BLUE ABADI BUSINESS PLAN

Protecting the planet's single greatest reservoir of marine life. F o r e v e r . The Bird's CONTENTS H e a d S e a s c a p e Initiative works to EXECUTIVE SUMMARY SUSTAINABILITY PLAN 04 18 protect one of our planet's BACKGROUND STRATEGY 1: EMPOWER m o s t 06 22 unique treasures VALUE PROPOSITION STRATEGY 2: SECURE 11 26

SEASCAPE INITIATIVE STRATEGY 3: CATALYZE 12 38

THE COALITION THE RISKS & THE STAKES 14 40

SEASCAPE PROGRESSION APPENDICES 15 44

IMPACT OF WORK REFERENCES & NOTES 16 49 EXECUTIVE SUMMARY

4 Named for 5 the bird- like shape Blue Abadi o f N e w A business plan for Seascape sustainability Guinea, the Bird's Head S e a s c a p e is located A little over a decade ago, an unprecedented coalition After more than a decade of work, it is now time to ensure i n We s t of partners began what has become one of the that those results are lasting and that we endow the local most ambitious and effective marine conservation Papuan communities, governments, and civil society P a p u a , programs in the world. Conservation International, with the capacity and financial resources they need to The Nature Conservancy, and WWF launched the carry forth the legacy of the Bird’s Head. Bird's Head Seascape Initiative in 2004, in recognition of the extraordinary value of the marine ecosystems To that end, the Bird's Head Seascape Coalition and the surrounding Indonesia's Province. West Papua Government have launched Blue Abadi, an initiative to ensure the sustainability of the Seascape. From the start, the goal was to conserve the Seascape's "Abadi" means forever in Bahasa Indonesia and it is unparalleled marine biodiversity in a way that through Blue Abadi that we aim to ensure that the value empowered local indigenous communities while of the Bird’s Head is protected forever. enhancing their food security and livelihoods. With local management and governance systems now With the generous support of the Walton Family in place, we are executing a transition, transferring Foundation and a network of over 70 donors, the Bird's responsibility for the management of the MPA Head Seascape Coalition, which has grown to include network and key Seascape functions to capable 22 international and local partners, has pushed the local co-management bodies and institutions, while boundaries of marine conservation. Together, we have simultaneously working to secure their financial boldly worked to demonstrate that community-driven sustainablity. A transition at this scale is unique and conservation can be successful on large scales. when successful will provide a global model for effective and enduring marine conservation. The results have been tremendous. As part of the initiative, local communities worked with the A key component of the plan is the creation of the Blue government to establish Indonesia's first effectively Abadi Fund, a $38 million endowment, to secure the managed network of Marine Protected Areas (MPAs), future of the Seascape. covering 3.6 million ha across 12 MPAs. The MPAs and local patrol teams that enforce them have successfully We welcome new partners and investors to join us as we reduced overfishing by outside poachers by 90%, work to permanently protect the single greatest reservoir leading to significant increases in fish biomass, catch by of tropical marine species on the planet while significantly local fishers, and local food security. Marine tourism is improving the lives of indigenous Papuan communities. booming and is now, along with sustainable fisheries, the foundation of the local economy. Join us. BACKGROUND

6 7 T h e s e ecosystems,

that sustain There are many spectacular places on this planet. local Few are as globally unique as Indonesia's Bird's communities, Head Seascape are among the richest reservoirs of Located in the heart of the ‘Coral Triangle’, the Bird’s being recognized for their importance not only as life on the Head Seascape (BHS) encompasses over 22.5 million critical nursery habitats for fish and function in coastal planet hectares (ha) of sea and small islands in eastern flood protection, but also in their role sequestering Indonesia off West Papua Province. It stretches from carbon. Papua contains the world’s most extensive and Cenderawasih Bay in its eastern reaches to the Raja diverse mangrove communities and more than half of Ampat archipelago in the west and the Fakfak-Kaimana Indonesia’s 4,000,000 ha of mangroves. coastline in the south, and sits firmly in the global epicenter of marine biodiversity. These reefs and mangrove forests are the life support system for indigenous Papuans, providing food, jobs, As stunningly beautiful above water as it is below, the and protection from storms and rising seas for more BHS has a startling diversity of habitats to explore. than 760,000 people. The communities are made up From the stark wave-pounded slopes that drop away of kinship groups living in the same area and, while beneath the karst cliffs of Wayag and Uranie, to the deep, the size and membership of the different communities nutrient-rich bays of Mayalibit and Cenderawasih, to varies considerably, all are very much attached to the the “blue water mangrove” channels of Kofiau and Gam inherited property, or tenure system, that has provided to the plankton-rich upwelling areas of and them with sustenance for generations. For centuries, the Dampier Strait, these habitats are home to unique the region’s pristine forests, mangroves, and coral reefs assemblages of species that, when taken together, were relatively untapped by development due to their add to produce the most impressive species lists ever remote location, low human population density, and compiled for a coral reef system of this size. the traditional cultural beliefs of Papuans.

To date, surveys have confirmed over 600 scleractinian Over the last twenty years, development that started corals (approximately 75 percent of the world’s total) in western Indonesia has moved increasingly eastward and over 1,750 species of coral reef fish. The Seascape towards Papua, leading to rapid change. Papua’s also includes Abun, the world’s largest nesting beach abundant natural resources have become a major target for the highly endangered Pacific leatherback sea turtle, for new development investments, many focusing on as well as critical habitats for other globally threatened short-term exploitation such as destructive fishing and marine species, including whale sharks, whales and overfishing, oil and gas exploration, nickel mining, dolphins. illegal logging, poorly planned roads and other infrastructure development. The region is also rich in ‘blue carbon’ habitats including mangroves and seagrass beds which are increasingly 8 9 But, with tremendous resources comes tremendous pressures

In the coastal communities throughout the BHS, decentralization. Starting in 1999, Papua’s provincial fisheries provide a main source of income and food. and regency governments gained greater autonomy Prior to the 1960s, and still extensively practiced today, over the management of their natural resources. The traditional subsistence fishing – predominantly using decentralization process led to the formation of new handlines from small canoes – was the only form of regency governments in Papua, particularly on the coast fishing in the region. The introduction of commercial and around small islands, including the Raja Ampat fisheries – both legal and illegal – in the 1960s heralded Regency and the . Local officials had a rapid decline in fishery resources due to over- limited understanding of the potential environmental exploitation. The introduction of destructive fishing or social impacts of their decisions, and had almost methods such as bomb fishing, cyanide and compressor no understanding of how healthy ecosystems sustain fishing in the 1980s further contributed to the decline human populations. of fishery resources. By the 1990s, some fisheries were reporting a decline of up to 90% in catch per unit effort. West Papua was at a critical juncture. As these fisheries became depleted, due primarily to outside poaching, most households became ‘food Rapid increases in efforts to profit from the region’s insecure’, with 13% of households experiencing severe relatively untapped forests, coastal zones, and coral recurrent involuntary hunger. reefs were threatening to have an enormous impact on traditional livelihoods and values as well as on the As extractive pressures in Papua have increased, Papuan region’s globally outstanding biodiversity. Meanwhile, communities, which were already among the poorest local communities were increasingly marginalized in Indonesia, expressed increasing concern that their and local governments, while politically empowered, traditional tenure ownership and cultural practices lacked the capacity to critically evaluate the economic were weakening, particularly as transmigrant workers development options available and sustainably manage relocated to Papua. Although Papuan communities their natural resources. technically have tenure rights over their reefs under traditional customary law, they felt they had few tools The Bird’s Head Seascape Initiative was born from or available options to address the illegal harvesting of this context and at its core was designed to empower their marine resources and were increasingly turning local communities to regain control of their marine to destructive fishing themselves. resources and then to co-manage them with capable local governments within their own unique cultural During this time of increasing extractive pressure, context. Indonesia was undergoing the process of rapid 10 11 Bird's Head Seascape

BIODIVERSITY by the numbers The Bird's Head Seascape has more marine species than any other single place on the planet 22.5 million ha in the Seascape and is considered a center of marine speciation. New species continue to be discovered each 14% of global mangrove area year. It is also home to some of the world’s most endangered 75% of Earth's hard coral species and charismatic species. 1750+ species of reef fish

PEOPLE 3.6 million ha of MPAs

With over 40% of the 760,000 people population living in poverty, 75% of families dependent 500,000+ people protected from storms on fish for protein, and the majority of families food insecure, with 13% 40% of people live in poverty experiencing reoccuring hunger, sustainable fisheries is 75% of people rely on fish not simply an economic issue, but one of survival. 30% annual growth in tourism

33% of local GDP from fisheries ECONOMY

Through sustainable fisheries ~3.5 million tons of CO2 sequestered/yr and sustainable tourism, the marine ecosystems of West Papua are foundational for the local economy, providing The Bird's Head Seascape contains some employment for over half of of the world's richest marine ecosystems coastal households. Fisheries generate a third of local GDP with both globally significant biodiversity and tourism is growing at a value as well as immeasurable value for rate of 30% annually. local indigenous communities. Together, we can protect that value forever. THE INITIATIVE

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A new model for community-driven conservation at scale.

Initial rapid assessments (RAPs) conducted in 2001 and connection between all three. The BHS coalition The BHS coalition directly supported conservation in Influencing positive change on a Seascape scale 2002 revealed for the first time the complexity, extent, worked simultaneously to protect Papua’s marine four corridors of the Seascape—Cenderawasih Bay, required not only a long-term commitment by the and unprecedented biodiversity of the Seascape’s ecosystems and biodiversity, sustain local fisheries and Abun, and Raja Ampat and Kaimana Regencies. Each BHS coalition, but also a significant investment on the marine ecosystems. Besides generating world record generate other sustainable local livelihoods through NGO supported management in unique geographic ground. At various different phases of the initiative, the species lists and describing dozens of new and endemic marine eco-tourism development, while always areas, but linked sites from all corners of the Seascape BHS coalition included over 250 full-time staff directly species, these baseline surveys stressed the need for a maintaining a commitment to the empowerment of through joint science, capacity building, and policy supporting the management of the Seascape, the vast comprehensive conservation effort in order to address Papuan communities and local governments. initiatives, based out of the provincial capital, majority of which were local Papuans. the growing threats to Papua’s marine ecosystems . and the livelihoods and traditional values of local At the core of the initiative was the establishment of communities. a multiple-use network of ecologically-connected marine protected areas (MPAs), supported by and Inspired by the RAP results, three of the world’s embedded in local and national legislation, and co- leading international conservation non-governmental managed by local communities and local government organizations (NGOs) - Conservation International agencies. Since the start of the initiative, the BHS Abun (CI), The Nature Conservancy (TNC), and WWF- coalition focused on designing, establishing, and Indonesia - forged an unprecedented collaboration. facilitating the effective management of this MPA network as well as supporting cross-cutting policies, R a j a Together, we launched the Bird’s Head Seascape governance, environmental education, monitoring, Ampat Initiative (BHS) with the shared vision that: capacity building, livelihoods, and financing initiatives. Manokwari

Empowered Papuan communities, governments, and As a result, the BHS today contains Indonesia’s first local partners protect their critical coastal and marine functioning MPA network at a Seascape scale, a network ecosystems, thereby protecting the single greatest of 12 ecologically-connected MPAs that collectively reservoir of tropical marine species on the planet, manage almost 3.6 million ha of critical coastal and Cenderawasih while enhancing food security, livelihoods, and their marine habitats. This MPA network includes over Bay traditional way of life. 30% of Papua’s critical marine habitats and contributes over a fifth of Indonesia’s national MPA coverage. The The tri-institutional partnership quickly grew into majority of the MPAs in the BHS were designated a coalition, as the NGOs further partnered with the through a bottom-up, community driven process and local, regency, provincial, and national governments, are co-managed in a way that integrates the principles coastal communities, local organizations, universities, of both modern large-scale MPA management as well and the private sector. as traditional community-based management. Within the MPAs, 20-30% of all critical habitats have been Kaimana Understanding that environmental, economic and established as “no-take” zones to support fisheries social-cultural aspects of Papua are intertwined, replenishment, with the majority of the remaining area the BHS coalition designed an integrated marine set aside exclusively for the sustainable use of local conservation strategy that explicitly considered the communities and tourism. THE COALITION THE EVOLUTION

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Seascape transition to be completed. Local Anchored by three of the world's leading conservation leadership and sustainable financing in place organizations, the Bird's Head Seascape Coalition has 2017 grown to a network over 22 partners

Local MPAs transferred to government co-management schemes 2014

Management plans and zoning complete for MPAs 2011

Conservation The Nature WWF International Conservancy MPA network declared by 2008 communities and government Conservation International The Nature Conservancy WWF has been working in (CI) has led the Bird's Head (TNC) has been a committed West Papua for over 30 years. Seascape coalition since the partner since the program's Their geographic focus is program's inception in 2004. inception, with a primary Cenderawasih Bay National CI's geographic focus includes geographic focus in southern Park and Abun. Their team The Bird's Head Seascape Coalition northern Raja Ampat and Raja Ampat. They have further in the United States provides Kaimana. CI further leads supported Seascape-wide technical leadership for the 2004 forms and starts the initiative the Secretariat team and the communication efforts. Seascape's impact monitoring Seascape's MPA capacity program. development programs.

Initial rapid assessments reveal the Seascape's 2001 extraordinary biodiversity One Vision, One Workplan, One Team IMPACTS

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THREATS REDUCED BENEFITS REALIZED

The Bird's Head Seascape has had a transformative impact on marine ecosystems and local coastal As destructive practices have been reduced or eliminated, ecosystem health and local fisheries have started communities in West Papua. Building an effectively co-managed MPA network was the first and most to recover. Since MPA establishment in Raja Ampat the average increase in live coral cover across MPAs fundamental aspect of the Bird’s Head Initiative. Over the first ten years of the initiative the coalition has been 12%. The average increase in fish biomass is 114%, with even higher increases for key fisheries supported the gazettement of over 2 million ha of new MPAs, the formation of MPA networks, the design of species and within no-take reserves (Mark Allen, unpublished data). Even more importantly, local fishers MPA management systems, and the training of close to 1,500 community members to actively participate are now catching more fish with the same level of effort. Meanwhile, the Bird's Head Seascape has grown in MPA management. The results: Indonesia's first effectively managed MPA network with the highest into a world-class tourism destination with an average annual tourism growth rate of 30%. MPA management effectiveness scores in the country, with an average score of 73% based on the World Bank MPA Effectiveness Scorecard. Ultimately, our goal is to enhance food security, livelihoods, cultural heritage and rights. Evidence on the ground shows significant results across all these categories, with communities catching more fish, Both through the effective management of the MPA network and through direct efforts to support revitalizing traditional practices, and finding new livelihood opportunities in the growing tourism sector. sustainable fisheries and sustainable tourism development, the BHS coalition worked to reduce threats With the world’s most robust MPA social impact monitoring program, our team will be able to quantitatively and develop a local economy founded on sustainable industries. MPA patrol teams were able to reduce report on these impacts within the next year as replicate data is analyzed. destructive fishing practices to less than 1% of fishers in Raja Ampat MPAs. Illegal overfishing from outside poachers was reduced by over 90%.

DESTRUCTIVE CATCH BY FISH BIOMASS CATCH PER UNIT FISHING OUTSIDERS EFFORTInvestment 30% 30%200 200 12 2 100 Percent of Fishers of Percent

0% (kg/100km survey)Catch 0% 0 ) (tons/km Biomass 0 (kg/100km surveyCatch 0 2009 2013 2009 2012 2009 2013 2009 2012

In the last decade, MPA patrol teams have In Raja Ampat, illegal overfishing from The average increase in fish biomass is 114% In Raja Ampat, local fishers are now catching reduced destructive fishing practices to less outside poachers was reduced by over 90%. within Raja Ampat MPAs, with even higher more fish with the same level of effort, than 1% of fishers in Raja Ampat MPAs. increases for key fisheries species within no- increasing their food security. take reserves.

* All graphs produced from monitoring data averaged from all available Raja Ampat MPAs. 18 19

SUSTAINABILITY PLAN BLUE ABADI BLUE ABADI

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A business plan for Seascape sustainability EMPOWER We envision a Seascape led by Papuans. International NGOs spent the last decade building local management capacity and institutions. As their capacity has grown, now is the time for local institutions to assume full responsibility for the management of the Seascape. The Bird’s Head Seascape Coalition has helped establish to local stewards will open up new opportunities for one of the most ambitious and effective marine innovative conservation, fisheries, and community conservation programs in the world. The results have development work within the Seascape. been tremendous. Now is the time to ensure that those results are lasting and that we endow the local Papuan In the following sections, we describe each of these three communities, governments, and civil society with the strategies in detail as well as analysize the risks for this capacity and financial resources they need to carry transition. We have worked to carefully identify these forth the legacy of the Bird’s Head. possible risks and to thoughtfully develop mitigation SECURE strategies to reduce the likelihood and impact of each. We aim to secure the financial sustainability To that end, the Bird's Head Seascape Coalition and the of the Seascape through diversified revenue $ West Papua Government have launched Blue Abadi, an A transition at this scale is unique and when successful sources. These will include government initiative to ensure the sustainability of the Seascape. will provide a global model for effective and enduring revenues, user fees, new models for "Abadi" means forever in Bahasa Indonesia and it is marine conservation. conservation finance, and a dedicated trust through Blue Abadi that we aim to ensure that the fund that will leverage both international and value of the Bird’s Head is protected forever. domestic donor commitments. Abadi is Forever. We are currently executing a transition, transferring responsibility for the management of the MPA network and key Seascape functions to capable and qualified local co-management bodies and institutions while designing strategies for long-term financing.

The transition has three interconnected strategies. The first is to empower local institutions to lead Seascape management, while transitioning international CATALYZE NGOs out of direct implementation. The second is to secure the financial sustainability of the Seascape We see opportunities to catalyze new initiatives through a combination of sustainable revenue sources. utilizing the existing Seascape platform. As the The third is to catalyze new initiatives utilizing the management of the MPA network transitioned Seascape platform to address new and ongoing threats. to local stewards, new opportunities Transitioning the management of the MPA network have emerged for investing in innovative conservation, fisheries, and community development work and to address emerging threats within the Seascape. STRATEGIES

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EMPOWER

Papuan institutions are empowered to lead the Seascape.

The Bird’s Head Seascape has become a model for The international NGOs directly hired teams of local One of the most important examples of local tourism, but it also endorsed the level of financial community-driven conservation at the Seascape scale. community members and supported them with institutional development is the MPA network co- management and transparency of the institution. With As the Seascape is undergoing the current transition to comprehensive training and mentoring programs. As management authority in Raja Ampat. Through its new Public Service Agency status, the MPA network sustainability, a growing coalition of local institutions new local institutions were developed and local human the work of the coalition, the local government and co-management Authority can now independently are leading the way. resource capacity was built, a steady transition to local communities of Raja Ampat declared the first co- raise, accept, and manage non-governmental revenue, leadership began. management authority for a protected area network in laying the foundation for sustainable financing. Public From the beginning, the vision was for the Seascape Indonesia. The management authority provided a legal Service Agency status also means it has increased to be effectively led by local institutions. Initially, The Seascape will continue to experience a steady framework for community-based MPA management flexibility to hire professional (non-civil servant) staff. however, there were very low levels of environmental increase in government and local partner leadership teams, previously reporting to the international In this case that means hiring the highly qualified awareness and human resource capacity in Papua. and a further decrease in international NGO staff NGOs, to report through a government institution and community MPA teams that the NGOs had put in place. The international NGO team worked for over a directly supporting MPA management. While each access government funding and support. Starting in decade to systematically build the capacity of local groups’ role is changing, they will all continue to make 2013, many of the NGO staff from local communities communities, governments, and civil society partners essential contributions to the Seascape. began transitioning to the newly created local MPA to take on active roles in the Seascape's management. management authority.

200 Steady State Roles Once the co-management authority was established, the BHS coalition supported an effort to have it endorsed as Gov't Mgmt Authorities Indonesia’s first environmental “Public Service Agency.” 150 Direct MPA management Originally designed for public hospitals, public service board status is designated to quasi-governmental Local Partners institutions that perform a vital public service and 100 Policy Coordination, M&E, Species Protection, Education, thus should be granted higher levels of autonomy and # of Staff # of Capacity Development, etc. rights.

50 Int'l NGOs By declaring the Raja Ampat MPA network management Technical support, management backstopping, authority as the first environmental Public Service innovation, donor stewardship Agency, the national government not only recognized 2005 2008 2011 2014 2017 the vital public service MPAs provide people, most notably food security and economic growth through MPA Zoning Consolidation Transition S t e a d y Design & Mgmt State Planning

As the MPA network has been developed and local capacity built, leadership has shifted from international to local. Illustrated here is the transition of staff involved in the management of the BHS MPA network across the different phases of MPA development. Local Seascape Partners

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MPA Management Monitoring and Environmental Sea Turtle Evaluation Education Conservation Co-Management State University Kalabia Papuan Sea Turtle Authorities of Papua Foundation

The MPA co-management The Bird’s Head Seascape The Kalabia floating The Papuan Sea Turtle authorities bring together Center of Excellence at the education center has brought Foundation is one of the oldest local governments and local State will interactive environmental Papuan conservation NGOs. communities to directly be responsible for monitoring education programs to With a team of highly trained manage the MPA network. the ecological and social thousands of children Papuan community members, They are responsible for impact of the Seascape and across the Seascape and is they run a world-class sea implementing the management facilitating cutting-edge marine responsible for transforming turtle monitoring and nest plans for each MPA, ensuring scientific research. They will the next generation of fishers, guarding program at the most active and effective patrol further lead work to protect decision-makers, and cultural significant nesting beaches systems, community outreach the most important nesting leaders into champions for throughout the Seascape. and development activities, beach globally for the Pacific conservation. The Kalabia and monitoring for adaptive leatherback sea turtle. was transitioned to a local management. non-profit to ensure local ownership.

Meet four of the Bird's Head Seascape's most important local partners STRATEGIES

26 27 SECURE The shift to local revenue s o u r c e s i s Financial sustainability is secured through a l r e a d y w e l l diversified revenues. under way with ~70% of local The Bird’s Head Seascape has been supported by average out to $2.00/ha of MPA, which is an order the unparalleled generosity of The Walton Family of magnitude more efficient than the average cost of costs covered Foundation and a coalition of over 70 donors who have $26.98/ha for MPA globally (Balmford et al., 2006) collectively invested over $65 million. After 12 years of by local being supported largely by international philanthropy, Since the start of the Seascape initiative, local and the local Seascape institutions are now positioned to not national government agencies have come to understand sustainable only take on greater autonomy in leading the Seascape, the benefits of MPAs and have collectively quadrupled sources but also to contribute towards its financial sustainability. their annual funding allocations for MPA management, now providing $3 million annually. In addition to There are countless examples of conservation initiatives government budget allocations, a system of visitor fees whose success eroded after the end of initiative funding established by the BHS coalition is already generating or the exit of a significant donor. Unfortunately, there over $1 million a year for MPA management and is are few good examples of successful transitions from projected to reach $1.4 million by 2020. donor-dependence to true financial sustainability, and even fewer for initiatives at this scale. The Bird’s Head The BHS coalition is further working to investigate Seascape aims to provide one of the world's first such and pilot various new models for conservation finance. examples. The visitor fee system is already generating significant revenue for the Seascape. Others, like Blue Carbon, The BHS coalition established a sustainable financing while not yet viable enough to include in the cost working group that in partnership with a Papuan model, have significant long-term potential and can Advisory Council has developed a pathway for financial serve as important models for replication globally. sustainability. The first component, as described earlier, was equipping local institutions with the capacities While these local funding commitments are remarkable, and governance structures they will need to access a a gap does remain. Together the BHS coalition and diversified set of revenue streams. Next, the group the West Papua government are establishing the Blue worked to understand costs, maximize local revenue Abadi Fund, a $38 million endowment, in order to fill streams, and fill remaining gaps. the remaining gap. The West Papua Government and the BHS Coalition are currently seeking international BHS partner, Starling Resources, developed a partners and investors from the private sector, public comprehensive cost model, projecting costs, revenues, agencies, and the philanthropic community to and gaps under the “steady state” management system capitalize the Blue Abadi Fund. expected to be in place by 2017. The cost model determined that a minimum investment of $7.7 million We invite you to become a Blue Abadi partner, helping annually, $6.7 million of which goes to local institutions, ensure that the single greatest reservoir of marine life is necessary to maintain the efficacy of the BHS MPA on the planet can be protected forever. network. While Seascape costs are significant, they COSTS REVENUES

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ANNUAL SEASCAPE COSTS PROJECTED ANNUAL FUNDING SOURCES $7.7M Total; $6.7M for Local Institutions $6.7M for Local Institutions

Local The effective management of the entire Seascape Government Local Partners Blue Abadi aims to secure the financial Partners requires $7.7 million annually. That total is Allocation $0.8M sustainability of local institutions. This will require $1.9M $3.1M divided between the three primary groups actively a sustainable and consistent revenue stream of supporting Seascape management. The vast approximately $6.7 million each year, of which 70% majority, $4.8 million, is required to keep MPA has already been secured. The largest contributor Tr u s t Management Authorities operational, $1.9 million F u n d is the government, which allocates over $3 million Int'l is needed for local civil society partners, and $1.0 Distributions annually to the MPAs. The visitor fees system NGOs million for International NGOs. For the purpose $1.4M established in Raja Ampat, is projected to generate $1.0M of the sustainable financing strategy, the focus is $1.4 million revenue annually for MPA costs. Local on filling the costs for local institutions only, with civil society partners are projected to collectively MPA Authorities a total cost of $6.7 million annually. International Visitor cover a minimum of $0.8 million of their costs $4.8M NGOs are committed to funding their own Fees through annual fundraising which they will operations. $1.4M provide as match to any trust fund distributions.

COSTS BY FUNCTION COSTS BY SITE ANNUAL GOVERNMENT VISITORANNUAL FEESGOVERNMENT Local Institutions Local Institutions INVESTMENT ContributionsInvestment

Administration Policy $2.62M 11% 7% National Government $2.6M Tourism $1,500,000 4% Enforcement 32% $1.77M Raja Ampat Regency $1,000,000 $238k Economic D e v. $1.50M 5% $500,000 $590K Kaimana Regency $295k $200K 2008 2016 2024 Monitoring 22% The government has quadrupled its spending User Fees in Raja Ampat are projected to Education, Community Cenderawasih Raja Ampat Kaimana Abun Network BHS 1 Engagement, and on the MPA network in the last decade. generate ~$1.4 million annually by 2020 Communication under a medium growth model. 2 19%

For more detailed information on costs and revenues for each Seascape partner and site see Appendices A and B FUNDING GAPS

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FUNDING GAP, BY GROUP

MPA Authorities FILLING THE GAP Local Partners $6,700,000 Annual Local Costs The level of International NGOs secured local revenue sources $0 $2,000,000 $4,000,000 is unprecedented,

Funded To be funded by Trust Fund To be raised annually but additional investment is $5,300,000 needed to ensure a Annual Projected Funding fully sustainably resourced Seascape. PERCENT OF COSTS FUNDED, BY SITE The Blue Abadi Fund has been 23% Abun 41% B H S 94% Network specifically designed to fill this R a j a $1,400,000 Ampat important need. Annual gap 100%

Cenderawasih

Kaimana 50% Funded THE FUND

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Blue Abadi Fund

Managed by experienced financial investment managers, the endowment is expected to generate an average gross The West Papua rate of return of 7.5%, which is slightly lower than the 5-year average return for conservation trust funds globally Government and the (Mathias and Victurine, 2014). After investment fees, principle recapitalization, and administration costs, the Blue 4 Bird’s Head Seascape Abadi fund is expected to disburse approximately $1.4 million to local BHS partners annually. Coalition are seeking partners and investors Fund disbursements will incentivize and leverage a minimum of $5.3 million annually in local revenue, representing from the private sector, a 375% match. Funds are to be disbursed only to local institutions based on pre-established prioritization criteria public agencies, and and will be contingent upon: the philanthropic community to capitalize 1. Alignment with BHS MPA management plans the Blue Abadi 2. Performance in prior years Fund, a $38 million 3. Demonstrated commitment to cost matching endowment 3 for the 4. Financial transparency and quality of reporting Bird’s Head Seascape to permanently protect the Each investment into the Blue Abadi Fund will be highly leveraged by other investments. The Fund will be further single greatest reservoir leveraged by $84 million in local funding allocations in net present value terms. 5 of tropical marine species on the planet while significantly $38 million improving the lives of indigenous Papuan coastal communities. Investors are invited to leverage their investment through a single close deal scheduled for January 2017

43% 48% 9% I n v e s t e d Invested in I n v e s t e d in MPA S e a s c a p e i n Management Conservation Innovation The Bird's Head Seascape is globally unique. So is its Fund. FUND STRUCTURE

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Conservation International’s Global Conservation BHS coalition, donors and the private sector. Members Fund (GCF), is working with BHS coalition partners appointed by the Government will be kept to a to design the Blue Abadi Fund. This is being done minority interest. Special consideration will be given in accordance with established best practices and to ensure adequate inclusion of members appointed standards for conservation trust funds as laid out by indigenous peoples and members of both genders. by the Conservation Finance Alliance (Spergel and The governance body will be supported by three expert Mikitin, 2014; Bladon et al., 2014). GCF has over 10 committees, including a science advisory committee, years of experience in designing such funds and has a Papuan advisory committee, and a financial designed and invested in 23 conservation trust funds advisory committee. The governance body will make around the world. final decisions on instructing the Trustee regarding investment and expenditure of the fund. The BHS coalition has helped establish a Papuan Advisory Council with high-ranking Papuan leaders The Indonesian Biodiversity Foundation or Yayasan to further advise on the fund development and to Keanekaragaman Hayati Indonesia (KEHATI) has ensure the fund structure is locally appropriate and been selected as the initial fund administrator for the has necessary support and buy-in from Papuan Blue Abadi Fund. With over 20 years of experience government and communities. administering large and complex conservation funds 1. Governance in Indonesia, distinct tax exempt status, and a mission Board The design for the fund structure is further informed focused on biodiversity conservation, KEHATI is by the results of a comprehensive legal options analysis well qualified to be the fund administrator. KEHATI 2. Trustee directs investment prepared by GCF with legal advice from global and will be responsible for administering grants to the owns Singapore and use of funds 6 Indonesian law and tax firms (GCF, 2015). The approved local partners in the Seascape, monitoring "foreign" trust options analysis evaluated legal and tax implications and evaluating grantee progress and compliance, and of various fund structures, aiming to (i) ensure low or report annually to Blue Abadi Fund donors. Singapore Manokwari no taxation on the fund, (ii) put in place robust and flexible governance structures led from Indonesia, and With the goal of maximizing local participation in the 3. Investment (iii) minimize administrative costs. Blue Abadi Fund, the BHS Papuan Advisory Council Manager and the Government of West Papua are working to The Blue Abadi Fund will be owned by a Singapore establish a new grant-making foundation, West Papua's invests funds Trustee as part of a Singapore “Foreign” Trust. 7 Funds Global Heart of Conservation Foundation. KEHATI will 4. KEHATI will be domiciled in a dollar-denominated account and work directly with the new Papuan foundation to build + invested by a professional investment manager selected its capacity. Once the new foundation demonstrates Papuan Foundation through a competitive bidding process. 8 the requisite capacities for administration of a fund this size and has a clear track record of successful receive funds tax-free The fund will be governed by the Trustee taking administration 9 of any locally sourced funds for a and administer funds direction from a governance body with 9-13 volunteer minimum period of 2-3 years, it will transition into to local institutions members, which will likely include members appointed being the primary fund administrator for the Blue by government, local indigenous communities, the Abadi Fund. NEW MODELS FOR CONSERVATION FINANCE

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VISITOR FEES In addition to visitor fees, the coalition is actively investigating and piloting four other conservation finance schemes

Sustainable tourism can provide Revenues, which are projected to an alternative route for economic exceed $1 million in 2015 , now development that creates go directly to the Raja Ampat TRASH BANK RESOURCE-USER incentives for conservation and MPA Management Authority CONTRIBUTIONS benefits to communities. With to support MPA management that understanding, the BHS and community development Coalition worked together with initiatives. Local NGO Misool Baseftin, in partnership In Kaimana, local fishing cooperatives the Department of Tourism with the Misool Ecoresort, has developed are providing voluntary contributions to to extensively promote Raja In order to minimize and manage a self-financing trash bank, whose 1,231 their local community MPA patrol teams. Ampat as a world-class diving the environmental and social registered members have recycled over 200 Although the payments are small, they are destination, leading to an average risks associated with tourism tons of trash. Members receive payments never-the-less highly significant and are annual growth rate in visitors of development, the BHS Coalition into a personalized savings account for illustrative of local community support 30.5% from 2008-2014. further supported the Raja collected trash, which is then processed for the MPAs and their understanding of Ampat Tourism Department and and sold to a recycling plant in Java. In this the direct benefits the MPAs provide to To ensure that local communities association of tour operators to way, the trash bank is both cleaning up the their livelihoods. This model is likely to directly benefited from the take voluntary and regulatory Visitor fees environment and providing much needed be further replicated as additional fishing growing tourism arrivals in Raja steps to ensure best tourism currently cover 2/3 local banking services to remote villages cooperatives are established throughout the (Misool Baseftin, 2015). BHS. Ampat, an innovative tourism practices and to limit the number of MPA management visitor fee system was developed and size of operators to stay that requires all visitors to buy a well within the region’s carrying costs in Raja Ampat year-long pass, in the form of a capacity. waterproof tag with an attractive design that changes each year.

VOLUNTARY BLUE CARBON 12,000 100 PORT FEES

# of Ecotourism Discussions are underway with the Port CI is conducting Indonesia’s first blue

9,000 75 Operators Authority in City about the carbon pilot, working to harness the value establishment of a voluntary environmental of the carbon stored in the extensive container fee to offset potential mangrove forests protected within 6,000 50 environmental damage from a planned Kaimana’s MPA network. The Kaimana port expansion and increased shipping. government and communities aim to sell # of Visitors 3,000 25 Although it has never been done before the carbon credits generated from the MPA in Indonesia, the model has merit and if protection on the voluntary carbon market. successful, could be replicable for other Proceeds would fund MPA management MPAs in close proximity to ports. and livelihoods development for local 2007 2008 2009 2010 2011 2012 2013 2014 communities.

Visitors Operators STRATEGIES

38 39 CATALYZE The MPAs are secure, capacity is Advancing conservation and community development utilizing the Seascape platform in place, and political will is strong.

Opportunities West Papua continues to be a dynamic place with new for managing fisheries sustainably. Teams are now are limitless. development opportunities and challenges emerging focused on fisheries policy and management reform, rapidly. As such, the BHS coalition will continue to be development of fishing cooperatives, decreasing waste dynamic in our response, boldly searching for the next and spoilage, and increasing market access and value advancement, solution, and level of impact. for sustainable seafood products.

The transition of MPA management to local stewards The coalition is further expanding to include more than has freed up NGO capacity to tackle new challenges just conservation organizations. With local healthcare and experiment with new approaches to sustainable charity "MER-C," we've helped to facilitate greater economic development beyond the MPA boundaries. access to medical care for many of the Seascape’s most remote citizens. A new small grants facility focused on Particular opportunities in various stages of assessment promoting innovation from Papuan civil society has or development include sustainable fisheries further generated many new ideas and potential local management and markets reform, impact investment partners. funds, community development initiatives, integrated watershed planning (i.e. "ridge to reef"), livelihoods and We see this next phase in the Bird’s Head Seascape as economic development, and health initiatives. These an exciting new frontier. The MPAs are secure, capacity and other initiatives aim to help solidify the role of a is in place, and political will is strong. Although the healthy ecosystem as the foundation of a prosperous emerging threats are real, the opportunities are limitless. economy and community. We invite current and new donors to help us build off of our past successes, to explore new paradigms for After over a decade of investment, the Seascape is an conservation and development, and to creatively tackle ideal platform from which to pilot new experimental new threats as they emerge. approaches. The MPA network forms a foundational base from which to catalyze new initiatives. For There is still much work to be done to secure a sustainable example, the MPA network, which was designed to future for West Papua—one in which its unparalleled support local sustainable fisheries, provides an anchor biodiversity is protected and its citizens are prosperous. for an emerging ecosystem-based fisheries management We are committed to being part of the solution. strategy for the Seascape. Through the MPA network, critical spawning habitat for fisheries have been protected, areas have been set aside for exclusive use of local communities, and capacity has been built RISKS

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A transition from an international NGO-led and donor-funded conservation initiative to full sustainability has FUEL PRICES INCREASE NEW THREATS EMERGE rarely, if ever, been attempted on this scale. While the transition is both necessary and well-planned, it remains uncharted territory with some inherent risks. The BHS Coalition has worked to carefully identify these possible Fuel prices in Indonesia, while still subject to West Papua is changing rapidly, with new challenges risks and to thoughtfully develop mitigation strategies to reduce the likelihood and impact of each, as detailed limited subsidies, are now linked to market prices. and threats emerging regularly. Even as the MPAs briefly below. This exposes the BHS to volatility in global oil reach "steady state", there will be no steady state markets. Fuel is one of the largest cost drivers (after around them and so we anticipate there still being a personnel) for the BHS as it is in conservation and significant need for the international NGOs to ensure MPA management more generally, accounting for rapid response to the changing circumstances. The GOVERNMENT REDUCES MPA The Blue Abadi Governance Board will be well- roughly 15% of total conservation costs in the BHS. international NGOs are transitioning to leaner, more FUNDING equipped to prioritize granting and minimize impact A 20% rise in fuel prices lifts total costs by 4%, or focused teams, but we believe those teams will still from reduced funds on any key partner. Lastly, as an average of USD 55,000 over a ten-year period. play a vital role for the foreseeable future to design The new MPA management authorities have been the fund is one of several revenue sources, partners Conservation managers are directly seeking ways to solutions and mobilize capacity and resources to designed to reduce bureaucracy and ensure visitor will be prepared for some volatility and ready to seek minimize fuel costs and price volatility through bulk address urgent emerging threats. fees are considered government revenues to be emergency funding from other sources, if necessary. purchasing of fuel and through the development directly allocated towards MPA management. of MPA management approaches that require JURISDICTION OF MPAs CHANGES Disbursements from the fund will be contingent on significantly less fuel, where feasible. government match. The BHS coalition is additionally INADEQUATE FUNDS RAISED FOR BLUE ABADI FUND The three most significant possible jurisdictional working to build a local constituency equipped to DISRUPTIVE EVENT IMPACTS changes are a) the transfer of Cenderawasih Bay advocate for effective government management and TOURISM National Park from the Ministry of Forestry to the funding of the MPAs near- and long-term. The Blue Abadi Fund is scheduled to be capitalized in a single close deal in January 2017. If less than $30 Ministry of Marine Affairs and Fisheries, leading to million has been committed for fund capitalization, Conservative estimates were used to model growth a reduction in national level funding; b) the splitting BLUE ABADI FUND GENERATES the deal close will be postponed until the target is in tourism arrivals, decaying from a base growth rate of the Raja Ampat Regency into multiple regencies; INSUFFICIENT RETURN reached. If the close is postponed and/or it closes of 10% while historical growth rates have hovered and c) the transfer of regency level MPA networks with less than the full $38 million required, the around 30%. Even with no growth, fee generation to provincial level management. The BHS coalition The Blue Abadi fund will be managed by professional is expected to cover two thirds of the Raja Ampat is carefully monitoring all potential policy and and experienced investment managers. Fund international NGOs will continue annual fundraising to cover as much of the gap in MPA management MPA network management costs in 2015. Fund jurisdictional shifts, engaging with all appropriate managers will work closely with various fund disbursements will be flexible in order to cover core levels of government, and developing contingency stakeholders to establish investment guidelines that costs as possible until the fund is fully capitalized. The BHS coalition will continue to work towards MPA management costs in the case of a significant plans for each possible scenario. take into account near-term and long-term needs, reduction in visitor fees. Despite this, a no-growth balance risk and security, and take advantage of increasing revenues from other sources. scenario would likely require some reprioritization POTENTIAL PUBLIC PERCEPTION a wide array of investment vehicles to hedge and EFFICACY OF MPAs DECREASES of expenditures from the fund as well as local OF GREENWASHING otherwise minimize exposure to systemic and government. A sudden and dramatic drop in tourism idiosyncratic risk. Despite this, some fluctuation in arrivals would put considerable stress on financing, All private sector partners will be vetted by the annual returns is inevitable. Though projected costs The international NGOs will continue to support the however prior experience with extreme events in Papuan Advisory Council. No endorsements, logos are smoothed over time, the endowment has been MPA teams, providing ongoing technical support Indonesia (such as the 2002 and 2005 Bali bombings) or licenses will be allowed in association with calculated to cover some volatility in costs, leaving in the development and implementation of SoP’s, has demonstrated rapid recovery in tourism arrivals. corporate investment. a small buffer in most years. Moreover, managers institutional standards and other performance will be obligated to leave excess returns untouched, guidelines and checks. Furthermore, disbursements adding to endowment principle and increasing buffer from the fund will be contingent on performance to size, unless certain conditions are met. help mitigate this risk. THE STAKES

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We need you. While the risks in the transition are real, none are as great as the risk from not acting Investing in the Blue Abadi Fund will secure

The communities of West Papua are on the brink of securing a sustainable future - one in which their children remain the financial deeply connected to the beauty of their natural and cultural heritage while having increased access to food, education and livelihoods, and a greater voice in managing their own resources. sustainability o f t h e But if sufficient trust fund revenues and government commitments are not in place by 2017, current levels of funding and protection will lapse, raising the specter of a return of heavy foreign fishing pressure, destructive fishing practices Seascape, such as bomb fishing, and uncontrolled tourism growth. providing the local communities the resources they need to sustainably manage their extraordinary resources.

F o r e v e r .

We can't give up on them now. APPENDIX A

44 Summary Costs by Institution 45

Annual Annual Annual Institution Function Gap Annual Costs Revenue Institution Function Fund- Gap Costs raising MPA Management Authorities Cenderawasih Management of International NGOs Bay National Park Cederawasih Bay $ 2,624,527 $2,624,527 - Conservation $392,675 $392,675 - Authority National Park International Raja Ampat The Nature $97,379 $97,379 - MPA Network Management of the Conservancy Management Raja Ampat MPA $1,624,480 $1,624,480 - Authority (UPTD- network WWF $535,513 $535,513 - BLUD) $1,025,567 $1,025,567 - Kaimana Management of MPA Network the Kaimana MPA $125,660 - $125,660 Management Network Authority TOTAL $7,716,420 $6,319,272 $1,397,148 Kaimana MPA Community Patrols Network Community $464,425 $295,042 $169,382 for Kaimana MPAs Patrol Group TOTAL LOCAL INSTITUTIONS $6,690,853 $5,293,705 $1,397,148 $4,839,092 $4,544,050 $295,042

Note: Annual costs, revenues and gaps are based on projections for the year 2020. Annual revenue for local Local Partners partners is anticipated match fundraising. Monitoring and State University of evaluation; Abun $719,986 $289,986 $430,000 Papua (UNIPA) leatherback sea turtle program; research BHS Secretariat Policy engagement $172,106 - $172,106 Environmental Kalabia Foundation $482,576 $292,576 $190,000 education Patrols in SE Misool Misool Baseftin $149,901 $49,901 $100,000 MPA; trash bank Papuan Sea Turtle Sea turtle $207,193 $117,193 $90,000 Foundation conservation Innovative Other Papuan conservation $120,000 - $120,000 Partners initiatives through small grant facility $1,851,761 $749,656 $1,102,106 APPENDIX B

46 Summary Costs by Site 47

Cenderawasih Bay National Park Abun (Jambursba Medi and Warmon) Institutions Activities Costs Institutions Activities Costs Surveillance Leatherback sea turtle program Cenderawasih Bay National Park Authority Basic monitoring $2,624,527 State University of Papua Community development $208,855 Outreach Revenue Sources Revenues Revenue Sources Revenues

National Government: Ministry of Forestry $2,624,527 State University of Papua (in-kind) $50,000

Gaps - Gaps $158,855

Raja Ampat MPA Nework Kaimana MPA Nework

Institutions Activities Costs Institutions Activities Costs

Surveillance Kaimana MPA Network Management Raja Ampat MPA Network Management Basic monitoring MPA Basic monitoring $125,660 $1,624,480 Authority (UPTD) Authority (UPTD-BLUD) Outreach Community development Kaimana MPA Network Community Patrol Community patrols $464,425 Community patrols in SE Group Outreach Misool Baseftin Misool MPA $149,901 Total costs $590,084 Trash bank Revenue Sources Revenues Total costs $1,774,381 Kaimana Regency Government $295,000 Revenue Sources Revenues Gaps $390,084 Raja Ampat Regency Government $238,545

Raja Ampat Visitor Fees $1,359,584

Other $76,252

Total Revenue $1,624,481

Gaps $100,000 APPENDIX B REFERENCES

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Bird's Head Seascape Network Balmford, A., P. Gravestock, N. Hockley, C. McClean, C. Roberts. "The worldwide costs of marine protected areas." Institutions Activities Costs Proceedings of the National Academy of Sciences of the United States of America. 101. 26. (2004): 9694-9697 Monitoring and evaluation State University of Papua $511,131 Bladon, A., E. Mohammed, E. Milner-Gulland. A Review of Conservation Trust Funds for Sustainable Marine Research Resources Management: Conditions for Success. London: IIED. 2014. [http://pubs.iied.org/16574IIED] BHS Secretariat Policy engagement $172,106 Global Conservation Fund. Legal Options Analysis for the Structure of the Blue Abadi Fund. Arlington: Conservation Kalabia Foundation Environmental education $442,576 International, 2015.

Papuan Sea Turtle Foundation Sea turtle conservation $ 107,193 Matias, K. and R. Viturine. Conservation Trust Investment Survey for Calendar Year 2013. Conservation Finance Alliance, 2014. Innovative conservation Other Papuan Partners initiatives through small grant $140,000 "Misool Community Recycling Project." YouTube. Misool Baseftin, 23 June 2015. Web. 22 Aug. 2015.

Starling Resources. Alternative Revenue Sources for the Bird's Head Seascape of West Papua: Assessment and Recomendations. Denpasar, Indonesia: Starling Resources, 2014. NOTES

1. The contribution from the Raja Ampat government is currently committed at $238,000 annually. However, Inflation and exchange rates: Inflation and exchange rate volatility would impact the fund, and the cost of activities as visitor fees grow and cover an increasing proportion of Raja Ampat MPA management costs, the gap for it seeks to support, in myriad and complex ways and professional fund managers will be tasked with informing government to fill with direct funding allocations will decrease over time. and executing an investment strategy that is well diversified and soundly hedges against inflation and currency fluctuations. In addition, an allowance for inflation is built into projected fund revenue and a conservative exchange 2. The number of fee-paying visitors to Raja Ampat increased by an average of 30.5% from 2008-2014. Projected rate of 11,000 USD/IDR is used to project US dollar equivalent financing needs (rate as of July 6 2015: 13,353 USD/ visitor fee revenue was modeled based on high growth, medium growth, and low growth scenarios. Under high IDR). A quick analysis reveals that a weakening of the Rupiah of 1,000 (~9%) to a total of 12,000 USD/IDR would growth, the growth rate was assumed to be 13% in 2017, decaying by 22% each year, reaching 1% growth rate in lead to surpluses averaging $113,000 per year over a ten-year period. Conversely, strengthening of the Rupiah by 2026. Under medium growth, the growth rate was assumed to be 10% in 2017, decaying by 22% each year, reaching roughly 9% to 10,000 USD/IDR leaves a shortfall averaging $136,000 over a ten-year period. This analysis does not 1% growth rate in 2025. Under low growth, the growth rate was assumed to be 7% in 2017, decaying by 22% each take into account indirect impacts of currency fluctuations on global commodity markets. year, reaching 1% growth rate in 2024. User fees are collected in IDR and an exchange rate of 11,000 (IDR/USD) was assumed. For the purposes of the cost model and this business plan, visitor-fees are modeled based on the medium 5. Net Present Value was calculated using a discount rate of 4.5%, which is the expected net rate of return for the growth model, which is still considered to be conservative. Blue Abadi Fund after investment services fees and capital recapitalization to offset inflation are accounted for. Cash flow projections were calculated for 30 years. Values are rounded to the closest $100,000. The NPV of direct funding 3. An Endowment fund can be characterized as a fund whose capital is invested in perpetuity, and whose allocations are as follows: investment income is to be spent for financing activities. Endowment funds are well suited for the long term financing of recurrent costs, since they are designed with the intent to deliver a steady stream of funding in - National Government: $44,700,000 perpetuity. - Raja Ampat Regency Government: $w,100,000 - Kaimana Regency Government: $3,400,000 4. The $38m Blue Abadi Fund has been designed to generate USD $1.4M annually for disbursement to local - Visitor Fees: $25,000,000 institutions. Assumptions and sensitivity analysis are summarized here: - Local Partners (annual self-financing match): $8,500,000 − Gross Rate of Return: 7.5% − Investment Fee: 1% 6. The Blue Abadi Fund legal options analysis was prepared by Conservation International in partnership with a − Annual Principle Recapitalization (to offset inflation): 2% working group drawn from The Nature Conservancy, WWF-Indonesia and Starling Resources. Preliminary advice − Annual Trustee Costs: $25,000 on options for Fund ownership outside of Indonesia has been provided by the global law firm White & Case LLP. − Annual Fund Administration Costs: $300,000 Preliminary advice on Indonesian legal matters has been provided by the law firm, ABNR, Counselors at Law, who − Exchange rate IDR/US: 11,000 were selected as Indonesian counsel to advise on the establishment of the Fund, after a competitive bidding process. Preliminary advice on Indonesian tax matters has been provided by the tax firm, PT Pundi Stratejasa Indonesia, Endowment Return: The Blue Abadi fund will be managed by professional and experienced investment managers. who were selected as Indonesian tax counsel to advise on the establishment of the Fund, after a competitive bidding Fund managers will work closely with various fund stakeholders to establish investment guidelines that take into process. account near term and long term needs, balance risk and security, and take advantage of a wide array of investment vehicles to hedge and otherwise minimize exposure to systemic and idiosyncratic risk. Despite this, some fluctuation 7. Singapore trustee fees recently negotiated for another CI project were USD 15k for the establishment fee and in annual returns is inevitable. An increase or decrease of 50 basis points (.05%) in the endowment rate of return of USD 13k for annual administrative fees. Comparable rates are expected for the Blue Abadi Fund. (from 7.5% up to 8% or down to 7%) would increase or decrease total returns by roughly 14% or $200,000 annually. Though projected costs are smoothed over time, the endowment has been calculated to cover some volatility in 8. Costs of financial investment services have been modeled at 1% of net asset value. costs, leaving a small buffer in most years. Moreover, managers will be obligated to leave excess returns untouched, adding to endowment principle and increasing buffer size, unless certain conditions are met. Lastly, the Blue Abadi 9. The capabilities of the new Papuan grant-making foundation to serve as the Blue Abadi Fund administrator Governance Board will be well equipped to prioritize granting and minimize impact on any key partner. would be assessed through the achievement of predetermined financial management milestones and through an independent evaluation. Lastly, as the fund is one of several revenue sources, partners will be prepared for some volatility and ready to seek emergency funding from other sources, should it become necessary. ADDITIONAL INFORMATION

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Contributors The Bird's Head Seascape Coalition wishes to thank the following organizations for their contribution to the Blue Abadi Business Plan: Thank you to

Conservation International t h e P a p u a n The Nature Conservancy Starling Resources A d v i s o r y WWF Council, the Papuan Advisory Council Bird's Head Preferred Citation S e a s c a p e Katz, L, Delfs, R, Erdmann, M, Fox, M, Garbaliauskas, R, Greenberg, R, Renosari, G, Soles, A, Stone, C, Villeda, K (2015) Blue Abadi Business Plan. Bird's Head Seascape Coalition, Manokwari, West Papua, Indonesia. Coalition, and For More Information in particular Laure Katz Starling [email protected] 1-703-341-2484 Resources, and Conservation International CI's Global 2011 Crystal Drive, Suite 500 Arlington, VA 22202 USA Conservation www.birdsheadseascape.org Fund for their contributions Photo Credits Page 1: CI/ © Shawn Heinrichs t o t h i s Page 2: CI/ © Shawn Heinrichs business plan. Page 6: CI/ © Sterling Zumbrunn Page 9: CI/ © Shawn Heinrichs Page 10: CI/ © Jeff Yonover Page 18: CI/ © Shawn Heinrichs Page 24: CI/ © Shawn Heinrichs Page 25: CI/ © Shawn Heinrichs Page 25: CI/ © Angela Beer Page 25: CI/ © Jeff Yonover Page 27: CI/ © Shawn Heinrichs Page 32: CI/ © Shawn Heinrichs Page 39: CI/ © Shawn Heinrichs Page 42: CI/ © John Weller Page 43: CI/ © Mark Erdmann Page 53: CI/ © Shawn Heinrichs