contract 1 0.70 2.00 0.70 100 0 0

Equipment for RIMS, Networking with 10 DFO offices Contract 1 0.21 0.60 0.21 100 0 0Consultants-International & National MM 174 1.01 2.89 1.01 100 0 0Training for BFD Participants 395 0.89 2.54 0.89 100 0 0Training for community Participants 15000 0.38 1.07 0.38 100 0 0Workshop/meeting Number 10 0.04 0.11 0.04 1000 0 0

Component 4 Project Management

Consultant and Project Staff MM 1554 2.43 6.94 1.63 67 0.80 0

Vehicles, Boats and Equipment Number 140 0.56 1.60 0.51 91 0.05 0

42

Operation and Maintenance Costs Sum Sum 0.38 1.10 0.23 61 0.15 0

Project Total Base Cost 33.30 95.14 32.11 96.43 1.00 0.19

Price Contingency (5%) 1.70 5 1.69 99.41 0.00 0.01

Grand Total 35.00 100.00 33.80 96.57 1.00 0.20

43

Annex 3: Implementation Arrangements

BANGLADESH: Climate Resilient Participatory Afforestation and Reforestation Project

Overall Institutional Arrangements

1. The implementation of the proposed project will involve the following institutions:

• MoEF will be the coordinating ministry on behalf of GoB for this project;• BCCRF will provide funds for this project as well as exercise broad fiduciary controls

and provide strategic guidance through its Governing Council and Management Committee;

• BFD and AF will receive funds from BCCRF and be responsible for the implementation of the project. AF will make cash contribution of $200,000 for the Alternative Livelihoods to Support Forest Communities component; and

• The Government will contribute $1million in-kind contribution for the project management.

BCCRF

2. BCCRF is a partnership between the Government of Bangladesh, Development Partners and the World Bank (WB) established in May 2010with financial support from Denmark, European Union, Sweden, Switzerland, and United Kingdom to address the impacts of climate change. USAID joined the partnership recently. BCCRF will enable GoB to channel over $170millionof grant funds to build resilience to impacts of climate changes.

3. The objective of BCCRF is to support the implementation of BCCSAP. GoB leads the management and implementation of BCCRF. On behalf of the contributing Development Partners (DPs), and in consultation with GoB, the World Bank is ensuring the due diligence requirements on the BCCRF and ensuring efficient project implementation.

4. BCCRF has a two-tier governance system: (i) a Governing Council which provides overall strategic direction and guidance to BCCRF and ensures its alignment with the BCCSAP; and (ii) a Management Committee which is responsible for developing a work program, ensuring that the BCCRF is implemented in line with the agreed implementation arrangements and considering grant requests submitted by various line ministries and other eligible institutions.

5. Both the Governing Council and the Management Committee are chaired by GoB. A secretariat, based in MoEF, is responsible for providing support to the Governing Council and Management Committee and for providing advocacy, communication and coordination support to all agencies implementing the activities funded by BCCRF.

6. The Governing Council is a high-level committee chaired by the Minister of MoEF and comprise of Ministers from Ministry of Finance, Ministry of Food and Disaster Management, Ministry of Foreign Affairs and Ministry of Water Resource; Secretaries from Ministry of Environment and Forests, Economic Relations Division, Ministry of Finance, Ministry of

44

Planning; two representative from Contributing DPs; two representatives from civil society, and the Country Director of the World Bank as an observer. The primary responsibilities of the Governing Council are to provide advisory guidance on the program’s strategic goals and alignment with BCCSAP, establishing grant criteria, and high-level issues such as, transfer of fiduciary management responsibility to GoB; to oversee overall management and utilization of BCCRF; approve projects to be funded by BCCRF and review results envisaged by the BCCRF.

7. The Management Committee is a technical committee chaired by the Secretary, MoEF and includes two representatives from MoEF, one representative each from Economic Relations Division and Planning Commission, two representatives from contributing DPs, a representative each from the World Bank and civil society.

8. The primary responsibilities of the Management Committee are to review and endorse the BCCRF work program and budget allocations; carry out a detailed review of grant requests submitted by the secretariat; ensure that grant requests submitted are in-line with the agreed policies and procedures; review and endorse the reports prepared by the BCCRF Secretariat for submission to the Governing Council as well as for public dissemination. This high-level Management Committee established for BCCRF will provide strategic direction, undertake annual review of project implementation and address any issues hampering the progress. The CCF, Project Director, and ED of AF are expected to join the Management Committee meeting in which the project will be reviewed and discussed.

9. Bank is responsible for ensuring adequate fiduciary management, transparency and accountability in executing BCCRF and the projects funded are implemented with due regard to economy, efficiency and effectiveness. Bank is also providing some analytical and advisory support for implementation of BCCSAP via BCCRF.

10. An Implementation Manual detailing the governance and operational mechanism for BCCRF was agreed between GoB, DPs and WB. BCCRF became operational with the first Management Committee meeting held in February 2011.

Project Steering Committee

11. A Project Steering Committee (PSC) will be formed by MoEF and the Secretary of MoEF will chair the PSC. The PSC will comprise of relevant Government Officials (MoEF, other relevant Ministries, Economic Relation Division ERD, Planning Commission PC, Implementation Monitoring and Evaluation Division IMED, Bangladesh Forest Department etc.), a representative from the World Bank, Executive Director of AF. The PSC can co-opt additional members from civil society organizations having relevant experience. The committee will meet at least once a year, if possible, twice a year to take stock of progress of the project and provide implementation advice, guidance and policy directions. The key responsibilities of the PSC will be:

To provide oversight, policy guidance and approve the project’s Annual Work Plan and Budget;

To facilitate inter-agency coordination to ensure compliance and adherence to the project’s development objectives;

45

To resolve disputes or conflicts related ``to the project, if any; To approve any policy, regulatory and institutional recommendations from the

project. To approve changes in the project implementation arrangements, if requires.

Project Implementation Committee (PIC)

12. A PIC at BFD will be formed to ensure overall coordination of project implementation. ED of AF will be also a member of the PIC. The PIC, chaired by the Chief Conservator of Forests (CCF), will be responsible for: (i) reviewing the quarterly and annual progress of the project based on reports prepared by the PIU and AF; (ii) guiding the PIU and AF on implementation; (iii) reviewing and approving updated procurement plans and interim un-audited financial reports (IUFRs); and (iv) making independent field visits to the project areas to assess field implementation. The proposed composition of the PIC is as follows:

Chief Conservator of Forest, BFD Chairman Deputy Chief Conservator of Forest, Planning Wing, BFD Member Deputy Chief Conservator of Forest, Education & Training Wing, BFD Member Conservator of Forests, Chittagong & Barisal Members Deputy Chief, MoEF Member Concern Desk Officer, MoEF Member Representative from Implementation Monitoring and Evaluation

Division (Agricultural Rural Development and Research Sector) Member Representative from Arannayk Foundation Member PD, PIU, BFD Member Secretary

Project Implementation Unit (PIU)

13. A full-fledged PIU headed by a Project Director (Conservator of Forest or Deputy Conservator of Forest) will be established within BFD. The PIU will be equipped with relevant qualified specialists (Financial Management Specialist, Account Specialist, Procurement Specialist26), compensated at market value. A Project Manager (Forestry Expert) will be hired to coordinate the day-to-day managerial activities, provide technical guidance and input for different components. The project will have provision for need-based consultants to provide technical input and review different reports produced by the firm consultants. BFD officials will work closely with specialists and will receive appropriate on-job training to develop individual and institutional capacity to design and implement large scale projects.

14. BFD’s ten Divisional Forest Offices headed by the forest officers and will be responsible for implementation activities on ground. Each DFO will be supported by one Community Mobilization Officer (Junior Consultant) and one Account Officer (Junior Consultant) through project financing.

26 Procurement Specialist will be hired for 36 months.

46

15. As per BFD procedures, 3 Forest Circle Offices (Chittagong Circle, Coastal Circle & Social Forestry Circle) will supervise 10 Forest Division Offices activities at the field level. In addition, 2 Management Plan Divisions located at Chittagong and Khulna will monitor the afforestation and reforestation program regular basis.

16. AF will be the implementing agency for component 2. AF has experience in promoting alternative livelihoods activities in protected, wetland and forest areas through capacity building and providing grant funds to groups to match their savings for establishing revolving funds for individual loans. It provides financial grants to organizations (i.e., NGOs, Universities and local government agencies) to implement field-based projects in or around forests.27 AF will have limited staff at the Secretariat to support implementation of the project, but will use part-time professionals as required. A full-time Project Manager will be recruited by AF. AF plans to contribute $200,000 in cash for the component 2 of the project.

17. The PIU will support AF in implementing component 2 and will be responsible for its coordination with other project activities. AF will recruit specialized NGOs to implement the component in the project area. The process will take place according to specific IDA procurement guidelines, including call for proposals, evaluation, field verification and grant agreement. The NGO staff input, cost of logistics and other administrative cost will be part of the NGO proposal. AF Secretariat will conduct periodic monitoring of project implementation and will review progress against work plan, budget and other terms and conditions of the grant agreement by undertaking field visits. The NGOs will submit quarterly, annual progress reports and completion report to AF Secretariat.

18. Table 3.1 summarizes the key tasks, educational qualification and experience required for the key PIU officials and consultants.

27 By 2010, AF funded 57 grants, of which 30 were completed by 2009 and 27 were ongoing in 2010. Typically, a grant covers about $100,000 over a period of 1-3 years.

47

Table 3.1: Terms of Reference (TOR) for key PIU Staff and ConsultantsPosition Key Tasks Education/ Qualifications Experience and SkillsA. Bangladesh Forest Department (BFD)Project Director (PD)

• Provide overall leadership to a team comprising staff and consultants in carrying out project activities, including procurement and financial management, reporting directly to the Project Implementation Committee

• Plan, implement, manage, supervise, monitor, and coordinate all project activities

• Coordinate with the Divisional Forest Officers• Be responsible for regular reporting on project

activities to IDA

• Post- Graduation (Masters) preferably in the field of forestry or natural resource management or related field

• Trained in forest resource planning and management.

• Trainings on project management, procurement and FM are additional advantages

• Minimum 10 years’ experience in project/program planning, management and monitoring and evaluation

• At least 5 years forestry experience• Proficiency in writing and speaking

English• Basic computer skills (Word, Excel,

etc.)

Assistant Conservator of Forest (ACF) -01

• Assist the Project Director in overall monitoring and evaluation of the project activities especially the afforestation and reforestation.

• Working as the Procurement Focal Point of BFD in the Project and work with the Procurement Specialist in updating the procurement plan, preparing bidding documents and requesting for proposals, short-listing consultants, coordinating bid evaluation committee meetings, facilitating evaluation of bids/proposals and awarding contracts

• Assist PD in procurement monitoring at the field level

• Report directly to PD

• Post- Graduation (Masters) preferably in the field of forestry or natural resource management or related field

• Training on procurement is preferable (Otherwise, to be trained within 3 months)

• Minimum 5 years’ experience of project/program monitoring and evaluation

• Proficiency in writing and speaking English

• Basic computer skills (Word, Excel, etc.)

Assistant Conservator of Forest (ACF) - 02

• Assist the Project Director in overall monitoring and evaluation of the project activities especially the field office rehabilitation/reconstruction and technical studies.

• Working as the Financial Management Focal Point of BFD in the Project and work with the Financial Management Specialist and Accounts for preparing consolidated financial management

• Post-Graduation (Masters) preferably in the field of forestry or natural resource management or related field

• Training on Financial Management is preferable (Otherwise, to be trained within 3 months)

• Minimum 5 years’ experience of project/program monitoring and evaluation



48

Position Key Tasks Education/ Qualifications Experience and Skillsreports

• Assist PD in Financial Monitoring at the field level

• Report directly to PD

Project Manager (PM)

• Coordinating day-to-day activities under the project to ensure the quality of implementation and ensure the required process and procedures

• Act as the Team Leader of the Individual Consultants working in the PIU

• Organize monthly meetings• Prepare progress reports and annual work plans for

submission to the National Steering Committee• Extend secretarial service to the Steering

Committee• Prepare and distribute consolidated, periodic

reports• Take actions and monitor project activities• Ensure the timely preparation and submission of

annual audit report• Ensure accurate and timely compilation of project

indicators by each implementation team.• Assist the Project Director to prepare project

progress reports two weeks prior to each World Bank Implementation Review mission;

• Facilitate the preparation of the World Bank standard Project Implementation Completion Report (ICR).

• Facilitate procurement of goods and services, etc.

• Post-Graduation (Masters) on Natural Resource, preferably Forestry

• Trained in project management, and M&E

• Minimum 7 years as Project Manager/Project Director/Project Coordinator or donor funded project implementation experience for at least 10 years

• Experience in forestry sector is preferred

• Demonstrated capacity to work in foreign aided projects in a team environment



Financial Management Specialist (FMS)

• Operate of the project financial implementation system following the WB guideline for the project

• Conduct financial and budget planning, Cost accounting, auditing, etc. under the Supervision of PD and Project Manager

• Post-Graduation (Masters) in Accounting, Finance, MBA or Post Graduation (Masters) with Accounting Credibility

• Professional accounting

• Minimum 10 years as financial management specialist or similar position, preferably with IDA project

• Have had hands-on experience in

49

Position Key Tasks Education/ Qualifications Experience and Skills• Introduce computerized accounting system• Prepare of accounting and reporting and fund flow

for the project spending units and design reporting format

• Monitor and ensure budget implementation progress

• Ensure timely and efficient administration of allocated funds and monitor flows of funds from Bank to the project following appropriate procedures

• Ensure control and management of proper records of project assets and purchases, including inventory records.

• Prepare annual and quarterly disbursement forecasts and consolidate financial reports.

• Prepare of reports and supporting documents for the external audit and internal audit in conjunction with the Procurement Specialist

• Prepare and design a plan for implementing computerized accounting system

• Report to PM and PD

qualification CA, CMA, ACCA etc. are preferable

• Trained on operating Financial Implementation Software

Microsoft or similar computerized Accounting

• Proven track record of ability to develop a Chart of Accounts befitting the relevant computerized accounting system and the report

• Strong interpersonal communicative skills, experience in team leadership and participatory management

• Ability to impart training to the project staff on financial management system



Procurement Specialist (PS)

• Prepare and update the procurement plan in consultation with the PD and PM

• Consolidate requests for procurement of goods and services.

• Prepare procurement documents such as request of expression of interest, bidding document, and request for proposals according to the IDA Procurement Guidelines.

• Act as secretariat of Technical Evaluation Committee (TEC), Proposal Evaluation Committee (PEC) and Tender Opening Committee (TOC)

• Ensure required approval in the government system and also no-objections from World Bank

• Post-Graduation (Masters) in Accounting, Finance, Economics, MBA or B.Sc. Engineering

• Advanced academic/professional qualification(s) in procurement/purchasing and supply chain or membership of renowned institution(s) in the field of procurement/purchasing and supply chain will be given

• Minimum 10 years working as Procurement Specialist or Similar position, preferably with IDA project.

• Experience in preparation of procurement plans for Government projects, bidding documents, RFPs and evaluation reports following donor agencies’ guidelines shall be an added advantage

• In depth knowledge of technical, commercial and legal aspects of procurement in development projects, financed by Government

50

Position Key Tasks Education/ Qualifications Experience and Skillsfor procurement documents

• Act as a member of the central committee(s) for bids/proposals evaluation.

• Facilitate awarding of contracts• Review procurement activities conducted in the

field level.• Provide on the job training to the PFPs and other

filed level staffs dealing with procurement to build their procurement management capacity.

• Coordinate and manage contract awards and ensuring submission of contract award information to Central Procurement Technical Unit- CPTU (all contracts) and to IDA (for prior-review contracts)

• Prepare procurement performance monitoring report on a regular quarterly basis

• Track progress of procurement activities against the plans and highlight variations in progress, record reasons and identify remedial actions

• Report to PM/PD

preference and the World Bank is preferred• Proficiency in writing and speaking

English• Basic computer skills (Word, Excel,

etc.)

Communication/Information Specialist

• Review and assessment of the current state of public awareness and education related to the participatory forest management and to reduce the degradation of the forest resources

• Review the work of the firm consultant on the communication strategy development, the design and implementation of public awareness campaign and the web design

• Maintain regular communication with media, NGOs and other stakeholders and disclose information in public domain

• Prepare brochure, leaflet, newsletter on project activities

• Advise the project management on media issues• Report to PM and PD

• Post- Graduation (Masters) in communications, journalism, public relations, social sciences, international relations, or a related field

• A minimum of 3 years’ experience in communications at the national or international level, including experience in media relations

• Experience in natural resource management is added advantages

• Excellent communication skills in English and Bangla, both written and spoken


Accounting • Manage disbursement of loan proceeds following • Post- Graduation (Masters) in • Minimum 5 years in project

51

Position Key Tasks Education/ Qualifications Experience and SkillsExpert the WB guidelines and in conjunction with the

relevant ministry• Establish and manage the project Special Account

(including the preparation of account statements) Maintain Books of Account

• Regularly review the books of accounts of field level Accountant

• All other works related to project accounting and financial management under direct supervision of PD, PM and FMS

Accounting, Finance, Economics, MBA or Post Graduation (Masters) with Accounting Credibility.

• Trained on Financial Management/Accounting software application

accounting and financial management or similar responsibilities, preferably with IDA/ Donor project.

• Ability to work in foreign aided projects in a team environment



Accountant(10 Accountants will be based in 10 Divisional Forest Offices)

• Responsible for maintaining the accounts for the project at Divisional level

• Guide and train the field level staff for maintain the financial records as World Bank Guidelines

• Carryout field cross-checking for the payments made against physical progress

• Prepare monthly accounts report and submit the report to the respective DFO

• Work under supervision of DFO, Account Expert and FMS

• Bachelor (Graduation) in Accounting, Finance, BBA or graduation with accounting credibility

• Minimum 3 years as Accountant or Similar position, preferably with IDA/ Donor project.




CommunityMobilizationOfficer (CMO)(10 CMOs willbe based in 10DivisionalForest Offices)

• Support DFO in implementation of the participatory afforestation and reforestation program

• Facilitate the beneficiary selection process through open public meeting

• Liaison with AF and NGOs for alternative livelihoods activities

• Coordinate with Union Parishad and field level forest offices

• Work closely and monitor the community training and awareness campaign program

• Support environmental and social screening and monitoring

• Work under supervision of DFO and PM

• Post- Graduation (Masters) in Social Science.

• Trained on participatory approach

• Minimum 3 years in the field of Community mobilization or similar works, preferably with IDA/Donor project.

• Experience in participatory rapid assessment, focus group discussion, participatory monitoring etc.




52

Position Key Tasks Education/ Qualifications Experience and SkillsArannayk Foundation SecretariatProject Coordinator (PC)

• Guide and coordinate NGO-based project teams in all matters pertaining to the smooth operation of the Project according to the Project Document and Project Implementation Manual

• Coordinate with PIU of BFD and other stakeholders associated with the different components

• Mobilize necessary technical support and material inputs from relevant resource organizations (public, private, NGO) to promote alternative livelihoods development of the forest-dependent communities

• Oversee the preparation and implementation of results based monitoring of the project

• Provide backstopping support in implementation of training program

• Provide backstopping support in implementation of training program

• Provide backstopping support in preparing annual plan of operation of NGOs

• Prepare various technical reports of the project• Document success stories and identify weakness

and potential areas for improvement• Prepare quarterly and annual progress reports• Work closely with AF Secretariat Staff, especially

under the guidance of the Senior Program Officer and the PC shall be reportable to the Executive Director of AF

• Post- Graduation (Masters) in Natural Resource Management or any other related discipline

• With sound knowledge of contemporary issues in participatory forest management and (rural) livelihood development in Bangladesh.

• Minimum 5 years’ experience in a similar position in a relevant institution

• Proven skills in the management and coordination of NRM project Familiarity with the ‘Social Forestry Rules’ and modalities of implementing social forestry projects in partnership with the Forest Department

• Proven skills in participatory methods and tools are essential.




53

Financial Management, Disbursements and Procurement

Financial Management (FM) Assessment

19. A financial management (FM) assessment was carried out to evaluate the overall financial management environment prevailing in the country and within implementing agencies BFD and AF. The assessment also identified the financial management arrangements under the proposed project would need to be in place to meet the Bank's fiduciary requirements in accordance with OP/BP 10.02.

FM Arrangements

20. The Bank will rely on the Government of Bangladesh’s existing accounting and control systems, budgeting and auditing framework for implementation of this project. However, the project will adopt the international best practices to improve the financial management system in the project.

Budgeting

21. The annual budgets for each fiscal year will be prepared individually by FM staff of PIU at BFD and AF. These individual budgets will be consolidated by the PIU under the supervision of the Project Director on the basis of the approved procurement and implementation plans. The original and the revised budget proposals will be submitted to the planning wing of MoEF. The Project Director will undertake due diligence in approving realistic budget to ensure that the project implementation is not suffered by the budgetary constraints while taking adequate care that only the resources needed for the proposed implementation is budgeted. Budget will be prepared using the MS excel based accounting system that would be place until the computerized accounting system is adopted and made operational. Actual expenditures incurred under this project will be monitored against this budget for each quarter; budget variances and their rational will be reported and discussed in the Interim financial reports (IFRs).

22. Ministry of Finance (MoF) will monitor the budget implementation through issuance of authorization for use of the designated account and quarterly release of GoB funds. Any genuine necessary deviation from the budget will be met by obtaining the approval through the revised Annual Development Plan.

Disbursement and Fund Flow:

23. This project will be provided 2 (two) Designated Accounts- Convertible Taka Account (CONTASA) in Nationalized Commercial Bank of the Bangladesh. The DAs ceilings are specified in the Disbursement Letter. The recipient may request for advances up to the ceilings based on the project needs. The applications for uses of the advances will be supported by SOEs, and records (e.g. invoices) evidencing eligible expenditures for identified contracts in accordance with the Disbursement letter. This would be converted to IFR-based disbursement at the option of GoB and the Ministry after the project successfully demonstrates capacity to generate quality and timely IFRs. In addition, the project will be given flexibility to use other

54

disbursement methods including Reimbursement, Direct Payment, and issuance of special commitment.

24. (i) Designated Account A: This account will be opened by PIU and the Project Director or any officially designated official of BFD will be authorized to operate/withdraw funds from this Designated Account to implement the Component 1, 3 and 4 of this project.

25. Component 1, Afforestation and Reforestation Program: This component will be implemented by PIU in close coordination with ten (10) division forest offices. A separate bank account for this project will be opened by each division forest office and the funds from the Designated Account-A will be transferred into these individual bank accounts. These forest offices are headed by the division forest officers (DFOs) and they will be authorized to operate/withdraw funds from this bank account. The expenditures incurred by the division forest offices will paid from these individual bank accounts.

26. The project will engage the services of local communities for afforestation and reforestation activities. The funds will be withdrawn from the respective bank accounts of the division forest office by the Range Officer for payments to the local community labors, local transportation cost, purchase of planting related materials and collection of seeds. The amount withdrawn by the Range Officer will be accounted as an advance in the books of accounts and the expenditure against the same must be within 15 days. The funds that have remained undisbursed will be adjusted from the next cash advance. The DFO and Assistant Conservator of Forests will periodically monitor the payments made by the Range Officers.

27. Component 3, Capacity Development for Forest Resource Planning and Management: The expenditures under this component will be incurred at the central PIU level towards soft activities i.e. consultancies, training and workshops and the payments will be made directly from the Designated Account-A.

28. Component 4, Project Management: The expenditures under this component will be incurred at the central PIU level to support the establishment/operating costs of the PIU including salaries of the personnel appointed for this project. The payments will be made directly from the Designated Account-A except for salaries and travel cost of field based CMOs and Accountants. The payment of CMOs and Accounts Officer will be made from the bank account of the respective divisional office.

29. (ii) Designated Account B: This account will be opened by AF and the person authorized by the Board of Directors will operate/withdraw funds from this Designated Account to implement the component 2 of this project.

30. Component 2: Alternative Livelihoods to support Forest Communities: Under this component, the payments will be made to the specialized partner NGOs as per the terms and conditions of the consultancy contract. In addition, the grants will be released by AF from the Designated Account into the bank accounts of the target local communities in 200 communities for distribution to 6,000 identified beneficiaries on the basis of community proposals appraised by the NGOs. The NGO will also facilitate communities in the opening of bank accounts. The

55

communities on a periodic basis will prepare the progress reports on grant utilization and will be reviewed and compiled by the NGOs for submission to AF.

Financial Reporting (IFRs):

31. The project will submit 2 Interim Financial Reports (IFRs) to the Bank for the project components implemented separately by BFD and AF. These IFRs will provide information on the sources and uses of funds as per disbursement categories and project components. The formats of Interim Financial Reports (IFRs) have been agreed by BFD and AF.

32. (i) The IFRs of the component 1, 3 and 4 will be prepared by the PIU on the basis of expenditures incurred by all cost centers (including division offices) and will be submitted to the Bank within 45 days from the end of each calendar quarter. The amounts disbursed by PIU to the individual bank accounts of the division forest offices will be recorded as advances in the IFRs and will be reported as expenditures only on receipt of the utilization certificates. The process on monitoring of advances will be detailed out in the project implementation manual.

33. (ii) The IFRs of the component 2 will be prepared by AF on the basis of expenditures incurred and will be submitted to the Bank within 45 days from the end of each calendar quarter. The amounts disbursed to the NGOs, as per the terms and conditions of the contract and grants released into the bank accounts of the target local communities in 200 communities will be reported as expenditures in the IFRs.

Accounting and Financial Controls

34. The Treasury Rules and General Financial Rules of the Government and existing chart of accounts/ economic codes followed in Government’s iBAS accounting system will be used for the accounting and financial controls by PIU. There are clear guidelines prescribed by the Ministry (MoEF) for the authorization and approval of financial transactions. The MoF’s existing financial powers, authority and payment responsibility outlined for the development projects will be followed meticulously by PIU for this project. The DFO is the treasurer and also drawing and disbursement officer for respective division under BFD. In order to improve the accountability and transparency of the financial system, the concept of forensic accounting will be introduced into this project.

35. Component 1, 3 and 4: Separate books of accounts and registers will be maintained for this project by the PIU and the division offices. The project will follow cash basis of accounting to record the project expenditures using double-entry bookkeeping principles and the transactions will be supported by approved vouchers. The books of accounts will be initially maintained manually. Within three months of the project effectiveness a computerized accounting system (off –the-shelf package) will be procured by PIU and chart of accounts will be configured to this software to generate the financial reports for PIU and divisional forest offices. These financial reports will be used for the preparation of IFRs.

36. The FM manual which will be part of the Implementation Manual will be ready by the project effectiveness. This will provide complete details/procedures to be followed by the

56

project on the financial management arrangements: (i) Budgeting; (ii) Fund flows; (iii) Accounting; (iv) Internal controls; (v) Financial reporting (quarterly IFRs); and; (vi) External audit based on statement of audit needs agreed with Comptroller and Auditor General (C&AG) of Bangladesh.

Funds Flow Information Flow

37. Component 2: The AF currently has a computerized accounting system in place which is being used by the entity. There are effective checks and balances, with adequate audit trails in place to account, record and report the financial transactions. It has been agreed with the entity

57

Component 2

Implementing Activities

Beat Officer

Range Officer

DFO’sCommunity Bank

A/CNGO Bank

A/C

Vendors

Project Office-AF

Designated A/C-BDesignated A/C-A

Component 1Component-3 & 4

World Bank

Project Implementation Committee chaired by CCF

PIU-BFD

Steering Committee chaired by Secretary MoEF

that a separate module/field will be opened for recording of the expenditures incurred for this project. The quarterly IFRs will be prepared based on the financial details/trial balances generated from this system.

Staffing

38. It has been agreed with the project that the staff strength of the finance section will be increased at the PIU through appointment of one qualified FM consultant; and one account officer. These staff members will be adequate to maintain appropriate records for the project expenditures, coordination with the respective division forest offices, preparation of IFRs and project financial statements etc. In addition, the staff strength at the divisional forest offices will be increased through appointment of one Accountant at each location who will work under the close supervision of the division forest officer and will support the office in maintenance of books of accounts, submission of periodic reports to the PIU. The job descriptions and the requisite qualifications for these staff positions will be specified in the ToRs. Appropriate provisioning for these staff positions have been made under this project. These selected staff will be provided adequate training in financial management and disbursement related aspects to meet the Bank’s minimum requirements.

39. The finance staffing at the AF is adequate and it has been agreed that the existing finance staff will provide support for this project. The finance manager in AF will be the overall in-charge for the financial management aspects of this project.

Internal Audit:

40. The Chartered accounting firm(s) will be engaged to carry out audits in accordance with ToRs in agreement the Bank. The firm will be selected through appropriate competitive process to be initially reviewed by the Bank. The audit will cover the expenditures incurred under all the project components with a special focus on the amounts disbursed and spent by the division forest offices.

41. Since a large part of the funds under component 1 are being spent in cash by 10 divisional forest offices (DFOs) for afforestation and reforestation activities, the scope of the audit will be comprehensive and involve field-level review of financial operations and efficiency of the internal control arrangements. The project performance, operational aspects including the element of forensic accounting will also be covered under the audit.

42. The audits will be conducted semi-annually and will provide feedback to the project management on any control weaknesses and issues, if any, that require management attention. PIU at BFD and AF will take effective steps to address the weaknesses highlighted by the auditors. It has been agreed that the internal audit reports along with the corrective actions taken by the project to address the control weaknesses (if any) will be shared with the Bank.

58

External Audit:

43. The C&AG have mandate to conduct the audit for all the donor-financed projects in Bangladesh. The annual external audit for the Component 1, 3 and 4 of this project will be carried out by the C&AG through its Foreign Aided Project Directorate (FAPAD). A Statement of Audit Needs (SAN) will be agreed with FAPAD within 6 months of the project effectiveness. The PIU will be responsible for providing the audit report, project financial statements and management letter to the Bank within six months from the end of the each fiscal year (July 01 to June 30).

44. The audit report for the component 2 of this project will also be carried out by the C&AG through its Foreign Aided Project Directorate (FAPAD). A Statement of Audit Needs (SAN) will be agreed with FAPAD within 6 months of the project effectiveness. The Arannyak Foundation (AF) will be responsible to submit the audit report, project financial statements and management letter to the Bank within six months from the end of the each fiscal year (July 01 to June 30).

45. The following audit reports will be received by the Bank and will be monitored in Audit Report Compliance System (ARCS):

Table 3.1: Audit Reports ScheduleImplementing

AgencyAudit Report Auditor Due Date

PIU, BFD Audit report and project financial statements

C&AG of Bangladesh

December 31, of each year

AF Audit report and project financial statements

C&AG of Bangladesh

December 31, of each year

Project Audit Committee:

46. To ensure that the audit reports provided by the internal, operational and external audits of the project have met ToRs and reports have been reviewed and audit recommendations have regularly been followed up, a project audit committee will be set up under this project and will meet at-least twice in a year. This committee will report its findings to the Project Steering Committee.

Retroactive Financing:

47. The project has requested for a retroactive financing of $200,000. It has been agreed with PIU that the payments made from August, 2012 till signing date will be eligible for Bank financing, provided; (i) these activities are included in the project description/costing; (ii) the procurement procedures of the Bank are appropriately followed to finance such expenditures; and, (iii) these expenditures will be audited and a combined audit report for the first year (covering expenditures for retroactive and proactive period) will be submitted to the Bank.

59

Public Disclosure:

48. In line with the Bank’s Access to Information policy, it has been agreed with BFD and AF that the annual audit report and project financial statements of this project issued by the C&AG of the Bangladesh and Private Auditor will be disclosed in the implementing agencies website.

Project Supervision:

49. During the initial stages of project implementation, the FM supervision will focus on compliance with the agreed action plan, including training on FM related aspects and addressing any disbursement related issues. As implementation progresses, the supervision would involve six monthly field visits to review the adequacy of the agreed Financial Management arrangements, reviews of SOEs, IFRs, internal and external audit reports etc.

Financial Management Action Plan:

50. The following actions have been agreed with the implementing agencies:

Table 3.2: Financial Management Action PlanSL. No

Agreed Actions Responsible Due Date

1 Required clearance and formalities for project bank account opening

BFD and AF in coordination with

MoEF, MoF

Within 2 months of Negotiations

2 Develop formats of Interim Financial Reports (IFRs) in consultation with Bank

BFD and AF Prior to Negotiations. (Discussed and agreed

in Negotiations)3 Appointment of one qualified FM consultant and

Account officer in PIU-BFD and 10 Accountant in DFO under ToRs acceptable to the Bank.

PIU-BFD Within 2 months of project effectiveness

4 Procurement of computerized accounting system (off the Shelf) for PIU and Divisional Forest Offices

PIU-BFD Within 3 months of project effectiveness

5 ToRs for Internal Audit acceptable to the Bank PIU-BFD Within 6 months of project effectiveness

6 An agreement on Statement of Audit Needs with C&AG (FAPAD) acceptable to Bank

PIU-BFD and AF in coordination

with C&AG

Within 6 months of project effectiveness

7 Training to PIU-BFD and DFO’s on Financial Management aspects

Bank Within 3-4 months from project effectiveness

60

Procurement

51. Total value of the project is US$35 million; BCCRF’s projected contribution is US$33.8 million. Procurement under this project will largely involve consultancy services, non-consulting services, goods and works. Procurement for the proposed project would be carried out in accordance with the World Bank’s “Guidelines: Procurement of Goods, Works, and Non-consulting Services under IBRD Loans and IDA Credits & Grants by World Bank Borrowers” dated January 2011 (“IDA Procurement Guidelines”) and “Selection and Employment of Consultants under IBRD Loans and IDA Credits & Grants by World Bank Borrowers” dated January 2011 (“IDA Consultant Guidelines”) as well as the provisions stipulated in the Grant Agreement. For each contract financed by the grant, the respective procurement or consultant selection method, the requirements on prequalification, cost estimate, prior review and time frame are agreed between the Borrower and IDA within the Procurement Plan. The Procurement Plan will be updated semi-annually or as required to reflect actual project implementation needs and improvements in the capacity of BFD and AF.

52. The assessment of BFD’s procurement covered the legislative framework, procurement planning, procurement processing, organizational functions and staffing, internal control and support system, record keeping, and contract administration. The following weaknesses were identified: (i) inexperience with IDA-financed projects except the recently commenced Strengthening Regional Cooperation for Wildlife Protection Project (P121210); (ii) absence of dedicated procurement staff within the agency to deal with procurement activities; (iii) inadequate capacity for administering large and complex contracts; (iv) absence of processes for handling complaints; (v) vested interests; and (vi) political intervention. In addition, the areas comprising information dissemination, delivery follow up and payments will need to be improved.

53. The assessment of AF’s procurement covered the policy framework, procurement planning, procurement processing, organizational functions and staffing, internal control and support system, record keeping, and contract administration. The following weaknesses were identified: (i) inexperience with projects funded by Government funds or multilateral development banks (MDBs); (ii) absence of dedicated procurement staff within the agency to deal with procurement activities (very lean organization – required staff are hired on project basis and requirement); (iii) inadequate capacity for administering large and complex contracts (historically largest contract administered by AF costs less than $100,000); (iv) absence of processes for handling complaints; (v) absence of documentation policy (except financial records); and (vi) unfamiliarity with bidding documents of IDA or Government (Central Procurement Technical Unit- CPTU).

61

54. In view of the weaknesses and the relative size of the contracts envisaged under this project, the project is rated as “high risk” from the standpoint of procurement operation and contract administration. Several measures to mitigate the risks are either in place or will be put in place as described below. The procurement arrangements are described in the following paragraphs.

55. Measures completed during project preparation include: (i) agreement with the agency that most of the procurement will be centralized under the project implementation agencies, namely BFD and AF; (ii) delegation of one person from each agency as Procurement Focal Point (PFP) during project preparation and to work on procurement issues and report to PD on all procurement matters during project implementation; (iii) finalizing the Procurement Plan during appraisal mission; (iv) agreement on the Procurement Performance Monitoring Report (PPMR) for procurement risk mitigation; and (v) incorporation of the PPMR into the Government’s Development Project Proposal (DPP) for BFD component and the project proposal document for AF.

56. Measures envisaged for grant effectiveness include: (i) Assigning PFPs; (ii) hiring a procurement specialist/consultant with experience in international procurement of projects financed by MDBs or bilateral development partners to support the BFD and AF on procurement activities and guide PIU and AF on procurement issues for 36months with provision of extension based on requirements.

57. The following measures would be carried out during implementation: (i) PFPs would undergo national (and if practicable, international) level procurement training before significant procurement takes place; (ii) BFD will submit semiannually Procurement Performance Monitoring Report (PPMR) status report to IDA starting from six months after project effectiveness; (iii) The procurement consultant will be a mandatory participant in the bid/proposal evaluation committees; (iv) For contracts following IDA’s Procurement or Consultant Guidelines, the latest editions of publicly available Standard Bidding Documents (SBDs) and/or Request for Proposal (RFP) shall be used. For all contracts (either prior review or post review), IDA’s standard format for evaluation report (or model format agreed with IDA) should be used; (v) IDA will organize procurement orientation or training workshops as and when required to enhance the procurement capacity of the project staff and members of the evaluation committee; and (vi) The procurement plan will be updated semi-annually or as required.

58. Methods for procurement of goods, works and non-consulting services. Except as otherwise agreed in the procurement plan, works and goods and non-consulting services may be procured on the basis of International Competitive Bidding (ICB). Procurement of goods, works and non-consulting

62

services with an estimated value that falls below the ceiling stipulated in the Procurement Plan may follow National Competitive Bidding (NCB) and Shopping (RFQ). Direct Contracting (goods/ works/ non-consulting services) and Single source Selection (Consultants) would be allowed under special circumstances with prior agreement with IDA. Force Account and Direct Cash Purchase following Bangladesh Procurement Rules, 2008 applicable mainly for payment of labor and goods respectively under participatory afforestation and reforestation sub-component of the project. NCB would be carried out under IDA Procurement Guidelines using procedures provided in Bangladesh Public Procurement Act 2006 (incl. 1st Amendment 2009) and the Public Procurement Rules, 2008 (as amended in August 2009) and use standard bidding documents satisfactory to IDA. The “Request for Quotation” document based on the PPA is acceptable to IDA for local Shopping. NCB may be applied under the following conditions: (i) post bidding negotiations will not be allowed with the lowest evaluated bid or any other bids; (ii) bids should be submitted and opened in public in one location immediately after the deadline for submission; (iii) rebidding will not be carried out except only with IDA’s prior agreement; (iv) lottery in awarding contracts will not be allowed; (v) bidders’ qualifications and experience requirements are mandatory; (vi) bids will not be invited on the basis of percentage above or below the estimated cost and contract award will be based on the lowest evaluated, compliant bid price from eligible and qualified bidders; and (vii) single stage two envelope procurement system will not be allowed.

59. Methods for procurement of consultant services. Consultant procurement will follow IDA’s Consultant Guidelines. The following methods will be applied: Quality and Cost-based Selection (QCBS), Quality-based Selection (QBS), Fixed Budget Selection (FBS), Consultants’ Qualification (CQ), Least Cost Selection (LCS), Selection of Individual Consultant (IC) and Single Source Selection (SSS). The short list of consultants for services estimated to cost less than US$200,000 equivalent per contract may be composed entirely of national consultants. For selection of any consultant, IDA’s standard RFP including standard contract forms shall be used. The Procurement Plan will specify the circumstances for using each specific method.

60. Incremental operating costs. The term operating cost will include the incremental overhead costs incurred by the (i) Project Implementation Unit and Divisional Forest Offices of the Bangladesh Forest Department and, (ii) Arannayk Foundation for the implementation of the project activities. These will cover the costs of incremental project staff, operations and maintenance of vehicles (fuel, maintenance and insurance), renting of vehicles, office utilities, office supplies and stationeries, unforeseen printing of materials, souvenirs, events, workshops, rental of office buildings, bank charges, advertising costs or any other operational cost agreed with IDA. This may

63

not include salaries of permanent government officials that are paid out of government’s own budget.

61. Prior review thresholds. The Procurement Plan will set forth those contracts which shall be subject to IDA’s prior review. All other contracts will be subject to post review by IDA. The initial Procurement Plan agreed with the Borrower for the first eighteen (18) months indicates the following prior review thresholds which will be updated annually. The thresholds are based on the assessment of the capacity and performance of the implementing agencies and will be reflected in the updated Procurement Plan as appropriate. The thresholds are applicable to the following: (i) each contract for goods and works procured on the basis of ICB; (ii) the first contract for goods purchased by each implementing agency following NCB, regardless of the value, and thereafter, all contracts estimated to cost $300,000 equivalent or more, regardless of the procedure; (iii) the first contract for works following NCB, regardless of the value, and thereafter all contracts for works estimated to cost $2,000,000 equivalent or more, regardless of the procurement method; (iv) each contract for consultant services provided by a firm estimated to cost the equivalent of $200,000 or more; (v) each contract for services of individual consultants estimated to cost the equivalent of $100,000 or more; and (vi) all contracts for goods/works procured through Direct Contracting and all contracts for consultant services procured under single source selection.

62. Post review. To determine compliance with procurement procedures/methods/ Guidelines mentioned above, IDA will carry out sample post reviews of contracts that are below the prior review threshold. A post review (ex-post and procurement audit) of contracts below the threshold will constitute a sample of about 20% of the post-review contracts in the project. Procurement post-reviews will be done on annual or semi-annual basis depending on the number of post-review contracts.

63. Procurement Plan. The procurement plans for the project, prepared by BFD and AF, have been reviewed and accepted. These plans will be updated semi-annually or as required to reflect the latest circumstances. The following table indicates procurement of some major contracts under the project at PIU-BFD and AF as agreed till the preparation period. The procurement plan will be subject to public disclosure following project effectiveness.

64

Table 3.3: Procurement Plan – Goods (for BFD) Sl. No.

Contract Package Number

Contract Description Unit Qty/ Nos.

Estimated Price in US$ ‘000 (Actual Contract Price in Contract Currency)

Procedure/ Method

Procurement Guideline (PPR / BG)

Prior Review2 (Yes / No)

Planned Date of Bid Opening (Actual Date of Bid Opening)

Remarks

1 2 3 4 5 6 7 8 9 10 11

1 BFD/G1 Laptop & Printers No 40 &12 50 NCB PPR Yes 02/15/2013 First NCB contract

2 BFD/G2 Vehicles (1 jeep and 1 pick-up) No 2 142 NCB PPR No 03/01/2013

3 BFD/G3 Motor cycles No 40 74 NCB PPR No 03/01/2013

4 BFD/G4 Engine boats No 40 148 NCB PPR No 03/01/2013

5 BFD/G5 Photocopiers and Multimedia projects

No 12 & 2 32 NCB PPR No 03/01/2013

6 BFD/G6 Furniture ls ls 25 NCB PPR No 03/01/2013

7 BFD/G7 Air cooler No 2 2 Shopping/RFQ PPR No 03/01/2013

8 BFD/G8 Equipment for RIMS upgrading and ICT equipment for field networking

ls ls 210 ICB/NCB BG Yes 05/01/2014

Table 3.4: Procurement Plan – Works (for BFD) Sl. No.




Procedure/ Method

Procurement Guideline (PPR/ BG)



Remarks

1 2 3 4 5 6 7 8 9 10 11

1 BFD/W1.1 - W1.5

Rehabilitation/ reconstruction of field offices

Building 43 2707 NCB PPR Prior 10/01/2013 5 packages

Table 3.5: Procurement Plan – Services (for BFD)

65

Sl. No.



Estimated Price in US$ ‘000

(Actual Contract Price in Contract

Currency)

Procedure/ Method

Procurement Guideline

(PPA / BG)

Prior Review2

(Yes / No)


Remarks

1 2 3 4 5 6 7 8 9 10 111 BFD/S1 Climate Change Awareness,

Participation and Afforestation awareness training and Introductory package- Package Contract.

contract single 375 QBS BG Yes 04/01/2013

2 BFD/S2 Capacity Development Specialist- Individual Local

mm 48 119 IC BG Yes 02/01/2013

3 BFD/S3 Technical Study for Land use mapping, assessment and monitoring of proposed afforestation/reforestation sites

contract single 400 QCBS BG Yes 04/14/2012

4 BFD/S4 Technical Study for strengthening RIMS and development of Forest Resource Assessment and monitoring protocol


5 BFD/S5 Technical Study for developing communication strategy, awareness campaign and web-based information dissemination system

contract single 150 QCBS BG No 02/15/2013

6 BFD/S6 Technical Study for third party monitoring


7 BFD/S7 Resource Assessment Specialist (Individual International)

mm 18 270 IC BG Yes 03/15/2013

8 BFD/S8 MIS/GIS Specialist (Individual Local)

mm 39 120 IC BG Yes 02/15/2013

9 BFD/S9 Technical Study for Review Forest Master Plan and different sectoral studies for Forestry Master plan updating


10 BFD/S10 Technical Study for developing strategy, update Forestry Master plan and prepare time specific action plan


66

Sl. No.



Estimated Price in US$ ‘000

(Actual Contract Price in Contract

Currency)

Procedure/ Method

Procurement Guideline

(PPA / BG)

Prior Review2

(Yes / No)


Remarks

1 2 3 4 5 6 7 8 9 10 1111 BFD/S11 Forest Management policy/

Institution (Individual International)

mm 24 360 IC BG Yes 04/01/2013

12 BFD/S12 Forest Management policy/ Institution (Individual National)

mm 45 140 IC BG Yes 12/15/2012

13 BFD/S13 Design, Supervision and Monitoring Consultant for field infrastructure

contract single 143 QCBS BG No 08/01/2013

14 BFD/S14 Project Manager (Senior Individual Consultant)- 54 mm

mm 54 186 IC BG Yes 03/15/2013

15 BFD/S15 Financial Management Specialist (Senior Individual Consultant)- 54 mm

mm 54 186 IC BG Yes 02/15/2013

16 BFD/S16.1 -16.10

Procurement Specialist (Senior Individual Consultant) -36 months

mm 36 120 IC BG Yes 02/15/2013

17 BFD/S17.1 -17.10

Communication/Information Specialist- 30 mm

mm 30 82 IC BG No 03/15/2013

18 BFD/S18 Accountant (Individual Consultant)- 54 mm

mm 54 112 IC BG Yes 03/01/2013

19 BFD/S19.1 -19.10

Accountant (Individual Junior Consultant) – 10 Nos- 540 mm

mm 540 447 IC BG No 02/01/2013

20 BFD/S20.1 -20.10

Community Mobilization Officer (Individual Junior Consultant) – 10 Nos. 420 mm

mm 420 339 IC BG No 02/15/2013

21 BFD/S21 Need based Individual Consultants- 2mm

mm 2 5 IC BG No 12/15/2013

22 BFD/S22 Financial Audit Firm Contract

Single 20 QCBS BG Yes 06/01/2013

Table 3.6: Procurement Plan – Services (AF)

67

Sl. No.




Procedure/ Method

Procurement Guideline (PPA / BG)



Remarks

1 2 3 4 5 6 7 8 9 10 11

1 AF/S1 Project Coordinator mm 54 60 IC BG Yes 01/31/2013

2 AF/S2 NGO for AIG activities (south) 1,550 QBS BG Yes 03/25/2013

3 AF/S3 NGO for AIG activities (southeast)

1,157 QBS BG Yes 03/25/2013

4 AF/S4 AIGA Consultant 35 IC BG No 09/23/2013

5 AF/S5 Financial Audit Firm 12 LCS BG Yes 06/01/2013

68

Social and Environment (including safeguards)

Social

Introduction

64. The project is being prepared to help selected local communities in the coastal areas of Bangladesh to improve their resilience to climate change impacts. Its operational objectives are to (i) strengthen the institutional capacity of the Bangladesh Forests Department (BFD) and selected communities in the coastal and hilly areas of the country for participatory afforestation and reforestation; and (ii) increase the size of reforested areas in selected communities through participatory afforestation and reforestation. The activities under Participatory Afforestation and Reforestation will mainly focus on the degraded forest lands, marginal and fallow lands, and most importantly on the newly accreted lands in the coastal areas. The target geographic areas will be selected in 9 coastal districts. Plantation will also cover accreted offshore islands which are not inhabited.28 In the hilly areas, the subprojects will target the core and buffer zones of the Reserved Forest Lands of Chittagong and Cox’s Bazaar districts. The Afforestation and reforestation program will create about 3.0 million workdays for the forest depended communities.

65. From social perspective it is observed that forestry-related interventions are often made problematic by “elite capture” in community forestry or in cases of joint management. While influential and richer people are often responsible for deforestation, it is documented that the poorest living in and around the forests depend on forest-degrading livelihood activities like collection and selling of fuel woods and other forest products. To guard against elite capture, the project will support develop, test and introduce a modified beneficiaries’ selection process decentralized to the Union Parishad level, with engagement of communities and local government in a transparent, open and inclusive selection and decision making process.

66. Component 2 is expected to bring positive socioeconomic impacts through creation of jobs, transfer of knowledge and skills, and expanding income opportunities for the people living in the project areas. It will also empower and strengthen social capital of poor, women, vulnerable and marginalized members of forest dependent groups. The project will provide technical and financial support to the selected forest communities to build sustainable livelihoods without relying on illegal and unsustainable harvesting of forests and wetland resources. The project will facilitate social mobilization of poor forest dependent households into groups, engage them in afforestation and reforestation activities, provide them with relevant training, as well as technical and financial support to improve their livelihoods.

Social Safeguard

28Plantation in these islands will consist only of mangroves that have very little market value. As a result, community involvement, which is based mainly on the benefit sharing incentives provided in the Social Afforestation Rules, is highly unlikely.

69

67. All plantation activities will be undertaken on available public lands under the BFD control. These lands are not included in any on-going or planned projects. BDF has decided that no private lands would be acquired for plantation, but has still agreed to adopt certain guidelines to obtain private lands where they are absolutely necessary to maximize and sustain the benefits of a given subproject, which are included in the SMF prepared for the project.

68. Policy, Legal and Administrative Framework. It is likely that public lands may not be free of encumbrances and that some of these lands may be under authorized and unauthorized use, as well as not formalized for use by local peoples for living and livelihood.29 It is also likely that some of the coastal districts, especially Cox’s Bazaar and Patuakhali, may have indigenous peoples (IPs) living in settlements among local people. Social safeguards compliance requirements therefore have been triggered WB Policies on Involuntary Resettlement (OP 4.12) and Indigenous Peoples (OP 4.10). In the context of Bangladesh, indigenous people are referred to as Tribal People.

69. Social Management Framework. Although the compliance requirements would remain unknown until specific subproject locations are identified and screened, BDF has prepared a SMF to address any social safeguard issues that may arise due to the activities implemented under the individual subprojects. Social safeguards will also be applicable to the Alternative Livelihoods to Support Forest Communities component, to be implemented by AF and partner NGOs. Consistent with the Bank’s OP 4.12 and OP 4.10, pertinent provisions of GoB’s Social Forestry Rules 2004 (amended in 2011) and those of other DPs, the SMF proposes principles, policies, guidelines and procedure to identify and address impact issues concerning involuntary resettlement and indigenous peoples. The SMF will apply to the project as a whole and provide the bases to determine applicability of the safeguard policies, and prepare and implement impact mitigation plans like Resettlement Plans (RPs) and Tribal Peoples’ Development Plans (TPDPs) as and when subproject activities are found to cause adverse impacts on public land users and private landowners, as well as indigenous peoples. These safeguard policies, procedures and instruments will also be integrated into the implementation of the Alternative Livelihoods to Support Forest Communities component.

70. The objective of the SMF is to ensure that subprojects are planned, designed, screened, and implemented to enhance positive social outcomes from project activities; ensure participation of the target communities, including poor, women, vulnerable and marginalized groups, and proper selection of core afforestation/reforestation beneficiaries in a transparent, socially inclusive and verifiable process. It aims to avoid or minimize negative social impacts, prevent or compensate for loss of livelihood, which may result from displacement of public land users and use of private lands, and severely restrict access to common property resources, and ensure compliance with the relevant GoB policies and those of the World Bank on social safeguards and social inclusion issues, including those with gender implications.

29It was seen during field visits, plantation in one degraded hilly site (Chunati Range in Cox’s Bazaar) has been carried out without displacing the two poor households that have been living in the site. Rather, they have been accepted among the beneficiaries. In another potential site (Kumira Range in Chittagong), there is a small number of households living in the narrow strips of valleys between the hills. BDF has decided not to displace them, but accept them as beneficiary of the plantation program.

70

71. The SMF provides a framework of applicable policies, rules and regulations; guidelines to be followed in order to use private and public lands, guidelines on the preparation of indigenous people’s plans, consultation and communication, grievance redress and monitoring and evaluation. It also provides screening mechanisms for specific sub-projects; beneficiary selection methodology; institutional and implementation arrangements for the implementation of the SMF via the site specific plans; and the process of clearances and disclosure required both for the SMF and the site specific plans. The draft SMF has been disclosed on BFD and AF websites (http://www.bforest.gov.bd/ and http://www.arannayk.org/otherdoc.php) for public comments on May 17, 2012.

72. Implementation and Monitoring. BFD will implement the project and ensure that the SMF is implemented in its entirety or to the extent applicable for each subproject. Component 2 will be implemented by AF and its partner NGOs on the ground. Along with other project activities, BFD and AF will supervise and monitor SMF implementation. AF will design, supervise and monitor the income generating activities, and carry out periodic audit of the fund utilization by CBOs during the project period. The PIU at BFD will be responsible for overall supervision and monitoring of all activities under the alternative livelihoods subcomponent.

73. Grievance Redress Mechanism: For effective impact mitigation and a fair resolution of complaints, BDF will establish a grievance redress mechanism (GRM) for all subprojects undertaken in a range, to address complaints and grievances about any irregularities in application of the SMF guidelines for community consultation; impact assessment and mitigation; beneficiary selection; plot size and quality; eviction from public lands; and other personal/community concerns. Based on discussion and consensus, GRM will help to resolve the issues/conflicts amicably and quickly to ensure unhindered project preparation and implementation process. If resolution attempts at the Range level fail, the concerned Range Officer will refer the complaints to the DFO or next higher authority along with the minutes of the hearings. If a decision made at this level is found unacceptable by the aggrieved person, DFO will refer the case to BFD with the minutes of the hearings at both range and division levels. A decision agreed with the aggrieved person at any level of hearing will be binding on BFD. SMF provides a suggested composition for the GRM.

74. Safeguards Capacity: BFD has successfully implemented three Bank-supported forestry sector projects during 1980 – 2001. However, most of the present mid-level staff, such as DFOs and others who would support project preparation and implementation at the local level, are not familiar with Bank-supported operations. Thus, there would be a need to train the present BFD staff to the Bank procedures and requirements. On the other hand, with a network of partner organizations AF has reasonable experience with promoting projects/programs on alternative livelihoods for forest conservation. The latter will train partner NGOs, and they will train participating FDG in screening of livelihood micro projects.

Environment

75. Applicable Environmental Category and Safeguard Polices. The proposed project is expected to make a positive long-term contribution to the environment such as protecting against soil and water erosion, working as a barrier during cyclone and storm surge, reducing

71

http://www.arannayk.org/otherdoc.php

http://www.bforest.gov.bd/

atmospheric pollution and providing habitat for flora and fauna. The activities will be mainly focus on the degraded forestland, marginal, fallow and newly accreted land in coastal and hilly areas. The project has been classified as “Category B” considering risk associated with the site clearance of plantation, species selection, use of fertilizer in the plantation program, minor construction related disturbance and community level livelihood options in areas of high ecological sensitivity and vulnerability. The Project has triggered three environmental safeguard policies for environmental assessment (OP/BP 4.01), Natural Habitats (OP/BP 4.04) and Forests (OP/BP 4.36). It has been agreed during project preparation, no pesticides or herbicides will be used in the project.

76. BFD and AF prepared an EMF that describes the general baseline condition and typical environmental impacts from different types of activities during preparation, design, construction, and operation. EMF also provides the guidelines to comply with national legislation and World Bank safeguards policies, and defines the environmental requirements needed for reconstruction/rehabilitation of infrastructure in the forest. In addition, EMF has laid out the procedures for simple screening of the alternative livelihoods support activities and environmental code of practice for various project activities.

77. Activity Specific Environmental Safeguard Issues and Resolution Approach. The afforestation and reforestation activities may create possible environmental issues from (i) inappropriate site selection; (ii) plantation of non-native species; (iii) monoculture plantations; and (iv) disproportionate use of fertilizer causing damage to sensitive and valuable ecosystem. To safeguard against the possible environmental issues that may arise from the afforestation and reforestation activities a three step resolution approach will be prepared and followed. The three steps are (i) accumulation of site specific ecological baseline (ii) preparation of a plantation guideline and (iii) development of environmental code of practice to mitigate the environmental issues at any stage of project implementation and operation.

78. Environmental issues such as deterioration of natural drainage system, sedimentation of surface water, and cutting of trees may trigger from the rehabilitation/reconstruction of existing field infrastructures. Without knowing the specific site and design of the infrastructure, it’s not possible to ascertain the exact environmental impact. To avoid the probable adverse environmental impacts the implementing agency has developed a construction related Environmental Code of Practice (ECP) as part of EMF, which will delineate the methodologies for site selection and construction to minimize the adverse environmental impacts due to construction of infrastructure.

79. The activities under Alternative Livelihoods to Support Forest Communities component will be implemented both individually and at community level. The selection of possible activities at community level will require environmental screening. The community will follow the activity specific Environmental Management Plan (EMP) in consultation with Community Mobilization Officer (CMO).

80. Stakeholder’s Capacity on Environmental Safeguard.The implementing agencies BFD and AF have experience on conserving the natural resources and pay due diligence to environmental issues. BFD also implemented three IDA supported projects during 1980-2001

72

and presently implementing a regional wildlife project. However, both BFD and AF require to be further oriented on bank environmental and social safeguard policies. The capacity weakness has already been covered by hiring both social and environmental specialist during preparation phase. The Community Mobilization Officer (CMO) and DFOs will be further trained on the implementation of EMF and ECP. BFD will share the EMF with DoE for concurrence.

81. Environmental Safeguard Supervision and Monitoring. Assistant Conservator of Forests (ACF) based at each division level along with Community Mobilization Officer (CMO) will monitor the environmental safeguard issues and ensure the successful implementation of the environmental code of practice, execution of environmental assessment and environmental management plan. ACF will submit a semi-annual environmental report to the respective DFOs. The DFOs will ensure the quality and authenticity of the report and share the final report with the PIU.

82. Consultation and Disclosure: BFD and AF have prepared the EMF in consultation with different stakeholders and communities of the selected districts. The EMF along with Bangla version has been disclosed by the BFD and AF on their website and hardcopies are also be available at BFD and AF headquarters and district offices (project area). Advertisements requesting public comments are published in two daily Newspapers (English and Bangla). The EMF is also disclosed in Infoshop.

Results Monitoring and Evaluation

83. Monitoring and evaluation are fundamental to assess implementation progress and to provide necessary corrective measures during implementation. Annex 1 presents the Results Framework and Monitoring to measure achievement of the PDO. These include: plantation coverage, income, employment, participatory management, capacity building indicators. It may be noted here that the project has adopted the definition of ‘Resilience’ from the recent report ‘Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation’ published by Intergovernmental Panel on Climate Change (IPCC). ‘Resilience’ is defined as the ability of a system and its component parts to anticipate, absorb, accommodate, or recover from the effects of a hazardous event in a timely and efficient manner, including through ensuring the preservation, restoration, or improvement of its essential basic structures and functions.

84. BFD has its monitoring system to track the physical progress of the afforestation and reforestation. The overall monitoring system of BFD will be further strengthened with scientific and comprehensive data and information on existing resources in coastal and hilly areas. Component 3 will support the forest inventory, socio-economic survey, RS and GIS, which will baseline and change monitoring of increases in afforested and reforested area and impacts of the project on resilience of forests and livelihoods of local communities.

85. Special attention will be provided to improve the reporting system and the PIU will produce the quarterly and annual progress reports in an appropriate format to the Bank no later than 15 days after the end of each quarter. The Project Director of PIU and Executive Director of AF will be responsible for the preparation of quarterly reports on overall progress, site specific progress, major issues, expected completion dates for civil works, implementation of SMF and EMF, training, technical studies, procurement, and FM issues. The reports will include: (i)

73

comparison of actual physical outputs and disbursement with updated forecasts; (ii) financial statements; and (iii) procurement report showing status and contract commitments.

86. Monitoring and evaluation (M&E) for component 2 on alternative livelihoods will be based on a relevant and clear-cut strategy and plan developed by AF. The component will have a comprehensive monitoring and evaluation framework based on qualitative and quantitative indicators of the results to be achieved, i.e., the project’s development objective and intermediate results related to alternative livelihoods development and consequent impact on forest conservation.

87. The AF will elaborate the M&E plan including implementation strategy/process and data collection formats and train partner NGOs in its implementation. The M&E process will include baseline survey, quarterly and annual progress against the indicators defined in the results framework and final survey at the completion stage for impact evaluation. Partner organizations will implement baseline study collecting profile of the project area, information on households, existing livelihood practices, poverty, etc. The baseline study will implement a difference-in-difference approach for comparison between treatment (project beneficiaries) and control (non-beneficiaries) groups before and after project activities. AF Secretariat will carry out periodic monitoring of project implementation and review progress by undertaking field visits. The partner organizations will submit quarterly and annual progress reports to AF Secretariat. The AF Secretariat will verify the reports of the partner organizations and submit consolidated reports to the Project Implementation Committee and the World Bank simultaneously. In addition, the component will adopt participatory monitoring by project participants in different aspects.

88. Monitoring of annual development plan implementation: In their monthly meetings, the FDGs and their Union-level federations will review the progress and problems (if any) of implementation of their annual development plan (ADP) and will plan actions to solve the problems. The common activities to be monitored by the FDGs and their Union-level federations include: progress in implementation and effectiveness of training and exchange visits; collection of participatory savings from the FDG members; disbursement and recovery of credit; implementation AIGA; and adoption of improved cook stoves and sanitary latrines and use of safe drinking water by the FDG/community members.

89. Monitoring of participatory savings, credit recovery and AIGA effectiveness: In monthly meetings of the FDGs, the FDG leaders will take feedback from their members about the effectiveness and problems of their AIGAs and will document important observations and issues such as those that require organizing skill development trainings or dealing with marketing problems. In each monthly meeting, the status of participatory savings and credit recovery shall also be reviewed and follow up actions shall be planned in a democratic manner.

90. Monitoring of forest resource extraction: Extraction of forest resources by people shall be monitored mainly through ‘trail guarding’ method and discussion in the regular meetings of the FDGs and their Union level federations. In trail guarding method, period monitoring of forest resources extraction is done at the exit points of the forests using local volunteers. The process involves identification and mapping of the exit points (through which people bring out forest products from the forests) and counting the number of stems, bundles, sacs, wagon/van or

74

head loads of different forest products while carried out through the exit points, with subsequent estimation of volume or weight of those materials through sample measurements either at the exit points or in the marketplace where those are traded.

91. In each month, the trail guarding operation (monitoring) will be conducted in a market day and a non-market day, selected randomly. One or two Community Volunteers will take position at each exit point of the forest for the whole day and will observe and record (in a data sheet) the number of persons coming out from the forest and the forest goods being carried by them. The volunteers will record the name and distance (from the forest) of the communities the forest resource collectors came from, the distance of the place of collection of the forest goods from the exit points and the time spent in collection of the forest goods by asking those people in a friendly manner.

92. In the market place, the volunteers will collect complementary data such as the weight/quantity of forest goods in a bundle, sac or head load as brought by the forest resource collectors and the prices of the forest goods. The price data shall be collected once in every month but for data on weight/quantity of forest good per bundle, sac, etc., one time data will be sufficient unless a change in the standard sizes of the bundles, sacs, etc. are observed.

93. To monitor project progress, two full implementation support missions will be undertaken annually by the Bank. Additionally, the Bank will monitor implementation throughout the year. A mid-term review of the project will be carried out by September 2015. An Implementation Completion and Results Report (ICR) will be submitted to the Bank no later than six months after the closing date. Additional detail on the World Bank’s support to project implementation and monitoring can be found in Annex 5.

94. For an independent assessment on quantitative and qualitative performance of implementation, third party monitoring is proposed for the project. In addition, BCCRF secretariat will develop separate monitoring system for the projects to be funded under the trust fund.

75

Project Organizational Chart

76

Steering Committee(Chaired by Secretary, MoEF)

World Bank

Project Implementation Committee(Chaired by CCF, BFD)

Project Implementation Unit, BFD

(Component 1, 3 & 4)(Headed by Project Director &

supported by Project Manager & other specialists and staffs)

Project Office, AF(Component 2)

(Headed by Executive Director & supported by a full-time Project

Coordinator, AIG Specialist & other officers)

10 Divisional Forest Offices(Headed by Divisional Forest Officer & supported by Community Mobilization officer, Account Officer & regular staff)

Patuakhali Coastal Afforestation Division, Bhola Coastal Afforestation Division,

Noakhali Coastal Afforestation Division, Chittagong Coastal Afforestation Division,

Chittagong North Forest Division, Chittagong South Forest Division, Cox’s Bazar North Forest Division, Cox’s Bazar

South Forest Division, Barisal Social Forestry Division and Feni Social Forestry

Division.

2 Partner NGO Offices(Headed by Program Manager)

NGO (South): Patuakhali Coastal Afforestation Division, Bhola Coastal

Afforestation Division, Noakhali Coastal Afforestation Division, Barisal Social

Forestry Division and Feni Social Forestry Division

NGO (Southeast): Chittagong Coastal Afforestation Division, Chittagong North Forest Division, Chittagong South Forest

Division, Cox’s Bazar North Forest Division, Cox’s Bazar South Forest Division,.

Site Offices(Site Coordinators & Field Facilitators)

Range and Beat Offices(Range and Beat Officer with Forest Guards)

3 Forest Circle Offices(Headed by

Conservator of Forest)Chittagong Circle, Coastal Circle &

Social Forestry Circle

RIMS Unit(Headed by Deputy

Conservator of Forests & supported by technical

specialists

2 Management Plan Divisions

(Headed by Deputy Conservator of Forest at

Chittagong and Khulna)

Annex 4: Operational Risk Assessment Framework (ORAF)

Operational Risk Assessment Framework (ORAF)

Bangladesh: Climate Resilient Participatory Afforestation and Reforestation Project (P127015).

Project Stakeholder Risks

Stakeholder Risk Rating Substantial

Description: Risk Management:Selection of beneficiaries of the social forestry has a high political pay-off. Political capture at selection of beneficiaries would lead to exclusion of real poor people.

Selection of beneficiaries based on transparent criteria, and done at the union level. Greater emphasis on consultation with communities and close monitoring by Project Consultant.

Resp:Client

Status:Not Yet Due

Stage:Implementation

Recurrent Due Date: Frequency:

Implementing Agency (IA) Risks (including Fiduciary Risks)

Capacity Rating Substantial

Description:

Although Bangladesh Forest Department successfully 3 IDA funded forestry projects during 1980-2001, the department has limited experience on implementation of large-scale donor funded projects in recent years.

Financial Management: The overall accountability and financial controls are weak for this project. A large component (component 1) is implemented by 10 division forest offices spread across various locations. There is a substantial risk involved in delay of timely submission of financial reports and adherence to internal

Risk Management:

Project implementation itself will be supported by dedicated Project Implementation Unit (PIU) that will receive significant technical assistance, training and separate budgets. A Project Implementation Committee at BFD will be formed to ensure overall coordination of project implementation

Resp:Client

Status:Not Yet Due


Recurrent Due Date:15-Jan-2013

Frequency:

Risk Management:

While this remains an inherent risk, it has been agreed that a qualified accountant will be engaged at the PIU-BFD who will be responsible for the accounting, reporting and auditing functions. It has also been agreed that a computerized accounting system will be procured by PIU-BFD & divisional forest offices and the chart of accounts will be configured to this software which would assist in timely submission of IFRs.

Similarly, each divisional office will be staffed with 1 Community Mobilization Officer (CMO) & Accountant (AO) who will oversee the operational and financial aspects and will report to the

77

controls (for e.g. non-reconciliation of bank accounts, delay in settlement of advances etc).

In addition, to implement the project activities, it is expected that large amounts of cash will be withdrawn by the division forest offices from the bank accounts towards payment to local community labors, local transportation costs, purchase of seeds etc.

Procurement: BFD has no dedicated procurement staff to deal with procurement activities and has inadequate capacity for procurement and administration of contracts funded from IDA or IDA-administered trust funds.

Divisional Forest Officer (DFO). The Accountant will maintain adequate books of accounts and will report to the PIU-BFD on a periodic basis on the expenditures incurred under this project. In case of cash withdrawal, the agreed arrangement is to disburse all payments within two days of withdrawal and daily update cash in hand and bank balance, which will be monthly reconciled with Bank statement.

The additional fiduciary assurance will be obtained through internal/operational audit as per ToRs agreed with the Bank.Resp:Client

Status:Not Yet Due


Recurrent Due Date:31-Mar-2013

Frequency:

Risk Management:

Procurement Performance Monitoring Reports (PPMRs) will be prepared by BFD on a semi-annual basis with indicators aimed in managing procurement-related risks.

Qualified Procurement Specialist will be recruited at PIU level to support both BFD and Arannayk Foundation.

IDA will monitor implementation progress through standard supervision and focused capacity building based on reviews and PPMR findings.

Resp:Both

Status:Not Yet Due


Recurrent Due Date:28-Feb-2013

Frequency:

3.2 Governance Rating Substantial

Description:

Bureaucratic and slow decision making process can affect the project progress. Lack of accountability and oversight may affect the quality of project outputs.

Risk Management:

Oversight function will be strengthened in the project. Bank review of audit reports and follow up on actions taken by BFD to address audit recommendations.

Resp:Both

Status:Not Yet Due

Stage:Both

Recurrent Due Date:31-Dec-2013

Frequency:

Risk Management:

The project will make use of an independent third party monitoring system for verification of project activities. The project will support in strengthening the participatory monitoring in the BFD and will introduce social accountability tools.

78

Resp:Client

Status:Not Yet Due



Risk Management:

An in-country consultant will conduct random spot checks on the progress of the afforestation and reforestation.

Resp:Bank

Status:Not Yet Due



Risk Management:

Oversight function will be strengthened in the project. Procurement Risk Mitigation Framework will be prepared and implemented.

Resp:Both

Status:Not Yet Due

Stage:Both


Risk Management:

A Governance and Accountability Action Plan (GAAP) has been prepared that outlines key agreements on Governance issues. Regular monitoring during implementation.

Resp:Both

Status:Not Yet Due

Stage:Both


Project Risks

Design Rating Moderate

Description: Risk Management:No major technical complexity is foreseen for the project. BFD is familiar with afforestation program. BFD is mainly responsible for the project implementation and Arannayk Foundation will implement the livelihood subcomponent. The project design is flexible in terms of accommodative nature for afforestation,

Continued dialogue with the implementing partners to ensure smooth implementation

Resp:Both

Status:Not Yet Due

Stage:Both


79

livelihood development, studies etc. There will be good linkage between the plantation program and alternative livelihoods components.

Social and Environmental Rating Moderate

Description:

Environment: The project will make a positive long-term contribution to the environment such as protecting against soil and water erosion, working as a barrier during cyclone and storm surge, providing habitat for flora and fauna etc. Some short term impact is expected due to minor construction works.

Social: The project will bring positive changes by reducing climate change risk and providing employment opportunities. Resettlement will be avoided; however, some resettlement may be required.

Risk Management:

BFD prepared an Environmental Management Framework (EMF) and conduct screening/assessment and mitigation measures during implementation

Resp:Client

Status:In Progress

Stage:Both


Risk Management:

BFD prepared Social Management Framework during project preparation, which will provide guidance for conducting social impact assessment, resettlement plan etc. The project will screen the locations where activities are slated to be carried out in order to avoid as much as possible any sites where the displacement or involuntary resettlement of people may be expected

Resp:Client

Status:In Progress

Stage:Both


Program and Donor Rating Low

Description: Risk Management:The project will be implemented under BCCRF (a Bangladesh specific MDTF). The contributing donors and other secotral donors will be consulted on regular basis.

Close collaboration with other on-going programs and donors. Disclosure of project update in BCCRF and BFD website.

Resp:Both

Status:In Progress

Stage:Both


Delivery Monitoring and Sustainability Rating Substantial

80

Description:

Sustainability: BFD have demonstrated commitment by successfully implementing the afforestation program through social forestation program. However, Financial sustainability of the BFD is at stake although the government developed mechanism distribution of 100% income from social forestation to community, department and afforestation fund. AF also working to continue support to forest depended community through different projects.

Contract Management: BFD has no experience in recent times in with dealing Bank-financed contracts. AF also does not have experience of large scale contract management.Difficulty to satisfy quality assurance of the contracts scattered in remote areas.

Risk Management:

Studies in the project will develop model for strengthening management and explore the carbon finance and other innovative funding sources for sustainable forest management.

Resp:Client

Status:Not Yet Due


Recurrent Due Date:31-Decl-2016

Frequency:

Risk Management:

The Consultant will be engaged to provide support to BFD in ensuring quality control and close linkage with afforestation and livelihood component. Capacity development of BFD and AF will be supported through the program.

Resp:Client

Status:Not Yet Due


Recurrent Due Date:01-Jul-2013

Frequency:

Overall RiskPreparation Risk Rating: Moderate Implementation Risk Rating: Substantial

Description: Description:

The overall risk rating of the proposed project is substantial. The key risks to achieving the PDO fall under two main categories: project specific risks and risks in overall governance in the country and in the sector. The first category includes risks mainly associated with insufficient capacity of the implementing agencies in terms of logistics and adequate human resources to manage a large scale project in remote locations, and weak financial management system. The second category of key risks relate to the overall weak governance in the country and in the sector, including inefficient funding allocation for institutional development of BFD, weak internal accountability and integrity mechanisms and insufficient citizen oversight. This ORAF and the GAAP will help in tracking the risks and mitigation measures.

81

Annex 5: Implementation Support Plan

A. The strategy and approach for implementation support

1. The proposed project will require intense supervision, given there are two implementing agencies (BFD and AF) and both of them have limited capacity especially in terms of Bank procedures.30 In addition, most of the plantation sites especially in the coastal areas are far away from the main land and require substantial travel time. Adequate Bank resources and staffing to ensure this level of supervision will be made available throughout the project implementation cycle.

2. The Implementation Support Plan (ISP) provides the support required for implementation of all mitigation measures identified in the ORAF in the three following areas: (i) institutional capacity; (ii) program delivery and monitoring; and (iii) governance, in order to ensure all major risks are addressed. The design of the project contains safeguards against each of these risks. The ISP is designed to review and ensure the safeguards are effective and to reinforce them where necessary. The ISP is also designed to enhance BFD’s capacity in a range of technical and specialized areas. The ISP will be undertaken by Bank staff and is based on three major principles: (i) continual high level policy dialogue with BFD on institutional development and sustainable forest management; (ii) frequent local level and field based supervision including consultation with forest based communities; and (iii) consistent review of fiduciary procedures and controls.

3. The institutional capacity development and fiduciary support through Bank’s implementation support will focus on procurement and financial management. The strategy includes:

Procurement. Implementation support will include: (i) providing training to relevant staff of the PIU and AF; (ii) reviewing procurement documents and providing timely feedback to the PIU and AF; (iii) providing detailed guidance on IDA’s Procurement Guidelines to the PIU and AF; and (iv) monitoring procurement progress against the detailed procurement plan.

Financial management. Implementation support will review the project’s financial management systems, including but not limited to, accounting, reporting and internal controls. The project will introduce forensic accounting, which will ensure better transparency especially in field level transaction. Supervision will also cover pilot projects on a random sample basis.

4. The strategy will also include frequent supervision through field visits, considering (i) potentially large number of sub-projects in the field, especially in the context of Component 2, which will promote several AIGAs; and (ii) remote and diverse afforestation and reforestation sites. Bank supervision will need to rely on frequent field visits and dialogue with local stakeholders and on AF’s monitoring system. In addition, fostering a transparent communication

30Despite having successfully implemented three forestry sector projects, the present BFD mid-level officials (Divisional Forest Officer responsible for field level implementation) in the BFD are not familiar with Bank-supported operations.

82

between the two implementing agencies and developing an effective monitoring and reporting system will be emphasized. Each field visit will involve focus group discussions with the project beneficiaries to gauge project’s impact and beneficiary satisfaction. This information will be used to continually improve project practice.

5. The strategy also includes regular supervision of the implementation of the agreed Governance and Accountability Action Plan (GAPP) and provides guidance in resolving any issues.

B. Implementation Support Plan

6. Team Composition. The core implementation support team will be based in the Bangladesh country office and within the South Asia region. The staff based in Washington DC will also provide technical input from their working location and will also participate in selective missions. The Team will consist of Task Team Leader (TTL), Natural Resource Management Specialist, Forestry Specialist, Forestry Economist, Environmental Safeguard Specialist, Social Safeguards Specialist, Procurement Specialist, Financial Management Specialist, and Governance Specialist. The team will be complemented by consultant support on issues associated with capacity building especially with forest resource planning and management, climate change, RS, income-generating activities and disbursement.

7. Frequency of implementation support. Supervision missions will be carried out at least twice a year. Country-based staff and consultants will monitor implementation progress on a continuous basis and will have monthly/quarterly meetings with PIU to review annual work program progress and address emerging issues. Safeguard and technical field visits (during afforestation phase) will be undertaken quarterly.

8. Implementation Support Plan. The supervision mission will provide the following inputs to help achieve the project development objective:

Technical inputs: The team will provide technical inputs in several areas, e.g. by reviewing the criteria based on which project beneficiaries are chosen, monitoring the success of AIGAs, quality and extent of plantation and nursery practices, maintenance and survival rates of the project plantations through field visits. The technical studies i.e., monitoring system based on RS, GIS and field cross-checking, monitoring guidelines, several studies under master-plan and the final master plan will be extensively reviewed by the Task Team. The team will share the international best practices in improving the quality of the documents. The team will provide input for the content and process of the capacity building program.

Fiduciary aspects: The team will review the implementation of FM and procurement arrangements (hiring FM and procurement specialists at PIU) and their performance. The team will identify corrective actions and will monitor fiduciary risk. Monitoring implementation progress will involve reviews of PPMRs findings and other documents.

83

Safeguards: Timely implementation of all provisions of the SMF and Environmental Management Framework (EMF) will be supervised through review of project annual work plans, progress reports and site visits, as appropriate.

GAAP: The Governance Specialist based in Bank’s Dhaka Office will be member of the project team to support implementation of the GAAP and the risk mitigation measures related to governance and corruption throughout the project period.

C. Implementation Main Focus

9. Considering the risk associated with extraordinary visibility vis-à-vis external partners and media for climate change and required substantial work and follow-up during implementation, the IDA team would need significant resources to carry out proper implementation support. Most of the IDA team members will be based in the Bangladesh and South Asia to ensure timely, efficient and effective implementation support to the clients.

Table 5.2: Skills Mix RequiredSkills Needed Number of Staff Weeks Number of Trips CommentsTask Management 60 20 Country OfficeNatural Resource Management Specialist

30 10 South Asia

Procurement Specialist 30 10 Country OfficeFinancial Management Specialist

30 10 Country Office

Governance Specialist 10 5 Country OfficeForestry Specialist 10 4 Washington DCForestry Economist 6 4 Washington DCAfforestation Specialist 50 30 Country OfficeCommunity Development, Livelihoods and AIG Specialist

40 10 South Asia

Forestry Policy, Capacity Building & Climate Change Specialist

40 10 South Asia

Silvi-culture and Inventory Specialist

15 8 New Zealand

Environment specialist 20 10 Country OfficeSocial safeguard Specialist

20 5 Country Office

84

Annex 6: Governance and Accountability Action Plan (GAAP)

Introduction

1. The project aims to reduce forest degradation and increase forest coverage through participatory planning/monitoring and to contribute in building the long-term resilience of selected communities in coastal and hilly areas to climate change. The project development objective will be achieved by: (i) establishing newly afforested and reforested areas using climate resilient species to work as windbreak against cyclones; (ii) strengthening alternative livelihoods of forest-dependent communities; and (iii) improving the institutional capacity of the forest department to sustainably manage forest resources. The GAAP, if properly implemented, will contribute to enhancing efficiency of the institutional organization and performance of the project as well as strengthening the forestry sector governance. It will remain a living document and will be updated as issues emerge or are resolved and additional mitigation measures are developed during project implementation.

Country Context

2. Bangladesh has historically scored poorly on international governance indices, albeit with modest progress in recent years. There are entrenched difficulties in improving public sector performance. The Government of Bangladesh’s efforts to bolster its legal framework to counter corruption, including the empowerment of an Anti-Corruption Commission, and joining the UN Convention against corruption have yet to yield measurable gains. Institutions of accountability are weak and country systems to deter corruption such as asset statements or prosecution of corruption cases are rarely enforced. These capacity and governance challenges in the Bangladesh’s public sector, combined with the susceptibility of civil works projects worldwide to fraud and corruption, emphasize the importance of a GAAP that harnesses a range of sound measures to strengthen governance in the forestry sector and prevent and mitigate corruption at the project level.

3. The Bank’s strategy for improving governance in Bangladesh, laid out in its 2011-2014 Country Assistance Strategy (CAS), focuses on developing accountability mechanisms in public sector operations, especially through increased transparency. The Bank seeks to align with Government priorities in developing the means of accountability, especially strengthening of public financial management, support for local government, use of information and communication technology (ICT) and the adoption of a Right to Information (RTI) regime. In particular, the Bank is working with the Government to improve budgeting practices among line agencies in conjunction with enhanced accountability mechanisms. Bank is working to increase the role and quality of oversight of public finances by the Parliamentary Accounts Committee, improve capacity of the Comptroller and Auditor General’s Office, and promote greater public understanding of public financial management to build more informed demand and ability to hold Government accountable. The Bank’s strategy also focuses on improving public service delivery, a key component which is fostering greater accountability to recipients of services including through a strengthened role for local government. The Bank supports the Government’s efforts to establish functioning RTI regime, including building capacity in all

85

agencies to provide information more fully and efficiently. The Bank also continues to emphasize the importance of building demand for good governance among civil society. This in turn requires engaging with the civil society and monitoring the performance of, the public sector.

Objectives of GAAP

4. The GAAP’s main objective is to contribute towards strengthening governance and anti-corruption systems in the project and in the forestry sector for achieving project development objectives. It will achieve this objective by:

Strengthening transparency mechanisms through provision of information to all stakeholders about the Project, its objectives, process and requirements in a timely manner, understandable form and using appropriate means for reaching all in Project areas; disclosing information on BFD web site and in mass media.

Ensuring meaningful participation of all eligible beneficiaries in all stages of the Project through developing, testing and introduction of a new approach to selection of beneficiaries for social forestry program through transparent, open and inclusive process at the lowest level of government, i.e., Union Parishad level with engagement of communities in all stages of selection and affirmation; developing and implementation of Targeting and Selection Strategy with clear indicators and scoring system for selection of beneficiaries for alternative livelihoods program, introducing participatory affirmation of selected beneficiaries at the community level with participation of local government representatives; introducing and strengthening participatory management of group level funds; ensuring equity in sharing forest benefits among the local population.

Enhancing accountability through continuous monitoring of project implementation, procurement monitoring and input tracking for ensuring that resources allocated by the project are spent for the intended purposes and directed to the beneficiaries of the project; RS system will be used for monitoring and verification of project outcomes in afforestation and reforestation of areas; improving feedback flow mechanisms between beneficiaries, civil society, and project authorities, as well as establishment of grievance redress mechanisms.

Key governance issues in the project

4. Institutional weaknesses in the implementing agencies can pose risks to the project. These risks can lead to poor oversight and resulting problems with the delivery of payments and goods which in turn undermine project effectiveness. Although BFD implemented three IDA projects successfully during 1980-2001, the present mid-level officials do not have experience in managing large scale project and IDA procedures. In absence of transparent monitoring system and information dissemination system, the general perception about the forestry program is not very encouraging.

86

5. The major governance and corruption related risks will be in fraudulent practices in carrying out afforestation and in procurement of works. These and other governance risks are listed below:

There is risk of nonperformance and potential fraud and corruption owing to weak institutional capacity for control and accountability and poor internal incentives for staff. BFD is seriously underfunded. Funding for its afforestation and reforestation activities mostly come from the development projects outside of its usual operations, with poor control systems apparently contributing to mixed results. The area of actual afforestation is in practice difficult to verify and attribute to specific investments. BFD field staff has no strong institutional incentives to carry out afforestation and reforestation in terms of either reward or punishment for correspondingly good or bad performance. In that connection, BFD comes under criticism from the civil society on tangibility of its performance. The Project will mitigate this risk of nonperformance through a RS monitoring approach using GIS for verification of all afforestation and reforestation activities to ensure achieving project targets. It will also build capacity in terms of additional staff, accounting systems, and use of audits to monitor against abuse.

There is substantial risk in institutional arrangements for land tenure and use of forest resources. There is significant confusion, overlap and conflict in policy and legal acts related to forestry which inhibits many afforestation and reforestation activities. The rights to some forest covered lands are not legally formalized and under conflicting claims, resulting in mostly taking them by the Land Ministry to be leased out to private interests for agricultural and other productive purposes. BFD will ensure that all lands to be afforested and reforested using project funds will be public and not under conflicting claims, as well as clearly under BFD jurisdiction. Project will introduce screening process for verification of tenure status of affected lands to be executed before afforestation/reforestation activities start.

There is potential abuse in the application of social forestry and inclusion of intended beneficiaries in the project. Social Forestry Rules (latest version is of 2011) clearly define eligibility criteria for people participating in afforestation and in sharing benefits from the planted trees. These criteria are indeed pro-poor and gender-sensitive, but the selection process is being heavily influenced by local political powers and vested interests. Currently this process is not transparent or inclusive and in most cases leads to significant delays in the affirmation process and in some cases to exclusion of really poor and vulnerable members of community. According to the Rules, the final approval of the selected beneficiaries is to be made by the Upazila Parishad. However, this is where selection process gets sometimes manipulated and misused due to political pressure and other vested interests. In addition, the beneficiary selection process has been delayed in many cases at the Upazilla level for many years, which significantly hampers the community participation in afforestation and reforestation program. The Project will provide a model for good forest governance in selection of beneficiaries for social forestry program through decentralized decision making, and engagement of communities. It will also institute monitoring mechanisms through Forestry Department officials, an extensive transparency/right to information campaign to appraise all persons

87

on the procedures, benefits, and performance of the project, and a robust grievance mechanism and response protocol.

Poor governance and enforcement mechanisms pose a threat to forest resources in general and specifically for those areas which are targeted by the project. Illegal harvesting of timber and other forest resources leads to deterioration of forest ecosystems and depletion of its resources. With limited resources and manpower BFD is not capable to prevent such illegal and unsustainable use. Project will develop and support community protection of forest resources, especially of fragile and ecologically important forest areas through general awareness raising, capacity building and mobilization of informal Community Patrolling Groups (CPGs) to aid forest rangers and beat officers.

There is substantial financial management and procurement risk owing to weak Forest Department capacity. This lack of capacity can lead to delays in project implementation or provide opportunity for misuse of funds, as well as more generally hindering achievement of project objectives. There is a risk for fraud and corruption among parties engaged in procurement process. The procurement, financial management and monitoring systems in BFD need to be strengthened. Project will develop financial management and procurement manual with guidelines and reporting formats. PIU will employ Procurement Specialist who will be responsible for preparation of all tenders, review of bidding documents and administer contracts. Procurement documents will be verified by the Bank during supervision process. Bank will also employ consultant for providing support to the PIU on implementation issues who would also monitor following agreed procurement guidelines. In order to strengthen financial management, PIU will employ two persons: Financial Management Specialist and Accountant. In addition, all 10 Forest Divisions will employ Accountant for proper accounting and financial reporting.

5. A major implementing entity will be AF. The channeling of resources for beneficiaries in communities through this established NGO is an important governance and fraud & corruption risk mitigation measure for the project. Its institutional performance and capacity are strong. AF has demonstrated successfully managing small scale contract for NGO selection and contract management. The AF operates under a strong internal control framework and follows Operational Manual that has transparency mechanisms required for accounting from the AF and its implementing partners. There are Finance Standing Committee and Program & Operation Standing Committee that oversee AF operations. Implementation Manual includes detailed procedure for managing, monitoring and controlling the financial activities of the Implementing Partners (IP) to ensure that funds are used for intended purposes and mitigate any risk of corruption, misuse and misappropriation of AF funds by the IPs.

6. AF operates with own Grant Management Software (GMS) for planning, recording and reporting financial activities of the IPs, which allows it to electronically monitor and analyze the financial activities and progress of the IPs. The GMS is updated by the IPs with details of the financial planning & actual transactions and are critically reviewed by AF on a quarterly basis before disbursing any fund to the IPs.

88

7. AF will provide supervision and back stopping to partner NGOs with periodic monitoring in the field. There is a risk of not including really poor, marginalized and forest dependent households in alternative livelihoods program under the pressure from local elite and power holders. To enhance participation of communities in project activities, AF will take among other, the following measures:

AF will develop Awareness Strategy and Plan, and train partner NGOs in its implementation at the inception workshop. This strategy will contain information to be disseminated about the Project, its objectives, processes and benefits for the target population, details of selection process of participants; target audience to reach, such as local government offices, local civil society organizations, community based organizations, community members in generals, and especially Indigenous Peoples’ (IP) communities, poor and women; and means to reach them (through messaging to mobile phones, using loud speakers, focus group discussions with poor, women and vulnerable; separate community meetings with IP communities). Awareness Strategy will be also posted on the AF and BDF web sites for wider disclosure purposes.

AF will develop TSS, which will clearly define the selection process, starting from identification and ending with community affirmation of project beneficiaries. It will also have a set of eligibility criteria and scoring system for selection of members of Forest Dependent Groups. TSS will be based on participation of community in the whole process. TS Plan will have dates for community meetings and for all steps in selection process.

8. There are risks of sustaining the benefits from the project in communities. AF will develop exit strategy, where it will clearly stipulated steps and procedures to conduct full transfer of ownership of Project endowment funds to community groups. Partner NGOs will implement exit strategy under the monitoring of the AF. At the levels of FDGs, all financial decisions will be recorded in the minute books and access to books and records will be available to all members to ensure that transparency and oversight are maintained. Necessary financial information including funds released to FDGs; and annual audit report of the project will be made available in public domain through the AF website.

9. While it has strong capacity, AF has no experience in working with Bank funded projects. It’s Finance and Administration Officer will participate in initial training on procurement and financial management to familiarize with the IDA competitive procurement process of bigger size contracts and financial management and reporting. AF will be working closely with the Financial Management Specialist at PIU.

10. There is a clause for misuse and misappropriation of AF fund in Implementation Manual and always in each Grant Agreement between the AF and IPs resulting in refund.

11. As it is stipulated in SMF, Project will establish grievance redress mechanism at the local level to address issues on participation, inclusion and benefits sharing. Complaints will be recorded at Project site level. According to the nature and seriousness of the complaints they will be prioritized and addressed by enquiry group, comprised of partner NGO representative,

89

project site coordinator, FD officer, local government representative and other local representatives.

12. Bank will apply sanctions as per its guidelines if it determines incidences of fraud, corruption, collusion, coercive, and obstructive practices. Information on the Bank’s sanction process can be found at the website www.worldbank.org/sanctions. In addition, the Bank will coordinate with BCCRF Management Committee in the event of misconduct issues.

13. These sanctions may include fines, blacklisting, suspension of disbursements, or ultimately cancellation with respect to that contract. The Bank will seek first to remedy cases of corruption through cooperation with the implementing agency. Any entity that is found to have misused funds may be excluded from subsequent funding. Information regarding such cases, where lessons are learned and funds are retrieved, will be widely disseminated.

14. The GAAP proposes actions for each of these issues, timeline for each action, and responsible agency for implementation. There are also some “early warning indicators” which, if monitored properly, would enable timely actions for course correction.

Monitoring arrangements

15. The GAAP will be monitored regularly against agreed actions which will be reflected in the project’s periodical progress reports and aide-memoires. This will be a joint responsibility of PIU of BFD and AF. The GAAP matrix will be used widely for monitoring purposes. Project intermediate indicators include governance indicators on participation, inclusion, accountability. Any ‘early warning’ indicators of governance and accountability risks will be monitored regularly so that corrective measures could be carried out promptly.

16. PIU, Bank Implementation Consultant, and designated AF staff will undertake field supervision and verification of Project results. Monitoring shall include both quantitative measures of implementation of actions (e.g. numbers of complaints received, followed up and resolved, numbers of persons at accountability meetings), recording of benchmarks (e.g. establishing scientific baseline of plantation areas with RS and GIS, establishment of third party monitoring), as well as qualitative reporting on the efficacy of measures and instances where problems were corrected through these mechanisms. Its reports shall be submitted to PIC, BCCRF Management Committee, and Bank simultaneously.

Bank Supervision and Surveillance

17. Supervision arrangements, particularly for plantation at the field level, will be extensive. The Bank will also conduct regular monitoring between supervision missions, including random visits by local consultant to the plantation sites on a regular basis in the first three years of the project, when plantation will be taking place, to keep the Bank informed of issues arising in afforestation and reforestation. The Bank will conduct a mid-term review of the project in September 2015. Detailed plans for supervision by the Bank are given in Annex 5.

18. In terms of monitoring progress on the GAAP, Bank will conduct six-month reviews for the first 18 months and then successive annual reviews of GAAP implementation. The review

90

will assess progress, gauge the efficacy of measures, agree among all parties on areas for improvement, and make adjustments as appropriate. Bank will update its assessment of GAC risks on an ongoing basis, and anticipates that adjustments to the GAAP will be likely to reflect what will be most effective in the context of the project.

91

Governance and Accountability Action PlanIssues/Risk/Objectives

Actions to address the issues Responsible agency

Timeline Early warning signs

Institutional RisksWeak institutional capacity and internal incentives for performance

Project will establish RS System to track and verify afforestation/reforestation results

Random verification of sites by external party

PIU

IDA team, Independent Monitoring Firm

At the beginning and end of project period

Several times a year, Six-monthly

Discrepancy in areas under planned and actual afforestation

Poor tenure regime for forest resources

Project will ensure that only land areas with formalized tenure and under jurisdiction of BFD are selected for afforestation and reforestation through screening

Information on sites to be covered by afforestation and reforestation is disclosed on the BFD and AF web sites with feedback mechanisms installed.

PIU/Project site offices

As soon as area is identified

Feedback received on specific land plots

Strong political influence on local level on selection of project areas leading to changing sites leading to delay and ineffective use of resources

BFD will be bound to a map with areas agreed for afforestation/reforestation with maximum 15% discrepancy. Livelihood activities will start only when areas is confirmed for

BFD, IDA team, and AF

Map will be agreed within 2 months of Project inception

Requests to change land plots are received from the BFD

Lack of transparency and governance arrangements in selection of beneficiaries for Social Forestry program

AF will develop Targeting and Selection Strategy (TSS) and Plan with clear objectives, processes, indicators and scoring system for selection of areas and beneficiaries for Project activities.

Joint planning by BFD and AF in participants selection as Afforestation/Reforestation beneficiaries and AIG activities

Instead of beneficiaries selection at the Upazila level, selection of participants at union level through an transparent process

Proper assessment and verification of potential applications of participants. Well documentation of assessment and selection

BFD, AF, Third Party Monitor

First 3 years Delay in receiving progress report on public meeting and participation selection

Report of third party monitoring

92

Issues/Risk/Objectives



process.

Establish proper Grievance Redress Mechanism to handle the complaints.

Third party monitoring for cross verificationFiduciaryLack of procurement and financial management capacity

Establish PIU in the BFD and Project Office in AF with qualified staff and externally hired consultants

One Financial Management Specialist and one Accountant will be hired at PIU who will support both the BFD and AF

10 Accountant will be hired at 10 Divisional Forest Offices for physical verification and reporting in appropriate formats

One Procurement Specialist will be hired at PIU who will support both the BFD and AF

10 Community Mobilization Officers will be hired at 10 Divisional Forest Offices for community awareness, monitoring and safeguard support

One Project Manager will be hired at PIU to strengthen the overall management and technical support.

Financial management and procurement training will be provided to the PIU staff engaged in the project and a project-specific training will be provided during the initial stage of the project implementation.

Computerized financial management system will be introduced with adequate training facilities.

Payment for goods including materials for plantation shall be made only after inspection of goods on receipt by the accountant officer.

System to be developed for keeping all procurement related records and making available of records and documents for internal and external audit and procurement post reviews by the Bank.

Data quality assurance and monitoring system to be developed by adopting new monitoring guidelines and strengthening RS and

BFD, AF

BFD, AF

BFD

BFD, AF

BFD, AF

BFD

Within 2 months of Project Inception



Throughout Project Implementation



Delays in conduct of procurement, execution of contracts, processing of payments, filing reports

Delays in reporting

93




GIS

Internal Accountability SystemNeed to improve internal accountability mechanisms

Regular reporting on the progress and issues to the BCCRF Management Committee by BFD and AF

Establish a PIC chaired by the Chief Conservator of Forests to regular activity review and provide guidance to PIU and AF

BFD, AF Throughout Project Implementation

Committee to be set-up before Project Inception

Delay in reporting

Committee not set-up timely

Information Dissemination and TransparencyCitizens lack information for project results and implementation

Undertake regular reporting by PIU and AF project Office on implementation

Appointment of Designated Officers to implement the Right to Information Act and oversee proactive disclosure of budget, program, and performance information through means suitable to reaching the citizens

Regular information dissemination through website, meetings with stakeholders, and posting of information in UP and Upazila offices in targeted communities

AF will develop and implement Information Dissemination and Awareness Strategy and Plan, including designation of an RTI Designated Officer, which will include all messages, means and audience for delivering information to local government, target communities to enhance participation and inclusion.

BFD, AF Throughout Project Implementation

By Project effectiveness

Within 2 months from Project inception

Lack/delay of routine reporting

Delays in appointing Designated Officer

Delays in uploading and updating of information on website

Afforestation and ReforestationPoor quality seeds resulting less germination and seedlingPoor Nursery practices

Training of BFD field staff for identification and collection of mature and quality seeds

At least 10 percent seeds and site checking by the DFO to ensure quality

Third party monitoring for quality control

Hiring an international nursery expert to review the nursery and operations manual

BFD, Third Party Monitor

First 3 years Field visit report of DFOs

Field supervision of the Bank Consultants

Third Party Monitoring Results

94




Improve monitoring of actual plantation

Identification of the proposed land during the project preparation

Mapping of the proposed plantation sites by RS, GIS and field verification at the beginning of the project. Similar exercise and comparison at the end of project to identify the difference

Third party monitoring for cross-checking the actual plantation areas

BFDBFD, Firm

Third Party Monitor

During Preparation and Done

First year and last year of Project

Throughout project implementation

Strong baseline for comparison later on

Third party monitoring results

Illegal Forest Resource ExtractionIllegal deforestation and forest resource extraction

Local communities and other stakeholders will be made aware of the value of forest resources and the potential benefits of sustainable forest management through capacity building and awareness program, reporting to community assemblies.

During plantation, involving local communities as labor, and in Community Patrolling Groups to protect from illegal and unsustainable use.

Alternative livelihoods support to the forest dependent communities

Support the community to work as forest guard (volunteer) in order to protect forest and new plantation.

Capacity of the BFD Field staff strengthened to protect and communicate about the illegal deforestation and forest resource extraction.

BFD, AF Throughout implementation

Absence of community monitoring

Reporting for the different sources including media

Fund Management at Community LevelManagement and ownership of assets and finances at the community level provided by the project

AF will develop Guidelines for Rules and Regulations on Management of Mutual Rotating Saving and Loan Program (MRSLP). These guidelines will ensure arrangements for effective and transparent management of funds at the local level, information dissemination on allocation and repayments.

AF will develop Exit Strategy with clear procedures, mechanisms for transfer of ownership over finances and assets provided by project.

AF Three month of Project inception

Third year of Project implementation

AF and partner NGOs will monitor compliance of group MRSLP with general guidelines

Partner NGOs will review book keeping at the community level for updated records

Third party monitoring reports

95

Annex 7. Economic and Financial Analyses

1. The economic and financial analyses of the project are based on the Cost-Benefit Analysis (CBA) approach. The economic analysis includes separate CBAs for Components 1 and 2, and then captures the results into an aggregated CBA at project level. The financial analysis addresses the financial viability of the project from the perspective of the main stakeholders involved: Government (Forest Department, BFD) and communities.

Economic analysis

2. The economic analysis includes four CBAs, relating to: (i) Component 1. Participatory afforestation and reforestation (US$22 million); (ii) Component 2. Alternative livelihoods to support forest communities (US$4 million); (iii) Integrated analysis for Components 1 and 2; and (iv) Integrated analysis at project level (except for Component 4. Project management). All analyses use a discount rate of 10 percent and a time horizon of 30 years, to account for the climate change benefits of the project.

(i) Component 1. Participatory afforestation and reforestation

3. Table 7.1 identifies the main costs and benefits related to Component 1. The indirect benefits from coastal forests (e.g., off-shore fishery, storm protection) differ substantially from those provided by hilly forests (e.g., landslide protection). Thus, the CBA is carried out separately for coastal and hilly forests.

Table 7.1: Benefits and costs linked to Component 1Type of benefit Coastal areas Hilly areas

Costs

Afforestation costs Afforestation costsOpportunity cost of land Opportunity cost of landRehabilitation of field infrastructure Rehabilitation of field

infrastructureBeneficiaries’ selection, monitoring and evaluation

Beneficiaries’ selection, monitoring and evaluation

BenefitsDirect uses Wood (strip zone)

NWFPsWood (buffer)NWFPs

Indirect uses Off-shore fishery Protection from landslidesStorm protection

Non-use Biodiversity BiodiversityNote: Forests may provide additional benefits compared to those mentioned in the table. For example, forests may protect against storm surges also in hilly areas that are close to sea and vulnerable to cyclones.

Coastal areas

4. This section estimates the costs and benefits related to coastal forests on 7,200 ha and 1,672 km. They include mangroves (5,700 ha), mound (427 ha), Jhaw (410 ha),

96

enrichment (260 ha), non-mangrove plantations (400 ha), golpata (635 km) and strip (1,037 km). Wood will be harvested from the strip zone, with a rotation period of 15 years. Table A at the end of this Annex presents the detailed distribution by year of the estimated costs and benefits.Costs

5. Afforestation and harvest. Afforestation costs refer to nursery raising, plantation and maintenance. Thirty percent of total area is afforested in the second project year, 50 percent in the third year and 20 percent in the fourth year. Each plantation is preceded by nursery raising and followed by two-year maintenance. Labor cost varies from as low as 32 percent of total cost of nurseries and plantation (for golpata) to 99 percent of the total cost of maintenance (for strip plantations).31 We use a conversion factor of 0.75 to express the opportunity cost of unskilled labor in coastal areas.32 Accordingly, the PV of the cost of afforestation is estimated at BDT. 380 million and that of the harvest cost is BDT. 30 million. Adding up these estimates, total cost of afforestation and harvest attains BDT. 410 million.

6. Opportunity cost of land. This is the value of activities or land uses that will be forgone on the areas afforested by the project. Currently, this area is used primarily for grazing and fishing. We assume that only grazing will be restricted for 3 years (plantation and maintenance years), to allow for natural growth. The net returns from fodder grazed in this area are roughly estimated at BDT. 18,000 per hectare per year.33 Therefore, the opportunity cost on 7,200 ha of land is BDT. 269 million.34

7. Rehabilitation of field infrastructure. Assuming that the efforts of rehabilitation (about US$3 million) are equally distributed between coastal and hilly areas, the PV of the cost related to coastal areas is BDT. 93 million.

8. Beneficiaries’ selection, monitoring and evaluation. Selection of project beneficiaries occurs in the first project year. Monitoring and evaluation cover the successive years of the project. The PV of this cost is estimated at BDT. 38 million.

9. Overall, the economic cost on coastal areas is BDT. 811 million.

31 Labor cost varies according to the type of forests. It represents 45 percent of the total nursery and plantation cost for mangroves, 83 percent for mound, 40 percent for jhaw, 32 percent for golpata, 45 percent for enrichment, 43 percent for non-mangrove, and 40 percent for strip plantation. Labor cost accounts also for 79 percent of the total maintenance cost for mangroves, 89 percent for mound, 84 percent for jhaw, 90 percent for golpata, 97 percent for enrichment, 91 percent for non-mangrove and 99 percent for strip (Choudhury 2012). 32 It represents the shadow wage conversion factor for skilled and unskilled labor in the construction and crop cultivation sectors in Bangladesh. It is estimated by dividing the shadow wage of unskilled labor (BDT150) to the market wage (BDT 200). The former is calculated based on the market wage during peak and lean seasons, unemployment rate and the social cost of consumption. Reference is made to the detailed calculations are provided in the economic analysis of the Coastal Embankment Improvement Project (CEIP). 33 It corresponds to the difference between the gross benefit of BDT. 30,000 (2000 bags of fodder at a price of BDT. 15 per bag) and the labor cost of BDT. 12,000 (60 days).34 It is assumed that grazing does not affect the strip plantations.

97

Benefits

10. The estimation of the benefits below is based on the assumption that forests are maintained during and after the end of the project. This is particularly important in case of intangible services such as storm protection benefits provided by mangroves. To account for any uncertainty, the CBA is followed by a sensitivity analysis to different deforestation rates.

11. Timber. Timber will be extracted from strip plantations in the 15th year. According to the FD, yields include poles (7-8 m3/km), saw logs and peeler logs (19 m3/km) and fuel wood (11 m3per hectare). Average stumpage prices are BDT. 70 per pole, BDT. 12,600 per m3 of saw logs and peeler logs and BDT. 1,260 per m3 of fuel wood. Accordingly, the PV of wood benefits from 1,037 km of strip is estimated at BDT. 239 million.35

12. NWFPs. Statistics on harvested NWFPs in Bangladesh are scarce and outdated. It is however acknowledged worldwide that mangrove forests provide a wide range of benefits, such fisheries, bamboo, honey, coastal protection, etc. Table 7.2 provides available estimates for different NWFPs from mangroves in Asian countries. Rönnbäck’s (1999) summary of mangrove valuation studies reveals that the marketed value of fisheries dependent on mangroves ranges from US$850 to US$16,750 per hectare per year. Other estimates are substantially more conservative, such as for India and Southern Thailand. Adjusting the most conservative estimate (US$88 per hectare in Southern Thailand) to year 2011, and considering a survival rate of 80 percent (World Bank 2002), the annual NWFPs benefit would be US$87 per hectare in 2011. Assuming that mangroves will provide these benefits starting with the fifth year, the PV of these benefits is BDT. 374 million.

Table 7.2: NWFPs provided by mangrovesCountry Type of benefit Results (US$/year) AuthorThailanda aquaculture, mollusks,

crustaceans, mangrove forest products

1,336-6,011/ha IUCN 2006

Several countriesb

fish, crustaceans, mollusks 750 – 16,750/ha Rönnbäck 1999

India fodder, fuel wood, construction, crabs and mudskipper

420/ha Gujarat Ecology Commission 2004

Southern Thailand

in-shore fish, shrimp, crab, mollusks, honey, wood for fishing gear

88/ha Sathirathai and Barbier 2001

Bangladesh and India

fuelwood, fish, shrimp, crab, honey

284/ha Santhakumar et al. 2005

India in-shore fish 1.9/ha Badola and Hussain 2003Notes: a Ban Naca and Ban Bang Man; b review of studies carried out in Indonesia, Malaysia, Philippines, Thailand, South Africa, Australia, etc.

35Additional benefits include wood removals from thinning, for which no data is yet available.

98

13. Off-shore fishery. By fertilizing the sea, mangroves serve as breeding and feeding grounds to support off-shore fishery36 (Ramaiyan et al. 2002). Fish diversity tends to be higher during winter season and lower during monsoon (Saravanakumar et al. 2009; Kathiresan and Rajendran 2002). No study has estimated the value of off-shore fishery provided by mangroves in Bangladesh. Sathirathai and Barbier (2001) estimated this value in Southern Thailand at US$21-69, averaging to US$45 per hectare of mangrove37. Assuming that the project’s mangroves will provide these benefits starting in the fifth year, the PV is BDT. 191 million.

14. Storm protection. Available literature focuses mostly on the linkages between mangroves and storm protection benefits. Though their ability to protect against storm damages has been much debated, recent studies argue that mangroves can provide significant protection from surge during cyclones (Box 1). We estimate the protective role of the project’s mangroves in terms of averted deaths and house damages based on the most comprehensive work to date (Das and Vincent 2009; Das 2009).

Box 1. Do mangroves protect against storm surges? (Findings from available literature)

Efforts to estimate the coastal protection benefits of mangroves are difficult, due to a high degree of spatial variation in impact, depending on topography, vegetation properties, and the types of storms involved. For example, Kabir and others (2006) model the effect of mangroves in reducing storm surge from a 1970 cyclone on Hatia Island in Bangladesh. They find that while in some locations mangrove afforestation with a width of 133-600 meters leads to reduction in storm surge height of 0.18-0.45 meters, in other locations the protective benefits were negligible.

Mazda and others (1997) study mangrove zone on the Tong King delta in Vietnam, and find no significant reduction in storm surge in areas with immature mangrove cover, but wave height reduction of 20 percent per 100 meters of mangrove in areas with sufficiently tall trees. Badola and Hussain (2005) measure economic losses in three villages in Orissa hit by a 2005 cyclone, and find the greatest loss per household was suffered in a village with an embankment but no mangroves ($153.74), followed by a village with no embankment and no mangroves ($44.02) with the least damage occurring in a village with mangroves ($33.31). Barbier (2007) estimated the storm protection value at US$14,200 per hectare of mangroves per year, through the cost of constructing artificial breakwaters to prevent coastal erosion.

The above studies are however constrained by several drawbacks, including non-consideration of socio-economic, environmental factors and meteorological variables such as sea level elevation and radial wind. More recent research (Das and Vincent 2009; Das 2009) incorporated these influences in more comprehensive statistical analyses. The authors find that in case of 1999 Orissa cyclone, mangroves in Kendrapada district significantly reduced the number of deaths within 10 km of the coast. Based on the same cyclonic event, they estimate that mangrove width should be at least 0.35 km to avoid human death and 3 km to provide protection to houses. In addition, a recent review found that mangroves can protect against erosion, storm surges and potentially small tsunami waves (Gedan et al. 2010).

15. Averted deaths . Das and Vincent (2009) analyzed statistically the role of coastal mangroves in averting deaths caused by the 1999 super cyclone Orissa. They predicted

36 This function is an indirect use value, which is different than the in-shore fish catch, estimated within the NWFPs section.37 The benefit remains the same after adjustment with the survival rates and differences to 2011.

99

that mangroves within 10 km of the coast saved 0.0148 lives per hectare38. We assume that the project’s mangrove plantations provide a similar protective value against super cyclones in Bangladesh.

16. Cyclones hit the coastal regions of Bangladesh every year. Table 7.3 provides basic information about the different types of cyclones that make landfall in the country. Each year, the probability of a super cyclone is at least 10 percent (Dasgupta 2010). Thus, the project’s mangroves (5,700 ha) would be able to save 84 lives with a probability of 10 percent in the fifth year of analysis.

17. Coastal population in Bangladesh is projected to grow 1 percent per year until 2050. At the same time, the development of alternative protective measures over time (e.g. cyclone shelters, more resilient houses) is expected to reduce forests’ lifesaving benefit. Accordingly it is assumed that, over time, the protective role of mangroves will decrease proportionately with the trend of more resilient houses,39 until 2050.

Table 7.3: Types of cyclones in Bangladesh

Type of cyclone Wind velocity (km/h) Storm surge (m)Probability of occurrence every

year (%)Super cyclone > 220 6-7.8 10Very severe cyclone 119-220 2.5-6 20Severe cyclone 90-119 1.5-2.5 30

Source: MCSP (1993) for wind velocity and storm surge. Dasgupta (2010) for probability of occurrence.

18. Attaching a monetary value to human life is difficult. The most appropriate measure of the benefit from reduced risk of fatality is the “Value of Statistical Life” (VSL), which seeks to estimate the monetary equivalent of improved well‐being for individuals from reduced mortality risk. Local surveys estimating the VSL for Bangladesh are not available. Thus, the VSL for Bangladesh is estimated at US$230,000, after updating the United States central estimate of US$7.4 million (2006) available from the Environmental Protection Agency (EPA) with price adjustment between 2006 and 2011 and GDP differential between United States and Bangladesh.40

19. Conservatively assuming only 50 percent of the VSL estimated above, the life-saving benefit of mangroves is valued at US$5million or BDT. 382 million. This value is just a rough estimation of the protective role of mangroves.41

38 The model predicted that there would have been 1.72 additional deaths per village within 10 km of the coast if mangrove width had been reduced to 0.39 ‘Pucca’ houses are currently the most resilient houses and form about 4 percent of total houses. Over 30 year period, they are expected to increase to 71 percent (based on data collected from the country’s Household Income and Expenditure Survey (2005) and the Statistical Yearbook of Bangladesh (2006).40Other studies in Bangladesh (World Bank 2010). Bangladesh: Economics of Adaptation to Climate Change Study; BDS. 2012. The Cost of Adapting to Extreme Weather Events in a Changing Climate; DEC Research Policy Working Papers 5280 and 5469) use the same method for estimating the VSL. It is expected that the estimated VSL will grow over time, as a result of improved education and income due to economic growth. However, because no information is available on the predicted increase in the VSL, this analysis conservatively assumes a constant VSL value over time.41 It may easily underestimate the benefit, by not including averted losses in terms of injured people.

100

20. Averted house damages . Das (2007) estimated the protective benefit of mangroves in terms of averted damages to residential property caused by the 1999 super cyclone Orissa. She found that mangroves significantly averted the number of fully collapsed houses, to the extent of US$23,200 per kilometer width of forests or US$1218 per hectare of forests. Assuming a similar protective value for this project means that one-hectare of mangroves in Bangladesh would avert US$560 worth of housing damages caused by super cyclones, after adjusting for GDP differentials.

21. The number of households in the districts worst affected by cyclone Sidr was 12.4 million in 2007 (GoB 2008). Projection of population in coastal regions by 2050 indicates that an additional 7.1 million inhabitants will be exposed to significant damages from storm surges in a changing climate. Considering an average family size of 4.9, this corresponds to 1.5 million houses. In addition, the larger areal extent of a cyclone under climate change means that an additional 1.6 million houses could be damaged from a 10-year return period cyclone due to climate change (Dasgupta 2010). Thus, by 2050, the number of houses vulnerable to storm surge from a 10-year return period cyclone would be 15.5 million. This corresponds to an average annual increase of the number of houses of 0.5 percent per year.

22. We assume that the protective value provided by mangroves start in the fifth project year (US$560/ha) and increase by 0.5 percent per year for the 30-year period. Accordingly, the PV of house protection benefits is estimated at US$2.1 million, or BDT. 168 million (b). As in the case with the benefit of averted deaths, this valuation is a rough approximation of the overall benefit.

23. Overall, the economic benefits in coastal areas add up to BDT. 1.4 billion.

Cost-Benefit Analysis for coastal areas

24. The results of the CBA in coastal areas are positive, with a NPV of BDT. 544 million, a benefit-cost (B/C) ratio of 1.7 and an Internal Rate of Return (IRR) of 13 percent (Table 7.4).

Cost-Benefit Analysis for hilly areas

25. The analysis includes the costs and benefits related to the core (3,878 ha) and buffer zones (5,925 ha). Timber will be harvested from the buffer zone, with a rotation period of 15 years. Table B at the end of this Annex presents the distribution by year of the estimated costs and benefits.

Costs

101

26. Afforestation and harvest. Afforested lands on hilly areas are distributed similarly to those on the coast: 30 percent of total area in the second project year, 50 percent in the third year and 20 percent in the fourth year. For both core and buffer zones, labor cost is about 40 percent of the total cost of nurseries and plantation and about 90 percent of the total cost of maintenance. We use a conversion factor of 0.75 to express the opportunity cost of unskilled labor in coastal areas42. Accordingly, the PV of the cost of afforestation is estimated at BDT. 473 million and that of the harvest cost is BDT. 333 million. Adding up these estimates, total cost of afforestation and harvest attains BDT. 644 million.

27. Opportunity cost of land. The land to be afforested on hilly areas is currently used for grazing and fuel wood collection. The returns from these activities have been roughly estimated at about BDT. 20,800 per hectare per year.43 Considering that the project will forgo the benefits from these activities during plantation and maintenance, the opportunity cost of land is BDT. 424 million.

28. Rehabilitation of field infrastructure. Similarly to the case of coastal afforestation, the PV of this cost is BDT. 93 million.

29. Beneficiaries’ selection, monitoring and evaluation. As in the case of coastal forests, The PV of this cost is estimated at BDT. 38 million.

30. Overall, the economic cost in hilly areas is BDT. 1.2 billion.

Benefits

31. Timber. Timber is expected to be extracted from buffer zone in the 15 th year. According to the Forest Department (FD), yields include poles (210/ha), saw logs and peeler logs (17 m3/km) and fuel wood (13 m3/ha). Average stumpage prices are BDT. 70 per pole, BDT.12,600 per m3 of saw logs and peeler logs and BDT.1,260 per m3 of fuelwood. Accordingly, the PV of wood benefits is estimated at BDT. 1.3 billion.44

32. NWFPs. Forests in Bangladesh provide many NWFPs such as food, medicine, honey, essential oil, spice, resin, gum, latex, fiber and floss, bamboo and cane, broom-grass, sun-grass, mushrooms, tamarind (Zashimuddin 2004). Though the important NWFPs generate only about 6 to 8 percent of the total revenue of the BFD, they support the economic activities of at least 0.6 million people (FAO 2011). No statistics on the NWFPs collected from hilly forests exist in Bangladesh. In addition, attaching a monetary value to the NWFPs is extremely difficult, primarily because many of these products have subsistence rather than market uses. A review of the NWFPs estimates provides a mean value of US$200 per hectare of forests in India (Chopra 1993, adjusted to 2011 prices).

42 It represents the shadow wage conversion factor for skilled and unskilled labor in the construction and crop cultivation sectors in Bangladesh. Detailed calculations are provided in the economic analysis of the Coastal Embankment Improvement Project (CEIP). 43 This corresponds to the net returns from grazing (BDT. 20,000) and from fuel wood (BDT. 2800/ha, similar to the benefit estimated for Karnataka Watershed project in India).44 Additional benefits include wood removals from thinning, for which no data is yet available.

102

Assuming that the buffer and core plantations will provide similar benefits starting with the fifth year, the PV is BDT. 1.5 billion.

33. Protection against landslides. It is commonly known that in steep terrain, forests protect against landslides by modifying soil moisture regime, by providing root cohesion to soil and by maintaining secondary permeability in the soil (Siddle et al. 2006). However, recent research shows that in extremely vulnerable zones, erosion from steep slopes occur independently of the land use. Under certain circumstances, deforestation may increase erosion; reforestation helps moderate the effects of some extreme rainfall events, but without stopping erosion and destructive sediment transport45 (Wasson et al. 2008). Thus, the role of reforestation in protecting against landslides is not yet thoroughly understood. Estimating the forests’ benefit in preventing landslides is thus very difficult.

34. Landslides are common phenomena in Bangladesh, particularly in Chittagong and Chittagong Hill Tract region. Unsustainable land use, hill cutting and deforestation are blamed as major factors aggravating landslide vulnerability in these areas (Mahmood and Khan 2008). The frequency and intensity of landslides have increased dramatically in recent years: a landslide inventory prepared by the Disaster Management and Relief Division (DMRD) reveals 24 major landslide events in Cox Bazar and Chittagong districts during 2003-2010 (DMRD 2011). The landslide in 2007 in Chittagong was the worst, causing 128 deaths and damaging about 900,000 houses.

35. Forests’ benefit in preventing landslides can be estimated through the avoided damages that these landslides would cause in the absence of forests. In South Asia, the effects of forest conversion on landslides have been little studied, thus uncertainties exist related to effects of land cover change46. Evidence of the landslide impact caused by deforestation has been found only in Indonesia47 and Thailand48 (Sidle et al. 2006). In central Japan, forest cover is estimated to reduce landslide erosion 4-5 times compared with sites that lack substantial tree root strength49 (Imaizumi et al. 2008). In North America, clear cutting in steep terrain has been shown to increase landslide erosion by 2-10 folds (Sidle et al. 1985). However, none of these studies estimated these benefits in monetary terms. These examples confirm the difficulties to predict the reduction in the frequency and magnitude of landslides caused by the project activities. Thus, this valuation will make use of estimates from other studies in contexts as similar as possible.

45 In other cases, reforestation may trigger erosion and landslides, if undertaken inappropriately, because of the weight of the trees.46 For example, the 1988 landslides in northern Thailand during an intense monsoon storm yielded somewhat different conclusions related to the role of converted forest cover to landslide erosion: DeGraff (1990) suggested that forest conversion to weaker-rooted rubber plantations was responsible for a higher level of land sliding ; conversely, Phien-Wej et al. (1993) noted that landslide density appeared independent of vegetation cover, implying that the storm magnitude overwhelmed the stabilizing influence of the different root strengths.47 In Sumatra (Indonesia), conversion of tropical forests to coffee plantations produced 3 shallow landslides with a soil loss of 31-113 m3

per landslide occurring 14-16 years after conversion.48 In northern Thailand, river incision and deforestation caused 16 landslides with a soil loss of 25-5260 m3 per landslide.49 These benefits appear to be primarily associated with reducing the frequency of smaller landslides.

103

36. In North African countries, forests’ protection against erosion, floods and landslides have been estimated in the range of US$35-42 per hectare of forests (Croitoru and Merlo 2005). The economic value of forests for preventing avalanches is estimated at around US$100 per hectare year in open expanses of land in the Swiss Alps up to more than US$170,000 per hectare per year in areas with valuable assets (ProAct 2008). In Indonesia, the annual value of forests’ protection function against floods and landslides was estimated at US$34 per hectare of forests (IES 2009). Conservatively assuming that the project’s hilly forests provide US$34 per hectare per year in terms of erosion, floods and landslides prevention, the PV of this benefit after the 5 th year would be BDT. 254 million. This is a very conservative estimate, as it does not capture the lifesaving and other avoided damages that could be potentially high.

37. Overall, the economic benefits in hilly areas add up to BDT. 3.08 billion.

Cost-Benefit Analysis for hilly areas

38. The CBA in hilly areas provides a NPV of BDT. 2.6 billion, a B/C ratio of 2.6 and an IRR of 14 percent (Table 7.4). Afforestation costs account for the majority of the total cost.

Coastal and hilly areas

39. Overall, Component 1 provides net economic benefits of BDT. 2.4 billion over 30 years. It has a B/C ratio of 2.2 and an IRR of 14 percent (Table 7.4). It should be emphasized that these benefits depend on (i) the ability to maintain the plantations during and after the end of the project50; (ii) adopting coastal mangroves under certain technical parameters, such as minimum width; and (iii) adopting appropriate species on hilly areas that are able to provide good protection against landslides and erosion.Table 7.4: Cost-Benefit Analysis of Component 1 (present value, BDT. million)

Coastal forests Hilly forests TotalCosts 811 1,200 2,011Afforestation 410 644 1,054Opportunity cost of land 269 424 693Rehabilitate field offices 93 93 187Beneficiaries selection 5 5 11Monitoring 33 33 66Benefits 1,355 3,080 4,435Wood 239 1,322 1,561NWFPs 374 1,504 1,878Off-shore fishery 191 n.a. 191Storm protection (averted deaths) 382 n.a. 382Storm protection (averted house damages) 168 n.a. 168Landslide protection n.a. 254 254Net benefits 544 1,880 2,424

50 In absence of accurate information, the economic analysis was based on a survival rate of 80%, according to the Forest Department.

104

B/C ratio 1.7 2.6 2.2IRR 13% 14% 14%

Notes: n.a. = not applicable

40. Sensitivity analysis. The success of this component is largely dependent on the ability to maintain these forests. Thus, we conduct a sensitivity analysis to different deforestation rates, assuming constant deforestation rate every year after project ends51. Table 7.5 shows that investment in coastal forests becomes unprofitable if deforestation rate exceeds 3 percent per year on average. In hilly areas, the NPV is less sensitive to deforestation rates. However, the investment may become less attractive than alternative investments at deforestation rate higher than 8 percent on average.

Table 7.5: Sensitivity analysis to different deforestation rates Deforestation rate in

coastal areasIRR in coastal areas Deforestation rate in

hilly areasIRR in hilly areas

1% 12% 1% 14%2% 11% 3% 12%3% 10% 5% 11%4% 9% 8% 10%5% 8% 9% 9%

(ii) Component 2. Alternative livelihoods to support forest communities

41. To maintain natural growth of afforested areas under Component 1, access of forest communities to these lands will be limited for at least 3 years. As a result, communities will forgo benefits such as grazing and fuel wood collection in afforested areas. To compensate for these losses, Component 2 provides communities other income-generating activities and benefits from plantation thinning. This section estimates the economic IRR of this component, focusing only on small-scale livelihood activities at household level.52

About US$936,400 (BDT. 76 million) will be channeled as endowment fund to communities. It is conservatively assumed that the endowment fund will be replenished and used for at least the project lifetime, namely 5 years. If an average-size grant of BDT. 7,000 per household is considered53, the endowment fund would cover about 11,000 households.

Costs

42. Direct costs of this component include the funds channeled as endowment funds and all other administrative costs (e.g. selection of NGOs in different areas, supervision,

51 In addition, we simply assume that benefits will be lost proportionally to the deforestation rate, because of lack of more accurate data.52It was not possible to carry out an analysis of the economic activities at the community level, due to lack of data.53 A review of the activities carried out in 2010 shows that generally, investments ranged between BDT. 4,000-10,000, or BDT.7000 on average (AF 2011).

105

training), which total US$ 4 million, or BDT. 328 million. The PV of these costs amount to BDT. 298 million.

43. Indirect costs include forgone benefits of grazing and fuel wood during the 3-years limited access in the afforested land. Forgone benefits are estimated at BDT. 2,700/household (hh)/year - and include BDT. 2,100 worth of grazing54 and BDT. 600 worth of fuel wood.55 Total forgone benefits for 11,000 households amount to BDT. 30 million per year. The PV of these costs amount to BDT. 74 million.

44. Overall, the PV of the total cost is BDT. 372 million.

Benefits

45. Improved communities’ welfare. AF has a long track record on promoting alternative income generating activities (AIGAs) among forest dependent people and reducing their dependence on forest resources. According to crude estimates, gross returns of AIGAs ranges from 1.2 to 3.1 times the investments, averaging 2.1. Assuming the average profitability rate and an investment of BDT. 7,000, the annual gross returns for 11,000 households reach BDT. 161 million from the second to the fifth year.56 The PV of these benefits would be BDT. 511 million.

46. Forest protection benefits. AIGAs are meant to increase protection of the project’s afforested lands by releasing pressure on forests. These benefits have been already included and estimated in the economic analysis of Component 1.

Cost-Benefit Analysis

47. Overall, Component 2 provides net economic benefits of BDT. 139 million. It has a B/C ratio of 1.4 and an economic IRR of 22 percent (Table 7.6). Because the above analysis is based on crude estimates, no strong conclusions can be drawn.

Table 7.6: Cost-Benefit Analysis of Component 2 (present value, BDT. million)

Costs 372

54Hossain et al. (2005) estimate that the net benefit per cow is about BDT.10/hh/day. The average number of cattle per household is about 1.07 in Bangladesh (BBS 2009). Considering a grazing period of about 200 days per year, the benefit from fodder is estimated at about BDT. 2,100/hh per year.55 Annual fuel wood consumption in Bangladesh is about 0.1 m3 per capita (Sohel et al. 2006), or 0.5 m3 per household. At a price of BDT.1,260 per m3, the net benefit from fuel wood consumption would be around BDT. 600 per year.56 Communities will benefit also from wood from thinning from strip plantations on coastal areas and from the buffer zone in hilly areas, in the 4th and 7th year after plantation. Unfortunately, it is not known how much wood can be derived from thinning, on a per household basis.

106

Direct costs (endowment fund and administrative costs) 298Indirect costs (forgone benefits) 74Benefits 511Improved communities welfare 511Net benefits 139B/C ratio 1.4IRR 22%

48. A sensitivity analysis to changes in AIGAs’ profitability rates shows that Component 2 becomes unattractive when gross returns from AIGAs are less than 1.5 times investment (Table 7.7).

Table 7.7: Sensitivity Analysis of Component 2 (present value, BDT. million)AIGAs’ profitability ratio NPV (million BDT.)

Base analysis (profitability ratio 2.1) 1391.75 541.5 -71.25 -68

(iii) Integrated CBA for Components 1 and 2

Table 7.8 presents the results of the economic analyses carried out for Components 1 and 2. The integrated IRR is estimated at 15 percent57.

Table 7.8: Cost-Benefit Analysis for Components 1 and 2 (present value, BDT. million)

COSTS 2,306Component 1 - Afforestation 1,054 - Opportunity cost of land 693 - Rehabilitate field offices 187 - Beneficiaries selection 11

- Monitoring 66Component 2 - Direct costs (endowment fund and administrative costs) 298 - Indirect costs (forgone benefits) 74BENEFITS 4,946

Component 1 - Wood 1,561 - NWFPs 1,878 - Off-shore fishery 191 - Storm protection 550 - Landslide protection 254Component 2 - Improved communities welfare 511Net benefits 2,564

57 Calculated as a weighted average of the IRRs calculated previously by the cost of each component (1 and 2) [14% * (22/26) + 22%* (4/26) = 15%]

107

B/C ratio 2.1Integrated IRR 15%

(iv) Integrated CBA at project level 58 49. Table 7.9 integrates Component 3 in the CBA conducted at the previous step. This component (US$5.5 million) aims at improving forest management through technical studies and capacity development. However, these benefits are not measurable and are expected to take place in the long run. The integrated CBA shows a NPV of BDT. 2.2 billion, a B/C ratio of 1.8 and an IRR of 12 percent. This are conservative results, by not capturing several benefits that will take place in the future, e.g. strengthened institutional capacity for monitoring, etc.

Table 7.9: Cost-Benefit Analysis for Components 1, 2 and 3 (present value, BDT. million)

COSTS 2,740

Component 1 - Afforestation 1,054 - Opportunity cost of land 693 - Rehabilitate field offices 187 - Beneficiaries selection 11 - Monitoring 66Component 2 - Direct costs (endowment fund and administrative costs) 298 - Indirect costs (forgone benefits) 74Component 3 - Capacity Development 357BENEFITS 4,946Component 1 - Wood 1,561 - NWFPs 1,878 - Off-shore fishery 191 - Storm protection 550 - Landslide protection 254Component 2 - Improved communities welfare 511Component 3 - Strengthened capacity of FD and communities Not measurableNet benefits 2,206B/C ratio 1.8IRR 12%

Financial analysis

58except for Component 4. Project management

108

50. This section discusses the financial viability of the project, to ensure that afforested lands will be maintained beyond the end of the project. The financial viability depends on: (i) the BFD’s ability to cover the costs related to the afforested areas beyond the end of the project activity; (ii) the project’s ability to provide co-benefits to the forest community that would stimulate the maintenance of the project’s forests. Thus, the following paragraphs conduct a financial CBA at the levels of BFD and of AIGA grant beneficiaries.

Financial Analysis of FD

51. This analysis includes the financial costs that will be effectively covered by the BFD and the benefits that will be received.

52. Costs. As previously mentioned, 30percent of project area is afforested in the second project year, 50 percent in the third year and 20 percent in the fourth year. Afforestation is followed by 2-year maintenance, implying that plantations carried out in the 4th year will need to be maintained during the fifth and sixth years. Since the project extends on 5 years only, BFD needs to cover the cost of maintenance for the sixth year, which is equivalent to a PV of BDT. 44 million.

53. Benefits include revenues from wood harvest, occurring in the fifteen year from strip and buffer zones. As estimated in the economic analysis, the value of these benefits reaches BDT. 1.6 billion. It is expected that BFD receive 45 percent of these benefits,59 or BDT. 703 million.

54. Overall, the CBA is positive, with an NPV of BDT. 158 million and a Financial Internal Rate of Return (FIRR) of 36 percent. After project closes, some resources need to be allocated for forest maintenance. This issue has been discussed during project preparation.

Financial Analysis of AIGAs-related grant beneficiaries60

55. To ensure natural growth, access to forest communities to the project’s plantations will be limited for at least 3 years. As a result, communities will forgo benefits such as grazing and fuel wood collection in areas designated for afforestation. To compensate for these losses, the project will provide communities grants to support AIGAs and benefits from plantation thinning. We assume that each targeted household receives an average grant of BDT. 7000 in the 1st project year which provides revenues during second-fifth years. Costs include forgone grazing and fuel wood benefits during the first 3 project years, which are estimated at BDT. 6,700/ha in PV terms. Benefits include revenues from AIGAs, which are valued at about 1.7 times the investment61, or BDT. 37,600 in PV terms.

59 Another 45% goes to the selected beneficiaries and 10% to a tree farming fund. 60This section focuses only on small-scale livelihood activities, at household level. It was not possible to carry out financial analysis of the economic activities at the community level, due to lack of data.61 Based on individual grants of BDT 7,000 per household and a profitability rate of 1.7 (less than average), according to data from past projects of AF. See section (ii) of the economic analysis for more details.

109

Thus, the financial CBA is positive with an NPV of BDT. 27,600 per household. The NPV could be substantially higher with the increase in the loan size and profitability rate of the AIGAs. For example, an increase in the loan to BDT. 10,000 per household and of the profitability rate to623.1 would lead to an NPV of BDT. 82,600 per household over 5 years.

56. Because the above discussion is based on crude estimates, no strong conclusions can be drawn. However, it appears that on average, the net returns from alternative livelihoods cover the forgone benefits from afforestation in both coastal and hilly areas. Adopting AIGAs that provide higher benefits compared to deforestation is the minimum requirement towards maintaining the project’s forests. However, the experience of Integrated Conservation and Development Projects (ICDPs) has shown that offering profitable alternative activities may not be enough to prevent households from continuing environmentally damaging activities, as households may well undertake both, thus gaining the benefits of the alternative activity without forgoing those of the damaging activity. Moreover, there may be a timing problem if it takes some time for AIGAs to become profitable. To avoid these problems, the project will incorporate lessons drawn from the experience of other projects63.

62based on AF data.63 For example, the BolsaFloresta Program in the Brazilian state of Amazonas adopted an approach based on conditionality: households that commit not to deforest receive both assistance in establishing sustainable production systems in agricultural areas and a nominal monthly payment, conditional on complying with the no deforestation rule.

110

Table A. Component 1: Detailed CBA of afforestation in coastal area (base analysis, BDT. million)

Years

COSTS BENEFITSNET

BENEFITS*

Afforestation costs

Opp cost land

Rehabilitation field offices

Beneficiaries selection

Monitoring and

evaluation (4)

TOTAL COSTS

Wood (strip)

NWFPs (mangroves)

Off-shore

fishery

Storm protection TOTAL

BENEFITS

1 20 0 25 6 50 -502 95 39 25 159 -1593 155 104 25 13 297 -2964 142 130 25 13 310 -3105 88 91 25 13 217 41 21 96 158 -596 25 26 51 41 21 95 157 1057 41 21 94 156 1568 41 21 93 155 1559 41 21 92 154 15410 41 21 91 153 15311 41 21 90 152 15212 41 21 89 151 15113 41 21 88 150 15014 41 21 87 149 14915 58 58 263 41 21 86 411 35216 41 21 85 146 14617 41 21 83 145 14518 41 21 82 144 14419 41 21 81 143 14320 41 21 80 142 14221 41 21 78 140 14022 41 21 77 139 13923 41 21 76 138 13824 41 21 74 136 13625 41 21 73 135 13526 41 21 71 133 13327 41 21 70 132 13228 41 21 68 130 13029 41 21 67 129 12930 41 21 65 127 127

NPV 410 269 93 5 33 811 239 374 191 550 1,355 544 IRR 13%

Note: * calculated as total benefits – total costs

111

Table B. Component 1: Detailed CBA of afforestation in hilly area (base analysis, BDT. million)

Years

COSTS BENEFITSNET BENEFITS*

Afforestation costs

Opp

cost lan

Rehabilitation of field

infrastructure

Beneficiaries selection

Monitoring and

evaluation

TOTAL

COSTS

Wood (buffer)

NWFPs

Landslides and flood

protection

TOTAL BENEFIT

S1 44 0 25 6 76 -752 179 61 25 267 -2653 224 163 25 13 428 -4254 121 204 25 13 366 -3625 44 143 25 13 230 164 28 192 -336 13 41 59 164 28 192 1397 7 164 28 192 1928 8 164 28 192 1929 9 164 28 192 19210 10 164 28 192 19211 11 164 28 192 19212 12 164 28 192 19213 13 164 28 192 19214 14 164 28 192 19215 333 348 1,454 164 28 1646 131316 16 164 28 192 19217 17 164 28 192 19218 18 164 28 192 19219 19 164 28 192 19220 20 164 28 192 19221 21 164 28 192 19222 22 164 28 192 19223 23 164 28 192 19224 24 164 28 192 19225 25 164 28 192 19226 26 164 28 192 19227 27 164 28 192 19228 28 164 28 192 19229 29 164 28 192 19230 30 164 28 192 192

NPV 644 424 93 5 33 1,200 1,322 1,504 254 3,080 1,880 IRR 14%

112

Annex 8. Lessons learned for Alternative Livelihoods to Support Forest Communities component

1. The Alternative Livelihoods to Support Forest Communities component draws on the experience of similar types of projects in Bangladesh and the South Asian region. Experience was gleaned and assessed in consultations with development partners, such as UNDP, EU, USAID, with Forest Department officials at the national and local level, NGO in Dhaka and in the regions, local government representatives, as well as with community representatives around the country. Of particular focus were three development partner-funded initiatives working on co-management of protected areas and forest resources in Bangladesh: the USAID-funded Integrated Protected Area Co-Management Project (IPAC), the UNDP/GEF funded Coastal Wetlands and Biodiversity Management Project (CWBMP), and work undertaken by the Arannayk Foundation working in the Inani National Park in Cox’s Bazar area. IPAC has been operational since 2008 and builds on earlier work to develop a model for co- management of protected areas. All three interventions focus on establishing and sustaining community involvement in management of resources to maximize benefit and sustainability from those resources.

2. Forest resources are under pressure in Bangladesh. The extremely dense population prompts encroachment of people for agriculture, habitation and industry purposes. According to the Bangladesh Forest Department, about 40 percent of forest land has been encroached upon with rate of forest depletion is about 2 percent every year, and it especially concerns deciduous forests. Reforestation and afforestation activities supported by the Project will therefore not be sustainable without addressing this pressure. It is necessary to find ways to alleviate poverty and help local communities build sustainable livelihoods without relying on illegal and unsustainable harvesting of forest resources. Such livelihood activities should be centered on the poor households heavily depending on forest and wetland natural resources in order to provide them with other sources of income than from these resources.

3. Achieving this goal is a formidable task given the large number of people, many of them poor, weak institutional framework and social capital at local levels. However, there are several important lessons from past and ongoing interventions about addressing this challenge better. These lessons inform how best to obtain the development objective of this component and the project has a whole in five key areas: engaging communities and inclusion; linkage between livelihoods and afforestation and reforestation; livelihoods activities; financing arrangements; and capacity building.

Engaging Communities and Inclusion

4. Reaching poor and marginalized segments of the communities, dependent on forest resources requires substantial social mobilization efforts. Many of these people live in relative isolation, often do not benefit from public services and may have difficulties with market access. Moreover, frequently these persons are not organized in groups. A key element for targeting poor and marginalized persons is the creation of resource users’ groups in conservation and protection of natural resources. When successful, these groups overcome gaps in social capital and reinforce positive dynamics in building trust, increasing useful feedback mechanisms with

113

external entities like the Forestry Department, mutual assistance, and implementation of sustainable forestry practices. These groups are formed for effective participation in co- management of the resources, lobbying users’ interested and protecting rights, and for engagement in benefits sharing arrangements from the resources. For livelihood improvement purposes, these groups are formed of households which mostly depend on illegal and informal extraction of forest resources for subsistence and surplus trade.

5. In and around protected areas of Bangladesh there are such institutions. Projects have organized households into Forest Dependent Groups (FDG) or Forest Users’ Groups (FUG), which together with community leaders and local elite make Village Conservation Forum (VCF). Representatives of these forums are sent to Co- Management Councils and Co Management Committees (CMC), which have legal framework promoted by the IPAC program. The process of forming CMCs is very complex, multi staged and requires extensive outside support. It starts at the community level with identification of forest dependent households who form Forest Dependent Groups (FDG), these are at large poor households who in additional to mostly labor works are engaged in illegal tree felling for timber and collection of fuel wood and other resources. There have been cases in different projects, especially at the initial stage with inclusion of not eligible households, while excluding those who indeed depend on forest resources due to local favoritism. Such occurrences have been later fixed but could be avoided if there was a clear selection process stipulated from the start of the Project. These groups are engaged in livelihood activities, capacity building and awareness programs on conservation and resources degradation, climate change issues. They are provided with technical and financial support with development of alternative to forest resources income generation opportunities. The members of these groups are facilitated to arrange monthly meetings which are accompanied by capacity building and awareness efforts. Usually these groups are comprised of 20-30 households, though the number of members in the group is more steered by available project resources than the actual number of forest dependent families in the community.

6. The IPAC and other projects establish various community groups, such as informal Community Patrolling Groups (CPG), which usually includes members of forest users’ groups. BFD offices lack staff for effective designated area patrolling and CPGs jointly with forest officials undertake patrolling to prevent illegal extraction of forest resources. As a form of compensation, they are usually included in Alternative Income Generating Groups (AIGG) and get access to project resources. In exchange of work of 32-36 hours a month patrolling they receive assets, such as rickshaw vehicles or lease of fishponds, or get involved in revolving funds grant schemes from the project. They are also engaged in Social Forestry activities on a priority bases. Interviewees on the ground note that the CPGs provide significant support in protecting forest resources from illegal use.

7. There are considerable challenges in ensuring inclusion of poor, women, and other vulnerable groups, including indigenous people in project activities. While the vast majority of communities living in targeted areas are poor, there is substantial variation among community members’ relative influence and involvement of several segments, particularly indigenous people and women is difficult. Furthermore, there is a good deal of variations in terms of forest users as some extract directly or indirectly resources for commercial purposes and others use forest products for their own consumption and survival. This challenge has been addressed through

114

several means. Inclusion of poor in project activities is either mandated by project’s requirements, using village census data on households’ poverty level, access to land, or through selection process of poor households by local governments and community institutions. In some projects engagement was ensured through intensive awareness campaigns on the project’s objectives, tasks and processes. Other projects undertake intensive social mobilization process to engage all members of communities in selection or affirmation process.

8. In Bank-funded Empowerment and Livelihood Improvement “Nuton Jibon” Project (Social Investment Program Project), one of the criteria of eligibility of beneficiaries is that they should not have any other sources of income for joining group. Since a majority of rural women usually have no stable source of income, they automatically become eligible for the project benefits. In other projects, there are requirements for both members of household to participate in different activities, or there are activities specifically tailored for female members of communities, such as sewing, weaving, making crafts. At the same time such participation requires the agreement of their male partners, so not to put women in a difficult situation in their households as well as in the community.

9. Communities can be engaged in SF programs. Individuals or groups residing within one kilometer range from the forest land can apply to the Forest Department to be allocated land plots for plantations. SF Rules establish rotation period for different types of trees up to sixty years for Sal forest. Meanwhile, participants of the SF Program can harvest wood from thinning and pruning of these trees, and from sanitary felling. Benefits from these plantations are to be shared between participants of the program, Forest Department, local government, land owners and Tree Farming Fund. Benefits are different for different type of land and trees.

The lessons learnt on targeting benefits and inclusion for the Afforestation and Reforestation Project:

Information dissemination about Project must be conducted intensively and with sensitivity to effective means of communication at the outset and seek to reaching all members of targeted communities. The Project design envisages wide awareness campaign to inform all targeted communities about the Project, its activities and various possibilities to participate in it. The choice of tools is important because information dissemination is challenging. Many persons who should be informed are illiterate or barely literate; penetration of ICT is minimal; even mobile telephony which is successful for outreach on other interventions is ineffective due to poor coverage in most forest areas. The Project will need to prepare brochures particularly targeted to low literacy and disseminate them to community leaders, through schools and other public institutions. Special efforts will be made to reach vulnerable groups and respect traditional decision making systems in IP communities.

Owing to the difficulties of establishing and sustaining forest dependent groups, focus should be on using existing groups where possible. In forest protected areas, where there are co- management organizations established by IPAC, the Arannayk Foundation and other development agents, there is no need to form forest dependent groups but just to work with existing one. In other areas FDGs might be formed based on other types of

115

existing livelihood development community based groups, since forest dependent households are largely poor, they might have been already organized into groups by other projects or initiatives. For example, the Project can build on existing Jibon groups established by the Empowerment and Livelihood Improvement Project.

Local government, including Union Parishads, as well as Ward Committees will be engaged in social mobilization process, selection of beneficiaries and delivering services to these beneficiaries.

The selection process and criteria should be communicated clearly to communities and communities should be empowered to play a key role in selection and in affirmation of selected participants. Selection of participants for the groups should be inclusive and transparent. The Project will need to develop a detailed Targeting and Selection Strategy with scoring system for assessment of eligibility criteria, such as poverty and well-being level, level of dependency on forest resources, commitment to participate in Project activities. A list of selected members will need to be affirmed by communities to verify eligibility to avoid nepotism and misuse of selection procedures. In addition, all selected beneficiaries should be interviewed in the course of the baseline survey and results will be used for monitoring purposes, as well as for cross verification of eligibility of selected participants.

Only members of concerned community can participate in project activities. The Project would need to ensure that only affected communities participate in afforestation and livelihood activities to avoid influx of people from other areas, which in turn can further increase pressure on fragile forest ecosystems. Establishing this rule clearly at the outset and incentivizing and empowering the communities to enforce this approach are key ingredients for success.

Linkage between Livelihoods and Afforestation and Reforestation

10. Measures are needed to establish a clear linkage of Project afforestation and reforestation activities with livelihoods development in order to achieve overall project development objective. Without community members’ recognizing benefits from and placing a value on afforestation, they will continue to engage in harmful logging and other unsustainable utilization of forest resources. This linkage can be ensured through engagement of local communities in forestry management, i.e., in afforestation and patrolling activities, participatory monitoring, through information and awareness campaigns, and educational programs, especially for youth.

11. Various projects have tried to link social forestry activities with other directions of support and with the target beneficiaries. However, that was not always possible, since BFD makes decision on social forestry areas and Upazila makes decision on participants, the process is not transparent. But when and where the Social Forestry and alternative livelihoods activities were combined, they significantly complemented each other and have led to better results.

116

The lessons on linking afforestation and reforestation activities with the AIGs component for the BCCRF Project:

Opportunities for employment on afforestation and reforestation are an important contribution to livelihoods unto themselves. The afforestation and reforestation is expected to generate around 3 million work-days employment for the poor. Identification of participants for project funded afforestation and reforestation should be done with the participation and approval of the Union Parishads and Ward Committees, community based organizations. In addition, all members of the forest dependent groups need to be included in the afforestation and reforestation activities to raise their awareness on forest conservation and to ensure their income earning to supplement knowledge, skills and financing received for livelihood activities.

Mechanisms to provide for long term sustainability of the CPGs, especially in areas of endangered forest plantations, need to be integrated into project design. Where possible, CPGs members need to be eligible on a priority bases for the afforestation and reforestation activities.

Alternative income generating activities

12. Targeted beneficiaries are poor, vulnerable households who lack education, and often knowledge and skills about activities other than forest extraction. These households are vulnerable to various shocks and natural calamities. The most frequent livelihood activities in existing and past projects relate to agriculture, such as cropping and gardening on homestead or leased lands, goat and poultry rearing, cattle fattening, fish cultivation; small scale trade and services, such as establishment of small shops, providing rickshaw services, various cottage production, such as sewing, embroidering, making cloth, weaving, making bamboo baskets, mats and furniture. The type of activities depends on project objectives, local conditions, such as climate and terrain specifics, availability of and easy access to inputs, infrastructure, market demand, and most importantly existing skills.

13. There are two major livelihood models supported by various projects:

Option one is to provide support to poor groups of forest users to initiate or scale up small scale activities for generating income mostly for subsistence purposes with little surplus traded. These activities are mostly diversified within a group, are of low risk, they build on available skills and require small investments. These are safe options for poor and illiterate beneficiaries to provide them with secured subsidiary income. However, there is a danger that a size of received alternative income can be incomparable to benefits they would receive by extracting forest resources to keep them out of forest. For instance, women weaving bamboo baskets for carrying fish receive about BDT. 50 of profit from one product. She can do 2-3 baskets a day with support of other members of households. But she would earn about BDT. 200 from fuel wood collected within a day from the forest. In addition, extraction of fuel wood does not require any inputs but labor.

117

Option two is to provide support to either existing but very small scope or to establish new business activities, with a larger scope and thus with higher returns. Such activities are either group based to accumulate more funds for investment or individual businesses but with local entrepreneurs, who have skills, knowledge, and just need additional financing to start up such business and support in market linkages establishment. These are mostly group activities such as joint cropping on leased land, fish cultivation, ecotourism, and production of energy efficient stoves. These activities are more complex and require additional or new skills, and larger investments.

Lessons learnt on AIGAs for Climate Resilient Participatory Afforestation and Reforestation Project

Project might provide two windows of support to targeted areas: one for simple livelihood activities and one for economic enterprises development. Economic enterprise development activities should be economically sound and applied only with beneficiaries who have entrepreneurship skills. There need to be continuing monitoring of micro enterprise activities with providing technical support and counseling if there are difficulties occurring and replicating successful enterprises.

Having several households, groups engaged into one activity can improve marketing of produce and increase beneficiaries’ profit. Group activities will be encouraged for larger investments and for maintaining social cohesion of group and solidarity. Group produced products can be taken to the markets in bulk to decrease transportation cost, building specific links with markets can be facilitated by the Project. AF has successful experience in organizing that in some of its project sites. However, such group activities have to be very carefully assessed to avoid failure risk due to over saturating local market and have clear schemes for benefit sharing among group members to avoid conflict. Project would seek some economic group activities based on rapid value chain assessments for each area.

The selection of activities should be carried out very carefully not to increase pressure on forest ecosystems. Alternative livelihoods activities to be sustainable and indeed alternative to forest extraction income need to bring higher income that natural resources extraction activities, be less challenging and safer. In addition some of these activities can provoke more need in extracting of forest resources, such as bethel leaf production, which requires bamboo pole for construction or cattle fattening which can lead to grazing in forest areas and require more collection of fodder from the forest, cropping if individual has no own land can lead to further encroachment on forest lands. Thus, project would need to develop and follow environmental checklist for non-eligible activities.

Financing arrangements

14. Since forest dependent households are mostly poor people, they need financial support in changing sources of livelihood. There are different ways of supply of these households with financial support. IPAC provides groups with in- kind inputs for their livelihood activities or

118

matching grant for Alternative Income Generating business (it provides BDT. 50,000 of matching funds to business people who invest into eco cottage construction).

15. Since poor are not able to generate sufficient savings for productive investments, accumulating group savings allows them to obtain funds in amount and on conditions which are favorable for start- up small scale enterprises. The AF provides groups with the “revolving fund” at around BDT. 120,000 (about US$1,500) for a group of about 30 members. Each member is eligible for a loan of BDT. 5,000 which has to be repaid in a year with no interest rates. These loans are taken either for expansion of their activities or for a new. Some group introduced service charge to cover cost of banking transactions, and it is not higher than 5 percent of the received amount.

16. This scheme is very similar to traditional to development mutual savings scheme (ROSCA). The AF groups also accumulate saving fund. In IPAC Project, some groups organized such saving funds as its own initiative. Groups have different amount set as savings per member from BDT. 5 to BDT. 50 monthly. Many groups just lack knowledge and need support on appropriate use of these funds and productive investments.

17. An interesting model of financing was applied in the Rural Employment Opportunities for Public Assets Project (REOPA) funded by the EU and UNDP. Under this project, destitute women groups have been provided with cash-for-work employment for two years. They maintained a mandatory saving fund with deposition of money from their earnings and voluntary saving fund. Such saving funds provided women with microenterprise development opportunities without credit resources. One of the advantages of this mechanism is that it doesn’t require accounting and making group decisions. All saving funds have been financially sustainable with the small amounts allocated to each member and group pressure on repayments.

Lessons learned for financial arrangements:

The Project should seek to establish mutual saving funds for each group with savings from earnings received from afforestation and reforestation works and from other sources. Investments of own funds into rotational saving fund would ensure higher ownership of the group members. The amount of monthly saving contributions will be decided by the groups’ members. There should be clear strategy developed for use of saving funds jointly with participating groups. All collected money monthly should be allocated to member on rotational basis. Allocation of funds should be based on technical feasibility and financial viability of the proposal and can be made on lottery basis to avoid biased decisions or on priority bases but it should be decided by group itself to ensure ownership.

In order to ensure that grants provided by the project stay with intended beneficiaries and not captured by implementing partner NGOs or local group leaders, Project will develop an exit strategy with full transfer of ownership over funds to community groups. A key element to build trust as well as ensure sustainability and growth of livelihood initiatives in target community groups is establishing clear rules for the transfer of ownership of Project endowments/funds to them from the beginning.

119

Capacity building

18. Empowering participating households is a very important factor for sustainability of their AIGAs. The capacity building programs exercised in various projects have many topics in common starting from organizational trainings, forest conservation to livelihoods capacity building programs. However, in many projects training program organized for self-help groups are either too short or too general. Many groups cannot operate their own saving funds, it is difficult for them to make decision on further investments and expansion of business activities, and they have difficulty in managing own funds and understanding financial flows. Business skills and traits are not easy to locate in rural areas and therefore most of livelihood activities are the same.

19. There is a shortage of qualified business development staff in regional and local NGOs. They often lack knowledge and expertise in development of income generating activities, especially value adding activities which need solid support in exploring and establishment market linkages, improved processing and marketing of products. Such lack of in house expertise leads to relocation of simple, but not highly effective solutions.

Lessons learned for capacity building: Effective training programs for FDGs are most needed on the following topics: i)

organizational development and management of rotating mutual saving and credit fund; ii) basic financial management and accounting with special program for illiterate members of self-help groups; iii) livelihood training on selected livelihood and value adding economic activities; iv) forest conservation and climate change awareness. Beneficiaries will be trained in several alternative livelihoods activities to provide them with a broader range of skills for diversification of their enterprises and for making solid choice on major activity.

Project would need to recruit qualified business development experts on need basis at the central level, who would train and provide back up support to implementing partners in the areas.

Selected value adding activities would need to be supported by specialized organizations from public and private sector.

120

Annex 9. Recommended Plantation Types, Common Species and Rotation Period

BANGLADESH:COUNTRYClimate Resilient Participatory Afforestation and Reforestation Project

Sl No

Type of Plantation

Suggested rotation Direct benefits that will accrue to the participants

Remarks

1. Mangrove Afforestation

Keora (Sonneratiaapitala)The sites that are comparatively compact and harder and at the same time subjected to more saline condition should be planted with species such as Baen (Avicenniaofficinalis), Moricha Baen (Avicennia marina ), Shada Baen (Avicennia alba), Gewa (Excoecariaagallocha), etc.If the site is not soft enough to let the ankle dip into the mud, species such as Excoecariaagallocha may be used for planting

Cannot be felled. The plantations will be retained to function as wind break and combat cyclones and tidal surges.

Fishing and collection of fodder for livestock. Occasional collection of lops and tops as fuel.

BFD may allow local communities to collect NTFP (lops and tops): 100% for first tinning

Ref: Social Forestry Rules 2004. Section 15(3), 20(1)

2. Mound Plantation

Koroj (Pongamiapinnata), Babla (Accaciasinegal), Akashmoni (Accaciaauriculiformis), Katbadam (Termilariacatappa), Shingra (Cynometraramiflora), Puti jam (Eugenia spp.), etc.

18 to 20 years when these are inland and away from the sea front.

Some climber type agricultural crops may be raised during first two years. Fish may be reared in the ditches. When the felling is possible 45% of the produce will the shared with the participants.

Participants will get 45% of the harvest.

Ref: Social Forestry Rules 2004. Section 20(2)d

3. Jhaw Plantation Jhaw (Cassuraniaspp) To be retained and no felling. These plantations are supposed to function as wind break and combat tidal surges.

These plantations are supposed to function as wind break and combat tidal surges. The lower branches may be pruned and used as fuel wood.

121

Sl No

Type of Plantation


Remarks

4. Golpata Plantation

Golpata (Nypafruticans) To be harvested from 4 to 5 years of planting following the felling rules.

At least 45% of the harvest may go as share of the participants.


Ref: Social Forestry Rules 2004. Section 20(2)d

5. Enrichment Plantation

Baen (Avicenniaofficinalis), Moricha Baen (Avicennia marina), Shada Baen (Avicennia alba), Gewa (Excoecariaagallocha). Kakra (Bruguierasexangula), Sundri (Heritierafomes), Dhundul (Xylocarpusgranatum), Kholshi (Aegicerascorniculatum), Shingra (Cynometraramiflora), Goran (Ceriopsdecandra), Hetal (Phoenix Paludosa) etc.

Not to be felled. Collection of dead lops and tops as fuel wood and fodder for their livestock.

BFD may allow local communities to collect dead lops and tops: 100% for first tinning

Ref: Social Forestry Rules 2004. Section 15(3), 20(1)

6. Core Zone Plantation (Long rotation)

Gorjon (Dipterocarpus spp.), Sal (Shorea robusta), Dhaki Jam (Syzygium grande), Telsur (Hopea odorata), Champa (Michelia champa), Mehagony (Swietenia mahagoni), Chikrasia (Chikrassia tabularis), Jarul (Lagerstromia speciosa), Teak (Tectonia grandis), Civit (Swintonia floribanda), Bash Pata (Podocarpus neriifolius), Puti Jam (Syzygium spp.), Amloki (Emblica officinalis), Bohera (Terminalia belerica), Haritaki (Terminalia chebula), Haldu (Adina cordifolia)

40 to 60 year rotation

Communities will not get direct financial benefits

122

Sl No

Type of Plantation


Remarks

7. Buffer Zone Plantation (Short rotation)

Chittatian (Alstonia scholaris), Kodom (Anthocephalus chinensis), Ghora Neem (Melia sempervirens), Akashmoni (Acacia auricoliformis)


Approximately 45% of the harvests including thinning are shared with participants.


Ref: Social Forestry Rules 2004. Section 20(2)a

8. Non Mangrove Buffer Zone Plantation (Short rotation)

Chittatian (Alstonia scholaris), Kodom (Anthocephalus chinensis), Ghora Neem (Melia sempervirens), Akashmoni (Acacia auricoliformis) Koroj (Pongamia pinnata)


Approximately 45% of the harvests including thinning are shared with participants.


Ref: Social Forestry Rules 2004. Section 20(2)a

9. Strip Plantation Neem, Mehagony (Swietenia mahagoni), Chikrassia (Chikrassia tabularis), Amloki (Emblica officinalis), Tetool (Tamarindus indica), Hartaki (Terminalia chebula), Arjun (Terminalia arjuna), Harbarooi, Kala Jam (Syzygium spp.), Akashmoni ((Acacia auricoliformis), Rain tree (Samania saman), Palm (Borassus Fladellifer)

12to 15year The participants may grow some agricultural crops in first two years. Approximately 55% of the harvests will be the share of the participants.


Ref: Social Forestry Rules 2004. Section 20(2)c

123

124