Document of The World Bank

FOR OFFICIAL USE ONLY Public Disclosure Authorized

Report No. 20652

IMPLEMENTATION COMPLETION REPORT (Loan 3529-CH)

ONA Public Disclosure Authorized LOAN

IN THE AMOUNT OF US$11.5 MILLION

TO THE

REPUBLIC OF CHILE

FOR AN Public Disclosure Authorized ENVIRONMENTAL INSTITUTIONS DEVELOPMENT PROJECT

June 28, 2000

ESSDSector Management Unit Argentina,Chile andUruguay Country Management Unit LatinAmerica and the CaribbeanRegion Public Disclosure Authorized This documenthas a restricteddistribution and may be used by recipientsonly in the performanceof their officialduties. Its contentsmay not otherwisebe disclosedwithout World Bank authorization. CURRENCYEQUIVALENTS

(ExchangeRate EffectiveDecember 31, 1999)

CurrencyUnit = ChileanPeso US$1 = CH$527.7

FISCALYEAR January 1 - December 31

ABBREVIATIONSAND ACRONYMS

CEPAL - Comisi6nEcon6mica para AmericaLatina y el Caribe, or the EconomicCommission for Latin Americaand the Caribbean CONAF - Corporaci6nNacional Forestal, or the NationalForest Corporation CONAMA - Comisi6nNacional del Medio Ambiente,or the NationalCommission for Environment EIA - Enviromnental Impact Assessment IDB - Inter-American Development Bank MIDEPLAN - Ministeriode Planificaci6ny Cooperaci6nde la RepuTblicade Chile,or the Ministryof Planningand Cooperation MoF - Ministeriode Hacienda,or the Ministryof Finance NAFTA - North AmericanFree TradeAgreement NGO - Non-Governmental Organization PIU - Project Implementation Unit PPF - Project Preparation Facility SINIA - SistemaNacional de Informaci6nAmbiental , or the NationalEnvironmental InformationSystem SEGPRES - SecretariaGeneral de la Presidencia,or the SecretaryGeneral of the Presidency STyA - SecretariaTecnica y Administrativa,or CONAMA'sTechnical and AdministrativeSecretariat TA - Technical Assistance

Vice President: David de Ferranti CountryManager/Director: Myrna L. Alexander SectorManager/Director: John Redwood TaskTeam Leader/TaskManager: Ina-MarleneE. Ruthenberg Chile FOR OFFICIALUSE ONLY EnvironmentalInstitutions DevelopmentProject

CONTENTS

1. Project Data ...... 1

2. Principal Performance Ratings ...... 1

3. Assessment of Development Objective and Design, and Quality at Entry ...... 1 3.1 Original Objective ...... 1 3.2 Quality at Entry ...... 2 3.3 Project Components ...... 4

4. Achievement of Objective and Outputs ...... 5...... 5 4.1 Achievement of Objective ...... 5 4.2 Outputs by Component ...... 6

5. Major Factors Affecting Implementation and Outcome ...... 10 5.1 Factors Outside the Control of Government or Implementing Agency ...... 10 5.2 Factors Generally Subject to Government ControL ...... 11 5.3 Factors Generally Subject to Implementing Agency Control: CONAMA ...... 12 5.4 Costs and Financing ...... 12

6. Sustainability ...... 13 6.1 Rationale for Sustainability Rating ...... 13

7. Bank and Borrower Performance ...... 14 7.1 Bank Identification and Preparation ...... 14 7.2 Bank Supervision ...... 14 7.3 Overall Bank Performance ...... 15 7.4 Borrower Preparation ...... 15 7.5 Government Implementation Performance ...... 15 7.6 Implementing Agency ...... 16 7.7 Overall Borrower Performance ...... 16

8. Lessons Learned...... 16

9. Partner Comments ...... 19

Annexes: Annex 1. Key Performance Indicators/Log Frame Matrix ...... 20 Table 1: Project Performance Indicators as established in the SAR ...... 20 Table 2: Contribution by Donors and Bilateral Agencies for CONAMA's Environmental Programs ...... 21 Table 3: Component Performance Indicators ...... 22 This documenthas a restricteddistribution and may be used by recipientsonly in the performanceof their officialduties. Its contentsmay not be otherwisedisclosed without WorldBank authorization. Annex 2. Project Costs and Financing...... 23 Table 1: Project Cost by Component...... 23 Table 2: Project Cost by ProcurementArrangements (Appraisal Estimate)...... 23 Table 3: Project Costs by Procurement Arrangements (Actual)...... 24 Table 4: Project Financing Category...... 24 Annex 3. Bank Inputs...... 25 Annex 4. Ratings for Achievement of Objectives/Outputs of Components...... 27 Annex 5. Ratings of Bank and Borrower Performance...... 27 Annex 6. List of Supporting Documents...... 28 Annex 7. Stakeholder Workshop Results...... 33 Annex 8. Bo rrowerICR ...... 36 Annex 9. Lessons Learned from the Chilean Model for Public Sector Environmental Management. 49 Annex 10. CONAMA's Organizational Structure...... 53 Map 1. Project Data Name: Environmental InstitutionsDevelopment L/C/TF 35290; 3529A; Number: 3529S; P1641 Country/Department: Chile Region: LatinAmerica and CaribbeanRegion Sector/subsector: VI - Environmental Institutions Key Dates Original Revised/Actual PCD: 06/15/90 Effective: 02/08/93 Appraisal: 07/01/90 MTR: 06/01/1996 Approval: 11/17/92 Closing: 06/30/98 12/31/99 Borrower/lImplementingAgency: REPUBLICOF CHILE/NationalEnvironment Commission (CONAMA)

STAFF Current: At Appraisal: Vice President: David De Ferranti Shahid Husain Country Manager: Myrna L. Alexander Ping-CheungLoh Sector Manager: John Redwood James W. Adams Team Leader at ICR: Ina-MarleneE. Ruthenberg Luis Pisani ICR Primary Author: ICR Teamcomposed of Ina-MarleneRuthenberg, John Dixon, Kulsum Ahmed, Carter Brandon and Angela Armstrong

2. Principal PerformanceRatings (HS=Highlysatisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly likely, L=Likely, UJN=Unlikely, HUN=Highly unlikely, HU=Highlyunsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: HS Sustainability: HL Institutional DevelopmentImpact: SU Bank Performance: S Borrower Performance: S QAG(if available) ICR Quality at Entry: n.a. HS Project at Risk at Any Time: n.a. No

3. Assessmentof Development Objective and Design, and of Quality at Entry 3.1 Original Objective

The project was the World Bank's first environment operation in Chile. It was designed to help raise the priority of environmental protection and modernize environmental management in newly-democratic Chile by establishing a new national level authority. This required no less than a cultural shift within government.Chile selected a model that consisted of a small, decentralized National Commission for Environment (CONAMA) with technical and coordination functions, that was overseen by an Inter-MinisterialCommittee of relevant state ministries with environment-related functions (see Annex 11 for CONAMA Structure). The World Bank- financed project adopted a two-tiered approach to support the implementation of this model. First, it helped make the model workable by supporting many aspects of its implementation;and second, it helped strengthen the Government's ability to evaluate and manage priority environmental problems (forestry, mining, and industry). Details on these two components follow.

(i) Establishing an institutionalframework to manage environmental protection and conservation of natural resources. At the project's outset, a transitory version of CONAMA had been created by presidential decree, which consisted of a small Technical Administrative Secretariat (STyA) staffed with 6 persons in the Ministry of National Resources. The project specifically aimed to (i) strengthen the technical and administrative structure of the commission; (ii) implement and update the legal regulatory framework for environment; (iii) develop environmental impact assessments (EIAs) as a principle management tool for public- and private-sector investment projects; (iv) provide training in environmental and natural resources management; (v) develop a nonformal education program; (vi) implement small environmental projects at the community level; (vii) establish an environmental information system; and (viii) develop capacity for economic analysis of environmental issues.

(ii) Strengthening environmental management in priority sectors. The project selected forestry, mining and industry for strengthening sector ministries' environmental management capacity. Specifically, the project aimed to (i) improve the quality of management and conservation of Chile's native forests, (ii) conduct studies leading to a national strategy for reduction of industrial pollution, and (iii) develop a regulatory environmental framework for the mining sector.

3.2 Quality at Entry

Seizing the opportunity. The Chilean government's request for Bank assistance in environmental institution building came at a particularly opportune time. In 1990, after 17 years of military dictatorship, the country transitioned to a democratically elected government that was responsive and accountable to a wider range of public interests and stakeholders. At the same time, these stakeholders and interest groups became more energized and unconstrained in voicing their agendas. Environment emerged as an increasingly important issue, highlighted by the visibly poor air quality in Santiago and the mounting destruction of forests. In addition, transnational mining companies were introducing the more environmentally sound practices they already had incorporated into production systems under the more stringent requirements of their home countries. These companies also provided leadership in the environmental arena by conducting voluntary EIAs. The global context for the emergence of a new environmental agenda in Chile included the 1992 Rio Earth Summit and the possibility of a wider North American Free Trade Agreement that, if implemented, would have included environmental requirements for Chile. For the Bank, environment was a relatively new but increasingly important area, as reflected in the 1992 World Development Report focusing on development and the environment.

Setting broad, yet clear and realistic objectives. Since the project aimed at promoting a culture shift to raise the priority of environmental protection and modernize environmental management, the overall goal of the project was quite broad. The objectives were realistic in that they focused on building an agency to coordinate the efforts of existing public institutions rather than creating a new ministry. The new government preferred this approach because the development of large central administrations was a contributing factor in the downfall of the prior democratic government of President Salvador Allende. While the project was realistic in its goals, it was slightly overoptimistic about the time required to build political consensus for innovation and change. At the time there was no country assistance strategy, no portfolio with Chile, and the Bank's experience in this area was low. There were only two similar projects-in Brazil and Mexico-both of which had only recently been approved.

Risk assessment was adequate and the design allowedfor flexibility. The project was risky because government support was inconsistent; although President Aylwin was committed to the project's objectives, other officials felt that addressing environmental concerns would compromise economic growth. Furthermore, the project design was in the hands of a only few technical experts from academia and NGOs, the implementing agency initially had standing only by executive decree rather than by law; and there were no policies or procedures designed for the proposed institution. The SAR alluded to political difficulties in general terms as "resistance from the part of the public administration." This did not fully capture the political chess playing that is part of establishing a new public institution, creating a legal framework, and developing a set of public-sector management policies and tools. Flexibility of the project design, however, was highly adequate and allowed for changes in component design, pilots, and the loan disbursement schedule in order to deal with the risks.

2 Though demanding, complex, and politically risky, the project was very responsive to Chile's needs, circumstances,and developmentpriorities. The project was particularly demanding for the Borrowerbecause of its initially inadequate human resources. At the outset of the project, CONAMA had only six staff. The project was complex in that there were ten components (many of these became the basis for the current departments in CONAMA). Although in terms of what was being financed (goods, equipment, and a number of studies) the project was relatively simple, dividing the funds into ten componentsconsiderably increased accountability.The project objectives were also consistent with the country's needs. Chile had a strong economy and relatively high level of development, but the country was still playing catch-up on its environmental and social agendas. The project was responsive to Borrower circumstances, because it gave increased credibility to, while also demanding greater accountability from, the nascent institution. Finally, sustainability was clearly addressed in project design since the entire plan was to establish a new entity that would become a permanent institution in the Chilean government.

Methodologyfocused little on impact but a very good attempt was made to develop a logical project structure. The objective of strengthening institutional capacity to implement sectoral policies and plans was formulated as inputs that will have outputs rather than as outcomes with impacts on improved environmental performance. Overall projectperformance indicators were defined, but were not impact indicators. Substantial health benefits to the citizens in urban areas and locations affected by industrial or mining pollutants are mentioned in the SAR but no attempt was made to quantify baselines for these potential impacts. The same weakness applied on other componentswhere the expected results were general.However, within each component there was a detailed list of activities with detailed performance indicators that provided a better depiction of expected impacts. The SAR put these elements together in an overview that comes close to being a Logical Framework, and which was helpful in evaluating the project.

3 3.3 Project Components

Table 1. Costs by Project Component Costs At appraisal Reprogrammed At closing Component' (1992) (1996) (12-31-l 999 )b A. Institutional Strengthening: I. Strengtheningof CONAMA's Organization 11,660,000 11,317,000 14,350,000 2. Legal Regulatory Framework 860,000 866,700 800,000 3. Environmental Impact Assessment System 6,950,000 4,344,200 3,300,000 4. Training and Awareness 3,840,000 2,834,900 2,280,000 4.1. Trainingfor Public Sector Professionals 1,813,700 1,620,000 4.2. EnvironmentalAwarenessc 1,021,200 660,000 5. EnvironmentalInformation System 1,250,000 1,010,200 760,000 6. Economic Analysis of Enviromnental Issues 340,000 1,139,300 1,180,000 7. DecontaminationPlans and Emission Standardsd n.a. 2,898,300 2,220,000

B. Priority Sector Activities: 1. Native Forest Cadastre 5,390,000 5,392,000 4,790,000 2. Control of IndustrialPollution 2,020,000 2,020,100 1,770,000 3. Control of Mining Pollution 470,000 472,600 680,000

PPF 570,000 Total 32,770,000 32,295,300 32,700,000 a Componentnumbering changed several times during the course of theproject. This table reflects the numbers at projectclosing. b. Costsare rounded. c. ComponentA 4.2 is listedin the LoanAgreement as ComponentsA.5 (PublicEnvironmental Education Program) and A.6 (CommunityProjects). As thesecomponents were processed and reportedon collectivelyduring implementation, they are presented in theICR as a singlecomponent (Environmental Awareness). d. TheDecontamination Plans and Emissions Standards Component was added to theproject in December1997. Althoughit was listedas ComponentA.9 whenadded via a loanamendment, it is listedin the ICRas ComponentA.7.

Changes to project components. A new Component A.7 (Decontamination Plans and Emission Standards) was added to the project following the midterm review. The Bank approved a proposal for this component in 1996, and it was formally added to the project via an amendment to the Loan Agreement in December 1997. To finance this component, resources were reprogrammed from other components, mainly EIA and Training. In addition, there were substantial changes made to the design of Components A.5 (Environmental Information System) and B.2 (Control of Industrial Pollution). Component A.5 was completely revised because of rapidly changing information technology, which was particularly far-reaching during the mid- 1990s. Component B1.2 was revised in 1997 and its focus changed from development of a regulatory framework for industry to promotion of voluntary "cleaner production" initiatives. Industrial regulation development was then integrated into the new Component A.7 on decontaminationand emission standards. These adjustments in components also warranted a reallocation of proceeds among categories, which was processed in the December 1997 amendment. Two subsequent reallocations of proceeds to cover both disbursement overruns and slight component adjustments were requested by CONAMA and approved by the Bank in a notice to the Borrower in November 1998 and May 1999.

4 4. Achievementof Objective and Outputs

4.1 Achievement of Objective:

Establishing an institutional framework to manage environmental protection and conservation of natural resources. There were remarkable changes in Chile's environmental management over the life of the project. When project preparation began there were only six government staff working on environment and there were no laws, procedures or regulations. By the end of the project there was a central environment agency with 350 staff, environment units in ten ministries, and a solid track record on impact assessment, policy analysis, information systems, and other aspects of environmental management. The first objective-establishing an institutional framework-was fully achieved by any standard, and surpassed project expectations. Few (if any) countries have progressed so quickly from such a low base. The greatest credit clearly goes to the Chilean government. However, the evaluation team found that the World Bank-financed project was also an essential catalyst for change. The project helped the young CONAMA to acquire and manage a national budget, marshal essential technical assistance at key junctures, leverage donor assistance, weather political conflict, and gain stature in the eyes of government agencies, the media, the private sector, and civil society. While CONAMA still faces many problems (as discussed later), it truly has made remarkable advances.

Strengthening environmental management in priority sectors. Success on the second objective-strengthening and implementing sectoral policies-was mixed, in large part because the environment agenda sometimes conflicted with other institutional incentives. When the environmental objectives were consistent with the general objective of the relevant ministry, there was considerable success. This was the case in the preparation of a cadastre by the Forestry Ministry and the promotion of clean production by the Ministry of Economy. However, when environmental objectives were in conflict with the general mandate of the ministry there was considerably less success. Examples of this include development of regulatory frameworks by ministries in productive sectors such as Mining and Economy.

Reasoning for Highly Satisfactory overall project rating. The overall rating would be "satisfactory" if based only on the unweighted average of the separate components. However, the assessment of development outcome should be more than just the average of component ratings. In the case of this project, two main arguments justify a rating of "highly satisfactory."

First, this project set up an entirely new administrative sector in the Chilean government and was a catalyst in the very rapid expansion of institutional capacity in environmental management. The highly satisfactory outcome is reflected in the fact that the new agency is fully operational in its core functions, taken seriously by the private sector, commended by NGOs, and has gained broad public recognition of its authority. Sustainability is highly likely because the new commission has political support, an explicit legislative foundation, and receives regular and adequate budget appropriations. The project's success was mostly due to the Chilean government's political commitment, highly trained and motivated staff, and flexibility during implementation.

Second, the project substantially exceeded the performance indicators established in its SAR. These output indicators assessed the environment commission's relevance, importance, and attractiveness to other donors. The ICR team (which was composed of staff from the Latin America and Caribbean Region, the South Asia Region, and the Environment Anchor) identified this project as an example of good practice that should be included in the Bank's Knowledge Management base and used for learning exercises in other countries. In fact, this has already taken place in the form of a Pan-American workshop on the "Institutional Dimension of EnvironmentalManagement" (October 1999).

5 4.2 Outputs by Component

A. Establishing the institutionalframework to manage environmentalprotection and conservation of natural resources: Component A.1-Strengthening CONAMA's Organization: This component recognized the need to build CONAMA into an institution capable of developing and implementing environmental policies. The component was intended to help provide management autonomy, establish administrative structures, recruit and train staff, and provide adequate office space and equipment. While this component was the single largest expenditure item of the overall project budget (including counterpart funds), it received a relatively small percentage of World Bank financing. In fact, much of the Bank's technical contribution was made during project preparation, when the organizational structure, required tasks, and institutional strengthening needs were being conceptualized. During project implementationthe growth in CONAMA's recurring staff and administrative costs was primarily financed through counterpartfunding, although it is also clear that some consultants engaged for specific studies assisted CONAMA in various staff functions as well. In terms of recruitment and staff development, there is now a much more formal human resources department and training program in place than was possible during the commission's early years of rapid growth.

ComponentA.2-Legal Regulatory Framework: At the beginning of the project Chile had more than 2,000 environment-related regulations established under about 700 laws and decrees, yet there was no clear institutional responsibility for environment. The project helped address this situation by supporting development of the General Environmental Framework Law (Law No. 19.300), which took effect in March 1994. The law regulates fundamental .aspects of environmental matters by (i) defining key concepts such as environment, biodiversity, pollution, environmental heritage conservation, nature conservation, environmental impact, and environmental damage; (ii) establishing environmental management tools; (iii) clarifying responsibilities with respect to ordinary civil responsibility as well as responsibility for environmental damage; and (iv) creating a state institutional framework-CONAMA-that is responsible for environmental issues.

The legislation built an incentive system that is based on command-and-control instruments, but also includes the possibility of using economic instruments (though they do not currently exist). The law also envisioned four supplementary, sector-specific laws, but these lacked political support and have never been implemented (the Forestry Law has languished in Congress since 1992). Instead of pressing for these sectoral laws, CONAMA has concentrated on developing high-priority regulations in the three main areas where the legislation granted the commission specific powers: (i) managing the EIA process and clearing new projects; (ii) setting environmental standards and norms; and (iii) drafting and enforcing decontamination plans for the most highly polluted areas in the country.

Stakeholders see the legal regulatory framework as an excellent foundation that has produced tangible results, but which needs to be updated soon, particularly with respect to the EIA process and CONAMA's administrative organization. Currently only the decontamination plans have a compliance monitoring system. However, CONAMA is developing a more comprehensive system, including compliance monitoring for the sectors, and is also planning to prepare a National Report on Enforcement. Furthermore, training was conducted on environmental law, and Chile has signed most international environmental conventions and has improved its capacity to participate in international environmental initiatives. CONAMA, through a permanent committee, works closely with the Ministry of Foreign Affairs to monitor implementation of international commitments by the sector agencies. This component also benefited from additional Canadian support within the context of NAFTA preparations.

Component A.3-Environmental Impact Assessment System (EIA): The project succeeded in supporting a successful consultative process of establishing EIA rules and procedures that now carry the force of law. It also financed limited EIA training activities in the mid-1990s (although EIA training programs were discontinued, and are scheduled to be restarted this year). Approximately 1,896 EIAs have been processed since 1997, the year

6 the bylaws went into effect, and only about 20 CONAMA decisions have been contested in the courts. By all accounts -- private sector, government agencies, NGOs, and CONAMA itself -- the process works adequately. Some shortcomingsthat have been recognized will be addressed through modifying the bylaws and eventual amending the environmental law itself. (These modifications will address such issues as the criteria for determining which projects require EIAs; the scope, methods, and timing of public participation; the more explicit incorporationof social concerns, including resettlement; and CONAMA's intended role as a "one-stop shop" for all project permitting requirements,whether environment-relatedor not.)

However, the most fundamental problem with the EIA process-lack of national policies for resource use in areas such as water, land, forestry, fisheries, biodiversity, and mining-has more to do with the sectoral ministries than with CONAMA. Having such policies would provide a clearer basis for reviewing and clearing new investmentprojects. Without clear national guidelines, CONAMA must try to apply its best judgement on a project-by-project basis, and is open to public criticism. This problem was beyond the original scope of the project, although it could have been pursued more vigorously following the midterm review.

Component A.4-Training and Awareness:

4.1 Trainingfor Public Sector Professionals The performance capabilities of public sector personnel involved in managing environmental activities has improved markedly, but this cannot be attributed to activities under this project component. The component design was very detailed at the level of targets but not very clear in terms of needs and strategy, therefore implementation did not follow the original structure. The component envisioned a Training Program in Environmental Management for Public Sector Professionals as well as study visits and fellowships abroad, but these were not realized. The only activities conducted under this component were those directly related to a series of basic, intermediate, and advanced courses in environmental management developed in collaboration with a local NGO. Two-day courses for about 1,500 professionalswere conducted nationwide in 1995 and 1996 in collaborationwith local universities, but only for the basic and intermediate levels. A positive side effect was that these courses apparently triggered interest in developing environment curricula in local universities. The impact of this one time effort, however, does not go beyond awareness raising. Various other training courses are developed and organized by CONAMA, but under specific subtopics, mostly in EIA and legislation. The Inter-AmericanDevelopment Bank also financed a training program for pollution management.

4.2 EnvironmentalAwareness Outputs achieved under this component include establishment of a documentation center in Santiago, publication of printed texts and videos, and implementationof about 30 locally designed projects in regions IV, V, and X, as well as one in the Santiago Metropolitan Area that fostered citizen participation in solving specific environmentalproblems at the community level. One activity that was not implemented was a consciousness- raising and education program on environmental matters. The impact of this component has been mixed. The community-level projects, though not formally evaluated, provided CONAMA with useful experience in implementing these types of projects. This experience was helpful in designing the Fund for Environmental Protection, which was set up with national financing in 1997 and has supported about 400 similar projects. Environmentalawareness in Chile has generally increased in the past ten years. This is reflected by the fact that there is (i) a greater number environmental NGOs; (ii) more community participation in the EIA consultation process; (iii) an increase in the number of environmental consultants;and (iv) a greater number and diversity of environmentalcourses offered by local universities. However,the activities implemented under this component made only a minimal contribution to this change. Finally, the CONAMA web page, though financed under a separate component, has had a considerable impact on informing the public about environmental problems and solutions, and thus has helped achieve the original objectives of this component.

Component A.5-Environmental Information System: Chile has developed, and to a substantial degree started implementing, an environmental information system that contributes to decisionmaking at the sectoral

7 and regional level through (i) disseminating information, (ii) managing basic information, and (iii) developing a set of sustainable development indicators. These are the three characteristics considered essential for an effective system. The system is regionalized, it has substantially increased transparency through easy public access, and it has contributed to a culture of improved information-sharing.

Information dissemination through the web pages of CONAMA and the Environmental Information System (SINIA), which is managed by CONAMA, is highly satisfactory.They contribute to the transparency of the EIA process by posting a considerable amount of information on the World Wide Web, including the complete EIA studies (even in draft form). The web site is also used for consultations, for example during development of standards. On average the web site receives 3,800 visitors per month.

The challenge for SINIA is to go beyond compiling information and move towardmanaging it by selecting and defining the information that best contributes to strategic decisionmaking. A virtual network has been established that links the databases of more than 30 public institutions, 400 companies, and many other institutions. In total SINIA manages more than 14,000 html pages of environmental information. Together with the National Statistics Institute, CONAMA has published "Environmental Statistics 1994-1998." This is an important step, but the information does not yet have the quality to substantially contribute to decisionmaking in environmental conservationand preservation.

A success story with respect to generating and managing strategic information is the native forestry cadastre financed by the project under Component B.1. CONAMA also has published "Regional Sustainable DevelopmentIndicators," which includes a good methodology, but in most cases lacks the data needed to define the indicators clearly. A recommendation that has been made ever since project preparation is to publish a "National Report on the State of the Environment" along the same lines as the national reports published by other sectors, but such a report still has not been completed. Component A.5 was completely redesigned during implementation to take advantage of rapidly evolving information technology and the World Wide Web. The component financed all hardware and software available in CONAMA, as well as studies and consultants. The component also benefited from technical and financial support from Canada and Japan.

Component A.6-Economic Analysis of Environmental Issues: An important goal of the Bank project was to raise awareness of the use of economic analysis and economic instruments for improved environmental management, and to help CONAMA create an in-house capacity for this work. This has been accomplished by the creation, expansion, and "mainstreaming" of the Unidad de Economia Ambiental (the Unit). The Unit was set up in November 1994and has produced more than 25 studies on a variety of topics, from the use of tradable permits to valuation methodology (see Annex 6). It currently has five staff (four professionals and a secretary). A number of staff members have received extemal training. The Unit produces both paper reports and electronic versions of all its studies, and these are made available on the CONAMA web site.

The biggest challenge for the Unit has been to link the results of its studies more closely to the process of policy formulation. In the past a number of the studies, while technically well done, have had only limited impact on the policy process. One exception is in the area of "Decontamination Plans and Emission Standards," where the Unit has played an active role in assessing the economic benefits and costs of proposed norms, standards, and decontaminationplans. In the future the Unit plans to link its research program more directly to key policy areas in CONAMA's work plan and tailor outputs directly to the policy debate. In addition, Unit members need to be able to devote more of their own time to carrying out the studies, rather than managing the work of outside consultants.

An important indicator of the success of this component is that CONAMA has accepted the need for the Unit and has substantially increased its resources. Whereas the original project design had only modest resources to support economic studies ($300,000), during project implementation this function was formalized in the Unit and its budget was increased to over $1,180,000. The Unit has now become a core part of the CONAMA

8 structure and is supported through regular budget allocation. For the year 2000 the Unit's budget is more than $160,000($90,000 for studies and the rest for staffing and other costs.)

The one failure under this component was a study on resource accounting conducted jointly with a newly established resource accounting unit in the Central Bank of Chile. The initial study focused on the native forest sector (with additional work on the mining and fishery sector), and because of restrictions imposed on the dissemination of results for peer review, the report first received public notice through a "leaked" copy in the national press. Due to data and methodological errors, the results were quickly contested by the forestry industry, an uproar resulted, and the head of the resource accounting unit was fired. Limited additional work on environmental accounts consisted of studies carried out by the EnvironmentalEconomics Unit of CONAMA for the Central Bank on water and soils resources. At present the Resource Accounting Unit of the Central Bank is largely inactive, and resource accounting is not part of the Central Bank's work on national accounts.

Component A.7-Decontamination Plans and Emission Standards: Following the midterm review, the project introduced a new component designed to help establish environmental and emissions standards (norms) and prepare plans for decontamination of highly polluted areas. This component partially assumed work assigned to the Industrial Sector component, and partially recognized CONAMA's need for support in establishing norms across many other sectors besides industry. Bylaws for framing norms were approved in late 1995. Between 1996 and the end of 1999 the project helped finance work on 20 national norms (out of 31 that are on the complete list of norms scheduled to be drafted), of which 14 have been approved. During these years, CONAMA's role in coordinating the technical input from consultant studies, government review, and public consultation, even though at a much slower pace than expected at the beginning, has earned widespread respect. The principles used to establish norms are some of the latest worldwide (allowing for flexibility in standards based on the carrying capacity of the receiving bodies), and are beginning to incorporate greater use of economic instruments (such as in encouraging offset agreements for water pollution as well as air pollution).

In parallel with the work on norms, the project has helped finance CONAMA's role in developing "DecontaminationPlans" for areas designated as highly polluted. (To date, these "zonas saturadas" only include areas with air pollution problems.) Since these decontamination plans are the responsibility of the regional CONAMA offices in which the polluted areas are located, this component has helped support the regional offices. The next phase for these plans will more forcefully and more pro-actively ensure public participation in both the preparation and enforcement of the plans.

B. Strengthening the Borrower's ability to evaluate and managepriority environmentalproblems in selected sectors: Component B.1-Native Forestry Cadastre: Chile has important forest resources (both native forests and the rapidly growing plantation sector) that are the focus of continuing debate over their management and use. A new forestry law has been under discussion for several years. Because data on the type and coverage of forests are lacking, the project identified a forestry component centered on the cadastre of all forests in Chile. This highly successful activity was a multiyear, multimillion dollar component that included complete aerial mapping of all forest areas in Chile, and production of detailed maps containing information on forest and vegetative cover and type, elevation, and the location of roads and other features. This activity was carried out by CONAF (the National Forest Corporation) and its prime contractor, the Universidad Austral de Chile in Valdivia.

The cadastre was carried out successfully, and in fact the coverage and level of detail exceeded initial plans. Chile now has excellent baseline data for this key economic and environmental resource. In addition, since information technology costs dropped sharply during this period, the results are now available at all 50 CONAF offices nationwide, rather than at just the 13 regional offices as initially planned. At present CONAF is implementingthe follow-up monitoring and information-updatingpart of the activity. The proposed institutional study was dropped after discussions with CONAMA led to the decision that this study was not required.

9 The only issue surrounding the cadastre is that of access to the underlying digital data base. At present CONAF treats this as proprietary knowledge, and will sell maps and derived products, but not the raw data. This is a common modus operandi for many government institutions. Sale of information is often a notable source of budgetary income. Making the raw data more widely available in the future is worth considering, especially in an alliance with INFOR (the Forestry Research Institute) and the private sector. Any decision on this can only be made at the ministerial level.

Component B.2-Control of Industrial Pollution: Under the original design of this component, most of the activities were satisfactorily completed. These included several diagnostics of industrial emissions, as well as a manual on industrial solid waste management. Prior to full completion of the second phase, which involved the application of these inventories and the development of action plans, the design of this component was changed significantly to instead promote cleaner production activities.' The studies from phase one, however, were used in the development of standards under Component A.7. Outputs relating to clean production clearly have had an impact, despite the short time period. A second round of clean production awards and a second clean production month were recently implemented from non-Bank funds. Furthermore, seven voluntary agreements have been signed with different industrial sectors, and a new fund for clean production has been designed.

The sustainability of these activities is promising because the Ministry of Economy has assigned a continuing budget for them, and the cleaner production agreements themselves allude to a short-, medium-, and long-term time frame. Further, the fact that they are being promoted by the Ministry of Economy, rather than CONAMA, is also important for creating greater interest in the private sector and thus achieving potentially greater impact. Due to the change in component design, the environmental unit in the Ministry of Economy, which was created at the start of the project, was closed down and replaced by an Executive Secretariat of Cleaner Production. The capacity of this current secretariat is strong.

ComponentB.3-Control of Mining Pollution: The outputs under this component, namely a set of norms and standards related to effluent discharge, solid waste disposal, and mine abandonment, and a training program, were not achieved. The only area where limited progress was made is with respect to mine abandonment regulation, which is currently under development following a study financed by the Bank on this subject in 1997. The environment unit in the Ministry of Mines, which was in existence prior to project preparation, is weak and does not appear to have benefited in terms of capacity-building from this component.

5. Major Factors Affecting Implementation and Outcome

5.1 Factors Outside the Control of Government or Implementing Agency

Development of new or less costly technology had a positive impact on project implementation under two components. The design of the Environmental Information System (Component A.5) changed completely with the opportunity to use a system that would be Internet-based and would work as a virtual network. It was a positive change as the new design turned out to be more appropriate and will be less costly to maintain. The Native Forestry Cadastre (Component B. 1) has benefited from cost reduction in the technology it uses (e.g. GIS system).

I. Outputs from the second phase of this component include (i) a training and awareness raising program for the public and privatesectors, including publication of a cleanproduction manual, technical guides, design and implementationof a web page, implementationof a national clean production month, and design of an award for clean production; (ii) developing the basis for public-private sector clean production voluntary agreements;and (iii) studies to evaluate how to promote clean production through existing regulations and financial instruments.

110 5.2 Factors GenerallySubject to Government Control

Frequent turnover of CONAM4's Executive Director disrupted continuity because each director brought different priorities and agendas to the organization. The period under President Frei saw three different directors, which coincided with the period during which CONAMA had to prove its role in spite of political opposition. It is important to highlight that CONAMA's credibility is quite heavily dependent on the political commitment of the president and the Secretary General of the Presidency (SEGPRES) under which CONAMA is organizationally placed. Table 2 below gives an overview and Annex 11 provides an outline CONAMA's structure.

The delay in developing sector laws (e.g. natural resources) and in passing laws (e.g. the Forestry Law) can be attributed to government control. The sector ministries, and not CONAMA, are responsible for promulgating sector laws. Environment has not been among their priorities to date, and the political cost of noncompliance is considered low. CONAMA can attempt to promote an environmental agenda in these productive sectors, but its political influence within government depends largely on the Secretary General of the Presidency and the President of the Republic.

Table 2. Turnover in the Leadership of CONAMA and other Key Institutions Function Period Officeholder President of the Republic 1990-94 Patricio Aylwin Azocar 1994-2000 Eduardo Frei Ruiz-Tagle 2000-06 Ricardo Lagos Escobar ...... - . - -...... -....--.- _.-_-,__-._- Minister of Finance 1990-94 Alejandro Foxley 1994-2000 Eduardo Aninat 2000- Nicolas Eyzaguirre ...... I...... Executive Director of CONAMA 1990-94 Rafael Asenjo 1994-95 Jose Gofli 1995-97 Vivianne Blanlot 1997-2000 Rodrigo Egafla 2000- Adriana Hoffmann ...... I...... Secretary General of the 1990-94 Edgardo Boenninger Presidency (SEGPRES) 1994-96 Genaro Arriagada 1996-98 Juan Villarzu 1998-99 John Biehl 1999-2000 Jose Miguel Insulza 2000- Alvaro Garcia ...... I...... Vice-Ministerof the Secretary 1990-94 Ricardo Solari General of the Presidency 1994-95 Angel Flisfich (SEGPRES) 1995-96 Jorge Rosembluth 1996-99 Sergio Galilea 1999-2000 Carlos Carmona 2000- Eduardo Dockendorff

Enforcement of EIAs is almost entirely in the hands of the respective sector agency. While CONAMA is effectively in charge of the EIA decisionmaking process, its role during implementation of the EIA decision is limited to monitoring. The system is still too new to establish a track record on this issue, but it is viewed as a challenge because noncompliancefees are disproportionatelylow.

11 5.3 Factors Generally Subject to Implementing Agency Control: CONAMA

Changes in the project implementation unit affected performance with respect to the quality of reporting, dialogue with the Bank, and the availability of documentation. This resulted in a decline in the previously high standard set during the initial years of implementation. While the project had seen a total of five different project coordinators during its cycle, the influence of the first and last coordinators was marginal because they were only involved for a few months each.

CONAMA lacks an overall strategy with clear priorities despite its overall commendable achievements. This put great discretion in the hands of each director and frequently resulted in priorities being shifted between components.

Quality of studies and programs was not always of the highest standard. In a few cases insufficiently qualified staff were assigned to tasks, consultants were contracted who were not the most appropriately qualified, and the peer review system was not as rigorous as it could have been. Furthermore, CONAMA often missed the opportunity to select consultants and seek expertise at the international level, an option the project was specifically designed to include.

Inadequate attention was given to education and awareness raising activities. This is particularly regrettable given its relative importance to CONAMA's mandate of coordination between public entities and promotion of the environment agenda inside government and throughout the society.

Compliance with covenants. CONAMA has generally complied with all covenants under the Loan Agreement, with the exception of covenant 3.06 (a) and (b) which has been partially complied with. Under this covenant, CONAMA had agreed to submit to the Bank for its review the environmental standards for both the Decontamination Plans and Emission Standards and the Mining Components, as well as take all measures to implement these standards. For the Mining Component, these standards were not prepared. Although the covenants on reporting requirements (for yearly audit, programming, and progress reports) have been complied with, they have often been complied with after delay.

5.4 Costs and Financing

Once the loan became effective, expansion of CONAMA's staff and budget resources occurred fairly quickly. The project's financial resources played an important catalytic role in financing the newly created CONAMA administration. The Bank's share of financing was administered flexibly, which allowed CONAMA to weather difficult periods with the Ministry of Finance, particularly at the beginning of the project. Other donors also entered and began to support discrete activities within the overall framework of CONAMA's development, which surpassed expectations (see Project Performance Indicators in Annex 1).

Disbursement schedule was overly ambitiousfor a newly created public administration, which resulted in two project extensions. In 1993, during the first year of the project, an insufficient allocation of Bank and counterpart funds seriously delayed the implementation of the activities designed to strengthen the central institutional responsibilities of CONAMA. MoF had allocated about $1.8 million to the project ($1 million from Bank funds), which was far from the original amount committed during negotiations ($5.5 million). Of the amount allocated, the majority ($1.5 million) was assigned to the project's sectoral activities. The government was reluctant to allocate funds to CONAMA while the Framework Law (which would give CONAMA legal standing) was awaiting approval in Congress, and also because of its concerns about macroeconomic conditions. Another hurdle that needed to be overcome was the initial hesitancy of the sectoral ministries to collaborate with CONAMA. By the end of 1994, Bank disbursements had reached only 6 percent of the loan amount, compared to an expected 52 percent. However, this did not affect CONAMA because the government had increased its own budget allocations to CONAMA, for both the project and the institution's overall budget, from only

12 $500,000 in 1993, to $8 million in 1994. In fact, CONAMA was only able to spend $1.9 million of its own resources on the project in 1994 because the young institution could not absorb such a large budget increase so quickly. By the end of 1996, Bank disbursements reached over 50 percent of the loan amount ($6.83 million). For the remainder of project implementation, disbursements and government counterpart funds were both allocated and spent in a timely manner. Two requests for an extension of the project closing date were granted in December 1997, through an amendment to the Loan Agreement, and May 1999, via a notice to the Borrower, because by then CONAMA's track record proved its ability use the resources as planned.

Changes in cost structure due to new component and priority setting. In mid-1996, the Bank cleared CONAMA's proposal for a new component, "Decontamination Plans and Emission Standards," with an estimated cost of almost $2.9 million. Financing for this was taken primarily from the EIA component ($2.6 million). Furthermore, the component on "Economic Analysis of Environmental Issues" received an additional $800,000, which was shifted from the component on "Environmental Training of the Public Sector" as it had not progressed as planned.

Other Donor Support. Chile garnered an impressive amount of multilateral and bilateral donor support for its environment program, totaling over US$105.8 million over the life of the project. Donor support was one of the project's key performance indicators, and as shown in Annex 1, Table 1 this indicator vastly exceeded expectations. Many of these programs did not directly benefit CONAMA, but did support sectoral agencies' environmental programs. This support represented approximately 10 percent of the entire donor cooperation that Chile received for development programs. CONAMA itself did receive sustained support from other donors, primarily for its air pollution programs. A listing of CONAMA's programs that have been supported by other donors is presented in Annex 1, Table 2.

6. Sustainability

6.1 Rationalefor Sustainability Rating: Highly Likely

Sustainability of CONAMA. The public sector has firmly put legal underpinnings under improved environmental management, through a General Framework Law and three legal regulations on policy instruments (EIA, Plans and Norms). These major achievements seem to be widely supported in Chile, with no chance of their being reversed. Rather, CONAMA'seffort now is to sustain these achievements by (i) further operationalizing the law through more regulations and preparation of sector laws, and (ii) to update the Framework Law. An important indicator for the robustness and irreversibility of the main achievements under this project is the fact that they have survived a period where the political commitment for environment was weak. It also demonstrates that overall public awareness on environmental matters has increased, and that this has also influenced the political agenda. Slowly but increasingly, Chilean politicians have discovered the environment as a platform for building a constituency. The diminishing importance of the project funds for CONAMA's budget further demonstrates the Chilean government's willingness to sustain investments made in public environmental management. Finally, the recent appointment of a nationally prominent environmental activist as Director of CONAMA demonstratesconfidence by the Chilean government on the issue.

Sustainability of sector components. The sustainability of the activities carried out under the forestry and industry sector components will be ensured, since the objectives of these activities are consistent with the general objectives of each ministry. The Ministry of Industry has developed a track record of continuing and expanding the activities initiated under the project with its own resources. The native forestry cadastre is an important tool for planning and the information contained therein is in strong demand by the public sector (from the national to the local level) as well as by the private sector and NGOs.

13 7. Bank and Borrower Performance

Bank 7.1 Identification and Preparation: Highly Satisfactory

An active partner. The project was identified as part of the program discussions with the new government of President Aylwin in 1990. Since environmental issues had been neglected under the previous military regime, and since Chile was a major exporting country with increasing flows of foreign investment, the need for clear and practical environmental guidelines were an important need of the new government. The Bank responded quickly to the initial requests and several missions visited Chile in 1990 and 1991 to identify and prepare the project. The preparation team was multidisciplinary and drew on individuals with comparative experience in various countries in the region and elsewhere. The Bank team worked closely with key Chilean officials. (CONAMA had fewer than five staff members at time so most of the Bank's contacts were with individuals in various sectoral agencies, research institutions, and selected ministries.) Appraisal took place in July 1990, but the project was not approved until November, 1992. The use of a PPF facility allowed expenditures to begin before the project was finally approved and became effective in February, 1993.

7.2 Supervision: Partially Satisfactory

Supervision in a narrow sense was adequate, but a limited budget and lack of attention resulted in a lost opportunity. The Bank met its formal supervision requirements during project implementation:providing timely responses and action letters to requests, meeting internal reporting deadlines, selecting Task Managers with appropriate skills, etc. Audit Reviews, however, experienced some inconsistencies with respect to their timeliness and their comments. These inconsistencies resulted from changes in audit review procedures and staffing. The project was consistently rated satisfactory during implementationand no flags were raised to upper management for areas of concern or unsatisfactory performance. Due to the perception that this project had no implementation difficulties and was achieving very successfulresults, it was given reduced supervision budgets, which appear very low for at least five of the seven years of project implementation. This limited Bank supervision staff's ability to maintain a close dialogue with the Borrower, who thus perceived the Bank as losing interest in the project's outcomes. The ICR evaluation team were repeatedly informed by project stakeholders that greater supervision involvement by the Bank would have resulted in better project implementation results. In Chile, the environment was a new sector that required international expertise for its development and would have benefited from the Bank's international knowledge. As the ICR shows, performance per component is varied; greater supervision involvement by the Bank would have detected and reacted sooner to the problems occurring with some components. It should be acknowledged that it is difficult to supervise a project that encompasses such a broad range of environmental activities with a budget that only allows for approximately two weeks of task management staff time and short missions. Although supervision missions took place regularly, they were usually only three days on average (four days for the mid-term review) and did not allow for an in-depth assessment of implementation progress or the involvement of mission members with technical expertise complementary to that of the task manager.

The ICR Team believes that as a development institution the Bank has the obligation to supervise projects where its guidance adds value, even if a project is rated successfully and especially when the client wants our guidance. The young environment agency was conducting extensive analytical work on many fronts, asked for advice on the technical and operational ramifications of the findings, was advancing a new decentralized model not tried elsewhere, and was frustrated in not getting more from the Bank. The specific components that would have benefited from improved supervision are:, environmental impact assessment, training and awareness, economic analysis, environmental law, standards, mining, and industrial pollution. The benefits would have likely come in the form of accelerated progress, more effective implementation, and better use of international best practice. With the belief that supervision should be about a constructive on-going dialogue with the client and not only

14 about crisis preventionor crisis correction, the Bank has not performed satisfactorily. Advice was not given in a timely fashion when problems arose or when outside guidance would have improved the work.

Continuity in task managementduring project life was satisfactory.The project had four task managers in total, but two task managers covered most of the project's duration, and the other task managers were only involved for a short time at the very beginning and end of the project. The first task manager was involved in project initiation and early project preparation and the last took over only a few months before project closure. The final task manager focused on dissemination of the project's outcomes and on CONAMA's participation in a jointly organized "Client Workshop on the Institutional Dimension of Environmental Management" conducted in collaboration with CEPAL and the IDB. The workshop provided an opportunity to share the project's experienceswith other Latin American countries.

7.3 Overall Bank Performance:Satisfactory

Borrower 7.4 Preparation:Satisfactory

A committed and active partner. The Borrower was an active partner in project preparation but was limited by the fact that it was an extremely new organization, it lacked staff and experience in this type of activity, and had to contend with some political considerations that took time to resolve. The strong commitment of the President of Chile and the Executive Director of CONAMA, were essential to this difficult period. CONAMA was simultaneouslytrying to create an organization, design a work plan, recruit staff, and fight political battles over political control and budgets. In addition, the high level of attention being given to the environment in Chile (and global events like the Rio Earth Summit) all meant that these activities took place in a very visible and high profile environment.

Given all of these limitations, the Borrower responded well to the demands of project preparation and was an active partner in the process. The Borrower was more involved and more competent on the substantive side of project preparation, and was relatively weaker on the administrative side. This is one of the reasons for the delays in various project processing steps. The use of the PPF facility ($464,000), combined with modest government resources of approximately $106,000 in the first few years, allowed work to begin in many areas, including the sectoral components, even before the Bank's loan became effective. However, even the PPF took some time to become effective: it was approved in July 1990 at appraisal, but only became effective in June 1991 when UNDP agreed to manage the funds on behalf of CONAMA.

7.5 GovernmentImplementation Performance: Satisfactory

Initial delays in counterpartfunding were balanced by counterpart contributions in the later years that went considerably beyond what was envisaged during project design. The initial delays caused serious start-up difficulties and were mainly due to overall budget concerns and internal political "chess playing." One of these was the request by the MoF that the General Framework Law be passed before releasing funds for the locally financed parts of the project. The loan disbursements were adjusted flexibly (the Bank contributed 87 percent of project funds the first year of the project) and thus the impact did not seriously hamper project implementation. Project funding difficulties were resolved about one year after project approval, and the government's budget appropriations to CONAMA increased dramatically (from approximately $S00,000 in 1993 to $8 million in 1994).

Counterpartadministrative procedures hamperedthe timelyflow of Bank resources.Part of project implementation delay was due to the government's procedures for ToR contract approval-primarily by MIDEPLAN. Approvals for investments including studies required approval by MIDEPLAN, the Budget Office, the Bank, and finally the National AccountingOffice. This process routinely took 6-9 months.

15 Timeliness of audits. Although audit reports were due by June 30 of each year, they were usually submitted in August or September. In its review of the yearly audit reports, the Bank acknowledged that the reports met the majority of the Bank's audit requirements, but reminded the Borrower of the auditor's responsibility in examining and issuing an opinion on the adequacy of CONAMA's internal control structure with regard to the project as well as in providing a summary of the procedures and scope of the audit. During the ICR mission, CONAMA asked the Bank to direct these concerns to the Auditing Division of Contraloria General de la RepuTblica,as this office is responsible for determining the content of all government audit reports. The Bank subsequently submitted a letter to the Auditing Division in June 2000 and asked them to provide information on the status of CONAMA's internal control deficiencies in their 1999 Audit Report for the project.

7.6 ImplementingAgency: Satisfactory

Project management by CONAMA was satisfactory overall but notably diminished at the end. The PIU was competently staffed and highly effective until the end of 1997. Early progress reporting was excellent but not sustained over the life of the project. At the beginning there was some tension because the PIU acted like a "shadow budget unit." The reason was that at the beginning the large majority of CONAMA resources came from project resources and thus went through the PIU, thus influencing a lot of decisions. Over time these tensions eventually diminished and were completely resolved when the PIU was integrated into the new Planning and Monitoring Unit at the end of 1997. This was a prudent decision because project implementation effectively took place in the respective working areas in CONAMA and the sector ministers. With this decision the role and profile of the project coordinator changed, making him head of the new Planning and Monitoring Unit as well. This resulted in the coordinator being responsible for administrative and reporting functions, while being only marginally involved in the substantive aspects of the project, which by then were fully integrated into the respective working areas. The Bank supported this strategic move. However, the opportunity was missed to clarify Bank proceduresand reporting requirements to the new CONAMA Director and the project coordinator. This particularly affected financial reporting, and caused major problems both with reporting and lack of documentation of project files at project closure. This can also be seen as total absorption of the project into the CONAMA administration.

Coordination with the sector ministries was closely managed by the PIU at the beginning of the project, but the PIU's oversight of sectoral components diminished toward the end. This is not considered problematic, as it should be perceived as the sector agencies taking greater ownership of these components, with the exception of the Ministry of Mining.

Financial management reporting had a mixed performance. With technical assistance provided by the Bank on financial management procedures in 1994, CONAMA developed an excellent capacity to report on the project's sources and uses of funds, and submitted this information to the Bank in its yearly project execution reports, as well as to the General Accounting Office each March for their annual audit. Unfortunately CONAMA's excellent track record was hampered when financial reporting was transferred to the newly created Planning and Monitoring Unit in late 1997. CONAMA's project financial management suffered as a result: coding methods for project expenditures were changed and it became less clear how the project's counterpart funds were used to finance activities by component, as both the project's counterpart funds and CONAMA's national budget were maintained in the same account in accordance with their national regulations.

7.7 Overall Borrower Performance: Satisfactory

8. Lessons Learned

Projects that promote a cultural shift within government succeed better if the overall environment of societal change supports them. TA projects that aim to establish a new government agenda (e.g., the environment) and a

16 new public authority to implement it, need public support that is profound enough to influence political decisionmaking.To transform a general notion of public concern on environment into broad public support that has political clout typically requires an event that affects the entire society, or at least large segments of it. Otherwise, powerful and well-organizedinterest groups that perceive themselves as "losers," have demonstrated a great ability to slow down the process and fragment reform efforts by lobbying only for their particular interests. In the case of Chile, this catalyst was the transition to a democratic government that was expected to be more responsive to the needs of the broad population. In other countries environmental disasters had such a trigger effect.

Complexity of the project has to be commensuratewith the capacity of the Borrower. Designing complex TA projects requires a careful assessment of the Borrower's capacity to manage these different challenges. Chile clearly has demonstratedthat capacity. It matched the demanding project agenda with highly trained and highly motivated people who stayed focused on the task. The same design with a weaker Borrower would have been considered overly ambitious and unrealistic.

The importance of adequate supervision. Any technical assistance project involves uncertainty in the use of resources, scope of technical work, quality of consultants, receptiveness of the borrowing agency to TA inputs, and long-term commitment of the implementing agency to follow-up.For these reasons, TA has been described as "a leap of faith." Because of this uncertainty, the best TA projects are those that are closely supervised and enjoy close technical (as well as managerial) interactions with the Bank throughout the duration of project. Without such interactions TA projects can become relatively unfocused, producing many outputs (for example, lots of studies) but lacking clear strategic discipline, project follow-up, or development outcomes. World Bank supervision of this project was inadequate because early in project implementationit stopped providing adequate technical and strategic advice on the use of project resources.This left responsibility for the success of this "leap of faith" entirely in the hands of CONAMA.

The World Bank and Project Implementation Units (PIUs) are not neutral, but rather can impact internal institutional dynamics. In a technical assistance project designed to support an entire agency, the ideal scenario is for the agency leadership and the World Bank-orientedPIU, and the World Bank to work seamlessly together. However, in reality they risk being perceived as independent and separate, as was the cases at times in this project. At an early stage the operating units of CONAMA became wary that the project had introduced not one but two new hurdles to their work programs:first, the PIU had to agree to fund their proposed activities, and second, the World Bank had to issue letters of no objection. Some CONAMA units refused to subject themselves to this gauntlet, and insisted on using only national funds. The solution seems to lie in (i) ensuring that the PIU (if required at all) is not an independent decision center, but rather a coordinating unit that helps manage the project's resources as part of the agency's overall budgetary resources; (ii) ensuring close strategic agreement between the implementingagency and the World Bank to form a strong enough strategy base that the letters of no objection for individual activities are relatively pro formna;and (iii) ensuring high-quality World Bank technical inputs so that conditional "no objections" (i.e., comments on ToRs that may lead to delays) are seen as contributingvalue to the technical debate and not merely as obstructive bureaucratic requirements.

Continuity of key personnel is important. . . and helps. Some of the problems faced by the project stem from frequent personnel changes, particularly in CONAMA and lesser so in the World Bank. During the life of the project there were four different executive directors for CONAMA, five project coordinators, and four World Bank task leaders. This lack of continuity effectively prevented the elaboration of a strategic management plan for CONAMA that was focused on priority issues. Every agency has to battle ongoing short-term disruptions, but this repeated turnover of key personnel, combined with the increasing politicization of environmental management more generally in Chile, made it impossible to adopt and implement a coherent and consistent strategy.

17 The World Bank's currentfocus on outcomes, as opposed to outputs, is an improvement over the previous style ofproject design. In this project, both the objectives and indicators essentially focused on outputs, not outcomes. As a result, while the project fully met its stated objectives, the more fundamental measure of "did the Chilean environment improve?" was not applied. Although in the past implementingagencies for TA projects typically were not held accountable for ultimate development outcomes, greater clarity on the expected outcomes-such as in a Logical Frameworkformat-would have-helpedthe project focus on more fundamental objectives.

Environmentalmanagement is a highlypolitical topic that poses project risks. Political changes due to different government administrations are common and can be expected in any borrower country. The topic of environmental management in Chile became increasingly politicized over the course of this project. However, during supervisionthe World Bank did not adequatelyassess the ongoing political changes so that, together with the implementing agency, it could more explicitly reprioritize activities. Rather, the World Bank became less engaged altogether, and some project activities became less focused and accountable.

Risk-taking in institutional development can pay off. This project embraced a decentralized, unproven, and therefore risky vision of environmental management-a "mainstreaming" approach where fundamental responsibility lies with the sectoral agencies rather than in a single environment ministry. In this model, while CONAMA has significant tools at its disposal for inter-ministerial coordination, policy development, and pollution prevention (through standards, EIA clearances, and decontamination plans), it has very weak monitoring and enforcement roles or responsibilities. The project gave this model a fair test, and clear lessons can be drawn. Now, following the design (1990-93), implementation (1994-97), and consolidation (1998-99), phases of institutional development, Chile is now entering therevision phase of its environmental management system. The commitment made early on by the World Bank was essential for convincing the government- which was divided in its views on the merits of the model-to give it a fair test.

Institutional sustainability can be thought of differently. From the beginning, the project faced the risk that CONAMAwould not be sustainable once significantWorld Bank resources dried up. This did not happen. Even though CONAMA faced difficult battles for national budget in the early years of the project, it has grown into a stable and credible agency. As is typical of World Bank projects, the loan agreement called for a constant share (35 percent) of counterpart funding over the life of the project. An alternative approach could have been to introduce a specific sliding (and declining) scale for the share financed by the World Bank over the life of the project. This would have allowed the Bank to provide a higher share of CONAMA's funding (perhaps 60-80 percent) when the agency's national financing was weak, and then reduced the level of Bank support (to 20-30 percent) when CONAMA had stronger govermnent funding. This could have allowed CONAMA to gear up faster. (For example,the Bank anticipated an expenditure of $8.3 million in the first year of the project, whereas it actually took three years to reach this level of disbursement. Part of this was a learning curve, certainly, but another part was the severe restriction on counterpart funds to hire the staff required to manage the expenditure of World Bank funds at the expected level.) Finally, a sliding scale would provide a clear incentive for the agencyto move toward local financial sustainabilityduring the course of the project.

Environmentaleducation is low-cost and high-return. Given the cross-sectoraland potentially political nature of environmental management, public awareness is highly valuable, both for generating grassroots demand (and political pressure) for improved-environmental management, and encouraging public participation in specific environmentactivities (such as the EIA and decontaminationplan processes in the case of Chile).

Adequately aligning sectoral and environmental objectives,particularly in the sectoral ministries is crucialfor success. Investment promotion and regulation of the same activity by one institution clearly resulted in tensions, and hence poor impact in the case of the mining and the initial industry components. However, the change in design of the industry component from a regulatory function to a cleaner production focus was an improvement because it was more in line with the ministry's main objective of promoting greater investment. Similarly, the preparation of a forestry cadastre aided decisionmakingin the National Forestry Service (CONAF).

18 9. Partner Comments

(a) Borrower/ImplementingAgency

CONAMA shares the Bank's evaluation findings presented in the Draft ICR Report. CONAMA considers the project a success, since Chile now has a functioning environmental management system with clear responsibilities and public sector capacity. It wants to build on the success achieved and further invest in improvements.

With respect to Component A.4 (Training and Awareness) and its unsatisfactory rating, CONAMA would like to note that its performance suffered because it was a young institution with a very demanding agenda. It had to prioritize its actions and it decided that training would be carried out once principal environmental management tools had been established.

With respect to financial management reporting, CONAMA would like to point out that its decision to integrate the PIU into a Planning and Monitoring Unit two years ago was based on the need to consolidate its internal administration. By that time, Bank resources represented only a small part of the budget and they were integrated into CONAMA's overall financial reports to the Contraloria General, which followed Contraloria's requirements for public sector administration. CONAMA kindly requests that the Bank decide jointly with Contraloria General on the reporting requirements in order for CONAMA to be able to respond.

19 Annex 1. Key Performance Indicators/Log Frame Matrix

Table 1: Project Performance Indicators as established in the SAR Key Project Baseline - SAR Indicators Actual Results PerformanceIndicators At Appraisal

Real increase of Public and 0 ElAs carried out. 32% Increase over life of By December 1999, 1,873 Private sector projects being project. ElAs carried out for public subject to Environmental and private sector projects. Impact Assessments * An increase of 1,873ElAs over the life of project. Real growth of donors' and Approx. US$20,300,000 35% Increase over life of By December 1998, donors Bilateral Agencies' project. and bilateral agencies had contributionsto implement contributed US$105,782,940 EnvironmentalProgram in Chile. * Over a 500% increase over life of project. RecurrentCost Budget in N/A Increase of US$37million By 1998,US$ 302 million the Public Sector for (Baseline data not in SAR) over life of project. EnvironmentalProtection. * Increase of over US$211 million over life of project. Real increaseof 6 Increase of 450 By 1999,4,758 professionals Professionalswith professionals over life of with environmental Environmental project. managementresponsibilities Management in the public sector. Responsibilitiesin the Public Sector. * Increase of over 4,752 professionals, a ten-fold increase over the target. Real increase of Specialized 2 Increase of 30 specialized By 1999, 14 specialized EnvironmentalUnits in environmental units over environmentalunits. Public Sector Entities. life of project.

20 Table 2: Contribution by Donors and Bilateral Agencies for CONAMA'sEnvironmental Programs Area Year of Donor Project Donor Support Inception Agriculture and Forestry 1999 Montreal Demonstration Project on $348,000 Protocol Alternatives in Soil Treatment for Tomato and Pepper Production Air Pollution 1994 Germany (GTZ) Technical Assistance for $2,013,000 EnvironmentalDecontamination Plan (PPDA) (Stage I) 1997 Switzerland Air Quality Monitoring in Urban $483,100 (COSUDE) Industrial Areas 1998 Sweden (ASDI) Strengtheningof Air Quality $700,000 Information System 1998 Switzerland Monitoring and Modeling of Air $351,400 (COSUDE) Quality in Talcahuano 1998 Germany (GTZ) Technical Assistance for PPDA $2,300,000 (Stage II) 1998 Sweden (ASDI) Pilot Program to Introduce Natural $980,000 Gas Buses in the Metropolitan Region 1998 Sweden (ASDI) Management of Public Transport $700,000 Service 1998 Sweden (ASDI) Program on Regulation of Transport $71,750 to Reduce Emissions Biodiversity 1999 GEF National Biodiversity Strategy and $271,000 Action Plan Climate Change 1993 U.S. Dept. Climate Change Cooperation $76,500 of Energy & Agreement EPA 1997 GEF Training for Compliance with UN $350,000 Convention on Climate Change 1999 U.S. Dept. Climate Change Cooperation $225,000 of Energy & Agreement EPA Solid Waste 1991 Netherlands EnvironmentalManagement Plan $1,000,000 for the Metropolitan Region 1994 Netherlands Management of Environmental $700,000 Management Plan for the Metropolitan Region (Stage II) 1996 Netherlands Enforcement, Pollution Control and $1,700,000 EnvironmentalManagement in the Metropolitan Region Miscellaneous 1997 European Union Urban Parks, Forestation and $1,072,727 Environmental Education TOTAL $13,34i2,477

21 Table 3: Component Performance Indicators Output Indicators: Indicator/Matrix Projected in last PSRI Actual A. INSTITUTIONALSTRENGTHENING: 1. StrengtheningCONAMA's Organization S S 2. Legal Regulatory Framework S HS 3. EnvironmentalImpact Assessment HS HS 4. EnvironmentalEducation and Awareness S U 4.1. EnvironmentalEducation in the Public Sector 4.2. EnvironmentalAwareness 5. Environmental Information System HS S 6. Economic Analysis of EnvironmentalIssues HS S 7. DecontaminationPlans and Emission Standards S S B. PRIORITY SECTOR ACTIVITIES: 1. Native Forest Cadastre S HS 2. Control of Industry Pollution HS S 3. Control of Mining Pollution S U I End of project

22 Annex 2. Project Costs and Financing

Table 1: Project Cost by Component (US$ million equivalent) Appraisal Actual Estimate Project Cost By Component US$ million US$ million A. INSTITUTIONALSTRENGTHENING: I. StrengtheningCONAMA's Technical Secretariat 11.66 14.35 2. Legal Regulatory Framework 0.86 0.80 3. EnvironmentalAssessment 6.95 3.30 4. EnviromnentalTraining and Awareness 3.84 2.28 4.1. EnvironmentalManagement Training in the Public Sector (2.77) (1.62) 4.2. EnvironmentalAwareness (1.07) (0.66) 5. EnvironmentalInformation System 1.25 0.76 6. EconomicAnalysis of EnvironmentalIssues 0.34 1.18 7. Plans and Norms 2.22 B. PRIORITY SECTORACTIVITIES: 1. Native Forest Cadastre 5.39 4.79 2. Control of Industry Pollution 2.02 1.77 3. Control of Mining Pollution 0.47 0.68 PPF 0.57 Total Project Costs 32.70 32.7

Table 2: Project Costs by Procurement Arrangements (Appraisal Estimate) (US$ million equivalent) Procurement Methodl ExpenditureCategory ICB NCB Other2 N.B.F. TotalCost 1. Goods 0.85 1.35 0.23 0.00 2.43 (0.65) (0.76) (0.17) (0.00) (1.58) 2. Services 0.00 0.00 13.25 0.00 13.25 (TechnicalAssistance and (0.00) (0.00) (9.19) (0.00) (9.19) Studies) 3. Training 0.00 0.00 5.11 0.00 5.11 (0.00) (0.00) (0.73) (0.00) (0.73) 4. Community Pilot Projects 0.00 0.00 0.00 0.22 0.22 (0.00) (0.00) (0.00) (0.00) (0.00) 5. Incremental Recurrent 0.00 0.00 0.00 11.77 11.77 Expenditures (0.00) (0.00) (0.00) (0.00) (0.00) Total 0.85 1.35 18.59 11.99 32.78 (0.65) (0.76) (10.09) (0.00) (11.50)

23 Table 3: Project Costs by Procurement Arrangements (Actual) (US$ million equivalent) Procurement Method' ExpenditureCategory ICB NCB Other2 N.B.F. Total Cost 1. Goods 0.00 1.32 1.02 0.00 2.34 (0.00) (1.10) (0.43) (0.00) (1.53) 2. Services 0.00 0.00 20.90 0.00 20.90 (TechnicalAssistance and Studies) (0.00) (0.00) (9.95) (0.00) (9.95) 3. Training 0.00 0.00 0.00 1.71 1.71 (0.00) (0.00) (0.00) (0.00) (0.00) 4. Community Pilot Projects 0.00 0.00 0.00 0.18 0.18 (0.00) (0.00) (0.00) (0.00) (0.00) 5. Incremental Recurrent 0.00 0.00 0.00 7.56 7.56 Expenditures (0.00) (0.00) (0.00) (0.00) (0.00) Total 0.00 1.32 21.92 9.45 32.69 (0.00) (1.10) (10.38) (0.00) (11.48) 1/ Figuresin parenthesis are the amountsto be financedby the BankLoan. All costsinclude contingencies. 2/ Includescivil works and goodsto be procuredthrough national shopping, consulting services, services of contractedstaff of the projectmanagement office,training, technical assistance services, and incrementaloperating costs relatedto (i) managingthe project,and (ii) re-lendingproject funds to localgovernment units.

Table 4: Project Financing by Category (US$ million equivalent) Category AppraisalEstimate Actual Percentage of Appraisal Bank Govt. Bank Govt. Bank Govt. Consultancy Services 0.76 3.13 0.20 7.39 26.3 Studies and Fellowships 9.16 0.93 9.28 3.49 101.3 Goods 1.58 0.85 1.53 0.81 96.8 CommunityPilot Projects 0.22 0.18 0.0 Training 1.71 Recurrent Expenditures 0.0 - Salaries 8.85 4.77 0.0 - Operation 2.92 2.79 0.0 Refunding of Project 0.47 0.07 Preparation Advance Total 11.48 21.22

24 Annex 3: Bank Inputs

(a) Missions:

Stage of Project Cycle No. of Persons and Specialty Performance Rating Month/Year Count Specialty Implementation Development Progress Objective Identification/Preparation May 1990 1 Senior Economist July 1990 I Sr. Environmental Economist May 1991 1 Sr. Environmental Economist 1 SeniorEconomist 1 Environ. AssessmentExpert December 1991 1 Division Chief I Pr. Operations Officer Supervision January 1993 1 Pr. Operations Officer March - May 1993 1 Pr. Operations Officer May - June 1993 1 Pr. Operations Officer S S I Sr. Environmental Economist November 1993 1 Pr. Environmental Economist S S October - November 1994 1 Pr. EnvironmentalSpecialist S S I Education Specialist I Consultant November 1994 1 Pr. Environmental Economist S S I Economist July 1995 2 Pr. Environ. Specialists S S I Pr. Environ. Economist 1 Consultant December 1995 1 Pr. Environmental Specialist S S May - June 1996 1 Pr. Environmental Specialist S S I Consultant April 1997 1 Pr. Environmental Specialist S S July 1997 1 Economist S S October 19971 1 Pr. Environmental Specialist S S I Environmental Specialist May 19981 1 Pr. Environmental Specialist S S 1 Projects Assistant April 1999 1 Economist S S I Lead Specialist I Projects Assistant October 1999 1 Economist S S I Sector Leader I Projects Assistant ICR May 2000 1 Economist S S I Lead Economist I Principal Environmental Economist 1 Environmental Specialist I Operations Analyst No Aide Memoire/BTOavailable for these missions.

25 (b) Staff:

Stage of Project Cycle Planned Actual

______Weeks US$000s Weeks US$000s Identification 7.8 20.2 Preparation 115.2 299.3 Appraisal/Negotiations 26.9 63.0 Supervision FY93 6.3 18.3 FY94 6.2 19.8 FY95 17.6 59.9 FY96 18.6 63.4 16.0 63.2 FY97 10.0 38.0 5.5 20.0 FY98 9.0 29.9 10.6 32.7 FY99 7.0 19.7 4.8 21.5 FY00 4.4 20.0 4.4 Approx. 20.0 ICR 16.0 76.0 17.6 Approx. 86.0 (26.0 originally assigned and an additional 50.0 shifted from preparation of follow-onproject due to nature of an Intensive LearningICR) TOTAL 238.9 723.9

26 Annex 4. Ratings for Achievement of Objectives/Outputsof Components

(H=High, SU=Substantial,M=Modest, N=Negligible,NA=Not Applicable)

Rating Macro Policies Not applicable Sector Policies Not applicable Physical Not applicable Financial Not applicable Institutional Development High Environmental Substantial Social : Community pilots and civil society participation Modest Private sector development Not applicable Public sector management Substantial

Annex 5. Ratings of Bank and Borrower Performance

(HS=Highly Satisfactory,S=Satisfactory, U=Unsatisfactory,HU-Highly Unsatisfactory)

6.1 Bankperformance Rating Identification: HS Preparation assistance: HS Appraisal: HS Supervision: Partially Satisfactory'

6.2 Boryowerperformance Rating Preparation: S Implementation: S Covenant Compliance: S Operation: _na

'After consulting with the LAC Quality EnhancementTeam, and since no objections were raised by OCS, the ICR Team considers Pardally Satisfactorythe appropriate rating. In the absence of this category, it would be rated Unsatisfactory.

27 Annex 6. List of Supporting Documents

STUDIES and PUBLICATIONS

Component A.1 - Strengthening of CONAMA's Organization

Financed studies that were initiallynot consideredin the Project: I. Analysis of National Policy on Noise Control (96-97) 2. Developmentof a TerritorialInformation Instrument for urban and rural planning (96-97) 3. Analysis of regulationson fuel use (CADE IDEPE, 96-97) 4. Studies on characterizationof carbon and particulate matter in Santiago (97) 5. Air quality recuperationprogram for the MetropolitanRegion (Universidadde Chile, 97) 6. Advisorysupport to the DecontaminationUnit (97) 7. Updatingphotography of native vegetation coverage(96) 8. Studyon air and water monitoring networks (S.G.S. Chile, 97) 9. Plan on closing solid waste dumps (UniversidadCatolica de Valparaiso,97) 10. Proceduresand technicalnorms for setting latent and saturatedzones (CIMM, 97) 11. Technical/economicanalysis of water emissions (TESAMS.A., 97) 12. Study on water quality norms (Kristal Ltda., 97) 13. Decontaminationplan for Potrerillos (ERM Chile, 97) 14. Environmentalquality diagnosticand decontaminationplan for Rio Damas (Centro EULA, 97) 15. Study on methodologiesfor the environmentalnorms program (UniversidadCatolica de Chile, 97) 16. Study on methodologiesfor the design of operational plans to confront emergency situations (CCA Ingenieros,97) 17. Policy proposal on the managementof dangerouschemical wastes (AMBAR S.A., 97) 18. Study on decontaminationof copper quarries (Universidadde Chile, 97) 19. Characterizationof typical soils and their treatment (Knight Piesold S.A., 97) 20. Study on ruling for classificationof species (Carlos Prado, 97) 21. Communicationstrategy for the MetropolitanRegion (FeobackCommunicaciones, 97)

Component A.2 - Legal Regulatory Framework

Legal InformationSystem: I. Study on modificationsto existing legislation and new legislation (Rafael Valenzuela,94) 2. Legal study for the identificationand execution of an environmentallegal informationsystem (Enrique Gallardo, 94) 3. Computationalsystem for the recording, maintenance,and updating of environmental legal information (ELITSISLtda., 94)

AdministrativeLegislation: 1. Diagnosticon environmentalcompetencies and administrativeprocedures (Rafael Valenzuela,94-95) 2. Preliminarydiagnostic on legal planning applicableto biological diversity protection (Sergio Praus, 96) 3. Environmentaladministrative procedures on soils (Sergio Praus, 96) 4. Studyon agriculturaland urban use of soils: environmentalcompetencies of ministries and state services with respect to legislation(Sergio Praus, 96)

EnvironmentalFramework Law: 1. Study on the applicationof the EnvironmentalFramework Law (Sergio Praus, 94) 2. Studyon the applicationof the EnvironmentalFramework Law and the development of regulations for enviromnental quality norms (Femando Toledo, 94) 3. Studyon the application of the EnvironmentalFramework Law and development of regulations for decontaminationand preventionplans (FernandoToledo, 94) 4. Identification,evaluation and harmonization of nationalenvironmental legislation (U. Diego Portales, 97)

Other: 1. Diagnosticstudy and analysisof environmentalpenal legislation(C.J.A. Consultores,94-95) 2. Diagnosticstudy and analysis on environmentalincentives and disincentives(C.J.A. Consultores,94-95) 3. Studyon environmentaladministrative procedures regardingwater (Sergio Praus, 96) 4. Proposal for strategic norms to control aquatic pollution (Sergio Praus, 96)

28 5. Preventionof potable water and sewagepollution (Sergio Praus, 96) 6. Study on punitive environmentallegislation regarding water quality (Sergio Praus, 97) 7. Study on punitive environmental legislationregarding air qulality(Sergio Praus, 97) 8. Study on punitive environmental legislationregarding protected forest areas (Sergio Praus, 97) 9. Study on punitive environmental legislationregarding fauna (Sergio Praus, 97) 10. Study on punitive environmentallegislation regarding flora (Sergio Praus, 97) 11. Study on punitive environmentallegislation regarding soil (Sergio Praus, 97) 12. Study of legal rulings on solid waste management in Chile (Sergio Praus, 97)

InternationalEnvironmental Law 1. Study on internationalenvironmental rights and analysis of current internationalconventions and agreementson environment(C.J.A. Consultores,95-96)

Component A.3 - Environmental Impact Assessment System

Defining Criteria: 1. Analysis of the criteria for the EIA and support for the design of a global EIA system (Jose Leal, 94) 2. Analysis of environmentalcriteria used in the EIA system (Tesam Hartley, 94-95) 3. Methodologiesof control, environmentalenforcement, and environmental audits (SGS Chile Ltda., 95)

Procedures: 1. Study on type and source of regional environmentalinformation and procedures for the EIA system (Hugo Romero, 94) 2. Analysis of the administrativeprocedures for the EIA system (Geotecnica,94-95) 3. Methodologicalguidelines for the review of EIAs for specificproject types: Methodologicalguidelines for oil pipeline project (96) Methodologicalguidelines for forestry development(TESAM S.A., 96-97) Methodologicalguidelines for projects producing toxic substances (TESAM S.A., 97) Methodologicalguidelines for projects using water resources in their cultivating/processing(96) Methodologicalguidelines for agriculturalfactory and industry projects (Intec. Chile, 96-97) Methodologicalguidelines for hydrobiologicalprojects (U. Austral, 97) Methodologicalguidelines for environmentalsanitation (U. de Chile, 97) Methodologicalguidelines for pulp and paper projects (Centro EULA, 97) Methodologicalguidelines for bus terminal projects (AMBAR S.A., 97) Methodologicalguidelines for sustainabletourism projects (TESAM S.A., 97) 4. Publicationof EIA Methodologies (TESAM S.A., 97) 5. Studiesto review EIAs that respond to the specific technical requirementsat the central and regional levels (98)

InstitutionalChanges: 1. Analysis of the institutionalneeds and changes for the EIA system (Dames & Moore, 94) 2. Study on environmentalpermits for the EIA system (Cristiin Franz, 94)

Regulation: 1. Study on the developmentof regulationsfor the EIA system (PatricioVallespin, 94) 2. Analysis of the regulations for the EIA system (Dames & Moore, 94) 3. Study on the establishmentof a program of EnvironmentalQuality Norms (95)

Training: 1. Study on training needs for implementingthe EIA system (Ernst Hajek, 94) 2. Diagnostic on the curriculum design for EIA instructors (Dames& Moore, 94) 3. Inventory on Existing Experts and Implementationof a database (95) 4. Preparationand publication of EIA methodologies (Tesam S.A., 95)

Other: 1. Study on development of a program to establish environmentalquality norms (Tesam S.A., 95)

29 Component A.4 - Environmental Training and Awareness

4.1. - Environmental Management Training for the Public Sector

Studies: 1. Study on the training needs for a program on environmentalmanagement education and training for the public sector (UniversidadAustral de Chile, 94)

Program Definition: 1. Design and implementationof the process of adjudicationand control of the studies on the Training Program (Araceli de Tezanos, 94) 2. Analysis of the detailed definition of the training program in environmental management for the public sector (Ecologia y Desarrollo, 95)

Evaluation: 1. Analysis of a design for the evaluation system for the training program (UniversidadAustral de Chile, 94)

4.2 - Environmental Awareness

1. Study to prepare and apply a "Program of Citizen Participation for the EIA System." (Cooperaci6n de Educaci6n, 97-98)

Component A.5 - Environmental Information System (SINIA)

System Design and Implementation: 1. Study on the design of a National EnvironmentalInformation System (Electrowatt Ingenieros, 94-95) 2. Study on the technological platform to supportthe SINIA system (Datatek, 97) 3. Gathering EIA information for the SINIA system (J.C. Aravena, 97) 4. Gathering of CONAMA studies for the SINIA system (Javier Haresi, 97) 5. Improvingthe legislation information module (Intermedia Ltda., 97) 6. Study on organization of workshops to disseminate SINIA (98) 7. Study on the graphic design and construction of a SINIA regional module for the website, adaptable for other regions (98) 8. Study on the graphic design and constructionof an informationdisplay module for the website (98) 9. Study, design and development of an enviromnentalyearbook (98) 10. Estudio realizaci6n de taller de difusi6n del estado actual de desarrollo del SINIA Jefes de Servicios con injerencia amnbiental It. Edici6n e impresi6npublicaci6n "Presentaci6n y estado actual de SINIA"

Component A.6 - Economic Analysis of Environmental Issues

National Economic Studies: I. Diagnostic of public sector expenditureson environmental management (CEGADES, 94-95) 2. Design of a tradable permits system (Universidad de Chile, 95) 3. Analysis of the impact of environmental regulations on employmentpolicies in small and medium-sized industries (95-96) 4. Economic valuation of biodiversity: elements for a protection strategy (Edmundo Claro, 96) 5. Economic valuation of pollution and mitigationmeasures (96) 6. Definition of environmental quality and emission norms (96-97) 7. Formulationof environmentaldecontamination plans (96-97) 8. Developmentof methodologies for the economic valuation of enviromnental impacts (Universidad Catolica de Chile, 96-98) 9. Developmentof methodologies for the economic valuation of environmental standards (Universidad de Chile, 96-97) 10. Design of a variable tariff system in the managementof household wastes (UniversidadCatolica de Chile, 96-97) 11. Study on sustainable development indicators at the sectoral and regional level (Universidad Bolivariana, 97-98)

30 12. Study on economic disincentive instruments in the control and enforcement of urban pollution problems (Universidad de Chile, 97-98) 13. Study on economic instruments for the control of industrial and mining effluents in surface and ground water (AMBAR, 97-98) 14. Development of environmental economic statistics to support the general analysis of the economic and social impact of prevention and decontamninationplans and of environmental quality norms (98) 15. Development of environmental accounts for Chileanwater resources (98) 16. Proposal on the reform of the existing tax and subsidy system and defmition of ecological taxes to support sustainable development (98) 17. Development of a proposal to apply a transferable emission permit system to the Metropolitan Region, within the context of stages 2 and 3 of the DecontaminationPlan (98)

International EconomicStudies: 1. Diagnostic on the impact of possible environmental restrictions on the Chileanexport sector (Centro EULA-Chile, 94-95)

Component A.7 - Decontamination Plans and Emission Standards

I . Analysis of supporting information for the implementationof a program on primary norms for environmental quality and emissions (bidding 96) 2. Design, evaluation of improvement of air and water monitoring networks (bidding 96) 3. Methodology for the design of operational plans for critical areas (air and water) (96) 4. Decontamination of state copper mining quarries (96) 5. Program for the environmentalrecuperation of Talcahuano (96) 6. Study for generatingtechnical support informationto develop a decontaminationplan for Caletones (96) 7. Study for generating economic supporting information for development of a decontaminationplan for Caletones (96) 8. Design of a plan to close and rehabilitate areas used as solid waste sites (bidding 96) 9. Procedures and norms for saturated areas (bidding 96) 10. Technical/Economicanalysis of the application of norms on surface water (bidding 96) 11. Technical/Economicanalysis of application of norms on water quality (bidding 96) 12. Technical/economicanalysis of application of norms on solid waste emissions 13. Air quality norms for determined uses 14. Decontaminationplan for Potrerillos 15. Analysis of national policy on environmental noise control (Ambiente Consultores,96) 16. Norms and plans economic evaluation manual (Universidadde Chile, 97)

Component B.1 - Native Forestry Cadastre

I. Updating photography of native vegetation coverage (Servicio AerofotogrametricoF.A.CH., 94-96) 2. Cadastre and evaluation of native vegetation coverage (ConsorcioUniv. Austral de Chile, 94-97) 3. Study and Developmentof a monitoring system for native vegetation formations (UniversidadAustral, 95-97) 4. Cartography characterizationof protected areas (CONAF, 97)

Component B.2 - Control of Industrial Pollution

Diagnostics and Methodologies: 1. Diagnostic and application of methodologies to determine gaseous industrial emissions and air quality (Dames & Moore, 94-95) 1. I In Region V (CADE IDEPE Ing., 96-97) 1.2 In Region IX (96) 2. Diagnostic and application of methodologies to determine production of industrial solid wastes and their final placement (CADE-IDEPE, 94-95) 2.1 In Region V (96) 2.2 In Region IX (96)

31 Policy Definition: 1. Development of a policy proposal for the control of water pollution from industrial sources (Tesam Hartley, 94-95) 2. Diagnostic of an integrated policy for industrial pollution control (Tesam Hartley, 94-95) 3. Diagnosison environmental pollution problems stemming from industry (Tesam S.A., 97) 4. Design of a state strategy on the development of cleaner production (Fundaci6n Sercal, 97) 5. Study on implementinga voluntary pilot program (Intec, 97) 6. Study on a cleaner production training program (Universidadde Chile, 97) 7. Study on implementationof a cleaner production strategy (Soledad Larenas, 97)

Other: 1. Development of a manual for solid waste management (Fernando Alliende, 94-95) 2. Cleaner ProductionManual (97) 3. Development of a Voluntary Pilot Program (97) 4. Perfecting the regulatory system for cleaner production and efficient energy use (98-99) 5. Financial or fiscal assistance for modifying existing plants to achieve environmental improvement (98-99)

Component B.3 - Control of Mining Pollution

Feasibility Studies: I. Basic study for the use of waters from the Pampa Austral mines, from the Salvador Division of Codelco Chile (Geotecnica Consultores,94-96) 2. Evaluation of the environmental impact of tailing discharges in the coastal area of Chaflaraland a proposal for mitigation methods (95-97) 3. Development of a generic environmental analysis, applicable to small mining companies (95-96) 4. Diagnostic of Air Quality in Region III (CIMM, 96-98) 5. Analysis and proposal of norms on mine abandonment (Dictuc, 96-97)

32 Annex 7. Stakeholder Workshop Results

SEMINARON ENVIRONMENTALMANAGEMENT IN CHILE: REFLECTIONSON THE EVOLUTION OF INSTITUTIONALDEVELOPMENT MAY 22,2000- SANTIAGODE CHILE

EXECUTIVE SUMMARY

L Backgroundand Methodology Thirty-six professionals, from the private and public sectors, academia, NGOs and bilateral and multinational organizations, met on May 22, 2000 to reflect on the evolution of environmental management in Chile over the past ten years and to evaluate how the Bank's Environmental Institutions Development Program has contributed to environmental management in the short, medium and long term. A speaker from each of the areas represented-civil society, private sector, consulting firms, and public sector-gave a brief presentation, analyzing how the environmental management process has contributed to building ties with their respective area. After each presentation, the workshop participants discussed their views on the speakers' assessments. A workshop facilitator kept note of the participants' viewpoints with respect to which aspects should be re- evaluated, further explored, and/or included in the dialogue on Chile's environmental management process. For the purpose of this annex the discussion by representatives of the civil society and the private sector were selected from all together five sectorial presentations.

Int'l Community CentralGov't liament

Participants by Area Academidem

-]Consultants

PrivateSec_ al/RegionalGov't

NGOs

II. Evolution of EnvironmentalManagement in Chile In his introduction to the workshop, the facilitator presented an overview of Chile's advancement in environmental management over the past ten years, which is summarized in the table below.

RelevantIndicators Beginningof 1990 End of 1999

CONAMA'sYearly Budget .US$76,000 ApproximatelyUS$ 21 million in 1999 PublicSector Resources for Environmental No dataavailable US$ 289 million Protection CONAMAPersonnel 6 people 370 people Professionalswith Environmental Management No data available 4,758people Responsibilitiesin PublicPersonnel EnvironmentalUnits in PublicSector Entities 2 10

NGOsworking on EnvironmentalIssues 27 60 Publicand PrivateSector Projects subject to ElAs 0 1,873

33 Relevant Indicators Beginningof 1990 End of 1999

ElAs Approved during the past Ten Years 0 1,137

Decontamination Plans 0 8 Enactment of Regulationsand Standards 0 8 Fornal Citizen Participation Events 0 4 (ElAs, regulations,plians, consultative meetings) Citizens who view Environment as a Priority 12% 7%

EnvironmentalConsultancy Firms 5 >50

III, Civil Society's Perspective Ximena Abogabir, representing Chile's civil society, noted that the country's previous two Concertaci6n administrations have not sufficiently taken advantage of Chile's social capital in addressing environmental problems. She expressed civil society's optimism at the beginning of the decade for greater collaboration between environmental NGOs and the Government to combat environmental problems, resulting from Earth Day celebrations in 1990, the formation of a Citizen Action Group for the Environment (ACPEM), a meeting held between President Aylwin and 150 civil society members, diverse awareness-raising events held after the Rio Summit in 1992, and meetings held in 1992 with CONAMA to establish a methodology and program for NGO participation in Agenda 21. This optimism diminished a bit during the remainder of the decade, however, as the new administration gradually made environmental concerns less of a priority and was perceived to put less trust in the people's ability to work toward improved environmental quality. NGOs found it difficult to participate actively in discussions on the new Environmental Framework Law. Although NGOs were represented under a newly formed Agenda 21 Council in mid-1994, by the end of 1994 NGOs had ended their working relationship with CONAMA on the Council. Civil society felt that little of the intemational cooperation received by the country was directed toward them. They also felt that the private sector had little interest in gaining their input on the country's cleaner production programs. Despite the decade's challenges, she added that there have been positive aspects, including training workshops for NGOs on project development and management provided by the Council of the Americas and the Environmental Protection Fund. Ximena Abogabir concluded that environmental outreach initiatives have been well though out, designed and implemented, but not understood by the public. Improving the public's understanding remains one of the major challenges for the future.

Ximena Abogabir's presentation generated the following comments on environmental aspects that need to be explored further in Chile, as well as on environmental aspects that need to be re-evaluated within the dialogue on environmental management:

Environmental aspects to be further explored: * Public perception. Environment is only a secondary concern to the Chilean public, and the public seems concerned about the environment only during environmental emergencies. To change public perception, a cultural change is required. * NGOs role in outreach and bringing about a cultural change. Need for NGOs to capture greater community support, as well as provide better representation. However, NGOs need to strengthen their capacity, which will require more resources. There is also a shortage of instruments to bring about a cultural change. Environmental aspects to be re-evaluated: * The presence of powerful organizations that defend private interests.

IV. Private Sector's Perspective Jaime Dinamarca, offering a viewpoint from the private sector, perceived contradictions in the application of the country's environmental laws, namely in regard to EIAs and environmental standards. He viewed the 14

34 ministries and 32 public services in Chile with environmental competencies to have ambiguous functions and responsibilities and to lack coordination. He also perceived these authorities to make uneven environmental demands toward the same types of industries and to make demands in some cases that went beyond their adverse impact. Under the Environmental Framework Law, the EIA system has established the time periods for the sectoral environmental authorities to present their environmental assessments to CONAMA's regional offices. Dinamarca noted that these authorities often do not meet their deadline dates, which slows down the rate of investment. The legitimacy of the EIA system has also been weakened by the central CONAMA office's approval and rejection of investment projects on a political basis, rather than on the basis of the technical evaluations carried out by environmental authorities. Dinamarca perceived these environmental authorities to resist and to not fully understand the coordinating role of CONAMA. Despite these difficulties, he commended the EIA system for rationalizing the environmental management of new investment projects through its creation of a "single window" to approve new investment projects. Despite a few instances in which environmental standards have been irregularly applied, he also expressed the private sector's support for the establishment of environmental quality norms, which permit a precise definition of pollution and provide objective criteria to evaluate the environmental impact of projects.

The main comments raised during Jaime Dinamarca's presentation included:

Environmentalaspects to be furtherexplored Environmentalaspects to be includedin the country's environmentaldialogue Perceptionthat workersand NGOs have had limited Needto reinforcethe importanceof decrees involvementin environmentalmanagement. restrictingvehicle emissions Greaterpublic awarenessis neededregarding the Needfor sectoraland regionalinitiatives in environmentalsignificance of a countrythat is a environmentalmatters. naturalresources exporter

V. Lessons Learned Luis Pisani, who had been Project's Task Manager during appraisal and negotiations, addressed the lessons learned during the preparation of the Bank/CONAMAProject on Environmental Institutions Strengthening. He expressed that the Bank project played a critical role in sustaining Chile's environmental management process, as it was a primary financial contributor to CONAMA in its early stages and also helped sustain and validate an innovative institutional model. He added that the Bank project also played a key part in the development of Chile's Environmental Framework Law and providing the foundation for a discussion on the various environmental management instruments to be included in this legal framework.Ultimately, the project's design and strategy enabled a new environmental institutional system to take form and function in a relatively short time. The following lessons learned were identified, which would have improved project implementation had they been fully considered during preparation: * When an institutional policy framework does not exist, it is necessary to limit the project's objectives. It is difficult to implementpublic policy in a new area when a tradition of coordination does not yet exist; * The project should have been more aggressive in promoting environmental awareness and creating alliances to promote a consensus on environmental issues. In effect, a large part of the early resistance to the new environmental structure was due to the private sector and community's lack of knowledge on the country's environmental strategy and policies. In its early stages, the project should have focussed more on building sectoral ties to clarify the distinct institutional and community roles in environmental management; * The project should have focussed more on human resource development, specifically with respect to environmental decision makers in sector agencies. The project did not provide a deliberate plan to expose these managers better to international experience and best practices, and these managers often learned from the available courses and seminars provided by other sources of international cooperation.

35 Annex 8. Borrower ICR

Parte I. Informe Central

1. Introducci6n

En este informe se da cuenta de los principales resultados y logros alcanzados por el proyecto para el fortalecimientode la institucionalidadambiental chilena y la instalaci6n la gesti6n ambiental en el pais durante los 6 afios de su duraci6n (1993-1999). Por otra parte, el informe presenta un detalle de las principales actividades realizadas, en el marco de los componentes especificos disefnadosbajo el proyecto, y los beneficios alcanzados para la instalaci6n de la gesti6n ambiental, su institucionalidad y los diferentes instrumentos disefiados para la protecci6n del medio ambiente y la conservaci6n de los recursos naturales. Finalmente, el informe identifica el conjunto de factores que incidieron sobre el desempeflodel proyecto.

Se revis6 la documentaci6ndisponible sobre el proyecto e informes de las misiones de supervisi6n del Banco y de las actividades de CONAMA elaborados para diferentes fines, la cual fue proporcionada y preparada por profesionales de CONAMA. Se realizaron 26 entrevistas a actores claves del proyecto (CONAMA nacional y regional, servicios publicos participantes / beneficiarios del proyecto, y consultores involucrados en la generaci6n de los productos relacionados con el proyecto, entre otros) para complementar la informaci6n generada en el punto anterior y conocer los aportes en temas especificos, los logros en general, y los aciertos y las dificultadas encontradas durante la ejecuci6n.

2. Situaci6n Ambiental en Chile al Inicio del Proyecto

La creaci6n de CONAMA se inserta dentro de la situaci6n general del tema en el pais en 1990, el estado de la problematica ambiental nacional y regional, y la ausencia de las condiciones adecuadas para enfrentar el tema dentro del aparato estatal. En efecto, al inicio de la decada, el tema no era prioritario para la poblaci6n en general, los partidos politicos y sus lideres no consideraban el tema dentro de las necesidades fundamentales de la poblacion (priorizando la recuperaci6n de la democracia, la pobreza y la estabilidad econ6mica) y las instituciones publicas presentaban vacios importantes y una desarticulaci6n en materia ambiental, que no permitia resolver los problemas ambientales mas urgentes y sentar las bases para una gesti6n modema. Los principales problemas detectados en 1990 para avanzar en la instalaci6n de la gesti6n ambiental se referian a los siguientes aspectos:

Debilidad Institucional en el Sistema Ambiental. El tema ambiental habia sido incorporado implicitamenteen distintos grados en las funciones regulatorias y en las politicas de desarrollo aplicadas por el Estado, a traves de sus instituciones sectoriales. Sin embargo, al establecer en forma explicita la tematica y los objetivos ambientales, se mostraron grandes deficiencias en la gesti6n producto fundamentalmente de la escasa internalizaci6n por parte de la sociedad. Ello se puede fundamentar en los siguientes hechos durante la epoca: (i) escasez de recursos administrativos, tecnol6gicos, humanos y financieros aplicados a los problemas del area; (ii) falta de informaci6n adecuada para la toma de decisiones que afectan las variables ambientales; (iii) escasas aplicaciones metodol6gicasde evaluaci6n y control de las intervenciones

36 humanas en el medio ambiente; (iv) falta de capacitaci6n de los recursos humanos; y (v) escasez de iniciativas privadas y debilidad de la gesti6n ambiental puTblica.

Falta de Conocimiento Especifico sobre los Problemas Ambientales Prioritarios.Durante esa epoca se habian detectado distintos problemas ambientales (se hablaba de 1.300 problemas o situaciones criticas) en diversos grados de importancia. Sin embargo, las iniciativas surgidas como reacci6n a estos problemas normalmente carecian de coordinaci6n entre los distintos agentes y existen riesgos definitivamente no evaluados ni controlados. Se reconocia que la gesti6n de los riesgos ambientales requeria de recursos y legislaciones multisectoriales dificiles de coordinar, el control en consecuencia era escaso o nulo. Esta debilidad en la gesti6n de las variables ambientales habia producido una acumulaci6n de problemas que se pueden dividir en tres tipos: (i) el manejo deficiente de los recursos naturales; (ii) la contaminaci6n del aire, del agua y por residuos s6lidos; (iii) la administraci6n inadecuada del espacio territorial.

Teniendo presente la complejidad de los alcances y naturaleza del tema, y la estrecha interdependencia entre las politicas puiblicas,CONAMA prioriz6 los siguientes temas generales:

* Introducir la gesti6n ambiental en forma gradual, selectiva e inductiva, conforme a las prioridades que emergen desde los niveles sectoriales y territoriales, tomando en cuenta que el pais se encontraba en un proceso de modernizaci6n de su economia y que, al mismo tiempo, debia incorporar a un sector social que habia quedado rezagado en la pobreza. • Generar capacidadesen gesti6n pu6blicaambiental, para coordinar los procesos de generaci6n de prioridades y de compromisos con los distintos sectores de la sociedad, con el fin de corregir y prevenir problemas ambientales en las areas de contaminaci6n, manejo racional de los recursos naturales y en el mejor ordenamiento de la expansi6n urbana e industrial. * Coordinar los procesos de explicitaci6n de la politica ambiental bajo un esquema participativo, tratando de establecer los consensos y compromisos con los diferentes sectores y respetando las reglas del juego establecidascon el sector privado. * Introducir la tematica ambiental en las distintas actividades econ6micas para corregir y prevenir problemas ambientales, supeditando los cambios que surgieran a procesos progresivos de negociaci6n y consenso con los distintos sectores y agentes econ6micos. * Impulsar el desarrollo de capacidades institucionales para la gesti6n y administraci6n de la gesti6n ambiental en el contexto de las reformas y modernizaci6n del Estado, en el marco de los esfuerzos de democratizaci6n, de desconcentraci6ny regionalizaci6n.

3. Descripci6n General del Proyecto CONAMA / BIRF

Con un aporte del BIRF de US$ 11,5 millones y Chile los restantes US$ 21,2 millones, se completa el monto de US$ 32,7 millones que corresponde al total destinado al proyecto Su prop6sito fue contribuir a fortalecer la institucionalidad ambiental del sector puiblico,de tal manera de obtener una mejor planificaci6n, programaci6n, coordinaci6n y evaluaci6n de sus planes, programas y proyectos. Todo ello, con el fin de lograr un manejo racional y sustentable de los recursos naturales, y una reducci6n adecuada de los niveles de contaminaci6n del aire, del agua y por efecto de los residuos s6lidos. Particular menci6n tiene aca, la absoluta sobreposici6n entre los mandatos de la Ley 19.300 y este proyecto de desarrollo institucional. Especificamente, el proyecto se insert6 en los prop6sitos que CONAMA buscaba lograr en torno a: A) Establecer el marco institucional para manejar la protecci6n ambiental y la conservaci6n de los recursos naturales mediante: (i) fortalecimiento de la capacidad tecnica, administrativa y de manejo financiero de la STyA de CONAMA; (ii) actualizaci6n y puesta en marcha del marco regulatorio ambiental; (iii) incorporaci6n de la ELAen los proyectos de inversi6n del sector publico y privado; (iv) desarrollo de programas de capacitaci6n en el manejo ainbiental y recursos naturales; (v) desarrollo de programas no-formales de educaci6n ambiental; (vi) implementaci6n de pequefnosproyectos al nivel comunitario; (vii) establecimiento de un sistema de informaci6n ambiental; y (vii) desarrollo de un analisis

37 econ6mico de los problemas ambientales; y B) Fortalecer los sectores prioritarios involucrados en actividades ambientales mediante: (i) mejoramiento de la calidad de los programas de manejo y conservaci6n del bosque nativo; (ii) implementaci6n de estudios que conduzcan al desarrollo de una estrategia contra la contaminaci6n industrial; (iii) apoyo a las iniciativas ambientales destinadas a reducir el impacto negativo de las actividades mineras en el medio ambiente.

Cabe mencionar que producto de la evaluaci6n de medio termino del proyecto, se realiz6 una importante reestructuraci6n de sus componentes y alcances, incorporando el Componente Estandares de Emisi6n y Planes de Descontaminaci6n, en base a los ajustes de los componentes de EIA y Capacitaci6n. Durante esta evaluaci6n, se rediseno el Componentesobre SINIA y el Componente relacionado con el sector industrial.

4. Situaci6n del Pais Despues del Proyecto CONAMA / BIRF

Durante el periodo de ejecuci6n del proyecto, los grandes logros en materia de gesti6n ambiental y fortalecimiento institucional impulsados por CONAMA, dicen relaci6n principalmente con la incorporaci6n de la protecci6n del medio ambiente como una definici6n de politica, para lo cual se propuso un marco de regulaci6n general sobre la protecci6n ambiental expresada en la Ley N° 19.300 sobre Bases Generales del Medio Ambiente (1994) y la Politica para un Desarrollo Sustentable (1998). Se dot6 al Estado de una institucionalidad que se ocupara especificamente de los temas ambientales, a traves de CONAMA y los servicios puiblicos con competencia ambiental, y se abri6 un espacio de acci6n dentro del Estado para los asuntos ambientales, ante lo cual se establecieronfunciones de coordinaci6n en CONAMA y de ejecuci6n en los ministerios sectoriales. Tambien existen importantes aportes en la generaci6n de politicas ambientales regionales y sectoriales (6 politicas regionales y 2 politicas sectoriales: agua y residuos), asi como en la generaci6n de propuestas en materia de biodiversidad y conservaci6n de suelos.

Se hizo operativa la Ley N° 19.300,con aprobaci6n de los reglamentos de EIA, normas de calidad ainbiental y de emisi6n, planes de descontaminaci6ny prevenci6n. Se tomaron medidas de descontaminaci6n atmosferica en Santiago que, aunque no ha mejorado la calidad del aire, al menos no la ha deteriorado aun mas con el incremento del parque automotor que hoy es el doble de 1990. A lo anterior se incorporan los esfuerzos realizados para descontaminar la ciudad de Talcahuano (Plan de recuperaci6n Ambiental de Talcahuano) y las fundiciones mineras de Maria Elena-Pedro de Valdivia (PMIO), Chuquicamata (S02, PM10), Potrerillos (S02, PMIO), Hermin Videla (S02), Ventanas (S02, PM10), Caletones (S02, PMIO) y Chagres (S02).

Adicionalmente,entre 1997y 1999 se han promulgado 8 normas de calidad ambiental y/o de emisi6n relativas a descargas de residuos liquidos a aguas superficiales, regulaci6n de contaminante arsenico emitido al aire, contaminaci6n luminica, compuestos fetidos asociados a la fabricaci6n de pulpa sulfatada, y material particulado respirable PM10. En materia de EIA, la aprobaci6n del Reglamento de Sistema de EIA, permiti6 hacer obligatoria la revisi6n ambiental de los proyectos de inversi6n puiblicosy privados, bajo un procedimiento unico y criterios para determinar el grado de afectaci6n de los componentes ambientales. Hasta fines de 1999, han ingresado al Sistema mas de 1.800 proyectos de inversi6n.

Se gestaron acuerdos estrategicos con el sector privado, a traves de la negociaci6n con gremios empresariales, a partir del cual el sector privado esta jugando un papel de importancia en la protecci6n ambiental (Ejemplo, el Programa de Producci6n Limpia del Ministerio de Economia y las grandes compafnias transnacionales, especialmente las mineras). Se tomaron medidas de descontaminaci6n atmosferica en Santiago que, aunque no ha mejorado la calidad del aire, al menos no la ha deteriorado ain mis con el incremento del parque automotor, que hoy es el doble de 1990.

La generaci6n y divulgaci6n de informaci6n ambiental en gesti6n ambiental tambien ha sido fortalecida con la puesta en marcha del Sistema Nacional de Informaci6n Ambiental, asi como con la generaci6n de importantes estudios como el Perfil Ambiental de Chile y el Catastro de Bosque Nativo.

38 La sociedad civil en general a incrementado su nivel de concientizaci6nen materia ambiental, particularmente debido a:

* Esfuerzos de capacitaci6n en gesti6n ambiental para funcionarios puiblicos,representantes de los medios de comunicaci6n,sector privado y organizacionesno gubemamentales. * Generaci6n de espacios de participaci6n ciudadana en la institucionalidad ambiental y en la aplicaci6nde instrumentos de gesti6n ambiental. * Creaci6n del fondo de protecci6n ambiental y otros fondos para fomentar la participaci6n ciudadana en la soluci6n de problemas ambientales. * Creaci6n de una sensibilidad nacional en el tema de la evaluaci6n ambiental, incluyendo capacitaci6nde funcionarios publicos. * Actividades de difusi6n respecto a las acciones, mandatos y propuestas emanadas desde la recientementecreada CONAMA.

Los indicadores mAs relevantes relacionados con la evaluaci6n de la gesti6n ambiental en Chile y que fueron apoyados por las actividades del proyecto, se resumen en el Cuadrol.

CUADRO1 IndicadoresRelacionados con la Evoluci6nde la Gesti6n Ambiental en Chile Al Inicio del Proyecto (1990) Despues del Proyecto (2000) . Ausenciapolitica ambiental explicita a nivel . Politicanacional publicada nacional,regional y local * Politicasregionales (6) * Politicassectoriales (aguas y residuos) . Dispersi6nde legislaciony normativa * Promulgaci6nde LeyN° 19.300sobre Bases del Medio ambiental(alrededor de 1000normas) Ambiente,que ordenacuerpos legales presentes y futuros * Pocasinstituciones con competencia * Se creanpor ley instanciasde caractercoordinador: ambientalesexplicita 1 CONAMA 13COREMAS * 17 UnidadesAmbientales * 25%de los municipioscuentan con unidades ambientales . Incipientesrecursos fmancieros y tecnicos * Disponibilidadde recursosfinancieros y tecnicos para impulsaractividades de proteccion ambiental - PresupuestoCONAMA: US$ 76.000 - US$21 mill (aproximadoen 1999) - Recursosdel SectorPublico en Temas - US$289 mill Ambientales:Sin datos - PersonalCONAMA: 6 personas - 370 personas - PersonalPublico Ambiental: Sin datos - 4.758personas . Ausenciade instrumentosde gesti6n Disponibilidadde instrumentos: ambiental * SEIA * Normasy Planes * SINIA * Participaci6nciudadana * Permisosde Emisi6nTransables * Instrumentosecon6micos (formalizados pero no desarrollados) * Cuentasnacionales (formalizadas pero no desarrolladas) * Ausenciade diagn6sticosambientales * Informenacional sobre el estadodel ambiente(en preparaci6n) . Temasno prioritariosen sectorprivado, salvo * Introducci6nde consideracionesambientales en sector

39 CUADRO 1 IndicadoresRelacionados con la Evoluci6n de la Gesti6n Ambiental en Chile Al Inicio del Proyecto (1990) Despues del Proyecto (2000) en grandes compafliastrasnacionales productivo. Creaci6n de comisiones ambientales en diversas instituciones(ANCHAM, SOFOFA, SONAMI, ASIQUIMICH,Camara de Comercio, Camara de la Construcci6n, etc.) * 7 Acuerdos VoluntariosPublico Privado Falta de esfuerzos para involucrar * Espacios formales de participaci6nciudadana en EIA y a activamente a comunidad en la soluci6n de formulaci6n de normas de calidad / emisi6n y planes de problemas ambientales descontaminaci6ny prevenci6n * Creciente tendencia a aplicar conceptos de participaci6n ciudadana anticipadaal ingreso de proyectos de inversi6n al SEIA * Instanciaformal de participaci6n de la sociedad civil en los Consejos Consultivos de CONAMA * Creaci6n del Fondo de Protecci6n Ambiental (CONAMA)y otros fondos (Fondo de las Amdricas, Fondo de PequeflosSubsidios, PNUD) Fuente: Elaboraci6npropia

Parte II. Resultados Especificos del Proyecto CONAMA / BIRF l. Tablas Resumen

CUADRO 2 Nuimero de Actividades Desarrolladas Bajo el Proyecto Coniponentes Estudios Consultorias Programas Capacitaci6n Talleres 1 Legislaci6nAmbiental 15 64 34 12 2 EIA 34 54 30 35 3 y 5 Capacitaci6ny Sensibilizaci6n 3 34 30 38 4 Desarrollode un SINIA 7 18 0 0 6 y 7 Eco. y Est. de Emisi6n y Planes de 25 12 0 0 Descontaminaci6n 8 FortalecirnientoCONAMA 14 78 4 0 9 Sector Forestal 7 1 0 0 10 Sector Minero 6 0 0 0 11 Sector Industrial 17 2 0 0 Totales 121 260 85 85 Fuente: Elaboraci6npropia.

2. Resultados Alcanzados por Componente

2.1. Programa de Legislaci6nAmbiental

Con el apoyo del proyecto, fue posible conocer y sistematizar las mas de 700 leyes y decretos de caracter ambiental, constituyendo un Sistema Juridico Ambiental, en actual funcionamiento. Adicionalmente, se logr6 elaborar y tramitar la Ley N° 19.300 sobre Bases Generales del Medio Ambiente. La ley establece un marco

40 general destinado a generar un proceso ordenador de la normativa ambiental existente y futura. Asimismo, crea una institucionalidad ambiental coordinadora como la CONAMA y establece un conjunto de instrumentos de gesti6n ambiental, tales como: (i) las normas primarias y secundarias de calidad; (ii) la educaci6n ambiental; (iii) los planes de manejo, prevenci6n y descontaminaci6n (este instrumento permite el desarrollo de mecanismos de mercado para la protecci6n ambiental); (iv) la Evaluaci6n de Impacto Ambiental; (v) la responsabilidaden materia ambiental; (vi) la fiscalizaci6n;y (vi) el fondo de protecci6n ambiental.

Asimismo, el proyecto permiti6 hacer operativa la Ley en cuanto se dictaron los siguientes reglamentos, en base a estudiosy consultoriasde revisi6n de competencias y procedimientosadministrativos:

* Sistema de Evaluaci6n de Impacto Ambiental, promulgadoel 3 de abril de 1997. * Dictaci6n de Normas de Calidad Ambiental y de Emisi6n, promulgado el 26 de octubre de 1995. * Procedimiento y etapas para establecer los Planes de Prevenci6n y Descontaminaci6n promulgado el 26 de octubre de 1995. * Constituci6n del Consejo Consultivo de la Comisi6n Nacional y de las Comisiones Regionales de Medio Ambiente, promulgadoel 26 de octubre de 1995.

Este proceso estuvo acompafiadopor un conjunto de iniciativas apoyadas por el proyecto para difundir a nivel nacional los alcances de la ley y capacitar a actores relevantes en su manejo y aplicaci6n practica. Este proceso fue acompafiadopor publicacionesde difusi6n. Finalmente, bajo este componente se apoyaron los esfuerzos del gobiemo de Chile en el campo internacional, particularrnentepara armonizar los marcos regulatorios de Chile y Canada dentro del Tratado de Libre Comercio ente ambos paises.

CUADRO3 Resumen de Logros en Legislaci6n Ambiental . Aprobaci6ndel InstructivoPresidencial "Pauta de Evaluaci6nde ImpactoAmbiental para Proyectosde Inversi6n . Promulgaci6nde Ley N° 19.300sobre Bases Generalesdel MedioAmbiente, creado la CONAMAe instrumentosde gesti6nambiental . Aprobaci6nPolitica Ambiental para el DesarrolloSustentable . Dictaci6nde Reglamentosobre el Sistemade Evaluaci6nde ImpactoAmbiental . Dictaci6nde Reglamentopara la elaboraci6nde Normasde CalidadAmbiental y de Emisi6n * Dictaci6nde Reglamentosobre Procedimientoy Etapaspara establecerlos Planes de Prevenci6ny Descontaminaci6n

2.2. Incorporacion de la EM a los Proyectos de Inversion Publico y Privado

El desarrollo del Sistema de EIA es quizas uno de los logros mAs interesantes vinculados a los aportes del proyecto. Para este componente, el proyecto fue exitoso en generar los consensos necesarios para la aplicaci6n de la EIA a proyectos de inversi6n publicos y privados y apoyar su aplicacion mediante la contrataci6n de profesionales de apoyo para la revisi6n de documento sometidos al Sistema, la elaboraci6n de guias metodologicasen area prioritarias, la difusi6n y capacitaci6n sobre la aplicaci6n de del Sistema de EIA al sector publico y privado.

Por primera vez en el pais se cuenta con un procedimientounico y conocido por todos los actores involucrados, para velar por la sustentabilidad ambiental de las actividades humanas. De igual manea, por primera vez en Chile se cuenta con instancias de participaci6n ciudadana establecidas en la etapa de revisi6n de los proyectos de inversi6n, lo cual es reconocido por la sociedad civil como innovador e indispensable para cualquier iniciativa que busque instalarse en un territorio determinado.

41 CUADRO 4 Resumen de Logros en EIA . Constituci6nde Departamentode Evaluaci6nde ImpactoAmbiental a nivelnacional y de unidadeso responsablesa nivelregional y sectorial * Elaboraci6nde guiasmetodol6gicas de temasrelevantes, guias de elaboraci6nde Estudiosde Impacto Ambientaly de Declaracionesde ImpactoAmbiental, documentos orientadores para el tratamientode temas culturales,etnicos, reasentamiento, y planesregulares * Programas de capacitaci6n para el sector puiblicoen todas las regiones Indicadores del Sistema Nuimero Porcentaje (en relacion al total presentado) DIA ETA DIA EIA EstudiosPresentados 1606 267 85,7 14,3 EstudiosAprobados 941 196 82,8 17,2 EstudiosRechazados 85 18 82,5 17,5 Proyectosque hacenseguimiento de planesde manejo 126 71 64,0 36,0 arnbiental una vez aprobados los estudios Proyectoscon sanciones/ multaspor no aplicarplanes de 7 15 31,8 68,2 manejo una vez aprobados los estudios Reclamosejecutados por diversosactores a la decisi6nde 56 11 83,6 16,4 la autoridad_ Proyectos con participaci6n ciudadana en alguna etapa - 267 - 100 Fuente: CONAMA,2000

2.3. Programa de Capacitaci6n en Gesti6nAmbientalpara el Sector Putblico

Bajo este componente, CONAMA ha logrado realizar un conjunto de actividades de capacitaci6n para el sector, especialmente de caricter introductorio. Los esfuerzos de capacitaci6n al sector publico en gesti6n ambiental han incluido cursos breves a nivel nacional sobre instrumentos de gesti6n ambiental, derecho ambiental y EIA. Esfuerzos regionales de capacitaci6n para el sector puiblicose han concentrado en los siguientes temas: manejo, uso y desarrollo de recursos hidricos en condiciones de escasez; analisis multicriterio; planificaci6n estrategica; manejo de recursos hidricos; tratamiento de residuos solidos y liquidos; monitoreo ambiental, manejo del borde costero; derecho del mar; gesti6n amnbientalminera; y contabilidad, administraci6n, computaci6n y estadisticas. Adicionalmente, el proyecto financi6 diplomados y postitulos orientados a otros sectores involucrados en la gesti6n ambiental, tales como ONG, dirigentes vecinales, y representantes empresariales. Los programas desarrollados en este Ambitodicen relaci6n con economia ambiental y liderazgo ambiental.

Sin embargo, el componente no logr6 plenamente los resultados esperados, ya que no pudo despegar los programas de capacitaci6n en el extranjero y pasantias, como un nivel de perfeccionamiento mayor al de los cursos breves. Esta situaci6n no implica necesariamente que el recursos humano de CONAMA y sus servicios publicos asociados carezcan de un entrenamiento adecuado, ya que producto de los esfuerzos iniciales del proyecto, se ha ampliado la oferta de cursos y programas de especializaci6n en universidades nacionales y profesionales de las instituciones publicas ambientales han participado en programas largos y pasantias en el extranjero. Sin duda que el programa inicialmente propuesto en el proyecto sufri6 cambios debido a las nuevas ofertas de programas nacionales y en el extranjero. Sin embrago, el componente no fue reestructurado oportunamente y los esfuerzos de capacitaci6n no lograron los resultados deseados.

42 CUADRO 5 Logros del Programa de Capacitaci6nen Gestion Ambiental Temas de Capacitaci6n Nuimerode Cobertura Programas Instrumentosde gesti6narnbiental 6 Nacional Derechoambiental 7 Nacional EIA 14 Nacional Manejo,uso y desarrollode recursoshidricos en 1 Regional condicionesde escasez Analisismulticriterio 1 Regional Planificaci6nestrategica 1 Regional Manejode recursoshidricos I Regional Tratamientode residuoss6lidos y liquidos 1 Regional Monitoreoambiental 1 Regional Manejodel bordecostero 1 Regional Derechodel mar 1 Regional Gesti6nainbiental minera 1 Regional Contabilidad,administraci6n, computaci6n y estadisticas 4 Regional Economiaambiental 1 Regional Liderazgoambiental 1 Regional

2.4. Desarrollo de un Sistema Nacional de Informaci6n Ambiental

En base a los compromisos especificos establecidos en la Politica Ambiental del Gobiemo y una de las obligaciones de Ley 19.300, el proyecto permiti6 impulsar esfuerzos para el diseiio y puesta en macha del SINIA, la cual se ha constituido en una herramienta fundamental de informaci6n y comunicaci6n para CONAMA y los servicios piublicos con competencia ambiental. Por otra parte, el SINIA ha fortalecido la participaci6n ciudadana en el marco de los instrumentos gesti6n amnbiental,particularmente la EIA, la normas de emisi6n y calidad ambiental y los planes de prevenci6n y descontaminaci6n, mediante su divulgaci6n y presentaci6n de observaci6npor via electr6nica.

El diseno, poblamiento y operatibizaci6n del SINIA se logr6 mediante el establecimiento de convenios institucionales que aseguraran el flujo permanente de informaci6n actualizada, el desarrollo en sus propias paginas WEB, y ademas, para aquellas instituciones que no tenian la capacidad de crear paginas WEB con informaci6n ambiental, la CONAMA proporcion6 las facilidades para su disenio.

Para ampliar, la cobertura del SINIA, se recopil6 informaci6n ambiental local en seis regiones del pais, a saber: Antofagasta (II), Atacama (III), del Maule (VII), del Bio-Bio (VIII), de la Araucania (IX) y de los Lagos (X). Para estas regiones se construira y poblara un m6dulo regional de SINIA durante el primer semestre del 2000. Finalmente, dado que Internet no esta disponible facilmente en todos los niveles de la comunidad nacional, se gestion6 un convenio con el Instituto Nacional de Estadisticas, a traves del cual se confecciona, publica y distribuya anualmente un documento con la informaci6n ambiental del pais que tiene caracter puiblico.

43 CUADRO 6 Logros del SINIA Indicadores Cantidades Nimero de pagina WEB ambientales construidas para otras instituciones. 20.485 Numero de sitio WEB revisados y clasificados dentro de la metabase del 1.422 SINIA Numero promedio de visitantes mensuales del sitio WEB del SINIA 3.800 Numero de Regiones a las cuales se les esta realizando un catastro de 6 informaci6n ambiental local, para la confecci6n de su propio M6dulo Regional del SINIA. Nuimerode instituciones contactadas para la realizaci6n de convenios. 32 Fuente: CONAMA, 2000

2.5. Programa de Sensibilizaci6n en la Perspectiva de la Educaci6n Ambiental Modalidad Educaci6n No Formal

El proyecto aport6 recursos financieros y asesoria tdcnica que permitieron sentar las bases para lo que hoy es el Fondo de Protecci6n Ambiental, fuente de financiamiento para la realizaci6n de proyecto comunitarios orientando a resolver problemas ambientales locales en forma participativa.

CUADRO 7 Logros del Programa de Sensibilizaci6n Indicadores Cantidad Documentos Publicados CONAMA 55 (aproximadamente) Nuimerode Registros de Libros en Centro de Documentaci6n 1500 Proyectos Aprobados por el Fondo de Protecci6n Ambiental I Concurso 23 II Concurso 58 III Concurso 87 Nuimerode Titulos y Boletines de Revistas en Centro de Documentaci6n 100 Fuente: CONAMA 2000

2.6. Promoci6n de la Introduccion de Conceptos Economicos en el Analisis y en la Toma de Decisiones Ambientales del Sector Publico

Bajo este componente y con el apoyo del proyecto, se logr6 constituir una Unidad de Economia Ambiental dentro de la estructura de CONAMA, con 5 profesionales, otorgandole el necesario perfil y apoyo institucional al tema. Bajo esta unidad se han realizado importantes estudios para incluir consideraciones econ6micas en todos los componentes de la politica ambiental, en particular en el desarrollo de los planes de prevenci6n y descontaminacion (mediante un sistema de permisos de emisi6n transables), las normas de calidad ambiental y de emisi6n y la EIA. Se ha logrado alcanzar un nivel de conocimiento adecuado en materia de instrumentos alternativos de gesti6n ambiental, en particular incentivos de mercado, y se ha generado conocimiento para otras opciones instrumentales, tales como: acuerdos voluntarios, sistemas de responsabilidad y sistemas de informaci6n.

Menci6n parte amerita el programa de incorporaci6n de variables ambientales en las cuentas nacionales del Banco Central. Este programa fue suprimido producto de que los primeros resultados mostrados sobre los impactos ambientales y la sustentabilidad ambiental en el sector forestal, fueron altamente criticados por

44 sectores empresariales y directivos del Banco Central, con el consecuente retiro del apoyo institucional y termino del programa.

CUADRO 8 Temas Analizados y Estudios Realizados Bajo el Componente de Conceptos Econ6micos * Un sistemade tarificaci6ndiferenciada para el manejode residuoss6lidos domiciliarios en base a la cantidad generada; * Unapropuesta de instrumentosecon6micos para el controlde los efluentesindustriales y mineros(RILES) en aguassuperficiales y subterraneas; * Unapropuesta de aplicaci6nde desincentivosecon6micos en la fiscalizaci6ny sanci6npara el controlde la contaminaci6nurbana; * Unapropuesta de instrumentostributarios para la politicaambiental; * Unapropuesta de SistemaNacional de EtiquetadoAmbiental, para productoscomercializados tanto a nivel nacionalcomo internacional; * Unapropuesta de PoliticaNacional de Certificaci6nde la CalidadAmbiental; * Una propuestametodol6gica para la valoraci6necon6mica de impactosambientales asociados al SEIA; * Una propuestade criteriose indicadoresde desarrollosustentable a nivelessectorial y regional;y * Una propuestade sistemay calculodel gastopiiblico ambiental 1998 y presupuestonacional ambiental 1999.

2.7. Estcandaresde Emision y Planes de Descontaminacion

Con el apoyo del proyecto, este componente logr6 apoyar sustancialmente los esfuerzo de CONAMA sobre la elaboraci6n y dictaci6n de un conjunto de normas ambientales y planes de prevenci6n y descontaminaci6n.Bajo este componente, se realizaron los estudios econ6micos y sociales, requeridos por ley para la elaboraci6n y aprobaci6n de estos instrumentos de gesti6n. Especificamente y bajo el alero de la Unidad de Economia Ambiental, el componente fue decisivo en la dictaci6n de las normas y planes (Cuadro 9).

CUADRO 9 Planes y Normas Desarrolladas con Aportes del Proyecto * Plan de Descontaminaci6nde Caletones * Plan de Prevenci6ny Descontaminaci6nde la Regi6nMetRopolitana * Plande Descontaminacionde Potrerillos * Normade Ruidode FuentesFijas * Normade Emisi6nde RILESal Alcantarillado * Normade Emisi6nde ResiduosLiquidos a Cuerposde AguasSuperficiales * Normade Emisi6nLuminica para II III y IV Regiones * Normade Emisi6nde Arsenico * Normade Ernisi6nde TRSen Industriasde Celulosa * Normade Calidadde Aguaen Cuerposde AguasContinentales * Normade CalidadPrimaria de MP 10 * Reglamentopara Uso de LodosProvenientes de Plantasde Tratamiento * Normade Emisi6nde MaterialParticulado en el Valledel Huasco

2.8. Fortalecimiento de la Direccion Nacional de la CONAMA

Es indudable que el apoyo del proyeeto permiti6 la constituci6n CONAMA como ente coordinador y articulador de la gesti6n ambiental en el pais, otorgandole autonomia administrativa y financiera, procedimiento administrativos, equipamiento, personal, y espacio de oficinas, tanto a nivel central como regional. De un numero de 5 personas al inicio del proyecto, hoy dia CONAMA cuenta con un staff de aproximadamente 350 personas y 13 Direcciones Regional operativas.

45 En este sentido, el apoyo del proyecto permiti6 darle a CONAMA la necesaria continuidad para el desarrollo de capacidades de gesti6n ambiental e independizarlo de las decisiones politicas coyunturales, tal como lo demuestra el Cuadro 10 sobre aportes del proyecto al presupuesto anual de CONAMA.

CUADRO 10 Presupuesto CONAMA/ BIRF Aoo CONAMA BLRF Porcentaje Afio CONAMA BIRF Porcentaje Miles US$ Miles del Miles US$ Miles US$ del US$ Presupuesto Presupuesto Total % Total % 1990 75 0 1996 15.286 6.166 40,3 1991 146 0 1997 17.341 7.854 45,3 1992 218 - 0 1998 24.488 7.585 30,1 1993 1.039 442 42,5 1999 21.042 2.359 11,2 1994 9.658 2.867 29,7 2000 20.897 - 0 1995 10.112 5.460 54,0 Fuente: CONAMA,2000.

La Unidad Coordinadora del Proyecto, que producto del conocimiento adquirido y de la rigurosidad impuesta por los procedimientos del Banco, se ha trasformado en una instancia permanente de planificaci6n y licitaci6n y revisi6n tecnica de los estudios y consultoria que se desarrollan dentro de toda la instituci6n.

2.9. Sector Forestal

La elaboraci6n del nuevo catastro de vegetacion nativa fue, sin dudas, uno de los aportes mas significativos del proyecto a la gesti6n ambiental del pais. Desde hace mas de 50 afios que Chile no disponia de informacion que pudiese verificar el estado de la vegetaci6n nativa. El catastro puso a disposicion del pais los antecedentes basicos para tomar decisiones sobre uno de los recursos maksrelevantes para la diversificaci6n de la economia nacional. El Catastro y Evaluaci6n de los Recursos VegetacionalesNativos de Chile determin6, en 1997, que los bosques en el pais cubren 15.647.894 hectAreas,lo que representa el 20,8% del territorio nacional. Los aportes especificos del catastro dicen relaci6n, con conocer la superficie de los diferentes tipos de bosques a nivel nacional y regional, asi como la representatividad del Sistema Nacional de Areas Silvestres Protegidas.

2.10. Sector Minero

Bajo este componente, los aportes del proyecto no permitieron avanzar en la cosolidaci6n de una unidad ambiental en el Ministerio de Mineria, como se esperaba. Sin embargo, el proyecto aport6 para la realizaci6n de estudios sobre el establecimiento de estandares de calidad ambientales relacionadas con descarga de efluentes liquidos en el sector minero, asi como manejo de desechos s6lidos y programas de abandono de faenas mineras. De igual manera, los programas de entrenamiento establecido en el proyecto no se realizaron. El esfuerzo de este componente se centr6 los estudios tendientes a establecer una normativa nacional para el abandono de faenas mineras.

2.11. Sector Industrial

Con anterioridad a la reestructuraci6n de este componente, se lograron avances sustantivos en tomo al diagn6stico de emisiones industriales y un manual de manejo de residuos s6lidos industriales, que fueron un aporte relevante para el establecimiento de normas de calidad ambientales y emisi6n en la materia, particularmente relacionados con la emisi6n de residuos liquidos a cuerpos de aguas superficiales, la emisi6n de TRS en industrias de celulosa, y el uso de lodos provenientes de plantas de tratamiento.

46 Con posterioridada la reestructuraci6n del componente y su disminuci6n sustancial en recursos, se constituy6 la Unidad de Producci6nLimpia en el Ministerio de Economia, la cual ha apoyado consistentemente la aprobaci6n de 7 acuerdos voluntarios con el sector privado, entre los cuales destacan los acuerdos con la empresa de la celulosa, fundiciones de la Regi6n Metropolitana y VI, aserraderos, empresas quimicas de la Regi6n Metropolitana,productores de cerdo, y empresas de la construcci6n. En este sentido, el proyecto, a traves de la experiencia aportada en la etapa anterior a la reestructuraci6n, permiti6 que el Ministerio se involucrara activamenteen la formulaci6n de los acuerdosvoluntarios.

3. Conclusiones

3.1. Aportes del Proyecto CONAM /IBIRF al DesarrolloInstitucionalAmbiental del Pais

Es dificil especificar los aportes exactos del proyecto a la implantaci6nde la gesti6n ambiental chilena, ya que, dada su concepci6noriginal, estaba inmerso integramente en el conjunto de otras acciones previstas para generar la capacidad de gesti6n en el pais. Sin embargo, el pais cuenta con una legislaci6n marco, una institucionalidad ambiental y numerosos instrumentos de gesti6n ambiental, que le ha permitido enfrentar los temas ambientalesy proyectarse sobre como enfrentar los temas futuros, como resultados evidentes de la ejecuci6n del proyecto.

El proyecto permiti6 sentar las bases de la institucionalidadvigente en Chile. Por una parte, el apoyo logrado con el proyecto permiti6 la implantaci6n y desarrollo de un modelo de gesti6n ambiental ajustado a las realidades del pais, en un periodo de la historia chilena que requeria un esfuerzo significativo por parte del gobiemo para apoyar la incorporaci6ndel tema a la agenda puiblicay darle sustentabilidad ambiental al modelo economico. Dado que el tema habia estado postergado durante el regimen militar, el esfuerzo realizado durante la etapa de disenio del proyecto, permiti6 una priorizaci6n de temas relevantes que fueran entendibles y alcanzables para la autoridad politica. En efecto, el proyecto fue el mejor defensor el modelo institucional de CONAMA, en el sentido de crear un 6rgano tecnico para coordinar las competencias ambientales de los demas servicios, en lugar de crear un ministerio.

Cabe destacar que el proyecto, que en su inicio fue el principal proveedor de recursos de CONAMA, otorgandole estabilidady rigor a la instituci6n, oblig6 a cumplir con los compromisos adquirido previamente.Es decir, signific6 un aporte sustantivo para otorgarle la permanecia en el tiempo a CONAMA, necesaria para impulsar los cambios requeridos en el aparto estatal y sentar las bases de la gesti6n ambiental, independizando su gesti6n de los cambios de autoridades y direcciones

Asociado a lo anterior, el proyecto entreg6 una cantidad importante de recursos financieros y asesoria tecnica para la estructuraci6n de CONAMA y sus representaciones regionales y sectoriales. En efecto, durante los primeros afios de CONAMA, los recursos aportados por el proyecto fueron su sustento principal, para la dotaci6n de personal e implemrentaci6nde la politica ambiental de gobiemo en sus areas prioritarias. Tambi6n fue decisivo el aporte de numerosos expertos del BIRF que con frecuencia visitaron Chile, durante la fase de disenfodel proyecto.

Adicionalmente,el proyecto requiri6 de CONAMA la implantaci6n de un conjunto de procedimientos para el desarrollo de actividades que aportaron una gesti6n mas ordenada. Lo anterior, aport6 sustancialmente a la creaci6n de un equipo profesional en CONAMA de alto nivel, con vocaci6n de servicio puiblicopara impulsar un tema absolutamentenovedoso e incipiente en el pais. Por otra parte, el proyecto aport6 a CONAMA con la infraestructuray equipamiento necesario para su funcionamiento efectivo durante las primeras etapas de su gestaci6n.

Todo lo anterior signific6 que el pais pudiera avanzar en materia de gesti6n ambiental y desarrollo institucional. CONAMA ha logrado incorporar sustancialmente la protecci6n del medio ambiente como una definici6n de

47 politica, mediante un marco de regulacion general sobre la protecci6n ambiental expresada en la Ley N° 19.300 sobre Bases Generales del Medio Ambiente (1994) y la Politica para un Desarrollo Sustentable (1998). Se dot6 al Estado de una institucionalidad que se ocupa especificamente de los temas ambientales, a traves de CONAMA y los servicios publicos con competencia ambiental, y se abri6 un espacio de acci6n dentro del Estado para los asuntos ambientales, ante lo cual se establecieronfunciones de coordinaci6n en CONAMA y de ejecuci6n en los ministerios sectoriales.

3.2. Factores que Incidieron en la Implementaciondel Proyecto y la Obtenci6n de Resultados

Uno de los principales factores relacionados con la obtenci6n de resultados se refiere a los cambios de direccionesejecutivas (4), coordinadores del proyecto (6), "task manager" (3), y de gobiemo (1), que cambiaron los enfasis del mismo y sus modalidades de trabajo. A ello es atribuible el bajo rendimiento en los componentes econ6micos, mineria y en manera tangencia al componente industrial. En definitiva, el proyecto fue concebido bajo una administraci6n y ejecutado por otra distinta sin la adecuada cobertura del BIRF, interrumpiendo la continuidad de los equipos de trabajo y las lineas prioritarias para el proyecto.

Hubo un distanciamiento progresivo del BIRF en la etapa de implementaci6n del proyecto, con la consecuente falta de un apoyo tecnico sustantivo y perdurable en el tiempo a la Unidad Coordinadora del Proyecto. Quizas 6sta sea una falencia mas sentida ya que la ausencia de capacidades mas s6lidas en el pais, requeria de apoyo tecnico por parte del BIRF, lo cual produjo en la practica que el proyecto se implementara con las capacidades nacionales existentes.

Existieron inconsistencias en los procedimientos administrativos de CONAMA y del BIRF, lo cual signific6 un doble esfuerzo por parte de la Unidad Coordinadora del Proyecto. Por una parte, las actividades del proyecto eran revisadas y aprobadas por el Banco Mundial, bajo sus procedimientos,y por otra parte por el Ministerio de Hacienda para el desembolso de los recursos bajo otro conjunto de procedimientos.

Otro de los factores relevantes asociados a la obtenci6n de resultados, se refiere a la voluntad necesaria por parte de las instituciones que debe coordinar CONAMA. En efecto, CONAMA convoca a una serie de organismos pnblicos que provienen de jerarquias diversas, lo cual ha generado en sus primeros anlosde funcionamientoun conflicto mas bien de sensibilidad. Los servicios puiblicos,a traves de los funcionarios que tienen competencia ambiental, han sido reticentes a participar o a ceder espacios en estas convocatorias.

La insuficiente comprensi6n por parte de los diferentes profesionales de CONAMA sobre los objetivos del proyecto gener6 diversas objecionesy limitaciones a las actividades que debi6 impulsar la Unidad Coordinadora del Proyecto.

La falta de capacitaci6n y entrenamiento del personal de CONAMA debilit6 a las contrapartes de los estudios y consultorias del proyecto, reduciendo la efectividad de los resultados esperados.

Durante la etapa final del proyecto, con la consolidaci6n de la Unidad Coordinadora del Proyecto como departamento especializado y formal dentro de la estructura de CONAMA en la ejecuci6n de licitaciones para los diferentesprogramas, esta asumi6 mayores obligaciones, las cuales limitaron su apoyo directo al proyecto.

48 Annex 9

Lessons Learned from the Chilean Model for Public Environmental Management

In the aftermath of the Rio Summit most Latin American countries started to invest in public institutional capacity for improving environmental management. When these countries looked at the international experience, they were not able to find a single "good-practice" approach for the most effective institutional arrangement. While the OECD countries had been able to achieve significant improvements in environmental quality, their road to strong environmental managementinstitutions has neither been easy due to uneven political commitment, conflicting interests and interest-groups, and numerous changes in the regulatory and institutional frameworks. The Latin America Region has experimented with two distinct models that take very different approaches; both are considered quite successful. Chile and Brazil have chosen the "Coordinator Model" that relies heavily on existing sectoral ministries, whereas Mexico exemplifies the opposite, the so-called "Ministry Model", with a strong central authority. The purpose of this annex is to add to the understanding of these alternative models, and use the Chilean experience, and the main lessons learned, to further our understanding of how to create effective environmental managementinstitutions.

The Chile experience has shown that the "Coordinator Model" can be successful when three conditions are met:

First, political commitment must be serious and translated into sectoral ministries' ownership and commitment for environmental protection. These ministries also need to be strong institutions with good administrative and technical capacity.

Second, a strong role for non-governmentalparticipation (both private sector and civil society) that goes beyond mere information sharing and consultation.

Third, certain central clearance and monitoring functions (e.g. Environmental Impact Assessments and formulation of emissions standards) remain under the control of the national environmental agency.

What is the so-called 'Chileanmodel'? Chile opted for a model that is rooted in an approach of inter-sectoralcoordination and political closeness to the office of the President, but with enforcement largely retained by sectoral ministries. The National Commission for Environment (CONAMA) was formally established in March 1994 with the approval of the General Environmental Framework Law (Ley de Bases del Medio Ambiente N° 19.300)and falls under the jurisdiction of the Secretary General of the Presidency. CONAMA's mandate is to guide and coordinate public sector administration of environmental issues. Thus, responsibilities of environmental management remain with the sectoral agencies and decisions are taken by an Inter-Ministerial Council to which CONAMA is the Executive Secretariat. Environmental authority is therefore integrated into the sectors which have the responsibility of implementing the policies, regulations and enforcement instead of in one central vertical institution like a ministry of environment. Furthermnore,CONAMA is also a highly decentralized institution with presence in each of the 13 Regions. (See Annex 11 on CONAMA's organizational structure).

An important factor that influenced the decision to opt for the "Coordination" instead of the "Ministry" model was the strong sentiment in Chilean society against creating large, new public sector agencies. Furthermore, it was argued that the economic, political and legal costs associated with establishing a vertical authority (ministry) were too high given the multiplicity of already existing responsibilities in the different ministries and public services and considering that the environmental issues inherently are cross-sectoral. Therefore, the strategy was to develop a sense of ownership for environmental issues in each line agency's respective policies and activities.

49 Why is political commitmentpivotal, and how does Chile compare in the region? In many countries, environmental protection agencies seldom have real power for two reasons: (i) real political commitment to implement change is often lacking, and (ii) resistance of existing institutional, legal and administrative relationships may hinder progress. This holds true for OECD countries as well as developing countries. How does Chile compare to other countries in the region?

Chile took on the challenge of systematic environmental management around the same time than Mexico and Brazil in the first half of the 1990s. It evolved and grew under the political support of President Aylwin (1990- 1994), and was part of an overall change agenda with a democratically elected government after 17 years of dictatorship. Without his strong commitment CONAMA would have probably died or been emasculated by the more powerful sectoral ministries. The President's political support got the Framework Law through Congress, and helped settle the early battles with the Ministry of National Resources. CONAMA was sufficiently well established that it was able to weather the drifting support by President Frei (1994-2000), who was not willing to sacrifice any perceived potential for short-term economic growth in favor of long-term sustainable development. Under President Lagos, elected this year, environmental management in Chile has a new chance to re-define itself and tackle outstanding issues, particularly the natural resource agenda and the role of public participation. Following the design (1990-93), implementation (1994-97), and consolidation (1998-99), phases of institutional development, Chile is now entering the revision phase of its environmental management system.

Since it is recognized that political will is crucial for building effective environmental management capacity, one can ask which institutional model responds better. The "Coordinator Model" that Chile follows acknowledges its dependence on political commitment, particularly by the President, more openly than the "Ministry" model, as in Mexico. Chile's experience has shown both the strengths and the weaknesses of this dependency- the advantage under President Aylwin and the disadvantageof it under President Frei.

Chile and Mexico are good country cases to compare, given their advanced economic development and the fact that in both countries the NAFTA negotiations gave environment a more prominent place. Mexico established a large Environment Ministry (SEMARNAP) to which a number of sector responsibilities were transferred -- among them responsibility for natural resource management. In SEMARNAP planning, regulatory, enforcement and productive functions were all brought together under one roof. It is a big federal institution that is slowly 2 decentralizing. Coordination across institutional boundaries has been difficult and mainstreaming the environment agenda in a systematic and operational way has not yet been very successful. On the other hand, Mexico has emerged as a leader in biodiversity conservation and has a success story to tell on air pollution management in Mexico City.

In contrast, Chile focused on urban pollution management and neglected the natural resources agenda, despite having an economy that is based on natural resource extraction. This may be explained by the fact that air pollution is a very visible problem affecting a highly urbanized population. In addition, those affected by the control measures were usually large in number and not individually powerful. In contrast, the small in numbers, highly politicized, and politically and economically powerful copper mining, fishing and timber groups have been much less easy to manage. Progress in these sectors has been slower.

A big contributor to the success of the Chilean "Coordinator Model" obviously is people. Chile isfortunate to have highly trained, and highly motivated people who made CONAMA work and thrive. They also form the "involved public" and are active in NGOs, the press, and in the Congress. Most other Latin American countries also have highly trained people but they tend to be in the minority and the overall public capacity is weaker. In cases like Mexico and Brazil the country's size plays an important role as well - it is harder to concentrate political and public interest on issues in very large countries with many pressing local environmental problems.

2 Theenvironment as a new administrativesector in Mexicois so far less decentralizedthan the traditionalsectors of health, education,agriculture or infrastructure.

50 The "Coordinator Model" needs strong sectoral ministries with serious commitment towards environment The collaborative policy-making style of the Chilean model has a huge potential advantage, namely its ability to mainstream environmental issues into the sectors. Other LAC countries with vertical ministerial institutional organizations have struggled with and have not been able to produce very convincing results. In fact, CONAMA by itself is not a powerful institution; rather, its ability to influence the sectors and to effectively promote sustainable development depends on the respective President of the Republic. The President is in the position to give CONAMA substantial credibility (or make it less effective as the period under President Frei demonstrated). CONAMA's credibility suffered considerably when President Frei publicly stated that no economic investment should be stopped due to environmentalconcerns. The then nascent Environmental Impact 3 Assessment System was put to a rough political test with high profile investment cases like RALCO , which subsequently led to the resignation of the CONAMA Director. Over time, it is expected that with the mainstreaming and institutionalizing of environmental concerns into the policies and operations of sectoral agencies, that political commitment will become relatively less pivotal in setting the countries environmental agenda. Rather, a much more broad-based consensus on at least minimum and enforceable environmental standards will take hold.

The Role of Non-governmental Participation in the "Coordinator Model" Key actors that shape environmental management outcome include non-governmental organizations and the private sector. Compared to other Latin American countries, the business-governmentnexus in Chile appears to be particularly close. Critics claim that this closeness has led to diluted legislation, delay in regulations, lax standards, and limited public participation. On the other hand, the private sector already takes the environmental authority seriously and has invested in its own capacity to be a more competent partner in the dialogue on environmental policy. Chile has made considerable advances in promoting clean production activities through their voluntary agreements program, which are in tune with the sectoral ministry's agenda of promoting investment. This approach is constructive and may bring forth positive results, particularly for small and medium size enterprises (SMEs). However, this approach still needs to be complemented with adequate enforcement of compulsory regulation. However,

Civil society participation in the formulation and implementationof environmental policy is in the Chilean case a story of a missed opportunity. However, Chile is not different from other Latin American countries in this regard, and it is being argued that true participation can really only arise once a major cultural change has occurred. At the beginning of the decade only few NGOs were concerned with environmental issues and often were acting on a local level and concentratedon forestry and education issues. They harbored great optimism for greater collaboration with the Government to combat environmental problems, but were disappointed. NGOs found it difficult to participate actively in discussions on the new Environmental Framework Law, and they were not able to sustain their participation in an Agenda 21 Council. They also felt that the private sector had little interest in gaining their input on the country's cleaner production programs. While it is acknowledgedthat environmental outreach initiatives have been well thought out, designed and implemented, NGOs claim that they were not understood by the public. Improving the public's understanding remains one of the major challenges for the future.

The importance of keeping central clearance and monitoring functions with the National Environmental Administration in the "Coordinator Model". Even in a decentralized co-ordinator model, some power is retained centrally. In Chile the three principal management tools that were administered by CONAMA were covered by the Environmental Framework Law of

3 Thehydro-electric dam RALCOwas a US$470 millioninvestment in the RegionVIII and IX (AltoBio Blo)by the EmpresaNacional de ElectricidadS.A. ENDESA in 1996.The controversialissues included (i) resettlementof 555 indigenouspeople of the ethnicityPehuenche, (ii) alterationof localhydro-ecological regime and changein the conditionof aquatichabitat, and (iii) lossof vulnerablevegetation, which is regardedimportant for conservation.

51 1994 include: (i) Environmental Impact Assessment, (ii) Norms for environmental quality and emissions, and (iii) Decontamination Plans when the norms have been surpassed. The possible use of economic instruments is mentioned in the context of the Decontamination Plans only. One can wonder why a country that is considered the regional open and free market champion would base its environmental management tools solely on command-and-control mechanisms and not applying any market-based incentives. It is worth noting that relevant work to introduce such new incentive schemes actually exists, but that there is political reluctance to introduce them.

Chile has developed and implemented a functioning, decentralized and public Environmental Impact Assessment System, which clearly is a major achievement. To date more than 1,800 investment projects have entered the review and the process is very transparent as all information is published on the web, which allows public involvementand scrutiny. The EIA process is decentralized and the responsibility lies with CONAMA in the Regions. Enforcement, however, is under the jurisdiction of the respective sector agency under which the investment falls.

Chile has invested substantially,in an Environmental Information System, and has become a regional good practice example for information dissemination. The availability of existing information through a virtual network of relevant databases that respect information ownership contributes to civil society's knowledge and empowerment. The challenge of the information system, however, is to provide relevant data that contributes better to strategic decision making for environmental protection and conservation and the development of sustainable development indicators.

Enforcement of environmental policy is presently a weakness in the system. While Chile has the necessary public sector capacity for enforcement, it depends on the willingness of the respective sectoral agencies to pursue enforcement as the responsibility lies with them. At present, the political cost associated with weak enforcement is low and CONAMA's role is restricted to monitoring and promotion. It does not have the "teeth" to ensure enforcement. Therefore, the incentive for the sector agencies is rather to subordinate environmental protection to their primary objective of promoting their sector and ensure economic growth.

52 Annex 10 CONAMA's ORGANIZATIONAL STRUCTURE

| PRESIVENTCOFEM ______U_B_ _X

11 I rEXECUJTIVE DIRECTORATE INzTER-MINISTERIAL CONSULTATIVE CONAMA Rf COUNCIL INCOMMITTEE

EGecutiOA Director Seroet;ry GRneal of AdiPorsid;cy (President) 2 NGO Reprisentativei _Ministries:Ecorony sodDevelopment, Public Wwks, 2 USive.oity Rcps -- i,- Mining, Health Seri ces, Housing asd Planning. 2 Entrepreneurial Reps. Oetin Agriculture,a TrTnsportT d eLornicmunication,. 2 Unio Representatives Com-iftul Affai., Ed-dilo., Defensse, Planning ud Coordhiati., I koo ep.foPresientativRepuli Subcoromitb7s tNational Resources I Representoodeota CAADc CONARAegoE -e- Di(Pr (Se-deny)

CORIEMA CONSULITATIVE Rntrndt e Regisonalo (President): Provincia REGIONAL COMMITTEE RtEGIONAL eRCOAE Go,emurs; 4 Regional Advisors; Regional Ministeria .1nit of CONAMA . SEcniarrmesond Eoaaeny Devern pment,o Chile. Pubt i Th Inter-iiteriaCouncilW,h, Aicrhlsthert, h-ighe.g offdCe .in. tei Cs, NGOi2 Rhpas ntihes Regiond eveauate. p c dr ic h Seproips, Malsg, Hoisa gmad Prlaen d 2 Envtipmentualp Repsr c resoucescnservtion.TheCuni isT alsod Telecommunication, Edpcatops, 2 thi- Represenative o environmental billsandmeasures,aswNatlnal Rasodrees, CONAMA's RegionaE Diectio I RepreDsentative - urseandrn (Secsay) o t Regiv

TECHNICAL COMMITlTEE

C=NAMA'sExcut CONAMA"e R,gional Diedtr (PDsidynt) Repu cRalteghnal i c Dmcton of Public nating b

Source: CONAMA,1997. EnvironmentalManagement of the Goverrnmentof Chile.

The Inter-ministerial Council, which holds the highest office in the Commission, has the mandate to study, analyze and evaluate policy and strategic proposalsin all matters related to environmentalprotection and natural resources conservation. The Council is also responsible for proposing to the President of the Republic environmental bills and measures, as well as defining the Executive Directorate's structure and organization. The SecretaryGeneral of the Presidencypresides over the council.

CONAMAs'sExecutive Directorate, headed by an Executive Director who is appointed by the President of the Republic, is the central technical coordinating body. The Executive Directorate is responsible for defining national environmental policies. He/she oversees four technical departments within the Directorate: EnvironmentalImpact Assessment, Decontamination,Plans and Norns, Natural Resources and Environmental Economics. In addition, the Executive Directorate has departments that address Citizen Participation, Law, Management, Information Systems, Strategic Development, Communications, as well as an international cooperation Projects Unit.

The Consultative Committee is comprised of representatives from the private sector, NGOs, academic institutions, workers' unions, and the President of the Republic, with CONAMA's Ministry President presiding over the Committee. Its purpose is to provide guidance to the Executive Directorate on environmental and natural resources policies, planning, and strategies. The Committee is duplicated at the regional level, but the Regional Consultative Committee is chaired by local govermnent authorities.

The Regional Directorates coordinate environmental activities in each region. The Regional Director for Environment is appointed by CONAMA's Executive Director from a short-list of five candidates submitted by the regional government. In addition to the Regional Director, the staff in these regional units typically includes one to three professionals,one secretary and one administrativeassistant.

53 The Regional Environmental Commissions (COREMAS). CONAMA is territorially decentralized through the COREMAS, consultative councils whose structure replicates the institutional structure of the National Government in Santiago. Among their competencies is the decision to approve or reject environmental impact assessment studies impacting the region. The COREMAs are chaired by local government authorities (the Intendente Regional who is a representative of the Internal Affairs Ministry). Regional Development Plans are defined by the Intendente and his/her cabinet, while CONAMA's Regional Director is responsible for introducing environmental aspects to the Plan. The COREMA's are constituted by (i) the Directors of the regional ministerial secretaries, who are representatives of the different ministries in the region and who fonn a Council of Ministers, (ii) the provincial governors, who are in charge of coordinating environmental issues with the municipalities; (iii) four regional advisors chosen by the Council of Ministers, and (iv) CONAMA's Regional Director, who acts as the COREMA's executive secretary. In addition, each region has a Technical Committee, chaired by CONAMA's Regional Director and comprised of the regional directors of the public services who have authority on environmentaltopics.

This institutional structure provides sectoral agencies with a significant environmental role. The following chart lists the functions of the main sectoral institutions with environmental competencies in Chile:

PRIMARY ENVIRONMENTAL FUNCTIONS OF SECTORAL AGENCIES Ministryof Health Safeguards the elimination or control of all environmentalfactors, elements or agents that affect the health, security or well-being of the population. Maritime and Merchant Enforces the quality and use of coastal waters, as well as navigable courses. Marine General Directorate (DIRECTEMAR) Sub-secretaryof Fisheries Proposesfisheries policy, as well as the methods for its application.Coordinates the country's fishing activities. National Fisheries Service Implementsnational fishing policy and regulations.Ensures the appropriate application of (SERNAP) fisheries regulations. National Tourism Service Ensures the preservationof cultural and historical heritage. (SERNATUR) GeneralDirection of Measures water resources and oversees the usage of water resources. Waters (DGA) Superintendenceof Studies and proposes technicalstandards for the design and constructionof sanitation SanitationServices (SISS) services. Oversees the granting of concessions and applies sanctions to the concessionaires that violate existing legislation. National Forest Manages the conservation,management and use of forestry resources.Develops and carries Corporation(CONAF) out national and regional forestry developmentplans and administersthe developmentof the country's forestry resources. Agriculturaland Promotes agriculturaland livestockdevelopment. Inspectsthe safety of animal and plant LivestockService (SAG) products and byproducts. National Service of Advisoryservice to the Minister of Mining. Ensures mining regulations are followed and Geology and Mining applies sanctions to offenders. (SERNAGEOMIN) National Monuments Authorizes construction and excavation in zones that have been declared "nature Council sanctuaries." IndigenousDevelopment Establishesthe appropriateuse of indigenouslands. Promoteseconomic and social Corporation developmentof indigenous communitiesthrough an IndigenousDevelopment Fund. Ensures the preservationof archaeological,historical and cultural heritage of indigenous communities. Sub-secretaryof Determinesthe requirements and procedures for vehicle inspections, such as setting the Transport maximumpermissible levels of emissions. Source: CONAMA, 1997.Environmental Management of the Governmentof Chile

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