INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE Public Disclosure Authorized I. Basic Information Date prepared/updated: /2011 Report No.: 74819 1. Basic Project Data Original Project ID: P 108943 Original Project Name: Country: Madagascar Project ID: P 108943, P074235 Project Name: The Ankeniheny-Mantadia-Zahamena Biodiversity Conservation and Restoration Corridor Carbon Project, Conservation Component. Task Team Leader: Bienvenu Rajaonson Estimated Appraisal Date: 2005 Signing ERs Purchase Agreement with The Government of Madagascar Public Disclosure Authorized April 2008 Managing Unit: AFTEN Lending Instrument: Specific Investment Loan Sector: Environment (100%) Theme: Carbon Offset IBRD Amount (US$m.): 0.00 IDA Amount (US$m.): 0.00 GEF Amount (US$m.): 0.00 PCF Amount (US$m.):1,505,000 (ERs) Other financing amounts by source: Public Disclosure Authorized Environmental Category: C Repeater [] Is this project processed under OP 10.00 (Emergency) or OP Yes [ No [X] 8.00 (Rapid Response to Crises and Emergencies) ] 2. Project Objectives 1. Original project development objective: The project aims to purchase 430,000 t of emission reductions from verified reduced deforestation within the Corridor Ankeniheny- Zahamena- (CAZ) located in the eastern region of Madagascar. This carbon offset operation is fully part of the investments under EP3, IDA project P074234 and its Additional Financing. Public Disclosure Authorized 3. Project Description 2. The Corridor Ankeniheny - Zahamena (CAZ) protected area (432,000 ha) is located in the eastern portion of the country and its management objective is to protect its natural ecosystems and use the natural resources sustainably such that conservation and use are mutually beneficial. It aims at reducing forest fragmentation and reconnecting forest fragments, while at the same time promoting alternative livelihood activities for impoverished communities. More than 30 Communes totaling 315,000 persons are depending on environmental services provided by the forest area comprised within the Corridor. In addition, research and studies have shown that this forest corridor holds a number of important endemic species, 70% of which are threatened according to the IUCN. These endemic species in the corridor include 460 species of flora, 11 lemur species, and 89 bird species. Major pressures to the area consist of slash and burn practices for tavy farming, as well as the expansion of mining and timber harvesting activities. 3. The CAZ reserve has specifically been designed to be eligible as an “avoided deforestation” carbon project and has benefited from one of the first contracts (with the BioCarbon Fund) that will provide carbon revenues long term that will cover the reserve’s core costs. Through the creation of the new CAZ protected area, the project will result in reduced emissions from deforestation. Through the Voluntary Carbon Standard (VCS), the project will generate Voluntary Carbon Units (VCUs) from REDD, featuring as one of the first REDD initiatives in Africa. Through the marketing and sale of VCUs from the project, the Government of Madagascar intends to partially finance the management of the protected area and expand economic opportunities for local communities. 4. The protected area’s category is in line with IUCN VI category and given the local contextual reality, it was decided to develop a co-management governance structure of CAZ. Co- management necessarily implies a sharing of decision making among various stakeholders. 4. Project Location and salient physical characteristics relevant to the safeguard analysis. 5. The project aims to reduce deforestation of primary Malagasy forests by creating a corridor to protect remaining native forests between the Zahamena and Mantadia National Parks in east- central Madagascar. The Ankeniheny-Zahamena Corridor in Madagascar stretches over 425,000 hectares, and includes five protected areas: Mangerivola, Betampona, Analamazaotra-Mantadia, Zahamena) managed by the Madagascar National Parks (MNP), 60 areas which management has been transferred to local communities, and four private areas. The corridor encompasses the majority of what is left of Madagascar’s eastern dense tropical rainforest. The corridor is included in Toamasina Province and the three Regions concerned by its management are respectively, Atsinanana, Alaotra Mangoro and Analanjirofo. 6. The project’s site is encompassing a mid range of approximately 700-1000 m and a slope range of 0–60 degrees. The sites selected for the project activity are within the slope range of 20- 45 degrees. The CAZ Protected Area site makes up a vast watershed that holds the sources of eight large rivers and a multitude of water systems, the largest of which include Sahatandra, Ivohitra, Rianila, Ivondro, Ivoloina, Onibe, Ihofika, Namarafana, Sahatavy, Managory, Simianona, Marimboha, Manatsatrana, Onibe and Fanandrahana. These rivers are largely used on a daily basis by local populations as important sources of potable water supply. 5. Environmental and Social Safeguards Specialists 1. (AFTCS TBC) 2.Mr Paul Jean Feno (AFTEN) 6. Safeguard Policies Triggered Yes No Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Forests (OP/BP 4.36) X Pest Management (OP 4.09) X Physical Cultural Resources (OP/BP 4.11) X Indigenous Peoples (OP/BP 4.10) X Involuntary Resettlement (OP/BP 4.12) X Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP X 7.50) Projects in Disputed Areas (OP/BP 7.60) X II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts: 7. The draft EA specifically for CAZ within EP3 framework prepared by the GoM pursuant to OP4.01 and lessons learned from the implementation of the parent project EP3 confirm that large-scale, significant and/or irreversible environmental impacts are not expected. The GOM is committed to the principle of associating surrounding communities to the implementation of the management plan of CAZ and therefore no resettlement is expected to take place. Other necessary safeguards have been conducted under the parent project and disclosed under the same. 8. Activities proposed for BioCF CAZ follow those expected under the parent project EP3, IDA Project P074234 and its additional financing. Therefore, the BioCF resources will help promote sustainable forest management around CAZ as it is conceived and designed to have significant positive environmental and social impacts. Revenues generated from the carbon purchase will be shared in three parts. One major part is dedicated to communities; the second one is for the delegated manager of the Park to ensure a better conservation of the Park and use of carbon revenue and the third one is for the State. So, optimum quantity of carbon available for sale is only generated in the CAZ if the three entities are closely working together and coordinating their respective efforts to reduce and/or avoid deforestation in and around the park. All environmental and social issues related to CAZ are already addressed in the execution of EP3 thanks to the full assessment done on PAPs and corresponding PAPs financing. Overall, the carbon revenue will be a complement of safeguards mitigation activities planned under EP3. It will be then shared more inclusively to PAPs as well as to non PAPs. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: 9. Long-term impacts are those that may be associated with induced activities related to income generating activities and management transfer of forest areas that will be promoted to local communities around CAZ. However, the environmental impact of such an activity has been and will continue to be among the most critical determinants of the capacity building plan dedicated to all involved stakeholders. In addition, the GoM is already committed with its decentralized structures (Forest Department) to put in place enabling corresponding mitigation measures in case leakage as well as slash and burn are extended any time and in compliance with the national legislation. Therefore, no negative long-term impacts are anticipated due to project activities. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. 10. Not relevant. 4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. 11. The three decentralized forestry directions that cover the Corridor have been mandated to manage the protected area until the permanent protection status of CAZ is obtained. To this end, a technical committee composed with governmental and non-governmental partners involved in the creation of CAZ has been established. The purpose of this technical committee was to orient the process for officially creating CAZ and monitor implementation progress. The technical committee meets twice monthly with a technical support of Conservation International which assures its secretariat. 12. The borrower's capacity to deal with safeguard issues have been improved based on their combined track record in-country, as well as with the implementation of the parent project. Indeed, tools and instruments have been developed, disseminated and experienced in other protected areas through training