Environmental and Social Management Plan 1. Introduction 1.1 Project Development Objective and Components The Protected Area and Wildlife (PAW) Project seeks to help strengthen selected environmental protection management systems, specifically for protected areas conservation, enforcement of wildlife laws, and environmental assessment management. It will be implemented in three main components: • Component 1:Training of FEBM lecturers • Component 2: Engaging FEBM academics and students into research activities • Component 3: Training of GoL officials • Component 4: Operationalization of two pilot CEF schemes • Component 5: Sub-project management 1.2 Rational of subproject within overall Project Institutional context The main role of the FEBM is to teach tertiary students, train GoL officials, conduct research and provide advice to policy makers. The FEBM is a leading research and education institution in Laos. It produces qualified graduates who can contribute to economic and business development in Laos. The FEBM has collaborated with various research institutes and universities at the regional and international levels as well as with multilateral and bilateral organizations such as United Nations Development Program, the World Bank, Asian Development Bank, JICA, Mekong River Commission, IUCN. FEBM researchers provide advice to various government agencies including the Ministry of Finance, the Ministry of Industry and Commerce, the Ministry of Natural Resources and Environment, the Ministry of Education, the Ministry of Agriculture and Forestry, and the Bank of Lao PDR. In 2013-2014, the FEBM had about 90 staff members (most of whom hold an MA/MS and six hold PhD degrees) reflecting a growing demand for tertiary education related to economics and management within the country. Currently, the FEBM has 8,152 students (of which about 60% are enrolled in regular and 40% in special courses). The Bachelor program in Economics and Business Management offers the following six courses: • Economics of Money and Public Finance • Economics of Development and Planning • Applied Economics • Commerce • General Business Management • Accounting Main challenges faced by the FEBM • Limited teaching capacity in environmental and resource economics. • Lack of capacity to provide advice to GoL officials. • Lack of capacity to provide training opportunities for GoL officials. Page | 1 • Limited capacity of staff and students to conduct research in environmental and resource economics (e.g., limited experience in presenting at conferences; publishing papers). • Lack of research opportunities for students and staff in environmental and resource economics (challenges in securing research grants, participation in international conferences). Priority needs of the FEBM • Accelerated and enhanced development of tertiary students' skills in natural resources and environmental economics to take up positions as managers and policy makers. • Increased capacity of GoL staff to better manage protected areas and implement environmental and social policy, through knowledge of natural resources and environmental economics. • Improved capacity of FEBM academics to provide relevant and timely advice to GoL officials in matters relating to natural resource and environmental economics. • Improved familiarity with the concepts and applications of environmental and natural resource economics amongst senior government officials to enhance policy making. Broader challenges The protected areas of Lao PDR face ongoing degradation processes from illegal activities including wildlife poaching, logging and clearing for agriculture. There is an urgent need for the development of policies designed to protect these forest resources while improving the livelihoods of the people living in and around the protected areas. Approach of sub-project The sub-project will: 1. Improve the capacity of FEBM academics to teach, research and provide policy advice to the GoL in the fields of natural resource and environmental economics. 2. Increase the capacity of GoL officials to manage protected areas using economic principles. 3. Grow the skill base of graduates of FEBM in natural resource and environmental economics. 4. Reduce the degradation of the natural resources in two case study protected areas. 5. Improve the livelihoods of the communities involved. These goals will be achieved through: 1. Training programmes, facilities and research opportunities for FEBM academics and students 2. Training programmes for GoL officials. 3. The introduction of two pilot schemes that will support the implementation of the GoL’s Community Engagement Framework (CEF). The pilot CEF schemes will: 1. Pay local people to patrol the case study protected areas to reduce wildlife poaching and forest resource damaging actions. Page | 2 2. Provide community development grants to villages supporting the patrol teams. 3. Be a ‘class room’ for the study of environmental and natural resource economics. 4. Generate data allowing research work of international standing to be conducted by FEBM academics. 5. Form the ‘proving ground’ for the development of advice to the GoL on policies relating to Payment for Environmental Services (PES) schemes, including a Prime Ministerial decree. CEF scheme design A key element of the approach taken by the sub-project is the implementation of these two pilot CEF schemes. These two schemes will act as “classrooms” in which FEBM academics, students and GoL officials will learn the application of environmental and natural resource economics in real-world contexts. It will also be through these schemes that the forest resources will be protected and the livelihoods of local people will be enhanced. The pilot CEF schemes will seek to establish and sustain a financial link between those with a demand for environmental services and those within the local communities who are potential ES suppliers. This link is established through one or multiple agents interceding between prospective ES buyers and ES suppliers to facilitate an exchange. Suppliers are those within the local communities who have control over the production of ES (e.g., villagers engaging in anti-poaching patrolling), whereas buyers are those who pay for their provision. Buyers may include developers (e.g., hydroelectricity companies) who are obligated by their concession agreements to contribute to environmental protection efforts, domestic and international tourists as well as international agencies representing broader world- wide community concern for environmental assets such as endangered species. CEF schemes designed in this way have the potential to achieve environmental outcomes and improve the livelihoods of those who supply ES. The two pilot CEF schemes will enable a cost-effective and efficient distribution of funds that are earmarked for environmental protection efforts. Information on: • the cause-effect relationship between supply actions and the production of ES (through bio-physical models); • marginal benefits of consumption (through market and non-market valuation methods); and, • marginal costs of supply (through conservation tenders) is required to implement the schemes. This information on benefits and costs will enable the estimation of a ‘market’ price paid per unit of ES that will ensure that both buyers and suppliers are made better off. This is important in the context of the Lao PDR where the ES suppliers are expected to be mainly poor rural communities. As well as securing livelihood improvements, forest resource protection goals will be achieved. The implementation of the two pilot CEF schemes will provide the information necessary to refine the CEF for application in other locations. A rigorously defined conceptual framework for the implementation of the two pilot CEF schemes is detailed in: Scheufele, G, Bennett, J, Kragt, M & Renton, R (2014), Development of a Page | 3 'virtual' PES scheme for the Nam Ngum River Basin, Research Report 3, Effective Implementation of Payments for Environmental Services in Lao PDR, ANU, Canberra (see Attachment 1). Goals of the pilot CEF schemes • Protection of wildlife and forest resources in the selected protected areas. • Improving the livelihoods of households located near or within the selected protected areas by paying them to protect wildlife and forest resources. The concept of the pilot CEF schemes • ES are things that people enjoy from the environment. For example, the diversity of wildlife and forest resources in the Annamite Ranges. • The pilot CEF schemes aim to provide the environmental service ‘wildlife and forest resource protection’. • People who want and are willing to pay for ‘wildlife and forest resource protection’ are ES buyers. • Local communities have the local knowledge to become effective guardians of ‘wildlife and forest resource protection’ through performing wildlife protection actions. • Local communities and their members who engage in wildlife and forest resource protection actions are ES suppliers. • Suppliers of ES get paid for performing wildlife and forest resource protection actions. • The CEF schemes link those people who are willing to pay for ‘wildlife and forest resource protection’ with those who are willing to perform wildlife and forest resource protection actions. Opportunities for participation • Community engagement (villagers refrain from performing wildlife damaging actions specified in Community Action Plans and in Conservation Agreements). • Individual engagement (villagers form patrol teams and engage in