Report and Recommendation of the President to the Board of Directors
Project Number: 39603 November 2005
Proposed Asian Development Fund Grant Kingdom of Cambodia: Tonle Sap Sustainable Livelihoods Project
CURRENCY EQUIVALENTS (as of 16 November 2005)
Currency Unit – riel (KR) KR1.00 = $0.00024 $1.00 = KR4,118
ABBREVIATIONS
ADB – Asian Development Bank CARD – Council for Agricultural and Rural Development CLF – community livelihood fund CLFT – community livelihood facilitation team CPBC – commune planning and budgeting committee C/SF – commune/sangkat fund DOF – Department of Fisheries EA – Executing Agency IFREDI – Inland Fisheries Research and Development Institute MOE – Ministry of Environment MOI – Ministry of Interior NGO – nongovernment organization TSBR – Tonle Sap Biosphere Reserve TSEMP – Tonle Sap Environmental Management Project
GLOSSARY
Amenities. Features that contribute to physical and material comfort or increase attractiveness or value. Rural amenities cover a wide range of resources such as built environments, natural or semi natural habitats, and cultural activities of significance, as well as the human skills and occupations associated with them. The utility and corresponding value that rural (and urban) populations derive from these resources demand that rural amenities be considered important to rural development.
Biological diversity. Defined in the Convention on Biological Diversity, 1992, as the variability among living organisms from all sources including, among others, terrestrial, marine, and other aquatic ecosystems and the ecological complexes of which they are part. The term includes diversity within species, between species, and of ecosystems. Biological diversity is commonly referred to as biodiversity.
Biosphere reserve. An area of terrestrial and coastal or marine ecosystems, or a combination thereof. Biosphere reserves are nominated by governments and remain under their jurisdiction. They must meet a minimal set of criteria and adhere to a minimal set of conditions before being admitted to the World Network of Biosphere Reserves of the United Nations Educational, Scientific, and Cultural Organization. Reserves are intended to fulfill three complementary functions: (i) a conservation function, (ii) a development function, and (iii) a logistic function. Biosphere reserves contain one or more core areas that are securely protected sites, a clearly identified buffer zone, and a flexible transition area.
Buffer zone. A zone that usually surrounds or adjoins core areas, and is used for cooperative activities compatible with sound ecological practices, including environmental education, recreation, ecotourism, and research. In the Tonle Sap Biosphere Reserve, a buffer zone of about 5,400 square kilometers (km2) surrounds the core areas up to the outer limit of the flooded forest.
Commune councils. In Cambodia, a body that governs commune administration. In addition to fulfilling their administrative tasks, they engage in dispute resolution, plan and implement development projects, provide some agency functions for the central and provincial governments, and conduct advocacy. Development activities consist mainly of small-scale infrastructure and public goods projects. Every commune council has a commune chief, who also acts as presiding commune councilor. The commune chief has two assistants, a first deputy chief and a second deputy chief, who come from among the elected councilors. The commune chief may also appoint advisory committees.
Community fisheries. In Cambodia, (i) a form of co-management in which a community of people, usually a village or group of villages, is recognized and empowered as a co- management unit for fisheries; and (ii) a clearly defined and demarcated area in the fisheries domain that is allocated to a community for management. The sub-decree on community fisheries management defines community fisheries as a group of persons holding Cambodian citizenship living in or near a community fishing area, voluntarily established, and initiated to improve livelihoods by using fisheries resources sustainably for economic development, social improvement, and poverty reduction.
Community management. The community-based management of local natural resources, including certain designated fishing areas, with support from relevant authorities, and institutions and organizations.
Core areas. Securely protected sites for conserving biodiversity, monitoring minimally disturbed ecosystems, and undertaking research and other low-impact uses such as education. In the Tonle Sap Biosphere Reserve, core areas are in Prek Toal (213 km2), Battambang; Boeng Tonle Chhmar (Moat Kla) (145.6 km2), Kompong Thom; and Stung Sen (63.5 km2), Kompong Thom. They are characterized, respectively, by a flooded forest, streams and water bodies, and rich biodiversity. Nearly 100 water bird species are found there, a dozen of which are of global significance. The areas are also known for their fish, mammals, and reptiles.
Fisheries domain. A body of water, defined by law, that includes practically all inland waters except man-made ponds and reservoirs, as well as areas that are only temporarily aquatic such as the flooded forest. The Department of Fisheries is responsible for it.
Fishing gear. Any equipment used for fishing. More than 200 different types of gear are in use on the Tonle Sap. They range from large-scale gear such as barrage traps and bagnets; middle- scale gear such as arrow-shaped traps, drift seine nets, rafted mounted lift nets, and scooping nets; to family-scale gear such as gill nets, small traps, single long lines, small dip nets, and cast nets. Almost all gear is developed locally.
Fishing lots. Exclusive geographic areas that are awarded through a competitive, public bidding system for a period of 2 consecutive years, with the auction fee payable for each of the two fishing seasons. They range in size from 20 to 500 km2 and may include lake areas, river areas, and a flooded forest. The largest are found on the Tonle Sap. The operator of each lot has the right to harvest fish according to the burden book for the lot. The burden book describes
the open season, the payment schedule, permissible fishing gears, the boundaries, the main geographic features, and the designated public fishing areas. In 2000, there were 175 fishing lots in Cambodia, covering 9,537 km2. That year, as a result of conflict between lot operators and communities over access to fisheries, about 56% of the area was transferred to community fisheries, leaving 82 lots covering 4,175 km2.
Fish sanctuaries. Water bodies set aside to protect fish stocks, improve fish recruitment, and provide dry season refuge areas for nonmigratory fish. Year-round, fishing activities, including small-scale fishing, are prohibited. Fishing for research is allowed. Seven of the eight sanctuaries on the Tonle Sap are inside the permanent lake, and one is near the mouth of the Tonle Sap River. Most are found in the deeper parts of the lake. None is in the flooded forest.
Flooded forest. A descriptive term for the particular natural vegetation that originally covered most of the Tonle Sap's floodplains. It is now characterized by low forest and shrubs that still account for the productivity of the Tonle Sap.
Inland fisheries. Divided into three legally recognized categories, on the basis of fishing gear and allocation of waters: (i) Large-scale fisheries. Commercial fisheries that use such gear as barrage traps, bagnets, and large arrow-shaped traps in fishing lots. Fishing lots are auctioned every 2 years. (ii) Medium-scale fisheries. Commercial fisheries that use such gear as arrow traps, large seine nets, and large gillnets. Such gear can be deployed only in open-access waters under license. (iii) Small-scale fisheries. Subsistence fisheries that use gear such as nets, traps, and hooks. Such gear requires no license. Fishing can be carried out in all categories of inland fisheries, except within fishing lots during the open season and in protected areas.
Livelihoods. The capabilities, assets, and activities required for a means of living. A livelihood is sustainable when it can cope with stresses and shocks and maintain or enhance itself in the present and in the future without undermining the natural resource base.
Livelihoods approach. A way of thinking about the objectives, scope, and priorities for development. It reinforces positive aspects and militates against constraints or negative influences. Its core principles are that poverty-focused development should be people-centered, responsive, and participatory; multilevel; conducted in partnership; sustainable; and dynamic. It puts people at the center of development.
Sustainable livelihoods framework. A tool to improve understanding of livelihoods. It illustrates the main factors that affect people's livelihoods (e.g., access to assets; vulnerability; policies, institutions, and processes), and the typical relationships between these. Livelihood assets can be divided into five types of capital: (i) human capital, e.g., skills, knowledge, and ability to work; (ii) social capital, e.g., networks and connectedness, formalized groups, and relationships of trust; (iii) natural capital, e.g., natural resource stocks from which resource flows and services useful for livelihoods are derived; (iv) physical capital, e.g., transport, shelter, buildings, water supply and sanitation, energy, and access to information (communications); and (v) financial capital, e.g., available stocks and inflows of money.
Transition area. An area in which stakeholders work together in a variety of economic and other activities to manage and develop sustainably a biosphere reserve's natural resources. In
the Tonle Sap Biosphere Reserve, a transition area of about 9,000 km2 lies between the outer boundary of the buffer zone and Highways No. 5 and No. 6.
The Tonle Sap at a Glance
Item Characteristic Area • 250,000–300,000 hectares (ha) in the dry season and 1.0–1.6 million ha in the wet season • The flooded forest extended over more than 1 million ha originally, 614,000 ha in the 1960s, 362,000 ha in 1991, and about 20,000 ha in 1997 Hydrology • 1–2 meters above mean sea level in the dry season and 8–12 meters above mean sea level in the wet season • 20% of the Mekong River's floodwaters are absorbed by the Tonle Sap • 62% of the Tonle Sap's water originates from the Mekong River and 38% from the Tonle Sap basin • The Tonle Sap is connected to the Mekong River by the 100-kilometer-long Tonle Sap River, which reverses its flow seasonally Biology • The flooded forest contains about 200 plant species • The Tonle Sap contains at least 200 species of fish, 42 species of reptiles, 225 species of birds, and 46 species of mammals • Of the 500 fish species once found in Cambodia's wetlands, as many as 300 are now thought to have disappeared Socioeconomy • 1.2 million people live in the area bordered by Highways No. 5 and No. 6 • The Tonle Sap yields about 230,000 tons of fish each year (about 50% of Cambodia's total freshwater capture fisheries production) • Rice production in the Tonle Sap's floodplains makes up about 12% of Cambodia's total Source: Asian Development Bank.
NOTE
In this report, "$" refers to US dollars.
Vice President L. Jin, Operations Group 1 Director General R.M. Nag, Mekong Department (MKRD) Director U. Malik, Agriculture, Environment, and Natural Resources Division, MKRD
Team leader O. Serrat, Senior Project Economist, MKRD Team members K. Emzita, Counsel, Office of the General Counsel I. Fox, Principal Project Specialist, MKRD
CONTENTS
Page GRANT AND PROJECT SUMMARY i MAPS I. THE PROPOSAL 1 II. RATIONALE: SECTOR PERFORMANCE, PROBLEMS, AND OPPORTUNITIES 1 A. Performance Indicators and Analysis 1 B. Analysis of Key Problems and Opportunities 3 III. THE PROPOSED PROJECT 5 A. Impact and Outcome 5 B. Outputs 5 C. ADF IX Grant Component 9 D. Special Features 9 E. Cost Estimates 10 F. Financing Plan 10 G. Implementation Arrangements 11 IV. PROJECT BENEFITS, IMPACTS, ASSUMPTIONS, AND RISKS 16 A. Benefits and Impacts 16 B. Risks 19 V. ASSURANCES 19 A. Specific Assurances 19 B. Conditions for Grant Effectiveness 20 VI. RECOMMENDATION 20 APPENDIXES 1. Sector Analysis 21 2. External Assistance to the Tonle Sap Region 28 3. Design and Monitoring Framework 31 4. The Community Livelihood Fund 34 5. Summary Cost Estimates 36 6. Project Management and Organization 39 7. Indicative Activities Schedule 40 8. Contract Packages and Indicative Staffing Schedule for Consultants 42 9. Community Livelihood Fund Flow Mechanism 43 10. Gender Action Plan 45 11. Summary Poverty Reduction and Social Strategy 48 SUPPLEMENTARY APPENDIXES (available on request) A. Problem Tree B. The Sustainable Livelihoods Approach C. The Project Area D. Features of the Tonle Sap and its Biodiversity E. Geographic, Demographic, and Socioeconomic Background F. Institutional Framework and Government Policies and Plans G. Financial and Economic Analyses
H. Relevant Ongoing Projects and Programs and Lessons Learned I. Land Acquisition and Resettlement Framework J. Initial Environmental Examination K. Terms of Reference for Consultants L. Implementing Small Projects with Community Participation M. Detailed Cost Tables
GRANT AND PROJECT SUMMARY
Recipient Kingdom of Cambodia
Classification Targeting classification: Targeted intervention Sector: Agriculture and natural resources Subsector: Environment and biodiversity Themes: Sustainable economic growth, environmental sustainability, gender and development Subthemes: Fostering physical infrastructure development, natural resources conservation, gender equity in opportunities
Environment Category B sensitive Assessment An initial environmental examination was undertaken. The summary initial environmental examination was circulated to the Board on 25 August 2005.
Project Description The Project will support community-driven development to deliver demand-driven services more equitably, efficiently, and effectively (output 1); safeguard the core areas to protect their functions, products, and attributes (output 2); and build skills and awareness for sustainable livelihoods to strengthen institutions and processes at all levels (output 3). It will benefit people in the communes that are located either fully or partly in the buffer zone and core areas. Specifically, the project area covers 37 communes surrounding the lake, in which there are 316 villages with a population of 287,430 in 54,857 families.
Rationale Tackling poverty in Cambodia means working with the rural poor, initially where livelihood assets are being fundamentally affected by unfavorable trends. Such trends are obvious in the Tonle Sap region of Cambodia: its indicators of poverty are even more negative than those of the country as a whole. There, human capital has been seriously affected by the extermination of a generation of leaders, levels of health and education are low, and women shoulder heavy responsibilities as a consequence of male deaths during the protracted civil war and genocide. Social capital has been severely diminished by the war and democratic processes have only recently been introduced. Natural capital, especially forests and fish, is under growing human exploitation. Physical capital is inadequate and there are few rural amenities. Access to financial capital is restricted: most loans are taken from relatives or neighbors, and moneylenders charge interest rates of up to 100% per month. The structures and processes that affect these assets are institutions, policies, legislation, culture, and power relations. They determine access, terms of exchange, and returns; shape the livelihood strategies of the poor; and govern their outcomes. All are weak. The asset base of the rural poor must be enhanced and developed. Without improvements, investments in the Tonle Sap region will become progressively less productive. ii
Impact and Outcome The Project will improve livelihoods. It will increase access to assets in the five provinces that adjoin the Tonle Sap.
Cost Estimates The total project cost, including contingencies, taxes, and duties, is estimated at $20.3 million equivalent. The foreign exchange cost is estimated at $6.9 million, or 34% of the total project cost. The local currency cost including taxes is $13.4 million, or 66% of the total project cost.
Financing Plan Financing Plan ($ million)
Foreign Local Total Source % Exchange Currency Cost Asian Development Bank 4.0 11.0 15.0 74 Government of Finland 2.8 1.9 4.7 23 Government of Cambodia 0.1 0.5 0.6 3 Total 6.9 13.4 20.3 100
Grant Amount The Asian Development Bank will provide a grant of $15,000,000 from its Asian Development Fund. The Government of Finland will provide a grant of $4,738,000.
Period of Utilization Until 30 June 2010
Estimated Project 31 December 2009 Completion Date
Executing Agency Ministry of Interior
Implementation The Ministry of Interior will act as Executing Agency. The Council Arrangements for Agricultural and Rural Development, through its secretary general, will head a project steering committee established to provide policy and strategy guidance. The Ministry of Interior will also act as Implementing Agency for output 1. The Tonle Sap Biosphere Reserve secretariat in the Cambodia National Mekong Committee will act as Implementing Agency for output 2, in close consultation with the Department of Fisheries in the Ministry of Agriculture, Forestry, and Fisheries; the Inland Fisheries Research and Development Institute in the Department of Fisheries; and the Ministry of Environment. The activities for output 3 have been composed to promote the rapid accomplishment of output 1. They will be implemented by the Council for Agricultural and Rural Development, the Ministry of Interior, and the Ministry of Environment.
iii
Procurement Civil works, goods, and related services will be procured in accordance with ADB's Guidelines for Procurement. The civil works that relate to output 1, such as water supply and sanitation, schools, and small village works, will be procured through local competitive bidding procedures acceptable to ADB where the cost is less than $500,000. Vehicles, machinery, and office equipment will be procured through international shopping where the cost is from $100,000 to $500,000 per package and through local competitive bidding where the cost is less than $100,000. Procurement of goods with a value of less than of $50,000 can be made through direct purchase. Service contracts may be given to nongovernment organizations. Commune councils, through the bidding committee, will procure the civil works, goods, and related services for eligible activities. Details of packages for procurement will be determined during project implementation.
Consulting Services The consultants will be selected and engaged in accordance with ADB's Guidelines on the Use of Consultants and other arrangements satisfactory to ADB for the selection and engagement of domestic consultants. The WorldFish Center of the Consultative Group on International Agricultural Research will be appointed by direct selection to accomplish output 2. Live and Learn Environmental Education will be appointed by direct selection to accomplish certain activities in output 3 that relate to education for the protection of natural resources.
Project Benefits and The Project will generate substantial environmental benefits Beneficiaries affecting sustainable livelihoods, the core areas, and environmental education and awareness. It will boost decentralization and deconcentration through institutional incentives, self-reliance, and service delivery. It will raise social capital by promoting collective action, women's participation, and social infrastructure. Its economic and financial benefits will draw from improved rural livelihoods that contribute to the sustainable management of the Tonle Sap, and better governance and provision of incentives that encourage institutional innovation. It will benefit people in the communes that are located either fully or partly in the buffer zone and core areas.
Risks and Assumptions The Project includes measures to mitigate all environmental, institutional, and financial risks. The principal assumption is that the Government sustains the decentralization and deconcentration process.
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CAMBODIA LAO PEOPLE'S TONLE SAP SUSTAINABLE LIVELIHOODS PROJECT DEMOCRATIC REPUBLIC
ODDAR MEANCHEY Siem Pang Samrong Cheom Ksan o RATANAKIRI o 14 00'N 14 00'N BANTEAY Tbeng Meanchey MEANCHEY STUNG Banlung TRENG Poipet Sisophon SIEM REAP THAILAND PREAH VIHEAR Lumphat Mongkol Borey Stung Treng Siem Reap
Battambang .
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PAILIN Tonle g n VIET NAM BATTAMBANG o Sap k Pailin KOMPONG e KRATIE THOM M MONDULKIRI Moung Roessei Kompong Thom Sambor Sandan Kratie Sen Monorom Pursat Krakor
Prek Kak Sre Khtum Kompong Chhnang PURSAT Chhlong Snuol Sdok KOMPONG KOMPONG Kompong Cham CHAM CHHNANG Phuni Tonle Bet Memot Gulf of Thailand Krek Koh Kong KOMPONG SPEU PHNOM PENH N Kompong Speu Prey Veng KOH KONG Tonle Sap Biosphere Reserve Takmau PREY VENG National Capital KANDAL Sre Ambel SVAY 0 25 50 75 100 Provincial Capital RIENG Kompong o Angtassom Takeo o 11 00'N City/Town Kaaong Trabek Svay Rieng Kilometers 11 00'N
B National Road KAMPOT TAKEO a s s Veal Renh Tani a Other Road c Kampot R Sihanoukville . Existing Railway Kep Tuk Meas Dismantled Railway SIHANOUKVILLE KEP River Mekong R. Provincial Boundary International Boundary 0
5 Boundaries are not necessarily authoritative. South China Sea - M 5 6 2 a 7 a p
H o o 103 00'E 107 00'E 1 R o 104 00'E
CAMBODIA BANTEAY MEANCHEY TONLE SAP SUSTAINABLE LIVELIHOODS PROJECT
Sisophon
Kralanh SIEM REAP
Puok Prasat Bakong N Siem Reap Sour Nikorm BATTAMBANG 0 10 20 30 40 50 Aek Phnom
Kilometers Chi Kraeng Battambang Sangka o o 13 00'N 13 00'N
Stoung KOMPONG THOM Tonle Sap
Kompong Svay Moung Roessei Kompong Thom
Santuk Bakai
Pursat Krakor Baribur
Baray
P U R S A T Kompong Leaeng Transition Area National Road Kompong Chhnang Buffer Zone Railway Rolea Bie Chol Kiri Core Area River KOMPONG Target Commune Commune Boundary CHAM r e v Fish Sanctuary District Boundary i Kompong Cham R
KOMPONG g Provincial Capital Provincial Boundary n o CHHNANG k District Center Boundaries are not necessarily authoritative. e M Commune Center 0 5 M - 5 6 a 2 7 p b
H
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I. THE PROPOSAL
1. I submit for your approval the following report and recommendation on a proposed grant to the Kingdom of Cambodia for the Tonle Sap Sustainable Livelihoods Project.
II. RATIONALE: SECTOR PERFORMANCE, PROBLEMS, AND OPPORTUNITIES
A. Performance Indicators and Analysis
1. The Nature of the Tonle Sap
2. The Tonle Sap is the largest freshwater lake in Southeast Asia, covering an area of 2,500–3,000 square kilometers (km2) in the dry season. Owing to a hydrological phenomenon, the Tonle Sap River draining the lake reverses its flow in the wet season when the waters of the Mekong River flow into the lake to inundate 10,000–16,000 km2 for months. The wetlands born of this cycle are home to a high biodiversity of fish, reptile, bird, mammal, and plant species that qualified the Tonle Sap as a biosphere reserve in 1997. This biological richness is reflected in the enormous productivity of the Tonle Sap as a fishing area: the lake supports one of the most productive fisheries in the world, and provides most Cambodians with their main source of animal protein, calcium, and vitamin A.1 The fisheries, together with the flooded forest and agricultural lands of the inundated area, have underpinned human activity since ancient times.2 Indeed, the Tonle Sap and the associated heritage of Angkor have defined Cambodia's identity. Today, the land, water, and biotic resources of the Tonle Sap directly benefit 40% of the population of the provinces adjoining the lake and shore up food security and employment elsewhere.3 The lake also benefits the lower Mekong basin as a feeding and spawning area for migratory fish. It is of global significance for biodiversity conservation.
2. The Threats to the Tonle Sap
3. However, in Cambodia, high population growth is increasing the number of people to feed and consumptive use of the Tonle Sap basin's natural resources is intense. Major threats to the Tonle Sap include overexploitation of fisheries and wildlife resources,4 particularly through the fishing lot system,5 conversion of the flooded forest to agriculture, and collection of fuel wood from the flooded forest.6 Widespread deforestation in the watersheds is destroying habitats, impairing water and soil quality, and increasing siltation rates. And so, despite the inherent richness of the lake, indicators of poverty in the basin are even more negative than in the country as a whole. Outside Cambodia, the main concern is the cumulative impact of built structures on the hydrology of the Mekong basin.
1 Fish consumption rates can exceed 80 kilograms per capita per year. (The national average is 25–30 kilograms.) 2 They are believed to contribute more to national food security than they do in other countries. (Their contribution to gross domestic product has been reassessed at 16%. The value of the catch is estimated at $200 to $300 million.) 3 The fisheries are an irreplaceable source of food and livelihoods for about 2 million Cambodians. They give opportunities to (i) diversify activities and ensure against crop failures, (ii) optimize labor among different activities in different seasons, (iii) access an income-generating activity with very little capital and no requirement for land, and (iv) maintain or improve nutrition, as fresh and processed fish represent a significant source of protein. 4 Many species are on the 2004 IUCN Red List of Threatened Species™. Twelve are listed under the Convention on International Trade in Endangered Species of Wild Fauna and Flora, 1979. Attention was drawn to the high rates of extraction in ADB. 2004. Cambodia: Country Environmental Analysis. Manila. 5 The fishing lot system was introduced in colonial times and has dominated inland fisheries ever since. It is a potentially powerful management tool. But it has become increasingly inequitable, divisive, and destructive. 6 The area of flooded forest is declining rapidly. In 1997, satellite imagery revealed only about 20,000 hectares of flooded forest, compared with 362,000 hectares in 1991, 614,000 hectares in the 1960s, and more than 1 million hectares originally. 2
3. Poverty and Vulnerability
4. Despite the richness of its natural resources, the Tonle Sap provides an inadequate living for most of the inhabitants of the provinces that adjoin it as more compete for livelihood assets. Indicators of poverty are more negative than for the population as a whole or, indeed, for other rural areas: between 40% and 60% of the households in half of the villages, and about 80% in other areas, are below the poverty line. Many communities own no land and depend entirely on fishing and foraging, with access to fishing areas often under dispute. Such is the dependence of the rural poor on natural resources and the subsistence nature of their livelihood strategies that they have little to fall back on if things go wrong.
5. More than elsewhere in Cambodia, health shocks and chronic illness are major causes of impoverishment. The cycle of poverty, ill health, and high health-care expenditure by households (11% of household income) cripples families. Since people frequently rely on pond water for drinking, children suffer from repeated attacks of diarrhea. Malaria, dengue fever, acute respiratory infections, and tuberculosis are endemic, and the rate of HIV/AIDS infection is the highest in the region. About 45% of the people borrow to cover the cost of health emergencies and, all too often, respond to health shocks by removing children from schools, starting with girls. Half of the children under the age of 5 are malnourished and, for every 1,000 live births, 115 children die before they reach the age of 5.
6. Adult literacy averages 63%. (This figure is inflated as it includes the partially literate and hides wide provincial and gender differences.) About 70% of children do not complete primary school, compared with the national average of 60%. Twice as many women as men over 15 years of age have never attended school. Lack of education limits the ability to recognize and act on opportunities. Interestingly, however, a high demand exists for technical and vocational education and training. Low literacy levels, lack of access to environmental education materials, and a dearth of basic information—such as copies of laws, sub-decrees, proclamations, directives, and circulars—do not favor decision making for natural resource management.
7. Women are very vulnerable. They have even less access than men to land ownership and other property rights, credit, paid employment, education, and health services. They also have few opportunities for self-development or participation in community decision making since Khmer tradition ascribes a passive role to women. Nevertheless, the gender division of labor is changing overall: women and men play progressively interchangeable roles because women are increasingly called upon to meet household needs. There are also many displaced or disabled persons, who suffer from poverty and other forms of social deprivation to an even greater extent than the rest of the population.
8. The ethnic minorities living in the Tonle Sap basin are the Vietnamese and Muslim Cham. Even though most of the Vietnamese were born in Cambodia, they are not Khmer people and are classified as immigrants. This status limits their contribution to community-based natural resource management, despite the fact that they are innovative fishers. The Cham, who are also fishers, do not experience segregation. But all ethnic minorities are disadvantaged because of inadequate representation at management and legislative levels. The Vietnamese are further deprived by lack of property rights and language barriers.
9. In the wet season, heavy swells and high waves can topple the houses of the communities that live on the Tonle Sap. The inhabitants pay to have their houses towed to new anchorage sites to accommodate the changing water levels and move into sheltered locations. These and other costs related to repairing damage to the houses account for as much as a third 3 of annual expenditure. Indebtedness is high and returns for labor are low as most poor fishers are locked into a system of borrowing and selling to middlemen. Microfinance is rarely available. Further, absence of clean water and sanitation leads to morbidity and low life expectancy.
10. In the lowlands, rural life is intrinsically linked to the natural, annual cycle of flooding. The communities have developed coping mechanisms to live with flooded conditions, often for up to 6 months a year. But when floods are deeper than normal, unexpectedly fast at onset, or unusually prolonged, they can tax community self-reliance and capacity to cope.
11. Poverty is also related to extended instability and conflict and the resultant harm to the population. Most of Cambodia experienced more peace and economic growth after 1993 but only since 1998 have areas northwest of the Tonle Sap enjoyed their first real respite from war. Many internally displaced persons, repatriated refugees, internal migrants, and demobilized soldiers are reestablishing livelihoods in what remains a fractured society.
B. Analysis of Key Problems and Opportunities
1. Livelihood Outcomes
12. Poverty and vulnerability are caused by declining access to assets.7 Human capital has been seriously affected by the extermination of a generation of leaders, health and education are poor, and women shoulder heavy responsibilities as a consequence of male deaths during the protracted civil war and genocide. Social capital has been severely diminished by the war and democratic processes have only recently been introduced. Natural capital, especially forests and fish, is under growing human exploitation. Physical capital is inadequate and there are few rural amenities.8 Access to financial capital is restricted: most loans are taken from relatives or neighbors, and moneylenders charge interest rates of up to 100% per month. The structures and processes that affect these assets are institutions, policies, legislation, culture, and power relations. They determine access, terms of exchange, and returns; shape the livelihood strategies of the poor; and govern their outcomes. All are weak (Appendix 1).
2. The Government's Response
13. The Tonle Sap Biosphere Reserve. In recognition of the lake's importance, a royal decree designated the Tonle Sap as a multiple-use protected area in 1993. Furthermore, the lake was declared a biosphere reserve in 1997 under the Man and the Biosphere Program of the United Nations Educational, Scientific, and Cultural Organization. The institution of the Tonle Sap Biosphere Reserve (TSBR), which entails adherence to core area, buffer zone, and transition area zoning principles, should lead to sustainable management and conservation of natural resources and biodiversity. But its management is a great challenge for the Government and few practical measures have been implemented since to protect the reserve. The Government needs to practice the tenets of biosphere reserve zoning: the existence of fishing lots in the core areas is the clearest example of failure to turn commitment into action.
14. Community Fisheries. In 2000, a prime ministerial decree released 56% of the fishing lot area and turned it over to community fisheries. In the long term, this change should benefit
7 ADB. 2003. Technical Assistance to the Kingdom of Cambodia for the Participatory Poverty Assessment of the Tonle Sap. Manila. 8 Attention to rural amenities, e.g., schools, health posts, communal facilities, water supply and sanitation, or roads, is strongly justified for reasons of economic efficiency, social equity, cultural diversity, and sound management of natural resources and the environment. 4 communities, improve fish habitats, and lead to sustainable management of natural resources. But the reform process was driven by decree. It was not the result of policy planning and communities were not involved. As a result, the boundaries of community fisheries sometimes need readjusting; communities are still trying to organize themselves in the absence of legislation;9 and they have insufficient funds with which to prepare and implement community fisheries management plans. The reform process also burdens the Department of Fisheries (DOF) in the Ministry of Agriculture, Forestry, and Fisheries, which has low capacity.
15. Decentralization and Deconcentration. In 2001, to achieve democratization at the grassroots, the Government embarked on a process of decentralization and deconcentration.10 It formulated a subnational governance system that is intended to be democratic, participatory, accountable, effective, efficient, and pro-poor. The reform process culminated in the election of commune councils in 2002 and a three-tier institutional structure with central, provincial, and commune levels. The national treasury now transfers funds to commune council accounts, which are administered by provincial treasuries. These funds are to be used for administrative expenditures (30%) and development (70%).11 Decentralization and deconcentration should afford opportunities to embed peace and democracy in the Tonle Sap region as elsewhere, increase accountability and transparency, and enhance pro-poor, participatory development. Cambodians are generally well satisfied with the performance of their commune council.12 What remains to be done is to ensure efficient, effective, and relevant use of increased commune funds13 to improve livelihood outcomes, especially through investment in social infrastructure, enterprise development, and support for community fisheries.
3. The Tonle Sap Initiative14
16. In 2003, the Asian Development Bank (ADB) drafted the Tonle Sap Basin Strategy,15 giving geographical focus to ADB's Country Strategy and Program, 2005–2009. It forms the basis for setting priorities and planning assistance in the Tonle Sap basin over the next 5–10 years. It gives focus and direction to external assistance to the Tonle Sap region (Appendix 2). The Tonle Sap Initiative16 will accomplish the Tonle Sap Basin Strategy through a suite of highly integrated loan, grant, and technical assistance projects. In the Tonle Sap basin, the development objectives are to foster, promote, and facilitate (i) pro-poor, sustainable economic growth, (ii) access to assets, and (iii) management of natural resources and the environment. The strategy is based on three underpinning principles: (i) sustainable livelihoods, (ii) social justice, and (iii) a basin-wide approach. It focuses on two areas: (i) rural development and the environment, and (ii) human development. Its crosscutting themes ensure that attention is paid to vulnerable groups, governance, resource cooperation, and the private sector. The threats to the Tonle Sap must be considered from the perspective of the basin as a whole, but everything
9 The draft Fisheries Law awaits passage in the national assembly. The Council of Ministers expects this to happen before the Cambodia Consultative Group meeting scheduled in December 2005. 10 Decentralization is delegation of political and administrative authority to the commune level. Deconcentration is delegation of administrative authority from central ministries to provincial departments or district offices. 11 Commune councils are required to collect local contributions to cover at least 10% of the cost of their development projects. 12 The Asia Foundation. 2005. Commune Councils in Cambodia: A National Survey on their Functions and Performance, with a Special Focus on Conflict Resolution. Phnom Penh. 13 In practice, own sources of revenue are very limited. 14 The Tonle Sap Initiative is a partnership of organizations and people working to meet the poverty and environment challenges of the Tonle Sap. 15 ADB. 2005. The Tonle Sap Basin Strategy. Manila, and ADB. Various years. Future Solutions Now: The Tonle Sap Initiative. Manila. 16 Details are available at http://www.adb.org/projects/tonle_sap. 5 cannot be tackled at the same time. Therefore, the Tonle Sap Initiative has important tactics: (i) geographical phasing of interventions; (ii) development of the institutional, policy, and regulatory framework; (iii) acquisition and dissemination of knowledge; (iv) enabling of stakeholders; and (vi) forging of partnerships. These should present opportunities to reduce poverty and vulnerability.
17. The Tonle Sap Environmental Management Project (TSEMP)17 was the first intervention. Its outcome is to be enhanced systems and developed capacity for natural resource management coordination and planning, community-based natural resource management, and biodiversity conservation in the TSBR. The Commune Council Development Project is closely allied.18 The present Project will build on both, and on other grant and technical assistance projects of the Tonle Sap Initiative, in harmony with the Government's Rectangular Strategy for Growth, Employment, Equity, and Efficiency.19 Above all, the Project will support community- driven development to bridge the end of the Seila program20 and its assimilation.21
III. THE PROPOSED PROJECT
A. Impact and Outcome
18. The Project will improve livelihoods. It will increase access to assets in the five provinces that adjoin the Tonle Sap (Appendix 3).22 The project area encompasses the buffer zone and core areas. Specifically, it covers 37 communes, comprising 316 villages with a population of 287,430 in 54,857 families. These communes qualify because they pursue livelihood activities in the buffer zone.23
B. Outputs
1. Community-Driven Development Is Supported
19. The purpose of decentralization and deconcentration is to devolve responsibilities, functions, and power to the lowest practicable structural level to deliver demand-driven services
17 ADB. 2002. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Kingdom of Cambodia for the Tonle Sap Environmental Management Project. Manila. 18 ADB. 2002. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Kingdom of Cambodia for the Commune Council Development Project. Manila. 19 The strategy has four goals: (i) economic growth, (ii) employment generation, (iii) improved governance, and (iv) accelerated implementation of reforms in all sectors to reduce poverty and achieve sustainable development. 20 Seila means "foundation stone." It is the name given to the 10-year-old trial approach to decentralized development planning, financing, and implementation. The Seila program's support structures were rolled out to all provinces following the election of commune councils in 2002. The result is a successful system of local government at the commune level. The Seila program will be wound down by the end of 2006. Its support structures are being integrated into those proposed in the Government's strategic framework for decentralization and deconcentration over a period of transition of about 5 years, the most intensive of which are the next 2. 21 The poor are prime actors in the development process, not targets of externally designed poverty reduction efforts. In community-driven development, control of decisions and resources rests with communities. Studies have shown that community-driven development, especially by means of social funds, can increase the relevance, effectiveness, efficiency, and sustainability of projects or programs by making them more pro-poor and responsive to local priorities. The scaling up of such projects or programs, however, hinges on the successful embedding of structures and processes in the country's social fabric. A "learning by doing" culture—one that values adaptation, flexibility, and openness to change—needs to be fostered at all levels. 22 They are Battambang, Kompong Chhnang, Kompong Thom, Pursat, and Siem Reap. 23 Fifty-seven communes have some land in the buffer zone. The 37 target communes are of two types: (i) 21 have villages in the buffer zone, and (ii) 16 have community fisheries and some land area, but no villages, inside the buffer zone. The 20 excluded communes have land but neither villages nor community fisheries in the buffer zone. 6 more equitably, efficiently, and effectively. The first driver of success is availability of finance to the decentralized bodies. This is being achieved by direct transfer of capital from central government to the commune/sangkat fund (C/SF)24 managed by the commune councils. But the amounts involved are small and so, under the Seila program, the C/SF has been augmented by the donor community. The second driver of success is ability to plan and manage disbursement to improve livelihood outcomes.
a. Establish a Community Livelihood Fund
20. The Project will establish a community livelihood fund (CLF) to finance small-scale community-driven activities planned and agreed on at village and commune levels. The CLF will be managed by MOI, and the 37 communes in the project area will be able to access CLF grant funds through their Commune Councils.25 The planning of the activities will follow the procedures of the Commune Development Plan.26 The Project will make allocations from the CLF to 37 individual communal funds. The allocations will be channeled to a commercial bank account for each commune at the district level. Eligible activities will relate to (i) social infrastructure,27 (ii) income-generating activities, and (iii) support for community fisheries. Limits will be set on the allocation to each category (Appendix 4). Community livelihood facilitation teams (CLFTs) will be established in each project province in the office of the governor.28
b. Design and Implement Livelihood Investment Packages
21. The Project will integrate the planning of activities to be funded through the CLF with the established process of village and commune planning. However, village-level planning needs to be supported, particularly in the less familiar income-generating and community fisheries activities, and activities to ensure greater participation of women and the more disadvantaged households. To this end, the Project will assist demand-based organizations including community fisheries in formulating proposals for funding under the CLF. It will also help to form village or commune special interest groups.29 It is accepted that in the first update of the 3-year rolling commune development plans in which the Project will be involved there will be little change particularly in social infrastructure.30 However, at that stage, community fisheries that are being organized under component 2 of the TSEMP may be formulating plans for funding.
22. Village-based proposals will be passed through to the commune councils via the commune planning and budgeting committees (CPBCs) for inclusion in the annual update of the commune development plans. The commune councils may choose specifically to earmark individual items for funding under the CLF; other items may be included with other proposals put
24 Provinces are divided into districts and communes. Municipalities are divided into khan and sangkat. There are now 20 provinces, 4 municipalities, 171 districts, 14 khan, 1,510 communes, and 111 sangkat. The C/SF was established in 2001 to provide Commune/Sangkat Councils with predictable and transparent fiscal transfers for development spending. 25 The range of eligible activities was decided based on participatory rural appraisals during project preparation. 26 The commune development plan is a 3-year rolling plan with annual updates derived from proposals put forward by individual villages working through their representatives on the commune planning and budgeting committees. Individual commune development plans are passed to a district integration workshop at which line agencies, nongovernment organizations, and donors pledge support. Components of the plans that are not adopted will be considered for direct funding through the C/SF. 27 Construction of small piped water supply systems, wells, or intra-village roads may entail minor acquisition of land. A land acquisition and resettlement framework has been prepared to guide planning and implementation. 28 Emphasis will be placed on improving the quality of facilitation services to commune planning. The facilitation will include a discussion of what are, and what are not, pro-poor outcomes. 29 Special interest groups will include women's groups and ethnic minorities. 30 Experience under the Seila program shows that commune development plans tend to focus on this. 7 forward to the district integration workshops and, if not selected for funding through other sources at that forum, would be reconsidered for funding under the CLF.
23. The Project will set guidelines to which all proposals for activities to be funded through the CLF will conform.31 The guidelines will indicate the technical support needed to ensure that activities are properly implemented, and this support will be contracted to government agencies, nongovernment organizations (NGOs), or the private sector. The Project will also contract independent auditors to verify project accounts and financial transactions. Additionally, the provincial offices of economy and finance will audit the CLF each year.
2. Core Areas Are Safeguarded
24. The core areas are reservoirs of natural capital that strengthen the Tonle Sap's resilience in the face of ever-increasing pressures and contribute directly to fisheries productivity. Protecting their functions, products, and attributes will contribute appreciably to sustainable livelihoods. The fishing lots that overlap, sometimes totally, with the core areas provide a degree of protection of sorts but they compromise their conservation function: they maximize the fish harvest and private economic rent with no regard for sustainability.32 Implementing a robust core area management system depends on a solid understanding of the biological functions of the core areas (as well as sanctuaries) in the broader lake ecosystem; the dynamics of resource use and the livelihood strategies of the population of the core areas;33 and an effective management framework for the core areas. DOF endorses the strategy of doing away with fishing lots in the core areas in favor of establishing fish sanctuaries and a management system compatible with biodiversity conservation. The fishing lot licenses in the core areas, which will expire in 2009, will not be extended.
a. Establish an Information Base on Core Areas
25. The Project will (i) review and describe the operations of fishing lots in the core areas, (ii) establish a database of biological and socioeconomic information as a subset of the TSBR environmental information database, and (iii) build the capacity of the TSBR secretariat in the Cambodia National Mekong Committee to manage the information base. b. Institute a Management System for Core Areas
26. The Project will (i) establish the position of core areas coordinator in the TSBR secretariat; (ii) assist the TSBR secretariat to develop, conclude, and implement a management and protection agreement for the core areas between the Cambodia National Mekong Committee, DOF, the Inland Fisheries Research and Development Institute (IFREDI) in DOF, and the Ministry of Environment (MOE); (iii) detail a plan and schedule for the removal of the fishing lots,34 with reference to activities under component 3 of the TSEMP; (iv) select the best way to maximize the conservation of natural resources in the core areas;35 (v) identify all current classes of direct users—seasonal and others—of the core areas and prepare a livelihoods
31 Activities must be demonstrably free of negative effects on the environment and cultural heritage. They must not disadvantage or cause losses to any part of the community. Activities for which there are potentially negative environmental effects may nevertheless be retained subject to the findings of a competent environmental impact assessment. The TSBR secretariat will be the arbiter of such cases. 32 They are lot no. 2 in Prek Toal; lots no. 4, no. 5, and no. 6 around Boeng Tonle Chhmar; and lot no. 1 in Stung Sen. License to exploit these fishing lots until 31 May 2009 has been granted. 33 Only Boeng Tonle Chhmar is populated. In July 2004, it was home to 2,218 people. 34 The mechanism will be applicable to any additional core areas that may be identified. 35 This might include various levels of spatial or temporal restriction of access. 8 development and support plan identifying (a) priority interventions in support of livelihoods for poorer groups that might be affected by the removal of the fishing lots, and (b) activities to embed the protection and management of the core areas in the livelihoods of neighboring communities; (vi) identify and recommend alternative livelihoods for the population of Boeng Tonle Chhmar, whose right of abode is maintained under the Royal Decree on the Establishment and Management of the Tonle Sap Biosphere Reserve,36 and who will be allowed to continue using the natural resources of the core areas in ways that respect the protection objectives of the core areas; (vii) assess, with reference to activities under component 3 of the TSEMP, the operations of the fishing lots and recommend mitigation measures to DOF for immediate action and inclusion in the burden books of the lots; (viii) plan and propose a new management system for core areas, and its monitoring and evaluation; (ix) identify, jointly with DOF, IFREDI, and MOE mechanisms to ensure compliance;37 and (x) propose the incorporation of the additional potential core areas identified under component 3 of the TSEMP.
c. Institute an Improved Network of Fish Sanctuaries
27. The Project will (i) assess the function of fish sanctuaries vis-à-vis fish productivity in the Tonle Sap;38 (ii) determine the optimum number, location, and size of fish sanctuaries; and (iii) formulate recommendations for their use and management.
3. Skills and Awareness for Sustainable Livelihoods are Built
28. Decentralization and deconcentration have boosted local autonomy and participation in national development. Accordingly, the structures supporting this effort—at central, provincial, district, and commune levels—have received considerable assistance. But, given their short history, the impact on improved livelihoods, though encouraging, has been modest: there remains a need to strengthen institutions and processes at all levels. This includes improving cross-sectoral linkages in development planning, building skills for community-driven development, and raising awareness of the need to protect natural resources.
a. Improve Coordination for Community-Driven Development
29. The Project will (i) recommend the institutional arrangements, including the role, functions, terms of reference, structure, budget, and staff complement, that would enable the Council for Agricultural and Rural Development (CARD) to better coordinate with ministries, facilitate policy formulation, and harmonize external assistance for agricultural and rural development, (ii) draw up a work plan and train staff of CARD to update it; and (iii) build the capacity of CARD to complete critical tasks effectively, efficiently, and more inclusively.
b. Enhance the Skills Base for Community-Driven Development
30. The Project will familiarize government institutions at central, provincial, and commune levels with the CLF. This will entail preparing a range of materials for awareness-raising activities covering the objective of the CLF, its scope, and the means of accessing it. The
36 Those measures would be based on a series of stakeholder and community consultations and surveys to identify socially acceptable options and tradeoffs. The consultations would also serve the important function of building legitimacy for the rules once they are implemented. 37 This involves defining the roles of various government and local institutions, and also designing community institutions to enforce measures at the community level. MOE would be the main management authority, and the TSBR Secretariat would approve recommended enforcement mechanisms. 38 The fish sanctuaries referred to are the eight protected areas of the Tonle Sap under the jurisdiction of DOF. 9 principal modes of delivery will be group discussions, workshops, and audio-visual materials.39 A project information center will be set up in each project province.40
31. Staff of the provincial departments of rural development, environment, and women's affairs, and the provincial office of fisheries assigned to the CLFTs or otherwise involved in project implementation will receive formal training in participatory development planning and performance management based on the Project's design and monitoring framework. Staff of the provincial offices of economy and finance will be trained in specific auditing requirements. Training in operations and financial accountability will be given to members of the CPBCs and to the accountants of the commune councils.41 The commune facilitators will be trained in the participatory analysis of livelihood needs and opportunities and the mobilization of communities for deeper involvement in sustainable development planning, implementation, and performance evaluation.
32. Training modules specifying content, inputs, outputs, and costs will be prepared by the CLFTs. Their delivery will be contracted to service providers. The training will develop, within provincial line agency staff, commune councils, and village-level organizations, the ability to conduct inclusive, community-driven development planning.
c. Educate for Protection of Natural Resources
33. The Project will (i) assemble educational materials on natural resource management, including those developed under component 3 of the TSEMP; (ii) hold environmental awareness forums for staff of the Ministry of Agriculture, Forestry, and Fisheries, MOE, Ministry of Rural Development, Ministry of Women's Affairs, their provincial departments, and commune leaders; (iii) prioritize villages according to their potential impact on resource extraction; (iv) assemble, train, and equip a mobile training team to extend environmental awareness in priority villages; (v) deliver the environmental awareness program; and (vi) conduct monitoring and evaluation. The activities will build on achievements under component 1 of the TSEMP, according to the principles developed under an ADB-assisted pilot and demonstration activity.42
C. ADF IX Grant Component 34. As a poor, debt-stressed country, Cambodia is eligible for Asian Development Fund (ADF) grant financing of up to 50% of its ADB lending program, as spelled out in the ADF IX Donors' Report, Development Effectiveness for Poverty Reduction. It is recommended that ADB provide the Project with $15,000,000 grant financing from the ADF IX grant facilities. Special justifications include the Project's close alignment with the Tonle Sap Initiative and the Government's Rectangular Strategy for Growth, Employment, Equity, and Efficiency, as well as the Project's unequivocal intention to harness community-driven development to reduce poverty and vulnerability in one of the poorest regions of Cambodia.
D. Special Features 35. Grassroots Funding. The Project will bridge the gap in access to finance by improving the sectoral allocation and geographic balance of public investment. There is no generic
39 These will include posters and video presentations in the language or dialect of the target audience. Specific information materials will also be prepared for the illiterate and semi-literate. 40 These will normally be included in the office of the CLFTs. 41 Accounting and procurement systems for the CLF will be formulated at the start of project implementation. 42 ADB. 2003. Technical Assistance for Promoting Effective Water Management Policies and Practices III: Developing and Testing Methodologies and Tools for Environmental Education and Awareness. Manila. 10 solution to rural development: the process must be locally specific and responsive to conditions and circumstances; it must also maximize local participation. The concept of rural amenities provides the overarching perspective necessary for this.
36. Environmental Governance. The Project will help the Government to make a stand on environmental governance. The removal of fishing lots from the core areas would signify the Government's intention to meet the obligations that are embodied in treaties and conventions,43 and work toward the goals of the Seville Strategy for Biosphere Reserves, 1995.44
E. Cost Estimates 37. The total project cost, including contingencies, taxes, and duties, is estimated at $20.3 million equivalent. The foreign exchange cost is estimated at $6.9 million, or 34% of the total project cost. The local currency cost including taxes is $13.4 million, or 66% of the total project cost. Cost estimates are in Table 1.
Table 1: Project Cost Summary by Output ($ million)
Foreign Local Total Output Exchange Currency Cost A. Base Costs 1. Community-Driven Development Is Supported 5.67 11.83 17.50 2. Core Areas Are Safeguarded 0.48 0.29 0.77 3. Skills and Awareness for Sustainable Livelihoods Are Built 0.51 0.72 1.23 Subtotal (A) 6.67 12.84 19.51 B. Contingencies 1. Physical Contingenciesa 0.03 0.14 0.18 2. Price Contingenciesb 0.20 0.46 0.66 Subtotal (B) 0.23 0.60 0.83 Total 6.90 13.44 20.34 a Based on 5% for all costs except for civil works (10%). b Based on annual escalation factors. Source: Asian Development Bank estimates.
F. Financing Plan
38. It is proposed that ADB provide a grant of $15,000,000 equivalent to finance 58% of the foreign exchange cost of the Project amounting to $4.0 million, and 82% of the local cost, amounting to $11.0 million.45 The Government of Finland is expected to provide about $4,738,000 grant financing to cover the cost of consulting services and independent external auditors. The Government of Cambodia will contribute $600,000, or 3% of the total project cost, from local sources (Appendix 5). The financing plan is in Table 2.
43 Cambodia's obligations vis-à-vis the Tonle Sap are embodied in more than 10 treaties and conventions. These include the Convention on Wetlands of International Importance especially as Waterfowl Habitat (the Ramsar Convention), 1971; the Convention on International Trade in Endangered Species of Wild Fauna and Flora, 1979; and the Convention on Biological Diversity, 1992. One of the core areas of the TSBR, Boeng Tonle Chhmar, was designated as one of the country's three Ramsar sites in 1999. 44 The goals of the Seville Strategy for Biosphere Reserves are to (i) use biosphere reserves to conserve natural and cultural diversity; (ii) use biosphere reserves as models of land management and of approaches to sustainable development; (iii) use biosphere reserves for research, monitoring, education, and training; and (iv) implement the biosphere reserve concept. 45 The allocation of grant proceeds in the Grant Agreement will be presented in US dollars, with reference only to total expenditure, in accordance with the policy on Cost Sharing and Eligibility of Expenditures for Asian Development Bank Financing: A New Approach. 11
Table 2: Financing Plan ($ million)
Foreign Local Total Source % Exchange Currency Cost Asian Development Bank 4.0 11.0 15.0 74 Government of Finland 2.8 1.9 4.7 23 Government of Cambodia 0.1 0.5 0.6 3 Total 6.9 13.4 20.3 100 Source: Asian Development Bank estimates.
G. Implementation Arrangements
1. Project Management
39. The Ministry of Interior (MOI) will act as Executing Agency (Appendix 6).46 In the context of decentralization and deconcentration,47 MOI has been tasked with building the central and local institutions that will support the operation of the entire sub-national system of governance and implementing the related capacity-building effort. While the Project will be executed predominantly at the commune level and rely on the decentralized structures strengthened under the Seila program, at the central level MOI plays a leading role in decentralization. MOI's main functions will be setting overall project direction, resolving implementation problems, reviewing project progress and performance against milestones (with reporting every 6 months), ensuring flow of funds to the communes48 and timely and adequate counterpart funding by the Government, and carrying out certain procurement under outputs 1 and 3.
40. The Ministry of Economy and Finance (MEF) will assist MOI in the smooth transfer of funds from the central to the commune levels. MEF has already created a local finance department to provide assistance and monitor the performance of sub-national administrations in the management of local finances. The Project will assign a domestic consultant to strengthen its operations. MEF also led the task force that drafted guidelines, standard operating procedures, and detailed instructions for financial management and procurement under donor-assisted projects.49 These guidelines, procedures, and instructions are expected to be formally approved by the Government in 2005, and the Project will provide an opportunity to apply them on a limited basis.
41. CARD, through its secretary general, will head a project steering committee established to provide policy and strategy guidance.50 CARD will also communicate project outcomes to the Council of Ministers. The steering committee will meet at least twice a year. An international consultant will assist CARD intermittently.
46 MOI is the Executing Agency for the Commune Council Development Project. 47 Royal Government of Cambodia. 2005. Strategic Framework for Decentralization and Deconcentration Reforms. Phnom Penh. 48 First- and second-generation imprest accounts will be opened at the central level for this purpose (see Disbursement Arrangements section below). 49 This reflects the commitment made by Cambodia to implement the "Declaration by the Royal Government of Cambodia and Development Partners on Harmonization and Alignment" (December 2004), and thereby improve the management of external assistance. 50 The project steering committee will include the Cambodia National Mekong Committee, the Ministry of Agriculture, Forestry, and Fisheries, MEF, MOE, MOI, the Ministry of Rural Development, and the Ministry of Women's Affairs. Other ministries can join upon request. 12
42. MOI will also be the Implementing Agency for output 1. The commune-level committees and working bodies that were strengthened under the Seila program have been enshrined in legislation but many institutional structures at the central, provincial, and district levels are to be reconfigured in a further phase of structural change itemized in the Government's strategic framework for decentralization and deconcentration.51 Importantly, the Government is drafting an Organic Law on Deconcentration to introduce decentralized governance structures at provincial and district levels (dovetailing with those created at commune level), streamline relations between government agencies at the central and provincial levels (now clouded by overlapping responsibilities and a mix of centralized, decentralized, and deconcentrated features), and devolve own-resource financing to sub-national levels. By February 2007, when the next commune elections take place, a successor to the Seila task force secretariat will be operational. Meanwhile, the existing institutions will continue to function, perhaps with different titles, and their roles will eventually be integrated into new structures developed according to the strategic framework.52 The Project will therefore work through the existing institutional arrangements but with such management and organizational flexibility that its structures and processes can evolve and blend with those of the anticipated new administrative structures.53 As an important move toward implementing the recommendations in the strategic framework, the Project will set up commune bank accounts as the vehicle for moving funds to the communes. The provincial local administration units in MOI's department of local administration will oversee the CLFTs.
43. The TSBR secretariat, in close consultation with DOF, IFREDI, and MOE, will be the Implementing Agency to accomplish output 2. The long-awaited sub-decree on community fisheries management was approved on 20 May 2005, and the draft Fisheries Law is also expected to be ratified by the national assembly before December 2005. The Government intends to reinforce its commitment to the edicts of biosphere reserve zoning. Critical to this is stopping the operations of fishing lots in the core areas once a management system compatible with biodiversity conservation has been instituted.
44. The activities for output 3 have been composed to promote the rapid accomplishment of output 1. CARD will equip itself to improve coordination for community-driven development. Given its important and increasing role in the implementation of local development planning through decentralized and deconcentrated agencies, MOI will also act as Implementing Agency in enhancing the skills base for community-driven development. MOE will act as Implementing Agency in educating for the protection of natural resources.
45. The CLFTs will oversee the implementation of livelihood support at commune and village levels. Each CLFT will be headed by the chief of the provincial local administration unit and will have a permanent administration and a representative from each of the provincial departments of rural development, environment, and women's affairs, and the provincial office of fisheries. It will also include commune facilitators,54 posted in each commune,55 to assist communities in (i) identifying activities suitable for funding under the CLF,56 and (ii) preparing the activities for
51 The strategic framework was expected to be approved by the Council of Ministers in August 2005. 52 The new decentralization and deconcentration systems and processes will be introduced in two phases: a transitional phase of 2 years (2006–2007) and a consolidation phase of 3 years (2008–2010). 53 Retaining CLFT staff in the new structures would further guarantee sustainability. 54 Commune facilitators were created under the Seila program (some 800 have been appointed in 24 provinces) to assist commune councils in planning and to monitor the implementation of works. 55 An additional 74 commune facilitators (48 for Battambang, Kompong Chhnang, and Pursat; and 26 for Siem Reap and Kompong Thom) will be selected and appointed. Each commune will be represented by two facilitators. 56 The CLFTs will take the opportunity to promulgate the technical packages based on sustainable natural resource management that are being designed under component 2 of the TSEMP. 13 submission to the CPBC.57 Additionally, the Project will attach to each CLFT domestic consultants responsible for guiding, training,58 fielding, and supporting the line agency staff and commune facilitators in the performance of their duties. An international consultant to be based in each of the CLFTs in Pursat and Siem Reap will manage and coordinate CLF implementation.59 The CLFTs will approve the activities, monitor procurement by the commune councils, and report on CLF-related activities to MOI through the provincial local administration units.
2. Implementation Period
46. The Project will span 4 years (Appendix 7). All project activities are expected to be fully completed within this time. But much will depend on a speedy start-up to output 1. During the first 6 months there will be an intensive effort to build skills and awareness for sustainable livelihoods. In each commune, information dissemination workshops will be held and awareness-raising materials (e.g., pamphlets, posters, and samples of activity proposals) in the Khmer language will be distributed to villages through their CPBC representatives. Commune facilitators60 will be recruited, and a first round of priority activities61 for funding under the CLF will be identified in consultation with the CPBCs. Activities will be screened by the consultants to eliminate any that are unsuitable, and a combined list will be submitted to the commune councils for approval. Detailed designs, cost estimates, business plans, and implementation arrangements will be prepared for approved activities, and then contracts for their implementation will be prepared and awarded.62 The consultants will use this first cycle to provide direct, hands-on training to the commune facilitators and other agents (e.g., village representatives, administrative staff of commune councils, and CPBC members) in identifying, screening, designing, and implementing activities under the CLF. Adherence to this plan of action should ensure that later activities for output 1 proceed smoothly. The accomplishment of outputs 2 and 3 is not expected to present difficulties.
3. Procurement
47. Civil works, goods, and related services will be procured in accordance with ADB's Guidelines for Procurement. Civil works for output 1, such as water supply and sanitation, schools, and small village works, that cost less than $500,000 will be procured through local competitive bidding procedures acceptable to ADB. Their small and scattered nature is not likely to attract international bidders. Vehicles, machinery, and office equipment will be procured through international shopping if the cost per package is from $100,000 to $500,000, and through local competitive bidding if the cost is less than $100,000. Goods with a value of less than $50,000 can be purchased directly. Service contracts may be given to NGOs. The commune councils, through the bidding committee, will procure civil works, goods, and related services for eligible activities. Details of procurement packages will be determined during project implementation. The training packages under output 3 will be procured by MOI.
57 The commune facilitators will have extensive experience in facilitation, including presenting, synthesizing, and responding to organizational issues raised. 58 Training will focus on awareness raising, group formation, planning, coordination, quality assurance, and reporting. 59 Pursat has 13, Siem Reap 10, Battambang 8, Kompong Chhnang 3, and Kompong Thom 3 target communes. 60 The long list of candidates will be drawn up by the commune councils based on criteria agreed with CPBCs and line agency staff assigned to the CLFTs. 61 Most of the activities are expected to be drawn from existing commune development plans—those that were not funded in the current development budget or multi-year plans. 62 The Project will aim to complete these operations in time for the communes to receive the CLF funds together with the development funds, which are released each February by the national treasury. 14
4. Consulting Services
48. The Project will require 841 person-months of consulting services—708 person-months by domestic consultants and 133 person-months by international consultants (Appendix 8). The consultants will be selected and engaged according to ADB's Guidelines on the Use of Consultants and other arrangements satisfactory to ADB for the selection and engagement of domestic consultants. In view of its experience, capacity, and commitment, the WorldFish Center of the Consultative Group on International Agricultural Research will be appointed by direct selection for output 2.63 Live and Learn Environmental Education64 will be appointed by direct selection for the activities in output 3 that relate to education for the protection of natural resources. ADB's quality- and cost-based selection method will be used in recruiting all other consultants. Two international consultants and 20 domestic consultants will be based in the project provinces. A team of international and domestic consultants will be attached to MOI's department of local administration65 in Phnom Penh.
5. Disbursement Arrangements
49. The Government will open a first-generation imprest account at the National Bank of Cambodia into which grant funds from ADB will be deposited. The amount to be deposited into the first-generation imprest account will not exceed the equivalent of $1 million. A second- generation imprest account will be established in the name of MOI in a commercial bank, acceptable to the Government and ADB, for the purpose of replenishing and liquidating the CLF and for other activities under the Project. The ceiling of the second-generation imprest account will not exceed $500,000. ADB's statement-of-expenditures procedure will be used to reimburse eligible expenditures and to liquidate advances to the imprest accounts. The ceiling on the statement of expenditure is $100,000 per payment. The first- and second-generation imprest accounts will be established, managed, replenished, and liquidated according to ADB's Loan Disbursement Handbook of January 2001, as amended from time to time, and detailed arrangements agreed upon between the Government and ADB. The CLF grant funds will be transferred from the second-generation imprest account to the account of each of the 37 commune councils at a commercial bank acceptable to ADB and MOI (Appendix 9).
6. Accounting, Auditing, and Reporting
50. MEF, MOE, MOI, the TSBR secretariat, and the CLFTs will maintain separate accounts strictly for the Project. The CLFTs will maintain ongoing and up-to-date accounts for the Project according to sound and acceptable accounting principles and will submit quarterly reports to MOI through the provincial local administration units. The CLFTs will use the financial management procedures in the Financial Management Manual and its supplement.66 MOI will prepare an annual financial report on the Project's accounts and submit it to MEF and ADB. The imprest accounts and statement of expenditures will be audited as part of the regular audit of
63 The WorldFish Center works on inland and marine fisheries in developing countries. It has existing collaboration arrangements with DOF on issues dealing with institutional frameworks, livelihood analysis, and economic valuation. It has just opened a regional center in Phnom Penh. 64 Live and Learn Environmental Education is a regional nongovernment organization specializing in environmental education. It works with poverty-stricken communities to develop community-based problem-solving models and with government to integrate these models into national curricula and education strategies. It has been tasked with delivering the national environmental education and awareness campaign under component 1 of the TSEMP. 65 A project manager no lower in rank than a director will serve full time throughout the Project. 66 ADB and World Bank. 2005. Financial Management Manual for Investment Projects Financed by ADB and the World Bank. Manila. Also relevant here is the Manual on Operating Procedures for Externally Assisted Projects Under the Purview of the Ministry of Economy and Finance (undated). Manila. 15 the Project's accounts and financial statements, and audit opinions on the imprest account and statement of expenditures will be set out separately according to ADB procedures. The Project's accounts will be audited each year by independent external auditors acceptable to ADB. The audited accounts, together with the auditor's report, will be submitted to ADB not more than 6 months after each financial year. MOI's decision in June 2005 to establish provincial and municipal C/SF accountability working groups is also expected to promote the transparent, accountable, and effective use and implementation of the CLF. The annual audit report should specify the auditor's opinion on the imprest accounts and statement of expenditures.
7. Anticorruption Measures
51. ADB's Anticorruption Policy was explained to and discussed with the Government. Consistent with its commitment to good governance, accountability, and transparency, ADB reserves the right to investigate, directly or through its agents, any alleged corrupt, fraudulent collusive or coercive practices relating to the Project. To support these efforts, relevant provisions of ADB's Anticorruption Policy are included in the Loan Regulations and the bidding documents for the Project. In particular, all contracts financed by ADB in connection with the Project will include provisions specifying the right of ADB to audit and examine the records and accounts of the Executing Agency and all contractors, suppliers, consultants, and other service providers as they relate to the Project.
8. Project Performance Monitoring and Evaluation
52. Project performance monitoring and evaluation will be based on the design and monitoring framework and the baseline surveys specified in it, as set out in Appendix 3. Monitoring will also be undertaken by the Executing Agency as part of the standard procedures required by ADB through the disbursement of funds and the semiannual and annual reporting. The Implementing Agencies will be responsible for providing the Executing Agency with quarterly progress reports on their respective outputs.
9. Project Review
53. ADB will conduct semiannual reviews facilitated by CARD. The reviews will (i) examine the appropriateness of implementation arrangements and schedules of activities, (ii) assess the procedures for village and commune development plans, (iii) review compliance with agreed procurement procedures, (iv) analyze the outcomes of the capacity-building and training programs, and (v) monitor, in consultation with the TSBR secretariat, the effectiveness of safeguard procedures. At mid-term, a comprehensive project review will be jointly undertaken by ADB and the Government. Within 3 months of project completion, MOI will submit to ADB a project completion report in the standard ADB format.
10. Gender Action Plan
54. The analyses conducted during project preparation confirmed gender inequality and the particular vulnerability of women, especially those who head households.67 Women have few opportunities to take action because of traditional gender roles in Khmer society.68 Thus, they
67 Women-headed households constitute about 25% of all households in the project area. 68 Issues raised by women included (i) high levels of indebtedness, (ii) lack of technical know-how for livestock raising, (iii) the passive roles expected of them in community decision-making meetings, (iv) lack of educational opportunities for the children of poor households, (v) heavy workloads for women heads of households, (vi) child labor especially among children of poor households, (vii) lack of maternal and child health facilities, (viii) lack of 16 are poorly represented in community decision-making bodies, have low social status, and lack equal access to and control over livelihood assets—all the factors that define livelihood outcomes. The Project will seek to counter these constraints by promoting community-driven development. A gender action plan lays out the strategy that will achieve this, which is one of supporting women's claim to effective participation (Appendix 10).
IV. PROJECT BENEFITS, IMPACTS, ASSUMPTIONS, AND RISKS
A. Benefits and Impacts
55. Environmental. The Project will generate substantial environmental benefits. (i) Sustainable livelihoods. Investing in livelihoods will mitigate threats to the Tonle Sap. Inadequate access to assets and associated activities for short-term gain degrade the ecosystem. (ii) Core areas. Safeguarding the core areas will conserve the globally significant, high concentrations of biodiversity within species, between species, and of ecosystems. It will also contribute to maintaining fish populations and the productive fisheries of the Tonle Sap. (iii) Environmental education and awareness. Better awareness of the value of the environment and how certain activities undermine it will foster behavioral change.
56. Institutional. The Project will boost decentralization and deconcentration. (i) Incentives. The Project will provide institutional incentives to address policy and institutional failures that constrain livelihood outcomes. These incentives derive from the changing of fishing rights, the empowerment of local social capital through decentralized planning, and horizontal coordination. Natural resource management will become more efficient as transaction and management costs are lowered and more decisions are made at the local level. The benefits from institutionalizing these changes will be reflected in greater stakeholder access to resources, services, and information through which communities can retain a greater share of market value. The institutionalization of these incentives, along with new mechanisms for horizontal and vertical interaction, will contribute to the emergence of policy, legal, and organizational structures that support conservation and improved livelihood outcomes. The incentives and increased empowerment of stakeholders in the longer term will increasingly define a management system compatible with biodiversity conservation. (ii) Self-reliance. Focusing on communes and devolving decision making and financial control to that level will encourage self-reliance. Benefits will include enhanced capacity, at village and commune level, to prepare, manage, and implement development plans, as well as monitor and evaluate results. Training in the establishment, orientation, and operation of activity groups will support this. (iii) Service delivery. Decentralizing and deconcentrating will lead to more specific requests for service delivery. Building capacity at the provincial level will assist line agencies in meeting such demands.
potable water, (ix) poor sanitation, (x) domestic violence, and (xi) limited opportunities for improved livelihoods. Khmer tradition does not favor women speaking out in public. As a result, women tend to agree with proposals put across by male-dominated commune councils and male commune chiefs. 17
57. Human and Social. The Project will raise human and social capital. (i) Collective action. Increasing the stock of active connections among people— trust, mutual understanding, and shared values and behaviors—will bind communities and make cooperative action possible. Cambodians hold social capital in high regard, irrespective of income level, gender, or ethnicity. (ii) Gender. Helping women to organize and develop their capacity for informed representation and participation in an expanded community-based planning and decision-making framework will give them fairer access to assets. (iii) Social infrastructure. Investing in basic infrastructure such as water supply and sanitation, waste management facilities, clinics, and schools will improve the health and well-being of all members of a community. Lack of basic infrastructure is considered a core dimension of poverty. (iv) Ethnic minorities. The Project will give ethnic minorities equal opportunities to participate. Built-in design features exist to meet their needs and demonstrable benefit to ethnic minorities is a criterion for activities eligible for funding under the CLF (Appendix 11).
58. Economic and Financial. The project benefits are (i) improved rural livelihoods that contribute to sustainable management of the Tonle Sap, and (ii) better governance and provision of incentives that encourage institutional innovation. The funding of priority commune development plans leaves investment decisions with the mandated commune councils and as such the investment is programmatic. The analysis of economic benefits uses an assumed investment package based on indicative models derived from analyses conducted during project preparation.69 Actual packages will vary with emphasis on those that (i) enhance local access to assets through income-generating activities and increased value addition and capture; (ii) reduce vulnerability and risks by providing social infrastructure such as water supply and sanitation, waste management facilities, clinics, and schools; and (iii) expand opportunities for livelihood improvement through better access to markets, services, technology, and information.
59. Two infrastructure models were used for the economic assessment: (i) Introducing small-scale domestic water supply by providing wells and pumps for groups of households (30 households representing 165 individuals). The investment will reduce water collection time (by 66%), and the incidence of illnesses (by 30%), and the number of productive days lost. The expected benefits from reducing health expenditure (now 11% of household expenditure) and social distress (45% of households now have to borrow for health-care treatment) have not been quantified. (ii) Providing fish marketing infrastructure for each group of 20 households. This is predicted to reduce post-harvest losses, which now amount to 2% of total sales, and increase value by 3% by better preserving fish for market.
60. Four income-generating activity models were used to assess the feasibility of income- generating activities:
69 These analyses developed a wide range of models that were simplified during grant fact-finding to reflect the programmatic nature of the funding arrangement. The actual investments will vary significantly by locale. The purpose of the assessment is to indicate the feasibility of the overall investment: it does not seek to validate individual pre-specified investments. 18
(i) Fattening pigs on boats or floating platforms. This model assumes production to be fully incremental. It involves the yearly purchase of three piglets, that are fattened over 9 months to a final weight of 70 kilograms. The model assumes a 10% death rate and use of unimproved local breeds.70 (ii) Introducing micro irrigation schemes to garden and cropping areas. The irrigation systems will replace hand watering, saving an assumed labor input of 10% and resulting in a 30% yield increase. Cropping intensity does not increase and other inputs remain the same as the model assumes that agrochemicals and fertilizers are not included in the model as they are not eligible for investment funds. (iii) Introducing improved fish smoking technology using a low technology upgrade of existing systems. The model involves limited investment and is based at the household level. The benefits are based on a 20% saving in labor input, reduced fuel wood demand of 23%, and a 5% increase in value addition. (iv) Providing improved fish drying technology to add value to excess and lower quality catch. Groups of 10 households will introduce improved drying racks that will reduce fish drying losses by 2%, add value by 5%, and through the process of group formation bulk-purchase salt for a 10% discount. A 10% increase in labor input is assumed necessary for the handling of bulk salt, additional fish, etc.
61. The financial feasibility of the models, and hence their contribution to household cash flow as a measure of the likelihood of the households' participation, was assessed. The financial assessment, on a "with project" and "without project" basis, indicates significant financial benefits ranging from KR2,400 to more than KR6,000 per day, compared with an imputed daily wage rate of KR3,600. Given the high levels of underemployment in the country, these returns are expected to attract the participation of the target beneficiaries. In all, about 250,000 beneficiaries will be directly involved in the Project. Of these, 100,000 will benefit from income- generating activities, and 150,000—possibly more if public goods such as school classrooms are provided—will benefit directly from social infrastructure.
62. The annual incremental output of the indicative models amounts to (i) 500 tons of live- weight pigs from 2,448 enterprises, (ii) 350 tons of irrigated garden crops from 2,448 gardens, (iii) 70,000 tons of fish with an increased value of about 7% from fish smoking and drying, (iv) about 5,000 tons less in post-harvest losses because of improved drying and market infrastructure, (v) 4,723 water supply systems, and (vi) 610 community-based markets.
63. The economic internal rate of return (EIRR) for the individual models range from 42% to more than 200%.71 The overall EIRR is 24% for the base case, representing a return well above the opportunity cost of capital (12%). Sensitivity tests indicate that the Project is robust: large changes are required to reach the switching points. Details are in Table 3.
70 The Project will make use of information from ADB. 2005. Grant Assistance to the Kingdom of Cambodia for Improving the Access of Poor Floating Communities on the Tonle Sap to Social Infrastructure and Livelihood Activities (Financed by the Japan Fund for Poverty Reduction. Manila. (JFPR 9064–CAM). 71 Although high, these EIRRs reflect the small-scale nature of the investments. They are also consistent with the World Bank's assessment of small-scale rural infrastructure under the Seila program. 19
Table 3: Economic Analysis and Sensitivity Tests
Description EIRR Base case 24% Sensitivity tests - Project costs up 20% 21% - Net benefit streams down 20% 20% - Net benefit streams down 50% 15% Switching values @ 12% (opportunity cost of capital) - Net benefit streams down 59% - Project costs up 146% EIRR = economic internal rate of return. Source: Asian Development Bank estimates.
B. Risks
64. Environmental Impact. The initial environmental examination finalized during grant fact-finding concluded that the Project would have no negative impacts on the environment. Quite the reverse, it will contribute significantly to sound management of natural resources and the environment. Still, because it will precipitate the removal of fishing lots from the core areas, It will be vital to have a management system in place when this happens to prevent uncontrolled exploitation. The service provider that will design it will be fielded well in advance.
65. Corruption. The Seila program has experienced abuses and corruption and it is necessary to build confidence in the integrity of financial management. The fund flow mechanism and procedures for the CLF, as well as the guidance that the Project provides for implementing small projects with community participation, will minimize the possibility of monies being misappropriated.72
V. ASSURANCES
A. Specific Assurances
66. In addition to the standard assurances, the Government and MOI have given the following assurances, which will be incorporated in the legal documents: (i) The Government will provide counterpart funds for project implementation on time. It will make timely submission of annual budgetary appropriation request and ensure prompt disbursement of appropriated funds during each year of project implementation. (ii) The Government will ensure the smooth flow of funds from central level to the project provinces and the commune level. (iii) The Government and MOI will ensure that the CLFTs are established in the project provinces to oversee the implementation of the activities funded under the CLF. The Government and MOI will also ensure that the CLF is established within 3 months following the grant effective date. The CLF will only be used to finance small-scale community-driven activities that are planned and agreed at village and commune levels relating to (a) social infrastructure, (b) income generation, and (c) community fisheries in accordance with Appendix 4 of this report.
72 The guidance proffered includes (i) a sample questionnaire for community participation in the construction of school buildings, (ii) a draft agreement for community participation in the construction of school buildings, (iii) a draft contract for civil works, and (iv) sample selection criteria for NGOs. 20
(iv) To ensure the smooth transfer of the CLF grant funds to each of the 37 communes, immediately upon the establishment of the CLF, each of the commune councils will establish a bank account at a commercial bank acceptable to ADB. (v) The Government and MOI will ensure that only investment packages meeting the eligibility criteria for CLF activities set out in Table A4.1 of Appendix 4 of this report receive funding under the CLF. (vi) The Government and MOI will ensure that each of the communes implementing activities funded under the CLF is responsible for adhering to the Government's environmental laws and regulations, and ADB's Environment Policy (2002), and making certain that best environmental practices are incorporated into all activities and their implementation. Further, the Government will ensure that each of the communes meets the environmental assessment review procedures described in the initial environmental examination. (vii) The Government and MOI will ensure and will cause the communes to ensure that, prior to the award of civil works contracts, it will screen for involuntary resettlement effects to make certain that there are no losses of land, income, housing, community facilities, and resources that would require compensation to be paid in accordance with ADB's Policy on Involuntary Resettlement (1995). In the event land acquisition and resettlement is required for any activities or projects funded under the CLF, such land acquisition and resettlement will be carried out in accordance with the land acquisition and resettlement framework. (viii) The Government and MOI will ensure that the village or commune special interest groups established under the Project in each of the project provinces will include women's groups and ethnic minorities. There will be no ethnic discrimination and equal opportunities will be provided to all minorities. (ix) The Government will ensure that the Project is implemented in accordance with ADB's Policy on Gender and Development (2003) and the agreed gender action plan as set out in Appendix 10 of this report.
B. Conditions for Grant Effectiveness 67. Prior to grant effectiveness, a project steering committee headed by the secretary general of CARD will have been established and all necessary staff with qualifications acceptable to ADB will have been appointed.
VI. RECOMMENDATION 68. I am satisfied that the proposed grant would comply with the Articles of Agreement of the Asian Development Bank (ADB) and, acting in the absence of the President, under the provisions of Article 35.1 of the Articles of Agreement of ADB, I recommend that the Board approve: (i) the grant not exceeding the equivalent of $15,000,000 to the Kingdom of Cambodia, from ADB's Special Funds resources, for the Tonle Sap Sustainable Livelihoods Project, on terms and conditions substantially in accordance with those set forth in the draft Grant Agreement presented to the Board; and (ii) the administration by ADB of financing not exceeding the equivalent of $ 4,738,000 to the Kingdom of Cambodia to be provided by the Government of Finland on a grant basis.
Joseph B. Eichenberger 23 November 2005 Vice President Operations 2 Appendix 1 21
SECTOR ANALYSIS
A. The Tonle Sap in Transition
1. Population and development pressures are taking their toll and the Tonle Sap is in crisis. So too are those who live from it. Threats include overexploitation of fisheries and wildlife resources, encroachment during the dry season, and cutting of the flooded forest, leading to severe and rising levels of poverty and a pending environmental disaster. In the lakeside provinces of Battambang, Kompong Chhnang, Kompong Thom, Pursat, and Siem Reap about 38% of the population falls under the official poverty line, the highest proportion in the country. Ominously, 50% of villages have 40–60% of households living below the poverty line, with a peak of 80% in parts of Siem Reap and Kompong Chhnang.
B. The Sustainable Livelihoods Framework
2. A livelihood comprises the capabilities, assets, and activities required for a means of living. A livelihood is deemed sustainable when it can cope with and recover from stresses and shocks and maintain or enhance its capabilities, assets, and activities both now and in the future, while not undermining the natural resource base. Sustainable livelihood approaches are based on evolving thinking about poverty reduction, the way the poor and vulnerable live their lives, and the importance of structural and institutional issues. They suggest development activities that are people-centered, responsive and participatory, multilevel, conducted in partnership with both the public and private sectors, dynamic, and sustainable.
3. Sustainable livelihood approaches facilitate the identification of practical priorities for actions that are based on the views and interests of those concerned, but they are not a panacea. They do not replace other tools such as sector-wide approaches and integrated rural development. However, they make the connection between people and the overall enabling environment that influences the outcomes of livelihood strategies. They bring attention to bear on the inherent potential of people in terms of their skills, social networks, access to physical and financial resources, and ability to influence core institutions.
4. From April to July 2004, a project preparatory survey was conducted in 32 communes within 11 districts of the five provinces that adjoin the Tonle Sap. More than 673 people (including 318 women, 25 ethnic Vietnamese, and 48 ethnic Cham) participated. New and different images of each community were revealed. Entry points for sustainable livelihoods were developed. The survey was termed purposive participatory rural appraisal because of the emphasis placed on strengths rather than on weaknesses, and the desire to look to the future in terms of those strengths.
C. Livelihood Assets
5. Human Capital. Why couldn't they—whose ancestors built the temples of Angkor—now make their communities better places in which to live? Survey participants asked this of themselves. They once caught plentiful fish, gathered as many non-timber forest products as they needed and, in most years, grew enough rice to feed all households. Food security was never an issue. The feeling that the world had become too complex for them to understand was challenged by their recognition that the lives of their ancestors were also not without great challenges.
22 Appendix 1
6. Thankfully, there is still considerable human capital in the Tonle Sap region. Communities still have enviable skills, knowledge, and ability. But they now find that these do not equip them sufficiently to meet rapidly changing needs. Access to radio and television is a daily reminder that they must have more advanced education and training. Survey participants recognized that their human capital deficits relate to how to: add value to fishery products; conduct small-scale livestock raising and fish-cage culture, access potable water, and reconcile immediate consumption with sustainable use of natural resources.
7. Social Capital. Cambodians hold social capital in high regard, irrespective of income level, gender, or ethnicity. All prefer to rely on their community than to seek assistance elsewhere. And, notwithstanding distress sales of livelihood assets, no one wants to see fellow villagers suffer unduly.
8. Networks and connectedness, membership in more formalized groups, and relationships of trust, reciprocity, and exchanges determine how people can work together in pursuit of livelihood outcomes. Communities know of prohibitions against the use of illegal fishing gears. They look for the structures and processes that would enable them to abide by or enforce regulations.
9. Vertical patronage networks exist. They include food-for-work programs to construct or rehabilitate irrigation canals, intravillage roads, school buildings, and health centers. Increasingly, such networks involve political support to patrons who are elected to the national assembly. These patron-client relationships often appear to be a more dominant force than the rule of law. Patronage is also provided to individual households in the form of emergency assistance after house fires or crop failures.
10. Households routinely participate in reciprocal labor exchange to transplant and harvest paddy, women band together to collect non-timber forest products from the flooded forest, and entire villages move to catch fish during the dry season. New horizontal networks in the form of village development committees have also emerged. In some communities they have created an enabling environment for women to be heard. In others, they operate at non-village level through their commune council to generate or ratify development activities.
11. Why then do the poor and vulnerable end up on the streets of Phnom Penh? Initially, survey participants affirmed that they had little social capital at their disposal. Yet, as the survey progressed, they began to discuss possibilities for establishing small-scale savings and credit groups. They recognized that establishing such groups was not so different from the vertical and horizontal networks that provide safety nets.
12. The communities of the Tonle Sap region have far to go before they can enjoy the kinds of livelihood outcomes that they had in the past. They welcome lessons from elsewhere but expect outside experts to demonstrate intimate knowledge of social networks in Cambodia before they make recommendations. Those who disparage this point deepen dependency.
13. Natural Capital. Apart from the abundance of fish in the Tonle Sap—which makes it the most productive freshwater-capture fisheries in the world—the flooded areas are rich in natural assets that, if properly managed, can provide sustainable livelihoods for all. The flooded forest can supply building materials and fuel wood, as well as a wide range of non-timber forest products, to which value can be added. The flooded areas and the receding floods provide fertile paddy fields within which there is also a rich harvest of fish, crabs, frogs, snails, ants, herbs, and plants to supplement the diet. Appendix 1 23
14. But evidence points to a grim future. Average fish catches are smaller, the share of larger species in the total catch volume is in sharp decline, and the catch of medium-sized fish is showing a decrease. In 2004, the fish catch dropped to 250,000 tons from vertiginous peaks of 300,000–400,000 tons in recent years. And the flooded forest, which stimulates fish reproduction, shows unabated and dramatic decline. It originally extended over 1 million hectares. By the 1960s, this area had been cut to about 614,000 hectares. In 1991, the flooded forest was estimated at 362,000 hectares. Land use data now suggest that only 20,000 hectares remain.
15. Commercial fishing lots claim significant areas of the lake. Although these are now subject to reforms, there is dismay at how long these have been going on or indeed whether change will occur at all. Survey participants, except those involved in fishing lots operations or seasonal construction, declared that abolishing the lots would improve their livelihoods.
16. Communities should be supported in their claim to greater ownership of natural resources that are critical to livelihoods. Attempts to help establish community fisheries and community forestry organizations are a step in the right direction, but these alone are not sufficient. Such organizations are now under-resourced—often lacking basic equipment such as boats and motorcycles—and not all community members have been encouraged to participate actively. There is also a need for practical community-based management guidelines and for supportive legislation.
17. In the first stages of the survey, especially at predominantly Khmer locations, participants blamed everyone but fellow villagers for the decline in fisheries. The ethnic Vietnamese were often the focus of this blame (although not in non-fishing villages), as were larger-scale, non-community-based fishers and executive agency officials. Yet there was some concession that not all ethnic Vietnamese—especially long-term residents—seek to overexploit fishing resources. At the end of the survey, Khmer fishers admitted that members of their own communities do use illegal fishing gears or engage in destructive fishing practices using explosives, poisons, and electro-fishing. They claimed that they had no choice.
18. Survey participants from non-fishing villages, especially land-poor or landless people, looked to the flooded forest as a natural resource that can be converted into agricultural land. They found it difficult to appreciate the resource flows and services that it provides, not least of all to fishers. But in dialogue with the latter, they showed willingness to examine ways to conserve the flooded forest provided their changing livelihood needs can be met. Indisputably, the key to sustainable livelihoods is to maintain the balance between fisheries and agricultural interests while keeping the system ecologically intact.
19. Physical Capital. Without adequate access to services such as water and energy, human health deteriorates and long periods are spent in nonproductive activities such as the collection of water and fuel wood. Without transport infrastructure, essential fertilizer cannot be distributed effectively, agricultural yields remain low, and it is difficult and expensive to move limited produce to the market.
20. Lack of clean domestic water is a problem. More than 80% of households in the Tonle Sap region rely on shallow dug wells or surface water sources and many travel long distances to the closest source of supply, especially in the dry season. Since all these sources tend to be polluted, it can be assumed that at least 80% of households do not have access to safe domestic water. Survey participants recognized that their physical capital deficits relate to fully
24 Appendix 1 staffed and equipped health centers; access to safe drinking water, bathrooms, and latrines; improved roads; and new or rehabilitated irrigation systems.
21. Physical capital can be expensive. At the outset of the survey, most participants assumed that the Government would pay for infrastructure. This is what they had observed over the past decade. However, at the end of the survey, they asked how communities could build physical capital if all stood to benefit. They spoke of voluntary associations. They suggested that village development committees or similar institutions could mobilize in-kind contributions, perhaps with external assistance, to build and maintain essential infrastructure such as intra- village roads and water supply systems. The willingness of survey participants to consider user involvement in the provision of infrastructure holds promise. Demand-driven approaches can ensure that there are incentives for maintenance because of high levels of user investment in the form of labor and materials.
22. Financial Capital. Financial capital tends to be the least available livelihood asset of the poor. Indeed, it is because the poor lack financial capital that the other types of livelihood assets are so important to them. In Cambodia, savings often take the form of jewelry, which has stood the test of time and remained convertible during crises. For most farmers, livestock is still a very important financial asset. Yet it is now increasingly necessary to also have access to cash. Until recently, Cambodians preferred to deal in dollars or baht. But, as though to indicate confidence in the local currency, more and more are willing to trade for goods and services in riels, especially to meet immediate livelihood needs.
23. What can be done to build financial capital for the poor? Since development agencies are not in the business of handing out money to the poor and vulnerable, and demand outstrips supply in any case, increasing access to financial services is of special importance, particularly in the area of microfinance. In Cambodia, however, people prefer to avoid microfinance institutions. This is partly because they are risk-averse and partly because they cannot meet collateral requirements. Unless people believe that microfinance institutions will persist over time and will continue to charge reasonable rates of interest, they will not entrust their savings to them or be reliable in making their loan repayments.
24. The Association of Cambodian Local Economic Development Agencies, which also operates as a microfinance institution, is a case in point. It was constituted to help the poor and vulnerable but inability to comply with its terms and conditions can spell disaster, including loss of livestock, fishing gear, landholdings, and house. The survey revealed a general preference for borrowing money from less formal sources, preferably kin and neighbors or even wealthier villagers and traders, whose repayment terms are considerably more flexible than those of microfinance institutions. The survey also revealed that the ethnic Vietnamese are less risk- averse and that they prefer to use traders to meet urgent livelihood needs.
25. A few nongovernment organizations (NGOs) also provide microfinance. By preference, they target the very poor and vulnerable. In fact, however, non-poor households often benefit most from such programs. But this is more likely to be a function of deficient focus. The real problem, as the survey participants saw it, is that NGOs, not communities, manage the programs.
26. The size of the loans that survey participants take can vary. KR50,000 ($13) meets immediate livelihood needs for rice and other necessities. Only the very poor take such loans out up to six times a year. At the other extreme, KR5,000,000 ($1,300) allows investments in livelihoods activities that will increase financial capital. Only better-off households take out such Appendix 1 25 loans. KR50,000 buys up to 50 kilograms of rice while KR5,000,000 buys large encircling gillnets to catch higher-value fish in the Tonle Sap or a pair of draft animals and farming implements. Plainly, livelihood outcomes from such loans are quite different for the very poor and for the better-off. Credit schemes can materially improve the livelihoods of the poor, especially if they are integrated into a broader financial services package, e.g., as key components of a broader financial services infrastructure. In such instances, revolving credit funds providing seed capital to meet start-up costs for equipment and training bode well. Higher still, village development funds can build physical capital in the form of school buildings, intravillage roads, or adequate water supply and sanitation.
D. The Vulnerability Context
27. The vulnerability context defines the external environment in which people exist. The conflict that raged from the early 1970s to 1993—and continued northwest of the Tonle Sap until 1998—devastated or traumatized entire communities. To this must be added critical trends, e.g., demographic, environmental, economic, governance, and technological trends; shocks, e.g., illnesses, floods, storms, and droughts; and seasonalities, e.g., prices, and employment opportunities.
28. At present, primary sources of vulnerability are low fish catches, fires in the flooded forest (set to clear it for farming or charcoal), and flooding and drought (reportedly more difficult to predict than in the past). Another major source of vulnerability is illness, which can strip households of livelihood assets. The main coping strategy is to rely on close kin, sympathetic neighbors, and wealthier villagers to avoid at all cost the loss of fishing boats, draft animals, and land. Natural shocks that affect food security are now a major problem for more than half of the households in the Tonle Sap region. For the land-poor, rice deficits may begin in August and extend until April. This worsens their reliance on non-timber forest products.
E. The Transforming Structures and Processes
29. Structures are the public and private sector organizations that set and implement policy and legislation, deliver services, purchase, trade, and perform all manner of other functions that affect livelihoods. Since 1993, the Government has done a great deal to define the basic governance framework. As might be expected, it has provided a range of services to communities such as schools, health centers, all-weather roads, and irrigation systems. However, it has been less successful with non-physical assets, particularly natural and financial capital. Much work remains to be done in building structures for the poor in that respect.
30. Are there pro-poor structures in Cambodia? Most executing agencies have embraced poverty reduction as a crosscutting theme but how they reduce poverty is not always apparent. For the survey participants, the agriculture, forestry, fisheries, and even environmental executing agencies that have made their presence felt at the commune level are not pro-poor. The participants argued that if the rhetoric of these agencies is pro-poor, the practices of many of their officials are not. They requested that these agencies demonstrate their commitment to improving livelihoods and explain how their processes have been made pro-poor. Likewise, they expressed no confidence in judicial bodies and thought that courts are where those with money and influence can legalize their plunder of natural resources. Compared with most executing agencies, NGOs are seen as trying to be pro-poor in practice even if they do not always succeed.
26 Appendix 1
31. NGOs offer a range of programs that directly achieve livelihood outcomes. Many effective NGOs maintain a visible presence at all times. Highly effective NGOs actively co-opt community members. Survey participants appeared to know more about the services offered by NGOs than those offered by executing agencies. Some even spoke of the kinds of services executing agencies should (and should not) provide. Village development committees have an important role to play. However, to be truly of use, they must improve their capabilities, as well as their mechanisms for horizontal networking with commune councils.
32. After seeking to understand how the private sector makes investment decisions, survey participants saw no reason why communities could not link arms with it to jointly investigate livelihood activities in cattle raising, fish processing, or non-timber forest products.
33. Survey participants want policy makers to experience life on and around the Tonle Sap. Policy makers can take trips to see multiple-engine boats equipped with illegal fishing gear operating late at night; ask armed personnel why they harass ordinary villagers; find out whether or not ethnic Vietnamese do indeed over-fish; and speak to people who have migrated in search of livelihoods. Merely calculating poverty headcounts and then arguing that nearly 40% of the population lives on less than $0.65 a day is a meaningless abstraction to the poor and vulnerable. Perhaps because of this distrust, it might be argued that the best pro-poor structures are created by the poor and vulnerable themselves, in their communities rather than outside. These may include self-help groups focused on highly specific livelihood outcomes. But the failure of elite-controlled governance arrangements does not negate the need, at the central level, to build structures that represent the poor, reform structures that make policy and provide services to the poor, provide support to the establishment or expansion of private sector organizations, and support forums for decision making and action.
34. Processes embrace the laws, regulations, policies, operational arrangements, agreements, societal norms, and practices that, in turn, determine the way in which structures operate. Policy-determining structures cannot be effective in the absence of appropriate institutions and processes through which policies can be implemented. Processes are important to every aspect of livelihoods. They provide incentives that stimulate people to make better choices. They grant or deny access to assets. They enable people to transform one type of asset into another through markets. They have a strong influence on interpersonal relations.
35. One of the main problems faced by the poor and vulnerable is that the processes that frame their livelihoods may systematically restrict them unless the Government adopts pro-poor policies that in turn filter down to legislation and even less formal processes. In October 2000, a prime ministerial decree released 56% of the lot area to community fisheries. There are now more than 160 designated community fisheries (or 300 management units) in the fishing lot area released from commercial fisheries. The release of lots to communities should benefit the latter if the resource is properly managed.
36. Survey participants from fishing villages are aware that using illegal fishing gear will reduce fish catches further. However, without these, they feel they cannot compete with others who, they presume, also use illegal fishing gear. The sub-decree on community fisheries management and the draft Fisheries Law are important transforming processes.
37. The social land concession program of the Government facilitates consultations with the landless and land-poor. It provides an enabling environment for the poor and vulnerable. Microfinance organizations need to adopt processes that allow a more flexible response to Appendix 1 27 communities, such as extending microfinance facilities to savings and credit groups or other self-help groups without undermining their own liquidity.
38. The private sector often queries the Government's pro-poor approach when transaction costs are considerably higher than in neighboring Thailand or Viet Nam. These include the excise tax on diesel fuel, which the private sector considers too high, and whose cost, it says, is often borne by the very poor that development is supposed to help.
39. Livelihood systems would soon cease to function if it were not for the active involvement of women. Irrespective of their ethnic background, women generally work longer hours each day than men. They are less likely to be literate. They have a lower profile than men. Any new process that advances societal norms and beliefs in relation to women will achieve a marked improvement in livelihood outcomes.
28 Appendix 2
EXTERNAL ASSISTANCE TO THE TONLE SAP REGION
Amount Area of Project Title Duration Source Objective (million) Operation Environment and Natural Resources Biodiversity and 2000– World Bank, To develop an effective national $4.9 Ratanakiri and Protected Areas 2003 GEF protected areas system based on a Stung Treng Management consistent and well-articulated set of management, financial, and institutional procedures within a well- functioning legal and regulatory framework
Natural Resource 2001– Danida To sustain environmental resource — Nationwide and Environment 2006 management based on environment- Program friendly, technologically and socioeconomically sound use of natural resources by communities, the private sector, and Government; mitigate the detrimental effects of urban and industrial development; and support environmental education, particularly among the younger generation
Mekong River Ongoing UNDP, GEF, To establish a multi-sectoral planning $31.5 Mekong region Basin Wetland to 2008 The process at national and regional Conservation and Netherlands levels, strengthen the policy Sustainable Use framework and macroeconomic Programme environment to support wetland biodiversity conservation and sustainable use, and strengthen the information base to improve management of wetlands, including community-based natural resource management
Rural Development to Enhance Environment and Natural Resources Support 1995– EU To increase the income of farming $39.0 Kompong Speu, Programme for 1998 communities and to promote growth Takeo, the Agricultural 1999– and prosperity in rural villages Kompong Cham, Sector in 2003 Kompong Cambodia Chhnang, Prey Veng, and Svay Rieng
Agriculture 2000– IFAD, To increase food and income security $10.4 Battambang, Development 2006 UNDP, for about 64,500 poor households Banteay Support to Seila AusAID through a more diversified pattern of Meanchey, crop and livestock production and Pursat, Siem better access to credit services, Reap leading to capital formation at the household and local levels
Community-Based 2001– IFAD To increase food production and farm $22.8 Kompong Thom Rural 2005 incomes through intensified and and Kampot Development diversified crop and livestock production, and increase the capacity of the poor to use services from the Government and other sources for their social and economic development Appendix 2 29
Amount Area of Project Title Duration Source Objective (million) Operation Stung Chinit 2001– ADB, To increase income and improve the $23.8 Kompong Thom Irrigation and 2006 AFD quality of life by providing sustainable Rural irrigation, agricultural extension, and Infrastructure rural infrastructure such as roads and markets
Cambodia 2001– MAFF To improve access to agricultural $15.2 Battambang, Australia 2006 knowledge through a sustainable Banteay Agricultural district-oriented extension system as Meanchey, Extension Phase a focal point for coordinating and Kompong II facilitating extension services Chhnang, Kompong Thom, Pursal, Siem Reap, Kandal, Takeo, Prey Veng, Svay Rieng, Kompong Cham, Kampot, Kompong Speu
North East Village 2002 World Bank To promote rural development $6.0 Kompong Cham, Development through directly productive activities, Kompong Thom, training in agriculture fisheries and and Stung Treng vegetable cultivation, microenterprise development, small-scale rural infrastructure, and harbor improvement
Cambodia Land 2002– World Bank To improve land tenure security and $33.4 Nationwide Management and 2007 promote the development of efficient Administration land markets
Reducing Chronic 2002– MOWRAM To increase agricultural production by $17.5 Battambang, Undernourishment 2007 building, maintaining, and Banteay (WFP rehabilitating existing irrigation Meanchey, Bilat systems, building the capacity of Kompong 10161.0) farmers to maintain these systems, Chhnang, and strengthening the capacity of Kompong Thom, Government counterpart staff Pursat, Siem Reap, Kompong Cham, Prey Veng, Svay Rieng, Kompong Speu
Rural 2002– GTZ To improve the economic activities of $7.0 Kompong Thom, Development 2007 village organizations and their Kampot Program institutions through income- generating activities, natural resource management and agricultural production
Northwestern 2002– ADB To reduce poverty through $35.3 Battambang, Rural 2007 accelerated rural development Oddar Development Meanchey, Banteay Meanchey, and Siem Reap
Community Based 2002– MRD To increase food production and farm $10.0 Kompong Thom, Rural 2008 income for 40,000 poor households Kampot Development in through intensified and diversified
30 Appendix 2
Amount Area of Project Title Duration Source Objective (million) Operation Kompong Thom crop and livestock production and Kampot
Integrated Pest 2003– DANIDA To empower farmers to apply $1.65 Battambang, Management 2005 sustainable agricultural production Banteay Farmer Training systems through better integrated Meanchey, Project Phase II crop management Kompong Chhnang, Kompong Thom, Oddar Meanchey, Prey Veng, Svay Rieng
Improving the 2003– ADB/JFPR To reduce rural poverty through $1.8 Stage 1: Livelihood of Poor 2008 sustainable livelihood opportunities Kompong Cham, Farmers in (access to agricultural services and Prey Veng, Southern resources for income-generating Svay Rieng Cambodia activities) for poor and vulnerable groups of farmers particularly for rural Stage 2: women; small-scale village Kompong infrastructure, village revolving funds, Chhnang, village-based agro-enterprises; social mobilization program and agricultural, Takeo horticultural, and livestock training, including intensive support for disadvantaged and landless farm workers; capacity building of local community-based organizations and NGOs
Tonle Sap 2005– ADB, GEF, To develop the capacity for natural $18.7 Battambang, Environmental 2008 UNDP resource management coordination Kompong Management and planning, community-based Chhnang, natural resource management, and Kompong Thom, biodiversity conservation in the Tonle Pursat, Siem Sap Biosphere Reserve Reap
Northwest 2005– ADB, AFD To reduce poverty in selected rural $22.6 Battambang, Irrigation Sector 2010 areas in the northwest through Banteay rehabilitation and sustainable Meanchey, operation of small and medium-scale Pursat, Siem irrigation schemes and other water- Reap, Kandal control infrastructure within priority (AFD only) river basins, to enhance agricultural production
Tonle Sap Water 2006– ADB To provide sustained access to safe $18.0 Battambang, Supply and 2011 water and sanitation and better Kompong Sanitation Sector hygiene to all communities and their Chhnang, members, including the poorest. Kompong Thom, Pursat, Siem Reap
ADB = Asian Development Bank; AFD = Agence Française de Développement; Danida = Danish International Development Assistance; EU = European Union; FAO = Food and Agriculture Organization of the United Nations; GEF = Global Environment Facility; IFAD = International Fund for Agricultural Development; JFPR = Japan Fund for Poverty Reduction; MAFF = Ministry of Agriculture, Forestry, and Fisheries; MRC = Mekong River Commission; MRD = Ministry of Rural Development; NGO = nongovernment organization; UNDP = United Nations Development Programme. Source: Asian Development Bank.
Appendix 3 31
DESIGN AND MONITORING FRAMEWORK
Design Summary Performance Data Sources/Reporting Assumptions and Risks Targets/Indicators Mechanisms Impact Assumption Livelihoods improved Poverty reduced (compared Government's annual • The Government with baseline survey)a income and poverty sustains the surveys decentralization and Biodiversity conserved deconcentration (compared with baseline Project performance process survey)b monitoring surveys and Risk project performance audit • The cumulative impact report of built structures in the Mekong River basin could disrupt the Tonle Sap basin ecosystem Outcome Community-driven Design and monitoring Assumptions Access to assets increased development supported, framework • Commune councils in the five provinces that based on the eligibility function increasingly adjoin the Tonle Sap criteria specified, by the Project completion report efficiently, especially end of year 4 with regard to Socioeconomic indicators in management and Core areas safeguarded by the five provinces protection of natural the end of year 4 resourcesc • The Government Skills and awareness for maintains its sustainable livelihoods built commitment to by the end of year 4 biosphere reserve zoning principles Risks • The removal of the fishing lots precipitates uncontrolled exploitation in the core areas • Corrupt practices divert funds from the community livelihood fund Outputs Assumptions 1. Community-driven A community livelihood Design and monitoring • The proposals put development is fund is established by the framework forward to the supported middle of year 1 commune councils Grant review mission reflect community Livelihood investment reports desires packages are designed and • Removal of the fishing implemented from the end Semiannual progress lots from the core areas of year 1 reports and the new management system 2. Core areas are An information base on Quarterly progress reports provides sufficient safeguarded core areas is established safeguards for the core by the end of year 1 Audit reports areas • Staff of national, A management system for Commune accounts provincial, district, and core areas is instituted by commune institutions the middle of year 2 Number of proposals and villagers are successfully implemented receptive to the training An improved network of fish in each category and messages sanctuaries is instituted by imparted the end of year 2 Number of proposals
32 Appendix 3
Design Summary Performance Data Sources/Reporting Assumptions and Risks Targets/Indicators Mechanisms successfully implemented Risks 3. Skills and awareness for Coordination for • Access to the sustainable livelihoods community-driven Number of proposals put community livelihood are built development is improved forward to the commune fund is dominated by from the middle of year 1 councils each year better-off interest groups The skills base for Village prioritization • The new management community-driven exercises system is not sustained development is enhanced • Target groups cannot from the middle of year 1 Removal of the fishing lots spare the time to attend from the core areas training courses Education for protection of natural resources is Gender action plan delivered from mid-year 2 End-of-assignment reports
Monthly progress notes
Training reports
Training and awareness building materials developed Activities with Milestones (for details of activities and their milestones, see the Inputs indicative activities schedule and the terms of reference for consultants) ($ million) • ADB 15.0 1. Community-driven development is supported • Government 4.7 1.1 Establish a community livelihood fund by the middle of year 1 • Cofinancing 0.6 1.1.1 Establish a community livelihood facilitation team in each province 1.1.2 Prepare the inception report for livelihood support 1.2 Design and implement livelihood investment packages from the end of year 1 1.2.1 Create village activity and special interest groups 1.2.2 Select activities for funding under the community livelihood fund (first cycle) 1.2.3 Select activities for funding under the community livelihood fund (second and later planning cycles) 1.2.4 Prepare detailed implementation arrangements (first and later planning cycles) 1.2.5 Implement investment packages (first and later planning cycles)
2. Core areas are safeguarded 2.1 Establish an information base on core areas by the end of year 1 2.2.1 Review and describe the operation of fishing lots in the core areas 2.2.2 Establish a biological and socioeconomic database 2.2.3 Build the capacity of the Tonle Sap Biosphere Reserve secretariat to manage the database 2.2 Institute a management system for core areas by the middle of year 2 2.2.1 Develop, conclude, and implement a management and protection agreement for the core areas 2.2.2 Plan and propose a new management system for the core areas 2.2.3 Identify mechanisms to ensure compliance 2.2.4 Propose the incorporation of additional core areas identified under component 3 of the Tonle Sap Environmental Management Project 2.3 Institute an improved network of fish sanctuaries by the end of year 2 2.3.1 Assess the operation of existing fish sanctuaries 2.3.2 Determine the optimum number, location, and size of fish sanctuaries 2.3.3 Formulate recommendations for improved management of fish sanctuaries
Appendix 3 33
Design Summary Performance Data Sources/Reporting Assumptions and Risks Targets/Indicators Mechanisms 3. Skills and awareness for sustainable livelihoods are built 3.1 Improve coordination for community-driven development from the middle of year 1 3.1.1 Recommend institutional arrangements to strengthen the Council for Agricultural and Rural Development (CARD) 3.1.2 Formulate a work plan and operating guidelines for CARD 3.1.3 Build the capacity of CARD to carry out its functions 3.2 Enhance the skills base for community-driven development from the middle of year 1 3.2.1 Raise the awareness of agencies at the national, provincial, district, and commune levels 3.2.2 Train provincial, commune, and village staff in project implementation 3.2.3 Train commune facilitators in participatory project implementation 3.3 Educate for protection of natural resources from year 2 3.3.1 Assemble educational materials on natural resource management 3.3.2 Hold environmental awareness forums 3.3.3 Prioritize villages on the basis of their potential impact on resource extraction 3.3.4 Assemble, train, and equip a mobile training team 3.3.5 Deliver the environmental awareness program 3.3.6 Conduct monitoring and evaluation
ADB = Asian Development Bank, CARD = Council for Agricultural and Rural Development. a The survey will make use of information from ADB. 2003. Technical Assistance to the Kingdom of Cambodia for the Participatory Poverty Assessment in the Tonle Sap. Manila. b The survey will make use of information from component 3 of ADB. 2002. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Kingdom of Cambodia for the Tonle Sap Environmental Management Project. Manila. c This is the one area of commune council performance that both citizens and councilors deem least satisfactory. See The Asia Foundation. 2005. Commune Councils in Cambodia: A National Survey on their Functions and Performance, with a Special Focus on Conflict Resolution. Phnom Penh.
34 Appendix 4
THE COMMUNITY LIVELIHOOD FUND
1. Activities eligible for community livelihood fund grant funds will include, but will not be limited to, those described below: (i) Social infrastructure. The cost limit for each village is $20,000 (refer to Table A4.1). The participatory livelihoods analyses conducted during project preparation showed high priority for improvement of water supply and sanitation, rehabilitation and enlargement of schools, provision of houses for teachers, and construction of small village facilities (e.g., community meeting rooms, fish processing sheds and drying platforms, small produce stores, small markets, and solar power supply for public buildings). New road construction is a special case that would require clearance by the Ministry of Environment. (ii) Income generation. Grants for income-generating activities will be available to groups and individuals. Non-rice agricultural income-generating activities include improved horticultural production using production of pigs and drip irrigation. Financing of processing and marketing may be applied to improved techniques for (a) drying, smoking, and fermenting fish; (b) producing fermented fish paste (prahoc);1 (c) packaging and marketing dried and shelled shrimp; (d) producing, packaging, and marketing fish sauce; and (e) bulk fish purchasing and marketing. Grants will be available for small-scale industries that would employ relatively large numbers of people such as repair and maintenance of electrical and other appliances, production of basketry and other products using bamboo, rattan, hyacinth, and other non-timber forest products; and production of honey. In support of income-generating activities grants could also be used for skills training (e.g., food processing and other vocational training) or for more general education such as adult literacy. Applications would need to show that at least 25% of the beneficiaries of grants are poor. (iii) Support to community fisheries. The community livelihood fund grant funds may also be used to support the implementation of community fisheries management plans, prepared under component 2 of the Tonle Sap Environmental Management Project,2 that have been approved by the Department of Fisheries in the Ministry of Agriculture, Forestry, and Fisheries. This supplementary assistance to community fisheries will enable communities to establish fish sanctuaries and administrative facilities, procure boats and other necessary equipment, and expand the range and frequency of monitoring of illegal fishing practices.
1 Prahoc is made from small low-value fish such as trey riel. After the fish are washed, the head and scales are removed, the fish are salted and dried for a few days, and then the fish are stored in large ceramic pots to ferment. The protein in prahoc is more digestible than that in fresh fish. Prahoc is thus an excellent food for the elderly and the young. It is the main product made from excess fish. Families work together and businesses that make and sell prahoc hire many temporary workers. 2 ADB. 2002. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Kingdom of Cambodia for the Tonle Sap Environmental Management Project. Manila. Appendix 4 35
Table A4.1: Eligibility Criteria for Community Livelihood Fund Activities
Type of Investment Criterion Certifying Agency Any activity financed - High priority accorded by community in - Commune planning by the community the village development plan and budgeting livelihood fund - Inclusion in the commune development committee plan - Commune council - Not expected to have adverse environmental effects - Compliance with applicable environmental, legal, and other requirements of the country and with the environmental assessment requirements of the Asian Development Bank - Does not disadvantage any part of the community - Demonstrable benefits to the poor, women, ethnic minorities, or other vulnerable groups - Entails only legal activities. - Does not affect cultural heritage sites
Social infrastructure - Total cost not to exceed $20,000 per - Commune planning village and budgeting - Technical, financial, and economic committee feasibility - Road construction requires special clearance from the Ministry of Environment
Income generation - Each grant not to exceed $5,000 - Commune planning - Financial feasibility of the business plan. and budgeting - Enterprise would employ a significant committee number of persons - Improved technology successfully demonstrated and financially feasible
Support to community - Cost of each community fishery grant not - Commune planning fisheries to exceed $5,000. and budgeting - Supported by a majority of the members committee of the community fisheries. - Department of Fisheries
Source: Asian Development Bank estimates.
36 Appendix 5
SUMMARY COST ESTIMATES
Table A5.1: Project Components by Year—Base Costs ($ '000)
Item 06/07 07/08 08/09 09/10 Total
Support Community-Driven Development 2,628 7,589 5,469 1,815 17,501 Safeguard Core Areas 0 493 279 0 772 Build Skills and Awareness for Sustainable Livelihoods 589 520 89 34 1,232 Total Baseline Costs 3,217 8,602 5,837 1,849 19,505 Physical Contingencies 62 61 30 21 176 Price Contingencies Inflation Local 67 213 162 87 529 Foreign 45 82 55 17 199 Subtotal Inflation 112 294 217 105 728 Devaluation (9) (29) (23) (13) (73) Subtotal Price Contingencies 104 266 195 92 656 Total Project Costs 3,384 8,929 6,062 1,962 20,337
Taxes 234 1,014 718 246 2,212 Foreign Exchange 1,604 2,982 1,927 389 6,901 Source: Asian Development Bank estimates. Appendix 5 37
Table A5.2: Expenditure Accounts by Components—Base Costs ($'000)
Build Support Safeguard Skills and Physical Community- Item Core Awareness for Total Contingencies Driven Areas Sustainable Development Livelihoods % Amount A. Investment Costs 1. Civil Works 173 0 0 173 10.0 17 2. Vehicles a. Vehicles 293 36 86 415 0 0 b. Boats 15 0 0 15 0 0 Subtotal (2) 308 36 86 431 0 0 3. Equipment and Furniture 85 15 0 100 5.0 5 4. Consulting Services a. International Consultants 1,961 470 357 2,788 0 0 b. Domestic Consultants 1,366 115 155 1,636 0 0 Subtotal (4) 3,327 586 512 4,424 0 0 5. Training and Workshops a. Training 0 0 387 387 10.0 39 b. Workshops 102 20 132 255 10.0 25 Subtotal (5) 102 20 519 641 10.0 64 6. Field Expenses 0 36 86 121 5.0 6 7. Livelihood Grants a. Social Infrastructure 5,874 0 0 5,874 0 0 b. Income-Generating Grants 3,371 0 0 3,371 0 0 c. Community Fisheries 2,346 0 0 2,346 0 0 Subtotal (7) 11,591 0 0 11,591 0 0 Total Investment Costs 15,586 693 1,203 17,481 0.5 93 B. Recurrent Costs 1. Project Administration a. International Consulting 49 0 0 49 0 0 b. Domestic Consulting 81 0 0 81 0 0 c. Administration Costs 187 15 30 231 0 0 d. Staff Costsa 1,034 56 0 1,090 5.0 54 Subtotal (1) 1,351 71 30 1,451 3.8 54 2. Operations and Maintenance a. Building O&M 11 0 0 11 5.0 1 b. Vehicle and Boats 247 9 0 256 5.0 13 Subtotal (2) 259 9 0 267 5.0 13 3. Social Infrastructure O&M 305 0 0 305 5.0 15 Total Recurrent Costs 1,915 79 30 2,024 4.1 83 Total Baseline Costs 17,501 772 1,232 19,505 0.9 176 Physical Contingencies 112 8 56 176 0 0 Price Contingencies Inflation Local 463 18 48 529 0 0 Foreign 166 14 20 199 0 0 Subtotal Inflation 629 32 68 728 0 0 Devaluation (64) (2) (7) (73) 0 0 Subtotal Price Contingencies 565 30 61 656 1.9 12 Total Project Costs 18,178 810 1,349 20,337 0.9 188 Taxes 2,054 25 133 2,212 0.9 19 Foreign Exchange 5,859 498 544 6,901 0.5 37 a Includes all payments to Government staff assigned to the Project, and any other local staff recruited by the Project. O&M = operation and maintenance. Source: Asian Development Bank estimates.
Table A5.3: Expenditure Accounts by Financiers ($'000) 38
Asian Local Duties
Government of Government of 5 Appendix Development Total Cambodia Finland Item Bank Foreign (Excluding and Amount % Amount % Amount % Amount % Exchange Taxes) Taxes A. Investment Costs
1. Civil Works 59 30.0 139 70.0 0 0 198 1.0 69 99 30 2. Vehicles a. Vehicles 8 1.8 426 98.2 0 0 433 2.1 217 61 156 b. Boats 0 0.0 16 100.0 0 0 16 0.1 5 8 3 Subtotal (2) 8 1.7 441 98.3 0 0 449 2.2 221 69 159 3. Equipment and Furniture 0 0 110 100.0 0 0 110 0.5 71 22 16 4. Consulting Services a. International Consultants 0 0 0 0 2,858 100.0 2,858 14.1 2,572 286 0 b. Domestic Consultants 0 0 0 0 1,677 100.0 1,677 8.2 168 1,510 0 Subtotal (4) 0 0 0 0 4,535 100.0 4,535 22.3 2,740 1,795 0 5. Training and Workshops a. Training 68 15.0 383 85.0 0 0 451 2.2 90 293 68 b. Workshops 45 15.0 256 85.0 0 0 302 1.5 60 196 45 Subtotal (5) 113 15.0 640 85.0 0 0 752 3.7 150 489 113 6. Field Expenses 14 9.4 123 90.6 0 0 135 0.7 41 81 14 7. Livelihood Grants a. Social Infrastructure 0 0 6,021 100.0 0 0 6,021 29.6 2,107 3,010 903 b. Income-Generating Grants 0 0 3,455 100.0 0 0 3,455 17.0 691 2,246 518 c. Community Fisheries 0 0 2,405 100.0 0 0 2,405 11.8 481 1,563 361 Subtotal (7) 0 0 11,881 100.0 0 0 11,881 58.4 3,279 6,819 1,782 Total (A) 193 1.1 13,333 73.8 4,535 25.1 18,061 88.8 6,572 9,375 2,114 B. Recurrent Costs 1. Project Administration a. International Consulting 0 0 0 0 52 100.0 52 0.3 52 0 0 b. Domestic Consulting 0 0 0 0 87 100.0 87 0.4 9 78 0 c. Administration Costs 5 2.1 245 97.9 0 0 250 1.2 25 225 0 d. Staff Costsa 2 0.2 1,165 94.6 64 5.2 1,231 6.1 0 1,231 0 Subtotal (1) 7 0.5 1,410 87.0 203 12.5 1,620 8.0 86 1,534 0 2. Operations and Maintenance a. Building O&M 2 15.0 11 85.0 0 0 13 0.1 4 7 2 b. Vehicle and Boats 42 15.0 247 85.0 0 0 290 1.4 116 131 44 Subtotal (2) 45 15.0 258 85.0 0 0 303 1.5 120 138 45 3. Social Infrastructure O&M 353 100.0 0 0 0 0 353 1.7 123 176 53 Total (B) 406 17.8 1,667 73.3 203 8.9 2,276 11.2 329 1,848 98 Total Project Costs 599 2.9 15,000 73.8 4,738 23.3 20,337 100.0 6,901 11,223 2,212 a Includes all payments to Government staff assigned to the Project and any other local staff recruited by the Project. O&M = operation and maintenance. Sources: Asian Development Bank estimates. Appendix 6 39
PROJECT MANAGEMENT AND ORGANIZATION
Ministry of Ministry of Economy Ministry of Interior Agriculture, Forestry, and Finance Ministry of Women's and Fisheries Affairs
Ministry of Rural Council for Development Agricultural and Rural Ministry of Development Environment
Provincial CNMC Other Ministries Project Consultants Departments (Contract 4) of Agriculture, TSBR Secretariat Forestry, and Fisheries Provincial Local Administration Units
Project Consultants (Contract 3)
Project Consultants (Contracts 1 and 2)
PDWA
Community Livelihood PDRD Facilitation Teams PDE
Commune Councils Commune Planning and Budgeting Committees
Community Activity Groups Special Interest Fisheries Groups
CNMC = Cambodia National Mekong Committee, PDE = provincial department of environment, PDRD = provincial department of rural development, PDWA = provincial department of women's affairs, TSBR = Tonle Sap Biosphere Reserve. Source: Asian Development Bank.
INDICATIVE ACTIVITIES SCHEDULE 40 Activity Project Year
2005 2006 2007 2008 2009 2010 7 Appendix Anticipated Grant Effectiveness Initial Activities Recruit consultant team for project management Nominate project manager in MOI Open first generation imprest account Open second generation imprest account Output 1: Support Community-Driven Development 1.1 Establish a Community Livelihood Fund 1.1.1 Establish a CLFT in each province - appoint one staff each from PDE, PDRD, PDWA, and PFO - establish offices in the five provinces - procure vehicles, machinery, and office equipment - recruit commune facilitators in all project communes - open commercial bank accounts in all project communes 1.1.2 Prepare the inception report for livelihood support - review and assess related ongoing activities - prepare operational guidelines and procedures - prepare work plans for the CLF - conduct inception workshop and prepare inception report 1.2 Design and Implement Livelihood Investment Packages 1.2.1 Mobilize community groups - conduct information dissemination workshops in each commune - assist in setting up and activation of community groups - assist community groups in designing participation modalities and guidelines 1.2.2 Select activities for funding under the CLF (first cycle) - identify unfunded priority activities in the current 3-year rolling CDPs - screen activities in eliminating any that would be unsuitable for the CLF - assist the CPBCs prepare lists of priority CLF activities Ministry of Interior Ministry 1.2.3 Select activities for funding under the CLF (second and later planning cycles) - assist community groups in generating ideas for income generating activities - assist community fisheries in generating fisheries proposals - assist the CPBCs prepare lists and prioritize new CLF activities 1.2.4 Prepare detailed implementation arrangements (first and later planning cycles) - submit environmentally sensitive activities to MOE for review - finalize list of priority activities in consultation with the CPBCs - assist the CPBCs in preparing detailed designs, costs, business plans - assist the CPBCs in preparing contracts and financing plans 1.2.5 Implement investment packages (first and later planning cycles) - release funds to commune accounts for conforming CLF activities - assist commune councils to award contracts and supervise implementation - assist community groups to review progress and formulate recommendations - monitor performance of contract implementation - assist the CPBCs to audit financial accounts and report progress
Activity Project Year 2005 2006 2007 2008 2009 2010 Output 2: Safeguard the Core Areas 2.1 Establish an Information Base on Core Areas 2.1.1 Review and describe the operation of fishing lots in the core areas 2.1.2 Establish a biological and socioeconomic database 2.1.3 Build the capacity of the TSBR secretariat to manage the database 2.2 Institute a Management System for Core Areas 2.2.1 Develop, conclude, and implement a management and protection agreement for the core areas 2.2.2 Plan and propose a new management system for the core areas 2.2.3 Identify mechanisms to ensure compliance 2.2.4 Propose the incorporation of additional core areas identified under the TSEMP 2.3 Institute an Improved Network of Fish Sanctuaries 2.3.1 Assess the operation of existing fish sanctuaries TSBR secretariat/DOF/MOE TSBR 2.3.2 Determine the optimum number, location, and size of fish sanctuaries 2.3.3 Formulate recommendations for improved management of fish sanctuaries Output 3: Build Skills and Awareness for Sustainable Livelihoods 3.1 Improve Coordination for Community-Driven Development 3.1.1 Recommend institutional arrangements to strengthen CARD 3.1.2 Formulate a work plan and operating guidelines for CARD 3.1.3 Build the capacity of CARD to carry out its functions 3.2 Enhance the Skills Base for Community-Driven Development 3.2.1 Raise the awareness of agencies at the national, provincial, district, and commune levels 3.2.2 Train provincial, commune, and village staff in project implementation 3.2.3 Train commune facilitators in participatory project implementation 3.3 Educate for Protection of Natural Resources 3.3.1 Assemble educational materials on natural resource management MOI/CARD/MOE 3.3.2 Hold environmental awareness forums 3.3.3 Prioritize villages on the basis of their potential impact on resource extraction 3.3.4 Assemble, train, and equip a mobile training team 3.3.5 Deliver the environmental awareness program
3.3.6 Conduct monitoring and evaluation 7 Appendix
CARD = Council for Agricultural and Rural Development, CDP = commune development plans, CLF = community livelihood fund, CPBC = commune planning and budgeting committee, MOE = Ministry of Environment, MOI = Ministry of Interior, PDE = provincial department of environment, PDRD = provincial department of rural development, PDWA = provincial department of women's affairs, PFO = provincial fisheries office, TSBR = Tonle Sap Biosphere Reserve, TSEMP = Tonle Sap Environmental Management Project. Source: Asian Development Bank. 41
CONTRACT PACKAGES AND INDICATIVE STAFFING SCHEDULE FOR CONSULTANTS 42
Project Year International Domestic 8 Appendix Position Consultant Consultant 2006 2007 2008 2009 2010 (Person-months)
Team Leader/Local Governance Specialist 18 Deputy Team Leader/Decentralization Specialist 45 Finance and Administration Specialist (attached to MEF) Phnom 45 Organization and Strategy Advisor (attached to CARD) Penh 9 Education and Training Specialist bd 3
MOI Training Specialist 12 Rural Livelihoods Specialist (Pursat) 30 CONTRACT 1 Rural Livelihoods Specialist (Siem Reap) Province 30 Community Development Specialist (10 persons) based 300 Community Development Specialist (10 persons) 180 Subtotal (Contract 1) 90 582
Senior Environmental Specialist 2
2 Phnom
MOI Environment Specialist Penh 40
CONTRACT bd Subtotal (Contract 2) 2 40
Team Leader/Natural Resources Planner 18 Fisheries Biologist 9 Socioeconomist Phnom 6 Policy and Planning Specialist Penh 18 Fisheries Biologist 18 CONTRACT 3 Socioeconomist 18 TSBR Secretariat TSBR Subtotal (Contract 3) 33 54
Team Leader/Community Education Specialist 6 Teaching Resource Development Specialist 3 Monitoring and Evaluation Specialist Phnom 1 MOE Environmental Education Specialists (4 persons) Penh 60
CONTRACT 4 Graphic Designer 12 Subtotal (Contract 4) 10 72 Total 133 708
CARD = Council for Agricultural and Rural Development, MEF = Ministry of Economy and Finance, MOE = Ministry of Environment, MOI = Ministry of Interior, TSBR = Tonle Sap Biosphere Reserve. Source: Asian Development Bank. Appendix 9 43
COMMUNITY LIVELIHOOD FUND FLOW MECHANISM
A. Reporting and Flow of Funds
Asian Development Bank
MEF – Local Finance National Bank of Cambodia Department First Generation Imprest A/C
Second Generation National Ministry of Interior Imprest A/C
Local Administration Unit Provincial Provincial Governor's Office
Community Livelihood Commune Commune Council Fund (Commercial Bank A/C)
Community Fisheries Village Community Groups Activity Groups Special Interest Groups
Suppliers and Contractors
Funds Flow
Reporting
A/C = account, MEF = Ministry of Economy and Finance. Source: Asian Development Bank.
44 Appendix 9
B. Fund Flow Procedures
1. The Ministry of Economy and Finance (MEF) will open a first-generation imprest account at the National Bank of Cambodia into which grant funds from the Asian Development Bank (ADB) will be deposited. MEF will also create a budget line item in the commune council accounts to be used for the Project. Funds will be released on the basis of the annual work plans prepared by the commune planning and budget committees with the help of commune facilitators and the community livelihood facilitation teams. Once the plans are complete, the commune councils will request fund transfers via the provincial local administration unit of the Ministry of Interior (MOI). The community livelihood facilitation teams will screen each request for eligibility and forward them through the provincial local administration unit to MOI. MOI will then request MEF to release funds into a second-generation imprest account opened by MOI in a commercial bank for the purpose of replenishing and liquidating the community livelihood fund and for other activities under the Project. MOI will then direct the funds to the commercial bank accounts of the commune councils. It is proposed that funds be released in two or three tranches in year 1 to ensure that the system is operating well.
2. The commune councils will use the funds according to ADB's guidelines for: (i) direct procurement of goods, (ii) procurement of technical services for village project design, (iii) contracting of public works and social infrastructure, (iv) payments to community groups for income-generating activities, and (v) payments to community fisheries.
3. Procurement and purchases undertaken by the commune councils will be recorded in a project accounting system that includes: (i) procurement details, including specifications of goods to be procured; (ii) record of three quotes obtained; (iii) contract copies and procurement dates, suppliers and schedule of payment; (iv) invoices and receipts; and (v) balanced cash-book that is reconciled each month with the statements from the commercial bank.
4. Community groups will be required to maintain simple balanced cashbooks showing the funds received and transferred and the signatures of at least three authorized individuals attesting to the accuracy of the records, and to post a copy of the cashbook in a public place. The cashbooks will be the basis of project accounting. A copy of each cashbook will be forwarded to the commune council each month. The cash book will record: (i) the amounts of money received by date, with date of receipt; (ii) the amounts of money paid, to whom and when; and (iii) the goods and services purchased including the supplier's name and signature and sale documentation (receipts, invoices, etc.) for each item purchased.
5. The planning and budget committees of the commune councils will consolidate all expenditure documentation, forward one copy to the project manager from MOI, and retain a complete set for the commune records and audit purposes. The project manager must review and approve the expenditure documentation before the next tranche of funding can be released. Incomplete expenditure documentation will stop the flow of funds to the commune council. The project manager will submit a consolidated statement of expense to ADB for the replenishment of the imprest account.
Appendix 10 45
GENDER ACTION PLAN
1. The project area comprises 316 villages organized into 37 communes, with about 290,000 inhabitants in 55,000 households. Assuming a poverty rate of 50%, about 145,000 persons in 27,500 households live below the poverty line. As women constitute more than half of the population, at least 72,500 women in the project area live in poverty. At least 13,500 households are likely to be headed by women.
2. The establishment of the community livelihood fund (CLF) will offer women an opportunity to secure sustainable livelihoods. The CLF will fund community-driven development through strengthened local participation in planning. While the CLF is derived from the present system of commune council accounts—which receive funds directly from the national treasury— the Project will significantly augment the resources available to participating communes. It will deepen and expand the participation of community members, particularly women and other vulnerable groups, in planning and deciding on priority investments and associated resource allocation, distribution, utilization, and accountability.
A. Strategy for Gender-Responsive Community-Driven Development
3. The Project will support the following measures for improved gender responsiveness in commune planning and resource allocation: (i) Compulsory gender-sensitization training for all levels of staff to be involved in the Project, as part of project management training. (ii) The inclusion of sessions on gender analysis and gender-sensitive monitoring indicators in training for project staff in participatory planning and performance management based on the project framework. Gender-related training for communities will be adapted to the absorption capacity of the communities, particularly the commune councils and the commune planning and budgeting committees (CPBCs). (iii) Project presentations for Government agency staff and for beneficiaries at central, provincial, and commune levels, designed to lead to a shared understanding of gender issues and the gender equality concerns of the Project. Ensuring women's full participation and full benefit are integral to realizing the Project's outcome. (iv) The establishment of gender focal points in each provincial community livelihood facilitation team (CLFT). (v) The appointment of women to at least half of the commune facilitators posts. (vi) At least equal participation of women from poor households and men in all community-training programs. The training sessions should be short and to allow women with low literacy levels to participate. (vii) The nomination of at least two staff members of each provincial departments of women's affairs to the CLFT to ensure that women will be represented and gender issues will be discussed at CLFT meetings.
B. Strategy for Maximizing Women's Participation at the Commune Level
4. The Project will make the communities better able to formulate, implement, and manage development plans. To promote the participation of women in development planning so that the plans explicitly reflect the needs and concerns of women, the gender action plan envisages the following: (i) Women will be organized into planning groups in each community.
46 Appendix 10
(ii) At the start of the Project, specialized teams, including members from the women's affairs office, consultants/NGOs, and commune facilitators, will join meetings of women in the communities to brief these groups on the project components and expected outcome. The briefing will be done at times that are convenient to the women. (iii) At such meetings, women will be encouraged to speak about their livelihoods and their needs so that the proper use of project resources to benefit them and their communities can be determined. (iv) Each commune is expected to start with one women's planning organization. For this, the women's groups will select leaders between 5 and 10 per organization information dissemination, training, and capacity building. (v) The selected leaders will be trained in gender-responsive planning and development, leadership development, and accountability. They will represent the women in the different organizations (e.g., CPBC, bidding committee, and project management committee, community fisheries). By the end of year 4, at least half of all CPBC members should be trained women representatives, selected directly by their women constituents. (vi) Women representatives will participate in commune planning to ensure that the interests of their constituents are represented, and they will meet weekly with their constituents to brief them on the various activities. (vii) Gender-responsive commune development plans will be reviewed by the women's planning group at a plenary meeting before these are submitted to the CPBC for consolidation. (viii) Local women's groups will meet weekly and keep records of the proceedings to aid monitoring by commune facilitators.
C. Strategy for Gender-Sensitive Project Management
5. The Project will leverage the following gender-sensitive project management tools: (i) Gender focal points will be established in each CLFT. (ii) The gender focal points will meet each month to assess gender-related achievements and gender issues encountered during project implementation. (iii) The progress reports will include gender-related achievements. (iv) The midterm review will determine if the targets set for the participation of women are being met, and draw up plans as appropriate.
D. Design of Gender-Responsive Commune Development Plans
6. The CLFTs, along with the provincial and district gender focal points, will meet at least twice with the members of the CPBC and women's planning groups at commune level, to identify their needs and priorities and assist them in formulating sub-proposals to be included in the CLF. (i) The CPBC prioritization exercise should include separate group discussions for women participants to screen activities proposed by women and the poor. (ii) The CLF allocation should reflect women's practical needs, such as water supplies, sanitation, and health services, which will reduce women's work load and free up time for income-generating activities.
Appendix 10 47
E. Delivery of Investment Packages
7. For the construction or rehabilitation of small-scale infrastructure, such as intra-village roads, wells, and latrines: (i) Ensuring that contractors' agreements contain an appropriate clause promoting the hiring of women and equal pay for men and women for work of equal value. (ii) Reserving half of unskilled jobs for women, especially women-headed households, so that they can support their families without having to go out on boats with their small children to catch fish.
For rural water supply and sanitation, (i) Ensuring the appropriateness of awareness-raising and health education materials, training packages, and manuals to the literacy level of women in the project area, and emphasizing the important roles of women, especially married women, in operation and maintenance, as they rarely leave the communities. (ii) Assisting targeted communities in establishing water and sanitation user groups1 where women make up at least 40% of the board members, have equal opportunity to receive training, and participate in meetings to decide on the location and design of water points and latrines that meet the practical needs of women.
F. Education for the Protection of Natural Resources
8. Gender focal points and consultants will facilitate the testing of awareness-raising material on women's groups. This issue will also be incorporated in literacy classes, in schools, and in the child-to-child approach for out-of-school children.
G. Expected Outcomes
9. The expected outcomes of the gender action plan are: (i) All project entities are trained in gender-responsive planning, implementation, and monitoring. (ii) At least half of all community fisheries, CPBCs, and other committees are fully trained. (iii) All selected commune councils have trained and articulate women members. (iv) In all 316 villages, women take an active part in planning. (v) Women constitute at least 50% of social infrastructure groups/committees. (vi) Training in participation and gender-responsive project monitoring is conducted for all 316 villages.
1 National guidelines on water and sanitation user groups were drafted during the preparation of the proposed Tonle Sap Rural Water Supply and Sanitation Project. At least 40% of the boards of the water and sanitation user groups will be formed to include at least 40% women and at least 50% the board members will receive technical training in operation and maintenance. The boards will also be representative of the ethnic composition of their members.
48 Appendix 11
SUMMARY POVERTY REDUCTION AND SOCIAL STRATEGY
A. Linkages to the Country Poverty Analysis
Is the sector identified as a national Yes Is the sector identified as a national Yes priority in country poverty analysis? priority in country poverty partnership No agreement? No
Contribution of the sector or subsector to reduce poverty in Cambodia:
The Tonle Sap and its floodplains are home to 1.2 million people, of whom about 25% live in floating villages. Despite the enormous productivity of the Tonle Sap's fisheries, which yield up 230,000 tons of fish each year (about 50% of Cambodia's freshwater-capture fisheries production), declining access is one of the major causes of food insecurity and malnutrition. Increasing access to assets offers great potential for poverty reduction. The Project is the second grant project under the Tonle Sap Initiative and aims to improve livelihoods, with close attention to the interests of particularly vulnerable groups such as women, poor fishing households, and ethnic minorities.
B. Poverty Analysis Targeting Classification: Targeted intervention
What type of poverty analysis is needed?
Extensive livelihood analyses were conducted during project preparation to supplement the participatory poverty assessment being conducted in the Tonle Sap region. These analyses provide significant information about the concerns of the poor and their policy implications. Under the Project, the monitoring and evaluation of poverty reduction impact will be participatory.
C. Participation Process
Is there a stakeholder analysis? Yes No
Is there a participation strategy? Yes No
Extensive stakeholder analysis was carried out during project preparation. Using the livelihood approach, the analysis was aimed at acquiring a wider and better-informed view of the opportunities, constraints, objectives, and interactions that characterize peoples' lives in the project area. The analysis first explored the relationships between the five categories of livelihood assets. It then identified and prioritized, with beneficiaries and partners such as nongovernment organizations, entry points that can significantly affect the livelihoods of the poor. Specifically, the analysis (i) identified links across sectors, between field and policy levels, and between urban and rural areas; (ii) suggested a range of high-yielding, priority entry points; and (iii) provided a basis for the design of project activities that are appropriately sequenced and accommodate intercommunity relations and potentially conflicting interests. The tools that were used were not discrete and overlapped internally. They included environmental checklists, gender analysis, governance assessment, institutional appraisal, macroeconomic analysis, market analysis, participatory poverty assessment techniques, risk assessment, social analysis, stakeholder analysis, conflict assessment, and environmental assessment. Rapid and participatory methods and sample surveys complemented these tools. Policies, institutions, and processes for sustainable livelihoods were also analyzed to determine how they relate to one another and how they influence livelihoods.
The Project's participation strategy is straightforward, tried, and tested because the planning and approval of small- scale community-driven activities will follow the procedures of the commune/sangkat fund. To further ensure that communities are truly involved in project implementation, the Project also provides for the posting of commune facilitators in each commune within the project area. Additionally, the Project will attach to each community livelihood facilitation team domestic consultants who will be responsible for guiding, training, fielding, and supporting the line agency staff and commune facilitators in the performance of their duties.
The Project will also give ethnic minorities equal opportunities to participate. Built-in design features exist to meet their needs, and demonstrable benefit to ethnic minorities is a criterion for activities eligible for financing under the community livelihood fund. The Project will also facilitate the inclusion of ethnic minorities in the community-driven development process through the community livelihood fund: the community livelihood facilitation teams will pay Appendix 11 49 particular attention to the empowerment of these minorities by organizing them into homogeneous groups for livelihood activities. The Project will thus offer ethnic minorities real chances to participate in village and commune planning and to identify priority investments. The Government has given assurances that there will be no ethnic discrimination and that equal opportunities will be given to all.
D. Gender Development
Strategy to maximize impacts on women:
The Project will support the organization and capacity building of women at the community level to bring about their full representation and participation in community-based organizations. The Project includes targets for women's full access to decision making and livelihood assets. It will provide continuous gender sensitization training for all project staff at all levels. All the project targets will be monitored through gender-sensitive monitoring frameworks. Women from ethnic minorities will also benefit from this strategy.
Has an output been prepared? Yes No
E. Social Safeguards and Other Social Risks
Item Significant/ Plan Required Not Significant/ Strategy to Address Issues None
Significant Construction of small piped-water-supply systems, wells, Full or intra-village roads may entail minor acquisition of land. Not significant A land acquisition and resettlement framework has been Short Resettlement prepared to guide planning and implementation according None to ADB's Policy on Involuntary Resettlement (1995). None
Framework
Significant N/A Yes
Not significant No Affordability
None
Significant The Project will generate employment by providing social Yes infrastructure and other livelihood assets. Labor Not significant No
None
Significant There are no indigenous peoples in the project area. On Yes the other hand, the Project will have positive impacts on Not significant ethnic minorities such as the Vietnamese and Muslim No Indigenous Cham. The strategy entails giving ethnic minorities equal Peoples None opportunities to participate. Built-in design features exist to meet their needs and demonstrable benefit to ethnic minorities is a criterion for activities eligible for funding under the community livelihood fund.
Other Risks Significant N/A Yes and/or Vulnerabilities Not significant No
None