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CANAL AUTHORITY SUSTAINABLE FOREST COVER ESTABLISHMENT PROJECT

Project Design Document for Climate, Community & Biodiversity Standards (CCBS) Second Edition

Prepared by MGM Innova

September, 2010

Panama Canal Authority

Sustainable Forest Cover Establishment Project

Versión Elaboró Revisó Aprobó Nombre Jorge Ramírez GautamDutt 1. Primer informe Fecha Julio 16 de 2010 Julio 19 de 2010 Nombre Jorge Ramírez Gautam Dutt 2. Segundo informe Fecha Sept. 2010 Sept. 2010 Nombre Jorge Ramírez Alejandro Rueda Gautam Dutt 3. Tercer informe Fecha Oct. 2010 Oct. 2010 Nov. 2010 Nov. 2010

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Panama Canal Authority

Sustainable Forest Cover Establishment Project

PROJECT OVERVIEW

Location of the project Country: Panama Nearest City: Panama City. Center of the Project Activities: Panama Canal Authority. Geographic coordinates 8°58’53”N- 79°34’37’’W.

Implementing organization The Panama Canal Authority (ACP according to its initials in Spanish) is the entity of the Government of Panama in charge of the operation, administration, management, preservation, maintenance, and modernization of the Panama Canal, as well as its activities and related services, pursuant to legal and constitutional regulations in force, so that the Canal may operate in a safe, continuous, efficient, and profitable manner.

Also, the project has the support of other institutions which have jurisdiction over the project site, included ANAM (Autoridad Nacional del Ambiente – Panama national Environmental Authority), MIDA (Ministerio de Desarrollo Agropecuario de Panamá – Ministry of Agricultural Development of Panama) and BDA (Banco de Desarrollo Agropecuario – Agricultural Development Bank).

Project background Completion of the Panama Canal in 1914 led to recognition of the importance of the Panama Canal Watershed (PCW) that supports the millions of gallons of water required for each ship to pass through the Canal. In addition, the PCW is widely acclaimed for its ecological importance due to it sits in the center of one of the world’s most biologically diverse areas (Myers et al. 2000 and Condit et al. 2001). Today the watershed is home to many of the people living in Panama, for it borders the cities of Colón and Panama City. The watershed supports suburban life as well as agriculture, ranching, and forestry. These are the main reasons why ACP is fully committed with this PCW resources conservation program.

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Panama Canal Authority

Sustainable Forest Cover Establishment Project

At the end of 1999, the operation of the Panama Canal was turned over to Panama. Since then the ACP is responsible of the conservation of hydric resources in the watershed, which it is related with land-use changes1. Some of the watershed is undergoing rapid changes in land use, for instance, forest destruction. There is concern about the compatibility of urban and economic development with hydrological needs and conservation of the watershed (Condit et al. 2001). Human activities like deforestation, land degradation and erosion in the PCW are affecting the future ecological resources, and thus the carbon storage potential.

There are several causes that have led forest destruction in the PCW, such as forests clearance for “cash” crops (for example, bananas and coffee), logging operations, cattle ranching and subsistence farming. It is not really surprising that when the international prices for cash crops go up, we also observe an accelerated forest destruction as more people are trying to take advantage of such price increases (CREA 2005).

To reverse the negative trends, the ACP has initiated different conservation projects within the PCW that including support to establish forestry plantations with native and exotic species, and the establishment of agroforestry and silvo-pastoral farms.

The ACP hopes that the implementation of the proposed project would help recover the land cover on approximately 10,000 hectares of degraded areas and mitigate water resource problems in the PCW in terms of quantity and quality of the water.

The project The ACP, with its own funds, is implementing the project PIEA (Programa de Incentivos Económicos Ambientales, Environmental Economic Incentives Program) focused on promoting forest restoration, forest and biodiversity conservation, and alternative livelihood through

1Political Constitution of Panama, Art. 316: Se crea una persona jurídica autónoma de Derecho Público, que se denominará Autoridad del Canal de Panamá, a la que corresponderá privativamente la administración, funcionamiento, conservación, mantenimiento y modernización del Canal de Panamá y sus actividades conexas, con arreglo a las normas constitucionales y legales vigentes, a fin que funcione de manera segura, continua, eficiente y rentable. Tendrá patrimonio propio y derecho de administrarlo.

A la Autoridad del Canal de Panamá corresponde la responsabilidad por la administración, mantenimiento, uso y conservación de los recursos hídricos de la cuenca hidrográfica del Canal de Panamá, constituidos por el agua de los lagos y sus corrientes tributarias, en coordinación con los organismos estatales que la Ley determine. Los planes de construcción, uso de las aguas, utilización, expansión, desarrollo de los puertos y de cualquiera otra obra o construcción en las riberas del Canal de Panamá, requerirán la aprobación previa de la Autoridad del Canal de Panamá. los lagos y sus corrientes tributarias, en coordinación con los organismos estatales que la Ley determine. Los planes de construcción, uso de las aguas, utilización, expansión, desarrollo de los puertos y de cualquiera otra obra o construcción en las riberas del Canal de Panamá, requerirán la aprobación previa de la Autoridad del Canal de Panamá. 4 Carrera 43A#1-50. San Fernando Plaza – Torre 4, oficina 315. Tel: +57.4.3260584 www.mgminnova.com

Panama Canal Authority

Sustainable Forest Cover Establishment Project

reforestation, as well as silvo-pastoral and agro-forestry systems. The project will cover approximately 10,000 hectares of degraded lands (formerly pasture grassland with low carrying capacity). The forest cover establishment project has been implemented annually since 2007 and it is expected continue until 2013. So far, 3,057 ha of reforestation projects, Agroforestry and Silvo-pastorial systems have been established in the project area.

Project Activities The activities and targets under the project are reforestation with commercial and native species (3,445 ha), and the establishment of agroforestry systems (4,147 ha) and silvo-pastoral systems (2,408 ha); all components cover the whole range of operations from nursery establishment and seedling production to planting and maintaining the seedlings. It is expected that all project activities improve ecosystems services and provide an income source alternative to incomes from unsustainable use of forest patches.

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Panama Canal Authority

Sustainable Forest Cover Establishment Project

ACRONYMS ACP Panama Canal Authority (ACP according to its initials in Spanish) CCBS Climate, Community and Biodiversity Standards PCW Panama Canal Watershed PIEA Environmental Economic Incentives Program CO2 Carbon dioxide GEI Greenhouse gases

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Panama Canal Authority

Sustainable Forest Cover Establishment Project

TABLE OF CONTENT General Section ...... 14 G1. Original Conditions in the Project Area ...... 14 G1.1. Project Area Location and Physical Parameters...... 14 G1.2. Vegetation within the Project Area ...... 29 G1.3. Boundaries of the Project Area and the Project Zone ...... 33 G1.4. Carbon Stocks within the Project Area ...... 36 G1.5. Communities Located in the Project Zone ...... 38 G1.6. Current Land Use and Land Tenure in the Project Zone ...... 43 G1.7. Current Biodiversity within the Project Zone ...... 44 G1.8. High Conservation Values within the Project Zone ...... 50 G2. Baseline Projections ...... 56 G2.1. Baseline Land Use ...... 56 G2.2. Additionality ...... 61 G2.3. Carbon Stock Changes ...... 61 G2.4. Baseline Communities ...... 62 G2.5. Baseline Biodiversity ...... 62 G3. Project Design and Goals ...... 64 G3.1. Major Climate, Community and Biodiversity Objectives ...... 64 G3.2. Major Project Activities ...... 65 G3.3. Location of Project Activities ...... 74 G3.4. Time-frame and Project Accounting ...... 74 G3.5. Project Risks and Mitigation Measures ...... 74 G3.6. Maintenance of High Conservation Values ...... 75 G3.7. Measures Taken to Enhance Climate, Community, and Biodiversity Benefits Beyond Project Lifetime...... 76 G3.8. Stakeholder Involvement ...... 76 G3.9. Publicitation of Public Comment Period ...... 77 G3.10. Conflict Resolution Tools ...... 77 G3.11. Project Financial Support ...... 77

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Sustainable Forest Cover Establishment Project

G4. Management Capacity and Best Practices ...... 78 G4.1. Project Proponents ...... 78 G4.2. Technical and Management Expertise ...... 78 G4.3. Capacity Building ...... 79 G4.4. Community Employment Opportunities ...... 79 G4.5. Employment Laws ...... 80 G4.6. Employee Safety ...... 80 G4.7. Financial Health of the Implementing Organizations ...... 80 G5. Legal Status and Property Rights ...... 81 G5.1. Local Laws and Regulations ...... 81 G5.2. Documentation of Legal Approval ...... 81 G5.3. Free, Prior, and Informed Consent ...... 81 G5.4. Involuntary Relocations ...... 81 G5.5. Illegal Activities ...... 81 G5.6. Carbon Rights ...... 82 Climate Section ...... 83 CL1. Net Positive Climate Impacts ...... 83 CL1.1. Net Change in Carbon Stocks ...... 83

CL1.2. Net Change in Non-CO2 Gases ...... 85 CL1.3. Other GHG Emissions from Project Activities ...... 85 CL1.4. Positive Net Climate Impact ...... 86 CL1.5. Avoided Double-Counting ...... 86 CL2. Offsite Climate Impacts ...... 87 CL2.1. Types of Leakage ...... 87 CL2.2. Mitigation of Negative Offsite Impacts ...... 87 CL2.3. Unmitigated negative offsite climate impacts ...... 87 CL2.4. Non-CO2 gases ...... 87 CL3. Climate Impact Monitoring ...... 88 CL3.1. Carbon Pool Selection and Monitoring ...... 88 CL3.2. Monitoring Plan ...... 104

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Panama Canal Authority

Sustainable Forest Cover Establishment Project

Community Section ...... 105 CM1. Net Positive Community Impacts ...... 105 CM1.1. Community Benefits ...... 105 CM1.2. Impact on High Conservation Values ...... 106 CM2. Offsite Stakeholder Impacts ...... 107 CM2.1. Potential Negative Offsite Stakeholder Impacts ...... 107 CM2.2. Plans to Mitigate Potential Offsite Impacts ...... 107 CM2.3. Unmitigated Offsite Impacts ...... 107 CM3. Community Impact Monitoring ...... 108 CM3.1. Community Impact Monitoring Plan ...... 108 CM3.2. High Conservation Value Plan ...... 109 CM3.3. Community Impact Monitoring Implementation...... 109 Biodiversity Section ...... 110 B1. Net Positive Biodiversity Impacts ...... 110 B1.1. Biodiversity Impacts...... 110 B1.2. Impact on High Conservation Values ...... 110 B1.3. Species Used by the Project ...... 111 B1.4. Exotic species in the project area ...... 111 B1.5. Genetically Modified Organisms ...... 112 B2. Offsite Biodiversity Impacts ...... 113 B2.1. Potential Negative Offsite Biodiversity Impacts ...... 113 B2.2. Mitigation of Potential Negative Offsite Biodiversity Impacts ...... 113 B2.3. Evaluation of Potential Negative Offsite Biodiversity Impacts ...... 113 B3. Net Positive Biodiversity Impacts ...... 114 B3.1. Biodiversity Impact Monitoring Plan ...... 114 B3.2. Biodiversity Impact Monitoring Effectiveness ...... 115 B3.3. Biodiversity Impact Monitoring Implementation ...... 115 Gold Level Section ...... 116 GL3. Exceptional Biodiversity Benefits ...... 116 GL3.1 Demonstrate the site’s vulnerabilit ...... 116

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Panama Canal Authority

Sustainable Forest Cover Establishment Project

GL3.2 Demonstrate the site’s Irreplaceability ...... 118 REFERENCES ...... 120 ANNEX ...... 128 Annex 1. Environmental Economic Incentives Program brochure ...... 128 Annex 2. Usufruct Contract ...... 130 Annex 3. Families benefited by the program during 2009 and 2010 ...... 135

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Sustainable Forest Cover Establishment Project

LIST OF FIGURES Figure 1. Map of Panama showing the location of the project zone and the administrative regions of the Panama Canal Watershed ...... 15 Figure 2. Climates within the Panama Canal Watershed according to the Köppen classification system...... 17 Figure 3. Average monthly precipitation and temperature registered at Gamboa station for the 2000 – 2009 period...... 20 Figure 4. Average monthly precipitation and relative humidity at Gamboa station for the 2000 - 2009 period...... 20 Figure 5. Map of land-cover in the Panama Canal area in 2008...... 30 Figure 6. Eligible Areas ...... 35 Figure 7. Major population centers with more than 500 inhabitants ...... 39 Figure 8. Project zone 1986 land cover ...... 57 Figure 9. Project zone 2008 land cover ...... 58 Figure 10. Project zone 1986 – 2008 land cover change ...... 59 Figure 11. Area planted in Panama between 1992 and 2004...... 60 Figure 12 Net anthropogenic removals by sinks (tCO2) ...... 85 Figure 13. Major land cover categories change scenario, including Trans-Isthmian highway...... 117

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Panama Canal Authority

Sustainable Forest Cover Establishment Project

LIST OF TABLES Table 1. Monthly and annual rainfall (mm) at Gamboa station for the 2000 – 2009 period...... 18 Table 2. Average monthly and annual temperature (°C) at Gamboa stationfor the 2000 – 2009 period...... 19 Table 3. Average monthly and annual relative humidity (%) at Gamboa station for the 2000 –2009 period...... 21 Table 4. Monthly and annual solar radiation (in thousands of Langleys) at Gamboa station for the 2000 - 2009 period...... 22 Table 5. Monthly measurements of evaporation (mm) at Gamboa station for the 2000 - 2009 period...... 22 Table 6. Geological Materials in the project area ...... 23 Table 7. Characterization of the Typical Profile of an Ultisol Soil ...... 26 Table 8. Characterization of the Typical Profile of an Alluvial Soil ...... 27 Table 9. Maximum, minimum and median values of parameters evaluated and their comparison to values guidelines for tributaries ...... 28 Table 10. Homologate land cover maps 1986 and 2008...... 34 Table 11. Components of major land cover types of the project zone...... 36 Table 12. Carbon content (tCha-1) in aboveground components off our 20-year-old teak plantations located in Chagres and Soberania National Parks (from Kraenzel et al. 2003)...... 38 Table 13. Corregimientos and important towns within the project zone ...... 40 Table 14. Number of flora species and families by group within the project zone ...... 46 Table 15. Endemic, threatened, and protected species in the project zone ...... 47 Table 16. Diversity of fauna species recorded in the project zone ...... 48 Table 17. Project schedule ...... 68 Table 18. Number of families benefited by the program during 2009 and 2010 ...... 73 Table 19. Estimates of net anthropogenic GHG removals by sinks ...... 84 Table 20. GHG emissions by sources within the project boundary as a result of the implementation of the project ...... 86 Table 21. Data and variables to monitor the project management practices ...... 90 Table 22. Data to be collected to monitor the changes in carbon stock in the carbon pools...... 101 Table 23. Data to be collected to monitor the GHG emissions by the sources...... 103 Table 24. High conservation values related to communities monitoring indicators...... 109 Table 25. Indicators and methods to be used in the monitoring biodiversity impacts of the project ...... 114

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Panama Canal Authority

Sustainable Forest Cover Establishment Project

LIST OF PHOTOS Photo 1. Deforestation and degradation processes in the Soberania National Park...... 31 Photo 2. Saccharum spontaneum areas ...... 32 Photo 3. Project nurseries ...... 66 Photo 4. Land preparation ...... 67 Photo 5. sowing ...... 68 Photo 6. Tectona grandis (Teak) plantation...... 69 Photo 7. Some natives species...... 70 Photo 8. Project advance...... 71 Photo 9. Workshops held with the farmers...... 72

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Panama Canal Authority

Sustainable Forest Cover Establishment Project

Gen Clim Comm Bio G1. Required

GENERAL SECTION

G1. ORIGINAL CONDITIONS IN THE PROJECT AREA

G1.1. PROJECT AREA LOCATION AND PHYSICAL PARAMETERS

Project area description The Panama Canal Authority (ACP according to its initials in Spanish) Sustainable Forest Cover Establishment Project (“the Project”) is located in Panama, within the Panama Canal Watershed. The nearest urban area is Panama City, located about 20 km from the Project boundary. The Project area includes 10,000 ha (Figure 1)

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Panama Canal Authority

Sustainable Forest Cover Establishment Project

Figure 1. Map of Panama showing the location of the project zone and the administrative regions of the Panama Canal Watershed

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Panama Canal Authority

Sustainable Forest Cover Establishment Project

Physical parameters of the project area

Climate The climate may be characterized by the following basic variables: rainfall, temperature, relative humidity, wind velocity and direction, solar radiation, and evapotranspiration.

• Type of climate: According to the Köppen classification system, the climate in the project area is Humid Tropical Climate and Tropical Grass Land Climate, which are characterized by an annual rainfall greater than 2,500 mm, a marked dry season that lasts 3months (January to March) and an annual average temperature ranging between 24 and 26 °C (Figure 2).

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Panama Canal Authority

Sustainable Forest Cover Establishment Project

Figure 2. Climates within the Panama Canal Watershed according to the Köppen classification system.

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Panama Canal Authority

Sustainable Forest Cover Establishment Project

• Rainfall: The annual average precipitation registered at ACP station of Gamboa (elevation: 31.4 m, geographical coordinates: 09° 06' 44'' N, 79° 41' 38'' W), station nearest to the study area, is 2,073.8.Table 1 shows the monthly and annual average values at this station in the last decade.

Table 1. Monthly and annual rainfall (mm) at Gamboa station for the 2000 – 2009 period. Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total 2000 35.6 7.6 2.5 91.4 330.2 315.0 160.0 274.3 304.8 317.5 215.9 215.9 2270.8 2001 25.4 2.5 25.4 35.6 119.4 190.5 236.2 236.2 238.8 193.0 304.8 279.4 1887.2 2002 27.9 2.5 50.8 76.2 160.0 215.9 348.0 292.1 160.0 213.4 238.8 55.9 1841.5 2003 5.1 27.9 0.0 190.5 215.9 284.5 266.7 322.6 403.9 373.4 396.2 274.3 2761.0 2004 38.1 0.0 0.0 83.8 292.1 312.4 154.9 340.4 287.0 294.6 238.8 66.0 2108.2 2005 20.3 0.0 38.1 61.0 312.4 121.9 175.3 188.0 315.0 182.9 246.4 43.2 1704.3 2006 10.2 12.7 81.3 73.7 289.6 322.6 271.8 223.5 160.0 180.3 381.0 149.9 2156.5 2007 7.6 2.5 5.1 264.0 368.0 258.0 191.0 221.0 316.0 178.0 217.0 133.0 2161.2 2008 16.0 28.0 8.0 70.0 138.0 132.0 346.0 129.0 73.0 134.0 455.0 43.0 1572.0 2009 29.0 13.0 37.0 22.0 241.0 369.0 214.0 379.0 148.0 405.0 381.0 37.0 2275.0

Average 21.5 9.7 24.8 96.8 246.7 252.2 236.4 260.6 240.6 247.2 307.5 129.8 2073.8 Max 38.1 28.0 81.3 264.0 368.0 369.0 348.0 379.0 403.9 405.0 455.0 279.4 2761.0 Min 5.1 0.0 0.0 22.0 119.4 121.9 154.9 129.0 73.0 134.0 215.9 37.0 1572.0 Source: ACP

The data in Table 1 shows that the years 2005 and 2008 were the driest years; probably influenced by the presence of the El Niño Phenomenon, which is characterized by periods of droughts in that years.

In general terms, a considerable increase may be observed in the average monthly precipitation for the months of May to December, compared to the levels of precipitation for the months of January to April, coinciding with the typical rainy season and dry season of the country.

It is worthwhile noting that the operation of the Panama Canal depends wholly on the rains that fall in the Watershed (3,360 km2). The dry season (4 months long) is characterized by the lack of rains resulting from the action of the trade winds and the movement of the Intertropical Zone of Convergence on the Isthmus. The rainfall schedule of the PCW is influenced by the Intertropical Zone of Convergence, which is responsible for the two climatic seasons in Panama.

• Temperature: The ambient temperature shows few fluctuations throughout a ten- year recording period (2000 - 2009), according to the date from the ACP station of Gamboa as shown in Table 2.

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Sustainable Forest Cover Establishment Project

Table 2. Average monthly and annual temperature (°C) at Gamboa stationfor the 2000 – 2009 period. Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Average 2000 25.6 26.1 26.3 26.8 26.2 25.7 25.7 25.9 25.3 25.3 25.8 25.4 25.8 2001 25.2 25.7 25.8 26.9 26.6 26.5 25.7 26.7 25.9 26.4 25.9 26.1 26.1 2002 26.9 26.9 27.2 27.4 28.0 26.7 26.6 26.3 26.2 26.1 26.1 26.7 26.8 2003 26.9 27.1 27.4 27.3 26.7 26.2 25.1 25.1 24.8 24.7 24.6 24.8 25.9 2004 24.8 25.7 26.4 26.1 25.7 26.7 26.3 26.2 26.2 26.1 26.1 26.7 26.1 2005 26.8 26.7 27.3 27.8 26.7 26.9 26.8 26.6 26.2 26.1 25.7 26.4 26.7 2006 26.9 26.8 27.3 26.8 26.6 26.5 26.3 26.4 26.2 26.1 25.8 26.5 26.5 2007 27.2 26.6 27.5 27.1 26.5 26.5 26.3 25.8 25.9 26.0 25.8 25.8 26.4 2008 26.1 26.3 26.8 27.3 26.7 26.6 25.8 26.1 26.4 26.2 25.3 26.3 26.3 2009 26.6 26.7 26.7 27.5 26.9 26.5 26.5 26.4 26.7 26.2 25.8 26.7 26.6 Average 26.3 26.5 26.9 27.1 26.7 26.5 26.1 26.2 26.0 25.9 25.7 26.1 26.3 High 33.2 33.3 33.9 33.8 32.4 32.0 31.3 31.4 31.5 31.4 30.7 31.9 34.3 Low 22.8 22.4 22.7 23.4 24.0 24.0 23.8 23.6 23.6 23.7 23.4 23.3 23.4 Source: ACP

The Gamboa Station shows an annual average temperature of 26.3 °C, which ranges between a high of 26.8 °C for the year 2002, and a low of 25.8 °C for the year 2000.

At the Gamboa Station the average monthly temperatures ranged between 25.7 to27.1 °C, with the month of November being the coolest on average, while the month of April the hottest. In conclusion, it may be noted that, as far as extreme conditions (highs and lows) are concerned, the months of March and April show the most elevated records of high temperature, coinciding with scarce precipitation, while the months of October and November register the lowest temperature averages, coinciding with the final of the rainy season.

In general, to a greater rainfall, there is a lower temperature and vice versa. Figure 3 shows the relation between precipitation and temperature.

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Sustainable Forest Cover Establishment Project

Figure 3. Average monthly precipitation and temperature registered at Gamboa station for the 2000 – 2009 period.

• Relative humidity: Since there is little variation in temperature, relative humidity is closely related to precipitation and, in general terms, the greater the precipitation the higher the relative humidity (Figure 4). Nevertheless, the relative humidity is relatively high (above 80%) even in the dry season, probably for the presence of tropical oceans nearby.

Figure 4. Average monthly precipitation and relative humidity at Gamboa station for the 2000 - 2009 period.

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This relationship between rainfall and relative humidity may be seen in the Gamboa station data (Table 3). Relative humidity parameters at the Gamboa Station fluctuate from a low of 73% in the dry season and a high of 97% in the rainy season.

Table 3. Average monthly and annual relative humidity (%) at Gamboa station for the 2000 –2009 period. Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Average 2000 84.8 78.0 73.7 77.7 86.0 88.4 86.0 77.1 85.3 86.2 84.5 84.6 82.7 2001 81.6 78.6 79.2 77.8 82.1 84.4 85.8 84.3 82.9 82.5 82.0 82.5 82.0 2002 78.0 74.8 75.2 76.0 77.4 82.0 82.5 82.7 82.4 82.4 82.4 78.1 79.5 2003 75.2 74.5 73.5 76.7 82.1 82.1 84.3 84.3 84.4 94.0 85.5 83.7 81.7 2004 88.1 84.9 82.8 87.0 91.1 91.6 94.4 96.3 97.1 97.0 95.9 95.5 91.8 2005 86.3 83.1 85.3 86.2 91.4 91.1 91.6 91.5 92.5 96.6 97.4 95.4 90.7 2006 86.6 84.3 83.4 87.6 91.7 92.1 92.2 92.1 92.4 91.4 95.8 95.9 90.5 2007 84.5 84.3 81.5 87.1 91.3 91.4 91.8 92.2 92.0 91.5 92.8 91.3 89.3 2008 86.2 83.0 83.1 84.1 90.1 92.7 93.6 91.5 90.2 85.2 86.1 81.0 87.2 2009 84.5 83.7 82.6 83.4 89.3 90.4 91.4 90.7 90.0 90.9 93.0 89.1 88.2 Average 83.6 80.9 80.0 82.4 87.2 88.6 89.4 88.3 88.9 89.8 89.5 87.7 86.4 Source: ACP

• Solar radiation: Panama is located close to the equator, and there is little variation in solar radiation on clear days over the months. The main variation observed is due to cloudiness and solar radiation is higher in the months of the dry season, which is normally the first four months of the year. As this season begins, toward the end of December, the values of solar radiation increase significantly to values above 10,000 Langleys, while during the remaining months they show values below 8,000 Langleys.

• At the Gamboa station, it is during the month of March that the highest values are recorded (≈11,200 Langleys). The lowest intensity solar radiation registered is in the month of November (7,300) Langleys. The monthly averages within the above mentioned parameters are shown in Table 4. The radiation value may also change, depending on the presence or lack of tree vegetation and its density.

• Evaporation: Evaporation is higher in the months of January through April (dry season) and it begins to decline from May to November (rainy season), in December it begins to increase until the cycle is completed in January.

Average annual evaporation at Gamboa station is 702.7 mm, with a median monthly maximum of 91 mm in the month of March, and a median monthly minimum of 46.1 mm in the month of August (Table 5).

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Table 4. Monthly and annual solar radiation (in thousands of Langleys) at Gamboa station for the 2000 - 2009 period. Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total 2000 10.5 10.9 12.0 10.4 7.9 7.0 7.8 7.4 8.3 7.9 8.5 7.8 106.3 2001 9.4 10.7 12.3 10.2 9.1 8.3 7.7 8.4 8.7 9.8 6.8 8.8 110.2 2002 13.0 11.9 12.5 11.3 11.3 7.5 8.0 8.4 8.6 8.6 7.5 10.4 118.8 2003 10.6 10.1 12.3 10.3 7.4 7.2 7.2 7.5 8.2 8.1 9.6 8.0 106.4 2004 8.5 10.4 11.2 10.1 8.6 7.6 7.3 6.9 9.0 9.4 7.5 10.1 106.7 2005 9.5 9.3 10.4 10.5 7.8 7.7 6.5 6.6 6.5 8.4 7.4 9.8 100.5 2006 9.0 9.8 11.7 10.8 7.2 7.4 9.6 7.8 5.5 6.7 7.5 10.3 103.2 2007 11.9 11.4 12.9 10.9 9.9 8.5 8.1 5.9 6.5 6.9 5.3 6.2 104.5 2008 8.0 7.3 8.9 8.2 6.9 7.9 5.5 8.3 11.1 9.9 7.1 10.7 99.8 2009 9.1 6.9 8.2 7.3 6.0 5.8 5.8 5.3 54.3 Average 10.0 9.9 11.2 10.0 8.2 7.5 7.5 7.4 8.0 8.1 7.3 9.1 101.1 Source: ACP

Table 5. Monthly measurements of evaporation (mm) at Gamboa station for the 2000 - 2009 period. Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total 2000 76.5 88.1 102.3 85.4 54.3 44.5 53.3 43.2 49.4 46.3 51.4 47.1 741.9 2001 61.0 79.8 93.1 77.9 62.1 51.7 44.9 52.6 55.9 65.6 47.7 57.3 749.5 2002 99.5 97.4 101.2 90.9 87.6 47.8 51.2 53.6 54.5 53.7 47.0 75.4 860.1 2003 92.9 92.3 112.3 89.7 55.8 50.9 49.3 51.8 54.6 46.2 70.4 56.4 822.7 2004 59.3 79.7 94.0 75.3 55.2 49.0 45.9 41.6 58.4 59.5 46.6 71.2 735.7 2005 69.9 76.0 80.0 82.6 50.7 49.0 39.2 40.1 38.2 52.3 44.5 66.8 689.2 2006 64.1 78.1 95.7 79.3 44.6 44.9 64.8 48.0 30.6 39.6 45.4 68.1 703.1 2007 89.1 85.6 103.3 80.4 64.2 53.2 49.3 32.3 37.3 40.3 29.1 34.9 699.0 2008 52.7 52.7 64.7 58.7 42.4 46.1 28.6 52.0 75.0 66.8 45.2 76.4 661.3 2009 64.4 49.3 62.9 55.3 37.0 33.7 32.8 29.0 364.4 Average 72.9 77.9 91.0 77.6 55.4 47.1 47.4 46.1 50.4 50.3 45.6 61.5 702.7 Source: ACP

Geology At the regional level, the geological studies of the central area of Panama have revealed the presence of a well defined sedimentary basin. This basin extends from the Pacific to the , across the Isthmus, forming an interconnected wall of thin and elongated basins.

The basin was developed where large faults disassociated the tectonic blocks of Choroteca and Chocó. The stratigraphic registers of this sector reflect the geological events that caused the separation of these large structural features.

Despite the number of detailed studies of this area, there is no agreement with regard to an adequate definition of certain formations, particularly within the Canal Watershed Area. The

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problem is due to the fact that certain types of locations have been covered by water, and others have been agglomerated into quarries.

The geological layering in the area is dominated by sedimentary rocks (limestone, sandstone, clay) and volcanic (igneous, extrusive, basalt, limestone deposits), the large majority of which are from the Pacific sector.

The local geology shown in Table 6 describes the geological materials that make up the zone. This zone is very diverse from the geological point of view, comprising 21 geological units or formations, with the Caimito formation (Tcm) being the most representative. The Bohio (Tbo) and Gatun (Tg) formations follow.

Table 6. Geological Materials in the project area Geological Formation Period Epoch Strata types unit Sediments, non-differentiated, No name Qa Quaternary Holocene Mainly alluvium or fill Miocene Intrusive, extrusive and volcanic No name Tb Tertiary middle and rocks, such as Intrusive and Extrusive upper Basalt Bas Obispo formation Tba Tertiary Oligocene Agglomerate and hard tuff Bohío Oligocene formation, Marine Facies, sandstone, calcareous Tbm Tertiary lower to Marine and conglomerate with small pebbles upper Facies Oligocene Bohío Conglomerate, mainly basaltic and Tbo Tertiary lower to formation sandstone (grauvaca) upper Miocene Calcareous sandstone and calcareous Culebra formation Tba Tertiary lower lutite Oligocene Sandstone Tuff and Lutite Tuff, and Caimito formation Tcm Tertiary upper limestone and tuff foraminifers Mainly agglomerate of porphyry Oligocene Caraba formation Tcr Tertiary dacite. In conglomerate, calcareous upper and limestone type area, both fossil Oligocene Volcanic Facies, agglomerates and Caimito formation Tcv Tertiary upper tuff grauvaca Miocene Sandstone, Lutite, Tuff, and Gatum formation Tg Tertiary middle Conglomerate Eocene Clay schists, Lutite, Quartz sandstone, Gatuncillo formation Tgo Tertiary middle to algal limestone and foraminifer upper Las Cascadas Tlc Tertiary Miocene Agglomerate and soft, fine grain tuff

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Geological Formation Period Epoch Strata types unit formation lower Intrusive, extrusive and volcanic Miocene No name Tica Tertiary andesite rocks, the same age as Las lower Cascadas Formation, lower Miocene Anti Tertiary. Basaltic and altered No name Pt Tertiary Cretaceous andesitic lavas and tuffs. Include diorite and dacite rocks Eocene Marine Rocks, Upper Eocene. No name Tue Tertiary upper Sandstone and lutite Miocene Non differentiated volcanic rock. No name Tv Tertiary lower Generally lower Miocene or older. Laminated bentonitic clay, Miocene carboniferous laminated clay and a Cucaracha formation Tca Tertiary lower thin layer of ignimbrite on the underside Miocene Calcareous Sandstone and calcareous Culebra formation Tcb Tertiary lower lutite No name Td Tertiary Miocene Intrusive dacite and porphyry dacite Miocene Clay schists, lutite, sandstone, tuff, La Boca formation TI Tertiary lower and limestone Las Cascadas Miocene Tic Tertiary Agglomerate and fine grain soft tuff formation lower Pedro Miguel Miocene Tpa Tertiary Agglomerate, fine to coarse grain formation lower Source: URS Holdings, Inc.

Geomorphology The geomorphologic characterization of the Canal watershed was conducted primarily based on the information gathered from the studies carried out by ACP and the mappings related to the matter obtained from the Geomorphology Map in the National Atlas of the Republic of Panama (Tommy Guardia National Geographic Institute, 1988) and from the GIS data base provided by the ACP.

The region is characterized by numerous hills of a conic shape. The faults and folds play a secondary role in the configuration of the scenic features. There are well developed and sharply defined drainage patterns, even though its geological age is relatively recent. In other words, at the place of the transition from the drainage between hard and soft formations, there is a notable widening of the valleys and a leveling of the profiles of rivers and brooks. After the close of the period of intense volcanic activity at the beginning of the Miocene, four continent

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shaping movements took place and the resulting erosive and depositional intervals created the present land mass.

During the first movement, the central portion of the Isthmus was elevated above the coastlines resulting in the bent plane in a very profoundly dissected area, mainly in the interior that skirts along the Pacific and Atlantic coasts. The present morphology of the area was developed principally during this period, as was the large variety of observable landmasses in the Central and Pacific portions. A second movement elevated the terrain to more than 90 meters in the Atlantic area.

While these valleys were still relatively young with prominent slopes and drop offs, the land surface entered a third movement, which was a slow settling. In some instances, the lower parts were overtaken by the sea, as is evidenced by the layers of marine deposits with strictly fluvial beds in the Atlantic mud, based on marine fossils. This submerged period may be assigned to the Pleistocene.

The fourth and last movement was the appearance of valleys filled with sediments and coastlines. The mud deposits or organic deposits were brought to their present level of a few meters above tide, and the Pacific islands were taken to their present elevation.

The study area presents formations of greatest age, including some from the pre-Tertiary period. In this area there are formations of extrusive igneous rocks of the pre-Tertiary period; sedimentary rocks, alluvium-coluvial valleys and plains of the Tertiary period, extrusive igneous rocks and residual outlines also dating back to the Tertiary period, glacis or esplanades from the ancient and middle Quaternary, and in lesser proportion, toward the southeast of the zone, surfaces of erosion and sedimentary rocks of the Tertiary period.

The outline of the zone is typical of that of low lying regions and littoral plains, however, some hills and slopes may be seen there, too.

Soils As a part of the soil characterization, this section will describe the types of soil present in the area of study, the use of soils, delimitation of property, as well its usage capacity and capability.

From the studies of soil conducted in the study area, it may be established that the dominant soils in the region are acid soils, developed from the originating material of rocks and igneous conglomerates under intense processes of meteorization classified as Ultisol. These soils are acidic, infertile, and most of them have lost the top layer because of recurring eroding processes. Said soils are less erodible; that is, they are less susceptible to water erosion than other types of soils in the area. On the alluvial plains of the main rivers such as the Chagres,

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Gatun and Gatuncillo, there are recent alluvial soils which are classified as Entisols. These soils are of a coarser texture, less clay like than the Ultisol and more fertile. In areas of material originating from limestone, soils have developed with greater organic material and fertility that, nevertheless, are less resistant to the water erosion.

• Ultisol Soils: In the greater portion of the area acid Ultisol soils are predominant. These soils were formed originally from the generating material of rock sand igneous conglomerates. A typical profile of this type of soils present a surface horizon between ocrico and umbrico and the greater concentration of organic material is of variable thickness, between 8 and 20 centimeters of depth. It is common in the soils of the region for this horizontal surface has been already eroded, consequently it is not present and what is exposed on the surface is an argilic horizontal subsurface; that is, an accumulation of “Bt” clay. This argilic horizon is much more leached and acid than the ocrico surface and it typically maintains a reddish coloration because of the abundance of iron oxide).

As may be seen from the characterization of the profile of this type of soils (Table 7), it presents a horizontal clay surface with an accumulation of organic material resulting from the processes of decomposition and deposition of various organisms that live in or on the surface of the soil. The first subsurface horizon shows an accumulation of clay, product of migration in time throughout the porous medium of the clay fraction. This condition defines a horizon known as argilic at 20 to 40 centimeters of depth at the sites where the same has not been removed or lost by water erosion.

In a typical soil profile, there follows two to three horizons that are also clay like, where the organic material and nutrients begin to diminish as it deepens. In general, in the region, those soils classified as Ultisol are moderately deep to deep, acidic, of low fertility, and a little more resistant to water erosion than alluvial soils.

Table 7. Characterization of the Typical Profile of an Ultisol Soil Depth Sand Slime Clay M.O. Mg K Na Acidity Cations Horizon pH Ca(me/100g) (cm) (%) (%) (%) (%) (me/100g) (me/100g) (me/100g) (me/100g) ∑ A 0-20 30 30 40 3.02 5.3 1.81 2.09 1.32 0.16 1.4 8.4 Bt1 20-40 31 20 49 2.68 5.2 3.29 2.49 0.5 0.07 3.9 6.35 B2 40-75 24 22 54 0.87 5.5 1.54 1.1 0.2 0.09 4.8 2.53 B3 75-110 26 18 56 0.67 5.4 5.54 1.74 0.31 0.10 4.3 3.25 C 110-180 24 26 50 0.2 5.1 1.7 4.7 0.14 0.1 3.5 6.71 Source: Regional Plan for the Development of the Interoceanic Region of Panama (Plan Regional para el Desarrollo de la Región Interoceánica de Panamá), 1996 Volume 2. Annex C.

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• Alluvial Soils: Alluvial soils are found on the flood plains of the main rivers and their tributaries. These soils are characteristically plain, with few stones, less clayey and more fertile, intrinsically, than the Ultisols. Alluvial soils are classified as Entisols because they are soils of the very recent alluvial plains and have no diagnostic horizons in the profile of the soil. Texture is more uniform and they encompass from the truly clayey to clayey.

Inasmuch as they are of recent deposition, from the pedological point of view, they do not present diagnostic horizons. Their main limitation is the potential for flooding because they are in areas under the impact annually of the rising levels of rivers or water reservoir dams. Table 8 shows the characterization of a typical profile an alluvial soil.

Table 8. Characterization of the Typical Profile of an Alluvial Soil Depth Sand Slime Clay M.O. Ca Mg K Na Acidity Cations Horizon (cm) (%) (%) (%) (%) pH (me/100g) (me/100g) (me/100g) (me/100g) (me/100g) ∑ A 0-17 46 24 30 5.24 6.3 4.77 5.57 1.32 0.10 0.1 10.72 B1 17-35 41 24 35 1.85 5.8 2.83 1.53 0.5 0.14 0.3 8.95 B2 35-65 34 28 38 1.51 5.8 2.25 2.1 0.2 0.14 0.5 9.43 B3 65-95 43 20 37 1.17 6.0 4.10 3.5 0.31 0.12 0.3 10.21 B4 95-140 56 16 28 0.85 5.7 2.92 2.6 0.14 0.1 0.4 8.75 SOURCE: Regional Plan for the Development of the Interoceanic Region of Panama (Plan Regional para el Desarrollo de la Región Interoceánica de Panamá), 1996 Volume 2. Annex C.

Hydrology One of the water elements of greatest importance within the study areas is the Panama Canal Watershed, which extends over a surface of 336,650 hectares. According to ACP (2006), the water potential of the Watershed has made it possible to supply the consumption need of the inhabitants of Colon, Panama and its surrounding areas, and the operations of the Canal (ship transits), in addition to the generation of hydroelectric power. The Watershed is made up of three lakes (Gatun, Miraflores and Alhajuela) and six secondary watersheds (the rivers Chagres, Gatun, Boqueron, Pequeni, Trinidad and Ciri).

The system of artificial lakes Alhajuela and Gatun regulates runoff and allows the operation of the Canal locks, distributing the flow of the Watershed between the Caribbean and the Pacific spillways, in response to the water requirements to perform lock ages, generate hydroelectric power, and to supply water to the city of Panama and other populated areas.

The results of monitoring conducted by ACP from 2001 to 2006 show that there is very good water quality in the basin of the and the Gatun and Alhajuela reservoirs. It may

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be concluded from these studies that the water quality of Gatun Lake falls within the category of good to excellent (ACP 2006- Report on the Water Quality in the Panama Canal Watershed).

The Gatun Lake receives contributions from some 39 bodies of water between brooks and rivers. For mention a few among them, there are the brooks, Ancha, El Congal, Harina, Juan Gallegos, Leona, La Puerca, La Tagua, Larga, Las Pavas, Las 3 Hermanas, and López, among others; and the rivers Agua Clara, Agua salud, Agua Sucia, La Seda, Culo Seco, Los Hules, Gatún, Canito, Cirí, Baila Mono, Frijoles, Frijolito, Frijolita, Palenque, Pelón, Trinidad, Caño Quebrado, etc.

Table 9 presents the main chemical and microbiological characteristics of some of the principal rivers within this zone. This information comes from the samples and analyses undertaken by the Panama Canal Authority Water Quality Unit from 2003 to 2005 (ACP 2006), with the purpose of monitoring the water quality in these rivers (Table 9).

Table 9. Maximum, minimum and median values of parameters evaluated and their comparison to values guidelines for Gatun Lake tributaries Escherichia coli Temperature (° C) Dissolved oxygen (mg/l) Nitrates (mg/l) Phosphates (mg/l) (NMP/100 ml) Max. V Min. V Med Max. V Min. V Med Max. V Min. V Med Max. V Min. V Med Max. V Min. V Med Value guidelines NA 5.0 0.3 0.05 200 Gatun River 25.7 25.4 25.4 9.49 5.59 8.00 0.201 0.000 0.041 0.057 0.000 0.030 5.86 5 >200 Boqueron River 27.9 23.8 25.5 9.85 5.90 8.50 0.260 0.003 0.091 0.042 0.002 0.021 15.65 5 <200 Pequeni River 28.4 23.7 25.7 9.60 6.30 8.50 0.274 0.000 0.072 0.060 0.003 0.022 4.13 10 126 Chagres River 27.9 24.0 25.1 9.20 5.79 8.40 0.277 0.000 0.084 0.038 0.000 0.013 5.73 10 74 Caño Quebrado River 27.2 25.1 26.1 9.03 5.78 7.60 0.260 0.053 0.128 0.030 0.010 0.010 1.64 132 300 Trinidad River 27.4 24.4 26.2 8.69 5.67 8.00 0.334 0.000 0.034 0.038 0.000 0.020 18.51 20 408 Cirí Grande River 27.0 24.1 25.7 8.65 5.50 7.60 0.286 0.011 0.064 0.025 0.001 0.008 6.91 111 408 Max. V = Maximum Value Min. V = Minimum Value Med. = Median Source: Report on Water Quality in the Panama Canal Watershed 2003-2005. Volumes I and II, Year 2006.

On the other hand, the Panama Canal Authority found that the dissolved oxygen in all the sampled rivers presented acceptable values. The Escherichia coli parameters exceeded the value guideline of 200 NMP/100 ml for direct contact recreational use, in most of the analyzed samples. This condition was evidenced at certain particular sampling sites; consequently, this condition might be more related to the presence of wildlife and cattle than to that of human settlements. Regarding the Water Quality Index (WQI) of the totality of the bodies of water mentioned, 8% may be classified as excellent, and the remaining 92% may be classified as of 28 Carrera 43A#1-50. San Fernando Plaza – Torre 4, oficina 315. Tel: +57.4.3260584 www.mgminnova.com

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good quality. These results show that the water quality in the main rivers of the Watershed is adequate for water supply, recreational use (direct and/or indirect contact) and support of aquatic life.

G1.2. VEGETATION WITHIN THE PROJECT AREA

The Panama Canal Watershed, which corresponds to the project zone, is one of the country’s most important watersheds because of the diversity of its uses. Among these uses are: the operation of the Panama Canal, the supply of water to several communities, energy production, industry, tourism, livestock and agriculture, forest, and fishery activities. However, the value of this area is not only due to the economic or commercial benefits it provides, it is also due to the biological diversity of its flora and fauna resulting from all the physical conditions present in the area. Vegetation reports of the project zone indicated that there are 420 species, distributed among 96 families (FUDEP).

Magnoliopsida is the best represented group with 329 species, followed by Liliopsida with 74 species. In the Magnoliopsida group, the best represented families are with 34 species and Rubiaceae with 33 species. Other species well represented are: Melastomataceae (17), Asteraceae (14) and Euphorbiaceae (13). In the Liliopsida group, the best represented families are: Poaceae with 29 species, Arecaceae with 13, and Araceae with 7species.

The types of vegetation present in the project zone consist of mature forests and secondary and intermediate secondary forests (Figure5), with the following tree species: Alseis blackiana, Anacardium excelsum, inermis, Casearia arborea, Apeiba membranaceae, Astronium graveolens, Dipteryx panamensis, Trattinnickia aspera and Hura crepitans. In the secondary forests, the following are observed: Pachira quinata, Pachira sessilis, Byrsonima spicata, Vochysia ferruginea, Casearia guianensis and Schefflera morototoni.

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Figure 5. Map of land-cover in the Panama Canal area in 2008.

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Nevertheless, because of the demographic growth and activities being carried out in the Watershed, the natural resources of the project area had been affected, a situation which threatens its ecological integrity. Among the detected threats were: deforestation, erosion, diminished soil fertility, sedimentation, and contamination of water bodies (Photo 1).

Photo 1. Deforestation and degradation processes in the Soberania National Park. Photos from Smithsonian Tropical Research Institute, HSBC Climate Partnership and Panama Canal Authority. Proyecto “Agua Salud”, Panamá. El papel de los bosques en proveer servicios ambientales en la cuenca del canal de Panamá

Specifically within the project area the natural vegetation was gradually destroyed as a consequence of the land use practices and policies promoting replaced by shrubs and grassland (Figure 10). Mainly, the types of induced vegetation in this area were the herbaceous vegetation which includes the following species: Hyparrhenia rufa, Saccharum spontaneum, Rottboellia cochinchinensis, Sorghum halapense, Alysicarpus vaginalis, Spigelia anthelmia and Waltheria indica.

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The introduction of paja blanca (Saccharum spontaneum) to Panama, took place during the establishment of the collection of ancestral species of sugarcane, in 1939, the then Experimental Garden of the Canal Zone, now known as Summit Garden (Cerezo, 2010).

Amongst them, Saccharum spontaneum (L.) (Graminae) is an invasive Asian grass specie, one of two wild species of sugarcane (Hammond 1999). S. spontaneum forms dense, continuous thickets that inhibit the establishment of woody species (Hooper et al., unpublished data) and are resistant to weed control measures due to the species’ deep and extensive root system. S. spontaneum resprouts vigorously after fire (Peet et al. 1999), and is in part maintained by the extensive wildfires that burn across Panama’s grasslands each summer, removing much native vegetation but leaving S. spontaneum rhizomes largely intact (Hammond 1999; Photo 2).

Photo 2. Saccharum spontaneum areas

Despite the aggressiveness of S. spontaneum, some species can compete with it, provided that no fires occur that interfere in the process of natural regeneration of native species. (Cerezo, 2010) In some cases the establishment of native forest plantations can compete with the S, spontaneum like the studies develped for Montagnini et al 2008; Jones et al, 2004

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G1.3. BOUNDARIES OF THE PROJECT AREA AND THE PROJECT ZONE

In order to assess the land eligibility, the project has adopted the minimum values for forest according to the forest definition of Panama for reforestation project, as communicated by the Designated National Authority (DNA) from Panama:

• A single minimum tree crown cover value of 30%

• A single minimum land area of 1 hectare

• A single minimum tree height of 5 meters

The land proposed for the project activities were not forested before January 1990 (see 1986 and 2008 land cover maps, Figure 8 and 9). No forest was classified from the areas that do not comply with the forest definition before 1990 and to date, as can see in the multitemporal analysis of land use changes that is showed below.

The available information comes from Landsat TM satellite image from 1986 and a land cover Shapefile from 2008, in both cases the information was provided by ACP.

1. Supervised classification of the 1986 Landsat TM satellital image: The 1986 map was elaborated through a supervised classification of the 1986 Landsat TM image with the software Erdas Imagine 9.2. Supervised classification allows defining the training data (or spectral signature) that it indicates to the software the kind of pixels to select as a certain land cover.

This procedure allows select pixels with specific characteristics for a better classification of the image by “Signature Editor” function. For the 1986 map, at least ten signatures for forest, non forest, urban areas, water, clouds and cloud shadows were identified.

2. Shapefile debugging: the shapefile of 1986 resulting had a lot of polygons from clouds and cloud shadows that they were replaced by the land cover of the dominant neighboring polygons. Finally, the 1986 land cover shapefile is constituted by forest, non forest, mining area and urban areas (Figure 8).

It was necessary homologate the classification systems of the land cover shapefiles from 2008 with 1986 as follow (Figure 9 and Table 10):

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Table 10. Homologate land cover maps 1986 and 2008. 1986 land cover 2008 land cover Mature forest Forest Secundary forest Plantation forest Scrub Saccharum spontaneum Non forest Pasture Agriculture Bare soil Urban area Urban area Other Mining area

The vegetation cover maps for each year were elaborated using the digitalization tools on the ArcGis 9.3 software

3. Definition of eligible areas: map algebra was used to combine maps from 1986-2008. This helped identify the eligible project areas, especially forest and non-forest areas during the periods included in the analysis of each site, resulting in a map of the cover changes (Figure 6).

The non forest areas in 1986 and 2008 were considered eligible, yellow areas in Figure 6.

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Figure 6. Eligible Areas

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G1.4. CARBON STOCKS WITHIN THE PROJECT AREA

The land-cover classes in the project zone were the following: forests, plantations, agriculture/pasture/scrub, bare ground, urban, and water (Figure 5; Table 11). Specifically in the project area, there are only agriculture/pasture/scrub systems. The agriculture, pasture, and scrub cover types are combined, for they have similar carbon content and are also difficult to distinguish on the remote sensing imagery.

Table 11. Components of major land cover types of the project zone. Land forest type Components Area (km2) Area (%) Mature 856.09 24.78 Forest Secondary 829.84 24.02 Plantations Forest plantations 63.30 1.83 Scrubby vegetation 312.13 9.03 Grassy areas (native and Pasture/agriculture/scrub/grass nonnative) 69.47 2.01 Pasture 780.44 22.59 Agriculture 19.96 0.58 Mineral extraction sites 4.88 0.14 Bare ground Erosion areas 4.07 0.12 Urban and commercial Urban areas 102.19 2.96 Water Rivers and lakes 412.93 11.95 Total 3,455.31 100.00 Source: ACP

Carbon stock in native forest The last national inventory in Panama was done in 1972. Based on the 1972 inventory, the carbon density of aboveground biomass for the tropical moist forest (the most common category in the zone of the PCW) was estimated to be 85–183 tCha−1, and for the tropical wet forest (also present in the PCW), it was estimated at 60–107 tCha−1 (Brown 1997). Although this inventory covered areas and life zones common to the PCW, it was not specific to this area and is almost 30 years old, thus it was not used in our analysis.

Two other studies have measured carbon densities of aboveground forest vegetation, specifically in the PCW (Gonzalez 2000; Heckadon-Moreno et al. 1999). The study by Gonzalez (2000) measured biomass Carbon in 339 plots scattered across three national parks (Soberania, Chagres, and Camino de Cruces) and in several life zones but with no distinction between mature and secondary forests. No significant difference was found among the mean carbon density estimates for the three national parks. The study by Heckadon-Moreno et al. (1999)

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measured aboveground biomass carbon in trees in 39 plots scattered across the PCW and in forests identified as mature and secondary. This study resulted in estimates of 177 tCha−1 for mature forests and 100 tCha−1 for secondary forests.

For our estimations we used the data from Gonzalez (2000) because that study was based on a more extensive number of plots. Given the distribution of plots across the PCW, we assumed that the estimates reflect the mix of secondary and mature forests in proportion to their occurrence across the project area.

The mean carbon density that we used was 126.6 tCha−1 (95% confidence interval of ± 15% of the mean). The mean carbon density is at the middle of the range obtained for this life zone based on the national forest inventory (85–183 tCha−1; Brown 1997).

The mean value of 126.6 tCha−1 does not account for belowground biomass or for coarse and fine litter and understory. We increased the aboveground carbon density by 20% to account for roots (based on Cairns et al. 1997) and by another 12% to account for fine and coarse litter and understory (based on Delaney et al. 1998 and Brown et al. 2000). This approach resulted in an estimate of the mean total carbon density for live and dead biomass of 167 tCha−1 with a 95% confidence interval of approximately 25 tCha−1.

We do not consider carbon from soil because there is no reliable information for the soil carbon content in the PCW forest soils. Omission of soil carbon results in a conservative estimation of the carbon content of this ecosystem.

Carbon stock in agriculture/pastures/scrubs Carbon in agriculture/pastures/scrub systems is low compared to other land uses, and few data in tropical humid environments exist. Although Dale et al. (2003) reports an average carbon density in above- and belowground vegetation for this type of land cover as 1.5 tCha−1 based on experience in tropical pastures/scrub and annual crops in and , we work with an average 6.2 tCha−1 according to the IPCC default estimates for standing biomass grassland (as dry matter) in tropical moist and wet climates

Carbon stocks in plantations The dominant plantation type in the PCW is teak, which covers at least 60% or more of the existing plantations. Kraenzel et al. (2003) measured the carbon content in above- and belowground components of four 20-year-old teak plantations located in Chagres and Soberania National Parks (Table 12). Estimates of carbon for the plantations are based only on locally derived allometric regression equations for teak.

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Table 12. Carbon content (tCha-1) in aboveground components off our 20-year-old teak plantations located in Chagres and Soberania National Parks (from Kraenzel et al. 2003). Plantation Trees Litter/undergrowth Total Chagres-1 105.6 5.8 114.4 Chagres-2 140.6 6.2 146.8 Chagres-3 134.8 5.0 139.8 Soberania-4 99.8 6.8 106.6 Mean 120.2 6.0 126.2 Standard error 10.2 0.4 10.1

G1.5. COMMUNITIES LOCATED IN THE PROJECT ZONE2

According to the 2000 Population and Housing Panama National Census, the project zone has a population of 65,445 inhabitants distributed among 50 communities approximately. It includes 3 of the 14 Colon District corregimientos3, the 7 Chagres District corregimientos, 2 of the 8 Arraijan District corregimientos, 6 of the 18 corregimientos, and one of the 13 District corregimientos (Figure 7). Table 13 presents the corregimientos and towns of Interest within the project zone.

2The information contained herein is based on documents of the Comptroller General’s Statistics and Census Directorate (2000), the United Nations Development Program’s National Human Development Report – Panama’s Human Development Index (2002), and documentation provided by the ACP. 3Corregimiento is the basic unit for the establishment of zones in Panama, it has also been used as the basis for the present description. In the case of certain variables on which information was not available at that level, district and/or provincial information was used as the basis. 38 Carrera 43A#1-50. San Fernando Plaza – Torre 4, oficina 315. Tel: +57.4.3260584 www.mgminnova.com

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Figure 7. Major population centers with more than 500 inhabitants

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Table 13. Corregimientos and important towns within the project zone Province District Corregimientos Important towns Los Chorros de Cirí, Nuevo Porvenir, La Cauchera, Los Cedros, , El Congal, Pablón, Frente a Ciricito, Ciricito Arrecifral, Nuevo Ciricito, Los Laguitos, Caña Brava, Caño Viviano, Cuipo, La Tagua Colon Cristobal Gamboa, Gatun, Los Negros, Las Cruces, La Valerosa, La Ullama, Caño Escobal Victorio, Vino Tinto, Campo Alegre, La Humildad, Coca Colon Cola (finca) None Achiote None El Guabo None Chagres La Encantada None None Piña None Salud None Panama Capira Ciri de los Sotos None None Arraijan Santa Clara Isla del Sonido del Silencio Lagartera Grande, Lagarterita, Caño del Gigante, Caño Amador Grande, Península Grande, Isla Barro Colorado Arosemena None La Chorrera None Iturralde Curchirvo, La Arenosa, La Leona La Laguna, Pueblo Nuevo, Cañito Mendoza None Source: URS Holding, Inc with data from the Office of the Comptroller General.

Most of these communities have a century old history, although there is evidence of the establishment of new communities as well as a trend towards a steady population growth. The most important town, taking into consideration its population, is Escobal, capital of the corregimiento by the same name, with 1,653 inhabitants.

This zone has a low population density per corregimiento, since the population density of most of its 19 corregimientos is less than 25 inhabitants/km², being Cristobal with 69.4 inhabitants/km² and Nuevo Chagres, with 87.4 inhabitants/km² the ones with the highest population density rate. Current population of the 37 towns identified in the zone is

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5,359persons, distributed among 1,497 housing units. The most populated town is Escobal, with 1,653 inhabitants, and the less populated is Arrecifal, with 6 persons.

A male predominance is evident in almost all of the Zone’s age groups, especially in the 14 to 39age group and the 45 to 79 age group. The corregimiento of Nuevo Chagres is the exception. Only in the 40 to 44 age group and in the 55 to 59 age group is the masculinity index lower than 100. The index for the total population is 119 males per 100 females. The annual average growth rate is negative in the corregimientos of El Guabo, Salud, Ciri de los Sotos, and Arosemena, and it is less than 1% in seven other corregimientos, while relatively high for Cristobal, Nuevo Chagres, and Amador.

Indigenous population The indigenous population in the project zone is 1,297 persons, representing 1.98% of the total inhabitants of the zone, with members of the Kuna and Emberá indian groups representing 36% and 27%, respectively, of the total population. The Ngöbe Indians are next with 18%, followed by the Buglé and Wounan, both with 9%. The indigenous population is distributed along the entire zone, but it is somewhat more concentrated in Nuevo Chagres and Cristobal, where these groups represent 3% and 2%, respectively, of the population.

Education Regarding education, the corregimientos of La Represa, Achiote, Ciri de los Sotos, and Arosemena report less than 90%, with 89.8%, 87.6%, 86.7%, and 86.3%, respectively; while the Cristobal corregimiento reports the highest literacy rate, 98.3%, which is higher than the national average of 95.5%. As regards to level of schooling, it became evident that there is a close relation between this and the literacy rate, with Cristobal reporting 10.2 years of education and Ciri de los Sotos reporting 4.7 years.

At the towns located near the Gatun Lake, 7 single grade schools and 11 multigrade schools were identified. Students from the remaining communities (20) attend schools at Ciricito, Sabanita, rio Rita, Limon, La Chorrera, Cuipo, and Escobal. This means that school age children from these communities have to walk or travel by cayuco an average of 30 minutes to one hour. In the northern area, only the communities of Cuipo and Escobal have a junior high school, so students have to travel to these areas to attend junior high. Communities in the southwestern area do not have this type of education center, so students must travel to the community of Las Pavas, where the only junior high school in the area is located.

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Mortality and morbidity indicators The mortality rate in the zone is calculated by using the average mortality rate in each of its districts. For the year 2002 it was 4.2% in Capira, 3.2% in Arraiján, 3.9% in La Chorrera and 5.2% in Colon; this information is not available for the Chagres District. The main cases observed in the zone during the year 2002 correspond to, in order of importance, malignant tumors with 142 cases in Colon, 82 in Arraijan, 15 in Capira, 81 in La Chorrera, and 5 in Chagres. Following are cardiovascular diseases with 106 cases in Colon, 6 in Chagres, 9 in Capira, and 68 in Arraiján, as well as diabetes with 5 cases reported in Capira, 34 in Arraiján, and 25 cases reported in La Chorrera.

In the important towns of the zone, 5 have health facilities: 1 health center at Cuipo, and another at Escobal; one clinic provides first aid care at Ciricito, and two health posts at Lagarterita and La Arenosa. The rest of the population has to commute to these centers by foot, cayuco, or public transportation for 25 minutes to an hour to seek medical attention. Currently, the Cuipo health center is not in service, which means that members of the communities who use this center (La Cauchera, Los Cedros, Caño Viviano, among others) now have to travel to Escobal to seek medical attention. Health coverage in this area is reduced.

Occupational indicators and quality of life In the project zone the average annual income is uneven. Cristobal’s average income is $2,781, ten times higher than Cirí de Los Sotos’ average of $255. The unemployment rates in the zone’s corregimientos are high, with 50% of the economically active population unemployed in certain areas, such as Santa Clara, El Arado, Iturralde, and Mendoza, which report unemployment rates of 51%, 65%, 44% and 50%, respectively. Of the remaining corregimientos, 9 have unemployment rates between 12% and 28%, higher than the national average, while El Guabo with 4.69%, La Encantada with 7.13%, and Cirí de los Sotos with 7.32%, are the only corregimientos reporting rates lower than the national average.

Approximately 40% of the zone’s economically active population is engaged in agriculture, while a much lower percentage of the population is engaged in subsistence fishing activities. The principal fishing communities are located in Nuevo Chagres, 6%, and Iturralde, 3%. Other common sources of employment are construction and commerce, engaging an average of 8.95% and 9.05% of the population, respectively. Hotel business activities are present in all corregimientos with Cirí de Los Sotos reporting the highest percentage (6%) of inhabitants engaged in this activity.

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G1.6. CURRENT LAND USE AND LAND TENURE IN THE PROJECT ZONE

Forests currently cover about the 54% of the PCW. Most of the remaining area is pasture, agriculture, or scrubland (Figure 5). Some of the forest has been lost to establishment of urban areas and agriculture using fires to prepare the site for planting by burning off remaining woody materials. However, because of the poor quality of much of the soil, the agricultural areas are subsequently often converted to pasture land.

Indeed, Landsat Thematic Mapper images of 1973, 1974, 1986, 1987, 1989, 1990, and 1991 established that the forests have decreased in the PCW by 43% since 1974, from 275,549 ha to 157,063 ha. Tarté (1999) reports the rate of deforestation in 1999 as 573 ha yr−1. Thus, the rate of clearing has declined from the 24-year average of 4,937 ha yr−1.

Today 34% of the 375,000 ha of the PCW is under some kind of protection, such as being maintained as a national park. Furthermore, the regional land-use plan provided by Panamanian Law 21 in 1997 mandates expansion of the protected area to 40% of the PCW. Almost 69% of the remaining forests are in protected areas, most of which have been established since 1980 when political decisions were made to preserve parts of the watershed by setting them aside in national parks and other protected areas. Within the protected areas it is found the , The Chagres National Park and the Soberania National Park. The Chagres National Park contains 55% of all forests in the PCW, which represents 80% of all forests in the protected areas. Most of these forests are primary, while those adjacent to the Panama Canal are secondary.

There is a noticeable increase in areas covered by secondary forests regenerating in both protected areas and on private lands in the watershed. Even so, these protected areas are a target for human colonization. Although anecdotal evidence of small scale deforestation abounds, there is no evidence of extensive illegal deforestation. The loss of forests occurs mainly in areas that are undergoing population growth where the National Environmental Authority (ANAM) granted approval for forest cutting.

In the remaining areas (mainly pasture) there are large zones occupied by the invasive Asian grass species Saccharum spontaneum (L.) (Graminae), one of two wild species of sugarcane (Hammond 1999). S. spontaneum forms dense, continuous thickets that inhibit the establishment of woody species (Hooper et al., unpublished data) and are resistant to weed control measures due to the species’ deep and extensive root system. S. spontaneum resprouts vigorously after fire (Peetet al. 1999), and is in part maintained by the extensive wildfires that burn across Panama’s grasslands each summer, removing much native vegetation but leaving S. spontaneum rhizomes largely intact (Hammond 1999).

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In the project area, the parcels to be reforested or to be used for agroforestry systems are currently used for agriculture/pasture/scrub systems.

Land tenure is currently secured for the project development due to the PIEA program. Before the beginning of the project there are a lot of problems with the land tenure, for instance, in the western side of the PCW only 8% of its 35,000 inhabitants had a land title.

For this reason, ACP along with Agricultural Development Minister, Economy and Finance Minister, National Authority of the Environment (ANAM), The Public Registration Office and the local governments; starts a program with the inhabitants of the watershed in order to include them in the Panama Cadastral system. So far, more than 12,000 land titles have been given to the local inhabitants and the remaining titles are in the processing phase. ACP has invested about 4.5 million dollars in this project component.

The agreements between the ACP and the participating people ensure tenurial security and incentives to develop, utilize and manage the land, in return of fulfilling the responsibility stipulated in the respective agreements (see Annex 2).

G1.7. CURRENT BIODIVERSITY WITHIN THE PROJECT ZONE

Vegetation4 The PCW is widely acclaimed for its ecological importance (Condit et al. 2001). Nevertheless, because of the demographic growth and activities being carried out in the PCW, the area’s natural resources have been affected, a situation which threatens its ecological integrity. Among the detected threats are: deforestation, erosion, diminished soil fertility, sedimentation, and contamination of water bodies.

Although the climatic conditions in the entire area of the PCW are appropriate for the growth of wooded vegetation, human intervention has introduced variations in the landscape, the reason why herbaceous vegetation and forest fragments can be found in different stages of growth. On the other hand, local soil conditions determine changes in the physiognomy and structure of the wooded vegetation.

According to the UNESCO system, the category of vegetation identified in the project zone is tropical Ombrophile evergreen. The following natural variations are observed associated with

4The following ACP reports were used for information on the flora: ACP (2006) ; CEREB-UP (2005); Moffatt & Nichol / Golder (2005); URS Holdings (2004); Mora et al (2004); Louis Berger Group, Inc. (2004); Moffatt & Nichol / Golder (2004); Universidad de Panamá and ACP (2003);Consorcio Louis Berger, Universidad de Panamá and STRI (2002); ACP (2000); ANCON-TNC (1996); Mayo and Correa (1994); D’Croz et al. (1994); Duke et al. (1994); Marshall (1994);Croat (1978) and Glynn (1972). 44 Carrera 43A#1-50. San Fernando Plaza – Torre 4, oficina 315. Tel: +57.4.3260584 www.mgminnova.com

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this vegetation category (tropical ombrophile marshy evergreen forest dominated by dicotyledon sand dry season deciduos tropical forest and latifoliated lowland forest) (Figure 5). In this category, several arboreal strata (at least three): canopy, subcanopy and understory. Canopy trees can reach up to 50 meters and strata of trees representative of the canopy are found under the canopy. The understory is dense, with numerous shrubs and abundant brush (STRI-USAID-ANAM 1999). Nevertheless, the Figure 5 shows that the underbrushes and grasslands constitute the predominant vegetation in the project area.

In terms of general structure, most forests of the canal area are quite similar. Well-drained sites have a closed canopy 20-40 m tall, with emergent trees reaching 50 m in height, and a dense understory of tree saplings, tree lets, palms, and many lianas. Large-scale natural disturbances, hurricane or fire, are absent, so small windstorms and individual tree falls are the sole source of canopy turnover. Even the driest sites have a mostly ever green canopy and thus do not qualify as dry or deciduous forest, and nearly all lowland sites within the PCW called tropical moist forest in the Holdridge (1967) system.

However, there is a gradient in deciduousness: Forests near the Pacific coast are about 25% deciduous, whereas Atlantic sites have almost no deciduous trees (Condit et al. 2000). A small area of wet ridges near the Atlantic are classified as wet forest or submontane forest in the Holdridge system, but these forests are structurally not much different from the moist forests.

The greatest representation of forests within the project zone is found in the surroundings of the Gatun Lake and the Canal. The natural vegetation of this zone includes the transition between the ombrophile evergreen, latifoliated lowland forest and the tropical semideciduous lowland forest. However, the vegetation in a large part of the area has been replaced by shrubs and grasslands, which correspond to productive systems with significant natural woody or spontaneous vegetation (STRI-USAID-ANAM 1999).

Reports pertaining to the flora in the project zone list 420 species, distributed among 96 families (Table 14). Magnoliopsida is the best represented group with 329 species, followed by Liliopsida with 74 species. In the Magnoliopsida group, the best represented families are Fabaceae with 34 species and Rubiaceae with 33 species. Other species well represented are: Melastomataceae (17), Asteraceae (14) and Euphorbiaceae (13). In the Liliopsida group, the best represented families are: Poaceae with 29 species, Arecaceae with 13 and Araceae with 7 species.

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Table 14. Number of flora species and families by group within the project zone Group Family Species Liliopsida 16 74 Magnoliopsida 71 329 Gymnospermas 1 1 Ferns and Allies 8 16 Total 96 420 Note: Barro Colorado Island records are not included (1,324 species) Source: URS Holding, Inc.

The types of vegetation present in this zone consist of mature forests and secondary and intermediate secondary forests, with the following tree species: Alseis blackiana, Anacardium excelsum, Andira inermis, Casearia arborea, Apeiba membranaceae, Astronium graveolens, Dipteryx panamensis, Trattinnickia aspera and Hura crepitans. In the secondary forests, the following are observed: Pachira quinata, Pachira sessilis, Byrsonima spicata, Vochysia ferruginea, Casearia guianensis and Schefflera morototoni.

Other type of induced vegetation in this zone is the herbaceous vegetation (grasslands) which include the following species: Hyparrhenia rufa, Saccharum spontaneum, Rottboellia cochinchinensis, Sorghum halapense, Alysicarpus vaginalis, Spigelia anthelmia and Waltheria indica.

As was mentioned previously in this document, Saccharum spontaneum (L.) (Graminae) is an invasive Asian grass specie, one of two wild species of sugarcane (Hammond 1999). S. spontaneum forms dense, continuous thickets that inhibit the establishment of woody species (Hooper et al., unpublished data) and are resistant to weed control measures due to the species’ deep and extensive root system. S. spontaneum resprouts vigorously after fire (Peet et al. 1999), and is in part maintained by the extensive wildfires that burn across Panama’s grasslands each summer, removing much native vegetation but leaving S. spontaneum rhizomes largely intact (Hammond 1999; see Photo 2 above).

• Threatened, endemic or endangered species: The basis used for the definition of threatened, endemic or endangered species was the information included in the Appendixes of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES, 2007), the Red List Threatened Species (UICN, 2006) and the First Report on the Richness and State of Biodiversity in Panamá (ANAM, 2000b).

This report takes into consideration the categories utilized by ANAM and UICN, which include: species in critical state (Cr), endangered species (En) and vulnerable species (Vu).

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In the project zone, 420 species were found in the different types of vegetation (grasslands, shrubs, secondary forests and mature forests). Of the total number of species reported, 20 are included in the lists of species in need of protection (Table 15). Four (4) endemic species were identified, 8 in the ANAM lists, 4 in the IUCN Red List, and 4 in the CITES appendixes. Although the landscape is dominated by pasture land and shrubs, threatened and protected species are found in the forest patch or fragments.

Table 15. Endemic, threatened, and protected species in the project zone Specie status Common Family Specie Endemic to the name ANAM UICN CITES Country Arecaceae Bactris coloradonis Cañabrava En Arecaceae Oenocarpus mapora Maquenque En Bignoniaceae Tabebuia guayacan Guayacán Vu Bignoniaceae Tabebuia rosea Roble Vu Burseraceae Protium panamense Copal x Burseraceae Protium tenuifolium Chutrá x Combretaceae Terminalia amazonia Amarillo Vu Fabaceae Dipteyx oleifera Almendro III Gesneriaceae Drymonia serrulata En Gnetaceae Gnetum leyboldii Cr Moraceae Brosimum guianensis Vu Myristicaceae Virola surinamensis Baboen En Myrtaceae Aulomyrcia zetekiana x Myrtaceae Myrcia fosteri x Myrtaceae Myrcia gatunensis Pimento x Orchidaceae Oncidium stipitatum Orchid II Orchidaceae Palmorchis powellii Orchid II Orchidaceae Vanilla planifolia Vanilla orchid II Rubiaceae Tocoyena pittieri Tocoyena Vu Rutaceae Zanthoxylum panamense Arcabú En Total 4 8 4 4 Notes: In the ANAM and UICN columns: Cr = critically endangered, En = endangered, Vu = vulnerable. In the CITES column: II and III, specie incluided in Apendix II. Source: Universidad de Panamá (FUDEP)

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Vegetal indicator species Most of the project zone’s environment has been altered for the establishment of farming and animal husbandry activities (farming and cattle raising). The forest fragments in the intervened areas are poor in the number of tree species per hectare, condition to be interpreted as a highly altered forest ecosystem. This indicates the natural ecological processes are not developing optimally. Among the species present in these areas are: Luehea seemannii, Tabebuia rosea, Cordia alliodora and Vismia macrophylla (indicators of a secondary forest) and Apeiba membranaceae, Tabebuia guayacan and Virola sebifera (indicator of a mature forest).

Fauna5 • Terrestrial fauna: According to the study conducted by ANCON-TNC (1996), twenty (20) species of bats, six (6) species of rodents, two (2) species of monkeys, two (2) species of anteaters, two (2) species of carnivores, one (1) species of opossum, and one (1) species of armadillo were sampled. As regards to amphibians and reptiles of this zone, twelve (12) species amphibians and eleven (11) species of reptiles were collected.

A total of 101 birds, 17 of which are migratory (Table 16) were recorded. The ANCON – TNC (1996) study indicates that there has been a noticeable decline among the populations of seven (7) of the seventeen (17) migratory species typical of the area; these are: Dendroica castanea (la reinita pechicastaña), Wilsonia canadensis (la reinitacollareja), Oporornis formoso (la reinita cachetinegra), Pheucticus ludovicianus (picogruesopechirrosado), Contopus virens (el pibíoriental), Protonotaria citrea (la reinitaprotonotaria) and the Hylocichla mustelina (el zorzal del bosque).

Table 16. Diversity of fauna species recorded in the project zone Taxa Types of Birds vegetation Mammals Reptiles Amphibians Migratory Resident Total Forest 63 37 191 228 26 27 Grasslands 2 2 19 21 4 0 Source: ANCON – TNC, 1996

Only two (2) mammals, the spiny rat (Proechymis semispinosus) and the hispic cotton rat (Sigmodon hispidus) were collected in the grasslands. The record of bird species includes a total of 21 species, including two (2) migratory, of which the eastern wood

5Information obtained from a series of reports prepared by the ACP (ACP 2006 and ACP-ANAM 2006), and technical studies performed by or for the ACP in preparation for the environmental impact study for the third set of locks by CEREB-UP (2005); FACINET/CCML-ACP (2005); The Louis Berger Group, Inc. (2004); FACINETC-CML-ACP (2004); URS Holdings, Inc. (2004b); ACP – UP (2003) 48 Carrera 43A#1-50. San Fernando Plaza – Torre 4, oficina 315. Tel: +57.4.3260584 www.mgminnova.com

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pewee (Contopus virens) shows a significant decline in its population. Only four (4) reptile species have been recorded in the zone, including the neotropical bird snake (Pseustes poecilonotus) and the Mexican vine snake (Oxybelis aeneus), which has one of the widest distribution of the neotropical snakes. The absence of amphibians in this habitat could be attributed to the absence of permanent water bodies or to low humidly (ANCON – TNC 1996).

Based on information generated by Navas et al. (1995) there are records in the zone of the families Culicidae (mosquitoes) and Psychodidae (laschitras); and among the Culicidae the genus Culex, Anopheles, Aedes, Culicoides, Mansonia. In general, the Culicidae are seasonal, decreasing in number in the dry season. The genus Culex, which predominated in all the simple locations, is capable of transmitting the filaroasis and the encephalitis virus. The genus Anopheles is especially important for its potential to transmit malaria, and the Aedes and the Mansonia have the potential to transmit the Venezuelan equine encephalitis.

• Aquatic fauna: The freshwater conditions predominant in the project zone (Gatunlake) show the presence of fifty five (55) different freshwater fish species. The fifteen (15) species of marine fish reported for Gatún lake organisms capable of migrating, and a few can adapt to this type of conditions, that is, they can tolerate significant changes in the salinity of the water. Thus, here we find species such as the tarpon (Megalops atlanticus), the fat snooks (Centropomus parallelus, C. viridisand C. armatus), and the mojarra (Gerres cinereus), among others. The invertebrates reported belong mostly to the gastropod mollusks and decapods crustaceans. Of the fifty six (56) invertebrates reported, twenty six (26) correspond to planktonic crustaceans, dominated by cladocerans and copepods, characteristics of freshwater environments, such as that of Gatun Lake.

The typical characteristics of the lake allow larger predators to be present in this zone, such as the babillo and three (3) turtle species: the snapping turtle (Chelydra acutirostris), the white tipped mud turtle Tortuga amarilla (Kinosternon leucostomum) and the jicotea (Trachemys scripta).The largest aquatic animal in zone is the manatee (Trichechus manatus), a fully aquatic herbivorous mammal introduced to Gatun Lake to control the aquatic vegetation.

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G1.8. HIGH CONSERVATION VALUES WITHIN THE PROJECT ZONE

Fragile ecosystems and representatively of ecosystem6

Tree Species The most striking feature of the tree communities around the Panama Canal is how variable they are in species composition. Except for sites within 1-3 km of each other, no two forests are similar in terms of their dominant tree species (Ibáñez et al. 1999). High turnover is illustrated by data from 44 tree inventory plots established throughout the watershed (Condit et al. 2001). In 34 tree inventories in the canal corridor, covering over 90 ha of forest, 561 species were recorded; in just 10 plots in the wet forests, there were 611 species, 422 of which were not recorded in the canal corridor. This abrupt change in species composition, high beta diversity, is why Panama is so rich in total species. The Barthlott et al. (1996) survey reports that Panama has more than 5,000 plant species per 10,000 km2,even though individual sites, such as the Barro Colorado Island 50 ha plot, are not particularly rich (Condit et al. 1996).

Wetter sites have higher local diversity, with over 150 species per ha compared with 84 species per ha in the canal corridor (Condit et al. 1996). Many tree species are still being discovered: of the 983 species tallied in plots, over 200 had not previously been recorded in the watershed, and 19 are newly recorded for Panama (Condit 2001). This tally is based on D’ Arcy’s (1987) checklist of Panama’s flora, which lists the political region of Panama in which each species has been recorded (either Panama’s provinces or the former Canal Zone; the canal watershed falls within two provinces and the Canal Zone). It is estimated that the canal corridor has 850-1000 species of trees and shrubs, with 24% to 28% restricted to the wetter section near the Atlantic, 12% to 16% restricted to the drier section near Panama City, and 30% to 45% widespread from coast to coast (Condit 2001). The inventories on the Santa Rita ridge and the wetter foothills near Chagres and Altos de Campana National Parks sample a small part of a very large area estimating that there are 1400-2200 species in these areas, 60% of which do not occur in the canal corridor (Condit 2001). It is estimated that the canal watershed holds 1700-2300 tree and tree let species, 60% to 70% of the total for Panama (Condit 2001).

Many species are exceedingly rare. Of the tree species tallied in plots, 376 appeared in only a single hectare, and 224 were represented by just one individual. Interestingly, however, of the 91 of those that are identified, 87 occur in countries other than Panama; just four are endemic to Panama and only one -Pleurothyrium racemosum in the Lauraceae- is restricted to the area

6 As source of reference for this subject, the following studies were consulted: ANCON (1995); ANCON – TNC (1996); Condit et al. (2001); ACP, (2006); CEREB-UP (2003); Alvarado and Palma (2000); Moffat & Nichol/Golder Ass. (2005). 50 Carrera 43A#1-50. San Fernando Plaza – Torre 4, oficina 315. Tel: +57.4.3260584 www.mgminnova.com

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around the canal watershed. Pleurothyrium racemosum is known only from a very small area, and it is rare where it is known.

It was also tallied all tree species believed to be endemic to central Panama or to the entire nation by consulting the check- list (D’Arcy 1987). It was cross-checked each in the Tropics data- base from the Missouri Botanical Garden, and found that many listed as endemic in the checklist have recently been collected elsewhere. Of the 1555 tree and shrub species that, according to the checklist, occur in the three political regions of the canal watershed, 165 (10.6%) are endemic to Panama and 79 (5.1%) are endemic to the three regions. One specie is a particularly interesting endemic. Eugenia nesiotica, an easy-to-recognize small tree in the Myrtaceae, was described on Barro Colorado Island in the 1930s. It is common on the island, appearing in every one of the 50 individual hectares of the large plot; a few individuals appear in three plots in Soberania National Park 10 km away, and it has been observed at two other sites just west of the canal. It has not been recorded elsewhere.

In general, the forests of the canal watershed have high beta diversity and many locally rare species, which makes conservation difficult. No one protected area can capture most of the tree species. There is considerable species turnover within each broad floristic region. In particular, there are about 100 species restricted to the drier forests of the Pacific side of the canal corridor, and there is almost no protected forest in that zone anywhere in Panama. Camino de “Las Cruces” National Park is the only protected area in Panama in Pacific forest, and it is small and fragmented.

Avifauna In contrast to botanical checklists, the bird list is near complete: 650 bird species are known from the Panama Canal watershed (Engelman et al. 1995), representing two-thirds of the Panamanian avifauna. Of these, 226 species are restricted to forests and are most at risk from deforestation.

Forest-dwelling bird species richness in the canal corridor increases from the dry Pacific slope forests to the wetter Caribbean slope forests and peaks in Soberania National Park. The diversity in Soberania can be attributed to the habitat heterogeneity in the park-secondary and old-growth forest; swamps, streams, and uplands; and a mixture of floristic elements of dry Pacific forests at the south end of the park and wet Atlantic elements at the north end. Species richness is positively related to annual rainfall, which is in turn positively related to distance from the Pacific Ocean.

The impact of forest fragmentation on bird communities is evident in the canal watershed (Willis 1974, Karr 1982). Small forest patches on both the Pacific and Caribbean slopes lack large fractions of the forest bird community and tend to be dominated by common, widely

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distributed forest species as well as species of the forest edge. Even common species have disappeared from the largest isolated fragment in the canal area lowlands, Barro Colorado Island, which has failed to sustain populations of 35% of the species, originally present on the island’s 1567 ha (Robinson 1999). Furthermore, fragmentation on an even larger scale may have disrupted the altitudinal migratory movements of forest birds from the foothills of Chagres National Park to the lowlands of the canal corridor forests. In the decades since construction of the transisthmian highway disconnected lowland forests in the Chagres foothills from those in the canal area, four species of altitudinal migrants that formerly occurred regularly in the canal corridor have rarely been detected: two hummingbirds (Eutoxeres aquila and Phaethornis guy), a toucan (Selenidera specatabilis), and a thrush (Turdus albicollis) (Robinson et al. 2000).

Not all bird species of the canal watershed fall within the protection of the national park system. In particular, 14 species are known only from forests along Achiote Road and three species only from Fort Sherman (these species occur elsewhere in the world, but nowhere else in the canal watershed). In contrast, no species are restricted to forests of the drier Pacific slope forests. Although a lack of unique species in drier forests might suggest a lesser need to conserve those forests for protection of bird diversity in the canal watershed, important treasons for conservation remain. First, as already indicated for plant conservation, lowland Pacific slope forests in the dry parts of Panama have been almost completely destroyed. Second, several regionally uncommon species have their centers of abundance in Pacific slope forests and are extremely rare in wetter forests; examples include the yellow-green tyrannulet (Phylloscartes flavovirens), sepia-capped flycatcher (Leptopogon amaurocephalus), lance-tailed manakin (Chiroxiphia lanceolota), and rufous-and-white wren (Thryothorus rufalbus). Third, the abundance of long-distance Neotropical migratory birds is greater in slope forests of the Pacific than in those of the Caribbean (Karr 1976, Petit et al. 1999). Many long-distance migrants spend more than half of each year in Panama, and the bulk of the populations of Acadian flycatchers (Empidonax virescens), bay-breasted warblers (Dendroica castanea), chestnut-sided warblers (D. pensylvanica), and Kentucky warblers (Oporornis formosus) winter in lowland

Panama. Fourth, the migratory patterns of year-round resident species between the Pacific and Caribbean slopes have been too little studied. Many insectivorous species are thought to move north to the wetter Caribbean slope during the depths of the dry season when insect abundance is low, whereas some nectarivorous and frugivorous species may instead move south to the Pacific slope to take advantage of a dry season peak in flower and fruit production (Karr and Freemark 1983, Robinson et al. 2000).

Studies in the canal watershed have produced much of the best evidence available on bird densities in tropical forest (Robinson et al. 2000). We know in general that tropical forest birds, like tropical forest trees, are rare. In forests of Soberania National Park, the most abundant

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species rarely reach densities greater than one pair per hectare, and 80% of species occur at densities less than 10 pairs per 100 hectares (Robinson et al. 2000). Thus, the minimum forest area required to sustain populations of all species over the long-term must be large, on the order of 500 to 1000 km2 for some of the rarest species (Robinson et al. 2000). Species richness in tracts smaller than several thousand hectares may continue to decline as delayed effects of isolation, such as reduced breeding success, lead to local extinction (Willis 1974, Robinson 1999).

Some birds of the region are globally rare. The canal watershed overlaps three areas of bird endemism, defined as regions where birds with global ranges less than 50,000 km2 are found (Stattersfield et al. 1998). Eleven of the 226 forest bird species in the watershed (4.9%) have restricted ranges by this definition (Stattersfield et al. 1998). Most of these are common in foothills or highlands, including the higher elevations of the watershed’s periphery, and have ranges extending as far as eastern Costa Rica or eastern Panama. But one of the species, Xenornis setifrons, the speckled antshrike, is globally threatened (Stattersfield et al. 1998). It is known only from the eastern edge of the watershed to the Colombian border, from only a few sites, and it is never common.

Although only a handful of species are known to have disappeared from the canal watershed and neighboring forests in the decades since the canal’s completion (Robinson et al. 2000), failing to protect a significant majority of the remaining forest tracts on both the Caribbean and Pacific slopes will certainly cause further reductions in regional levels of avian diversity. Long- term maintenance of bird species diversity in the canal watershed will therefore require preservation of large forest tracts from ocean to ocean and reestablishment of a forested corridor from the lowlands of the canal area to the Chagres lowlands and foothills.

Amphibians Amphibians, though less diverse than trees or birds, are known to be indicators of ecosystem alteration. Some of the best long-term data available on tropical amphibians have come from studies in the canal watershed. Ninety-three amphibian species, 52% of the amphibian fauna of Panama, have been recorded within the watershed (Ibáñez et al. 1994, 1995, 1996, 1999); these amphibians comprise 86 frog, five salamander, and two cecilian species. Species diversity in the lowland forests near the canal increases from the dry Pacific side to the wetter Caribbean side. Diversity peaks in Soberania National Park, where arid and humid tropical amphibian assemblages of lowland mix (Duellman 1966, Myers 1979, Rand and Myers 1990), a pattern that matches that for birds and reflects again the diverse mixture of forest in the park.

Many amphibian species are widely distributed with respect to elevation in the canal area: 54 species occur both in lowland forests (less than 300 m elevation) and higher. But 17 species are

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restricted to the lowlands, and 22 to the much less surveyed highlands. Just seven of the canal watershed’s 93 amphibian species are found exclusively in non forest habitat (grassland). The remaining species are all forest dwellers or associated with forests; these include 65 species that occur exclusively in forests and 21 more that occur both inside and outside the forest or at the grassland-forest edge.

All but one of the 93 amphibians in the canal area occurring a protected area. The exception is a dendrobatid, Phyllobates lugubris, a species of Costa Rica and western Panama whose range just reaches the western edge of the canal watershed. Five other species with very restricted ranges occur in the watershed. Atelopus limosus, A. zeteki, and an undescribed species of Atelopus are endemic to Panama, all occurring at mid elevation in a few forests across the country. There are also records from the watershed of two additional species presently considered to be Panamanian endemics, Bolitoglossa schizodactyla and Rana sp. (pipiens complex), though their distributions may extend to Costa Rica.

Amphibians have suffered disappearances and drastic population declines at several sites around the world (Blausteinand Wake 1990, Wake and Morowitz 1991, Houlahan et al. 2000). There has been no clear indication, however, that amphibian abundance has decreased in the Panama Canal watershed. Amphibians were monitored during the 1998, 1999, and 2000 dry seasons through visual encounters along streamside transects at 10 sites located in the lowlands and highlands, four of them previously surveyed in 1991 through 1995 and one in 1976 through 1978. Frogs congregate along streams during the dry season, and thus offer an easy census opportunity. During the 1999 dry season, overall frog abundance was low, but this could be attributed to an unusually wet period that disrupted the concentration of frogs along stream margins. Counts for 2000 were still rather low, although higher than for 1999; dry season rainfall was very close to average. Overall, there is no general, long-term decline, and all species seen in 1991 were present in 2000 (Ibáñez et al. 1999). Frog populations within the Panama Canal watershed appear not to have been affected by the fungal pathogen that has decimated some species in the highlands of western Panama and in other parts of the world (Berger et al. 1998, Lips 1999).

The Canal Water supply Total runoff over the canal watershed is 4.4 x 109 m3 of water annually. More than half of this, 2.6 x 109m3, is used to fill the locks 191,000 m3 each time a ship passes (Ibanez et al. 1999). The Panama Canal closed fiscal 2008 with 14.702 transits, a decrease of 12.9 percent from the 14.721 transits previous fiscal year (ACP, 2008). An additional 1.2 x 109 m3 of water is used to generate electricity at the Gatun Dam for canal operations, and 0.27 x 109 m3 is processed for drinking water (Ibáñez et al. 1999).

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In 1982, a dry year accompanying a strong El Niño event, the six main rivers feeding the canal carried just 1.8 x 109 m3 of water, 25% below their long-term average. If the entire watershed suffered a similar reduction, the 4.4 x 109 m3 typically available would be reduced to just 3.3 x 109 m3 of water, less than the 4.1 x 109 m3 needed to fill locks, generate electricity, and produce drinking water. Clearly, the water budget for the canal is tight enough that changes in runoff or sedimentation caused by land use are a serious concern.

The major natural resource concern raised about the canal is whether the deforestation in the watershed has increased siltation, which would reduce water storage capacity and raise the cost of dredging. But deforestation has a second, more direct impact on water resources: It alters temporal patterns of flow. It is demonstrated this impact in a watershed at the boundary of the north end of Soberania National Park. In a deforested catchment, 26% of incident rain entered streams almost immediately, while only 14% did so in an adjacent forested catchment matching in topography and geology (Ibáñez et al. 1999). As a result, stream flow during the wet season was higher in the deforested catchment than in the forested one, while the pattern reversed in the dry season. It is likely that further deforestation throughout the watershed would reduce dry season water supplies to the canal. Since dry season water supply is the major concern for canal operation, the only reason canal use has ever been limited, this issue appears to be far more important than the siltation issue.

The STRI Agua Salud project aims at improving our understanding of the ecosystem services provided by tropical watersheds including production of consistent high-quality supplies of water for human consumption and Canal operations.This experiment is undertaken within the Panama Canal watershed, on leased lands adjacent to the Soberania National Park, which is the former U.S. Canal Zone. Over the past two years we have planted over 150,000 trees, both native timber species and teak, in catchments that were until recently grazed pastures. We have instrumented these plantation catchments as well as control catchments that consist of pasture, old-growth forest, old re-growth forest, early secondary succession, and S. spontaneum. Instrumentation installed to date includes 16 on-stream weirs in catchments that range from 8 to 400 ha, a triple rain-gage network, two eddy-covariance systems, surface- energy-balance station, 10 shallow groundwater monitoring wells, and automated water quality samplers Our experiment is fully operational and beginning to yield interesting results. Better yet, the project infrastructure is positioned to observe a significant period of aforestation in a tropical watershed (Ogden et al, 2010).

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Gen Clim Comm Bio G2. Required

G2. BASELINE PROJECTIONS

G2.1. BASELINE LAND USE

Forests currently cover 175,103 hectares, approximately 60% of the PCW. Most of the remaining area is pasture, agriculture, or scrubland. Some of the forest has been lost to establishment of urban areas. In the rural areas, forest land is being converted into agriculture using fires to prepare the site for planting by burning off remaining woody materials. However, because of the poor quality of much of the soil, the agricultural areas are subsequently often converted to pasture land.

Between the 1980s and 2008 (View Figure 8, Figure 9 and Figure 10), maps elaborated from Landsat images from 1986 and 2008 and 1986 - 2008 land cover change), satellite imagery shows that 1.7 to 3% of forests per year changed to pasture, agriculture, or scrubby vegetation and 0.2% per year changed to urban areas (Panama Canal Watershed Monitoring Project 1999 and data analysis from this study).

There is great concern about the status of the forests in the watershed. Landsat Thematic Mapper images of 1973, 1974, 1986, 1987, 1989, 1990, and 1991 established that the forests have decreased by 43% since 1974, from 275,549 ha to 157,063 ha in 1991. In the last years, due to the attention to the system of protected areas, the forest cover has increased to 175,103 hectares.

Tarté (1999) reports the rate of deforestation in 1999 as 573 ha yr−1. Thus, the rate of clearing has declined from the 24-year average of 4,937 ha yr−1. Today, approximately 40% of the PCW is under some kind of protection as required by Panamanian Law 21 in 1997 that mandates expansion of the protected area to 40% of the PCW. The Chagres National Park contains 55% of all forests in the PCW, which represents 80% of all forests in the protected areas. Most of these forests are primary, while those adjacent to the Panama Canal are secondary.

Currently there is a noticeable increase in areas covered by secondary forests regenerating in protected areas in the watershed. Even so, these protected areas are a target for human colonization. Although anecdotal evidence of small scale deforestation abounds, there is no evidence of extensive illegal deforestation. The loss of forests occurs mainly in areas that are undergoing population growth where the national authorities granted approval for forest cutting.

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Figure 8. Project zone 1986 land cover

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Figure 9. Project zone 2008 land cover

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Figure 10. Project zone 1986 – 2008 land cover change

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There are some experiences with commercial plantations within the watershed. They began to be established in the watershed in abundance after 1993, and was reduced after 2002 (see Figure 11) due to mainly two conditions that was working within this period:

• Concessions to private sector: The Interoceanic Region Authority (Autoridad de la Región Interoceánica, ARI) was granting concessions for reforestation projects of degraded lands within the watershed. ARI gives away land-use rights for reforestation to the private sector with the intent of reducing erosion and sedimentation

• Law No 24 of the 23rd of November, 1992: a series of policies that want promote the reforestation sector in the country, like tax deductions in the sales, tax deductions in the import processes and some facilities in the migration process to the foreign investors.

Today the situacion is different and these practices are not implemented. ARI doesn’t exist and the Law No 24 is not currently in effect, which has done that during past years there has not been too much forest activity in the country, except for the establishment of Teak plantations in the area of Darien.

Source: Ugalde y Gomez, 2006 Figure 11. Area planted in Panama between 1992 and 2004.

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G2.2. ADDITIONALITY

There are several causes that have caused the forest destruction in the PCW, a sit shows in the landsat images analysis, for instance the clearances of the forests for “cash” crops, logging operations, cattle ranching and subsistence farming. It is not really surprising that when the international prices for cash crops go up, we also observe an accelerated destruction of forest as more people are trying to take advantage of such price increases (CREA 2005).

Additionally, the analysis show that similar lands in the vicinity are not being converted to either commercial tree plantations or agroforestry, indeed, some plantations established years later has been abandoned because there are no technical support to monitor these projects.

There are investment barriers for establishing commercial timber or agroforestry production in the area because the landholders are, generally, small farmers or communities without access to credit necessary to invest in the inputs required for seeds or necessary equipment. Also, farmers are generally risk-adverse. Farmers tend to be conservative, and seek to maintain a predict steady income as opposed to taking undue market risks with their limited capital and diverging into new income streams.

Institutional barriers prevent farmers from being key market players or manipulating the chain from investment through production and sales. This is because the economic activities of the farmers are very limited and their influence to local economy is weak in the absence of well organized farmers group or network.

Technological barriers limit the access of farmers to quality seed, as the production of these seeds is not possible without specialized technical knowledge. In addition, farmers and communities lack the necessary skills for commercial timber or agroforestry plantations.

To reverse the negative trends, the ACP voluntarily has initiated different conservation projects within the PCW that including the support to the establishment forestry plantations with native and exotic species, and the establishment of agroforestry and silvo-pastoral farms.

G2.3. CARBON STOCK CHANGES

As mentioned in section G1.4, the project area without the project is expected to continue in a steady state covered by agriculture/pastures/scrub systems. We work with a conservative average of 6.2 tCha−1 according to the IPCC default estimates for standing biomass grassland (as dry matter) in tropical moist and wet climates.

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G2.4. BASELINE COMMUNITIES

According to the 2000 Population and Housing National Census, the population of the project zone reaches 65,445 persons distributed among 50 communities located mainly in the lake banks. Most of these communities have a century old history, although there is evidence of the establishment of new communities as well as a trend towards a steady population growth. In general, this is a population engaged in activities linked to the primary sector, especially agriculture, cattle ranch, and fishing.

The human population in the PCW is growing at a high rate, and unless this trend is reversed or the families found other activities for live forest loss, hunting, and contamination will spread in the next few decades.

The following consequences are expected for communities under without the project scenario:

• Immigration within the project area/project zone.

• Clear-cutting of new areas for farming/land conversion.

• Monoculture farming practices and dependence in chemical use in farming.

• Bringing of more cattle within the area, also increasing the risk of fire occurrences due to cattle owners tend to burn grassland to stimulate fresh growth of grasses.

G2.5. BASELINE BIODIVERSITY

The population engaged in activities linked to the primary sector, especially agriculture, cattle ranching, and fishing could lead to a decline in the biodiversity of the area, mainly because many of the endangered, threatened and endemic species would experience continued habitat loss, degradation and fragmentation.

The PCW contains a substantial portion of old-growth forest where a lot of vegetal species, large mammals, birds and several endemic species persist. The region was defined as a hotspot due to the large number of species that are endemic (see G1.7 and G1.8).

The following consequences are expected for biodiversity in the baseline scenario:

• Conversion of forest land to slash-and-burn cultivation and forest product extraction resulting to further fragmentation of loss of wildlife habitat.

• Uncontrolled wildlife hunting that will lead to local decimation of wildlife species especially those belonging to the category of threatened species.

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• Increase of invasive non-native species of and animals that alter biodiversity composition and slows the regeneration, growth and reproduction of different endemic species (i.e. Saccharum spontaneum).

Grassland fires lead to hampering ecological succession thereby minimizing the growth of species diversity in the area.

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Gen Clim Comm Bio G3. Required

G3. PROJECT DESIGN AND GOALS

G3.1. MAJOR CLIMATE, COMMUNITY AND BIODIVERSITY OBJECTIVES

Due to its geographical and climatic characteristics, the PCW is one of the most world’s richest biodiversity areas. However, through years the forest cover has significantly reduced for habitat and agricultural lands, commercial logging. A decrease in forest cover not only results in a loss of habitat for animals and plants but also a loss of ecosystem services that it provides, such as stable water supply. It is necessary to protect and restore these damaged lands to secure the natural resource for about 1.5 million people, almost half of the country’s population that live immediately adjacent to the basin in the cities of Panama and Colon and in nearby areas, being directly dependent on the PCW for freshwater, hydroelectricity, flood control, economy, etc (Tetra Tech, 2010).

The overall goal of the PCA with this project is to promote the improvement of the agricultural production conditions in the PCW through the implementation of environmentally sustainable production systems that ensure the protection of water resources. This goal will be achieved through a combination of 1) reforestation of 3,445 hectares of open areas for commercial and habitat restoration proposes (Tectona grandis [teak] reforestation for commercial proposes and native tree species reforestation for habitat rehabilitation), 2) promotion of agroforestry systems to improve the vegetation cover and productivity of 4,147 hectares, and 3) silvo- pastoral systems establishment of 2,408 hectares.

By increasing the forest cover in the PCW through reforestation, agroforestry and silvo-pastoral systems, the project contributes to carbon sequestration and enhancing the water holding capacity in the PCW watershed. To support the implementation of reforestation, agroforestry and silvo-pastoral systems community organization for planning and community capacity building will also be conducted. The project has been implemented annually since 2007 and it is expected to continue until 2013.

The following are the climate, community, and biodiversity benefits of the project:

• Expanding CO2 capture through expanded reforestation areas in degraded, open grassland sand shrub lands.

• Expanding CO2 capture through expanded forest cover in agroforestry and silvo-pastoral systems.

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• Increased family income of project participants.

• Increased farm production by reduced soil erosion and improved soil fertility.

• Protected and conserved natural resource base for socio-economic development.

• Improve the biophysical conditions of the watershed.

• Improving habitat conditions through connecting fragmented/patches of forest.

• Improved habitat for wildlife and protected endemic and threatened wildlife.

G3.2. MAJOR PROJECT ACTIVITIES

In order to increasing the forest cover in the PCW the following activities are developed within the project area as mentioned in G3.1.

Vegetation reproduction Establishment of community nurseries where the tree individuals are propagated from seeds coming from known and managed forest stands in the case of teak, and from natural adjacent forest in the case of native species.

Each nursery is divided into growth areas, equipped with water dispersion systems. The reproduction area is covered with a poly-shadow material that regulates sunlight and protects the growing individuals from exposure. Fertilizers and other organic compounds are directly supplied in the reproduction area under controlled conditions, using agrochemicals and water rationalization practices. The sprouts are grown mainly in reusable plastic holders that do not cause final disposal problems (Photo 3).

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Photo 3. Project nurseries

Planting and plantation management The planting of individuals is carried out manually or mechanically, depending on the topography of the place. The most part of the total project area is planted in the traditional manner, using manual tools such as machetes, shovels, bars, hoes and brush-cutters. Planting in the remaining area is done mechanically, using agricultural tractors equipped with disks. The manual preparation of the land is preferred due to its low impact on soil. However, both activities achieve minimal impact by using adequate equipment and selecting of the most convenient timing. The potential impact of the mechanical activities is estimated to have a short duration (while seedlings are developing), local magnitude and is reversible if there are any undesired effects (Photo 4).

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Photo 4. Land preparation

Later, each sowing point is established at a 3*3 m distance for native and teak plantations, 6*6 m for agroforestry systems and 8*8 m silvo-pastorial systems (Photo 5). At each point, a 30*30*30 cm hole is made, where soil is completely removed and left beside the hole for sowing. This task is carried out using manual tools. Seedlings are subsequently placed in the hole using a crowbar, covered with the soil previously removed and the soil is stamped on to make it firm. The number of hectares to be established in each project year is presented in the following table (Table 17)

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Photo 5. Plant sowing

Table 17. Project schedule Total Hectares per year Modality (ha) 2007 2008 2009 2010 2011 2012 2013 Reforestation for 0 0 0 609 400 333 333 1,675 commercial purposes Reforestation with 212 245 185 405 400 162 161 1,770 native species Agroforestry 40 80 300 320 1,136 1,136 1,135 4,147 Silvo-pastoral 0 0 162 499 583 582 582 2,408 Total (ha) 252 325 647 1,833 2,519 2,213 2,211 10,000

All plantation manipulation activities are implemented following the best forestry practices. Other practices such as pruning and thinning in the commercial reforestation are also implemented periodically in order to maintain productivity. Survival rates are monitored and the areas where a low survival rate is detected are replanted to maintain the forest cover expected.

All isolated individuals (trees and palms) existing prior to the project have been left in situ, to provide a diversity of species in the plantation, biological control, shelter and food for local

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fauna, etc., following the concept of maintaining and improving the biodiversity in the different project activities areas.

The existing forest corridors along the small rivers present in the project activities areas have been left without intervention. They are part of the natural regeneration processes, categorized as conservation areas and provide biological corridor services for the improvement of biodiversity conditions. All these areas have been located and georeferenced in the geographic information system of the project for monitoring purposes.

Tree species • Reforestation for commercial purposes: Tectona grandis (teak).

Tectona grandis is commonly known as teak in English. It is one of the main woods in the world, an exotic species with high economic potential for the Tropical areas of America and widely renowned for its clear color, excellent fiber and high durability. Teak originated in Southeast Asia. It has become established in the tropical areas of Asia, , Latin America and the Caribbean (Costa Rica, Colombia, Ecuador, , , Panama, Trinidad and Tobago and Venezuela) (Pandey and Brown 2000) (Photo 6).

Photo 6. Tectona grandis (Teak) plantation.

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• Reforestation with native species, agroforestry and silvo-pastorial systems: Tabebuia guuyacan (guayacan), Pachira quinata (ceiba tolua) Anacardium excelsum (espave), Terminalia amazonia (amarillo), Dalbergia retusa (cocobolo), Enterolobium cyclocarpum (corotú), Copuifera aromática (cabimo), Carapa guianensis (Bateo), Plalymiscium pinnatvm (quira), Hymenaea courbaril (algarrobo), Ochroma pyramidale (balsa), Theobroma cacao (cacao) and other fruit species (Photo 7).

Photo 7. Some natives species. Pachira quinata (ceiba tolua). b: Terminalia amazonia (amarillo). c: Tabebuia guuyacan (guayacan). d: Anacardium excelsum (espave). e: Ochroma pyramidale (balsa). f: Dalbergia retusa (cocobolo).

So far, 3,057 ha of reforestation projects, Agroforestry and Silvo-pastorial systems have been established in the project area. Below some photos of the project advance (Photo 8).

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Photo 8. Project advance.

Community Capacity Building Component

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At the beginning of the project, ACP had a series of meetings and workshops with the farmers of 137 communities and the representatives of the local authorities. The participant communities were from río Indio, Caño Sucio, Coclé del Norte, Toabré, Los Hules- Tinajones and Caño Quebrado. The goal of the meetings and workshops were define the required actions in order to preserve the PCW (Photo 9).

Photo 9. Workshops held with the farmers.

These workshops were a great experience that allowed identifies the main social and environmental problems that exist in the PCW and along with the farmers, provide ideas in order to address these identified problems.

From this process, it was identified the importance of ensure the land tenure of the farmers through a cadastral and titulation plan and the main fields of training required for the successful of the project.

Trainings have been provided in the field of financial management, technical skills, and livelihood alternatives. The participants can make use of the skills and knowledge gained through these trainings for the project and outside the project.

For instance, the skill of raising seedlings may generate additional income by selling planting materials to other reforestation operations. Other trainings, like about agroforestry systems, give to farmers the tools to implement these type of systems in order have alimentary security and not only depend of the sales of wood. When farmers want to implement some agroforestry or silvo-pastoral system ACP cover with every cost required by the system, like seedlings, fertilizers, etc.

So far, more than 400 families have been benefited by the ACP program in the regions of Cirí- Trinidad and Hules tinajones (Table 18). Annex 3 shows a list of the families benefited by the program.

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Table 18. Number of families benefited by the program during 2009 and 2010 2009 2010 Region Community Program Program Agroforestry Silvo-pastoral Agroforestry Silvo-pastoral Las Tinajas 2 2 1 Altamira 14 2 Ciricito Arriba 7 Ciricito Abajo 18 3 Ciri Grande 20 6 9 2 Bajo Bonito 22 4 5 Yerba Buena 7 1 Peñas Blancas 12 5 2 Vista Alegre 30 8 Las Gaitas 5 23 2 Gasparillal 1 8 1 Los Raudales 7 1 La Bonga 13 17 4 La Florida 1 2 Las Negritas 17 1 Cirí-Trinidad Teria 6 3 2 La Conga 2 Trinidad las Minas 14 2 El Nazareno 2 1 Nueva Arenosa 1 Altos de las Minas 1 Limón-Raudal 7 Aguacate 13 El Cauchal 9 Trinidad Arriba 1 El Arenal 1 El Nance 4 El Cacao 11 5 El Jagua 7 El Chileno 24 La Tambora 3 Cañito 5 El Lirio 2 3 Cerro Cama 2 2 Tinajones Abajo 1 1 Nuevo Emperador 1 Hules tinajones Mendoza 1 1 El Peligro 1 1 La Colorada 2 5 Río Conguito 1 1 La Zanguenga 1 Divisa 1 0

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2009 2010 Region Community Program Program Agroforestry Silvo-pastoral Agroforestry Silvo-pastoral 153 15 212 56 Total 436

G3.3. LOCATION OF PROJECT ACTIVITIES

See map of eligible areas (Figure 6).

G3.4. TIME-FRAME AND PROJECT ACCOUNTING

The project encompasses the forest establishment, which includes reforestation, agro-forestry and silvo-pastoral planting and monitoring activities from 2007 to 2013. The GHG accounting period is defined to have a duration of 20 years.

G3.5. PROJECT RISKS AND MITIGATION MEASURES

Since most people prioritize short-term benefits, the lack of knowledge on long-term direct and indirect benefits will lead to non-cooperation.

In order to promote active participation of local communities for long term maintenance and protection of the project activities, the ACP through the project PIEA (Programa de Incentivos Economicos Ambientales - Environmental Economic Incentives Program) has paid annually to the local communities an economic incentive that consists of the costs of forest establishment and maintenance for three years, according to the contract showed in Annex 2.

Additionally, the APC has developed information, education communication activities in order to show the benefits to the local communities of well maintained forests covers can provide for improve watershed protection but also that reforestation, agroforestry and silvo-pastoral systems revenue can contribute to enhancing livelihood, with their own families and their local communities as direct beneficiaries.

In order to address common risks in forest systems as physical damage and fire or disease, the following measures have been adopted to mitigate these risks:

• Periodically visits to the forest by a ACP representative;

• Implement a health and protection control system;

• Investment in scientific research on forest dynamics; and

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• Monitoring of local climate data, hydrological dynamics and biodiversity.

G3.6. MAINTENANCE OF HIGH CONSERVATION VALUES

As it was mentioned above in G.1.8, there are important biodiversity values and ecosystem services in the project area which have been enhanced by the project.

• Biodiversity values: we expect that the project activities promotes the increase of biological diversity in the project area in at least three ways: first, forest cover allow for the visit of bird life and, as such, there is a consequent diffusion of seeds throughout the area; second, plantations improve soil quality by reducing gross density, increasing the availability of nutrients, and producing and store of organic matter; and, third, canopy provides the necessary conditions for seeds from the trees to germinate, decreasing aggressive pastures due to lack of light (Healey and Gara 2003). For instance, different studies carried out in teak plantations have found that biodiversity near the plantations increases, because the edge effect is reduced and an additional habitat is provided for some species (Luoma 2002).

Additionally, the restored forests improve forest habitat connectivity, which will result in facilitating the movement and dispersal of the endemic and threatened species of fauna.

Other studies (Umali et al. 1998) highlight that the establishment of forest cover help to maintain and conserve diversity at a reasonable level by minimizing biodiversity losses through the application of proper ordering techniques and by incorporating the main biodiversity conservation principles into the planning, formulation, and execution of forestry management plans. Thus, economic, environmental, and social benefits combine and allow for the sustainability of plantations over the long term through maintenance of the ecosystem’s ecological functions.

• Ecosystem services: the forest cover favors soil protection and recovery by decreasing erosion and sedimentation and, therefore, significantly improves water quality. The role the project activities play is groundwater recharging. Landscape in which degraded, eroding areas are restored to forest contributing to maintaining and enhancing this ecosystem service.

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G3.7. MEASURES TAKEN TO ENHANCE CLIMATE, COMMUNITY, AND BIODIVERSITY BENEFITS BEYOND PROJECT LIFETIME

This project will generate remarkable benefits for the landowners and surrounding communities, for this reason the project development team believes it will not be difficult for the CCB benefits to continue to accrue beyond the project’s timeline of twenty five years.

The project focuses on forest cover restoration and sustainable forest management, in order to guarantee these goals on a long term ACP will establish a Reforestation Cooperative.

The Reforestation Cooperative will focus on financial mechanism that ensures sustainability of the project impacts after the funding from ACP ends in 2013. The Cooperative will provide funds for the following activities:

• Maintenance of the project activities (reforestation, agroforestry and Silvo-pastoral systems);

• Establishment of new activities and increasing of forest cover; and

• Livelihood support.

G3.8. STAKEHOLDER INVOLVEMENT

At the beginning of 2001, a commission of the ACP visited the project area looking for families with intention to participate in implementing project activities in reforestation for commercial purposes, reforestation with native species, agroforestry and silvo-pastorial systems. From these initials meetings with the families it was defined the project areas and the specific activities like nursery, fire line construction in the reforestation areas, providers of seedlings for the project, and those who perform forest establishments and management.

Through group meetings, community assemblies and information dissemination campaign, all the identified local stakeholders have been informed and are continuously being encouraged to actively participate in project planning, implementation and providing feedback. For new or additional local stakeholders that may emerge as the project develops, they will likewise be informed and their participation sought.

They are the project partners like other institutions which have jurisdiction over the project site include ANAM (Autoridad Nacional del Ambiente - Panama national Environmental Authority), MIDA (Ministerio de Desarrollo Agropecuario de Panamá - Ministry of Agricultural Development of Panama) and BDA (Banco de Desarrollo Agropecuario - Agricultural Development Bank).

In the places where the project has been established year meetings with all the stakeholders are planning in order to communicate and socialize progress of the activities during the year.

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G3.9. PUBLICITATION OF PUBLIC COMMENT PERIOD

This PDD is widely knowledge since it is the result of inputs of all the local stakeholders that include the local communities and local institutions like ANAM, MIDA and BDA. Additionally, ACP will take various steps to communicate and publicize the CCBA project during the public comment period.

First, this Project Design Document will be made available on the CCBA webpage (http://www.climate-standards.org) and open to comments from the public. This document will be also available to the public in hard copy during the public comment period, affording local stakeholders an opportunity to raise and address any grievances.

The documents will be on public display at: Autoridad del Canal de Panama (Panama Canal Authority) División de Ambiente (Environmental Division) Tel.: (507) 276-4830 Fax: (507) 276-2759 Balboa – Panama 7:30 am to 4:00 pm Monday through Friday

G3.10. CONFLICT RESOLUTION TOOLS

The project includes this process for hearing, responding to and resolving community and other stakeholder comments during the project life. ACP will attempt to respond all reasonable comments raised, and provide a written response to comments within 30 days. Comments and project responses will be documented.

G3.11. PROJECT FINANCIAL SUPPORT

ACP with own resources is responsible for the project implementation and performance during the first five years (though 2013). They have the financial resources guaranteed year by year during the project life time. Then, it is expected that the project begin to generate incomes from sales of agro and silvo products; additionally it is expected that forest activities, such as thinning begin to generate incomes.

Carbon marketing is another expected option for sustainable financing. It is expected the commercialization of the forestry carbon credits starting on 2014.

More information about the project’s financial support is available for review by the verifier during the site visit.

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Gen Clim Comm Bio G4. Required

G4. MANAGEMENT CAPACITY AND BEST PRACTICES

G4.1. PROJECT PROPONENTS

ACP is the project proponent. ACP has a workforce of more than 9,000 workers from all working around the PCW. All the human capital of the ACP is commitment to ensure the ability of the Republic of Panama to manage the safe, efficient and profitable operation of the Panama Canal, its modernization and preservation of water resources for the benefit of all Panamanians and international maritime trade. Additionally, the ACP has an Environmental Division responsible for taking the project forward.

Furthermore, the ACP project team will also be receiving additional technical, managerial and coordination assistance from other institutions which have jurisdiction over the project site like ANAM, MIDA and BDA.

The following are the ACP roles:

• Provides funds to the project establishment

• Provide the coordination and monitoring of the project implementation

• Conduct regular monitoring and consultations to ensure that implementation will proceed as planned.

• Promotes the participation of the community in project implementation

• Assess project impacts on biodiversity and the socio-economic conditions

ACP has hired MGM Innova to develop the strategy, implementation and sales of the carbon credits generated by this project.

G4.2. TECHNICAL AND MANAGEMENT EXPERTISE

ACP is the entity of the Government of Panama established under Title XIV of the National Constitution with exclusive charge of the operation, administration, management, preservation, maintenance, and modernization of the Panama Canal, as well as its activities and related services, pursuant to legal and constitutional regulations in force, so that the Canal may operate in a safe, continuous, efficient, and profitable manner.

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ACP has a workforce of more than 9,000 workers working in the operation of the Canal. The Environmental Division of the ACP has around 40 employees, who manage environmental programs involved in the operational areas of the PCW. The Division is ISO 14001 certified. Professionals in the Division include sociologists, social workers, agronomic engineers, forest engineers, biologists, among other professions.

Additionally, the project has the support of representatives of MGM Innova, a global leader in the development and commercialization of carbon projects; and independent local contractors.

G4.3. CAPACITY BUILDING

Technical guidance to the local communities has been provided in order to generate appropriate skills and knowledge to enable them to maintain and sustain project initiatives on their own.

Among the capacity building plan being pursued are trainings on:

• Nursery operation and seedlings preparation; propagation of native and commercial tree species

• Forest/Agroforestry/silvo-pastoral systems establishment, care and maintenance: Seedling planting and maintenance (including activities such as weeding, forest fire/pest and disease detection and control)

• Agroforestry and silvo-pastoral systems planning and implementation

• Surveying and mapping

• Community organization for planning

• Community capacity building

G4.4. COMMUNITY EMPLOYMENT OPPORTUNITIES

ACP has an established policy on hiring where everyone has equal opportunities to work irrespective of gender and religion. Available jobs will be equally open to the potential beneficiaries but selection varies depending on the capacity and interest of the individuals. In general, residents within the project zone are the target beneficiaries; involvement of men and women is highly dependent on the kind of task and capacity of individual.

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G4.5. EMPLOYMENT LAWS

ACP complies with all other applicable local and national workplace laws and regulations that are fixed in the Labour Code of Panama “código de trabajo7”. Additionally, ACP is obliged, under Panamanian laws to follow appropriate safe labor practices toward the prevention of injuries in the workplace, which is particularly critical for workers engaged in forestry operations.

G4.6. EMPLOYEE SAFETY

As it was mentioned in the previous section, all local and national work place laws and regulations will be met at the moment of hiring of each staff member. Regulations and safety concerns are discussed with each employee with an emphasis on guaranteeing workplace safety according to the Panamanian laws. Additionally, during activity implementation, it will be included detection of the potential risks and identification and set-up of necessary safety measures to avoid risks.

G4.7. FINANCIAL HEALTH OF THE IMPLEMENTING ORGANIZATIONS

ACP’s financial statements are audited and certified annually by Deloitte - Panamá. ACP is financially solvent and able to ensure completion of the Project. More information about ACP accountability is available on the ACP web site at http://www.pancanal.com/esp/general/fin- statements/index.html.

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Gen Clim Comm Bio G5. Required

G5. LEGAL STATUS AND PROPERTY RIGHTS

G5.1. LOCAL LAWS AND REGULATIONS

ACP as an entity of the Government of Panama has to comply and know every law and regulation concerning with the project development. Additionally, the project is implemented in close coordination and communication with the institutions which have jurisdiction over the project site (ANAM, MIDA and BDA).

G5.2. DOCUMENTATION OF LEGAL APPROVAL

Since ACP is the entity of the Government of Panama established under Title XIV of the National Constitution with exclusive charge of the operation, administration, management, preservation, maintenance, and modernization of the Panama Canal, as well as its activities and related services, pursuant to legal and constitutional regulations in force, so that the Canal have all the authority to develop this project. In addition to this, as was mentioned above, the project is implemented in close coordination and communication with the institutions which have jurisdiction over the project site (ANAM, MIDA and BDA).

G5.3. FREE, PRIOR, AND INFORMED CONSENT

ACP will have a legally binding agreement with all the landowners by which the ACP develops forest activities on the lands and the landowners transfers the carbon sequestration rights to ACP. The agreement also sets out the obligations and responsibilities placed on the parts for the duration of the project. Signing the agreement is based on their free, prior and informed consent after sufficient consultation and discussion have been performed. An example of agreement is showed in the Annex 2.

G5.4. INVOLUNTARY RELOCATIONS

No relocation of current occupants of the land will be done. On the contrary, it is a community- based project where the landowners are directly involve in the implementation of the project. Their roles are clearly stated and agreed in the binding agreement (see G5.3above).

G5.5. ILLEGAL ACTIVITIES

Illegal activities being done by local communities within the project zone include wood extraction for firewood, illegal logging and poaching of the living animals. In most cases, associated to these activities is the occurrence of uncontrolled grassfires of Saccharum

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spontaneum. To avoid these activities in the project area, ACP are working very close together with the local communities in order to know and correct any illegal action very soon, besides; the capacitation of the community about the project creates more conscience towards conservationist aspects.

G5.6. CARBON RIGHTS

This project is based on carbon capture through improve forest cover in degraded lands. ACP, as the project developer and it is highlighted in the binding agreement, has the rights over the carbon capture generated by the project activities.

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Gen Clim Comm Bio CL1. Required

CLIMATE SECTION

CL1. NET POSITIVE CLIMATE IMPACTS

CL1.1. NET CHANGE IN CARBON STOCKS

Total of 10,000 ha is included in consideration for carbon accounting. The net change in carbon stocks due to the project activities are estimated over the 20 year period (Table 19 and Figure 12).

Since it is expected that without the project, the project area will continue to be covered by agriculture/pastures/scrub systems, no changes in the baseline are expected.

The net change in carbon stocks was estimated using the CDM methodology ARAM0005:

Afforestation and Reforestation project activities implemented for industrial and/or commercial uses. According to the methodology, the determination of net anthropogenic GHG removals by sinks follows the following general equation:

Where:

-1 Net anthropogenic GHG removals by sinks; tCO2 yr in year t -1 Actual net GHG removals by sinks; tCO2 yr in year t -1 Baseline net GHG removals by sinks; tCO2 yr in year t -1 Leakage; tCO2yr in year t Time; years

All the calculations in this document were developed through the software TARAM, which is an Excel tool designed to facilitate ex-ante calculations of carbon capture in forestry projects in CDM A/R projects using CDM A/R approved methodologies8.

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Table 19. Estimates of net anthropogenic GHG removals by sinks

Total net anthropogenic greenhouse gas removal by sinks 1,934,787 tCO2e Average net anthropogenic greenhouse gas removal by sinks over -1 the crediting period 96,739.3 tCO2e yr Average net anthropogenic greenhouse gas removal by sinks per -1 -1 hectare and year 9.67 tCO2e yr ha

Project year Baseline net Actual net Net greenhouse greenhouse gas anthropogenic Calendar year Leakage gas removals removals greenhouse gas t* by sinks by sinks removals by sinks

year year tCO2e tCO2e tCO2e tCO2e 1 2007 - (7,389) - (7,389) 2 2008 - (16,835) - (16,835) 3 2009 - (34,955) - (34,955) 4 2010 - (83,982) - (83,982) 5 2011 - (131,061) - (131,061) 6 2012 - (132,384) - (132,384) 7 2013 - (91,618) - (91,618) 8 2014 - 55,530 - 55,530 9 2015 - 247,697 - 247,697 10 2016 - 479,996 - 479,996 11 2017 - 744,675 - 744,675 12 2018 - 987,654 - 987,654 13 2019 - 1,229,242 - 1,229,242 14 2020 - 1,426,838 - 1,426,838 15 2021 - 1,605,790 - 1,605,790 16 2022 - 1,711,474 - 1,711,474 17 2023 - 1,803,417 - 1,803,417 18 2024 - 1,870,633 - 1,870,633 19 2025 - 1,932,435 - 1,932,435 20 2026 - 1,934,787 - 1,934,787 Total 1,934,787 1,934,787

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2,000,000

1,500,000

1,000,000

500,000 removals by sinks) - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 tCO2e (net anthropogenic GHG (500,000) Project year (t)

Net anthropogenic greenhouse gas removals by sinks

Figure 12 Net anthropogenic removals by sinks (tCO2)

CL1.2. NET CHANGE IN NON-CO2 GASES

According to the CDM Executive Board agreed at its 42nd meeting GHG emissions in A/R CDM project activities from (i) fertilizer application, (ii) removal of herbaceous vegetation, and (iii) transportation may be considered as insignificant and hence can be neglected in A/R baseline and monitoring methodologies (http://cdm.unfccc.int/EB/042/eb42rep.pdf).

Additionally, non-CO2 GHGs are not likely to account for more than 5% of the project’s overall GHG impact.

CL1.3. OTHER GHG EMISSIONS FROM PROJECT ACTIVITIES

GHG emissions as a result of project activities were calculated according to the CDM AR AM0005 methodology. The project takes into account the increase in emissions of GHG gases resulting from land preparation and biomass loss (Table 20).

Since all labor for the project activity are from local villages and seedlings growth on site and transported to the planting the transportation need is minimal.

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Table 20. GHG emissions by sources within the project boundary as a result of the implementation of the project

Project Carbon stock change in non-woody biomass (biomass loss) year annual cumulative annual cumulative annual cumulative C C C t* Above-ground biomass carbon Below-ground biomass carbon Total pool pool -1 -1 -1 year tCO2 yr tCO2 tCO2 yr tCO2 tCO2 yr tCO2 1 (2,864.40) (2,864.40) (4,525.75) (4,525.75) (7,390.15) (7,390.15) 2 (3,694.17) (6,558.57) (5,836.78) (10,362.54) (9,530.95) (16,921.10) 3 (7,354.23) (13,912.80) (11,619.69) (21,982.22) (18,973.92) (35,895.02) 4 (20,835.10) (34,747.90) (32,919.46) (54,901.68) (53,754.56) (89,649.58) 5 (28,632.63) (63,380.53) (45,239.56) (100,141.24) (73,872.19) (163,521.78) 6 (25,154.43) (88,534.97) (39,744.00) (139,885.25) (64,898.44) (228,420.21) 7 (25,131.70) (113,666.67) (39,708.09) (179,593.33) (64,839.79) (293,260.00) 8 - (113,666.67) - (179,593.33) - (293,260.00) 9 - (113,666.67) - (179,593.33) - (293,260.00) 10 - (113,666.67) - (179,593.33) - (293,260.00) 11 - (113,666.67) - (179,593.33) - (293,260.00) 12 - (113,666.67) - (179,593.33) - (293,260.00) 13 - (113,666.67) - (179,593.33) - (293,260.00) 14 - (113,666.67) - (179,593.33) - (293,260.00) 15 - (113,666.67) - (179,593.33) - (293,260.00) 16 - (113,666.67) - (179,593.33) - (293,260.00) 17 - (113,666.67) - (179,593.33) - (293,260.00) 18 - (113,666.67) - (179,593.33) - (293,260.00) 19 - (113,666.67) - (179,593.33) - (293,260.00) 20 - (113,666.67) - (179,593.33) - (293,260.00) (113,666.67) (179,593.33) (293,260.00)

CL1.4. POSITIVE NET CLIMATE IMPACT

As it shows in Table 19, the net total climate impact of the project is positive. The total amount of CO2 sequestered minus GHG emitted from project activities over 20 years is 931,323 tCO2. Thus, the net climate impact of the project is projected to be positive.

CL1.5. AVOIDED DOUBLE-COUNTING

All of the Project’s emission reductions will be registered and held by an independent public third-party registry to insure property accounting. There is no national carbon accounting registry for Panama.

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Gen Clim Comm Bio CL2. Required

CL2. OFFSITE CLIMATE IMPACTS

CL2.1. TYPES OF LEAKAGE

The possible sources of leakage from the project are deforestation due to displacement of grazing activities and wood collection that existed within the project area to outside of the project area. However, no leakage is anticipated for this project for the following reasons.

The project do not expect to displace the grazing activities but it expect improve the conditions of the grazing areas thru planting of high yielding grasses and reforest at least 10% of the area. Additionally, the displacement of grazing activities to other grasslands does not result in leakage. In the project zone there about 780.44 km2 (22.59%) of pasture, agriculture, scrub, and grass lands where some grazing activities have the possibility to move.

With regard to the leakage from fuelwood collection, in the event that the residents of the project area require wood for their necessities, they can remove the wood from pruning and thinning left on the field after the project operations in the area. This fuelwood meets the requirements for renewable biomass.

CL2.2. MITIGATION OF NEGATIVE OFFSITE IMPACTS

There are no foreseen negative offsite climate impacts.

CL2.3. UNMITIGATED NEGATIVE OFFSITE CLIMATE IMPACTS

There are no foreseen negative offsite climate impacts.

CL2.4. NON-CO2 GASES

There are no foreseen negative offsite climate impacts.

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Gen Clim Comm Bio CL3. Required

CL3. CLIMATE IMPACT MONITORING

CL3.1. CARBON POOL SELECTION AND MONITORING

The monitoring plan is described as follows:

1. Monitoring project boundary and project implementation.

a. Monitoring project boundary.

During the crediting period, a combination of field surveys and/or remote sensing methods will be used to monitor the project activities within the project area.

ACP will follow the steps outlined below in order to monitor the area planted under each modality proposed in the project:

• Confirmation will be obtained that reforested sites correspond to the eligible area presented in this PDD.

• The spatial extent and location of the different modalities and species planted under the project will be recorded.

• As per the availability of remote sensing data of adequate resolution, ACP can assess the area planted and compare the changes observed in the planted area using remote sensing data and the data from ground checks, field monitoring, and from planting records.

• Any discrepancies between the area reported and the area estimated under the proposed project, including the areas of mortality due to natural factors (e.g., fire and pests) and anthropogenic factors will be recorded and reported.

b. Monitoring of the forest establishment

Activities implemented during the early stage of the forest establishment covering the 3-5 year period of the planting activity are listed below:

• Activities related to site preparation and vegetation affected as part of the site preparation shall be recorded.

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• Information about the area of the different modalities and planting layout as per the management plan will be prepared.

• Any deviation in the implementation in relation to the management or silvicultural plan and the information on such deviation will be recorded, and the justification will be presented in the monitoring report.

• Survival rates of reforested areas for each modality of the project during the initial months of the project will be recorded.

• The planted areas affected by natural and anthropogenic disturbances as well as seedlings planted as part of the gap planting during Year 2 and Year 3 will be recorded during the assessment.

c. Monitoring of the forest management activities in each modality

As part of monitoring of the forest management activities the following operation categories will be recorded in the project database:

• Species-wise thinning and harvest regimes prescribed and followed, as well as the biomass removed from the operations, including the damage (if any occurred as part of thinning and harvesting).

• Schedule of replanting, coppicing and other management implemented to ensure the land use has its intended purpose.

• Quantity of fossil fuels used in the forest management and operations during each year of the project.

• Natural or anthropogenic disturbances (including fire or other catastrophic events) by date, location, volume of biomass lost or affected, and the preventive or curative measures.

• Biomass burning practices, if any, carried out during the monitoring interval and the reasons for the activity.

• Information on the forest protection practices such as fire breaks, control burning, and closure to prevent anthropogenic activities that impact the standing biomass.

The data used to monitor the project establishment and management practices are shown in the table below (Table 21):

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Table 21. Data and variables to monitor the project management practices Measured (m), calculated (c) Recording Proportion of data Data variable Data unit Comment estimated (e) or frequency monitored default (d) Year year m 5 years 100% area Shortly after initial Planting is divided up into Project area ha m planting, 100% area ‘lots’. The area of and prior to each lot will be measured individually. verification 1 month after Survival rate % m sampling transects planting Pruning m m 5 years 100% area Measured each episode Thinning m3 m 5 years 100% area Measured each episode Harvesting m3 m 5 years 100% area Measured each episode Pruning area ha m 5 years 100% area Measured each episode Thinning area ha m 5 years 100% area Measured each episode Harvesting area ha m 5 years 100% area Measured each episode Area affected by ha e 5 years 100% area Data from field visits and observation disturbance

2. Sampling design for ex-post calculations

The procedures for monitoring the different project modalities (project strata) and for implementing sampling frame are outlined below.

The ex post stratification will consider monitoring of the project modalities and their boundaries in order to account for the changes occurring due to disturbances and management activities. Monitoring will be done using a geographical information system (GIS), which allows for the integration of data from different sources (including data from GPS and remote sensing methods). The stratification map will be of adequate scale and will reflect the variables considered under the ex post monitoring.

a. Ex post stratification of project area

The following factors will be considered in the ex post stratification

• Catastrophic disturbances such as fire, pest, or disease outbreaks that modify the homogeneous character of a stratum;

• The influence of grassland vegetation on stand development, for example, level of competition or shrub and herb weed growth that has changed during the period subsequent to ex ante stratification and could impact the growth of young stands should be taken into account;

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• Management and silvicultural activities, such as planting, thinning, harvesting, coppicing, and replanting, implemented at different intervals and locations from those proposed at the start of the project;

• Changes in local factors that lead to different planting regimes from those planned at the time of ex ante stratification leading to differences in the composition of strata and the carbon stocks associated with them;

• Additional information on site characteristics or other variables not considered during the ex ante stratification of grassland will be considered during ex post stratification.

b. Sampling frame

The sampling framework specifies the sample size, plot size, and plot location in order make an unbiased assessment of carbon stock changes under the project.

b.1. Sample Size

Permanent sampling plots should be used for sampling to monitor changes in carbon stocks over the crediting period as they take into account the high covariance between observations at successive sampling events. The plots will be treated in the same way as other lands within the project boundary (e.g., during site and soil preparation, weeding, thinning, etc.).

A maximum error of ±10 % of the mean at the 95 % confidence level is permissible. The sample size (n) can be estimated as per the Neyman criterion of fixed levels of costs and accuracy. The number of plots for modality shall be calculated using the following equation.

2  t   I   I s  n =  α   W ⋅ s ⋅ C ⋅ W ⋅ i  ∑ i i i ∑ i   E   i=1  i=1 C  i  Where:

n = sample size (number of sample plots required for monitoring) tα = t value for a significance level of α (0.05) or confidence level of 95% Ni = number of sample units for modality i, calculated by dividing the area of modality i by the area of each plot N = total number of sample units of all modality levels, N= Σ Ni Si = standard deviation of modality i E = allowable error (±10% of the mean) Ci = cost to select a plot of the modality i i = modality i (total number of modalities I)

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N i Wi = N The number of plots will be allocated among the modalities as per the equation below.

si Wi ⋅ Ci ni = n⋅ I si ∑Wi ⋅ i=1 Ci Where:

ni = number of sample units (permanent sample plots) per stratum, that are allocated

si Wh ⋅ proportional to Ci Ci = cost to select a plot of the stratum i n = sample size (number of sample plots required for monitoring) Si= standard deviation of stratum i i = stratum i (total number of strata I) = Wi N i N

b.2. Sample plot size

The permanent sample plots will be circular in shape and will have 600 m2 area.

b.3. Location of sample plots

The location of sample plots should be done using plot centers as reference points. The geographical position, administrative location, stand, and series number of plots and their location should be recorded, represented on the map and archived. The plots should be systematically located with a random start in each stratum or sub-stratum and their positioning may be accomplished with the help of GPS or by adopting standard field operating procedures for forest inventory. In situations where GPS is not readily available, the plot description should follow the standard forest survey and inventory practices.

The total modality area is divided by the number of plots to estimate the average area represented by one sample plot. Each site is divided by the average area per plot to obtain the number of plots rounded off to the nearest integer.

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b.4. Treatment of sample plots

All plots within a modality are managed in the same way and their layout and treatment should not lead to differentiated treatment. Any changes occurring in the sample plots and the type of management practices and disturbance observed in the sample plots should be recorded and considered in evaluating carbon stock changes.

b.5. Management of sample plot data

The georeferenced spatial database will be updated periodically taking into account the influence of the ex post stratification. The quality assurance and quality control measures will be applied in order to maintain the consistency of the monitoring data over the crediting period.

c. Monitoring interval

The first monitoring interval will coincide with the verification interval, which is expected to be every 5 years.

Data needed for the monitoring of emission sources will be collected and analyzed annually.

3. Calculation of ex post actual net GHG removal by sinks

a. Carbon stock changes

Carbon stocks in deadwood, litter, and soil pools are not monitored. Therefore, changes in carbon stocks equal the carbon stock changes in above-ground and below-ground biomass within the project boundary. The changes in the above-ground biomass and below-ground biomass will be estimated using local allometric equations.

The changes in the carbon stocks of above-ground and below-ground biomass are estimated as follows.

44 ∆Cijk ,t = (∆CAB,ijk ,t + ∆CBB,ijk ,t )⋅ 12

C + C AB,ijk ,m2 AB,ijk ,m1 ∆CAB,ijk ,t = T

C + C BB,ijk ,m2 BB,ijk ,m1 ∆CBB,ijk ,t = T

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Where:

ΔCijk ,t = verifiable changes in carbon stock in the living biomass of trees for modality i, -1 species j, sub-stratum k; tCO2 yr in year t ΔCAB,ijk ,t = changes in carbon stock in above-ground biomass of trees for modality i, -1 species j, sub- , stratum k; tCO2 yr in year t ΔCBB,ijk ,t = changes in carbon stock in below-ground biomass of trees for modality i, -1 species j, sub-stratum k; tCO2 yr in year t CAB,ijk,m2 = carbon stock in above-ground biomass of trees for modality i, species j, sub- stratum k calculated at monitoring point m2; tC CAB,ijk,m1 = carbon stock in above-ground biomass of trees for modality i, species j, sub- stratum k calculated at monitoring point m1; tC CBB,ijk,m2 = carbon stock in below-ground biomass of trees for modality i, species j, sub- stratum k calculated at monitoring point m2; tC CBB,ijk,m1 = carbon stock in below-ground biomass of trees for modality i, species j, sub- stratum k, calculated at monitoring point m1; tC T = number of years between monitoring points m2 and m1, which, in this methodology, is 5 years. 44/12 = ratio of molecular weights of CO2 and carbon; dimensionless.

a.1. Use of allometric equations

The tree biomass will be estimated as a relationship between biomass and diameter at breast height (DBH), to calculate biomass as an intermediate step in the estimation of biomass.

Step 1: For plot level measurements, plots will be located, their identity verified by comparing the identification in the project database. The measurements of DBH and tree height (H) will be collected. For tree height, trees above minimum DBH shall be selected. The minimum DBH may vary from 2.5 cm to 10 cm.

Step 2: Allometric equation relating the diameter at breast height and tree height is represented as below.

TB = f (DBH, H ) AB,ijk ,m Where:

TBAB, tree, ijk, m = above-ground biomass of a tree in modality i, species j, sub-stratum k; kg tree-1 at monitoring time m

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f (DBH, H) = an allometric equation for species j linking above-ground tree biomass (kg tree-1) to the diameter at breast height (DBH) in plots for modality i, species j, sub- stratum k.

Step 3: The carbon stock per tree in above-ground biomass will be estimated using allometric equations applied to the tree measurements

= ⋅ TCAB,ijk ,tree,m TBAB,ijk ,tree,m CFj Where:

TBAB, tree, ijk, m = above-ground biomass of a tree in modality i, species j, sub-stratum k; kg tree-1 at monitoring time m. TCAB, ijk, tree, m = carbon stock in above-ground biomass per tree in modality i, species j, sub-stratum k; kg C tree-1 at monitoring time m. -1 CFj = carbon fraction of species j, tC (t d.m.)

Step 4: The carbon stock in the living biomass of trees in each plot will be summed up and extrapolated to a per ha basis by multiplying the carbon stock per plot with the plot expansion factor XF:

TR ∑TCAB,ijk ,tree,m ⋅ XF tr=1 PCAB,ijk , plot,m = 1000

10000 XF = AP

PCBB,ijk , plot,m = PCAB,ijk , plot,m ⋅ R j Where:

PCAB,ijk, plot,m = plot level carbon stock in above-ground biomass for modality i, species j, sub-stratum k; tonnes C ha-1 at monitoring time m. TCAB,ijk,tree ,m = carbon stock in above-ground biomass per tree in modality i, species j, sub-stratum k; kg C tree-1 at monitoring time m. XF = plot expansion factor from per plot values to per hectare values, ha-1 AP = plot area; m2 PCBB, ijk, plot, m = plot level carbon stock in below-ground biomass for modality i, species j, sub-stratum k; tC ha-1 at monitoring time m

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R j = root-shoot ratio appropriate to increments for species j; dimensionless TR = tree (TR = number of trees in the plot)

Step 5: Mean carbon stock within each stratum will be calculated by averaging the carbon stock across plots in a modality.

Pijk ∑ PCAB,ijk , plot,m = Pijk 1 MCAB,ijk ,m = Pijk

Pijk ∑ PCBB,ijk , plot,m Pijk =1 MCBB,ijk ,m = Pijk

Where:

MCAB,ijk,m = mean carbon stock in above-ground biomass for modality i, species j, sub- stratum k; tC ha-1 at monitoring time m MCBB,ijk,m = mean carbon stock in below-ground biomass for modality i, species j, sub- stratum k; tC ha-1 at monitoring time m PCAB,ijk, plot,m = plot level carbon stock in above-ground biomass for modality i, species j, sub-stratum k; tC ha-1 at monitoring time m PCBB,ijk, plot,m = plot level carbon stock in below-ground biomass for modality i, species j, sub-stratum k; tC ha-1 at monitoring time m Pijk = plot in modality i, species j, sub-stratum k (Pijk = total number of plots in modality i, species j, sub-stratum k); dimensionless

Step 6: The carbon stock in living biomass is calculated from the area of each stratum i, species j and sub-stratum k at time t and the mean carbon stock in above-ground biomass and below- ground biomass per unit area, given by:

C AB,ijk,m = Aijk,m ⋅ MC AB,ijk,m

CBB,ijk ,m = Aijk ,m ⋅ MCBB,ijk ,m

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Where:

CAB,ijk, m = changes in carbon stock in above-ground biomass for modality i, species j, substratum k; tC at monitoring time m CBB,ijk , m = changes in carbon stock in below-ground biomass for modality i, species j, substratum k; tC at monitoring time m Aijk,m = area of modality i, species j, sub-stratum k; hectare (ha) at monitoring time m MCAB,ijk,m = mean carbon stock in above-ground biomass for modality i, species j, sub- stratum k; tC ha-1 at monitoring time m MCBB,ijk,m = mean carbon stock in below-ground biomass for modality i, species j, sub- stratum k; tC ha-1 at monitoring time m

b. GHG emissions by sources

The monitoring of the increases in greenhouse gas emissions from loss of biomass from the conversion of grassland and non-CO2 emissions from biomass burning (if practiced to clear the land to afforest or reforest) is represented as follows9:

Where:

- GHGE,t = annual GHG emissions as a result of the implementation of the project; tCO2 yr 1 in year t -1 EBiomassLoss, t = GHG emissions from the loss of biomass in site preparation; tCO2 yr in year t -1 ENon−CO2 ,BiomassBurn, t = non-CO2 emission as a result of biomass burning; tCO2 yr in year t

b.1. CO2 emissions from burning of fosil fuels

According to CDM EB 44, GHG emissions from fossil fuel combustion in reforestation projects are insignificant and may be neglected in A/R baseline and monitoring methodologies.

b.2. Emissions from loss of biomass in site preparation and conversion of grassland

9 Acording to EB report 44, fossil fuel combustion in A/R CDM project activities is insignificant in A/R CDM project activities and may therefore be neglected in A/R baseline and monitoring methodologies.

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The amount of biomass loss will be monitored on the basis of the area affected, biomass associated with the area, and the carbon fraction of the biomass using the steps outlined below.

Step 1: The peak biomass of pre-existing non-tree vegetation on lands to be reforested is estimated from the field data or local studies. The estimates of Bw,i and RG provided in the national publications or default data provided in the Good Practices Guide will be used.

Step 2: The CO2 emissions from biomass loss are estimated using the following equation.

l 44 EbiomassLoss,t = ∑ Ai ⋅ Bw, j ⋅(1+ RG )⋅CF ⋅ ∀t =1 = 12 i 1 E = 0 ∀t >1 biomassLoss,t

Where:

EBiomass Loss, t = average annual decrease in grassland biomass due to conversion of -1 grassland to forests in modality i, species j, sub-stratum k; tCO2 yr in year t Ai = area of stratum i; ha Bw,i = peak (maximum) above-ground biomass of pre-existing non-tree vegetation in modality i; t d.m. ha-1 RG = root-shoot ratio appropriate for pre-existing non-tree vegetation; dimensionless -1 CF = carbon fraction of dry biomass in pre-existing non-tree vegetation; tC (t d.m.) i = modality i (total number of modalities I) 44/12 = ratio of molecular weights of CO2 and carbon; dimensionless

b.3. Emissions from biomass burning

The following steps are used for monitoring and estimating the non-CO2 emissions from biomass burning.

Step 1: To estimate the biomass per unit area affected in the burning, the average biomass of the area will be estimated. The above-ground tree and shrub biomass per unit area will be estimated using available shrub and tree allometric equations. The non-tree biomass will be estimated by collecting the non-tree biomass in square frames and the dry to wet ratio of the biomass will be estimated using standard non-tree biomass sampling procedures. The total biomass per unit area can thus be estimated adding up all the above-ground biomass.

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Step 2: The monitoring data on the area affected by burning will be collected by surveying the area subjected to burning; this data on the affected area will be used along with the biomass per unit area to estimate the amount of biomass burn.

Step 3: The combustion efficiencies will be chosen from Table 3.A.14 of IPCC GPG for LULUCF. If no relevant combustion efficiency is found, the IPCC default of 0.5 will be used. The general default value of nitrogen/carbon ratio (N/C ratio) of 0.01 applicable to leaf litter will be used if no suitable data is available. Emission factors provided in Tables 3.A 15 and 3.A.16 of IPCC GPG for LULUCF shall be consulted for additional guidance.

Step 4: The GHG emissions from the biomass burn will be estimated on the basis of the revised IPCC 1996 Guidelines for LULUCF and IPCC GPG for LULUCF using the equations below.

E − = E + E Non CO2 ,BiomassBurn,t BiomassBurn,N2O,t BiomassBurn,CH 4 ,t

44 EBiomassBurn,N O,t = EBiomassBurn,C,t ⋅ N C ratio ⋅ EFN O ⋅GWPN O ⋅ 2 2 2 28

16 EBiomassBurn,CH ,t = EBiomassBurn,C,t ⋅ EFCH ⋅GWPCH ⋅ 4 4 4 12 Where:

ENon−CO2 ,BiomassBurn, t = non-CO2 emission as a result of biomass burning within the project -1 boundary; tCO2 yr in year t -1 EBiomassBurn,N2O, t = N2O emission from biomass burning; tCO2 yr in year t -1 EBiomassBurn,CH4 , t = CH4 emission from biomass burning; tCO2 yr in year t -1 EBiomassBurn,C ,t = loss of carbon stock in above-ground biomass due to burning; tC yr in year t N/C ratio = nitrogen/carbon ratio; dimensionless EFN2O = IPCC default emission ratio for N2O of biomass burning (IPCC default: 0.0007); kg -1 CO2. (kg C) EFCH 4 = IPCC default emission ratio for CH4 of biomass burning (IPCC default: 0.0012); -1 kg CO2. (kg C) GWPN2O = global warming potential for N2O (IPCC default for the first commitment -1 period: 310); kg CO2 (kg N2O) GWPCH4 = global warming potential for CH4 (IPCC default for the first commitment -1 period: 21); kg CO2 (kg CH4) 44/28 = ratio of molecular weights of N2O and nitrogen; dimensionless 16/12 = ratio of molecular weights of CH4 and carbon; dimensionless

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I J K EBiomassBurn,C,t = ∑∑∑ Aburn,ijk ,t ⋅ Bijk ,t ⋅ PPijk ,t ⋅CE ⋅CF i=1 j=1 k =1 Where:

-1 E BiomassBurn,C ,t = loss of carbon stock in above-ground biomass due to burning; tC yr in year t Aburn,ijk ,t = annual area affected by biomass burning in modality i, species j, sub-stratum k; ha yr-1 in year t Bijk ,t = average above-ground biomass before burning for modality i, species j, sub- stratum k; t d.m. ha-1

Note: if the burning occurs during site preparation, Bijk, t indicates the above-ground biomass on grassland before burning. Otherwise it indicates the above-ground biomass of established in year t.

PPijk,t = proportion of biomass burned, dimensionless CE = combustion efficiency; dimensionless (IPCC default =0.5) CF = carbon fraction of dry matter; t C d.m.-1 i = modality i (I = total number of strata) j = species j (J = total number of species) k = sub-stratum k (K = total number of sub-strata)

c. Actual net GHG removals by sinks

The actual net greenhouse gas removals by sinks represent the sum of the changes in the carbon stocks in the carbon pools considered minus the sum of all GHG emissions by sources increased due to the implementation of the project.

I J K ∆CACTUAL,t = ∑∑∑ ∆Cijk ,t − GHGE,t i=1 j=1 k =1 Where:

-1 ΔCACTUAL,t = actual net greenhouse gas removals by sinks; tCO2-e yr for year t i = modality i (I = total number of strata) j = species j (J = total number of species) k = sub-stratum k (K = total number of sub-strata)

4. Data to be collected and archived for actual net GHG removals by sinks

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The Table 22 presents the data to be collected in order to monitor the verifiable changes in carbon stock in the carbon pools and Table 23 presents the data to be collected or used in order to monitor the GHG emissions by the sources that are increased as a result of the implementation of the project.

Table 22. Data to be collected to monitor the changes in carbon stock in the carbon pools. Measured (m) Recording Proportion of data Data Variable Data unit calculated (c) Comment frequency monitored estimated (e) Before the Modality Alpha- Modality takes into start of the 100% (Stratum) ID numeric consideration places project Before the Each sub-stratum has a Alpha- Sub-stratum ID start of the 100% particular year to be planted numeric project under each modality Before the For the purpose of measuring Confidence level % e start of the 100% and monitoring accuracy project Before the For the purpose of measuring Accuracy % e start of the 100% and monitoring accuracy project Standard Before the For each modality and sub- deviation of each number e start of the 100% stratum modality project Before the Number of Plot ID shall be provided to each number c start of the 100% sample plots permanent sample plot project Before the Numeric series ID will be Sample plot ID Alpha numeric e start of the 100% assigned to each permanent project sample plot Using GPS to locate before start GPS Plot location m 5 years 100% of the project and at time of coordinators each field measurement Tree species 5 years 100% Arranged in this document Age of plantation year m 5 years 100% sampling plot Counted since the planted year 100% of trees on Number of trees number m 5 years Counted in plot measurement plots Diameter at Measured at each monitoring Breast cm m 5 year 100% trees on plots interval Height(DBH) 100% of sampling Mean DBH cm c 5 years Calculated plots Monitoring at each monitoring Tree height m m 5 year 100% trees on plots time per sampling method Mean tree m c 5 year 100% trees in plots Calculated height Marketable 100% of sampling m3/ha c 5 year Calculated volume plots Local-derived and species-spe- Wood density t d.m. m-3 e 5 year 100% of plots cific value have priority Biomass Local-derived and species- dimensionless e 5 year 100% of plots expansion factor specific value have priority 101 Carrera 43A#1-50. San Fernando Plaza – Torre 4, oficina 315. Tel: +57.4.3260584 www.mgminnova.com

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Measured (m) Recording Proportion of data Data Variable Data unit calculated (c) Comment frequency monitored estimated (e) (BEF) Local-derived and species- Carbon fraction tC. (t d.m)-1 e 5 year 100% of plots specific value have priority Locally-derived and species- Root-shoot ratio dimensionless e 5 year 100% of plots specific value have priority Carbon stock in above- ground kg C tree-1 c 5 year 100% sampling plot Calculated biomass of tree Carbon stock in below-ground kg C tree-1 c 5 year 100% sampling plot Calculated biomass of tree Carbon stock in above- ground tC ha-1 c 5 year 100% sampling plot Calculated biomass of plots Carbon stock in below-ground tC ha-1 c 5 year 100% sampling plot Calculated biomass of plots Mean carbon stock in above- ground biomass 100% of stratum tC ha-1 c 5 year Calculated per unit area per and sub-stratum modality per species Mean carbon stock in below- ground biomass 100% of stratum tC ha-1 c 5 year Calculated per unit area per and sub-stratum modality per species Area of modality Actual area of each modality and ha m 5 year 100% and sub- stratum sub-stratum Carbon stock in above- ground 100% of stratum biomass of tC c 5 year Calculated and sub-stratum modality per species Carbon stock in below-ground biomass of tC c 5 year 100% of stratum Calculated modality per species Carbon stock change in above- ground biomass tC yr-1 c 5 year 100% strata Calculated per modality per species Carbon stock change in below- tC yr-1 c 5 year 100% strata Calculated ground biomass per modality per

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Measured (m) Recording Proportion of data Data Variable Data unit calculated (c) Comment frequency monitored estimated (e) species Summing up carbon stock Total carbon tCO yr-1 c 5 year 100% project area change for all modality, sub- stock change 2 stratum and tree species

Table 23. Data to be collected to monitor the GHG emissions by the sources. Measured (m) Recording Proportion of data Data Variable Data unit calculated (c) Comment frequency monitored estimated (e) Area affected by Measured for different ha m Annually 100% biomass burning modalities Mean above- Sampling survey for different ground biomass t d.m. ha-1 e 100% modality and sub-strata before stock before burning burning Sampling survey for different Proportion of dimensionless m Annually 100% modality and sub-strata before biomass burned burning Biomass Before the IPCC default value (IPCC default: combustion dimensionless e start of the 100% 0.05) should be used if no efficiency project appropriate value available Carbon fraction tC (t d.m.)-1 e 5 year 100% Loss of above- ground biomass tC yr-1 c 5 year 100% Calculated from equation carbon due to biomass burning Before the IPCC default value (IPCC default: N/C ratio kg N/kg C e start of the 100% 0.001) should be used if no project appropriate value is available N2O emission -1 from biomass tCO2 yr c 5 year 100% Calculated using equation burning CH4 emission -1 from biomass tCO2 yr c 5 year 100% Calculated using equation burning Increase in non- CO emission as a 2 tCO yr-1 c 5 year 100% Calculated using equation result of biomass 2 burning Total increase in tCO yr-1 c Annually 100% Calculated using equation GHG emission 2

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5. Ex post net anthropogenic GHG removal by sinks

The net anthropogenic greenhouse gas removals by sinks will be calculated following the generic equation:

Where:

Ct = net anthropogenic greenhouse gas removals by sinks; tCO2e for year t ΔCACTUAL,t = actual net greenhouse gas removals by sinks; tCO2e for year t ΔCBSL ,t = baseline net greenhouse gas removals by sinks; tCO2e for year t

CL3.2. MONITORING PLAN

ACP is committed to developing a full carbon monitoring plan and will disseminate this on the internet within twelve months of validation of the project against the CCBA standards.

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Gen Clim Comm Bio CM1. Required

COMMUNITY SECTION

CM1. NET POSITIVE COMMUNITY IMPACTS

CM1.1. COMMUNITY BENEFITS

The project will generate the following net benefits to the project area communities:

• Net economic benefits

. The project will increase the household incomes through incentives for successful forests establishment and ensured growth of seedlings in reforestation (3,445 ha), agroforestry (4,147 ha) and silvo-pastoral systems (2,408 ha). . Benefit sharing from harvest of fruit trees, cacao, coffee and other crops in agroforestry and silvo-pastoral systems.

• Farmers and participants will receive training in various techniques in forest establishment and management, soil and water conservation, mulching, pest control, enterprise development, marketing of crops, cooperative management, and others. The training will be provided by ACP and the project partners ANAM (Autoridad Nacional del Ambiente – Panama national Environmental Authority), MIDA (Ministerio de Desarrollo Agropecuario de Panamá – Ministry of Agricultural Development of Panama) and BDA (Banco de Desarrollo Agropecuario – Agricultural Development Bank).

• Positive changes in land use practices and values. It is expected that the project will help to reduce the trend towards illegal logging as well as use of fuelwood and charcoal from natural forest, improved protection of habitats of threatened species, and improved management of soil and water.

Under the baseline scenario, the forest will continue to be reduced due to cutting trees for subsistence and commercial purposes, as well as due to conversion of land to upland farms and settlements through forest clearing. The baseline agricultural practice and livestock raising are expected to cause the land to degrade, resulting in soil and water problems. The project’s activity will reverse the unsustainable trends to positive, increase income of the participating families, and build capacity.

In the future the communities’ net benefits will be estimated on the basis of socio-economic indicators considered of great importance in project zone communities.

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To measure the net benefits, ACP will evaluated how each of the project activities would impact the community regarding these issues, on an evolving line of development, moving from a critical situation to a desired condition, and all the necessary measures to improve on every line.

The following are the main issues considered:

• Job opportunities

• Environmental services

• Water supply

• Forest management

CM1.2. IMPACT ON HIGH CONSERVATION VALUES

Fragile ecosystems with high biodiversity and endemic species, and water supply, the high conservation values identified in the project zone will not be negatively affected by the project. On the contrary, this project will positively impact the local community providing the landowners and their family’s new income sources more profitable than degrading the project zone. Additionally, the project activities to help minimize soil erosion and hazards due to grassfires, improve site conditions conducive to biodiversity and water supply.

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Gen Clim Comm Bio CM2. Required

CM2. OFFSITE STAKEHOLDER IMPACTS

CM2.1. POTENTIAL NEGATIVE OFFSITE STAKEHOLDER IMPACTS

The only possible negative social impact considered could be a price dampening due to oversupply of certain agronomic products being marketed to offsite communities producing the same fruit products. Thus, oversupply will dampen prices in those markets and adversely affect farmer-producers in those areas.

CM2.2. PLANS TO MITIGATE POTENTIAL OFFSITE IMPACTS

In order to mitigate any negative impact from oversupply of fruits a market study will be conducted to ensure that there is no oversupply of certain agronomic products in the surrounding markets. The possibility of marketing agronomic products to larger market, such as Panama City or abroad markets could also be explored to minimize over supply in local markets.

CM2.3. UNMITIGATED OFFSITE IMPACTS

As is explained above in CM 2.2., the possible negative offsite community impacts of the will be mitigated. Taking everything into account the Project is expected to bring positive impacts to the communities within the project area, as presented in CM 1.1. Thus, the project provides overall net positive community benefits.

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Gen Clim Comm Bio CM3. Required

CM3. COMMUNITY IMPACT MONITORING

CM3.1. COMMUNITY IMPACT MONITORING PLAN

A socio-economic survey will be conducted annually by a team composed of representatives from ACP and project partners (ANAM, MIDA and BDA). It will record information on land use, demography, occupation, types and sizes of agricultural operations, livelihood alternatives, etc (as mentioned above in CM1.1). Finally it will highlight the problems, opportunities and recommendations.

The monitoring plan will cover specifically data on the following indicators at community level and family level in the project zone:

• At the Community level

. Number of household with improved tenurial status . Improvements in physical infrastructure . Community health facilities and services . Skills upgrading for economic improvement . Number of local policies crafted for forest conservation . Status of implementation and results of local policies

• At the level of family participants and family non-participants (based on representative sample)

. Income from :

- cash incentives for successful establishment of trees, ensured growth of seedlings in reforestation - share in harvest of agronomic products

. Number of families benefitted and quantity of benefits accessed:

- with free seedlings received - with training accessed in techniques in forest establishment and management

. Positive changes in environmental values, attitudes and practices

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- Number of families making and selling charcoal with wood from pruning and thinning left on the field after the project operations in the area.

CM3.2. HIGH CONSERVATION VALUE PLAN

It is expected that the area within the project zone will improve the ecosystem services for communities, such as minimization of soil erosion and improvement of water quality and quantity.

In order to determine the impact of the forest cover establishment within the watershed and its impact to the communities in terms of biodiversity and water supply, different monitoring indicators have been identified, and their methods and frequencies specified (Table 24).

Table 24. High conservation values related to communities monitoring indicators. Indicator Monitoring set-up Frequency Recording of the climate data (rainfall, Hydrometeorological temperature, humidity, ground Continuous data recording temperature) Sprinkler method using 50 cm x 50 cm Twice a year in the rainy season and in Soil infiltration rate plots representing different soil the dry season conditions in the project site Marked water level indicators in Water extreme flow level Every prolonged rain creeks/rivers water table depth using water table Water table level Once a month during the dry season measure Two experimental adjacent plots, one subplot planted with tree seedlings; Surface soil erosion Twice a year other subplot unplanted; photo documentation comparison over time Monthly during the rainy Soil sedimentation rate Capture sediments in stream flow season and periodic checking during dry months Laboratory analysis of soil samples for Soil fertility Every year N,P,K, OM, and soil fauna

CM3.3. COMMUNITY IMPACT MONITORING IMPLEMENTATION

ACP is committed to developing a full community monitoring plan and will disseminate this on the internet within twelve months of validation of the project against the CCBA standards.

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Gen Clim Comm Bio B1. Required

BIODIVERSITY SECTION

B1. NET POSITIVE BIODIVERSITY IMPACTS

B1.1. BIODIVERSITY IMPACTS

One way to improve the conditions of the degraded lands is by establishing new forestry covers. Although it is clear that this cannot compensate for all the functions performed by the original natural forests, they can provide an appropriate habitat in order to maintain the flora and fauna populations without specific demands (Perla et al. 2002).

It is clear that forestry plantations alone do not contribute to the diversity of fauna, but they can help preserve the native forest and provide the potential for propagation of diverse and endangered species. This depends to a great extent, on the management of these ecosystems, thus it is important to preserve the existing fragments natural vegetation.

Although it is expected that the new forestry covers mitigate and decrease problems related to the inappropriate use of land, they could also act as a natural barrier, reducing the pressure on the relatively few native forests (relicts) still in existence in the project area. They are still highly valuable from the biodiversity point of view, and include endangered flora and fauna species.

Since fauna is moving within the ecosystem, it is forced to cross different types of vegetation cover and pass through or skirt areas covered with vegetation such as pasture or crops. Generally, human intervention has led to the fragmentation of natural ecosystems, forcing fauna to move because of their need to find a suitable habitat to settle and travel through different types of coverage in search of such habitats.

The project implementation will protect the endangered species reported in the different studies on the areas surrounding the project. It is expected that the forestry covers under the project will provide connectivity and, at the same time act as a barrier to prevent the expansion of the agricultural frontier, which causes the deforestation of natural forests. Additionally, the project will favor different communities of fauna which could make better use of the tree cover area, and allow the development of the understory, in comparison with areas occupied by pastures or crops with not much floral heterogeneity.

B1.2. IMPACT ON HIGH CONSERVATION VALUES

The project is designed to enhance and restore the forest cover within the project area, consequently it is expected that the project improve the biodiversity and the water supply.

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B1.3. SPECIES USED BY THE PROJECT

The chosen species for the project are: Tectona grandis (teak), Tabebuia guuyacan (Guayacan), Anacardium excelsum (espave), Terminalia amazonia (amarillo), Dalbergia retusa (cocobolo), Enterolobium cyclocarpum (corotú), Copuifera aromática (cabimo), Carapa guianensis (Bateo), Plalymiscium pinnatvm (quira), Hymenaea courbaril (algarrobo), Theobroma cacao (cacao) and other fruit species.

Teak is the only non-native species planted in the project area. According to the history of teak in Panama, it is a specie that easily adapts to the climatic and physical conditions of the project area. It is used mainly to increase the project sponsors’ returns on investment and adds financial stability to the entire project, as teak holds a high value on the international timber market. There are no foreseen negative impacts in the use of this species.

The other native species were selected according to its availability and abundance of seedlings within the project zone. Additionally, these species are fast-growing pioneering trees, soil- binders, and fruiting trees that will attract frugivore wildlife species to assist in seed dispersal. These tree species could provide enough shade to suppress grasses and serve as ‘nurse trees’ to protect additional, slower-growing native seedlings. As project progresses and more indigenous species seedlings are raised, mortalities of planted seedlings will be replaced by seedlings of other (shade tolerant) indigenous species to promote diversification.

The project will use no known invasive species.

B1.4. EXOTIC SPECIES IN THE PROJECT AREA

Teak is the only non-native species planted in the project area. Teak is native to Southeast Asia (India, Myanmar, Thailand and adapted in Java); however, it has become established in the tropical areas of Asia, Africa, Latin America and the Caribbean (Costa Rica, Colombia, Ecuador, El Salvador, Puerto Rico, Panama, Trinidad and Tobago and Venezuela) since the middle of last century.

The most important markets for teak are the United States, Europe, Japan and India, where the wood is used for the construction of houses in extreme climatic conditions, luxury furniture, exterior furniture, exterior surface cover, yacht interiors, etc.

Given the growing ecological pressure, many industrialized nations have limited tropical wood imports to those extracted from sustainable sources. Therefore, due to the rapid degradation of natural forests and the increasingly responsible legislation in industrialized countries, tropical wood availability has diminished, but demand has not and prices are still rising.

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This project activity intends to supply a high-demand international market for wood products, with well managed and sustainable teak plantations.

There are no foreseen negative impacts in the use of this species, as it was mentioned before, additionally, the project has areas of native species and the project will determine which areas are best for teak plantation and which for zones are better for the native species. This can guarantee the returns maximization due to the correct specie assignation to the site conditions. A correct arrangement with teak and native species can add financial and environmental stability to the entire project, more than a teak or natives only.

B1.5. GENETICALLY MODIFIED ORGANISMS

The project will not use any genetically modified species in its operations.

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Gen Clim Comm Bio B2. Required

B2. OFFSITE BIODIVERSITY IMPACTS

B2.1. POTENTIAL NEGATIVE OFFSITE BIODIVERSITY IMPACTS

The only identified potential negative offsite biodiversity impact of the project arises from the collection of seeds from forests located in the zone.

In order to establish native species, it is necessary collect seeds from natural forest to augment seedling production in the project nurseries. If not done properly by the community collectors, the negative effect of collecting seeds would result to reducing available in situ reproductions that may delay or hinder the capacity of these forest sources to naturally regenerate themselves.

B2.2. MITIGATION OF POTENTIAL NEGATIVE OFFSITE BIODIVERSITY IMPACTS

In order to mitigate the negative impact of seeds collection from natural forest, seeds collectors will be trained on the proper collection methods, identify areas that may be collected in secondary forest were observed to have abundant seeds.

B2.3. EVALUATION OF POTENTIAL NEGATIVE OFFSITE BIODIVERSITY IMPACTS

It is expected that the project generate net positive impact to biodiversity.

With the project, using non-invasive native species and teak for reforestation, the project will provide connectivity and, at the same time act as a barrier to prevent the expansion of the agricultural frontier, which causes the deforestation of natural forests. Additionally, the project will favor different communities of fauna which could make better use of the tree cover area, and allow the development of the understory, in comparison with areas occupied by pastures or crops with not much floral heterogeneity.

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Gen Clim Comm Bio B3. Required

B3. NET POSITIVE BIODIVERSITY IMPACTS

B3.1. BIODIVERSITY IMPACT MONITORING PLAN

It is expected that the project will enhance the native biodiversity through the creation and/or enhancement of forested habitats, which will over time increase the numbers and richness of both plant and animal species relative to the current condition in the project area.

A biodiversity monitoring system will be implemented in the project. The monitoring system aimed to identify trends of biodiversity at a given time. It involves simple standardized methods (such as field diaries, transect surveys, photo documentation) in monitoring the trends in population of indicator/priority species and land uses.

For plants, transect sites will be identified which will be monitored annually to document floristic changes. Habitat conditions will be monitored by fixed-point photography. This method will allow us to track changes in vegetation cover by taking photos in several locations within the project area at a fixed point at the onset of the project and every year thereafter. Land- cover map will be produced from remote sensing data every five years to monitor changes in habitat boundaries.

Fauna monitoring will be concentrated on important indicators of biodiversity and their habits so that it makes practically measurable using the least amount of equipment and effort.

The following table presents the monitoring indicators for biodiversity (Table 25).

Table 25. Indicators and methods to be used in the monitoring biodiversity impacts of the project Indicator Data Set Method Remarks Change in habitat type Remote sensing data/ Can show expansion and Manual methods using boundaries/ Change in vegetation maps and retreat of habitats. Shows overlay maps, or GIS total area of a particular monitored on the 5 years whether habitat is being where feasible and fixed habitat type throughout the gained or lost point photography duration of the project over the monitoring area. Numbers, presence or Indicates overall change in Change in number and absence. Sampling will be species population size Transect surveys composition of species done every year composition per habitat type Change in abundance Can indicate changes and distribution of Numbers, presence or in species range due to keystone/indicator/and absence. Sampling will be Transect surveys changes in environmental other species of special done every year factors interest (ecological processes)

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B3.2. BIODIVERSITY IMPACT MONITORING EFFECTIVENESS

Monitoring of threatened flora and fauna will be conducted annually to quantify and monitor the trend or number of threatened, endemic and globally threatened endemic species documented within the project zone. The same monitoring methods as described in B3.1. will be used. The survey of flora and fauna will be conducted once a year.

B3.3. BIODIVERSITY IMPACT MONITORING IMPLEMENTATION

ACP is committed to developing a full biodiversity monitoring plan and will disseminate this on the internet within twelve months of validation of the project against the CCBA standards.

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Sustainable Forest Cover Establishment Project

Gen Clim Comm Bio Gold GL3. Optional

GOLD LEVEL SECTION

GL3. EXCEPTIONAL BIODIVERSITY BENEFITS

GL3.1 DEMONSTRATE THE SITE’S VULNERABILIT

The PCW, in which the project zone is located, has been identified as a key biodiversity area.

The PCW is a hydrologically complex, ecologically diverse managed natural-artificial managed water resource system composed of many subbasins, rivers, and dammed lakes extending across both sides of the Panama Canal.

At present, forest preservation is arguably the most important water resources management issue for the PCW because deforestation causes enhanced soil erosion and reservoir sedimentation and also strongly affects the timing of the runoff. Overall, the challenge for the immediate future is to develop a consistent land management to ensure that the biodiversity and water resources will continue through the time.

The ecosystems within the PCW are of the most diverse anywhere around the world (Myers et al. 2000; Condit et al. 2001; Ibanez et al. 2001). The long-term maintenance and sustainability of this biodiversity depends on the preservation of the tropical forest cover. Currently forest cover reach to approximately 1,700 km2 of the watershed and contains pristine, old-growth tropical forest in national parks and nature monuments. Nevertheless, other long area that reaches to approximately 1,200 km2 is cover by agricultural, pasture, grasslands, and shrub lands. Due to the poor soil quality, it is probably that these areas continue as no-forest, that is to say, in a steady state.

One of the most important issues across the PCW at present is ongoing deforestation of primary tropical rain forest (Ibáñez et al., 2001). In many of the more rural parts of the basin, as well within the national parks, deforestation is undertaken to clear land for agriculture. Typically crops are planted for only few years on such cleared land parcels because of the low fertility of the soil, which leads to further cutting of forest in a repeated cycle of deforestation. Such land practice leads to lose of biodiversity, erosion, landslides, sediment transport downstream by rivers, and ultimately reservoir siltation (Wadsworth 1974; Nichols et al. 2005).

According to the model developed by Dale et al. (2003) to project land-cover dynamics in the PCW that assumes current land-cover trends will continue into the future. The rules include enforcement of environmental protection in the parks or other protected areas over the next 20 years. The projections map patterns of deforestation and reforestation based on current 116 Carrera 43A#1-50. San Fernando Plaza – Torre 4, oficina 315. Tel: +57.4.3260584 www.mgminnova.com

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land-cover patterns, distance from permanent roads (includes the establishment of the Trans- Isthmian highway between Panama City and Colón) and population centers, population growth, and past land use trends. Some factors that can exert pressure on the environment are not part of the current model (e.g., economic and technology changes).

The projections result in greatest land-cover changes near the new highway over the next 20 years (Figure 13). It is expected the increase in urban areas and in pasture, agriculture, or scrub lands. The forest area gradually declines. Most of the land-cover change occurs where the majority of the roads and communities are located (Heckadon-Moreno 2005).

Figure 13. Major land cover categories change scenario, including Trans-Isthmian highway.

Of the total number of species reported in the project zone, 20 are included in the lists of species in need of protection (Table 15). Four (4) endemic species were identified, 8 in the ANAM lists, 4 in the IUCN Red List, and 4 in the CITES appendixes. Although the landscape is dominated by pasture land and shrubs, threatened and protected species are found in the forest patch or fragments.

It is expected that the establishment of forest cover within the watershed help to mitigate the deforestation problem providing new appropriate habitat in order to maintain the flora and fauna populations. Additionally, they could act as a natural barrier, reducing the pressure on the native forests in the project zone. They are still highly valuable from the biodiversity and water supply point of view, and include endangered flora and fauna species.

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GL3.2 DEMONSTRATE THE SITE’S IRREPLACEABILITY

The canal sits in the center of one of the world’s most biologically diverse areas (Myers et al. 2000): Southern Central America has more forest bird species than any other region in the world, except Amazonia and the northern and central Andes, each of which is vastly larger than southern Central America (Stotz et al. 1996); and Panama has as many plant species per 10,000 km2 as any region in the world, more than Amazonia or the Malay Peninsula (Barthlott et al. 1996). Forests are crucial for protecting the water supply of the Panama Canal and for maintaining the plant and animal communities.

The most striking feature of the tree communities around the Panama Canal is how variable they are in species composition. Except for sites within 1–3 km of each other, no two forests are similar in terms of their dominant tree species (Ibáñez et al. 1999). High turnover is illustrated by data from 44 tree inventory plots established throughout the watershed (Condit et al. 2001). In 34 tree inventories in the canal corridor, covering over 90 ha of forest, 561 species were recorded; in just 10 plots in the wet forests, there were 611 species, 422 of which were not recorded in the canal corridor. This abrupt change in species composition—high beta diversity—is why Panama is so rich in total species. The Barthlott et al. (1996) survey reports that Panama has more than 5000 plant species per 10,000 km2. Many tree species are still being discovered: of the 983 species we tallied in plots, over 200 had not previously been recorded in the watershed, and 19 are newly recorded for Panama (Condit 2001). It is estimated that the canal corridor has 850–1000 species of trees and shrubs, with 24% to 28% restricted to the wetter section near the Atlantic, 12% to 16% restricted to the drier section near Panama City, and 30% to 45% widespread from coast to coast (Condit 2001). Many species are exceedingly rare. Of the tree species tallied in plots, 376 appeared in only a single hectare, and 224 were represented by just one individual.

In general, the forests of the canal watershed have few species that are narrow endemics, which is a plus in terms of conservation. On the other hand, the forests have high beta diversity and many locally rare species (Condit et al. 2001).

In contrast to botanical checklists, the bird list is near complete: 650 bird species are known from the PCW (Engelman et al. 1995), representing two-thirds of the Panamanian avifauna. Some birds of the region are globally rare. The canal watershed overlaps three areas of bird endemism, defined as regions where birds with global ranges less than 50,000 km2 are found (Stattersfield et al. 1998). Eleven of the 226 forest bird species in the watershed (4.9%) have restricted ranges by this definition (Stattersfield et al. 1998). One of the species, Xenornis setifrons, the speckled antshrike, is globally threatened (Stattersfield et al. 1998). It is known only from the eastern edge of the watershed to the Colombian border, from only a few sites, and it is never common.

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Amphibians are less diverse than trees or birds. Ninety - three amphibian species - 52% of the amphibian fauna of Panama- have been recorded within the watershed (Ibáñez et al. 1994, 1995, 1996, 1999); these amphibians comprise 86 frog, five salamander, and two cecilian species. Five of the amphibians have restricted ranges to the watershed. Atelopus limosus, A. zeteki, and an undescribed species of Atelopus are endemic to Panama. There are also records from the watershed of two additional species presently considered to be Panamanian endemics, Bolitoglossa schizodactyla and Rana sp. (pipiens complex).

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Sustainable Forest Cover Establishment Project

CEREB-UP, 2003.Evaluación Ambiental del Proyecto de Profundización del Cauce de Navegación del Canal de Panamá.

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Dale, V.H., Brown, S., Calderon, M.O., Montoya, A.S., and Martinez, R.E. 2003. Estimating baseline carbon emissions for the Eastern Panama Canal Watershed: Mitigation and Adaptation Strategies for Global Change, 8: 323-348.

Delaney, M., Brown, S., Lugo, A.E., Torres-Lezama, A. and Bello Quintero, N. 1998. The quantity and turnover of dead wood in permanent forest plots in six life zones of Venezuela. Biotropica 30, 2–11.

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FACINET/CCML-ACP. 2004. Colecta y análisis de muestras biológicas para la campaña de verano de los lagos Gatún y Miraflores. Informe Final. 411 pg.

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World Resources Institute. 2006. Panama. Biodiversity and Protected Areas. EarthTrends.

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ANNEX

ANNEX 1. ENVIRONMENTAL ECONOMIC INCENTIVES PROGRAM BROCHURE

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ANNEX 2. USUFRUCT CONTRACT

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131 Carrera 43A#1-50. San Fernando Plaza – Torre 4, oficina 315. Tel: +57.4.3260584 www.mgminnova.com

Panama Canal Authority

Sustainable Forest Cover Establishment Project

132 Carrera 43A#1-50. San Fernando Plaza – Torre 4, oficina 315. Tel: +57.4.3260584 www.mgminnova.com

Panama Canal Authority

Sustainable Forest Cover Establishment Project

133 Carrera 43A#1-50. San Fernando Plaza – Torre 4, oficina 315. Tel: +57.4.3260584 www.mgminnova.com

Panama Canal Authority

Sustainable Forest Cover Establishment Project

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ANNEX 3. FAMILIES BENEFITED BY THE PROGRAM DURING 2009 AND 2010

Subwatersheet Community Beneficiary Agroforestry Silvo-pastoral Year Anacleto El Chileno Alveo/Jaime Basilio Herrera 2.27 2009 Martinez El Chileno Domingo Herrera 2.1 2009 El Chileno Domingo Herrera 1 2009 El Chileno Emigdio Medina Gómez 1.56 2009 El Chileno Elvia Gómez de Medina 2.14 2009 El Chileno Esteban Alveo_1 0.38 2009 El Chileno Esteban Alveo_2 0.83 2009 El Chileno Hector Gómez 2.12 2009 El Chileno Hector Gómez 1.03 2009 El Chileno Ignasio Alonzo Martínez 1.87 2009 El Chileno José de la Cruz Alonso 1.24 2009 El Chileno Juan Herrera Troya 2.83 2009 El Chileno Julian Herrera Ovalle 2.36 2009 El Chileno Julio Herrera Domingo 2.45 2009 Leovigildo González El Chileno 1.01 2009 Zamora El Chileno Melido Carmona 3.43 2009 El Chileno Nivia Bellido Gómez 1.31 2009 Rafael Barragan Ciri, Trinidad El Chileno 15.48 2009 Fernández_1 Román Gómez El Chileno 2.34 2009 Sánchez/selia herrera El Chileno Saúl Medina 2.71 2009 El Chileno Rito Rodríguez 2.47 2009 El Chileno Sebastian Carmona Cedeño 4.5 2009 Pedro Pascual Herrera El Chileno 3.03 2009 Bellido El Chileno Vernal Herrera Ovalle 1.07 2009 Ciri Grande Alcibiades González 5.76 2009 Ciri Grande Alfonso Martínez Jaramillo 1 2009 Ciri Grande Alfonso Martínez Jaramillo 2.05 2009 Ciri Grande Ambrosio Rodríguez 4.8 2009 Ciri Grande Anastacio Reyes 2.5 2009 Ciri Grande Cándido Morán Ovalles 1.02 2009 Ciri Grande Cirilo Benítez Martínez 2.94 2009 Ciri Grande Cirilo Benítez Martínez 4.6 2009 Ciri Grande Domingo Morán Rodríguez 9.6 2009 Donaciano Ovalle Ciri Grande 0.8 2009 Rodríguez Ciri Grande Donaciano Ovalle 2.34 2009

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Subwatersheet Community Beneficiary Agroforestry Silvo-pastoral Year Rodríguez Ciri Grande Edwardo Gutiérrez 2.37 2009 Ciri Grande Faustina Ovalle de Campos 1 2009 Ciri Grande Felipa O. Sánchez Palacio 1.49 2009 Ciri Grande Gregorio Gil Mendoza 8.38 2009 Ciri Grande Gregorio Gil Mendoza 2.13 2.31 2009 Ciri Grande Gregorio Gil Mendoza 1.14 2009 Ciri Grande Issac Jiménez 1 2009 Ciri Grande Jerónimo Sánchez 5 2009 Ciri Grande Jose Santana 1 2009 Ciri Grande Leonel Benítez 0.74 2009 Ciri Grande Marcial Agraje Sánchez 2 2009 Ciri Grande María Rodríguez Gil 1.5 2009 Ciri Grande Merenciana Rodríguez Gil 0.73 2009 Prudencio Sánchez Ciri Grande 0.84 0 2009 Rodríguez Ciri Grande Ángel Mariscal 5 2010 Bacilio Antonio Rodríguez Ciri Grande 1.05 2010 Reyes Ciri Grande Biviano Reyes Rodríguez 1 2010 Ciri Grande Eriberto Sánchez Martínez 4.96 2010 Ciri Grande Eudocio Rodríguez 1.13 2010 Ciri Grande José Hito Martínez Rivera 1 2010 Ciri Grande José Isidro González Gil 2.49 2010 Juan Bautiista Rodríguez Ciri Grande 2.4 2010 Rivera Ciri Grande Juan Martínez Jaramillo 1 2010 Ciri Grande Salome Agrajes 1 2010 Ciri Grande Felicito Ovalle 1 2010 Bajo Bonito Alexis Pérez 1.95 2009 Bajo Bonito Andrés Avelino Rodríguez 1.37 2009 Aura Ester Zamora Bajo Bonito 1.1 2009 Rodríguez Bajo Bonito Catalino Sanchez 1.77 2009 Bajo Bonito Elvis Rux 1.01 2009 Facundo Rodríguez Bajo Bonito 1.86 2009 Martínez Bajo Bonito Félix Chiru Pérez 0.94 2009 Bajo Bonito Félix Morán Rodríguez 1.73 2009 Bajo Bonito Fulgencio Martin Sánchez 1.17 2009 Bajo Bonito Gusmán Martínez 1.88 2009 Bajo Bonito Horeste Zamora Rodríguez 1.02 2009 Bajo Bonito Jorge Benítez 1.07 2009 Bajo Bonito José Hilario Sánchez 2.01 2009

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Subwatersheet Community Beneficiary Agroforestry Silvo-pastoral Year Juan Manuel Zamora Bajo Bonito 1.75 2009 Rodríguez Justo Samuel Sánchez Bajo Bonito 1.18 2009 Domínguez Bajo Bonito Martin Morán Chirú 9.17 2009 Bajo Bonito Maximino Martínez 0.93 2009 Nicacio Rodríguez Bajo Bonito 1.08 2009 Rodríguez Bajo Bonito Roberto Rodríguez 2.14 2009 Bajo Bonito Ruben Herrera zamora 0.87 2009 Bajo Bonito Santiago Chirú 1.06 2009 Bajo Bonito Segunda Morán de Sánchez 3.5 2009 Silviano Cardenas Bajo bonito 1.48 2009 Rodríguez Bajo Bonito Félix Morán 3 2010 Bajo Bonito Jaime Delgado Almanza 6 2010 Bajo Bonito Martin Morán Chirú 4.42 2010 Maráa Lupita Bajo Bonito 5 2010 Zamora/Eladio Aura Ester Zamora Bajo Bonito 5.57 2010 Rodríguez Bajo Bonito Saturnino Magallón 1 2010 Francisco Magallón/ Bajo Bonito 1 2010 Alcibiades Bajo Bonito Roberto Rodríguez 3 2010 Bajo Bonito Marta Yaneth Morán 1 2010 Hierba Buena Catalino Sánchez 2 2009 Hierba Buena César Núñez Benítez 3.15 2009 Eleuterio Magallón Hierba Buena 4.01 2009 Domínguez Hierba Buena Felícito Zamora Rodríguez 1 2009 Hierba Buena Lorenzo Rivera 1.19 2009 Hierba Buena Norberto Domínguez 0.56 2009 Hierba Buena Norberto Domínguez 2.16 2009 Hierba Buena Rogelio Rivera Medina 1.29 2009 Hierba Buena Rolando del C. Cedeño 2.79 2009 Eleuterio Magallón Hierba Buena 5 2010 Domínguez Peñas Blancas Benito Chirú Rivera 1.71 2009 Peñas Blancas Benito Chirú Rivera 3.52 2009 Peñas Blancas Carmelo Sánchez 1.27 2009 Peñas Blancas Eligio Gil Sánchez 6.19 2009 Peñas Blancas Eugenia Rivera Benítez 1.11 2009 Peñas Blancas Eugenia Rivera Benítez 1.2 2009

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Subwatersheet Community Beneficiary Agroforestry Silvo-pastoral Year Francisco Magallón Peñas Blancas 2.58 2009 Rodríguez Peñas Blancas Gabriela Morán Rivera 1.02 2009 Jose De Los Santos Peñas Blancas 1.12 2009 Mendoza Peñas Blancas Alicia Garcia Gómez 1.01 2009 Peñas Blancas Martin Magallón Morán 2.17 2009 Peñas Blancas Martin Magallón Rodriguez 0.86 2009 Peñas Blancas Matías Móran Martínez 1.24 2009 Peñas Blancas Matías Móran Martínez 1.48 2009 Maximo Benítez/Claudia Peñas Blancas 0.36 2009 Morán Peñas Blancas Pastor Martínez 1 2010 Vicente Martínez/Enrique Peñas Blancas 1.56 2010 Martínez Peñas Blancas Santos Benítez Rivera 1.5 2010 Peñas Blancas Porfirio Segundo 1 2010 Peñas Blancas Venancio Morán 4.32 2010 Peñas Blancas Santos Benítez Rivera 7.76 2010 Peñas Blancas Gilberto Enrique Batista 2.79 2010 La Tambora Silvia Magallón Ovalle 5 2009 La Tambora Vicente Martínez Chirú 1.9 2009 La Tambora Jose Ramón Zamora Morán 1.12 2009 El Nance Victoriano Rodríguez 2 2010 El Nance Adriel Reyes Rodríguez 1.8 0 2010 Cornelio Benítez/Nartenia El Nance 2 2010 Cibala El Nance Bernardo Sánchez Martínez 2.5 2010 Bonga Abajo Ismael Issac Vargas 3.5 2009 Bonga Abajo Granja del Patronato 0.96 2009 Bonga Abajo Boris Martínez 1 2010 Bonga Abajo Cristobal Chirú 1.31 2010 Bonga Abajo Efrain Vega 2 2010 Bonga Abajo Efrain Vega 1 2010 Bonga Abajo Elvira Martínez 1.47 2010

Bonga Arriba Confesor Martínez 0.79 2009 Bonga Arriba Jose Hubaldino Martínez 1.3 2009 Bonga Arriba Eunice Argelis Díaz Ortiz 1 2010 Bonga Arriba Gregorio Lorenzo Morán 1 2010 Bonga Arriba Herminio Rodríguez Alonzo 1.25 2010 Bonga Arriba Juan Benítez 3.88 2010 Bonga Arriba Manuel Martínez 2 2010 Bonga Arriba Miguel González 5 5 2010

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Subwatersheet Community Beneficiary Agroforestry Silvo-pastoral Year Milquiades Martínez Bonga Arriba 2.5 2010 Benítez Bonga Arriba Osvaldo Martínez 8.08 2010 Bonga Arriba Pascual Adriel Vega 3 2010 Bonga Arriba Adriano Martínez 4.6 2010 Bonga Arriba Erik Domíngez 4 3.5 2010 Bonga Arriba Erik Domíngez 10.28 2010 Bonga Arriba Erik Domíngez 3.05 2010 Bonga Arriba Eugenia Grages 2 2010

Bonga Centro Agapito Goméz 1.73 2009 Bonga Centro Emiliano Martínez 1 2009 Bonga Centro Gustavo E. Soto 0.82 2009 Bonga Centro María Angela Gómez de Chirú 0.96 2009 Granja Patronato Bonga Bonga Centro 1.46 2009 Centro Bonga Centro Adriano Martínez 0.64 2009 Bonga Centro Astenia Cárdenas 1.53 2009 Bonga Centro Eligio Martínez 2.47 2009 Bonga Centro Angelica Cortéz 3.00 2010 Bonga Centro Ruben Alonzo 1 2010 Bonga Centro Teresin Reina 2 2010 Bonga Centro Ubaldino Sánchez 1 2010 Ciricito Alcibiades Alexis Batista 4 2010 Ciricito Alcibiades Alexis Batista 6.5 2010 Ciricito Ana Gil 0.43 2010 Ciricito Magdaleno Medina 0.91 2010 Ciricito Fulgencia Marcela Cárdenas 1 2010 Ciricito Margarito Rodríguez 1 3.68 2010 Ciricito Claudino Rivera Medina 1 2010 Ciricito Venancio Medina 1 2010 Ciricito Juan Martínez 2 2010 Ciricito Geronima Rodríguez 1 2010 Ciricito Abajo Granja Ciricito Patronato 2.81 2009 Ciricito Abajo Carlos Muñoz 1 2010 Ciricito Abajo Taurino Delgado 1 2010 Ciricito Abajo Secuendino Velásquez 1 2010 Ciricito Abajo Benicio Rodríguez 2.09 2010 Ciricito Abajo Justo Morán 1 2010 Ciricito Abajo Andrés Rodríguez 1 2010 Ciricito Abajo Elias Medina 1 2010 Ciricito Abajo Jose De Los Angeles Rodríguez 2 5 2010 Ciricito Abajo Jose Morán 3 2010

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Subwatersheet Community Beneficiary Agroforestry Silvo-pastoral Year Ciricito Abajo Juan De Gracia 1 5 2010 Ciricito Arriba Margarito Rodríguez 2 2010 Ciricito Arriba Rodolfo Delgado 2 2010 Ciricito Arriba Juan Medina 1 2010 Ciricito Arriba Teodoro Medina 1 2010 Ciricito Arriba Carlos Arin Pérez Velasco 2 4.96 2010 Ciricito Arriba Carlos Arin Pérez Velasco 6.81 2010 Ciricito Arriba Luis Solano 1 2010 Ciricito Arriba Luis Solano 4.5 2010 Ciricito Arriba Natividad Sánchez 1 2010 Gasparillal Abilio Ismael Vargas Alonzo 1 2010 Gasparillal Alcibiades Sánchez 10.77 2010 Gasparillal Ángel Mario Vargas 1 2010 Gasparillal Isaac Sánchez 1.64 2010 Gasparillal Jose Hernán Vargas 0.84 2010 Gasparillal Maximo Nuñez 3.24 2010 Gasparillal Willian Alonzo 1 2010 Gasparillal Jesus Sánchez 2 2010 Gasparillal Giorgios Malamas Georgeolius 6 2010 La Conga Alberto Navarro Nuñez 5.19 2010 La Conga Magdaleno Velásquez 1 2010 La Conga Gerardina Velásquez 4.32 2010 La Florida Marcelino Herrera 10.57 2010 La Florida Octaciano Alonzo 0.74 2010 Las Gaitas Tiburcio Gómez Morán 0.93 2009 Las Gaitas Minerva Ruíz 0.37 2009 Las Gaitas Maria Luisa Pérez de Soto 1 2009 Las Gaitas Ricardo Martínez 0.71 2009 Las Gaitas Francisco Antonio Pérez 2 2009 Las Gaitas Granja Las Gaitas Patronato 2.09 2009 Las Gaitas Tiburcio Gómez Morán 0.6 2009 Las Gaitas Agapito Gómez Alonzo 1 2010 Las Gaitas Edwin Rodríguez 1 2010 Las Gaitas Eustacio Reyes 4.68 2010 Las Gaitas Fernandino Pérez Lopez 0.8 2010 Las Gaitas Gerardo Ariel Gómez 1 2010 Las Gaitas Gerardo Gómez 1 2010 Las Gaitas Iracema Valdez 0.76 2010 Las Gaitas Isidora Gil 1 2010 Las Gaitas Isrrael Rodríguez 0.97 2010 Las Gaitas Itzet Martínez Gómez 0.7 2010 Las Gaita José Chirú 1 2010 Las Gaita José Ramiro Gómez 1 2010

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Panama Canal Authority

Sustainable Forest Cover Establishment Project

Subwatersheet Community Beneficiary Agroforestry Silvo-pastoral Year Las Gaitas Juan Carlos Morán Gómez 1 2010 Las Gaitas Juan Gómez Morán 1 2010 Las Gaitas Lily Rivera Gómez 1 2010 Las Gaitas Libertina Gómez 1 2010 Las Gaitas Luis Solano 1 2010 Las Gaitas Luis Solano 4.5 2010 Las Gaitas Lorenzo Gil 1 2010 Las Gaitas Marcela Valdez 0.5 2010 Las Gaitas Minerva Ruíz 2.37 2010 Las Gaitas Natividad Martínez 2 2010 Las Gaitas Natividad Martínez 1 2010 Las Gaitas Nedelka Chirú 1 2010 Las Gaitas Nelsa Omaira Gómez Chirú 1 2010 Las Gaitas Otilio y Jaime Martínez 1 2010 Las Gaitas Tiburcio Gómez Morán 4.71 2010 Nueva Arenosa Sixto De La Rosa 0 15.45 2010 Cañaza Marisol Rodríguez 11 2010 Altamira Blaviano Madina 0.75 2009 Altamira Casildo González Espinoza 0.82 2009 Altamira Elias Medina 4.94 2009 Altamira Eliseo Medina 2.1 2009 Altamira Gilberto Medina Rodríguez 1.16 2009 Altamira Gilberto Medina Rodríguez 0.98 2009 Humberto Ascanio Medina Altamira 1.09 2009 Rodríguez Luis Ricardo Alberto Altamira 1.06 2009 Medina Altamira Manuel E. Medina 1.18 2009 Altamira Miguel Ángel Navarro 1.14 2009 Altamira Pedro Díaz Urriola 1.9 2009 Altamira Rafael Medina 2 2009 Altamira Rafael Medina 10.27 2010 Altamira Elias Medina 8.97 2010 Bienvenida Herrera reyes Cacao 3.17 2009 (lauro) Cacao Dulcidio Lorenzo Rivera 1 2009 Cacao Francisco Javier Rivera 2.23 2009 Cacao Francisco Rivera 1.02 2009 Cacao Héctor Rivera 0.54 2009 Cacao Héctor Rivera 0.44 2009 Cacao Ismael Rivera 0.73 2009 Cacao Loreto Tamayo 1 2009 Cacao Miguel Angel Herrera 2.74 2009 Cacao Samuel A. Medina/ Usiel 1 2009

141 Carrera 43A#1-50. San Fernando Plaza – Torre 4, oficina 315. Tel: +57.4.3260584 www.mgminnova.com

Panama Canal Authority

Sustainable Forest Cover Establishment Project

Subwatersheet Community Beneficiary Agroforestry Silvo-pastoral Year castillo Cacao Valentin Martinez 1.12 2009 Cacao Arquimedez Martínez 1.73 2010 Cacao Cayetano Samaniego 1 2010 Cacao Expedita Martínez 1 2010 Cacao Faustino Rivera 1 2010 El Jagua Brigida Martínez Rodríguez 1 2009 Cristina Sánchez de El Jagua 2009 Miranda Concepción Samaniego El Jagua 1.42 2009 Soto El Jagua Cristino Martínez 1.5 2009 El Jagua Felicita Martínez 1 2009 El Jagua Juan Mauricio Martínez 1.07 2009 El Jagua Mauricio Martínez 1.03 2009 El Jagua Rufina Martínez 1.31 2009 El Jagua Guadalupe Meneses 2 2010 Las tinajas Antonio Rivera Rodríguez 1.5 2009 Las tinajas Justino Rivera 0.99 2009 Las Tinajas Marcelino Herrera 7.89 2010 Las Tinajas Adriano Rivera Rodríguez 1.2 2010 Las Tinajas Angel Mariscal 1.05 0 2010 Teria Eleuteria Rodríguez 1.29 2009 Teria Bernardino Gil 1 2009 Teria Basilio Gil 2.1 2009 Teria Teddy Elie Armuelles 1.08 2009 Teria Adriliano Alabarca 1.95 2009 Teria Pedro Rodríguez 1.06 2009 Teria Emigdio González 1.35 2009 Teria Jose Del Concepcíon 1.01 2009 Teria Jose Pedro Alabarca 0.91 2009 Teria Bernardino Gil 3.58 2010 Teria Francisco González 3.22 2010 Teria Cipriano Rodríguez 1 2010 Teria Nicolasa Soto 2 2010 Teria Pedro Rodríguez Chirú 5.94 2010 El Cauchal Anibal Benítez Alonzo 1.01 2010 El Cauchal Jesus Ovalle 1.63 2010 Jose De Los Santos El Cauchal 0.77 2010 González El Cauchal Juan Benítez 1.13 2010 El Cauchal Maria E. Benítez 1.24 2010 El Cauchal Maria E. Benítez 0.88 2010

142 Carrera 43A#1-50. San Fernando Plaza – Torre 4, oficina 315. Tel: +57.4.3260584 www.mgminnova.com

Panama Canal Authority

Sustainable Forest Cover Establishment Project

Subwatersheet Community Beneficiary Agroforestry Silvo-pastoral Year El Cauchal Patrocinio Velasquez 1 2010 El Cauchal Perfecta Alveo 1 2010 El Cauchal Ramón Ovalle B. 0.74 2010 Arenal Justino Martínez 0.68 2010 Icobaldo Ariel Gómez Trinidad Arriba 2 2010 (antonio) Icobaldo Ariel Gómez Trinidad Arriba 1 2010 (antonio) Aguacate Dimas Herrera 1.21 2010 Aguacate Eduvigis Montenegro 0.39 2010 Aguacate Erasmo Montenegro 1.25 2010 Aguacate Eugenio Gómez 1.2 2010 Aguacate Hermenegildo Montenegro 0.97 2010 Iglesia Evangelica/José Aguacate 1.02 2010 López Aguacate Isrrael Montenegro 0.69 2010 Aguacate Maria Virgilia 1 2010 Aguacate Narciso Rodríguez 1.05 2010 Aguacate Catalino Rodríguez 1 2010 Aguacate Porfirio Gómez Reyes 1.24 2010 Aguacate Gregorio Perez 0.75 2010 Aguacate Mariano Herrera 0.5 2010 Las Negritas Adan Pimentel Amaya 4.8 2010 Las Negritas Agustin Soto Vargas 1 2010 Las Negritas Alejandro Rivera 3 2010 Las Negritas Alfonso Jaramillo 1 2010 Las Negritas Armando Rivera Ramos 2 2010 Las Negritas Betzaida Martínez 1.57 2010 Las Negritas Francisco Mariscal 1.01 2010 Las Negritas Jose Gil Vargas Chiru 1 2010 Las negritas Jose Rosario Rivera 2 2010 Las Negritas Liduvina Rivera 3 2010 Maria De La Cruz Rivera de Las Negritas 1 2010 Soto Las Negritas Natividad Medina Sánchez 1 2010 Las Negritas Pedro Martínez 0.81 2010 Las Negritas Santiago Soto 1 2010 Las Negritas Secundino Reyes 1 2010 Las Negritas Virgilio Benítez 1.42 2010 Las Negritas Teofilo Chirú 1 2010 Las Negritas Edilma Chirú 1 2010 Vista Alegre Adelaida Arias 2.5 2010 Vista Alegre Adrian Victor Vargas 2 2010 Vista Alegre Amadonio Arias 1 2010

143 Carrera 43A#1-50. San Fernando Plaza – Torre 4, oficina 315. Tel: +57.4.3260584 www.mgminnova.com

Panama Canal Authority

Sustainable Forest Cover Establishment Project

Subwatersheet Community Beneficiary Agroforestry Silvo-pastoral Year Vista Alegre Anito Arias (Alberto) 1 4.58 2010 Vista Alegre Apolinar Nuñez Ramos 1 3 2010 Vista Alegre Bartola Rodríguez Segundo 3 2010 Vista Alegre Benjamin Sánchez Guerra 7.81 2010 Vista Alegre Ceferino Magallon 1.12 2010 Vista Alegre Ceferino Magallon 1 2010 Vista Alegre Ceferino Magallon 4.04 2010 Vista Alegre Constantino Navarro 0.6 2010 Diomedes De La Rosa Vista Alegre 1.02 2010 Morán Vista Alegre Eliecer Noel Reyes Nuñez 1.44 2.44 2010 Vista Alegre Esteban Arquiñez 1.43 3 2010 Vista Alegre Gumercindo Rodríguez 1.03 2010 Vista Alegre Isabel Aria Rivera 2 5.12 2010 Vista Alegre Isabel Herrera Martínez 1 2010 Jose Alexander Segundo Vista Alegre 1 2010 Mendoza Jose Emilio Rodríguez Vista Alegre 1 2010 Reyes Vista Alegre Jose Isrrael Nuñez Aguilar 2 2010 Vista Alegre Jose Virgilio Sánchez 0.5 2010 Luciana Benítez de Vista Alegre 2.42 2010 Arquiñez Manuel Enrique Mariscal Vista Alegre 1 2010 Benítez Manuel Enrique Mariscal Vista Alegre 1 2010 Benítez Vista Alegre Marciano Rivera Vargas 0.76 2010 Vista Alegre Marcos Moreno 1.6 2010 Vista Alegre Margarito Segundo 0.5 2010 Vista Alegre Maria De La Rosa Mendoza 1 2010 Vista Alegre Noriel Rodríguez 0.67 2010 Vista Alegre Noriel Rodríguez 1.89 2010 Vista Alegre Ramón Gómez Núñez 1.14 2010 Vista Alegre Ramón Gómez Núñez 8.4 2010 Vista Alegre Sebastiana De León 1.14 2010 Ceverino Segundo Vista Alegre 2 2010 Mendoza Vista Alegre Victorina Arias 2010 Vista Alegre Gilberto Enrique Batista 1.5 2010 Virgilia Ester Rodríguez Vista Alegre 2.5 0 2010 Martínez Trinidad Las Minas Anel Mariscal 0.099 2010 Trinidad Las Minas Ángel Aubeca 0.75 2010

144 Carrera 43A#1-50. San Fernando Plaza – Torre 4, oficina 315. Tel: +57.4.3260584 www.mgminnova.com

Panama Canal Authority

Sustainable Forest Cover Establishment Project

Subwatersheet Community Beneficiary Agroforestry Silvo-pastoral Year Trinidad Las Minas Ariel Mariscal 0.73 2010 Trinidad Las Minas Aurelia Mendoza 1.07 2010 Trinidad Las Minas Benito Mariscal 0.158 2010 Trinidad Las Minas Benito Mariscal 0.123 2010 Trinidad Las Minas Benjamin Pérez 2 2010 Trinidad Las Minas Magdaleno Rodríguez 1 2010 Trinidad Las Minas Fabiola Galvez 2 2010 Trinidad Las Minas Fabiola Galvez 0.95 2010 Trinidad Las Minas Geremías Herrera 1 2010 Trinidad Las Minas José Abel Herrera 1.5 2010 Trinidad Las Minas José Abel Herrera 1.06 2010 Trinidad Las Minas José Abel Herrera 5 2010 Trinidad Las Minas José Ferrer Rodríguez 2.1 2010 Trinidad Las Minas Porfiria Núñez 0.7 2010 Trinidad Las Minas Rosa Ovalle 1 2010 Trinidad Ferrer/Mónico Trinidad Las Minas 1 5 2010 Ferrer El Nazareno Jose Abdiel Reyes Nuñez 1.04 2010 El Nazareno Leonor Reyes Rivera 1 2 2010 Limon-Raudales Cirilo Vargas 1 2010 Limon-Raudales Eulogio Rodríguez Alabarca 2 2010 Gertrudis Amana Morán Limon-Raudales 1 2010 Rodríguez Limon-Raudales Hipólito Pérez Soto 1 2010 Limon-Raudales José De La Cruz Ovalle 1 2010 Limon-Raudales Marta Elena Vargas 1 2010 Limon-Raudales Paulino Benítez Rodriguez 0.57 2010 Alto de Las Minas Paulino Urriola Bordones 1 2010 Los Raudales Anita Morán Rivera 1 2010 Los Raudales Faustino Cedeño 1 2010 Los Raudales Isabelina Rodríguez 1 2010 Los Raudales Maria De La Cruz Delgado 1 2010 Los Raudales Miguel Rivera 1 2010 Los Raudales Natividad Rodríguez 1 2010 Los Raudales Natividad Rodríguez 1 5 2010 El Peligro María De La Cruz 1.69 2009 El Peligro María De La Cruz 15.52 2009 La Colorada Andrea Barrio 4.36 2009 La Colorada Ascanio Castillo 10.88 2009 Hules, Tinajones La Colorada Cesario Dejuanes Mateo 24.8 2009 La Colorada José Bolivar 14.4 2009 La Colorada Andrea Barrio 2.09 2009 La Colorada José Bolivar 2.1 2009

145 Carrera 43A#1-50. San Fernando Plaza – Torre 4, oficina 315. Tel: +57.4.3260584 www.mgminnova.com

Panama Canal Authority

Sustainable Forest Cover Establishment Project

Subwatersheet Community Beneficiary Agroforestry Silvo-pastoral Year Cerro Cama Calixto Camargo 25.9 2009 Cerro Cama Calixto Camargo Vega 50.00 2010 Cerro Cama Felix Melendez 6.83 2010 Río Conguito Hilario Meléndez 4.06 2009 Río Conguito Abel ortega 10.23 2009 Río Conguito Hilario Meléndez 11.22 2009 La Arenosa Calixto Camargo 4.7 2009 Divisa Alejandro Medina 15 2009 Mendoza Alcibiades Ortega 1.00 30.00 2010 Nuevo Emperador. TRUE-LIGTH 17.00 2010 Cañito Luís Rangel 5.96 2010 Cañito Isaías Rangel Delgaldo 3.08 2010 Cañito Ricardo Sanjur 25.00 2010 Cañito Eduardo Abdel Rangel 8.55 2010 El Lirio Julían Ríos 15.16 2010 El Lirio Lelys Ureña De León 4.00 10.02 2010 El Lirio Azael Salazar y otros 8.00 2010 El Lirio Hernan Cano 3.00 2010 El Lirio Crecencio Rangel 10.50 2010 Tinajones Abajo INVERSIONES ELVICA 8.66 2010 Tinajones Abajo INVERSIONES ELVICA 10.00 8.90 2010 Tinajones Abajo AGROPECUARIA ELSY, S.A. 17.88 2010 Total 448 618.04 670.03

146 Carrera 43A#1-50. San Fernando Plaza – Torre 4, oficina 315. Tel: +57.4.3260584 www.mgminnova.com