Report No. PID8639 Project Name Uruguay-Maritime Management Project Region Latin America and the Caribbean Region Sector Other Environment Project ID UYPE57753 Public Disclosure Authorized Supplemental Project UYGE60923 Borrower(s) Government of Uruguay Implementing Agency OPP Environment Category B Date PID Prepared November 1, 2000 (revised) Projected Appraisal Date March 2001 Projected Board Date June 2001 Public Disclosure Authorized 1. Country and Sector Background Coastal Contamination. The marine and coastal biota along the Uruguayan coastline are increasingly affected by human activities. Marine biodiversity is threatened by oil spills and other forms of hydrocarbon pollution, ship- generated wastes and wastes from coastal municipalities. Oil pollution is caused by petroleum loading zones, and heavy traffic of fishing, cargo and recreational boats generates a large amount of hydrocarbon residuals. Concentrations of hydrocarbons are spread along the coastline by sea currents and winds. The permanent exposure to toxic contaminants such as oil has the potential to generate changes in the composition of marine populations and communities of species. A serious oil spill in February 1997 contaminated over 20 miles of the Uruguayan coastline. This oil spill also jeopardized Public Disclosure Authorized the Isla de Lobos, home to a large population of sea lions. Marine Traffic Security. Expanding economic activity due to recent regional economic integration (MERCOSUR) has increased oil activity and commercial traffic is expected to increase along the Uruguayan coastline, and the country's current navigation information infrastructure is insufficient to control marine traffic security and prevent oil spill incidents. The 1997 oil spill highlights the need for improved hydrographic and other maritime information systems. Annually, thousands of ships pass close to the coast of Uruguay in the deeper water channels of the Rio de la Plata. Large areas of the Rio de la Plata have not been mapped using modern technologies, and consequently there might still be some uncharted rocks posing a threat to maritime traffic. In addition, there are areas with a high level of ship traffic that require continuous dredging, raising concerns of spoils management. Government agencies are slowly mapping the shipping channels, Public Disclosure Authorized but much remains to be done. In addition, government units responsible for monitoring ship traffic are hampered by a lack of modern equipment to track the position of each vessel. Environmental Management of Ports. The Port of Montevideo is the nation's most important port, handling most exports and imports. Other major ports include Colonia, Nueva Palmira, Fray Bentos and Juan Lacaze. The basic management of ports is under the jurisdiction of the Administraci6on Nacional de Puertos (ANP). The Bay of Montevideo in which the Port is located has several environmental management problems, which include processing of ship wastes, cleaning of holds, fuel spills and discharges from the local refinery, air pollution, handling of hazardous materials, and the discharge of organic wastes and industrial pollutants from several small streams and storm water outfalls. In conjunction with a high sediment load from the Rio de la Plata, these discharges have led to anoxic conditions in the Bay, turbid conditions and fairly high concentrations of heavy metals in the sediments. The Uruguayan Navy is responsible for emergency management, in particular responding to hydrocarbon spills in and around the port. Fisheries Management. The management of fisheries in the region is jointly carried out by Argentina and Uruguay on the basis of estimates of long-term sustainability and agreed quotas. In practice, however fish stocks have been declining. Both countries established exclusive fishing zones of approximately 200 miles width, jointly managed under the Frente MarUtimo Agreement and the Administrative Commission of Rio de la Plata. In addition, some areas have been designated as off-limit, being important for the juveniles of various species. However, these areas have not been respected and fish stocks have been declining. Biodiversity in the region is under threat. Clearly, in the face of declining stocks, pollution from ships and land-based sources adds to the stress. Institutional Issues. Maritime management is the responsibility of several agencies: - The Prefectura Nacional Naval, as part of the Coast Guard branch of the Navy, is responsible for the management fisheries enforcement and contingency. - The ANP handles a variety of issues associated with ports, but these tend to be commercial rather than environmental. - The Instituto Nacional de Pesca (INP) responsible for all matters related to fishing, but it does not carry out operational or enforcement tasks. - The Servicio de OceanografUa, HidrografUa y MeteorologUa of the Navy (SOHMA) has the principal responsibility for mapping coastal areas and providing the shipping industry with charts. - The Direccion Nacional de Medio Ambiente (DINAMA) has principal responsibility for environmental policies nationwide. - Land-related environmental issues are handled by local municipalities. The execution of responsibilities has been limited mainly because of a lack of financial and human resources but also by inter-agency rivalry. Improved urban environmental management, land use regulation enforcement and actions by local municipalities and other sectors (such as energy) could play a role in improving coastal zone management in general, but are beyond the scope of this project. This mix of agencies and lack of a clear leader in coastal zone and maritime management begs for a solution. This is especially important for Uruguay, where the proper management of its ports and the unhampered flow of trade are of key importance in maintaining its position in MERCOSUR and as a signatory to the MARPOL Convention. 2. Objectives of the Project The proposed project will provide for improved management of maritime natural -2 - resources and overall biodiversity in the near-in coastal areas (within 200 miles) of Uruguay. The project will also address specific operational and economic priority issues such as: (a) port pollution and emergency response systems in and around the Bay of Montevideo; (b) the high potential for maritime accidents and oil spills due to outdated hyrographic data and poor navigational aids; (c) degradation of the fishing grounds due to over-fishing and pollution; and (d) selected institutional issues which hamper effective, coordinated coastal pollution management. The project will provide initiatives in all these areas, for long-term and economically-sustainable management of maritime resources. 3. Rationale for the Bank's Involvement The World Bank serves as a catalyst in supporting the development of action plans, as well as a source of specialized advice drawn from a global knowledge base in the areas of biodiversity conservation, innovative pollution management instruments, and modernization of public sector environment agencies. The value-added of Bank support includes the ability to mobilize global experts, technical support for preparation, supervision capacity, and the development of linkages with other sources of expertise and funding. This project will build upon the findings of the Bank's prior sector work in environmental management as well as sector work related to fisheries management in the region. 4. Description The main project components and specific activities under each component include: A. Environmental and Safety Improvements in Port, Prevention of Pollution and Control of Ship Wastes. The component includes: (a) reception facilities for ship-based wastes; (b) equipment for the disposal of wastes generated at ports; (c) training and technical assistance for port personnel to strengthen their response capacity to emergencies; (d) improved navigational aides including buoys and lighthouses; and (e) improved storage, handling and transport of hazardous materials and wastes. The GEF portion of this component would address capacity building to handle ship-based wastes and compliance with international conventions. B. Improved Oil Spill Mitigation and Vessel Monitoring. This component includes: (a) oil spill contingency plans and strengthening of emergency response capacity; (b) hydrographic mapping of the Uruguayan coast; and (c) improved vessel monitoring systems. The component would address capacity building to handle oil spills drawing on international experiences. The GEF part of this component would support the development of a marine electronic highway, as well as co-funding of some of the above-mentioned activities. C. Promotion of Sustainable Fisheries. This component would support: (a) the preparation of a fisheries information base, though improving stock assessments; and (b) the preparation of an action plan for the fisheries sector. GEF portion of this component would address maintaining ecosystem integrity as well as biodiversity issues beyond those species of commercial interest. The activities that would be financed by GEF include: (a) assessments of - 3 - coastal and marine biodiversity; (b) identification of critical sites for conserving this biodiversity; (c) identification and establishment of marine protected areas, based on these results; and (d) mainstreaming biodiversity concerns in fisheries management through pilot activities, such as improved gear selectivity and innovative management methods. 5. Financing Total