PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE

Report No.: AB4299 Development, Empowerment and Conservation in the

Public Disclosure Authorized Project Name iSimangaliso Wetland Park and Surrounding Region Region AFRICA Sector Forestry (30%); Fresh Water (40%) and Biodiversity (30%) Project ID P086528 GEF Focal Area Biodiversity Borrower(s) SOUTH AFRICAN GOVERNMENT Implementing Agency iSimangaliso Wetlands Park Authority, KwaZulu-Natal Private Bag X05, Saint Lucia 3936 South Africa Tel: (27-35) 590-1633 Fax: (27-35) 590-1602 [email protected] Environment Category [ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined) Public Disclosure Authorized Date PID Prepared April 23, 2009 Date of Appraisal April 30, 2009 Authorization Date of Board Approval July 26, 2009

1. Country and Sector Background

Government Strategy for Economic Growth and Poverty Reduction The fifteen years since the end of apartheid have witnessed South Africa’s transformation into a stable and robust economy. Prudent economic management and a supportive global environment have helped the country attain a 4% average annual economic growth rate over the past ten

Public Disclosure Authorized years.

In 1996 the South African Government introduced a macroeconomic strategy of structural adjustment (the Growth, Employment and Redistribution strategy, or GEAR), based inter alia on tight fiscal discipline, attracting foreign direct investment, expansion of private investment, promotion of higher domestic saving, and industrial competitiveness. In the subsequent years there was in effect a move away from a broad strategic statement on poverty reduction, as in the Reconstruction and Development Program (RDP), towards sector specific programs pursued through a wide range of government departments and agencies from nation to provincial to local levels.

Still a lot of challenges remain. South Africa has been more successful at dismantling the economic structures of apartheid than its social structures. This has meant that the gains from

Public Disclosure Authorized economic growth have not been distributed equitably. Reducing poverty and inequality are the urgent, outstanding challenges that the Government is poised to address.

In 2006 the government launched the Accelerated and Shared Growth Initiative for South Africa (ASGISA) that consists of a focused set of policies and interventions to catalyze higher and

1 shared growth, complementing or strengthening existing programs.

The Government has committed to the Millennium Development Goals (MDGs), including the reduction of poverty by 50% by 2014. The pro-poor orientation of spending in the country has contributed to improved social development indicators in a range of areas, particularly relating to access to services and education. The MDGs on primary education, gender, several health indicators, and environmental sustainability are likely to be achieved.

South Africa tourism industry is one of its fastest-growing industries and the government considers it as a key sector to boost the country’s economic growth. Tourism industry has been identified as a high-growth potential area (due to its employment generation potential) in the government’s ASGISA. South Africa tourism industry contributed 8.8% to GDP in the year 2005 and it is expected to rise to 14% by the year 2014. The concept of “responsible tourism” has emerged as the most appropriate concept for the development of tourism in the country. This implies, among others, the promotion of nature-based tourism activities (such as game-viewing and diving) that rely on the rich biodiversity of South Africa.

South Africa’s biodiversity importance According to the National Biodiversity Strategy1, South Africa is a mega diverse country, considered one of the most biologically diverse countries in the world2, largely due to the species diversity and endemism of the vegetation.

Because of South Africa’s unique and rich biodiversity, as well as its potential for nature-based tourism development and job creation, considerable effort has gone to support conservation of natural resources, leading to some 6% of the country’s land area being managed in the form of land- and marine-protected areas. However, since most protected areas in South Africa are surrounded by poor rural communities, protection-only approaches to conservation management have resulted in poor local acceptance of conservation as a land use, and are no longer considered sustainable. Ongoing pressure on protected areas from adjacent local communities is leading to the formulation of strategies that balance conservation with development and poverty reduction. iSimangaliso Wetland Park- biodiversity importance South Africa’s third-largest protected area is the iSimangaliso Wetland Park, situated on the east coast of KwaZulu-Natal. The proclamation of the iSimangaliso Wetland Park in 2000, through Regulations established by the World Heritage Convention Act (1999), and the establishment of the iSimangaliso Authority (the Park’s dedicated management body) consolidated 16 parcels of previously fragmented land into a single protected area covering approximately 328,000 ha and extending 192 kilometers from the Mozambique border to Maphelane south of St Lucia. In the east, the Park is fringed by the Indian Ocean – the boundary runs three nautical miles out to sea and parallels the coast for the entire length of the Park – but the western boundary is convoluted and extends between one and 54 kilometers westwards from the coast. The Park was previously known as the Greater St. Lucia Wetland Park, but was renamed in November 2007. The word 'iSimangaliso' means 'a marvel' in Zulu.

1 South Africa’s National Bio-diversity Strategy and Action Plan, 2005 2 South Africa is one of 17 megadiverse countries according to UNEP World Conservation Monitoring Centre.

2 The global value of the biodiversity assets in iSimangaliso has been recognized internationally: the Park was inscribed on the World Heritage List in December 1999, contains four of the fifteen sites in South Africa registered as Wetlands of International Importance (under the Ramsar Convention) and forms a core component of the Maputaland-Pondoland-Albany Biodiversity Hotspot. The many and diverse ecosystems (wetlands, terrestrial and marine) contained in the Park provide important habitats for a large number of species, including those that are rare, threatened and/or endemic. The iSimangaliso Wetland Park harbors the last remaining subtropical area containing its original diverse components of wild plants and animals on the southeastern coast of Africa, and one of the last remaining in the world.

The remarkable ecological diversity and significance of iSimangaliso is unique, not only on the African continent, but also in a global perspective. For example, available information suggests that no other locality on the globe harbors such a wide range of wetland types in a single protected area. Of the 32 marine/coastal and inland natural wetland forms recognized by the Ramsar Convention, no fewer than 23 of these forms occur within the Park.

Economic/tourism importance of the iSimangaliso Wetland Park The iSimangaliso Wetland Park is widely regarded as an important economic asset with significant underdeveloped tourism potential. The tourist attractions within iSimangaliso include spectacular mountain ranges, wetlands, plains and bush land, a coastline and marine reserve that includes the southern-most coral reefs in Africa, dolphins, Humpback Whales, sea turtles and some 250 fish species, miles of fine beaches with clear warm-water seas, large inland lakes and estuaries, rich bird-life, marine-life and more than 3,000 plant types, a favorable year-round climate and a diversity of cultures, languages and customs among the Swazi, Zulu and Thonga people who have coexisted here for centuries.

The iSimangaliso Wetland Park forms the core of the Lubombo Spatial Development Initiative (LSDI), a trilateral regional program that started in 1998 aimed at stimulating development in a severely impoverished zone encompassing northern KwaZulu-Natal (KZN), southern Mozambique and eastern Swaziland. The Spatial Development Initiative’s vision was to put an end to “the paradox of poverty amidst natural plenty”. The iSimangaliso Wetland Park was identified as the South African anchor tourism project of the LSDI, capable of establishing a tourism core, thereby stimulating regional growth and creating a significant number of jobs.

Threats to the iSimangaliso Wetland Park The extensive iSimangaliso Wetland Park already has the basic elements of effective protection and management, including physical demarcation, infrastructure and equipment, park staff, management plan with different use zones, and at least some assurance of recurrent cost funding. Nonetheless, the Wetland Park faces two key threats that have not yet been adequately addressed: (i) Changes in the hydrological regime. The wetland ecosystems of iSimangaliso--most notably the Lake St. Lucia Estuary--are under considerable threat from the hydrological imbalance brought about by human activities, such as sugar cane and forest plantations, particularly along the Umfolozi River. Together, these comprise a dynamic and complex set of interconnected systems, in need of medium to long-term sustainable management of the

3 floodplain, river mouth and estuary, as well as related socio-economic development options. As a result of such imbalance, the volume of water in the Lake St. Lucia system3 has started to diminish and the salinity has increased, with a consequent deterioration of the ecological conditions. Left unchecked, these alterations in freshwater flows would continue to degrade the park’s critical wetland ecosystems, thereby threatening the long-term survival of numerous wetland-dependent species of plants and animals. Short-term solutions have been proposed and studies have been developed, but currently, there are no integral long-term solutions in place for this crucial component, which many regard as the key ecological issue facing the Park during frequent dry periods.

(ii) The risk of incompatible future land uses. Although the iSimangaliso Wetland Park currently enjoys comparatively good levels of on-the-ground protection, it is nonetheless at risk from future incompatible changes in the use of land and natural resources, such as mining and non-native forestry plantations. Besides, there is a wide range of natural resources harvested by communities living in and around the Park, some of which are permitted but regulated, including marine (such as mussels and fish), estuarine (crabs and fish), forest (such as Lala Palm and wood for building, fuelwood and carving), grasslands (such as for cattle grazing) and wetland species (such as iNcema). In view of the relatively large population of rural poor that live in vicinity of the Wetland Park, there is a need to proactively address their needs and aspirations for improved employment and livelihood opportunities in ways that are compatible with conserving the park’s rich biodiversity and other important natural values.

Country Eligibility and Drivenness The Republic of South Africa ratified the Convention on Biological Diversity (CBD) on 2nd January 1995.

The Global Environment Facility (GEF) presents South Africa with a vehicle for advancing global environmental objectives within the context of national development policies and programs. South Africa has signed and ratified all key international conventions pertaining to biodiversity conservation, including the Convention on Biological Diversity, Ramsar, CITES, and World Heritage Convention, as well as the Framework Convention on Climate Change (1997) and the Convention to Combat Desertification (1997), and ratified the Biosafety Protocol in 2003.

The project is consistent with the GEF Strategy for Biodiversity and is supporting the Strategic Objective 1: SO-1 Catalyzing Sustainability of Protected Areas Systems. Within the SO-1, the project particularly responds to the Strategic Program 3: Strengthening Terrestrial Protected Area Networks. By establishing a solution for the wellbeing of the St Lucia estuarine ecosystem this will strengthen the protection provided to the whole iSimangaliso Wetland Park. Enhanced protection of the iSimangaliso Wetland Park will contribute to improved representativeness of the entire PA network, by including habitats and ecosystems (from the Maputaland-Pondoland- Albany Biodiversity Hotspot) not represented elsewhere, and by strengthening models for local community benefits and co-management, which will be relevant to other PAs, and in areas where

3 “Lake St Lucia System” means Lake St Lucia and its estuary as well as the uMfolozi River mouth and uMfolozi- Umsunduze floodplain

4 claims on land with high global biodiversity value are still unresolved. Considering the iSimangaliso Wetland Park contains a marine ecosystem (including open ocean, sub tidal benthic [bottom-associated] habitats and the intertidal zone), by contributing to its conservation and sustainable use of natural resources, the project–which will complement activities already under way by the iSimangaliso Authority--will also contribute to the Strategic Program 2: Increasing Representation of Effectively Managed Marine Protected Areas in Protected Area Systems. By improving the ecological functioning of the Lake St. Lucia estuary, the project will enhance the nursery habitat for many species of fish and other marine life.

2. Objectives

The project development objective (PDO) is to improve access to information that addresses the availability of fresh water of adequate quality to the Lake St Lucia System4, a wetland of global biodiversity importance, and to increase access among local communities to conservation compatible economic opportunities.

This PDO will contribute to a long term goal of improving the ecosystem functioning of the Lake St Lucia System to conserve wetland habitats of global importance.

3. Rationale for Bank Involvement

South Africa is a unique client for the World Bank (WB) within the Africa region. It is a large middle income country with sizable own revenues and limited need for significant external financing. It already has substantial internal public and private capacity in a number of technical areas. Bank assistance to South Africa has been limited for the moment to technical assistance. To date, South Africa has not requested loans from IBRD for nature conservation and natural resource management. The main instrument underlying dialogue and project work in this area since 1998 has been grants obtained from the Global Environment Facility (GEF), for which the Bank is an Implementing Agency5. Considering projects under implementation, within the GEF’s Biodiversity and Multifocal Focal areas, the IBRD has a GEF portfolio size of US$45,4 million with a co-financing of US$120,7 million.

Currently, activities are being developed for a loan for the country’s energy sector.

The World Bank’s comparative advantage in this project is bringing to South Africa technical international best practices and most up to date knowledge on wetlands park management, biodiversity conservation, water management and hydrology, and community livelihoods, since

4 “Lake St Lucia System” means Lake St Lucia and its estuary as well as the uMfolozi River mouth and uMfolozi- Umsunduze floodplain 5 UNDP has been another leading agency in implementing GEF projects in South Africa. UNDP and WB GEF projects cover the most important regional biodiversity hotspots in the country (as specified by the National Biodiversity Strategy). There has been collaboration between the agencies particularly with the CAPE Biodiversity Conservation and Sustainable Development Project that is jointly implemented although funding is in great part managed by the WB. The rationale for the intervention of both agencies has been to cover all the ecosystems of the country. This proposed project adds to this purpose by integrating major wetland ecosystems to the portfolio of GEF projects.

5 the Bank has experience in many countries in the world on these issues. In particular, Component 1 of the project was designed based on successful World Bank’s wetland projects in other parts of the world, plus the experience and recommendations offered by the Bank’s Hydrology Expert Facility. During project implementation, the project will receive advice from the Facility and also project-focused hydrology and water management services.

The Bank is a leading institution in integrating natural resources management with improvement of community livelihoods and payment for environmental services, working within the new concept of territorial approach and spatial analysis6. In addition, the World Bank, together with other development partners, is providing non-lending technical assistance to the country for the preparation of a comprehensive climate change policy (mitigation and adaptation). The expertise obtained in these topics will be brought to the project, to examine the impact of climate change to the hydrology of the Lake St Lucia System.

The World Bank has the possibility of connecting the project stakeholders with other organizations that have developed similar opportunities, such as within Latin America and Europe, that can share their successes and lessons learns regarding landscape management, natural resources management, and community livelihoods. The exchange of experiences that the World Bank would promote during project implementation includes the topics of integrated wetland management as a tool for conservation and sustainable development, the design and implementation of local area plans, establishment of partnerships with local stakeholders, implementation of monitoring and evaluation systems and the territorial-based approach to rural development.

The Bank has also successfully promoted the mainstreaming of wetland conservation within infrastructure development projects: Argentina Flood Protection, Belize Drainage, and Colombia Cartagena. The World Bank brings the experience from other Wetland Projects such as Danube Wetlands Rehabilitation Project in Bulgaria, Wetland Restoration Project in Vietnam, Nariva Wetlands in Trinidad and Tobago, Wetlands Restoration and Management in Gulf of Mexico, the GEF Coastal and Biodiversity project in Guinea, and wetland components of projects in Guinea Bissau and the Gambia.

4. Description

Through its components, GEF funding will lead to global biodiversity conservation benefits by reducing the main threats (changes in the hydrological regime and incompatible land uses) to the long-term survival and ecological integrity of the Wetland Park.

Component 1: Hydrology and Ecosystem functioning of the Lake St Lucia System for biodiversity conservation. (Total US$ 10.8 million, of which GEF is US$ 2.8 million)

The objective of this component is to support the key studies that improve knowledge of the Lake St Lucia system, and initial follow-up actions needed to restore the St. Lucia wetlands to a

6 Latest advances in the concepts of territorial approach and spatial analysis, reframing the policy debates on urbanization, territorial development, and regional integration, can be found at: The World Bank (2008). World Development Report 2009: Reshaping Economic Geography. Washington, DC: The World Bank.

6 state of improved ecological functioning.

The expected outcomes of interventions implemented under this first component are: (i) Knowledge of ecosystem functioning improved and long-term solution agreed; (ii) Stakeholder concerns and involvement considered in the Feasibility study and EIA process; (iii) Management oriented monitoring system designed and implemented.

The key outputs will be: (i) Feasibility Study to detail preferred option completed; (ii) Environmental and Social Impact Assessment of the preferred option (ESIA) done; (iii) Follow up actions implemented.

The project will finance technical assistance, services, works, goods, training and operational costs in order to implement the following subcomponents:

Subcomponent 1.1: Analysis of Alternatives (Total US$1.4million, 100% GEF funded): Analysis of alternatives including a comprehensive feasibility study that will include an environmental and social impact assessment and analyze sediment load, hydrology, ecological systems, socio-economics and resource economics costing to select the best ecologically feasible solution taking into account social, financial, economic considerations and technical international best practices. Such study will include analysis of the wetland’s ecosystem services value such as fisheries, carbon sequestration and water regulation, among others that might facilitate leveraging additional funds to implement the selected solution.

Subcomponent 1.2: Implementation of Selected Solutions (Total US$1.4million, 100% GEF funded): support to follow up actions and investments to implement the selected alternative referred in subcomponent 1.1 above through consultant’ services, goods and works.

Subcomponent 1.3: Conservation Management (Total US$8 million, 100% Government funded): Support for the iSimangaliso Wetland Park operations related to the subcomponents 1.1 and 1.2 above through, goods, works, services and operational costs to manage the iSimangaliso Wetland Park’s physical assets, including compliance and enforcement, environmental management, rehabilitation, infrastructure development and maintenance, and community based natural resource management.

Component 2: Promoting conservation-compatible local economic and cultural development (Total US$ 7.1 million, of which GEF US$ 4.7 million)

The objective of this component is the improvement of employment and livelihood opportunities consistent with conservation of the Park's rich biodiversity and other important natural values, including diversification and scaling up of environmentally sustainable economic activities

The expected outcomes of interventions implemented under this component are: (i) Improved access to business development services; (ii) Improved access to knowledge in conservation and tourism for local youth, in nearby communities and land restitution beneficiaries; (iii) Improved capacity of local/community leaders in effective implementation of co-management agreements.

7 The key outputs will be: (i) SMME Program developed; (ii) Youth Educational Program operational; (iii) Capacity building program for beneficiary communities implemented.

Particularly, the project will finance Sub-grants, training workshops, operational costs and technical assistance to support the following sub-components:

Subcomponent 2.1: Implementation of a Conservation-Compatible Small, Medium and Micro Enterprise Program (Total US$ 2.7 million, 100% GEF funded): Implementation of a Conservation-compatible Small, Medium and Micro Enterprise (SMME) Program to promote the participation by local residents in eco-tourism and other conservation-compatible local enterprises, based on the experience obtained by the Authority on a previous pilot implemented. The component will provide support and capacity building in (i) identification of viable enterprises; (ii) business management; (iii) financial management; (iv) production and quality control; and (v) marketing and other relevant skills.

Subcomponent 2.2: Development of an Education and Academic Support Program (Total 1.4 million, 100% GEF funded): Development of an Education and Academic Support Program as part of the overall training program of the iSimangaliso Wetland Park Authority, targeted at local youth on conservation, eco-tourism and natural resources-related curricula, which will enable local youth to access formal tertiary education and employment in eco-tourism enterprises and conservation organizations.

Subcomponent 2.3: Establishment of a Capacity Building Program for nearby communities (Total US$ 0.6 million, 100% GEF funded): Establishment of a Capacity Building Program for the iSimangaliso Wetland Park neighboring communities, including land restitution beneficiaries, to build their skills and capacity to participate in the Wetland Park’s co- management processes. This will be achieved through training, mentoring, and study tours.

Subcomponent 2.4: SEED Program (Total US$ 2.4 million, 100% Government funded): Support for the iSimangaliso Wetland Park Socio-Economic Environment Development (SEED) Program, that complement subcomponents 2.1, 2.2 and 2.3 above through services, training, capacity building and operational costs to optimize empowerment participation in all activities of the Park in a way that improves the livelihoods of historically-disadvantaged individuals and communities.

Component 3: Institutional capacity building for biodiversity conservation (Total US$ 3.8 million, of which GEF is US$1.5 million)

The objective of this component is to improve the capacity of the iSimangaliso Authority and other relevant stakeholders for biodiversity conservation.

The expected outcome of interventions implemented under this component is: Improved capacity of the iSimangaliso Authority and other relevant stakeholders for biodiversity conservation.

The key outputs will be: (i) Training and mentoring activities implemented; (ii) GIS and databases functioning; (iii) M&E system implemented; and (iv) Website improved.

8 The project will finance technical assistance, goods, works, workshops, study tours and operational costs to support the following subcomponents:

Subcomponent 3.1: Institutional Capacity Building (Total US$1.5 million, 100% GEF funded): Management and Technical Capacity building including:

i. Enhancement of the iSimangaliso Wetland Park Authority’s capacity to manage the Project, including technical training and mentoring, recruitment of staff and the procurement of service providers ii. Support for the development of an information base including: mapping and survey data collection; databases and Geographical Information System iii. Establishment of a monitoring and evaluation system to: (i) monitor Project performance and outcomes, and (ii) adapt Project activities to enhance results iv. Exchange visits with relevant programs and participation in international seminars and conferences related to World Heritage management and conservation, land restitution, sustainable livelihoods, resource utilization and poverty issues, payment for environmental services, wetland management and territorial approach v. Implementation of a Project communication strategy and website development for the iSimangaliso Authority

Subcomponent 3.2: Support for the Administration of Wetland Authority (Total US$2.3 million, 100% Government funded): Support for the administration of the Wetland Authority including strategic oversight, consultation and facilitation activities, financial management and procurement, and monitoring and evaluation through salaries and operational costs.

5. Financing

The proposed five-year project will be financed by a US$9 million grant from the Global Environment Facility (GEF) in the form of a SIL (Specific Investment Loan). Government counterpart funding of US$ 12.7 million will be provided in the form of in kind contributions, for a total project cost of US$ 21.7 million. Source: (US$M) BORROWER/RECIPIENT 12.7 Global Environment Facility (GEF) 9.0 Total 21.7

6. Implementation

Partnership arrangements Project implementation will be undertaken by the iSimangaliso Wetland Authority7, previously known as the Great St. Lucia Wetland Authority (but renamed in 2007 consistent with the

7 The Authority is the nationally appointed Protected Area Manager and is statutorily empowered to manage the Park and make conservation and management decisions thereto.

9 renaming of the Park). This is the statutory body responsible for the development and management of the iSimangaliso Wetland Park.

The iSimangaliso Wetland Park Authority has the mandate to enter into cooperative governance agreements with a range of institutions across all spheres of government, importantly local government, to fulfill its core functions. One of the arrangements (that include rights and duties) has been established between the Wetland Authority, Ezemvelo KZN Wildlife (EKZNW)8 and the KZN Tourism Authority9 with respect to the management and development of the Wetland Park. The arrangements established between these organizations are regulated through legislation and have been further elaborated through a management agreement signed in August 2001 by the parties. Particularly, the agreement specifies that the parties will assist each other in achieving the required regulatory processes and approvals necessary for the general enhancement of the Wetland Park and to give effect to the objectives of the Wetland Authority. These agreements will be effective for the project implementation.

Institutional and implementation arrangements As mentioned, project implementation will be undertaken by the iSimangaliso Wetland Authority. The Authority was established by the Minister of Environment under the provisions of the World Heritage Convention Act of 1999 when the Greater St. Lucia Wetland Park was registered as South Africa’s first World Heritage Site. It became a statutory body in 2003 and reports to the national Minister of Environmental Affairs and Tourism. Unlike other protected areas in the country, the iSimangaliso Wetland Park Authority has a specific mandate to both protect and conserve the Park and to deliver benefits to communities living in and adjacent to the Park through facilitating optimal tourism and related development. The Authority’s activities are guided by the Wetland Park’s Integrated Management Plan (IMP), (2007-2012), which is the statutory tool to develop and manage the Park attempting to integrate conservation, tourism development, and the local economic development of historically disadvantaged communities in and adjacent to the Park.

The Authority is accountable to a broadly representative board (including representatives of national, local and provincial government, organized business, local communities and land restitution beneficiaries) and the national Minister of Environmental Affairs and Tourism. The Board of the iSimangaliso Wetland Authority must have at least 5 members, and not more than 9.

The iSimangaliso Authority has full authority over the region since it was superimposed over the mosaic of lands that constitute the Park. The Authority outsources services and works with other agencies at the national, regional and local level in order to access financing for Government programs for the Park and to develop cooperative governance agreements.

8 The EKZNW is the provincial conservation agency operating within the province of KwaZulu-Natal and is the successor to two agencies with fifty years of experience in managing nature conservation. EKZNW is currently responsible for conserving about 12% of the land surface of the province, with responsibilities including conservation, partnerships and ecotourism. 9 The KwaZulu-Natal Tourism Authority is a statutory entity responsible for the development, promotion and marketing of tourism into and within the province. The Authority was established by the KwaZulu-Natal Tourism Act, 1996 (as amended, including No. 2 of 2002).

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Project management will be the responsibility of dedicated staff members located in the relevant units in the iSimangaliso Authority, coordinated by a project manager who will be overseen by a senior manager reporting directly to the Authority’s CEO. The project has been conceptualized to integrate with the current operations and functions of the iSimangaliso Authority and the institutional arrangements will reflect this integration.

Relevant government departments, scientific institutes, local authorities, local communities, user groups and NGOs will be involved in project implementation through their representation in the Board. Currently, the Board comprises representatives from national government (DEAT), conservation, land restitution beneficiaries, EKZNW, NGOs, private sector, local government, traditional councils, tourism sector and the iSimangaliso CEO. Involvement will also be through the development of specific activities.

Broadly the Board’s role in the project will be to approve annual operating plans and oversee the executive of the iSimangaliso Authority including consideration of strategy, policy, budgets, stakeholder communication, appointments of executive staff, extra-ordinary expenditures, annual financial statements, risk management strategy, audit committee reports, audit findings. The Board will also ensure the complementarily and consistency of the project with the Integrated Management Plan.

Implementation arrangements for Component 1 foresee the use of the existent cooperative governance agreements and the use of panel of experts’ workshops to include the scientific community to review the feasibility study and agree on follow up actions. For example, EKZNW will be involved in the project through the existing structures established between EKZNW and iSimangaliso, and will support specific inputs, such as scientific ones into and review Terms of Reference for Component 1.

The implementation arrangements for component 2.1, the SMME Program, are the following: • The program will be advertised 3 times during the life of the project in local communities’ radio, communities’ public areas, local and traditional authorities’ areas through the communication program of the iSimangaliso Authority. • A selection panel will be set up by the Wetland Authority officials and service provider, with communities’ representatives as observers.

For Component 2.2, Academic and Support Program, the arrangements are the following: • The program will be widely advertised in newspaper, radios, high schools, etc in year 1, 2, 3 of the project life. • A selection panel will be created including the iSimangaliso Authority officials and community leaders.

7. Sustainability

Ownership of the project by the South African government and more specifically by the iSimangaliso Authority is evident from the fact that the project intervention lie within the major

11 strategies developed to protect and conserve the iSimangaliso Wetland Park, especially those included in the iSimangaliso Wetland Park Integrated Management Plan (IMP).

The active involvement of the Authority during every step of the project developed so far proves the institutional commitment with these and future activities. Significant political support exists at the local, provincial and national levels for this project.

The sustainability of the activities involved in the project is likely considering the following aspects:

(i) Ecological. The sound legal framework that is in place both in the Park and its buffer zone will allow long term approaches on restoring critical habitats and important ecological processes. The emphasis placed on these long term approaches plus the establishment of coherent data acquisition and monitoring systems will contribute to the sustainability of the ecological benefits achieved.

(ii) Institutional and financial. The iSimangaliso Authority provides the institutional framework for sustainable development and conservation in the greater iSimangaliso region. The project will rely on the existing administrative and organizational structures of the iSimangaliso Authority to implement activities, which will continue after the end of the project. The project has been explicitly designed to enhance the capacity of the Authority and its partners. The long-term institutional sustainability of the project will thus be achieved through a program designed to strengthen the capacity of these organizations and to implement sustainable institutional arrangements with local, provincial and national stakeholders (subcomponent 3.1). Considering the financial sustainability, the iSimangaliso Wetland Authority has an annual budget in excess of $6 million coming from government allocations (which corresponds to around 80% of total revenue), project based donor funds (international and private sector – around 10% of total revenue), and Park revenue (about 10% of total revenue). Importantly, iSimangaliso is the recipient of a medium term expenditure framework from government which will continue after the project. Additionally, as the tourism strategy is implemented Park revenue will increase.

(iii) Social. The project’s complements the Authority’s Socio-Economic Environment Development (SEED) program and contributes to social sustainability by optimizing the flow of tangible benefits from the Park to its neighboring communities and generally integrating local people into the life and management of the Park. The improved livelihood benefits through the Component 2 SMME will reduce the risk of future land uses incompatible with natural resource and biodiversity conservation. Importantly, the capacity of land resettlement beneficiaries to enter into and implement co-management agreements with the iSimangaliso Authority will be enhanced, strengthening the relation between the Park and local communities in the effective conservation of the protected area. In addition, as O.P. 4.12, if Component 1 should result in any resettlement or restriction of access, a Resettlement Action Plan (RAP) or Plan of Action (PoA) will be prepared, consulted and financed to make sure of the sustainability of the intervention.

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8. Lessons Learned from Past Operations in the Country/Sector

Lessons learned reflect experiences, including international best practice, from programs and projects under preparation or supervision inside and outside of South Africa. The main lessons that have been incorporated to the project design are the following:

(i) Participatory approach. Involving all relevant stakeholders at each stage of project preparation and implementation is key to success. The components selection and definition has incorporated the results from various exchanges with a range of stakeholders from the national to the local level. The participation given to all key stakeholders indicates the commitment to participatory approaches by the iSimangaliso Authority. (ii) Emphasis on Livelihoods. A key lesson has been the importance of integrating community income improvement activities within conservation purposes so to reduce the pressure of local communities on natural resources and increase their incentive in engaging in sustainable management of natural resources. The challenge faced by the Wetlands Authority is therefore to respond to the twin imperatives of conservation and development in a manner that aligns with the shift in national (and global) priorities from a strong focus on conservation-in-isolation to a new approach that integrates biodiversity conservation with poverty-reducing regional development. (iii) Results framework. The design of a simple results framework based on the newly developed forest sector results chain has facilitated that all key stakeholders have been able to understand the main purposes and issues of the project. (iv) Project implementation. Working within the existing structure of an accountable organization is preferable to creating a separate project coordination unit (PCU). For the project, an institutional assessment determined that the iSimangaliso Authority has the capacity to implement the project, especially after receiving some specific training and capacity building. (v) Wetland issues depend on the management of the upper and lower watersheds. International experience shows that salinization, drying up and sediment issues cannot be managed only by tackling the hydrological issues in the lower part of the watershed. The management of the upper watershed can have big impact on the drying up of the watershed. The Feasibility Study and EIA to be implemented under Component 1 will look at the watershed management holistically. (vi) Engagement between institutions needs to be aligned with the political and social contexts. The previous Country Assistance Strategy was approved in 1999. Recent findings indicate that (i) this CAS did not benefit from strong ownership from the National Treasury and (ii) at times, the Bank’s strategy was not well aligned with the political and social complexities of the country. These lessons are reflected in the current engagement with the iSimangaliso Wetland Authority, the Department of Environmental Affairs and Tourism, Ezemvelo KZN Wildlife, and the South African Biodiversity Institute. During the past two years, many joint missions between the World Bank Group and the Authority have discussed options to collaborate in support of the country’s environment sector and biodiversity projects. This dialogue has been enhanced during recent months and the project design builds on the Government’s strategy.

13 (vii) Safeguard Policies (including public consultation)

Safeguard Policies Triggered Yes No Piloting under OP 4.00 Environmental Assessment (OP/BP 4.01)_ X X Natural Habitats (OP 4.04) X X Forests (OP/BP 4.36) X Physical Cultural Resources (OP/BP 4.11) X X Pest Management (OP/BP 4.09) X Safety of Dams (OP/BP 4.37) X Involuntary Resettlement (OP/BP 4.12) X Indigenous Peoples (OP/BP 4.10)10 X Projects on International Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X

Under Operational Policy/Bank Procedure 4.00 (OP/BP 4.00), Piloting the “Use of Borrower Systems to Address Environmental and Social Safeguard Issues in Bank-Supported Projects” issued in March 2005, the Bank has the authority to support pilot projects in which lending operations are prepared using the borrowing country’s systems for environmental and social safeguards, rather than the Bank’s corresponding operational policies and procedures. The advantages of using country systems (UCS) are to scale up development impact, increase country ownership, build institutional capacity, facilitate harmonization and increase cost effectiveness. These objectives were endorsed by the Bank’s Board that, by approving the project, was also approving the UCS for some of the safeguards triggered by this project.

South Africa was selected to participate in the Pilot Program for Use of Country Systems (UCS) under O.P. 4.00, because it has an established legal and regulatory system and a favorable reputation for effective implementation of its systems governing environmental assessment, protection of natural habitats, protected areas and physical cultural resources. This project is the first project in South Africa and the second project in the Africa region to be undertaken under the UCS pilot program.

The Recipient, the iSimangaliso Wetland Park Authority (Wetland Authority), has strong capacity for addressing safeguard policy issues. This includes implementation capacity, a proven track record for high quality environmental work at both the strategic and project-specific levels, and enforcement at the Park level. The national environmental regulatory framework applicable to the iSimangaliso Wetland Park is sound, well designed, and adequately enforced. The Wetland Authority is subject to institutional oversight and monitoring from South Africa’s Department of Environmental Affairs and Tourism (DEAT).

As indicated in the table above, during project preparation, a Safeguard Diagnostic Review (SDR) was developed and three of the four safeguards triggered by the project were proposed under the recipient safeguard system. These are: Environmental Assessment (EA), Natural Habitats (NH) and Physical Cultural Resources (PCR).

10 During project preparation, the Task Team conducted a survey and discussed the status of the various communities living in the project area. It was determined, after consultation of stakeholders, that no indigenous peoples communities in terms of OP 4.10 exist in the area.

14 In addition, during preparation, it was decided not to pilot the Involuntarily Resettlement Policy (IR) because the actions under Component 111 that might possibly result in resettlement (or related economic displacement, due to involuntary taking of land or, within protected areas, restriction of access to natural resources) have not yet been determined, and will be only be determined during project implementation. As a consequence this safeguard will be implemented under the World Bank’s Involuntary Resettlement OP 4.12, rather than piloted under OP 4.00. Accordingly, a Resettlement Policy Framework and Process Framework was prepared per OP 4.12 for this purpose. The Resettlement Policy Framework and Process Framework was prepared as a precautionary measure to provide the principles and standards that would guide any possible future resettlement (should it become necessary) under the iSimangaliso Wetland Park Project, to ensure that any eligible persons who might possibly be displaced as a result of the Project receive the appropriate resettlement, compensation, or other assistance needed in their efforts to improve, or at least restore, their livelihoods and standards of living. Should resettlement (as defined in OP 4.12) occur as a result of this project, the iSimangaliso Authority would prepare, in consultation with the affected persons, a detailed Resettlement Action Plan (RAP) and/or Plan of Action (PoA) (as applicable), prior to implementing any such resettlement.

The World Bank supervision will include supervision of safeguards under OP 4.00 and OP 4.12.

(viii) List of Factual Technical Documents

Not applicable

(ix) Contact point

Contact: Paola Agostini Title: Senior Economist Tel: (202) 473-7620 Fax: (202) 477 0515 Email: [email protected]

(x) For more information contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-4500 Fax: (202) 522-1500 Email: [email protected] Web: http://www.worldbank.org/infoshop

11 The project’s Component 2 and 3 contain interventions to improve livelihoods and capacity and will not have any resettlement impacts. Only component 1 could possibly result in resettlement, but this is totally dependent on what option is seen as most advisable to address the hydrological and related ecological concerns, taking into account social, financial, economic criteria as well as political.

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