PROJECT INFORMATION DOCUMENT / INTEGRATED SAFEGUARDS DATA SHEET (PID/ISDS) CONCEPT STAGE

. Report No.: 146416 Date Prepared/Updated: 05-Nov-2019 I. BASIC INFORMATION A. Basic Project Data Country: Dominican Project ID: P161182 Republic Parent Project ID (if any): Project Name: FCPF Carbon Fund: Emissions Reduction Program (P161182) Region LATIN AMERICA AND CARIBBEAN Estimated Appraisal Date: 05-Mar-2020 Estimated Board Date: 30-Mar-2020 Practice Area Environment, Natural Financing Instrument: (Lead):PHGlbPracLbl Resources & the Blue Economy Borrower(s) Implementing Agency Ministry of Environment and Natural Resources Financing (in USD Million) Financing Source Amount Borrower/Recipient 0.00 Carbon Fund 37.50 Total Project Cost 37.50 Environmental Category: B-Partial Assessment Is this a Repeater project? No

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. B. Introduction and Context Country Context The Dominican Republic (DR) is an island nation located in the Caribbean that has been one of the fastest growing economies of the region in the past twenty-five years. The robust economic growth enjoyed by the Dominican Republic (DR) has positioned the country as the fastest growing economy in the Latin America and the Caribbean (LAC) region over the last 5 years . The economy has expandedat an average growth rate of 5.3 percent per year from 1993 to 2018 . Fueled by strong domestic demand, the pace of economic growth accelerated to an average of 6.6 percent annually between 2014 and 2018 . DR?s Gross Domestic Product reached US$ 81.3 billion in 2018 . Main economic sectors include agri-food (16 percent) manufacturing (9.9 percent), construction (9.8 percent), commerce (8.5 per cent), transportation (8.2 percent) and tourism (7.9 percent). Regardless of its consistent growth over the last decades, during the past 15 years the country has struggled to maintain fiscal balance. Between 1990-2016, the country averaged an overall fiscal deficit of 2.4 percent of GDP.

Despite being one of the economies with highest growth in the LAC region in the last 15 years, poverty reduction in the DR has been relatively modest. Between 2008 and 2016, poverty decreased from 34.4 to 19.9 percent . In parallel, the country?s middle class increased from 24 to 37 percent . During the same period, the Gini coefficient decreased by 2.5 percentage points from 49.6 to 47.1 percent, placing the country?s inequality levels below that of other countries of the region . Despite these achievements, a large percentage of the population (41 percent) remains at risk of falling back into poverty if affected by external economic or environmental shocks. Moderate poverty is still proportionally more predominant in rural areas than urban (38 percent against 27 percent in 2016) . Low agricultural productivity and natural disasters are a recurring threat to the rural population.

The DR?s geography endows the country with abundant natural resources on which its economy relies, but which also makes the country highly vulnerable to the impacts of climate change. The insular position of the country, abundant beaches and landscapes have enabled the development of a strong tourism industry. However, the country?s location makes it one of the most vulnerable to natural disasters that are expected to become more frequent and intense with climate change. The DR is highly exposed to rapid weather-related disasters (tropical storms, hurricanes, cyclones, floods and landslides), and to slow climate change processes, including sea-level rise and desertification. The country ranks as the 8th most vulnerable country to climate change . The northeastern region is exposed to floods and mudslides from severe storms, while arid regions of the northwest are experiencing increasing temperatures that pose risk of droughts that affect yields and reduce water supplies. Moreover, Hispaniola Island is at the center of a hurricane belt, and intense storms damage coastal infrastructure and beaches, leading to significant loss in tourism revenues. Between 1961 and 2014, natural disaster-related losses have costed 0.69 percent of Gross Domestic Product (GDP) per year . Recent estimates suggest that the impacts of storms, on average, last up to 15 months after occurrence, with substantial economic impacts: storms, on average, reduces gross domestic product by about US$1.1 billion (4.5 percent of gross domestic product in 2000 and 1.5 percent in 2016). A healthy forest cover can offset some of the impacts of climate-related disasters as they can function as green infrastructure against landslides, flood control and mangroves to minimize the effects of storm surge and sea level rise. Sectoral and Institutional Context The DR has been successful at pairing its outstanding economic growth performance with increasing its forest cover since the 1970s, but in recent years forests are facing important threats. From 1973 to 2012, the DR increased its forest cover from 22 percent to 39 percent of its territory . Although the DR is considered to have been successful at controlling deforestation, pressures on forests remain and exacerbate vulnerability to climate change.

The DR?s forest policy rests on three main pillars: (i) the sustainable management of national forest resources through Sustainable Forest Management Plans (MFSP); (ii) commercial reforestation and the conservation of deteriorated areas (e.g. Quisqueya Verde, localized programs, projects with international support, among others), and; (iii) incentive and compensation systems to support forestry development and averted deforestation with Payments for Environmental Services (PSA), particularly in water recharge areas. The proposed ER Program is aligned with DR?s national development priorities. The National Development Strategy (END) 2010-2030 establishes in its 10th Article a strategic approach to promote ?sustainable management of natural resources and adequate adaptation to climate change?. The sustainable use of natural resources, including such as forests, soil, and water, is part of the commitments the government has made under the ?Mandate of Water? (Cuatrenio del Agua).

The ER Program will directly contribute to reducing pressures on natural forests that will cut emissions from deforestation and forest degradation while promoting resilience and competitiveness for the forestry, agriculture and livestock sectors. The ER program looks at mainstreaming productive sectors to achieve national mitigation goals and simultaneously aims to contribute to enhancing the resilience of landscapes by compensating farmers, local rural development associations and government agencies that support the building up of climate smart value chains including, cocoa, coffee, silvopastoral and agroforestry arrangements. Relationship to CAS/CPS/CPF The ER Program is aligned to the Performance and Learning Review of the Country Partnership Strategy (FY15-FY18). In particular, it is aligned with Pillar 3: ?Building resilience? Outcome 6: ?Improved preparedness for disaster risk management and climate change? in line with the World Bank?s disaster risk management and climate resilience activities which include improving climate resilient infrastructure and supporting government to improve its investment planning to integrate DRM into national budget and program. These efforts include support through an integrated approach to natural resource management. The Government has declared its second mandate as the ?Mandate of Water? (Cuatrienio del Agua) and is committed to implement the principles of Integrated Water Resources Management for sustainable use of natural resources such as soil, water and forests by the agricultural sector.

. C. Proposed Development Objective(s) Development Objective(s) The proposed Development Objective is to incentivize reduced deforestation, forest degradation and enhancement of forest carbon stocks (REDD+) at the national level in the Dominican Republic, through payment of verified emission reductions (ER) and to ensure that paid amounts are distributed according to an agreed benefit sharing plan Key Results The achievements of the PDO would be measured through the following indicators:

1. Volume of CO2 Emissions Reductions that have been measured and reported by the Program Entity, verified by a Third Party, and transferred to the FCPF Carbon Fund; tCO2e 7.5 million tCO2e

2. Payment by the FCPF Carbon Fund for CO2 Emissions Reductions generated by the Program; USD USD$37.5 million

3. ER payments distributed in accordance with agreed benefit-sharing mechanism Yes/No Yes

. D. Concept Description The ER Program is under preparation and will constitute the framework for a financial transaction involving the deliveryof ER by the DR, and payments for Emission Reductions (ERs) by the FCPF. The payment for ER will be based on ER against a Forest Reference Level (FREL) where avoided emissions will be accounted and verified and will be paid out using a Benefit Sharing Plan (BSP). To achieve the target of ER, the GoDR will use its own resources to implement activities included in the ER Program, currently under preparation, described below.

DR ER Program will focus its efforts on avoiding deforestation, forest degra dation and enhancement of carbon stocks. Addressing forest degradation, which is affecting approximately four million hectares of the country’s forests, is of importance for the DR’s ER Program. In this regard, DR has made progress by developing initial tools to identify and monitor forest degradation, and the ER Program will build on these efforts. The GoDR prepared an Emission Reductions Program Document (ERPD) that includes all the details of the Program.

The private sector is expect ed to play an important role in the Project. Private sector participants from the cocoa, coffee, and livestock sector are playing an integral part in the ER Program, as the Program aims to mainstream sustainable practices that contribute to verified ERs. Incentives for the private sector to adopt these practices will be supported by the program, including payment for ecosystem services mechanisms and setting enabling conditions to access green markets with potential higher markups. On the later, the Readiness grant is supporting the development of innovative MRV mechanisms for commodities, starting with cocoa plantations.

The d esign of the ER Program is being developed based on the results of a series of analytical products and consultations funded by the FCPF Readiness grant (P151752). Analytical products generated during the REDD+ Readiness phase include a study on the direct and underlying drivers of deforestation and forest degradation in the country, the elaboration of forest cover maps, and reference levels for carbon emissions. These studies are being coupled with a strong participatory process founded on sixteen regional and one national workshop held for consultation and participation in the (i) Determination of Direct and Indirect Causes of Deforestation and Forest Degradation and (ii) Strategic Environmental and Social Assessment (SESA). This process has allowed to capture the opinion of those relevant stakeholders (including government agencies, private sector, and civil society) at the national and local level who proposed strategic options and public policy instruments to reduce deforestation and forest degradation, identified potential environmental and social impacts and risks of the strategic options identified, and defined the prioritized areas to carry out ER actions. A total of 617 representatives of private sector, government and civil society participated in the processes (424 men and 193 women). This process has generated the necessary inputs to design the REDD+ Strategy and a Program with a strong technical basis, while incorporating the views of key sector stakeholders and allowing to meet the country’s international commitments to the UNFCCC. The ER Program will be a first step to implement the REDD+ Strategy.

The ER Program will be applied at the nation al level, beginning with five prioritized areas. Prioritized areas have been identified for the purpose of program activities, based on deforestation and degradation trends, buffer zones in protected areas, and areas that have benefitted from reforestation activities promoted by the GoDR, as well as areas where cocoa, coffee and silvopastoral sustainable management activities have been identified. The DR has decided with its ER Program to focus efforts on avoiding deforestation, forest degradation and enhancement of carbon stocks.

The ER Program will implement actions comprised in three strategic lines of action, or strategic o ptions designed to address the main drivers of deforestation, forest degradation, and barriers to the enhancement of forest carbon stocks. The three strategic options are: Strengthen the legal and institutional framework and enforcement for the conservation of natural heritage and for the sustainable use of natural resources. Establish, strengthen and apply pu blic policies to contain the expansion of the agricultural frontier and expansion of cattle ranching and infrastructure into forest areas. Promote natural resource management models that contribute to conservation and sustainable use of forests. TheEmissions Reduction Program Document includes further details on the ER Program proposed actions and expected results. This set of strategic options and specific actions have been preliminarily identified and selected through a multi-stakeholder participatory process.

The ER Program has 2 components: (I) Measurement, Reporting and Verification (MRV) and program manage ment, and (II) Distribution of the ER payments per the Benefit Sharing Plan (BSP).

II. SAFEGUARDS A. Project location and Salient physical characteristics relevant to the safeguard analysis (if known) The 2015 Forest Resources Assessment (FRA) of the FAO reported that in 2012 forests covered 39.06% of the country?s territory, of which 21.85% corresponded to latifoliate and coniferous forests, 10.26% to dry forests, and 0.65% to wetland forests. In addition, the country has an extensive system of Protected Areas (128) covering 27.79% of the country, with national parks and forest reserves being the main categories.

The ER Program will be implemented at the national level with an initial focus on five preferential areas. These include areas with high rates of deforestation and forest degradation, buffer zones of protected areas, areas included in national reforestation programs, as well as priority areas for agroforestry (cocoa, coffee) and silvopastoral activities. The preferential areas are the following: (i) Municipalities of Cotui, , Sabana Grande de Boya and ; (ii) Municipalities of San Jose de las Matas, Moncion, Santiago Rodriguez, Villa Los Almacigos, and Restauracion; (iii) Municipalities of , San Francisco and ; (iv) Municipalities of San Juan, Bohechio, Padre Las Casas, Constanza, , , Ocoa, Cambita, Bani; and (v) Municipalities of Pedro Santana, Banica, El Llano, , La Decubierta and Jimani.

. B. Borrowers Institutional Capacity for Safeguard Policies The ER Program will be led by MARN through the Directorate of Climate Change which will be responsible for overall coordination with other ministries and agencies for the efficient implementation and effective governance of the Program. The MARN will sign interinstitutional coordination agreements with such agencies specifying roles and responsibilities for the execution of the Program?s activities, including safeguards. The detailed institutional arrangements for safeguards implementation will be specified further during preparation and the Appraisal ISDS will be updated accordingly.

The MARN has prior experience in developing and implementing reforestation programs with a high degree of participation from local NGOs and communities in the five preferential areas which have strengthened its local institutional capacity and governance conditions on which the ER Program will build upon. In addition, DR has an ample legal system which covers several aspects of environmental management. Currently, the MARN is carrying out a Strategic Environmental and Social Assessment (SESA) which will include a detail assessment of the Borrower?s institutional capacity and legal framework vis a vis the Bank?s safeguards policies. The main outcome of the SESA will be an Environmental and Social Management Framework (ESMF) that is currently under preparation. The ISDS will be updated at Appraisal stage with the results of the SESA and ESMF.

To strengthen the institutional capacity for safeguards implementation, the MARN has begun to institutionalize the national REDD+ management arrangements through four participation and consultation platforms: (i) a Technical Advisory Committee (TAC); (ii) a Safeguards Committee; (iii) a Land, Agriculture and Forest Use Committee; and iv) a Legal Committee. Each of these platforms has its own respective functions and has participated in the validation of key products throughout the REDD + preparation process. In addition, the MARN is in the process of carrying out a capacity assessment of the different entities that will be involved in the implementation of the ER Program and will establish a capacity building program to strengthen their institutional capacities through training workshops, including the technical staff of MARN?s Provincial and Municipal Offices as well as those of other ministries, local communities and farmers, and specific committees.

. C. Environmental and Social Safeguards Specialists on the Team Dora Patricia Andrade, Environmental Specialist Dorothee Georg, Social Specialist Fabiola Maria Lucia Mercado Jaldin, Environmental Specialist Lilian Pedersen, Social Specialist

. D. POLICIES THAT MIGHT APPLY Safeguard Policies Triggered ? Explanation (Optional) Environmental Assessment OP/BP Yes The project is classified as Category B since 4.01 the proposed activities aim to reduce emissions from deforestation and forest degradation and to enhance forest carbon stocks, thus leading to mostly positive environmental impacts through the increase of ecosystem services (e.g. carbon, soil, water, landscape beauty) and biodiversity conservation. Some of the activities included in the ER Program to achieve these objectives include reforestation, forest management and restoration, strengthening Protected Areas management, and promoting sustainable agricultural practices such as agroforestry and silvopastoral systems. These activities, if not managed properly, may lead to moderate negative environmental and social impacts such as soil erosion and biodiversity loss due to unsustainable forest management practices, soil and water contamination from the inadequate use of pesticides and fertilizers, increased water stress due to the introduction of non-native species, potential leakage of activities to other regions of the country as well to the neighboring country of Haiti, and involuntary resettlement and access restriction to natural resources from the creation of new protected areas. Underlying Program Activities may imply working in aspects related to the enforcement of forestry laws and the enforcement or establishment of protected areas, which may result in potential social risks because of the land tenure insecurity and productive activities in Protected Areas and buffer zones. Additionally, activities in the coffee and cacao sectors could potentially present child/ forced labor issues. These risks will be safeguarded through ESMF including labor regulation suggestions and a strong GRM, as well as a PF.

However, any such impacts are expected to be site-specific, short-term and manageable, and the ER Program?s environmental and social safeguard instruments will include best practices as well as measures to avoid and mitigate any such potential impacts.

The Borrower is preparing a Strategic Environmental and Social Assessment (SESA) (currently in final draft form) which includes a detailed assessment of the social and environmental risks and potential impacts of the ER Program?s strategic options and REDD+ activities. Based on the SESA, the Borrower is also preparing an Environmental and Social Management Framework (ESMF) (also in final draft form) which includes specific measures to prevent and mitigate potential environmental and social impacts of the ER Program through the implementation of best practices in forest management and conservation. Given that the ER program will largely rely on existing Government Programs, the ESMF will also provide a gap analysis of the national legal framework with the Bank?s safeguards policies to ensure that any gaps are adequately addressed, and risks are appropriately managed, including strengthening of the Borrower?s capacities when needed. In addition, the draft ESMF also establishes the procedures and requirements for the selection (and exclusion, as needed) of specific subprojects and preferential areas of implementation for the strategic activities to be implemented under the Program such as forest management, reforestation, agroforestry and silvopastoral activities, among others. The draft ESMF also considers potential risks and impacts related to leakage of deforestation and forest degradation to other areas of the country (as well as to the neighboring country of Haiti) from the ER Program actions; as well as labor regulation suggestions for workers in the coffee and cacao sectors, including for child/forced labor and other social risks. The ESMF will also include an Integrated Pest Management Plan (IPMP), a Resettlement Policy Framework (RPF), a Process Framework (PF) and a Grievance Redress Mechanism (GRM). The draft ESMF will be validated by the Safeguards Committee for REDD+ in December 2018 and submitted to RSA for review and clearance in March 2019. The draft ESMF is aligned with the requirements of the World Bank Operational Policies on safeguards. The Borrower is also developing a Safeguards Information System (SIS) to comply with the REDD+ safeguards of the UNFCCC. Performance Standards for Private No While performance standards have not been Sector Activities OP/BP 4.03 triggered, private sector actors will potentially be targeted and will be expected to comply with the national safeguards framework adopted by the government which are consistent with WB standards. Natural Habitats OP/BP 4.04 Yes This policy is triggered since many of the activities under the ER-Program will be implemented in legally recognized National Protected Areas which include natural habitats as defined by the Policy. The project is expected to have a positive impact on these areas by reducing the incidence of forest fires, improving environmental services and biodiversity, and strengthening their overall management plans, among others. Some activities such as reforestation and restoration of degraded lands may pose risks to natural habitats from the use of non-native species. The draft ESMF will include specific measures to ensure that any potential negative impacts on natural habitats are avoided and/or minimized through the use of best practices in forest management and include measures to ensure that productive activities supported by the ER Program do not result in expanding footprints of production but rather improve sustainability and productivity within existing converted landscapes. The provisions of the Policy on natural habitats will also be considered in any technical assistance included in the ER Program to delineate productive activities as well as in the use of non-native species in reforestation and restoration activities. Forests OP/BP 4.36 Yes This policy is triggered since the objectives and core activities of the ER Program address the direct causes of deforestation and forest degradation, and the regeneration and sustainable management of forests. Reducing the loss of forest cover will adopt a strategic approach, not only as a means to guarantee the conservation and flow of necessary ecosystem services, but also to maintain agricultural production systems at the regional and local levels. The activities proposed in the ER Program build on the experience of the country in the promotion of community forest management, payments for environmental services and sustainable forest management national programs such as "Quisqueya Verde?, ?Plan Sierra? and other rural development initiatives. During preparation, these initiatives will be assessed through the SESA to ensure that key social and environmental risks and possible impacts are identified, and appropriate mitigation measures are incorporated in the ESMF consistent with the requirements of the OP/BP 4.36. The ESMF will ensure that the programs that are under the umbrella of the ER program consider the provisions of OP 4.36 in regard to both commercial forestry (including certification) and those related to small- holder/community forestry, as well in relation to the use of non-native species in reforestation and restoration activities. In addition, the ESMF will be complemented to include best practices related to forestry investments and fire management programs consistent with the Environment, Health and Safety Guidelines of the WBG. Pest Management OP 4.09 Yes This policy is triggered since some of the ER Program activities, such as the promotion of forestry and sustainable agriculture practices (e. g. agroforestry and silvopastoral systems) and the implementation of a phytosanitary program may require pest management activities. The ESMF will include measures for integrated pest management through biological and mechanical treatment, will analyze impacts and risks and propose mitigation measures for any potential use of chemicals. These practices will be included in an Integrated Pest Management Plan (IPMP) and will also consider national applicable legislation for the use of pest management and control activities. The IPMP will also consider the provisions of OP 4.09in any technical assistance activities to improve forest phytosanitary programs. Physical Cultural Resources OP/BP Yes This policy is triggered since there is a 4.11 possibility that traces of physical cultural resources, sacred or culturally important forests would be found in areas where ER program activities will take place in both forests and rural areas. These resources may include objects identified as pre-Hispanic structures, sacred sites, and protected lands, among others. The ESMF will establish specific chance finds procedures to be applied in the case of physical, cultural and/or religious findings, including sacred or culturally important forests. In addition, the MARN is working with the National Institute of Culture (a government agency dedicated to the preservation and protection of the nation's archaeological, anthropological, and historical heritage) to coordinate the reporting and management of chance finds. Indigenous Peoples OP/BP 4.10 No This Policy is not triggered given that there are no longer distinct Indigenous Peoples according to the four criteria established under OP 4.10 in the DR. Involuntary Resettlement OP/BP 4.12 Yes This Policy is triggered primarily because there could be potential restrictions on the use of natural resources in national protected areas associated with the REDD+ strategic options and, whilst unlikely, there is still a possibility that involuntary resettlement/land acquisition would be required. The SESA process is expected to assess the risk of potential restriction of access to natural resources as part of the design phase of the EN-REDD+, including feedback from stakeholders. The Government will prepare a Resettlement Policy Framework (RPF) and a Process Framework to establish procedures to manage impacts in the event of potential economic displacement and/or involuntary resettlement/land acquisition, or potential restriction of access to natural resources in protected legal areas. A special focus will be placed on vulnerable groups and farmers, as well as populations without land tenure. Safety of Dams OP/BP 4.37 No This policy is not triggered given that the project will not support the construction or rehabilitation of dams, nor will it support other investments which rely on the performance of existing dams. Projects on International Waterways No This policy is not triggered as REDD+ OP/BP 7.50 activities will not involve the use or potential pollution of international waterways. Projects in Disputed Areas OP/BP No This policy is not triggered as REDD+ 7.60 activities will not be implemented in disputed areas.

. E. SAFEGUARD PREPARATION PLAN

. 1. Tentative target date for preparing the Appraisal Stage ISDS: 01-Oct-2019 2. Time frame for launching and completing the safeguard-related studies that may be needed. The specific studies and their timing should be specified in the Appraisal-stage ISDS. The ESMF is under preparation and will be finalized, consulted and disclosed prior to appraisal of the ER Program. It is expected that the ESMF will be submitted to the RSA for clearance in March 2019.

III. Contact point World Bank

PHWBCP Contact:Rodrigo Martinez Fernandez Title:Natural Resources Economist

. Borrower/Client/Recipient

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. Implementing Agencies

PHIACP Name:Ministry of Environment and Natural Resources Contact: Title: Email: . . .

IV. For more information contact: . The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects

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V. Approval Task Team Leader(s): Name:Rodrigo Martinez Fernandez Approved By: Safeguards Advisor: Name: Maria Da Cunha (SA) Date: 11-Nov-2019 Practice Manager/Manager: Name: Valerie Hickey (PMGR) Date: 11-Nov-2019 Country Director: Name:Alessandro Legrottaglie (CD) Date:19-Nov-2019

1 Reminder: The Bank's Disclosure Policy requires that safeguard-related documents be disclosed before appraisal (i) at the InfoShop and (ii) in country, at publicly accessible locations and in a form and language that are accessible to potentially affected persons.