PC/16/DOC/02a

8th EAS Partnership Council

Agenda Item: 2.0 (Technical Session)

Achieving the SDS-SEA post-2015 targets of the Da nang compact:

issues, challenges and PROPOSED ACTIONS

1.0Background

1.1Ministers and Senior Government Officials from 11 PEMSEA participating countries signed the Da Nang Compact during the 5th Ministerial Forum on 20 November 2015. The Da Nang Compact confirmed country commitments to the implementation of the SDS-SEA 2015, as well as four post-2015 Strategic Targets, which serve as key indicators of progress for the implementation of the SDS-SEA 2015 over the next 5 years. The four timebound targets include:

TARGET 1: By 2017, a self-sustaining PEMSEA Resource Facility managing and coordinating a suite of products, services and financing mechanisms for advancing SDS-SEA implementation at the regional, national and local levels

TARGET 2:By 2018, a regional State of Oceans and Coasts reporting system to monitor progress, impacts and benefits, and to continually improve planning and management of SDS-SEA implementation.

TARGET 3: By 2021, national coastal and ocean policies, and supporting legislation and institutional arrangements set up and functional in 100% of PEMSEA Partner Countries, consistent with international environmental and sustainable development commitments and based on best available scientific information.

TARGET 4:By 2021, ICM programs for sustainable development of coastal and marine areas covering at least 25% of the region’s coastline and contiguous watershed areas, supporting national priorities and commitments under the UN SDGs, UNFCCC, Aichi Biodiversity Targets, UNISDR Post-2015 Framework for Disaster Risk Reduction, and other relevant environmental and sustainable development targets subscribed to by PEMSEA Partner Countries.

1.2The objective of this meeting document is to facilitate discussion on the strategies and approaches for proactively engaging PEMSEA Country and Non-Country Partners in the planning and delivery of the four post-2015 targets. The paper provides an overview of progress to date, challenges and constraints to the targets, planned activities for 2016, and recommended actions from the PEMSEA Secretariat.

1.3This document consists of 4 attachments, with each attachment addressing a respective target and a request for Technical Session feedback and endorsement of actions proposed by the Secretariat.

ATTACHMENT 1

TARGET 1: By 2017, a self-sustaining PEMSEA Resource Facility managing and coordinating a suite of products, services and financing mechanisms for advancing SDS-SEA implementation at the regional, national and local levels.

1.0Background

1.1The 6th EAS Partnership Council (June 2014) adopted the Strategy and Implementation Plan for Achieving a Self-Sustaining PEMSEA and requested the PEMSEA Resource Facility (PRF) to proceed with its implementation. The Implementation Plan for Achieving a Self-Sustaining PEMSEA included 5 areas of development. Table 1 summarizes progress and achievements in each of these areas through 2016.

1.2In sum, PEMSEA appears to be making progress with regard to the Implementation Plan and Target 1, particularly in terms of financial sustainability and establishing a suite of products and services in support of SDS-SEA implementation. However, a question that warrants further discussion in connection with Target 1 is whether a self-sustaining PRF involves more than the ability to pay salaries and cover operating costs of the Secretariat.

2.0Financial Sustainability

2.1In 2015, the Total Receipts of the organization for 2015 were approximately:

  • US$1.14M (Unrestricted) + US$2.45M (Restricted) = US$3.59M

2.2For the same 12-month period, the organization’s Total Expenses were approximately US$3.29M, broken down as follows:

  • Expenses (Restricted) = US$2.36M
  • Expenses (Unrestricted) = US$488,000
  • Congress Expenses (Unrestricted) = US$446,000

2.3To be financially sustainable, PEMSEA must generate receipts that exceed its expenses, which it did in 2015:

  • US$3.59M - US$3.29M = US$300,000excess of receipts over expenses

2.4In a sense, PEMSEA has achieved financial-sustainability already in 2015, in that the PEMSEA Trust Fund was not drawn down and modest additional reserves were added for future use.

2.5However, central to the challenge of self-sustainability is the fact that a portion of the organization’s operations, which are vital to its function as an international organization, cannot be covered by restricted receipts designated for project activities. Operations that require unrestricted receipts include, for example:

  • Personnel costs for management and administration of the PRF
  • Secretariat services to the EAS Partnership Council, Executive Committee, Partners, PEMSEA Network of Local Governments and Technical Working Groups and Subcommittees established by the EAS Partnership Council
  • Hosting of meetings of the EAS Partnership Council, Executive Committee, as well as meetings of Technical Working Groups and Subcommittees established by the EAS Partnership Council
  • Organization, hosting and conduct of the EAS Congress and Ministerial Forum
  • Development, promotion and marketing of PEMSEA’s brand and PEMSEA Services, including support networks (PNLC, RCOEs, EAS SBN, EAS Youth Network) at the national and regional levels
  • Project planning, promotion and development
  • Partnership development, strengthening and fundraising
  • Travel and meeting costs associated with the aforementioned activities
  • Internal and external audits of the organization’s finances
  • Operation and maintenance of the PEMSEAOfficeBuilding
  • PRF staff development

2.6In 2015, the unrestricted expenses of the organization (excluding the EAS Congress) translate to 15% of the total expenses of the organization for the year (i.e., US$488K). These were covered by a combination of unrestricted receipts from: a) contributions from Cost Sharing Agreements (including CSAs with UNDP Manila) (71%); b) receipts from PEMSEA Services (including project administration fees) (29%); c) bank account interest (<1%).

2.7The PRF has developed a financial model, which will be presented for review by the Intergovernmental Session of the 8th EAS Partnership Council. By 2017, the PRF is forecastingTotal Receipts amounting to US$6.1M, based on existing projects and a new pipeline of projects, under development as well as the assumption that the current levels of Cost Sharing Agreements will be maintained.

2.8By 2017, projected Total Expenses are estimated to be of the order of US$5.57M, including adjustments for additional staffing and operating costs for the project implementation. This suggests that the PRF’s receipts will exceed expenses by US$535,000 in 2017. Furthermore, PRF is targeting a more even distribution of revenue sources, an important element of financial sustainability, as indicated in the diagram below.

3.0Challenges and Constraints to Target 1

3.1Over the past couple of years of PEMSEA’s transformation, questions have arisen during Council and Executive Committee meetings, as well as in communications with individual Country Partners, regarding such matters as: country ownership of PEMSEA; transparency in managing and reporting of the organization’s finances; development of new partnerships and collaboration with non-government sectors, specifically the business and corporate sectors; the scope and delivery of PEMSEA Services and PEMSEA outreach initiatives; the development of the PRF’s capacity as a regional/global hub in coastal and ocean governance and blue economy development; etc.

3.2These issues, and others, are important to PEMSEA’s organizational sustainability, and to the achievement of the post-2015 SDS-SEA targets. If unsettled, at the very least, they remain a source of misunderstanding among the Partners. Of even greater significance, however, is their relevance to PEMSEA as a sustainable and effective intergovernmental organization and the expectations of Partners in terms of leadership, management, innovation, anticipation of and adaptation to change, revenue generation, and project and partnership development.

3.3To address these issues, and to further engage PEMSEA Partners in the transformation process, it is suggested that the Partners consider establishing a sub-committee comprised of Country and Non-Country Partners for the purpose of: reviewing and assessing the direction and progress of the organization with respect to Target 1; addressing critical attributes of PEMSEA as a sustainable and effective intergovernmental organization, including country ownership; and providing feedback to the Council on achievements, progress, short-comings and further actions required with respect to Target 1.

4.0PRF Strategies/Actions under Target 1 for 2016

4.1In 2016, the PRF will intensify its efforts to achieve the target of a self-sustaining organization by 2017 through a series of actions, including:

  1. contracting a Marketing Communications Specialist to develop and deliver a marketing strategy that promotes PEMSEA and PEMSEA Services to a wide audience within the region as well as outside the region;
  2. completing the development of the SEAKnowledgeBank platform, and demonstrating its innovative products and services to governments, development agencies/project managers, the business community and investors, including conduct of value chain analysis and investment readiness of two or three blue economy initiatives at ICM sites in the Philippines, Indonesia and/or Vietnam (e.g., sustainable fisheries and aquaculture; sustainable tourism);
  3. conducting national and regional workshops, seminars and webinars to galvanize the PRF as the regional center of knowledge and services for blue economy in support of SDS-SEA objectives and the UN’s SDG 14 on oceans;
  4. activating the EAS Sustainable Business Network, the PEMSEA ICM Learning Center Network and the PEMSEA Network of Local Governments to support scaling up ICM programs across the region;
  5. exploring innovative partnerships and financing mechanisms for advancing blue economy investment for the region; and
  6. developing and promoting new project proposals for scaling up SDS-SEA/ICM implementation.

5.0Actions requested of the Technical Session

5.1The Technical Session is invited to:

  1. review Table 1 and provide feedback on the progress being made with regard to implementation of the strategy and implementation plan for achieving a self-sustaining PRF;
  2. provide comments and input on the actions to be taken by the PRF Secretariat in 2016 with regard to the delivery of Target 1;
  3. consider ways and means of engaging Country and Non-country Partners proactively in achieving Target 1, including establishing a Council sub-committee to review Partners’ concerns, expectations and commitments to the long-term sustainability of PEMSEA and for advancing SDS-SEA implementation at the regional, national and local levels.

Table 1: Progress on the Strategy and Implementation Plan for Achieving a Self-Sustaining PEMSEA

Key Activities / Progress/Status of Activities
Voluntary Contributions for PEMSEA Operations /
  • Headquarters Agreement with the Philippine Government ratified by the Philippine Senate, and copy formally transmitted to DENR Philippines (August 2015) and PEMSEA (September 2015).
  • Voluntary cash contributions received from Country Partners, namely the Governments of PR China, Japan, RO Korea and Singapore amounting to $344,000, are gratefully acknowledged for supporting PEMSEA operations in 2015, as is access to the PEMSEA Office Building, utilities and security services provided by the Government of the Philippines.
  • The Government of Timor Leste contributed funding (US$100,000) for capacity building in SDS-SEA implementation within the country.
  • The Government of Vietnam and Da Nang City hosted the EAS Congress 2015.
  • The Government of Cambodia committed to host the EAS Congress 2018.
  • The Government of RO Korea is in the process of seconding a mid-management level officer to serve in the PRF for a period of up to 3 years.

Branding & Communications /
  • New PEMSEA brand, including logo, vision and mission statements, officially launched during the EAS Congress in November 2015 and integrated across PEMSEA marketing, communications and materials, with consistently positive feedback from Partners and collaborating organizations.
  • Marketing Communications Specialist recruited and Marketing Communications Plan developed.
  • Launch of a new PEMSEA.org website during the EAS Congress 2015.
  • 6-minute PEMSEA promotional video launched at the EAS Congress.
  • Brochures on PEMSEA outreach services and the benefits of integrated coastal management published and disseminated.
  • Improved social media presence including staff blogs, infographics, Twitter, Facebook, etc.
  • 25 ICM Solutions published and disseminated at the EAS Congress 2015.
  • Ongoing promotion of PEMSEA and its services through speaking engagements at various international conferences and through media channels (e.g., CNN, APEC Ocean and Fisheries Working Group, ASEAN Conference on Biodiversity, GEF Int’l Waters Conference)

Business Network /
  • Published first-of-its kind report on Blue Economy for Business in East Asia in November 2015.
  • Launched East Asian Seas Sustainable Business Network (EAS-SBN) at the EAS Congress in November 2015, with 10 inaugural company members. The EAS-SBN provides a practical forum for business leaders to engage with peers across industries to build integrated approaches for managing coastal resources, based on the latest science, management best practice and ocean policy developments.
  • Developing partnership with the World Ocean Council to link 40+ additional international companies to the EAS-SBN.
  • Initiated Blue Economy e-newsletter and webinar series and developing plan for establishing PEMSEA as a blue economy hub in the region.
  • Published report in collaboration with a Singapore-based impact investing firm on ICM Investment Landscape Mapping in East Asia in November 2015.
  • As a member of the Climate Bonds Initiative TWG, inputs being provided by PRF on development of bond standards for marine assets.

PEMSEA Services:
1) Advisory and Project Services /
  • Provided services to four projects in 2015 (GEF/UNDP Scaling up SDS-SEA; GEF/WB Knowledge Management; UNEP/GEF Project on nutrient enrichment and oxygen depletion from land-based activities; CMC project on Development of case studies and good practices)with a total project cost of approximately $2.17 million. The revenue generated from the advisory and project services was of the order of $197,000 (inclusive of $74,000 in administrative fees for project execution and excluding EAS Congress).

2) Knowledge Services /
  • Provided Port Safety and Environmental Management Training Services to 3 international ports.
  • Launched Seas of East Asia Knowledge Bank regional knowledge platform, including knowledge products and services and features for enhancing blue economy investments. Services associated with the platform include value chain analysis(e.g., sustainable aquaculture and seaweed production) as well as other related regional KM platform services (e.g., knowledge product development and dissemination; investment readiness assessment; marketing and promotion of blue economy investments).
  • The regional KM platform represents significant potential for promoting and facilitating blue economy investments in the region, thereby supporting the targets and objectives of the SDS-SEA, and ultimately generating revenue for PEMSEA. Two collaborating organizations have already expressed interest in tapping PEMSEA’s Knowledge Services.
  • Preliminary identification of service partners for value chain analysis and business plan development for investment projects conducted.
  • Meetings with private investors undertaken to promote the SEAKnowledge Bank and cultivate potential sources of investment for projects identified through the platform.
  • Outreach service provided through conduct of ICM training for BOBLME project, sharing of ICM practices during India Study Visit in the Philippines, and co-organization of training and workshop on ecosystem valuation and spatial management (2014).

3) Certification Services /
  • Provided ICM Code Certification Services to 15 local governments in 2015, generating approximately US$4,700 in PEMSEA Services revenues.
  • Currently 7 pilot sites in Malaysia (1), Thailand (2) and the Philippines (4). Two additional sites in the pipeline in Cambodia.
  • ICM Code reviewed by ICM experts, revised and improved. PRF is seeking acceptance of the ICM Code as a PEMSEA certified document from the Partnership Council.
  • PNLG set objective of ICM level 1 certification for the PNLG members.

4) Facilitation and Secretariat Services /
  • Facilitation and Secretariat Services revenues exceeded costs by US$32,500 in 2015, primarily from the organization and conduct of the EAS Congress 2015.

Endowment Fund /
  • Discussions were initiated with Partners and collaborating organizations on the establishment of a blue economy fund to facilitate investments in blue economy projects across the region. Further work is required in 2016 to scope out the design, development, management and operation of such a fund.
  • Exploring development of an “Ocean Investment Facility” with international investment partners.

***

ATTACHMENT 2

TARGET 2:By 2018, a regional State of Oceans and Coasts reporting system to monitor progress, impacts and benefits, and to continually improve planning and management of SDS-SEA implementation.

1.0Background

1.1Prior to the EAS Congress 2015, based on the actions identified in the Changwon Declaration 2012, work was initiated by the PRF on the assessment of ocean economy, ecosystem services, and investment opportunities for sustainable blue economy development. The blue economy assessment aimed to facilitate understanding of the role of the ocean and its contribution to the national economy; impacts of human activities on ocean health and sustainability; potential areas for investments in environmentally-sound technologies and infrastructure; and the interventions and innovative mechanisms needed to respond to changing environments and climate.

1.2An Inception Workshop on Blue Economy Assessment was held at the PEMSEA Office on 28-30 July 2015. There were 15 participants from China, Indonesia, Malaysia, the Philippines, RO Korea, Thailand and Vietnam, and they agreed to work on the blue economy assessment, and present the results at the EAS Congress 2015.

1.3Abstracts and PowerPoint presentations made during the EAS Congress workshop, “Blue Economy Development: Where are we now? Where are we headed?” provided an initial assessment of ocean economy, ocean health and innovative investments for blue economy development in the 7 countries. Discussions and recommendations during the workshop focused on:

  1. developing ocean economy-environmental accounts, and quantifying ocean wealth in metrics that are understandable and usable by policy- and decision-makers;
  2. using the State of Oceans and Coasts (SOCs) reporting system as the platform to show the status of the ocean economy and ocean health, gaps, solution options and best practices, and areas for potential growth and investments; and
  3. applying the blue economy assessment and SOC reports in: (i) formulating economic development plans and investment programs that incorporate sustainability and inclusivity objectives; (ii) drawing up support for ecosystem protection for climate resilient communities; and (iii) designing combined carrot-and-stick mechanisms to refine policies and laws and make them more implementable by the private sector.

1.4The work done in 2015 paved the way for the development of national and regional SOC reports. The SOC reporting and blue economy assessment is in line with the post-2015 SDG Targets, Aichi Biodiversity Targets, Changwon Declaration Toward an Ocean-based Blue Economy (2012), Xiamen Declaration of the Fourth APEC Ocean-related Ministerial Meeting Towards a New Partnership through Ocean Cooperation in the Asia Pacific Region (APEC 2014), and other international conventions and agreements.