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World Bank Document Document of The World Bank Public Disclosure Authorized Report No: 82172-CL NOTE ON CANCELLED OPERATION (NCO) GEF Grant No TF011309 Public Disclosure Authorized IN THE AMOUNT OF USD 0.9 MILLION TO REPUBLIC OF CHILE FOR THE DESIGN AND IMPLEMENTATION OF A BIODIVERSITY MANAGEMENT SYSTEM IN THE MINISTRY OF PUBLIC WORKS PROJECT Public Disclosure Authorized 28 October 2013 Sustainable Development Department Bolivia, Chile, Ecuador, Perú and Venezuela Country Management Unit Latin America and the Caribbean Region Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate Effective 12 July 2013) Currency Unit = Chilean Peso Chilean Peso 1.00 = US$ 0.00195014 US$ 1.00 = Chilean Peso 512.783 FISCAL YEAR [January 1 – December 31] ABBREVIATIONS AND ACRONYMS GDP Gross Domestic Product BMS Biodiversity Management System CONAMA National Commission for the Environment DGA General Directorate of Water – Dirección General de Agua EIA Environmental Impact Assessment IBRD International Bank for Reconstruction and Development MOP Ministry of Public Works MSP Medium-Size Project NBS National Biodiversity Strategy SAG Service of Agriculture and Livestock- Servicio Agrícola y Ganadero TAL Technical Assistance Project Vice President: Hasan Tuluy Country Director: Susan Goldmark Acting Sector Manager: Emilia Battaglini Project Team Leader: Marcelo Acerbi ICR Team Leader: Marcelo Acerbi CHILE Design and Implementation of a Biodiversity Management System in the Ministry of Public Works Project CONTENTS Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Ratings of Project Performance in ISRs 1. Context, Project Development Objectives and Design 2. Post-approval Experience and Reasons for Cancellation 3. Assessment of Bank Performance 4. Assessment of Borrower Performance 5. Lessons Learned Annex 1. Bank Lending and Implementation Support/Supervision Processes Annex 2. List of Supporting Documents A. Basic Information (some fields are pre-populated by the system) Country: Chile Project Name: DESIGN AND IMPLEMENTATION OF A BIODIVERSITY MANAGEMENT SYSTEM IN THE MINISTRY OF PUBLIC WORKS Project ID: P108740 L/C/TF Number(s): TF011309 NCO Date:18 September 2013 Lending Instrument: GEF grant Recipient: Republic of Chile Original total commitment: 909,090 Disbursed Amount: 0.00 Environmental category: C Focal Area (for GEF): Biodiversity Implementing Agencies: Ministry of Public Works and Fundación Biodiversa Co financiers and Other External Partners: - B. Key Dates (all fields are pre-populated by the system) IBRD/IDA GEF Process Original Date Revised/Actual Original Date Revised/Actual Date(s) Date(s) Concept review: N/A 28 April 20091 Appraisal: N/A N/A Approval: 3 April 2012 9 March 2011 Effectiveness: N/A N/A N/A N/A Restructuring(s): N/A N/A Mid-term Review: N/A N/A N/A N/A Closing: N/A N/A N/A N/A C. Ratings Summary2 Performance Rating by NCO Outcome: Not Applicable GEO Outcome: Not Applicable Risk to Development Outcome: Not Applicable Risk to GEO Outcome Not Applicable Bank Performance: Satisfactory Borrower Performance: Moderately Satisfactory 1 This is a MSP GEF so it has not followed the WB project cycle. 2 All ratings given by the NCO should use a six-point rating scale (Highly Satisfactory, Satisfactory, Moderately Satisfactory, Moderately Unsatisfactory, Unsatisfactory, or Highly Unsatisfactory). i D. Sector and Theme Codes3 (all fields are pre-populated by the system─the same as in SAP/AUS) Original Sector Code (as % of total amount) 1. General Transportation Sector 40% 2. General Energy Sector 30% 3.General Water, Sanitation and Flood Protection Sector 30% Original Priority Thematic Code (Primary/ Secondary) 1. Environmental Policies and Institutions 67% 2. Other public sector governance 33% E. Bank Staff (some fields are pre-populated by the system) Positions At NCO At Approval Vice President: Hasan Tuluy Hasan Tuluy Country Director: Susan Goldmark Susan Goldmark Sector Manager: Emilia Battaglini (acting) Karin Kemper Project Team Leader: Marcelo Acerbi Marcelo Acerbi NCO Team Leader: Marcelo Acerbi NCO Primary Author: Marcelo Acerbi F. Ratings of Project Performance in ISRs (if available) [all fields are pre-populated by the system] No. Date ISR DO GEO IP Actual Disbursements (US$mil.) archived N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 3 There can be a maximum of five Sector Codes (that has more than zero percent) and five Theme codes (of which up to two are “Primary”). ii 1. Context, Project Development Objectives, and Design 1. Chile’s economy is the most stable and competitive in South America. The country’s stability is shown in its steady GDP. The competitive economy has traditionally, and continues to stem from a strong focus on efficient roads and irrigation systems. The country has rapidly recovered from the late 1990s economic slowdown and financial crisis, doubled per capita gross domestic product (GDP) since 1990, and cut poverty by more than half. A cornerstone of this trend is the country’s commitment to prudent economic management, sound, consensual governance, and proactive social investments. The Chilean Government has pursued a coherent development program built around equality of opportunity, which is aimed at accelerating growth, expanding global commercial linkages, improving education, safeguarding natural resources, and strengthening competitiveness while addressing acute and longstanding social problems. 2. Chile has a valuable ecological heritage characterized by high levels of endemism that reach 70 to 90 percent for certain taxa. For this reason, international organizations have recognized the global importance of the country’s natural wealth. This Project was intended to focus on the following ecoregions, which have the most valuable global attributes in terms of uniqueness and global environmental services: Chilean Matorral, Valdivian Temperate Forest, Magellanic Subpolar Forests, Patagonian Steppe, and Central Andean Dry Puna 3. The rapid pace of infrastructure development increases the threats on natural heritage. The infrastructure sector had doubled its investment pace reaching an annual average of US$1.5 million (1998–2003) and corresponding to 12 percent of the Chilean GDP. Road development had been particularly important. The road network comprises 80,000 kilometers of all road types that have directly converted about 484,000 hectares of land. It is also worth noting that as a result of climate change, predicted temperature increases and precipitation decreases will likely result in the expansion of irrigation systems and road networks to the south, putting increased pressure on the Valdivian Temperate Forests ecoregion. 4. At the time of the Bank’s project approval, the MOP relied on instruments from the National Commission for the Environment (CONAMA, the highest Environmental Policy body in the country), such as Environmental Impact Studies. However, these instruments lacked effective tools to prevent indirect habitat conversion and degradation in the area of influence of infrastructure projects. 5. The main barriers faced at the time of Bank’s project approval by the MOP to incorporate biodiversity conservation into infrastructure works were: (i) Methodologies focussed only on threatened species, with less emphasis on other aspects of biodiversity, such as ecosystems or other species with high conservation value and without considering habitats and their associated functions; (ii) Methodologies did not adequately take into account all relevant aspects of ecological processes; (iii) The baseline for environmental assessments for infrastructure projects, in general, was taken at the end of the design process, after technical alternatives and design options had been evaluated, when there was no longer any possibility to make changes to the planned infrastructure. This caused any biodiversity measures to be developed solely around mitigation and compensation schemes. 1 6. Biodiversity information was not fully integrated into the MOP’s decision-making system. For example, biodiversity considerations were not fully being addressed during the design process, but were basically being managed through compensation at the end of the design process arising from the regulatory Environmental Impact Assessment (environmental permitting) process. This increased project development times due to regulatory delays and internal perceptions that project costs are unpredictable because the magnitude of impacts was not known until the end of the planning phase. It also exposed the MOP to compensation demands that were not always related to environmental impacts. Consequently, the MOP was not able to: (i) determine the key institutional roles of an area that will eventually be impacted by an infrastructure plan or project at an ecosystem/territorial level; (ii) anticipate the financial costs of developing an ecosystem-based approach; and (iii) integrate such an approach into the decision- making process. 7. This Bank GEF project was proposed to be implemented in five pilot ecoregions with MOP infrastructure projects to validate the BMS. Institutional capacity would have been created to enable biodiversity management through an ecosystem approach that would become part of the guiding principles of the Ministry’s policy. It would also ensure that this policy is consistent with the strategic guidelines of the NBS and reflects its priorities and those of the Regional Biodiversity Strategies. Global benefits would have resulted from the strengthening and leveraging
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