Colombia - Natural Resource Management Program Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No: 23418 IMPLEMENTATION COMPLETION REPORT (CPL-36920; TF-20818) ON A LOAN IN THE AMOUNT OF US$39.0 MILLION TO THE REPUBLIC OF COLOMBIA FOR THE NATURAL RESOURCE MANAGEMENT PROGRAM (Loan No. 3692-CO) December 19, 2001 Environmentally and Socially Sustainable Development Sector Management Unit Latin America and the Caribbean Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (Exchange Rate Effective at Completion) Currency Unit = Peso (C$) C$= US$ US$ I = C$ FISCAL YEAR January - December ABBREVIATIONS AND ACRONYMS CAR Autonomous Regional Corporation (Corporaci6n Aut6noma Regional) CAS Country Assistance Strategy CC Community Council (Consejo Comunitario) CONPES National Council for Economic and Social Policy (Consejo Nacional de Politica Econ6mica y Social) CR Regional Committee (Comite Regional) CT Technical Committee (Comisi6n Tecnica) CVC Corporaci6n del Valle del Cauca DNP National Planning Department (Departamento Nacional de Planeacion) FAO-CP Food & Agriculture Organization/World Bank Cooperative Program FEPS Final Executive Project Swnmary GEF Global Environment Facility GIS Geographic Information System ICFES Institute for Higher Education (Instituto Colombiano para el Fomento de la Educaci6n Superior) ICR Implementation Completion Report IEPS Initial Executive Project Summary IGAC Instituto Geografico Agustin Codazzi INCORA Agrarian Reform Institute (Instituto Colombiano de Reforma Agraria) INDERENA National Renewable Resources Institute (Instituto Nacional de los Recursos Naturales Renovables y del Ambiente) LA Loan Agreement LRA Agrarian Reform Law (Ley de Reforma Agraria) MMA Ministry of the Environment (Ministerio del Medio Ambiente) MTR Mid-term Review NGO Non-governmental Organization NRMP Natural Resource Management Program PAFC Tropical Forestry Action Plan for Colombia (Plan de Acci6n Forestal de Colombia) PNDF National Forestry Development Plan (Plan Nacional de Desarrollo Forestal) POT Land Use Plan (Plan de Ordenamiento Territorial) RPF Protected Forest Reserve (Reserva Protegida Forestal SAR Staff Appraisal Report SENA National Training Service (Servicio Nacional de Aprendizaje) SINA National Environment System (Sistema NAacional Ambiental) SPNN National Parks System (Sistema de Parques Nacionales Naturales) TFAP Tropical Forestry Action Plan TS Technical Secretariat UAE Special Administrative Unit (Unidad Administrativa Especial) UC Coordinatiing Unit (Unidad Coordinadora) Vice President: David de Ferranti Country Director: Olivier Lafourcade Sector Director: John Redwood Sector Leader: Adolfo Brizzi Task Team Leader: Steven Oliver  IMPLEMENTATION COMPLETION REPORT (CPL No. 36920; TF No. 20818) COLOMBIA NATURAL RESOURCE MANAGEMENT PROGRAM CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2 4. Achievement of Objective and Outputs 5 5. Major Factors Affecting Implementation and Outcome 20 6. Sustainability 22 7. Bank and Borrower Performance 22 S. Lessons Leamed 26 9. Partner Comments 27 10. Additional Information 27 Annex 1. Key Performance Indicators/Log Frame Matrix 28 Annex 2. Project Costs and Financing 29 Annex 3. Economic Costs and Benefits 31 Annex 4. Bank Inputs 32 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 34 Annex 6. Ratings of Bank and Borrower Performance 35 Annex 7. List of Supporting Documents 36 Annex S. Summary of the Borrower's Report 37   | Project ID: P006868 Project Name: NATURAL RESOURCE MAN Team Leader: Steven William Oliver TL Unit: LCSER ICR Type. Core ICR Report Date. Januiary 7, 2002 1. Project Data Name: NATURAL RESOURCE MAN LIC/TFNuniber: CPL-36920; TF-20818 Country/Department. COLOMBIA Region: Latin America and Caribbean Region Sector/subsector: VM - Natural Resources Management KEY DATES Original Revised/Actial PCD. 01/23/91 Effective. 11/09/94 11/09/94 Appraisal: 07/01/93 MTR: 06/30/96 01/15/97 Approval: 12/23/93 Closing: 12/31/99 03/31/2001 Borrower/lImplementing Agency: The Ministry of Finance and Public Credit/The Ministry of the Environment Other Partners: The Autonomous Regional Corporations, the National Renewable Resources Institute, the Institute for Higher Education, the National Training Service, and the Agrarian Reform Institute STAFF Current At Appraisal Vice President: David de Ferranti S. Shahid Husain Country Manager: Olivier Lafourcade Yoshiaki Abe (Department Director) Sector Manager: John Redwood Nicholas Krafft (Division Chief) Team Leader at ICR: Steven Oliver ICR Primary Author: Steven William 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likelv, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: S Sustainability: L Institutional Development Impact: SU Bank Performance: S Borrower Performance: S QAG (if available) ICR Quality at Entry: S Project at Risk at Any Time: No  3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: 3.1.1 The overall objective of the Natural Resource Management Program, as defined in the Loan Agreement (LA) and the Staff Appraisal Report (SAR), was to develop policies and mechanisms to contribute to the arrest, over the long term, of the degradation of natural renewable resources. The program was intended to be the first phase of a long-term set of initiatives, and had two specific subsidiary objectives: (a) to help conserve the primary moist forest and its bio-diversity in the Choc6 Region on the Pacific coast; and (b) to assist in halting and reversing forest conversion and degradation in the Western and Central Cordilleras. 3.1.2 The overall objective was clear. It was intended to provide certain necessary conditions - the policies and mechanisms - for the achievement of a long-term goal, that of halting the degradation of natural resources in Colombia. The subsidiary objectives were also clear (although the second of them, concerning the Cordilleras, would probably have been better expressed as "halting and reversing forestry conversion and the degradation of natural resources ..."). The objectives were also realistic, because there was the implicit acceptance that the output and products of the program were necessary but not sufficient conditions for the achievement of the ultimate goals (hence the use of qualifying expressions in the definition of the program's objectives - "to contribute to", "to help", and "to assist"). It should be stressed that the achievement of the objectives of the program was most emphatically not to be measured by the achievement (or otherwise) of the eventual goals. The objectives were (and remain) important for Colombia and for its rural sector. The preparation and appraisal of the program predate the Bank's formal introduction of the Country Assistance Strategy (CAS) procedures. 3.1.3 The term "natural renewable resources" should be used with care, and in this case it should be qualified. It is not clear in the program's description precisely what constitute renewable natural resources. The emphasis in the program description is placed on forests, water and soil. Once destroyed, tropical forests can be recuperated in a time-frame measured in decades and centuries. However, a major part of the purpose of Component B was to reduce soil erosion, and soils are not, in any useful sense, a "renewable" natural resource. Once lost, soils are renewed - if at all - only over a geological time-frame. 3.1.4 The program was very complex (in the LA, the Description of the Project extends to ten pages). It had four components and twenty-two sub-components; as designed, it had eighteen implementing agencies, but by 1998 this had grown to twenty-six. This inevitably made significant demands on the coordinating unit and the implementing agencies. The coordinating unit faced a major task in administrative activity, the coordination of program actions and the definition of priorities. Some of the implementing agencies were not parts of the National Environment System (Sistema Nacional Ambiental - SINA), and in the latter phase of the program, when serious budgetary restrictions began to be felt, the transfer of funds to these bodies by the Ministry of the Environment (Ministerio del Medio Ambiente - MMA) was difficult. -2-  3.1.5 As recognized in the SAR, the program was subject to broad areas of risk and uncertainty, and it was recognized that the creation of safeguards against them had contributed to the complexity of the operation, particularly in its institutional aspects. The main areas of risk foreseen were: the fluid institutional structure; the evolving legal framework in areas affecting the program (i.e., land titling); the decentralization of government; the possible continuation of unsatisfactory forestry policies; the need for cooperation by populations affected by the program; and the situation concerning security. In one important respect, the program was a very risky one; the "unpredictable security situation in Colombia" was recognized at appraisal as one of the main risks, and it is greatly to the credit of the staff of the coordinating unit and of the implementing agencies that they were able to carry out their program-related tasks even as internal security steadily worsened over the life of the program. 3.2 Revised Objective: 3.2.1 The overall objective of the program, as "reformulated" at the mid-term review (MTR) in January 1997, was to develop the policy, institutional and technical base for sustainable natural resource management in the context of the decentralized framework for environmental management introduced by Law 99 in late-1993. Within this broad objective, the program emphasized the forestry sub-sector and had a regional focus on the Choc6 Region, because of the importance of its primary moist forests, its biodiversity, and the predominance of ethnic minorities (of indigenous and Afro-Colombian people). 3.2.2 The two specific objectives were maintained throughout the life of the program. They were endorsed during the MTR, when it was concluded that the program had become even more relevant to the government's objectives for sustainable development than it had been when originally approved. However, the passage of Law 99 at the end of 1993, through which the MMA and the SINA were created, had the effect of altering the relative importance of the objectives of the program. As designed, the program gave particular emphasis to the physical investments to be made (in Component B) in water-shed protection. With the passage of Law 99, and without diminishing the importance of water-shed investments, more emphasis was given to institutional development and to the elaboration of policy that would allow the implementation of the new and decentralized system of environmental management. It was concluded that all of the components were relevant to the achievement of the objectives of the program, and no adjustments were made to the projected costs or to their distribution between or within components. 3.3 Original Components: 3.3.1 The SAR contains a confusing mixture of terms when referring to the program and its subsidiary parts. In this ICR, the structure of "program/component/ sub-component/activity" has been used, and the term "sub-project" has been confined to the term "Part B Sub-project" as defined in the LA. The program had four components. The estimated cost of each component included the price and physical contingency provisions. -3 -  Component A - The Development of National Forest Policy, and of a Natural Resource Management Strategy for the Choco Region (US$10.8 million, 16.5 percent of project costs) The sub-components were: - the development of national forest policy; - the ecological zoning of the Choc6 region; - environmental monitoring; - demarcation and titling of indigenous reserves; - land title regularization for Afro-Colombian communities; - institutional analysis of five Autonomous Regional Corporations (Corporaci6n Aut6noma Regional' - CAR); and - support for five Regional Committees (Comite Regional - CR) Component B - Water-shed Protection and Rehabilitation (US$25.74 million, 39.4 percent of project costs) The sub-components were: - micro-catchment area protection; and - community fuelwood plantations. Component C - Management of National Parks and Buffer Zones (US$8.73 million, 13.4 percent of project costs) The sub-components were: - the institutional strengthening of the National Park Service (Unidad Administrativa Especial del Sistema de Parques Nacionales Naturales ) and the Corporaci6n del Valle del Cauca (CVC); - training in management of the protected areas of the Choc6 Region; - the development of park management plans for nine national parks; - the preparation of management plans for special areas selected for their bio-diversity; - community conservation and environmental education in park areas and buffer zones; - the preparation of a strategy and draft Action Plan for long-term flmding of protected areas; and - the monitoring and evaluation of protected areas. Component D - Forestry and Environmental Education, Training, Research, Project Management, and Monitoring & Evaluation (US$20.06 million, 30.7 percent of project costs) The sub-components were: - education and university research; - vocational training; - forestry research; - the project coordinating unit; - project preparation and evaluation; and - the establishment of a panel of independent experts. -4 -  3.3.2 The components were closely related to the achievement of the objectives of the program, and the sub-components were well within the capacity of the multiple implementing agencies. The design of the program took into account the experience gained in Bank-supported projects in the rural sector of Colombia (particularly the Upper Magdalena Pilot Watershed Management Project [Loan 2069-CO] and several integrated rural development projects). It also incorporated lessons learned in similar projects Bank-wide, including those expressed in Forestry Development: A Review of Bank Experience (Report No. 9524, of 4/22/1991) and The Forest Sector: A World Bank Policy Paper (September 1991). 3.3.3 The program was prepared and became operational during a period of growing awareness in Colombia of the need to protect natural resources. The Constitution of 1991 explicitly recognized the responsibility of the State in environmental management, and the development plan for 1990-1994 included the significant strengthening of institutions as well as the creation of the MMA. 3.4 Revised Components: 3.4.1 The components were maintained throughout the life of the program. 3.5 Quality at Entry: 3.5.1 The preparation of the program and the processing of the loan predated the introduction by the Bank of the CAS process. Bank strategy at the time was based on the sound macro-economic framework and the government's objectives for economic growth and poverty alleviation. Specifically, the program supported efforts to complete fundamental policy reforms in key areas of the economy needed to achieve sustainable growth and improved quality of growth, focusing on improving the institutional and regulatory frameworks for natural resource management and supporting investments in rehabilitation of watersheds and reforestation of degraded areas. 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective. 4.1.1 The program's overall objective was to create a mechanism (the policy framework and set of instruments) to be used throughout Colombia to contribute, over the long term, to the arrest of the degradation of natural renewable resources. The two specific subsidiary objectives were to apply parts of this mechanism in two geographically-defined areas: (a) to help conserve the primary moist forest and its bio-diversity (in the Choco Region on the Pacific coast); and (b) to assist in halting and reversing forest conversion and degradation (in the Western and Central Cordilleras). -5 -  4.1.2 The program's outcome and the degree to which it achieved these three objectives were all satisfactory. This is particularly true when the situation concerning security in much of the program's sphere of action is taken into account. There was no order of priority given to the objectives in the SAR, rather they were seen as being complementary. 4.1.3 The program was implemented against a changing back-drop of strategy, policies and priorities in the MMA. From its inception in 1993 and its development during 1994 into a fully functioning entity, the MMA had three changes at ministerial level before 1998 with consequent changes in priorities. The program provided a basis for continuity in activities, thereby stabilizing work in the main sub-components. However, the program was designed before the creation of the SINA and several of its sub-components/activities were not directed towards the evolving priorities of a changing institutional structure. 4.2 Outputs by components: 4.2.1 The objectives of the program were concentrated in the categories of sector policies, physical objectives and institutional development. There were no financial or macro-economic objectives. The outcome of the program was satisfactory with respect to all three of these categories of objectives. In certain parts of the program (for example, in the achievement of the physical objective of community titling for indigenous and Afro-Colombian people) the outcome was highly satisfactory. 4.2.2 The design of the program was appropriate for the achievement of the objectives, but the performance indicators for judging the achievement of the objectives were not well quantified in the SAR (the "key indicators" were limited mainly to target dates for the completion of program activities and studies). To remedy this, the SAR specified that two activities would be undertaken at the beginning of the program. First, a base-line study would be carried out by consultants to assemble and review all existing information related to the sphere of action of the program; assess the physical, economic, social and institutional conditions at the start of the program; and define the relevant monitoring and evaluation indicators. Based on this work, consultants would then design and implement the monitoring system in the Coordinating Unit and in the implementing agencies to monitor the progress in the implementation of all program activities and measure the results. However, the base-line study was initiated only in late-1996. 4.2.3 The sub-components contributed to the achievement of the objectives in varying degrees. The following table indicates how the sub-components and objectives were linked, and the degree of success achieved by each sub-component in contributing to the achievement of the objectives. -6 -  Objectives Overall Specific Specific Develop policies and Help conserve forest and Assist in halting and reversing forest mechanisms to contribute to bio-diversity in the Choco conversion and degradation in the the long-term reduction in Region Western and Central Cordillera the degradation of natural resoutrces Component A: Development of National Forest Policy and Natural Resource Management Strategy for the Choc6 region Sub-components: A. I National foTest policy development S A.2 Ecological zoning of Choc6 region HS A.3 Environmental monitoring S A.4 Demarcation and titling indigenous HS communities A.5 Title regularization for Afro-Colombian HS communities A.6 Institutional analysis of five CARs S A.7 Support for five Regional Committees Component B: Watershed Protection and Rehabilitation Sub-components: S B.I Micro-catchment area protection S B.2 Community fuel-wood plantations Component C: Management of National Parks and Buffer Zones Sub-components: C. I Institutional strengthening of NPS and CVC S S C.2 Management training for Choc6 protected areas S C.3 Park management plans for nine parks C.4 Management plans for special areas S (bio-diversity) S C.5 Education for parks and buffer zones C.6 Action Plan for long-term funding of protected S areas S C.7 Monitoring & evaluation of protected areas S Component D: Forestrv and Environmental Education; Training; Research; Project Management; Monitoring and Evaluation Sub-components: D. I Education and university research S D.2 Vocational training S D.3 Forestry research S D.4 Coordinating unit S S S D.5 Project preparation and evaluation S D.6 Panel of independent experts U Component A - The Development of a National Forest Policy and a Natural Resource Management Strategy for the Choco Region: 4.2.4 The main purposes of this component were to refine Colombia's policy framework for the forest sector and to address the specific issues facing the environmentally-fragile Choc6 region of the Pacific coast. -7 -  Sub-component A.1 - The Development of National Forest Policy: 4.2.5 Indiscriminate deforestation was recognized in the SAR to be "one of Colombia's principal environmental problems". Within the context of the international Tropical Forestry Action Plan (TFAP) initiative that began in 1985, the government of Colombia prepared its own action plan (the Plan de Acci6n Forestal para Colombia - PAFC) between 1987-1989, and its implementation was included in the national Development Plan for 1990-1994. The Natural Resource Management Program was considered to be an integral part of the PAFC. 4.2.6 This sub-component was intended to "help refine" Colombia's policy framework for the forest sector. Under the sub-component, all of the studies carried out and in progress concerning forestry policy in Colombia were to be consolidated and validated via field work and participatory meetings with local institutions and populations, in order: (a) to analyze the limitations to growth and sustainability in the forest sector; and (b) to recommend reforms and policy actions designed to solve the limitations. A series of additional studies was to be carried out, including several factors hitherto excluded (e.g., the impact of macro-economic policy, community participation, environmental considerations in the new Constitution, the reorganization of the legal and institutional frameworks, land titling initiatives for indigenous and Afro-Colombian people, and policies directed towards decentralization), to provide the analytical basis to produce the National Council for Economic and Social Policy (Consejo Nacional de Politica Econ6mica y Social - CONPES) draft resolution on forest policy. 4.2.7 Once the program was under implementation, however, the MMA and the DNP concluded that, given the time elapsed between project appraisal and Loan effectiveness and the extensive work on forestry policy that had continued in that period, sufficient information existed at the beginning of the program without the need for further study, and the draft CONPES resolution (No. 2834) was published in January 1996. 4.2.8 A complete review was carried out of legal measures issued between 1991-1996 concerning forests, particularly the social and ecological aspects inherent in the application of property rights over forested land, and this work supported the preparation of the 1996 decree on Forest Use (Decreto 1791: October 4, 1996: Regimen de Aprovechamiento Forestal de Colombia). A detailed evaluation was made of the existing policy incentives and the benefit streams associated with them; it was concluded that, in their absence, the private sector would have little incentive to change its behavior in the direction of reforestation or conservation. A package of modified and new incentive measures was proposed. A study was made to determine the maximum level of extraction of individual tree species in three types of forest, in order to provide the CARs with the technical bases for controlling extraction starting in 1996. The study proposed a restructuring of the system of extraction rates and a draft decree for the definition of these rates to operate throughout Colombia (a norma is currently under review by the MMA). 4.2.9 Colonization has been the principal factor in the destruction of tropical forest in Colombia. In times of peace, there has been an acceleration of occupation of forest reserves and peace per se does not guarantee the presence of govemrnent in these areas or any rationalization of occupation. A study of colonization found that it is mainly an ad hoc process badly in need of attention from the government. The areas of new colonization are concentrated in the upper Cordilleras, on higher ground in the Amazon region, and on the - 8-  Pacific coast, and are frequently based on deforestation for the establishment of extensive pastures. Since the 1980s, the introduction of illegal crops (e.g., coca, marihuana and opium poppies) has increased colonization of new areas, with the consequent destruction of forest and the substitution of traditional agricultural systems. The study recommended a set of measures, including community participation in the implementation of sustainable development strategies and the strengthening of institutions to support them. However, it is self-evident that a resolution of the current internal security emergency is a necessary condition to be fulfilled before any serious attempt can be made to improve the process of colonization. 4.2.10 A study of the control and monitoring of the use of forest products concluded that it was inadequate in almost all respects, mainly because of institutional weakness, lack of staff and equipment, and inadequate budgets at the level of the CARs. External factors, especially violence and the lack of security, are also important. Control has emphasized the transport of products rather than the extractive process, which leads to the conclusion that it is unlikely that the technical parameters established in the management plans are being respected. A series of measures was proposed, including the creation of a national coordinating unit in the MMA, a data base to allow the MMA and the CARs to have up-to-date information, and the strengthening of staffing, control points and the control mechanism (including a forest "passport" and timber identification). 4.2.11 A study of inter-sectoral policies that promote deforestation concluded that forestry resources are systematically under-valued. Forest destruction as the legal means to obtain title to land, mining that ignores the environmental externalities, and road-building (especially that in support of petroleum extraction) which encourages migration were identified as the main factors. Institutionally, there is a lack of coordination and a lack of awareness of the role of the environmental authorities, both at the national and the regional level. The forest reserves, although legally defined and constituted, do not have a clear line of authority over them, leading to their partial illegal occupation and ex post facto legalization by means of the mechanism of "Sustracci6n a las Reservas Forestales" (articles 2 and 3 of Ley No. 2 of 1959). 4.2.12 A study of the system of forest extraction permits in the Pacific coastal region identified issues and proposed solutions for sustainable extraction. In addition, two further studies were carried out: (a) a study of the domestic market for sawn-wood and other forest products; and (b) a study of international markets for sawn-wood and other forest products. 4.2.13 A pilot study was carried out of forest zoning as a planning and environmental control mechanism. The 1:100,000 scale thematic maps were combined into a Geographic Information System (GIS) and 1: 15,000 scale maps were created for the area of Tarapaca, located in Amazonian region of Colombia, with a detailed guide for methodology of forestry zoning. 4.2.14 The preparation of the National Forestry Development Plan (Plan Nacional de Desarrollo Forestal - PNDF) was aimed at establishing a strategic framework to incorporate forestry into Colombia's economic development, using its comparative advantage and promoting competitivity consistent with the sustainable use of both natural and planted forests. The PNDF is based on: (a) a significant level of state support for the promotion and development of forestry in recognition of its multifaceted role in the economy; (b) the central principles of sustainable use and recuperation of degraded areas, in support of biodiversity and -9-  conservation of ecosystems; and (c) the importance of market forces in an open commercial environment to guide development and to reveal comparative advantage. Although a coherent and well-articulated forest policy exists, its level of implementation is low. Whilst the program's objectives were to provide the tools for the eventual achievement of the resource protection goals (see paragraph 3.1.2) with the benefit of hind-sight it can be argued that provision could have been made for support for its implementation. However, this would have made for an even more complex program. Sub-component A.2 - The Ecological Zoning of the Choco Region: 4.2.15 The purpose of the sub-component was: (a) to provide the instruments at the regional level to plan and implement the use of natural resources in a sustainable manner, with emphasis being given to community participation; (b) to produce new cartography of the region and, based on available data, identify critical natural resource management issues; and (c) to integrate the cartography and base information into a GIS. The basic work was carried out by the Instituto Geografico Agustin Codazzi (IGAC), which is the mapping authority of Colombia and, in addition, is renowned for its remote sensing and GIS capabilities. As a result of this work, the following products were obtained: (a) a base-line study (Sintesis Integrada Regional) of actual and potential land use, together with the main constraints on future development; (b) the results of the agro-ecological zoning and the methodology used, with mapping at 1: 100,000 scale; (c) detailed agro-ecological zoning in the pilot areas of Bajo San Juan, and the catchment areas of the rio Guapi and the rio Mira, with mapping at 1 :100,000 scale; (d) a series of publications including a description of the methodology used, the digital cartography and thematic mapping generated, and a Final Report. 4.2.16 The Choc6 Region is extremely heterogeneous in terms of ecosystems. It is characterized by high rainfall (up to 10,000 mm in an exceptional year) and humidity, associated with soils generally of low fertility and high acidity. The zoning is a useful tool; however, for it to be fully taken advantage of at the level of municipalities (through their Planes de Ordenamiento Municipal), indigenous reserves and community-titled lands the level of detail would have to be increased. Sub-component A.3 - Environmental Monitoring: 4.2.17 The purpose of the sub-component was to identify the short- and medium-term impacts of four selected forest-use projects, to generate technical parameters for sustainable forest product extraction, and to strengthen institutional capacity for environmental monitoring. In practice, only one of the four forest-use projects identified in the SAR was studied. The study of environmental impact in forest areas included three types of forest. The study in the area known as Balsa II (in the lower rio Atrato basin) encompassed 24 parcels in four predefined stages of inter. ntion of the natural forest and place emphasis on the Catival forest. In addition, a study was carried out on 28 parcels located in five municipalities, 24 monitoring Nadi palm extraction and four monitoring areas in which Guandal timber extraction had been - 1 0 -  practiced earlier. Measurements were made between 1997-1999. The study planned for the area of Uruba could not be carried out because of its poor security status. Sub-component A.4 - Demarcation and Titling of Indigenous Reserves: 4.2.18 The purpose of the sub-component was to support the definition and legal protection of lands of indigenous Amerindian people in the Choc6 region. This included the granting of land titles to groups lacking secure title, establishing new reserves (resguardos indigenas) and marking the boundaries of existing reserves. In November 1995, the MMA signed an agreement (Convenio Interadministrativo Marco, no.45. November 17, 1995) with the Agrarian Reform Institute (Instituto de Reforma Agraria - INCORA) to implement this sub-component and that of titling of black communities. [N.B. In March 1998, an Action Plan was established (through the inter-institutional cooperation of MMA, the Red de Solidaridad and INCORA with the indigenous and Afro-Colombian communities' organizations) conceming Sub-components A.3, A.4 and A.7 and defining the resources necessary to complete the collective titling. By the end of the program, the Action Plan had been fully implemented.] 4.2.19 In this sub-component, 46 indigenous reserves were created and 10 were expanded, significantly exceeding the target of 40 reserves established in the SAR. In total, they covered 324,287 ha (representing 16.3 percent of the total area of indigenous reserves in the Pacific region) and include 9,272 people in 2,561 families. A further 10 reserves are in an advanced stage of processing (they were presented to the Junta Directiva of INCORA in early 2001) and 8 have been the subject of up-dated socioeconomic, legal and land tenure studies for the constitution of new reserves. In addition, 128 reserves have had full boundary demarcation (cf the SAR target of 123). Sub-component A.5 - Land Title Regularization for Afro-Colombian Communities: 4.2.20 The collective titling of land to Afro-Colombian communities is, arguably, the single most important achievement of the whole program. A total of 2,359,204 ha was titled to 497 communities, to the benefit of 113,954 people in 22,132 families. Under the program, community leaders were trained and the community organizations and councils were responsible for carrying out the studies that are required by law before a given extension of land can be recognized as being of collective property. 4.2.21 The purpose of the sub-component was to support initial actions to regularize and to provide title to traditionally-occupied land to the black communities. The Constitution of 1991 and the subsequent law (Ley 70, 1993) recognized the rights of black communities to the collective ownership of the lands that they have traditionally occupied in the Pacific coastal region and elsewhere in the country. This constitutional and legal provision had as its principal objective the legalization of these lands, recognizing that prior to 1991 there had existed significant legal obstacles to this. 4.2.22 The Pacific Watershed (Cuenca del Pacifico) covers 10.08 million ha and has a wide variety of coastal ecosystems and humid tropical forest. In 1959, it was declared to be a Protected Forest Reserve (Reserva Protegida Forestal - RPF). The Natural Resources Code (C6digo Nacional de Recursos Nacionales) of 1974 forbade the individual or collective titling - 11 -  of the unoccupied land (terrenos baldios) in the areas of forest reserve. However, the Law 135 of 1961 (the Ley de Reforma Agraria - LRA), through the mechanism of "removal of areas" (Sustracci6n a las Reservas Forestales) from the forest reserve, actively encouraged the creation of colonies of peasant farmers, both local and migrants from other parts of Colombia, over large parts of the region. In the thirty years following the approval of the LRA, close to 1.5 million ha were removed from the forest reserves and given individual titles, and in 1993 a further 0.5 million ha were the subject of title applications. Law 135 of 1961 provided for indigenous communities of the region the opportunity to have their collective rights legalized over their ancestral lands via the establishment of indigenous reserves ( resguardos indigenas) in unoccupied land and the establishment, expansion and legalization of the reserves. 4.2.23 By 1993, when Law 70 came into effect, INCORA had legalized in the Pacific area 137 indigenous reserves with 1,681,963 ha benefiting 9,673 families, and was processing a further 44 reserves with 324,288 ha. Applications were expected to expand and create new reserves covering a further 500,000 ha. In 1991, eight National Parks with an area of 580,500 ha were in existence, and eleven "special natural areas" with an area of 346,200 ha had been created for a wide range of purposes (ranging from national defense to university research). Thus, at the beginning of the 1990s a process of territorial definition was well advanced in the Pacific region in favor of a range of institutional actors and individuals which ignored the rights of the black communities as an ethnic group settled in the region and with "ancestral" occupation of land but lacking any title of ownership (in spite of the efforts made by their organizations for the legalization of their lands). By 1993, when Law 70 was promulgated, the status of land tenure in the Pacific region was as follows: Area (ha) Private property 1,820,000 Resguardos Indigenas in existence 1,681,963 Resguardos Indigenas and Reservas in formnation 824,288 National Parks 580,500 Special Natural Reserves 346,200 Urban Areas 140,205 Area available for collective titling to black communities 4,686,844 Total area of the Pacific watershed area 10,080,000 4.2.24 The sub-component was designed to "support initial actions to regularize and title land of black commnunities in the Pacific Region" and, as described in the LA and the SAR, it was clearly seen as facilitating or paving the way for such titling; there were no quantitative targets set for the number of titles to be granted or the area to be covered. In the Convenio between the MMA and INCORA, however, six specific commitments were agreed upon: (a) the dissemination of information on ethnic legislation and training of communities in their new rights; (b) the strengthening of organization and processes in the black conmmunities to improve their management and communication capacity; - 12 -  (c) the achievement of advances in the agreed and participatory definition of the territorial rights of ethnic groups in the Pacific and other regions of Colombia; (d) the institutional development of INCORA to serve as a facilitator in the solution of intra- and inter-ethnic conflicts; (e) the promotion of collective titling as a strategy for conservation and sustainable use of bio-diversity in the Pacific region; and (f) the collective titling of 2.3 million ha of land during the five-year life of the Convenio. 4.2.25 During the period 1996-2000, INCORA succeeded in establishing 58 collective titles over 2,359,204 ha of land, benefiting 497 communities (with 22,132 families and 113,954 people in total). In addition, a further 91 applications for collective titles are being processed and the average state of advance is approximately 70 percent. These 91 applications cover 2,541,923 ha and will benefit 31,234 families. 4.2.26 In the achievement of these results, numerous obstacles were overcome and a significant number of collateral benefits was generated. These included the resolution of legal restrictions on the inclusion of areas of coastal mangrove forests in collective titles, the processing of titles for communities displaced by violence, and the resolution of problems originating in the over-lapping of areas defined for National Parks and other state entities with the ancestral lands of black communities. 4.2.27 In the course of the implementation of the land titling program, there was a significant increase in the intensity of the violence along the Pacific Coast and the displacement of both the black and indigenous populations. In February 1997, for example, at the height of the land titling program, a major displacement took place along the lower rio Atrato in the Department of El Choc6. Many of the intemally displaced families were resettled in an encampment in Pavarandosito and in the sports stadium in the municipio of Turbo, Department of Antioquia. The Catholic Church and several human rights organizations, along with the Red de Solidaridad Social, played an important role in the resettlement process, and have since assisted the displaced families to return to their homes and communities along the rio Atrato where, as a result of the land titling program, they now have secure collective titles to their lands. 4.2.28 The sub-component made important advances, in particular, in training and organizational strengthening. The Regional Committees of the program were planned as the focal points of meeting with the black and indigenous communities on the subject of collective titling. During the life of the Convenio, six Regional Committees and two Inter-ethnic Regional Committees were established. Under the Convenio, 36 training exercises were carried out to support black communities in the establishment of their Community Councils ( Consejos Comunitarios - CC) and in the formulation and presentation of their applications for collective titles. More than 150 CCs were formed, which all presented their titling requests for an area of 4,546,497 ha benefiting 74,446 families. In May 2000, the first National Assembly of Community Councils of the Pacific region was held, with the participation of 148 CCs. - 13 -  4.2.29 In terms of institutional development, INCORA created first a Division and later a Program of Support to Black Communities in order to meet its responsibilities under the Convenio and with respect to Law 70. The Loan and the Convenio made a fundamental contribution to the functioning of the Technical Committee (Comisi6n Tecnica - CT) which was created under Law 70. The CT was composed of delegates from INCORA, IGAC, and MMA, and was responsible for the technical evaluation of the applications for collective titling and for delimiting the area to be titled. The CT did not have the financial resources to contract personnel, and it was agreed that the operation of the Central Support Unit of the CT would be financed from the Loan via the Convenio between MMA and INCORA. 4.2.30 In order to overcome the serious deficiencies in mapping and related thematic information available to the CT, a GIS was created by INCORA for the black and indigenous communities. The basic levels of information include the areas covered by collective titles given and under study, indigenous reserves, municipalities, and national parks. This GIS is based on the GIS developed under Sub-component A.2 by the IGAC. Sub-component A.6 - Institutional Analysis of Five CARs: 4.2.31 The purpose of the sub-component was to prepare proposals and action plans for the restructuring of the five CARs to improve their capability and efficiency in the management of natural resources. The original design had anticipated the hiring of specialized consultants to carry out this work; however, the CU of the program (in coordination with the Environmental Institutional Development Project of the MMA) revised the work that had been done in the preparation of this sub-component in order to ensure that there was no duplication with work that had already been done. The five CARs, also consulted, were of the opinion that sufficient diagnoses had already been done, that the weaknesses of the CARs were already well-defined and, therefore, that specific actions should be implemented immediately to improve their administrative and financial functions, their ability to formulate and monitor projects, and their institutional capability for environmental management. As a result, the program oriented its resources to consolidate (from the administrative, financial and technical point of view) the CARs of the Pacific. It provided computer equipment, hired consultants to identify the strengths and weaknesses observed in the process of environmental planning of each of them, and designed and implemented an application for the management of the information in the data bases of Regional Investment Projects. The program did not include resources for actual institutional strengthening of these CARs; without it, several of them remain weak and, whilst it can be argued that by not going further than the diagnosis the program did little in practice to develop the CARs, the inclusion of such resources would have made the program even more complex. Sub-component A.7 - Support for Five CRs: 4.2.32 The purpose of the sub-component was to support regional groupings of representatives of the indigenous and Afro-Colombian communities, and the main mechanism used by the program to promote community participation in the Pacific region, particularly in the sub-components of collective titling, was the CRs. They were mainly involved in the resolution of conflicts and the facilitation of decision-making. A number of self-supporting structures were created, both inter-ethnic and intra-ethnic. Participation continues to be - 14 -  strengthened within the Social Solidarity Network (Red de Solidaridad Social) and forms an important part of the social policy of the government in the Choc6 region. More than one hundred meetings and workshops were held. Between 1994-2000, and particularly after 1996, this sub-component operated very closely with sub-components A.4 and A.5 and the methodology used assisted greatly in the achievement of the results. Component B - Water-shed Protection and Rehabilitation: 4.2.33 The purpose of the component was to support local activities: (a) to protect and rehabilitate critical micro-catchment areas in the Western and Central Cordilleras; and (b) to establish community fuelwood plantations to reduce pressure on the remaining highland natural forests. It was projected that a total area of 143,500 ha of micro-catchments would be treated and that 24,800 ha of reforestation activities of all kinds would be carried out. The implementation of the component was principally the responsibility of the CARs, of which 18 participated, in addition to one Departmental government and two non-governmental organizations (NGOs). In practice, the implementation of the component did not draw a distinction between micro-catchment area protection and fuelwood production. Sub-component B.1 - Micro-Catchment Area Protection, and Sub-component B.2 - Community Fuelwood Plantations: 4.2.34 Work was carried out in 176 micro-catchment areas distributed in 123 municipalities. Using Loan proceeds, 5,000 land-owners and tenants were involved, benefitting an estimated 131,000 people in the areas in which the work was carried out. Interventions included the planting of forest species, ranging from purely protective stands to those used in conjunction with livestock pastures or for the production of fuel, and "bio-mechanical" control (i.e., physical structures and planting of barriers) of erosion courses. An area of 19,267 ha was reforested, of which 49 percent was combined protection & productive use, and 3,200 ha benefited from physical erosion control alone. Agro-forestry and pasture-forestry covered 3,376 ha whereas forest for purely protective purposes reached 2,943 ha and that for fuelwood purposes 2,745 ha. 4.2.35 Publicity, training and organization for community participation were of great importance, and the CARs emphasized the role of local communities in the identification of problems and the preparation of the activities. Participation, in effect, involved those affected by the degradation of resources and those actually responsible for the degradation, and stimulated a collective commitment to solving the problems and changing destructive practices. The degree of participation and the level of success in these activities were closely related. The activities carried out were an important source of employment, and the first three years of establishing tree plantings are very labor intensive; it is estimated that over the period 1994-1999 about 4,700 person-years of employment were generated for unskilled labor. Although the full benefits of tree-plantings will not be realized for many more years, there have been many collateral benefits from tree planting including the use of foliage in animal feeding, the impact of shade in coffee production, and an increase in land values. The activities have also generated a number of extemal benefits, some of them foreseen at the time of preparation and appraisal. For example, surface water flows from micro-catchment areas for domestic purposes have been increased and stabilized in some areas, and land-slides have been reduced in number. The activity has also served to change the mentality of many peasant farmers towards the use of tree planting and in natural resource management in general. - 15-  Component C - Management of National Parks and Buffer Zones: 4.2.36 The purpose of the component was to strengthen the capacity of the Administrative Unit (Unidad Administrativa Especial - UAE) of the National Parks Service (Sistema de Parques Nacionales Naturales - SPNN). The UAE was created as part of the MMA in December 1995 to protect some of the most threatened and diverse ecosystems in the western part of Colombia. (The Parks Unit - Unidad de Parques - is responsible for the administration of the whole of the Protected Areas System - Sistema Nacional de Areas Protegidas - in Colombia.) The activities of the component were directed at the nine national parks and one Special Management Area in the Choco region of the Pacific coast (Choc6 Biogeografico Colombiano), which cover a total of 1,007,987 ha. Through the component, efforts were made to strengthen technical and administrative management at the central and regional level and to improve inter-institutional coordination. Three decentralized regions of the SPNN were involved: the north-west, with six parks; the south-west, with three; and the southern Andean, with one. A separate MTR was carried out for this component in early 2000. 4.2.37 Although the component as described in the SAR nominally contained seven mutually-reinforcing sub-components (see Section 3, paragraph 3.3.1), in practice the activities carried out cannot be compartmentalized easily and it is analytically more helpful to consider them not as sub-components but as separate, related activities within one component. Its implementation began in October 1996. A master plan (Matriz L6gica del Plan Operativo General) was prepared for the parks in the Pacific region, the approval of which, in mid-1997, allowed the government of The Netherlands to proceed with full funding of the component. (Of the total of US$7.12 million, only US$4.57 million of the grant was actually spent as a result of budgetary ceilings imposed.) The plan provided a clear guide for annual planning and for implementation. Beginning in 1998, detailed management plans were prepared in conjunction with the communities affected for each of the nine parks in the component. 4.2.38 In terms of the achievements of the component as a whole, the National Parks Service has been significantly strengthened; its professional capacity has been increased and it is very committed to the objectives of the program. A basic minimum level of equipment has been established, to enable the program to function at the levels of the regional and individual parks. There has been considerable interaction with local communities, where in conjunction with the municipalities in the formulation of their zoning plans (Planes de Ordenamiento Territorial - POTs) the national parks have been included as conservation and environmental protection zones. The policy of social participation for resource conservation has helped to overcome conflicts in the protected areas, and in the buffer areas of the marine parts of certain parks the definition of artisanal fishing areas have been pragmatic solutions to potentially difficult problems. There were significant advances in consolidating an increase in income from ecotourism for the Parks System, at least until the upsurge in the level of violence which occurred in 1999. The promulgation of Decree No. 1124 in June, 1999 has provided the Parks Service with the legal basis to implement mechanisms to achieve a sustainable financial system for itself. However, it must be concluded that satisfactory progress was not made with the preparation of the strategy and action plan to achieve the long-term funding of the protected areas. - 16 -  Component D - Forestry and Environmental Education, Training, Research, Project Management, and Monitoring and Evaluation 4.2.39 The purposes of the component were: (a) to provide skills and knowledge through research, education and training for the forestry sector in particular and for environmental management in general; (b) to support the implementation of the program through a Coordinating Unit; and (c) to establish an independent "panel of experts" to provide reviews and advice in the implementation of the program. Sub-component D.1 - Education and University Research: 4.2.40 The educational results achieved in this sub-component are shown below: Institution Total Students Students Students Number of number of financed graduated retired places students offered National University: Forestry 50 48 39 9 50 Technology Program Industrial University of Santander: 72 46 39 7 40 Forestry Technology Program National College: Forestry 163 83 83 6 80 Technicians Program University of Tolima: M.Sc. in 10 3 0 0 10 Hydrogeological Basins National University: M.Sc in 5 1 0 0 10 Tropical Forest Management Total 300 181 125 22 190 Students benefiting from financial support were required to provide 800 hours of service to any institution within the SINA, either during or at the completion of their studies. 4.2.4] The institutions participating restructured their programs of studies and invested in the re-equipment of laboratories and field equipment for research. In order to improve the capacity for research at universities and in the agencies that make up the SINA, between 1996-1998 the MMA, universities and others undertook a series of measures to identify the subjects and areas for research. A Technical Committee (Comite Tecnico Operativo) was established and two priority subjects were identified, for which terms of reference were prepared for the presentation of research proposals. However, because of problems with the incorporation of the resources into the budget of the Colombian Institute for the Development of Higher Education (Instituto Colombiano para el Fomento de la Educacion Superior - ICFES) no further work was carried out under this sub-component. Sub-component D.2 - Vocational Training: 4.2.42 The purpose of the sub-component was to train semi-skilled staff and workers in forestry and environmental protection, and was applied to both the Pacific and Amazon regions. It was implemented in three phases: diagnosis of problems and publicity of the training activities, training in specific areas identified at the community level, and the - 17 -  implementation of a training strategy through small projects. In total, 1,275 people were trained under the sub-component. The training activities were complemented by practical activities including the establishment of nurseries and agro-forestry parcels. In several cases, community organizations were created or strengthened for the purpose of managing forestry resources. Sub-component D.3 - Forestry Research: 4.2.43 The sub-component was designed to support a small number of forestry research and demonstration activities, to be implemented by both private and public entities to improve technical knowledge for plantation forestry, to monitor the environmental impact of plantations, and to manage natural forest resources in the Choc6 region. Nine activities were supported: (a) the production of species of high commercial value for industrial-scale reforestation; (b) the conservation of forest genetic resources in the Andean region; (c) specimen selection from two tree species of high commercial value in the coffee-production region; (d) the establishment of a technical and statistical information system for industrial-scale forestry plantations; (e) the evaluation of the environmental impact of forestry plantations; (f) identification of methods of protection of forestry plantations; (g) the control, management and sustained utilization of Naidi palm forest in the Pacific coastal region; (h) community management of forest in areas of settlement; and (i) the conservation and management of humid tropical forests in north-east Antioquia. Sub-component D.4 - The Program Coordinating Unit: 4.2.44 The Coordinating Unit (Unidad Coordinadora - UC) for the implementation of the program was created at the central level attached to the General Sub-directorate (Subdirecci6n General) of the National Planning Department (Departamento Nacional de Planeacion - DNP). The UC was transferred to the MMA in January 1995, as projected in the SAR, shortly after the Loan became effective. The financial resources of the program were incorporated into the investment budget of the MMA and were utilized by public and private entities via annual operating contracts. The UC played a pivotal role between the MMA and the Bank in ensuring compliance with the conditions of the LA, as well as ensuring that the components of the program were in accordance with the environmental directives of the national development plans in effect during the implementation of the program. It also - 18 -  operated as a source of advice and training for staff of the implementing agencies in both technical and financial aspects of the program. Sub-component D.5 - Project Preparation and Evaluation: 4.2.45 The purpose of the sub-component was to carry out a number of specific tasks: (a) the preparation of the base-line study referred to in paragraph 4.2.2; (b) the design of the monitoring and evaluation system referred to in paragraph 4.2.2; (c) the identification and preparation of a future program for natural forest management and land titling in the Choc6 region; (d) the preparation of specific sub-projects under the program; (e) the preparation of the report providing the basis for the MTR; and (f) the preparation of the final report and contribution to the ICR process. 4.2.46 Under the sub-component, four principal studies were carried out: (a) the preparation of the policies, plans and programs for the long-term development of the Pacific region of Colombia - the Agenda Pacifico XXI; (b) the preparation of the macro land-use zoning ( Ordenamiento Territorial) of the Pacific region; (c) the preparation of a development program for the Amazon region - the Agenda Amazdnica XXI, and (d) the strengthening and consolidation of the National Parks system in Colombia. This was a significant departure from what had been intended at program design. Whilst some of the changes can properly be attributed to pragmatic decisions taken in the light of the actual experience of implementing the program, others resulted in gaps in knowledge and information that hindered the achievement of the objectives. The preparation of the base-line study began late and did not generate the information needed. As a result, the monitoring and evaluation system was not implemented, and it was left to Bank staff working with the UC to prepare a set of rudimentary indicators to follow implementation. The required report by consultants in preparation for the MTR was not prepared, and the final reports (which were presented with a wealth of detail - see Annex 8) were prepared by the UC itself. Sub-component D.6 - The Panel of Independent Experts: 4.2.47 The purpose of the sub-component was to establish a group independent of the government to carry out annual reviews of the program, to recommend adjustments, to help resolve conflicts, and to facilitate coordination with other projects both in the area of influence of the program and in the rest of Colombia. The Panel was established only after a delay, and in effect never functioned as it was designed to do. It was available during the period of the MTR, but appears not to have functioned thereafter. - 19-  4.3 Net Present Value/Economic rate of return: 4.3.1 No ex ante economic analysis was made of the program or of any of its components. As stated in the SAR, the main benefits were expected to be environmental and could not be quantified. 4.4 Financial rate of return: 4.4.1 No financial analysis was made of any of the components or activities carried out under the program. 4.5 Institutional development impact: 4.5.1 The program had a significant impact on several of the participating institutions, particularly on the MMA. However, the impact on institutional development of the CARs was low. 5. Major Factors Affecting Implementation and Outcome 5.1 Factors outside the control of government or implementing agency: 5.1.1 The program was seriously affected by the lack of intemal security in Colombia which steadily worsened as the program's implementation progressed. This affected the achievement of the subsidiary objectives in particular, because both of the geographical areas concemed suffered a lack of security and actual violence and displacement of people that restricted travel by technical staff and disrupted the lives of the local populations, in some cases making intemal refugees of the very people that were the target beneficiaries of the program. 5.2 Factors generally subject to government control: 5.2.1 The most important factors affecting the program were the budget problems and fiscal austerity measures that began in 1995. In that year (the first full year of implementation) budgetary resources were not actually made available until the very end of the year, and beginning in 1996 the government limited both the amount budgeted for investment under the program and the proportion of that budget actually made available (the authorized monthly expenditures - PAC) to the implementing agencies. As a result of this constraint, US$15.4 million from the total amount of the Loan of US$39.0 million (39.5 percent) was eventually cancelled at the request of the government. A major complication was introduced in the Budget Law of 1997, which prohibited one public sector agency from transferring resources to another without modification of the Budget law itself by Congress. This rendered the implementation arrangements unworkable, and a pragmatic solution, devised in mid-1997, was not made effective until near the end of that year, and only at that point could contracts for that year's activities be signed. The negative impact was particularly marked in Component B (investment in micro-catchment areas). 5.2.2 The transfer of the program's UC from the DNP to the MMA at the beginning of the - 20 -  implementation period was made without the administrative problems that might have been foreseen in such a move. The commitment and professionalism of the UC was exemplary. The level of government commitment to the program was variable. With the changes in government, conmmitment was weak at least until the importance of the program for the development of the SINA was fully appreciated. Changes in relative priorities by different administrations contributed to unnecessary delays in the implementation of some sub-components. 5.3 Factors generally subject to implementing agency control: 5.3.1 The UC was a small but technically qualified unit that made judicious use of consultants to carry out its functions. It was faced with a significant task inherent in coordinating eighteen implementing agencies. In most of the sub-components where it was relevant, the UC placed considerable emphasis on the participation of program beneficiaries and those otherwise affected by the program. The UC went to considerable lengths to prepare the progress reports, but the monitoring and evaluation of the program were significantly affected by the incomplete base-line study and the apparent failure to transform the study into a workable monitoring and evaluation (M&E) system. 5.4 Costs and financing: 5.4.1 The total cost of the program estimated at appraisal was US$65.34 million, of which US$39.0 was to be financed from the Bank's loan and U$26.34 million was to be financed by the central government and local agencies. As anticipated at appraisal, a grant was made by the government of The Netherlands which made up part of the counter-part financing; the grant, for US$7.12 million, became effective in July 1996 (20 months after the effectiveness of the Bank's loan) and was destined to finance the whole cost of Component C; in practice, only USS4.45 million of the grant was disbursed (the balance of US$2.56 million being cancelled) and this was complemented by US$1.91 million of the govemrnent's own resources. At the end of 1998, as a result of its severe fiscal crisis, the government took the decision to utilize only part of the loan and to reduce counter-part funding proportionally. The amount of US$15.4 million was cancelled from the loan and the proposed counter-part funding was reduced to US$15.75 million. In practice, the whole of the reduced amount of the loan was utilized and counter-part funding reached US$22.33 million. Components Appraisal Implemented Estimate Cost (US$ million) (US$ million) A - The Development of National Forest Policy and a Natural 10.80 9.23 Resource Management Strategy for the Choco Region B - Water-shed Protection and Rehabilitation 25.74 17.40 C - Management of National Parks and Buffer Zones 8.73 6.47 D - Forestry & Environmental Education, Training, Research, 20.06 12.20 Project Management, and Monitoring & Evaluation Total 65.33 45.30 - 21 -  6. Sustainability 6.1 Rationale for sustainability rating: 6.1.1 The sustainability of the program's achievements is considered likely, assuming that the government of Colombia, and the MMA in particular, remain committed to the objectives of sustainable management and protection of natural resources. The greatest impediment is without doubt the lack of security and the levels of violence to which very large parts of the national territory are subject. The program's achievements are necessary but not sufficient conditions for the achievement of the ultimate goals; to a large extent, the products of the program represent the enabling environment in which these ultimate goals can be sought, but by definition the application of even the soundest policy cannot be extended to areas that are not under government control. The achievements of the program with respect to the titling of land of indigenous Afro-Colombian peoples should lead to sustainable management of these areas, although the program was not able to go as far as necessary in the preparation of plans to this end. 6.2 Transition arrangement to regular operations: 6.2.1 The program represented an investment in the creation of a mechanism (of policy and instruments) to be applied throughout Colombia and a series of interventions in two separate and geographically-defined areas. These basic tools remain in the MMA and the other participating agencies and there is no specific "transition arrangement to regular operations"; in this sense, the program was implemented within the regular operations of the different agencies. In practice, there are no M&E perfonnance indicators generated as a result of the program. 6.2.1 There are, theoretically at least, numerous opportunities for the Bank to work with the government of Colombia in the areas of rural development and sustainable use of natural resources. Colombia has a wealth and heterogeneity of natural resources which are the envy of many countries and which, under other conditions, would generate significant opprtunities, inter alia, for eco-tourism. However, the poor and worsening status of internal security severely circumscribes the scope for these necessary project interventions. 7. Bank and Borrower Performance Bank 7.1 Lending: 7.1. 1 The process of identification, preparation and appraisal of the program took five years, and, although this apparent "delay" was criticized by the government in early 1993, in retrospect it can be seen as an example of close cooperation between the government, the Bank and the FAO-CP in the design of a coherent and appropriate operation set against a changing institutional and policy background. The Bank's processes of internal review functioned well, and resulted in major changes to the program's design in two key aspects. 7.1.2 Identification of the program began in June 1988, and there were four identification - 22 -  missions by the Bank and/or FAO-CP in the period up to August 1989. Preparation of the program began in early 1990 with an FAO-CP mission to define an operation in support of the PAFC, and its revised Project Brief was dated April 10, 1990. In July and December 1990, FAO-CP carried out short missions to support the local preparation team. The Initial Executive Project Sumrnary (IEPS) of January 25, 1991 (for what was then called the Forestry and Environmental Protection Project) emphasized the strengthening of institutions and technical capacity as essential contributions for the establishment of a new institutional structure for natural resource management in Colombia. Many of the components and activities which eventually made up the program were defined at that time, although a forest plantation incentive scheme, which was a major component of the proposed program, was later dropped, as was a sizeable Global Environment Facility (GEF) component. The issues focused on: (a) the transitional institutional requirements before the new structure could be installed; and (b) the extensive work and collaboration needed to prepare the policy framework. Preparation was expected to be costly. Two requests for Japanese Grant Funds for the Environment (in February and September 1990) were rejected, although it is not clear from the record why this was the case. An application by the govemnment of Colombia for a Bank Project Preparation Facility advance was also proposed in January 1990, but was not proceeded with. 7.1.3 The Interim Preparation report prepared by FAO-CP was dated May 1991. The Bank carried out a final preparation mission in April 1992, with the objective of taking over from FAO-CP any further required preparation work, based on its Final Preparation Report of October 1991, and initiating the processing of a loan. At that time, it was expected that the FEPS and (white cover) Staff Appraisal Report would be prepared by June 30 1992, and appraisal was scheduled for July 1992. A detailed review of the preparation report by specialized Bank staff concluded that the design of the project should focus more systematically on incorporating indigenous people (and Afro-Colombian people) into the project design because of their importance in the area; this "quality at entry" contribution by Bank staff was to have far-reaching and highly beneficial consequences in project implementation. 7.1.4 The "updated" EPS of July 1992 described the proposed project as the first phase of a long-term program, and part of a wider range of institution building and development initiatives aimed at forestry and environmental issues. At this stage, the three major issues concemed indigenous people, forestry planting incentives and the project's institutional structure. The major risks were felt to be the evolving institutions (given the then-current process of decentralization), the commitment of the govemment to take stronger measures concerning forest policies and taxes, and the issue of intemal security. A lively intemal debate ensued in the Bank, one result of which was to drop the Forest Plantation Incentive Scheme component from the project; at this point, the project's name was changed to the Natural Resource Management Program 7.1.5 A "pre-appraisal/appraisal" mission was carried out in August 1992, and was subsequently reclassified as a pre-appraisal. An appraisal mission was planned for January-February 1993, but following Departmental review was reclassified as a further pre-appraisal mission, charged with clarifying a number of pending issues including: the legal, institutional and policy frameworks; the appropriateness of the proposed interventions relative to the causes of deforestation; and forestry policy. This mission found that the investment components of the program had been fully prepared; having agreed on the basic principles of - 23 -  forest policy reform, a time-frame was established by which the drafting and approval of a forest policy document would proceed pari passu with the processing of the loan. At this stage, forest research, forestry education and training, a base-line study, forest policy evaluation for the mid-term review, and an indigenous peoples & community development plan were all introduced into the program. 7.1.6 In March 1993, an impasse was reached with the government over the issue of appropriate policies and investments for tropical forest management in the environmentally-sensitive Choc6 region. A high-level delegation visited Washington DC in April 1993 for the express purpose of deciding on the next steps, which included the possibility of the Bank disengaging from the program. The proposed investments in the Choc6 region were clearly inconsistent with the Bank's Forest Policy, and the Bank's preferred position, which was essentially agreed upon with the government, was to help develop forest policies, including the regulatory framework, the land information data base, and the clarification of land rights of the Afro-Colombian people who predominate in the area. At this point, agreement was also reached in principle with the governnent of the Netherlands to finance the National Parks component. The Final Executive Project Summary was prepared in June and an appraisal mission was carried out in July 1993. The Departmental review of the program took place in August, negotiations were held in October, and the Loan was approved by the Board in December 1993. 7.2 Supervision: 7.2.1 The program was intensively supervised by the Bank, and general supervision missions were supplemented by smaller visits by specialists whose responsibilities lay at the level of individual components (and occasionally sub-components) of the program. Two supervision missions were carried out prior to Loan Effectiveness, and between June 1994 (the project launch) and April 2000 a further twenty-one supervision missions were undertaken. 7.2.2 The MTR was carried out in January 1997, in accordance with the Loan Agreement. This occurred barely two years after Loan Effectiveness and three years before the originally-defined Closing Date of December 31, 1999 (and more than four years before the actual Closing Date of March 31, 2001). The MTR recognized that the implementing arrangements of a coordinating unit operating through annual work programs and contracts with 26 implementing agencies were difficult, especially when the complexities of the Colombian budget allocation and management system were taken into account. When the possibility grew of the loan amount being reduced as a result of pressure by the government to reduce public expenditure, the Bank did not accept the proposal made by the MMA to re-direct part of the Loan's resources to the CARs with the guarantee of the central government, and no agreement could be reached on any other alternative. 7.3 Overall Bank performance: 7.3.1 The overall performance by the Bank is considered to have been satisfactory. Although the time elapsed between initial identification and Board approval was over five years, the Bank was responsible for a significant number of design changes, particularly at the later stages, and was required to take a firm stand on important issues of policy. - 24 -  Borrower 7.4 Preparation: 7.4.1 The preparation of the project was carried out in Colombia by a local team coordinated by PAFC/TS in DNP and including CARs, ICFES, and the National Renewable Resources Institute (Instituto Nacional de los Recursos Naturales Renovables y del Ambiente - INDERENA) (see FAO-CP May 1991). In mid-February l991, some US$1.0 million was made available to Colombia by the government of The netherlands (through FAO) to strengthen the PAFC Technical Secretariat over a three-year period (1991-1993) and to carry out studies necessary for project preparation (some of which had already been started). 7.5 Government implementation performance: 7.5.1 The program was designed and implemented against a back-drop of changing sector policies, designed to improve environmental controls and management of natural resources, but deteriorating macro-economic policies which resulted in budgetary pressures and a defacto reduction in the size of the program. The government remained committed to the program throughout its life, and this was emphasized at the time of the MTR. 7.6 Implementing Agency: 7.6.1 The management of the program was effective, and the UC worked well in coordinating a complex set of activities and a large number of implementing agencies, in spite of the significant budgetary limitations which operated over the entire life of the program. At the time of the MTR in early 1997, a separate evaluation was made of the financial management of the program which found that, while further improvements were required, it was satisfactory and that significant progress had been made in 1996 to address the issues raised in the audit for 1995, especially on internal controls. A key recommendation of the evaluation was to strengthen accounting and to integrate the financial management system, in order to be able to use it as a management tool. The audit of the 1995 fiscal year's accounts and procedures was determined by the Bank not to have been in conformity with Bank norms, and a private audit firm was contracted to be responsible for the audit of the remaining part of the program. Delays in implementation were mainly beyond the reach of the UU; the delay in declaring the Loan effective, which was immediately followed by budget restrictions and procedural obstacles, exacerbated the difficulties inherent in a complex project. 7.6.2 The program was intensive in its use of technical assistance, and the hiring of consultants and consulting firns was carried out efficiently. As described elsewhere, the lack of a proper M&E system was a serious handicap. Large parts of the program were absolutely dependent on the participation of potential beneficiaries, and in some sub-components (for example, the collective titling of land and the organization of the Regional Committees that supported it) the performance was exemplary. In general, the compliance with the covenants of the LA was good, as was procurement and the preparation of progress reports; if anything, the progress reports and the final report were rather too voluminous and densely packed with information, and would have benefited from summary. As attested to by Annex 7, a large number of studies was carried out particularly in Components A and C. - 25 -  7.7 Overall Borrower performance: 7.7.1 The overall performance by the Borrower is considered to have been satisfactory. 8. Lessons Learned 8.01 In the implementation of the program, a number of important lessons have been learned or reinforced. These include the following: (a) It is essential to have an M&E system in place at the beginning of a project, and this implies that the preparation of the base-line study and the design of the M&E system itself should occur as early as possible in the project cycle. In the program, the study and design were supposed to take place early in implementation, but even though the Loan became effective in November 1994 the preparation of the base-line study did not begin until late in 1996. An adequate M&E system is, in practical terms, of equal importance to a properly functioning accounting system for project management. (b) Flexibility and pragmatism in implementation should be encouraged when an opportunity presents itself. In the sub-component of titling for Afro-Colombian communities in the Choc6 region, the program moved swiftly beyond merely providing the enabling environment for titling and, in the space of a few years, was able to establish (or provide the basis for establishing) collective titling for all the land available for these communities. (c) The experience of the early years of implementation with respect to accounting, financial management and audit strongly endorses the Bank's recent initiatives to require the installation of a proper accounting system as a necessary condition for the processing of a loan. (d) The implementation of the National Parks and Buffer Zones component generated two specific lessons: (i) The conservation of natural resources depends crucially upon community participation and partnership, especially in those areas where community territories (in this case, those of the Afro-Colombian and indigenous populations) adjoin or overlap the boundaries of national parks or other protected areas. The program supported and emphasized the need for appropriate, locally-supported (i.e., participatory) park management plans. This created a higher degree of local identification with the parks, reversing long-standing feelings of exclusion and prejudice against them. (ii) The effectiveness and impact of international cooperation, technical assistance and partnerships are enhanced when cooperation goes beyond the supervision and auditing of progress, and extends to participation in the launching of the programs they finance. In this manner, the international partners assume some responsibility for the outcomes and results. - 26 -  9. Partner Comments (a) Borrower/implementing agency. 9.1.1 Comments were received from the implementing agency and have been incorporated into the text of the ICR. (b) Cofinanciers: (c) Other partners (NGOs/private sector): 10. Additional Information - 27 -  Annex 1. Key Performance Indicators/Log Frame Matrix Outcome I Impact Indicators: Indicator/Matrix Projected In last PSRl ActuaULatest Estimate Production of national forest policy see paragraphs 4.2.5 - 4.2.14. A series of statements policy studies and statements was made during the life of the program. Modification of national forest see paragraph 4.2.8. The Regimen de statutes/regulations Aprovechamiento Forestal de Colombia was issued in October 1996. Number of new indigenous reserves titled see paragraph 4.2.19. 46 reserves were and demarcated created and 10 were expanded. Number of Afro-Colombian communities with see paragraph 4.2.20. 497 communities community titie received Utles to their land. Performance of regional corporations (CARs) see paragraph 4.2.31. in key areas of responsibility Output Indicators: Indicator/Matrix Projected in last PSR ActuaVLatest Estimate End of project - 28 -  Annex 2. Project Costs and Financing Project Cost by Component (in US$ million equivalent) Appraisal Actual/Latest Percentage of Estimate Estimate Appraisal Project Cost By Component US$ million US$ million A The Development of National Forest Policy and a 8.50 9.23 108.6 Natural Resource Mmanagement Strategy for the Choc6 Region B Water-shed Protection and Rehabilitation 19.07 17.40 91.2 C Management of National Parks and Buffer Zones 7.08 6.47 100.6 D Forestry & Environmental Education, Training, 15.58 12.20 78.3 Research, Project Management, and Monitoring & Evaluation Total Baseline Cost 50.23 45.30 Physical Contingencies 2.31 Price Contingencies 12.80 Total Project Costs 65.34 45.30 Total Financing Required 65.34 45.30 Project Costs by Procurement Arrangements (Appraisal Estimate) (US$ million equivalent) Procurement Method Expenditure Category ICB NCB Other N.B.F. Total Cost 1. Works 2.00 2.10 4.10 () (1.10) (1.20) 0 (2.30) 2. Goods 0.50 2.50 2.00 5.00 (0.30) (1.50) (1.20) 0 (3.00) 3. Services 12.80 12.80 _______________________ o 0 (8.30) 0 (8.30) 4. Materials, supplies and 7.40 11.10 18.50 local transport 0 (3.60) (5.30) 0 (8.90) 5. Salaries and labor 25.10 25.10 0 0 0 (16.50) (16.50) Total 0.50 11.90 28.00 25.10 65.50 (0.30) (6.20) (16.00) (16.50) (39.00) "Figures in parenthesis are the amounts to be financed by the Bank Loan. All costs include contingencies. 2'Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local government units. - 29 -  Project Financing by Component (in US$ million equivalent) Percentage of Appraisal Component Appraisal Estimate Actual/Latest Estimate Bank GovL CoF. Bank Govt. CoF. Bank GoVt. CoF. A - The Development of 9.80 1.00 7.10 2.13 72.4 213.0 National Forest Policy and a Natural Resource Management Strategy for the Choco Region B - Watershed Protection 12.90 12.90 7.51 9.89 58.2 76.7 and Rehabilitation C - Management of 8.70 6.47 0.0 National Parks and Buffer Zones D - Forestry & 16.30 3.70 9.01 3.19 55.3 86.2 Environmental Education, Training, Research, Project Management, and Monitoring & Evaluation - 30 -  Annex 3. Economic Costs and Benefits No ex ante economic analysis was made of the program or of any of its components. - 31 -  Annex 4. Bank Inputs (a) Missions: Stage of Project Cycle No. of Persons and Specialty Performance Rating (e.g. 2 Economists, I FMS, etc.) Implementation Development Month/Year Count Specialty Progress Objective Identification/Preparation June 1988 2 FAO/CP: Forester, Economist January 1989 1 Bank: Economist April 1989 3 FAO/CP: Forester, FMS, Economist August 1989 4 Bank and FAO/CP: 2 Economists, 2 Foresters February 1990 2 FAO/CP: Forester, Agronomist May 1990 1 Bank: Economist June 1990 2 FAO/CP: Forester, Economist December 1990 2 FAO/CP: Forester, FMS December 1990 2 Bank: 2 Economists February 1991 7 FAO/CP and Bank: 2 Foresters, FMS, 2 Economists, Watershed Management and Conservation Specialists, Environmental Economist July 1991 4 2 Foresters, Project Analyst, Economist April 1992 7 Bank and FAO/CP: 3 Economists, FMS, 2 Foresters, Conservationist Appraisal/Negotiation August 1992 5 Bank: Economist, FMS, Environmental and Watershed Specialists, Forester January-February 5 Bank: 2 Economists, 1993 FMS,Environmental and Watershed Specialists June-July 1993 4 Bank: Economist, FMS, 2 Environmental Specialists Supervision January 1994: 3 Economist, FMS, S S prior to loan Environmental Specialist effectiveness March 1994: 1 Environmental Specialist prior to loan effectiveness June 1994: 5 3 Environmental Specialists, S S project launch Tropical Forest Specialist, Sociologist, September 1994 1 FMS December 1994 3 Environmental Specialist, S S - 32 -  Sociologist, FMS April 1995 3 Environmental and (2) Forest Policy Specialists June 1995 1 FMS June-July 1995 5 (2) Environmental and Forest S S Policy Specialists, Marine Biologist, Forestry Specialist October 1995 2 Forest Policy Specialists October- 2 Environmental Specialist, FMS S S November 1995 February 1996 2 Environmental Specialist, U S Sociologist June-July 1996 3 Environmental Specialist, 2 S S Foresters September 1996 2 Environmental and National Parks Specialists January 1997 6 Economist, Environmental S S Mid-term Review Specialist, Sociologist, 2 Forest Policy Specialists, FMS April-May 1997 1 Watershed Management Specialist May 1997 2 Environmental Specialist Netherlands Govt. Official December 1997 1 Economist January 1998 5 Economist, 2 Environmental S S Specialists, Sociologist, Environmental Economist October 1998 6 Economist, Sociologist, 2 S S Environmental Specialists, Environmental Economist, Netherlands Government Official February 1999 2 Environmental Specialists October 1999 1 Environmental Specialist December 1999 1 Environmental Specialist April 2000 1 Agricultural Economist S S ICR March-April 1 Agricultural Economist S S 2001 (b) Staff: Stage of Project Cycle Actual/Latest Estimate No. Staff weeks US$ ('000) Identification/Preparation Appraisal/Negotiation Supervision ICR Total - 33 -  Annex 5. Ratings for Achievement of Objectives/Outputs of Components (H=High, SU=Substantial, M=Modest, N=Negligible, NA=Not Applicable) Rating El Macro policies OH OSUOM ON *NA E Sector Policies OH *SUOM ON O NA E Physical OH *SUOM ON ONA El Financial O H OSUOM O N * NA El Institutional Development 0 H * SU O M 0 N 0 NA E Environmental O H *SUOM O N O NA Social E Poverty Reduction O H OSUOM O N * NA El Gender O H OSUOM O N * NA Z Other (Please specify) 0 H O SU O M 0 N 0 NA Collective titling of lands of indigenous and Afro-Colombian communities E Private sector development 0 H O SU O M 0 N * NA E Public sector management 0 H O SU O M 0 N * NA E Other (Please specify) 0 H O SU O M O N * NA - 34 -  Annex 6. Ratings of Bank and Borrower Performance (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory) 6.1 Bankperformance Rating El Lending OHS OS OU OHU E Supervision O HS * S OU OHU O Overall OHS OS Ou OH U 6.2 Borrower performance Rating El Preparation O HS * S O U O HU EL Government implementation performance 0 HS 0 S 0 U 0 HU El Implementation agency performance 0 HS 0 S 0 U 0 HU O Overall OHS OS O U O HU - 35 -  Annex 7. List of Supporting Documents 1. Staff Appraisal Report (Report No. 12250-CO): December 2, 1993 2. Loan Agreement (Loan No. 3692-CO): August 9, 1994 3. Progress Reports (Informes Semestrales): Unidad Coordinadora, Ministerio del Medio Ambiente: Bogota 4. Individual Reports of the Members of the Panel of Experts: February, 1997 5. Mid-term Review Report on Financial Management (Informe sobre la Evaluaci6n de Administraci6n Financiera del Prestamo 3692 - CO: April 1997 6. Manual de Procedimientos Contables: Unidad Coordinadora: Bogota, September 1996 7. Informe Final Preliminar 1994-2000: Programa de Manejo de Recursos Naturales (pp. 452): Unidad Coordinadora: Bogota, February 2001 8. Informe Final 1994-2000: Programa de Manejo de Recursos Naturales (pp. 196): Unidad Coordinadora: Bogota, June 2001 9. Zonificaci6n Ecol6gica de la Regi6n Pacifica Colombiana: Instituto Geografico Agustin Codazzi, Ministerio del Medio Ambiente: BogotA, December 2000 10. Componente de Titulaci6n Colectiva de Tierras para Comunidades Negras - Informe Final: Convenio 045/1995 INCORA/Ministerio del Medio Ambiente: Credito BIRF 3692-CO: Bogota, 2001 11 Revisi6n de Politicas Sectoriales que Promueven la Deforestacion en Colombia: Informe Final: Ecoforest Ltda. Bogota, November 1997 12. Incentivos Econ6micos para la Conservacion en Colombia: Informe Final: Ambiental Consultores/Gaitan y Uribe Consultores/Econ6mica Consultores: Bogota, December 1996 13. Investigaci6n de Mercados Intemacionales para Productos Forestales Maderables y No-Maderables, sus Derivados y Manufacturas: Informe Final: Econometria Consultores - ACOFORE: Bogota, May 1999 14. Plan Nacional de Desarrollo Forestal: Ministerio del Medio Ambiente, Direcci6n General de Ecosistemas: Bogota, December 1998 15. Diagn6stico, Estrategia Nacional e Instrumento de Negociaci6n de Recursos de Credito para el Desarrollo de la Gesti6n Ambiental en Materia de Fauna Terrestre y Acuatica en Colombia: Convenio Ministerio del Medio Ambiente/Instituto de Ciencias Naturales: Bogota, November 1998 - 36 -  Additional Annex 8. Summary of the Borrower's Report Introduction 8.1 Colombia participated fully in the Tropical Forestry Action Plan led by FAO and others since 1985, and the Forestry Action Plan (Plan de Accion Forestal de Colombia - PAFC), formulated between 1987-1989, has been the central pillar of government policy since then. Deforestation in Colombia has been concentrated in the accessible areas of better soils destined for agricultural purposes, but their inadequate use and management has provoked erosion, degradation, loss of biodiversity and the destabilization of catchment areas with the consequent increase in flood risks. The cost of implementing the PAFC was estimated at US$232 million. 8.2 For the implementation of Colombia's Environmental Policy and its PAFC, the Government of Colombia authorized the use of funding from the multilateral institutions up to US$140 million. Based on this, in August 1994 the Loan Agreement No. 3692-CO was signed with the IBRD for Natural Resource Management Program (NRMP) for US$39.0 million and counter-part funding of US$26.29 million was committed, including US$7.12 million of grant funds from the Government of the Netherlands. 8.3 The NRMP was principally aimed.at conserving the forests and biodiversity of the Pacific coastal region, stimulating the recovery of degraded areas in the Central and Westem Cordillera, and improving the management of natural resources through institutional and technical strengthening. The NRMP had four components: (a) Policy and Strategic Development; (b) Rehabilitation of Micro-catchment Areas; (c) Management of National Parks; and (d) Education, Training and Research. During the implementation of the Program, several new activities were introduced to respond to the needs of environmental policies and regional initiatives; these included the regional for a created under the Agenda XXI for the Pacific and the Agenda XXI for the Amazon. The Natural Resource Management Program 8.4 Objectives: The central objective was to develop the national forestry policy in the framework of the application of environmental policy and to establish the technical and institutional basis to slow down the degradation of natural resources , promote their sustainable use and to protect and recuperate those areas which were degraded or fragile, or otherwise of strategic importance for regional and local development. There were seven specific objectives: (a) to complete the agro-ecological zoning of the Choc6 bio-geographic zone and begin the development of appropriate forestry and agro-forestry activities; (b) to promote community titling of forest land; (c) to define national policy and lines of action to make compatible forestry development, conservation and sustained use; Note: This translation and precis of the Borrower's Report was made by the ICR author. The Borrower's Report is a long document (of 196 pages) and is itself a condensed version of an earlier report by the Borrower of almost 500 pages. - 37 -  (d) to promote reforestation, with community participation, in critical areas of vulnerable forest land; (e) to strengthen the system of Protected Areas in the western part of Colombia; (f) to strengthen institutional capacity in planning and implementation of projects and in monitoring and control of the use of natural resources; and (g) to strengthen research, technology transfer, training and education in environmental matters, with emphasis on community participation. 8.5 The evaluation of the achievement of the objectives is closely related to the results of the components and sub-components of the program, most of which were consistent with the targets. In some sub-components and activities, the achievements were limited by several powerful restraining factors, including for example the internal security problems of large parts of the country and budgetary restrictions resulting from the fiscal crisis. On balance, program implementation was satisfactory and the objectives were largely achieved. 8.6 Forest Policy and the National Forestry Development Plan (Plan Nacional de Desarrollo Forestal - PNDF): the program supported the formulation of the Forest Policy (Politica de Bosques (CONPES 2834 of 1996) and the PNDF approved by the National Environmental Committee (Consejo Nacional Ambiental) in December 2000. 8.7 Agro-ecological Zoning of the Pacific Region: the basic biophysical and socioeconomic information supported by thematic cartography was provided for the area as an instrument of agro-ecological zoning, and was particularly useful in collective titling and the preparation of the Agenda Pacifico XXI. 8.8 Collective Titling of Land to Indigenous and Afro-Colombian Communities: 58 titles were provided, covering 2.38 million ha and benefiting 113,200 Afro-Colombian people in 22,100 families. A further 2.54 million ha are in process. In indigenous people's reserves, 46 new reserves were established, ten reserves were expanded, and the definition of boundaries of a further 126 reserves was achieved. A total of 181 reserves now covers 2.06 million ha, benefiting 66,300 people in 12,100 families. Through the Regional Committees coordinated via the Social Solidarity Network (Red de Solidaridad Social - RSS) support was provided to the consolidation of organization of both Afro-Colombian and indigenous people in the Pacific Region. 8.9 Recovery of Micro-Catchment Areas: the program promoted the recuperation of 176 catchment areas in 123 municipalities and covering 20,000 ha. 8.10 Research and Environmental Monitoring: the program initiated research and monitoring on both natural and planted forests of economic importance to the country. 8.11 Sustainable Management of Nine National Parks in the Pacific Region: the program strengthened the institutional capacity to manage selected priority areas of high biodiversity, to preserve unique eco-systems, promote the protection of natural resources, and to promote eco-tourism, environmental education and community participation in management. - 38 -  8.12 University-level Research and Education: under the program, improvements were made to the curricula of Forest Programs, 168 degree-level students were trained, three educational modules were published for training teachers in the incorporation of the environment in higher education, and 166 professional staff of the SINA were given diploma-level training. Investment were made in laboratory facilities in three university teaching and research facilities. 8.13 Vocational Training: the program trained 1275 people in a wide range of vocational subjects, such as the establishment of agro-forestry systems, nurseries, carpentry, accounting and marketing; implemented seven community projects on natural resource management; and created a system of continued education for extensionists. Principal Factors that Affected the Outcome of the Project 8.14 Factors beyond the control of the Government: a number of sub-components (e.g., collective titling, agro-ecological zoning) were dealing with issues where there was no prior experience in Colombia to guide the implementation of the program. This was particularly the case with the environmental monitoring of the Catival, Guandal and Naidi forests and with the collective titling of land to the black communities where Colombia itself has been a pioneer. In the constitution of 1991, participation became a fundamental right of all the population, and this was recognized most emphatically by the people of the Choc6 region of the Pacific coast. However, the customs of these people did not permit rapid decision-making conceming their role in the program and the program of work to be followed. In the case of the environmental monitoring of the Choc6 and Narifio regions, a process requiring between 6-8 months was necessary simply to decide if the communities would participate in the activities of the project. Similar circumstances affected the implementation of the components of ecological zoning and collective titling for indigenous and black communities. 8.15 The macro-economic policies adopted by the government towards the end of the 1990s to face up to the world economic recession introduced budgetary restraints for central government entities and therefore the programming of disbursements agreed for the NRMP could not be complied with. The policy of the government at the end of the 1990s adopted to control the level of external indebtedness obliged the DNP to request the cancellation of US$15,395,738 from the Loan. During 1994-1996 the resources disbursed by the Bank were justified completely by the payments that the project executing agency made to third parties which gave rise to a delay of about seven months in the rotation of funds through the Special Account because of the large volume of information that had to be revised in the process of completing disbursement requests. The US$2.0 million limit on the size of the Special Account proved a constraint. The availability of resources was also affected by the exchange rate "loss" generated by the Bank's treatment of the timing of the accounting entry of the exchange between pesos and the US dollar at the time of making payments to third parties. This generated a "loss" of US$250,000 which could not be justified as a cost, and thus reduced the real availability of the loan's funds. 8.16 The negotiations between the governments of Colombia and The Netherlands concerning the latter's grant, and subsequently between the government of The Netherlands and the Bank for the administration of the funds was somewhat drawn out and ended only in September 1996; the effect was to delay the implementation of the Pacific Parks component by about two years. 8.17 Factors within the control of the national and local governments: the armed conflict that grew during the 1990s affected areas that had previously been unaffected, such as the Pacific coastal region, and this affected the program's implementation in multiple ways. - 39 -  8.18 The lack of experience of the staff of the UC in the management of loans from multilateral banks slowed implementation during the first two years, especially because the program had support from both the IDB and the IBRD and because the program was complex and covered the whole of the national territory. The UC was never able to reach the designed structure and size, which meant that a very large effort had to be made by a reduced number of people. 8.19 The fiscal crisis intensified beginning in 1995; this affected the implementation of the program and was reflected in reduced budgetary allocations and continuous cuts and delays. The crisis meant that instruments designed as tools of administrative and fiscal efficiency (such as the Programa Anual de Caja - PAC) ended up being used instead as mechanisms of control and budgetary restriction. In 1997, the budgetary rules contained in the decree controlling the General Budget (Presupuesto General) obliged the UC to adopt a mechanism of resolutions of budget distribution instead of the Convenios between the MMA and the executing agencies. This caused delays because it meant that new financial regulations had to be introduced and additional training had to be given to the executing agencies concerning the management of financial resources and the preparation and maintenance of accounts. 8.20 The loan became effective in November 1994; the resources provided for implementation in that full year could only begin to be spent in the first quarter of 1995. The program was erroneously classified in the Budget Law for 1995 and this caused delays in expenditures. Resources could be committed only at the end of 1995 for expenditure in 1996, and the cumulative delay in implementation was two years. The finance available for the micro-catchment areas component was too large for the limited number of executing agencies in the Pacific coastal area; this was resolved in 1997 with the addition of new executing agencies in other parts of the country. 8.21 Colombian legislation provides that the resources of international loans must be included in the General Budget Law (Ley de Presupuesto General de la Naci6n) and thus to use such funds requires that the norms and procedures of the Estatuto Organico de Presupuesto Puiblico Nacional and those of the multilateral institution concerned must be made compatible. As a result, the program was subject to the labyrinthine complexities of the Colombian budget process; for example: (a) because of the limitations imposed by the size of the PAC, on average only 39% of the budget allocation for the program was actually made available in any given year, the balance was paid as a priority in the following year together with the resources allocated in the budget of that year (which were, of course, subject to the PAC restrictions); (b) the Direcci6n del Tesoro Nacional needs at least three months to issue a certificate for any financial resources returned unspent by executing agencies which impeded their use in other parts of the program and forced the processing of new disbursement requests even while funds were technically still available; (c) the Direcci6n General de Credito Publico requires one month to process a disbursement request and issue the required authorization fro funds transfer. In addition, a series of procedures must be made with the Direcci6n del Tesoro to actually achieve the physical payment of commitments, each taking about two weeks. 8.22 Factors within the control of the executing agency: this includes the MMA as the executing organization as well as the individual entities that were the executing agencies. At the central level, the transfer of the program from the DNP to the MMA at the time when the latter was beginning to create its technical structure made difficult the incorporation of the UC. Most of the executing agencies were CARs, some of which were in the process of being created and others were modifying their structures in line with -40 -  the Law 99 of 1993; their limited administrative and technical capacity required dedicated attention from the UC. These agencies also had limited capabilities concerning budgetary management and accounting which was exacerbated by the frequent change in staff which required continual retraining by the UC. The processes of consultation with the base organizations and the communities generated considerable delays which, for example, in the micro-catchment area component caused delays of six months. Sustainability of the Program 8.23 Forestry Policy Component: Beginning with the formulation of the Forest Policy (CONPES #2834) in 1996, the Consejo Nacional Ambiental approved the PNDF on December 5, 2000, the objectives of which are to "to establish a strategic framework which actively incorporates the forest sector into national development, optimizing comparative advantage and promoting the competitivity forest products (timber and others) in both domestic and export markets, starting from the sustainable management of both natural and planted forests". In pursuing this objective, it is expected that in 25 years the Colombian forest sector will have been consolidated as a strategic part of the development of the national economy. 8.24 Micro-catchment Area Component: To give continuity to the experience acquired through the implementation of this component, the MMA has formed strategic alliances with many organizations and local communities to implement the Plan Verde, the main objective of which is to promote the restoration of degraded ecosystems through the establishment and maintenance of vegetation cover. The goal for 2002 is to achieve 100,000 ha of cover; however, the PNDF has been reformnulated with goals for the year 2007 of: (a) restoring 245,000 ha and establishing 271,000 ha of protective forest; and (b) establishing 332,000 ha of protective-productive forest. 8.25 Environmental Research Component: Projects advanced by CONIF and CENICAFE-FEDERACAFE have been given priority in the research component of the Plan Verde and the PNDF. The MMA and the implementing agencies have made a commitment to give continuity to five of the research activities carried out under the program. The results of research on existing plantations have been given to the MMA and the Ministry of Agriculture, and will be perrnanently up-dated by the CARs, the SIAC, and others. The sustainability of forest management activities is guaranteed by the executing agencies and communities, particularly CORANTIOQUIA. The efforts made by CORPONARINO and CORPOURABA may be frustrated by a lack of resources, given the poor financial status of these bodies. 8.26 Ecological Zoning of the Pacific Component: This component was carried out to give the region a development planning instrument. The information was given to the Instituto de Investigaciones Ambientales del Pacifico and to the CARs of the region which will be responsible for the arrangements with the relevant bodies (e.g., IGAC) for maintaining the information up-to-date. 8.27 Environmental Monitoring Component: This is one of the most important components of the program, through which data was generated on forest use in three types of forest with the highest potential for sustainable extractive use: the Cativales, Guandales and the Naidizales. The validation of this type of informnation requires continuity over time, the MMA and CONIF (plus other agencies) have established the Environmental Monitoring Network for Forest Use in the Pacific Forest Area. CONIF, CODECHOCO and CORPONARINO have prepared second phases of these projects for inclusion in the project data base of Planeaci6n Nacional; however, the financial status of these bodies is such that continuity is far from assured, and firm support is needed from research institutions, SINA, the national govemment and intemational technical cooperation to ensure continuity. - 41 -  8.28 Collective Titling for Indigenous and Black Communities Component: Apart from their main purpose, the collective titles exercise a powerful influence over the conservation of biodiversity and natural resources of the region. The MMA has included in the "Colectivo Ambiental" project, the Environmental Policy statement in the National Development Plan, and in the PNDF , support for the formulation of management plans for the black and indigenous communities to ensure that the areas in question can simultaneously be conserved and provide for the livelihood of the commnunities inhabiting them. INCORA has formulated a proposal for sustainable production projects in the collectively-titled areas as well as to finish the work in progress to increase by one million ha the area titled to black communities. 8.29 Regional Committees Component: The sustainability of this component lies in the consolidation of the territorial rights of the ancestral ethnic groups, in the strengthening of their organizations, and in their capacity to communicate with the authorities of the state. 8.30 Pacific Parks Component: This will enjoy continuity through the second phase that is currently being negotiated between the Parks Unit and the government of The Netherlands in order to use the US$2.5 million unutilized under the program. It is also expected that the activities carried out under this component will also receive resources in the framework of implementation of the new policies to strengthen and consolidate the National Protected Areas System. 8.31 University-Level Education and Research Component: In addition to continuing with the training of forestry technicians, the CINOC is evaluating the feasibility of implementing the cycle of training in other municipalities of the department of Caldas. The Universidad Nacional (Medellin camnpus) has terminated the training activities in Piedras Blancas but is studying the possibility of training forestry technologists in other parts of the department of Antioquia. The Universidad Industrial de Santander, the Universidad de Tolima, the Universidad Distrital Francisco Jose de Caldas, and the Universidad Javeriana have all maintained the course developments achieved in recent years. Performance of the Bank 8.32 Beginning with the presentation in the first International Round Table of the PAFC, the Bank demonstrated its interest in financing part of it and this eventually was made concrete in the Natural Resource Management Program, Loan No. 3692-CO. It is important to emphasize that from identification through preparation, implementation and ex post evaluation the Bank has accompanied the process through the different missions that helped to advance the program and to make the necessary adjustments. The technical contributions made by different missions to sub-components A. 1, A.2, A.3, A.5, B. 1, D.3, and to the whole of component C should be emphasized. In the case of agro-ecological zoning, in 1997 the Bank supported the revision, adjustment and fine-tuning of the methodology as well as the whole scope of the activity. Valuable support was also given in the forestry policy, environmental monitoring and forestry research activities of the program. Special recognition is due to the interest shown by the Bank's missions related to the collective titling of land for the indigenous and black communities, which support was important in consolidating these processes. Performance of the Borrower 8.33 The implementation of the program covered three periods of government and saw five Ministers of Environment. The objectives of the program were maintained throughout this period, which responded to the outlines of the National Environmental Policy. The MMA had to fund the program which included some activities which, although environmental in nature, from a functional point of view were the - 42 -  responsibility of other entities of the national government; this had the effect of directly influencing the MMA's ability to fund certain activities that come directly under its responsibility. The Technical Directorates of the MMA involved themselves in the implementation of the program and worked closely with the UC. Performance of the Implementing Agencies 8.34 The program had 33 implementing agencies, including nineteen CARs and Corporaciones de Desarrollo Sostenible, three NGOs, eight public entities and three private companies. During the early years of implementation, there was considerable weakness in the capacity to identify, formulate and monitor projects, especially in the CARs, mainly because many of them were in the process of consolidating their technical structures and functions. The problems were overcome through a process of constant support from the UC and the MMA, and the interest which was maintained by the agencies in improving their performance and complying with their obligations under the program should be emphasized. In some of the entities, however, and in spite of the training given, there was a continuous lack of compliance with the requirements concerning accounting and the preparation and use of the POA; this had serious effects on implementation and compliance with contractual obligations. A significant effort was made by the MMA and the UC, on the one hand, and by the executing agencies, on the other, which resulted in the creation of an installed capacity that can be consolidated as the SINA matures. -43 -