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PROJECT BRIEF

  1. IDENTIFIERS:

PROJECT NUMBER:CN-PE-64729/CN-GE-60029

PROJECT NAME:China: Sustainable Forest Development Project, Protected Areas Management Component

DURATION:Six years

IMPLEMENTING AGENCY:World Bank

EXECUTING AGENCY:State Forestry Administration

REQUESTING COUNTRY:People’s Republic of China

ELIGIBILITY:China ratified the Convention on Biological Diversity on 5 January, 1993

GEF FOCAL AREA:Biodiversity

GEF PROGRAMMING FRAMEWORK:Operational Programs 3 (Forest Ecosystems) and 4 (Mountain Ecosystems)

2.SUMMARY:The main objectives of the Sustainable Forest Development Project (SFDP) are to: (a) develop and apply innovative and effective approaches to managing the last remaining natural forest areas in China and to conserving globally-significant forest and mountain biodiversity; and (b) establish tree plantations to relieve pressures on natural forest resources. The approaches to be developed and applied for the protection and sustainable management of natural forest resources in pilot areas in China will provide models for wider application under the government’s national Natural Forest Protection Program (NFPP). The SFDP has three components: (a) Natural Forest Management (NFM); (b) Plantation Establishment (PE); and (c) Protected Areas Management (PAM). The Protected Areas Management Component is being proposed for financing by the Global Environment Facility (GEF). The GEF grant would: (a) enhance the management of priority nature reserves located in the logging-ban areas of the NFPP which are of global significance for biodiversity conservation purposes; (b) identify and survey the wildlife in areas important for biodiversity conservation in Western Sichuan, which forms part of a globally important ecoregion known as Southwest China Temperate Forests, (c) increase participation of communities in nature conservation and the sustainable management of natural resources; (d) strengthen the capacity of institutions, particularly at the provincial and reserve levels, to manage the natural forests/nature reserves sustainably; and (e) support key protected area and natural forest-related policy studies.

  1. COSTS AND FINANCING (MILLION US):

GEF:Project 16.00

PDF: 00.35

Sub-total GEF: 16.35

GEF Co-financing:Government of PRC 45.48

NGOs 00.67

Sub-total GEF Component 62.15

Non-associated co-financingGovernment of PRC 56.02

World Bank (IBRD) 90.00

EU: 15.00 or

16.50 euros[1]

Sub-total:161.02

TOTAL PROJECT COST:223.17

  1. ASSOCIATED FINANCING (MILLION US$)n/a
  1. OPERATIONAL FOCAL POINT ENDORSEMENT:

Name:Yang JinlinTitle:Director, IFI Division 2, International Dept.

Organization:Ministry of FinanceDate:September 5, 2000

6.IA CONTACT:Robin Broadfield, Sr. Regional GEF Coordinator, East Asia and Pacific

Telephone: (202) 473-4355

Fax: (202) 522-3256

EMail:

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ACRONYMS AND ABBREVIATIONS

CASCountry Assistance Strategy

CBDConvention on Biological Diversity

CCECommunity Conservation Education

CCFCommunity Conservation Fund

COPConference of the Parties

CRMPCommunity Resource Management Plan

DODevelopment Objective

DNRDivision of Nature Reserves

DWPPDepartment of Wildlife and Plant Protection

EAEnvironmental Assessment

EATEcological Assessment Team

FCCDPForest Conservation and Community Development Project

GOCGovernment of China

GEFGlobal Environment Facility

GTZGerman Technical Assistance

IAImplementing Agency

IBRDInternational Bank for Reconstruction and Development

IDAInternational Development Association

IPImplementation Progress

MABMan and Biosphere

MPTManagement Planning Team

NFMNaturalForest Management Component (of the SFDP)

NFPCNaturalForestProtectionCenter

NFPONaturalForest Protection Office

NFPPNaturalForest Protection Program

NGONon-government Organization

NRNature Reserve

NRMPNature Reserves Management Project

NTFPNon-timber forest products

ONROffice of Nature Reserves

PADProject Appraisal Document

PAMProtected Areas Management Component (of the SFDP)

PDFProject Development Facility

PEPlantation Establishment Component (of the SFDP)

PFDProvincial Forestry Department

PMAProject Management Authority

PMCWorld Bank Loan Project Management Centre

PMGProject Management Group

PMOProject Management Office

PRAParticipatory Rural Appraisal

SFAState Forestry Administration

SFDPSustainable Forest Development Project

STAPScientific and Technical Advisory Panel

TATechnical Assistance

TNCThe Nature Conservancy

UNDPUnited Nations Development Program

UNESCOUnited Nations Education, Science and Culture Organization

WWFWorld Wide Fund for Nature

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CONTENTS

A.Project Development and Global Objectives

1.Project development objectives and key performance indicators

2.Project global objective and key performance indicators

B.Strategic Context

1 (a)Sector-related Country Assistance Strategy (CAS) goal supported by the project

1 (b)GEF Operational Strategy/program objective addressed by the project

2.Main sector issues and government strategy

3.Sector issues to be addressed by the project and strategic choices

C.Project Description Summary

1.Project areas

2.Project components

3.Key policy and institutional reforms supported by the project

4.Benefits and target population

5.Institutional and implementation arrangements

D.Project Rationale

1.Project alternatives considered and reasons for rejection

2.Major related projects financed by the Bank and/or other development agencies

3.Lessons learned and reflected in proposed project design

4.Indications of borrower commitment and ownership

5.Value added of Bank support

E.Summary Project Analyses

1. / Economic / 6. / Environmental
2. / Financial / 7. / Resettlement
3. / Technical / 8. / Participatory approach
4. / Institutional / 9. / Checklist of Bank policies
5. / Social

F.Sustainability and Risks

  1. Sustainability
  2. Replicability

3.Critical Risks

4.Possible controversial aspects

Annexes

Annex 1: Project Design Summary / Log Frame

Annex 2: Incremental Cost Analysis

Annex 3a: Technical Review by STAP Roster Expert

Annex 3b: Response to STAP Reviewer’s Comments

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A.Project Development and Global Objectives

1.Project development objective and key performance indicators (see Annex 1):

The Sustainable Forest Development Project (SFDP) will assist the People’s Republic of China to develop a strategy for sustainable natural forest management in the context of China’s National Forest Protection Program (NFPP). The principal objective of SFDP is the development and adoption of innovative management approaches in selected natural forests and protected areas and to establish plantations to relieve pressures on remaining natural forest resources and protect the natural environment. Key performance indicators include: (a) natural forest cover in project areas in the 3 key provinces increases; and (b) quality of natural forest habitat in nature reserves improve; (c) project generates X million m3 of timber and x million from tree crop production.

2.Project global objective and key performance indicators (see Annex 1):

The global environmental objective is to foster improved conservation and sustainable management of biodiversity in selected remaining natural forest areas by ensuring effective in situ protection of threatened and globally important forest habitats and rare and endemic species. Expected monitorable indicators are: (i) over 1 million hectares of important biodiversity areas brought under active management; (ii) substantial involvement and participation of local communities in nature reserve management planning and implementation; (iii) reduction of community reliance on forest resources inside biodiversity important zones, and (iv) increase in local government’s capacity to supervise, monitor, and implement conservation and sustainable resource use activities.

B.Strategic Context

1(a)Sector-related Country Assistance Strategy (CAS) goal supported by the project (see Annex 1)

CAS document number: 16321-CHADate of latest CAS discussion: 25 February, 1997

The overarching objective of the latest Bank’s Country Assistance Strategy (CAS) for China is the protection of the environment with emphasis on the need to strengthen institutions and tools for improved management of soil, water and forestry resources. The project would help address one specific objective set out in the CAS, which is to preserve productive natural forest reserves and biodiversity by promoting sustainable natural resources management.

1(b)GEF Operational Strategy/program objective addressed by the project:

China ratified the Convention on Biological Diversity (CBD) in January 1993. The project is consistent with the GEF Operational Strategy, which emphasizes in situ conservation of globally significant biodiversity, and aims at consolidating conservation efforts in tropical and sub-tropical forests (OP 3) and in montane ecosystems (OP 4). It responds to COP 3 and COP 4 guidance by promoting conservation and sustainable use through adaptive management of forest ecosystems; capacity building; and integrating biodiversity conservation into improved management of the forestry sector. While the GEF-financed activities will meet the incremental costs of directly protecting globally significant biodiversity, the over-arching SFDP will address one of the major root causes of biodiversity loss by implementing a comprehensive approach to sustainable forestry development that will meet China’s growing timber needs.

The project is also consistent with the National Biodiversity Conservation Action Plan (1994) which was prepared with support from the GEF Pre-Investment Facility during the GEF Pilot Phase and the China’s Biodiversity - A Country Study (1998). The Action Plan identified the project regions as centers of China’s biodiversity (see Annex 2 for a more detailed evaluation of the project’s proposed target sites). In addition, the project’s proposed interventions are consistent with other planning exercises regarding the significance of Chinese biodiversity; the priorities for its protection and management; and the specific areas targeted for development and implementation as described in the national Forestry Action Plan for China’s Agenda 21, WWF-supported Biodiversity Review of China (1996), and the National Forest Nature Reserves Conservation Plan under preparation with funds from the GEF-financed Nature Reserves Management Project.

2.Main sector issues and government strategy:

China’s land area encompasses a large diversity of natural ecosystems ranging from the grasslands, deserts and coniferous forests of central Asia through the mountains of the Himalayan Plateau and Tibet to the temperate, sub-tropical and tropical lowlands in the east and south of the country. These ecosystems provide a great diversity of habitats for numerous forms of wildlife. Although incomplete, existing species inventories indicate that China probably contains over ten percent of all living species on Earth. Much of China’s biodiversity is under threat from a rapidly growing human population which has doubled in size since 1949 and is now estimated to comprise at least 1.2 billion people. The combination of a large population and limited natural resources has led to extensive loss of natural habitats to agricultural production, logging, fuel-wood collection and livestock grazing. Other associated factors which have had a negative impact on the status of China’s biological resources include forest fires, hunting, harvesting and trade in particular species of wild animals and plants, water pollution, construction of dams and the use of pesticides. The introduction of exotic weeds such as Lantana camara and Eupatorium odorata which have become established in some areas, out-competing native species and preventing natural regeneration of secondary vegetation is also a serious problem. In the context of these factors, it is estimated that about 200 plant species have become extinct and 5,000 species have become endangered in China in recent years.

GOC has taken several important steps to protect the diminishing biodiversity including enacting laws and regulations (e.g., environmental protection law, forestry law, wildlife protection law, and nature reserves), establishing 1,118 nature reserves as of 1999 covering approximately 864,100 km2 or 8.62 percent of the country’s total land area, and developing captive breeding programs for endangered species such as the panda.

The forestry sector plays a critical role not only in protecting biodiversity and watersheds but also in the Chinese economy, providing 40 percent of rural household energy, almost all of the lumber and panel products for the large construction sector, and raw material for the large domestic pulp and paper industry. The resource base is small; forest cover amounts to only 0.11 hectares per capita, which is significantly below the world average of 0.77 hectares per capita. Forest land is divided into two categories: natural forests (about 87 million hectares), which are located in isolated areas in the northeast and southwest and account for 92 percent of standing wood volume; and plantations (about 34 million hectares), which account for only 8 percent of standing volume, since most are newly established. China is the third largest consumer of timber in the world and faces a widening imbalance between supply and demand for wood products. The present consumption level (about 300 million cubic meters of standing stock) exceeds the annual growth of the forests. This deficit is being made up by imports and over-cutting, contributing substantially to the loss of 500,000 hectares of natural forest area per year. This situation has been allowed to persist because logging enterprises do not bear the full cost of over-harvesting, are not efficiently regulated, and lack knowledge of sustainable natural forest management.

Although the Government of China (GoC) has taken steps to address the widening wood deficit by investing in plantations; until recently, it had not tackled the fundamental imbalances in the sector. Triggered by the devastating flooding that occurred in the YangtzeBasin and northeast China during the summer of 1998, GOC recently took bold actions to restructure the forest sector.

First, the State Council issued an emergency circular in August 1998 announcing the following immediate policy changes: ban on logging in natural forests; no opening up of new lands at the expense of forests; freezing of all construction projects on forest land for one year; and a new requirement for direct cabinet approval for any occupation of forest land. Supplemental regulations have been issued by the provinces that provide detailed guidelines for implementation at the local level.

Second, GOC launched an ambitious new investment program (Natural Forest Protection Program - NFPP) to improve natural forest management, covering approximately 95 million hectares of state-owned forests in 17 provinces. NFPP supports increased protection of natural forests and associated biodiversity in designated protection forest areas and nature reserves, establishment of timber plantations, and the transfer of state loggers to more environmentally sustainable employment. The NFPP was broadened in 1999 to include collective and individual-owned forests and the conversion of around 300,000 ha of steep lands (over 25 percent slope) in the upper reaches of the Yangtze and YellowRivers from agriculture back to forest. The plan is being implemented in two phases (1998-2000 and 2001-2010), at a total cost of 12 billion yuan, financed in part by budgetary allocations and subsidized loans from central and local governments.

Third, the government enacted additional legislation, such as a new land use law in September 1998, to promote more efficient use of land and increased reforestation.

The environmental impact of these reforms both locally and globally could be enormously positive: Approximately 31 million hectares of the remaining natural forests will be brought under legal protection as nature reserves, forest parks, or watershed protection forests according to their biological and watershed protection values, and 41 million hectares under sustainable management, which will strengthen forest cover, biodiversity conservation, watershed management, and other important environmental benefits. The introduction of NFPP provides an unprecedented opportunity to increase the number of protected areas as well as extend the size of existing protected areas to increase their biological viability.

Effective implementation of this government investment program is the biggest challenge facing the forest sector. It will necessitate: (a) developing comprehensive integrated management plans for forest resources and nature reserves that maximize economic and environmental benefits, particularly for local communities; (b) improving the efficiency of the wood processing sector through continued reform of the policy framework for state-owned enterprises; (c) expansion of forestry resources to support continued growth of construction and agro-processing sectors, with an emphasis on productivity gains through improvements in silvicultural technologies, particularly planting stock development and silvicultural management; and most importantly; and (d) developing more participatory approaches for the design and implementation of natural forest management, nature reserves management, and afforestation/reforestation programs to strengthen incentives for sustainable resource management by local communities.

3.Sector issues to be addressed by the project and strategic choices

The major thrust of previous Bank involvement in the forest sector was the creation of new wood resources through afforestation and rehabilitation of forest fire-affected areas. This effort was successful in strengthening the technical basis of plantation forestry within the prevailing policy and institutional framework. However, with the exception of the ongoing GEF-funded Nature Reserves Management project, which introduced more scientific methods for nature reserve management, previous Bank projects had limited impact on technical approaches to the management of natural forest areas. Now GOC’s new natural forest policy provides a new opportunity to more systematically focus on the management of natural forested areas. Key and inter-related issues that need to be addressed are: (a) insufficient incentives for resource users and producers, including small-holders, to sustainably manage the natural forests, conserve their biodiversity, and increase forest cover through planting trees; and (b) weak arrangements for the governance, management, and community co-management of the forest resources, including resource use conflict resolution mechanisms.

Several strategic choices were made in the design of the overall project:

First, building on lessons learned from the ongoing GEF NRM project and other donor-funded natural resources management projects in China and elsewhere, the emphasis will be on introducing much more participatory, bottom-up approaches to resource planning and management by involving local governments and communities much earlier on in management plan development. This will lead to more ownership by local governments and communities leading to better adherence to agreed boundaries and use zones, and greater likelihood that local government poverty alleviation programs can be directed to reduce the reliance on forest resources. This will also facilitate discussions of trade-off in the planning phase and building of consensus on how to protect and manage the forest resources and associated biodiversity.

Second, building on considerable amount of experiences gained in implementing the co-management component of the GEF NRM project, there needs to be a stronger linkage between conservation and sustainable income generation at all levels including local governments in community development. Oftentimes, conservation objectives are forgotten in the interest of economic development needs. Therefore, the focus will be placed on community protection and sustainable use without losing the incentives for participating. Community projects developed as part of the co-management process, to the extent possible, should be dependent on the long-term conservation of the natural resources. Community extension programs need to find alternative and diversified agroforestry and cultivation approaches to replace revenues lost from shrinking supplies of non-timber forest products. Conservation education and awareness will target specific groups of rural community households that are adversely impacting the biodiversity rather than production of general videos, posters, and brochures.