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Implementation Completion Report (ICR) Review - Environ. II

1. Project Data:   
ES Date Posted:
Project Name:
Environ. II
Project Costs(US $M)
 155.0  125.75
Loan/Credit (US $M)
 30.0  27.49
Sector, Major Sect.:
General agriculture fishing and forestry sector,
Agriculture fishing and forestry
Cofinancing (US $M)
 109.5  65.05
L/C Number:
Board Approval (FY)
Partners involved
UNDP, IFAD, GEF/WB, GEF/UNDP, EU, FRANCE, GERMANY, NETHERLANDS, JAPAN, SWISS, USAID, CARE, Conservation International, World Conservation Society, World Wide Fund for Nature 
Closing Date
06/30/2002 06/30/2003
Prepared by: Reviewed by: Group Manager: Group:  
George T. K. Pitman
Peter Nigel Freeman Alain A. Barbu OEDST

2. Project Objectives and Components:

a. Objectives
Two objectives are given in the SAR:

  1. reverse current environmental degradation trends and promote sustainable use of natural resources, including soil, water, forest cover and biodiversity
  2. create the conditions for environmental considerations to become an integral part of macroeconomic and sectoral management of the country.
These two overall objectives embraced the specific objective of GEF support that was a major component of the program:
  1. curb the loss of globally significant biodiversity by slowing current environmental degradation trends, promoting the sustainable use of natural resources, and creating the conditions for environmental considerations to become an integral part of the macroeconomic and sectoral management of the country.
The ICR notes that objectives given in the SAR were misstated as the Phase II of the Program cannot reverse environmental degradation, only reduce it - as was stated in the GEF objective. The ICR also indicates that while parts of the program were designed to look at national sector policies, all other aspects of implementation would focus on selected geographic areas. As a result of these considerations, the development objectives were revised in March 2001 following mid-term and quality enhancement reviews as follows:
  1. increase the sustainable use of natural resources, including soil, forest cover and biodiversity in target areas
  2. establish conditions for mainstreaming sustainable environmental and natural resources management at the national level.

b. Components
There were originally 14 components organized into three major categories (Field Operations, Regional Programming and Local Management, and Support Activities) implemented by seven agencies. After MTR two components were dropped, finances were reallocated and the remaining components were regrouped into the four revised components described below:

  1. Sustainable Soil and Water Management in Priority Target Zones. (planned US$43.5 million, actual US$25.67 million or 59% ). Implement sustainable soil, water and land management in 4,000 community-level mini-projects Unchanged after MTR.
  2. Forest Eco-system Management. (planned US$43.1 million, actual US$ 20.94 million or 49% ). Expand the protected area network of national parks and improve capacity for their management to enhance ecotourism. Unchanged after MTR.
  3. Protected Areas Management. (planned US$29.9 million, actual US$52.47 million or 175%). Improve multiple-use forest ecosystem management of gazetted forest reserves and community forests and assist reorganization and strengthening of the forestry department. Unchanged after MTR.
  4. Environmental Policies and Institutions (planned US$38.5 million, actual US$24.7 million or 64%).
      1. Upgrade the legal framework and formulation of environmental policies
      2. Assist sector ministries in implementing policies and making environmental impact assessment operational
      3. Formulate policies for management of coastal and marine zones and improve the relevant legal framework
      4. Support local natural resource management and land tenure security through setting-up the appropriate legal and regulatory framework for the transfer of management from state to communities and test implementation of the management transfer in 150 to 200 villages. Land tenure subcomponent dropped after MTR.
      5. Establish six regional technical units to provide support to the project's Regional Programming Committees and formulate local environmental strategies and sub-projects financed by the Regional Fund.
      6. Finance a demand-driven regional fund for environmental management. Component dropped following MTR .
      7. Establish a research coordination committee to identify priority research and support applied environmental and biodiversity research.
      8. Improve the environmental context in general education and vocational training.
      9. Build capacity to support geographic information systems and produce key geographic information. Component dropped after MTR.
      10. Build the capacity of various environmental management agencies to produce and exchange information necessary for informed environmental management.
      11. Support operation of the National Environment Office and other central coordinating bodies to enhance communication, monitoring and evaluation, program coordination and management.

c. Comments on Project Cost, Financing and Dates
The value of the Bank financing of SDR 30.56 declined in USDollar terms from 48.2 million in 1997 to 44.1 million in 2003. Bank financing comprised SDR 20.8 through ITF/IDA and a GEF grant of SDR 8.9 million. The Bank also managed and disbursed SDR 5.65 million from IFAD. 12 others (multilaterals, bilaterals and international NGOs) had pledged US$77.1 million and US$65.1 million was actually disbursed. Five donors (French, USAID, FIDA, UNDP, and the WB) contributed US$0.26 million to support a Multi-donor Secretariat for the project. The project was extended by one year because the government crisis of 2002 disrupted project implementation.

3. Achievement of Relevant Objectives:

Rating against the restated objectives:
  • The first, and primary, objective, to increase the sustainable use of natural resources, including soil, forest cover and biodiversity in target areas, was substantially achieved, albeit with some shortcomings. Physical targets were generally exceeded. Improved forest and land management, allied with transfer of forest management to communities, led to reduced deforestation through better regulation of extraction and reduced slash and burn cultivation, and the rate of loss of biodiversity declined. Soil and water management generally improved within mini-project sites and spontaneous replication of mini-projects occurred in adjacent areas. Soil erosion decreased while soils improved and this led to increased agricultural productivity. Awareness of ecotourism was raised and revenue from visitors to protected areas increased five-fold. Importantly, the project was able to demonstrate that environmental conservation is economically justified with ex-post economic rates of return (ERR) ranging from 12 to 202 percent.
  • The second objective, to establish conditions for mainstreaming sustainable environmental and natural resources management at the national level, was partially achieved with a number of shortcomings. Although only about half the policy reform agenda was fully achieved this was a notable effort as the agenda was ambitious and wide-ranging. The main weakness was a lack of government follow-through on moving from drafts to formal adoption and implementation. About half the planned number of environmental units were created, trained and strengthened in central ministries, regional environmental planning cells, and within coastal communities responsible for implementing integrated coastal zone and marine management. A number of sectoral policies were harmonized with the requirements of environmental impact assessment. Significant and effective public outreach raised awareness of the environmental conservation and Madagascar was awarded a international prize for its "World Day for the Environment" in 2000.

  • 4. Significant Outcomes/Impacts:

    The national system of protected areas expanded from 21 to 46 under the project and now cover 15% of the Madagascar's forests.
  • The project substantially contributed to reducing deforestation. Overall, primary forest loss has been slowed to 0.6% compared with 1.6+% outside protected areas over 5 years of the project. Specific protected areas in eastern Madagascar showed that in protected highland forests (>800 m elevation) deforestation rates were a third to a half of the rate observed in unprotected control areas, while lowland forests fared less well, protected area rates ranging for a third to 80% of unprotected rates. Slash and burn cultivation decreased by 72% during the first 4 years of the project.
  • Conservation agriculture and soil management reduced soil erosion in project areas by 80% (from an average of 8 tons/ha to 1.6 tons per ha annually). Soil quality and crop yields improved compared with traditional farming practices.
  • Biodiversity losses were reduced. A biodiversity index declined from 1.6% per annum pre-project to 0.6% five years later.
  • Annual income from tourism increased more than six-fold to US$0.67 million/year in 2001 because the number of ecotourists doubled over the life of the project and park fees were raised.
  • Conservation efforts on soil and water management significantly exceeded project targets. 5,072 agricultural conservation mini-projects were implemented ( 127% of target) and the area covered (82,100 ha) was 256% of target.
  • Community management of forest ecosystems was successfully planned for 320,000 ha (80% of target) involving wide-scale participation and forest management plans were implemented in four pilot forest reserves covering 180,000 ha (100% of target).
  • A pilot program for community forest management was implemented covering 278 villages (139% of target) and 174,132 ha (116% of target) and 200 natural resource management transfer contacts are under process.
  • Regulation was improved through establishment of the national Forest Sector Observatory as an independent, multi-stakeholder watchdog to oversee the sector and identify needed management improvements. Illegal and nonpaying concessions were either stopped or cancelled and controls on logging and biodiversity permits were tightened.
  • 14 environmental units were established in government ministries to mainstream environmental management and almost double the planned number of regional planning cells (15 instead of 9) were established. At the local level 29 community cells were set-up to implement integrated management of marine and coastal zones. Over 250 environmental staff, 940 trainers and teachers and 1,140 students received environmental training; 86 environmental facilitators were trained and accredited for community-based natural resource management.
  • New environmental policies were drafted, finalized and implemented for the mining, fishing, aquaculture, industry and forestry sectors - although there are difficulties in implementing the forestry policy.
  • The national environmental impact assessment (EIA) system was strengthened through revision of legislation and production of seven sectoral guidelines.
  • The Ministry of Environment and the Ministry of Water and Forests were merged to improved planning and coordination.
  • The Environmental Management Support Services Agency, the Environmental Information Training Center, the Land Entitling Directorate and the National Geographic Institute became independent private service providers.
  • Bank and project management were proactive in realigning project components and organizations following QAG and MTR and should be credited with embracing and implementing changes mid-course to improve project performance.

  • 5. Significant Shortcomings (include non-compliance with safeguard features):

    Quality at entry had several shortcomings. Although the project had a number of progressive and innovative features, a QAG quality at entry assessment (QAE, 1998) concluded that the project had "great promise and great flaws". Major problems were unrealistic objectives, too many actors, too many components and a weak institutional base. In retrospect, the QAG QAE was correct as the 2001 quality enhancement review (QER) demostrates. The QER identified four specific shortcomings (a) it was insufficiently integrated into Madagascar's broader rural development strategy a problem exacerbated by poor cooperation between government and Bank's staff; (b) the main project implementing agency, the National Environmental Office created under the first phase project, had a budget bigger than the combined budget of existing ministries responsible for rural development (agriculture, water and forest, fisheries and livestock), and denuded them of their best staff; (c) original objectives were unrealistic, not sufficiently linked to the ultimate goals of the 15-year environmental program, were beyond the capacity of local agencies to implement and monitoring and evaluation systems were inadequate; and (d) local, in contrast to national, ownership was weak because incentive structures were not aligned to peoples' needs.
  • Quality of Bank supervision was initially poor and was strengthened after an adverse QAG Quality of Supervision Assessment in 2000.
  • Government commitment to sustainable environmental and natural resource management was uneven. This, allied with weak governance, corruption and political pressure in the forestry and biodiversity sectors, allowed illegal resource mining that negatively affected project achievements. Madagascar was noncompliant with CITES in 200 and 2001. Irregular and short counterpart funding created implementation delays.
  • Environmental policies for agriculture (pesticides), tourism and urban development did not progress from drafting to implementation.
  • Few of the soil and water conservation mini-projects were within the protected areas. Site selection was guided by socioeconomic factors and poverty considerations with less attention to protected area criteria, and indicate that coordination between rural development and the project's environmental agencies was poor.
  • Lack of an integrated approach. Agricultural system intensification is a necessary but not sufficient condition to reduce slash and burn cultivation. Conservation techniques alone are not enough; equal attention has to be given to land tenure security, ensuring undistorted and predictable markets for inputs and outputs, and agricultural extension - all services either missing or very weak in the project areas.
  • There was no strategy to disseminate and mainstream research and viable technologies and practices for soil and water management generated by the project.
  • In the forestry sector, inadequate attention was given to security of tenure that would foster long-term stewardship of community managed resources.
  • Mini-projects appear to have weak sustainability and are almost totally dependent on external funding for start-up.
  • Only 26% of households introduced to conservation technologies were using it after two years (the SAR target was 70%).
  • Independent community management of protected areas proved to be unwieldy because of lack of skills and resources - this is being replaced by formal contracts with protected area management agencies.
  • While many policies were drafted, only half became operational because of weak government follow-up.
  • High turnover of senior and technical government staff in the first half of the project.
  • Implementing agencies has problems with financial and management accounting systems that slowed implementation, and difficulties on procurement meant that and economies of scale were not captured - these problems were well-known from the Phase I lessons (SAR Box 1).
  • The rate of expansion of protected areas is outpacing government's ability to provide adequate logistical support.
  • 6. Ratings:ICROED ReviewReason for Disagreement/Comments
    Institutional Dev.:
    Bank Performance:
    Borrower Perf.:
    Quality of ICR:

    7. Lessons of Broad Applicablity:

    Sustainable environmental conservation requires a holistic multisectoral approach incorporating, inter alia, preservation and enhancement of livelihood and attention to governance.
    • Unclear objectives allied with poor monitoring and evaluation will create a problem project. It is essential to give priority and adequate resources to establishing realistic objectives, development of the counterfactual, supporting good monitoring and evaluation, and the development of benchmarks and baselines to ensure accountability, evaluation and lesson-learning.
    • Do not put short-term expediency to manage a Bank project well ahead of longer-term building of governmental capacity. All too often, Bank projects either denude government agencies of their most able staff thus lowering agency effectiveness and/or effectively displacing them by establishing parallel agencies. It is generally better to strengthen the agencies and increase their effectiveness and efficiency. Ideally, project implementation becomes a mainstream function of the agency supported by private-sector consultants.
    • Results-based disbursement and contracting keeps project implementers focussed on achievements displacing the "business -as-usual" syndrome that frequently accompanies traditional disbursement arrangements.

    8. Audit Recommended?  Yes

              Why?  This is an innovative project and there are many lessons to be learnt about how to make environmental conservation sustainable.

    9. Comments on Quality of ICR:

    Although very long, it provides a thorough and candid coverage of this complex project. There are a few inconsistencies between the annexes and text. Lessons learned are good.

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