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Document of The World Bank

Report No: ICR0000437

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-40850 IBRD-4085A IBRD-4085S)

ON A

LOAN

IN THE AMOUNT OF US$ 15.8 MILLION

TO THE

REPUBLIC OF ARGENTINA

FOR A

NATIVE FORESTS AND PROTECTED AREAS PROJECT

December 28, 2007

Sustainable Development Department Argentina, Chile, Paraguay, and Uruguay Latin American and Caribbean Region

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CURRENCY EQUIVALENTS

(Exchange Rate Effective November 5, 2007)

Currency Unit = Peso $Peso 3.136 = US$1 US$ 0.3196 = AR$1

FISCAL YEAR

January 1- December 31

ABBREVIATIONS AND ACRONYMS

APN National Parks’ Administration BANK/FAO-CP World Bank/Food and Agriculture Organization Cooperative Program CAS Country Assistance Strategy CNB National Forestry Commission COFEMA The Federal Council of the Environment for Argentina DB Directorate for Forests FAO Food and Agriculture Organization of the United Nations FMS Financial Management System GoA Government of Argentina ICR Implementation Completion Report IFAD International Fund for Agricultural Development IFONA Argentinean National Forestry Institute INASE National Seed Institute INDEC National Institute of Statistics INTA National Institute for Agricultural Research IRR Internal Rate of Return LAC Latin America and the Caribbean LIB Limited International Bidding LOI Letters of Invitation M&E Monitoring and Evaluation MERCOSUR Common Market Consisting of Argentina, Brazil, Paraguay and Uruguay MTySS Ministry of Labor and Social Security NCB National Competitive Bidding NGO Non-Government Organization NPV Net Present Value OED Operations Evaluation Department PAR Project Audit Report PCU Project Coordination Unit POA Annual Work Plan PPMPM Program of Production of Improved Multiplication Materials SAGPyA Secretariat of Agriculture, Livestock and Fisheries SAyDS Secretariat of Environment and Sustainable Development SBD Standard Bidding Documents SOE Statement of Expenditure SRNyAH Secretariat of Natural Resources and Human Environment

TA Technical Assistance TOR Terms of Reference UMSEF National Forests Monitoring Unit

Vice President: Pamela Cox Country Director: Pedro Alba

Sector Manager: Ethel Sennhauser Project Team Leader: Robert Davis

ICR Team Leader: Francis Fragano

ARGENTINA Native Forests and Protected Areas Project

CONTENTS

Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph

1. Project Context, Development Objectives and Design............................................... 12. Key Factors Affecting Implementation and Outcomes .............................................. 63. Assessment of Outcomes .......................................................................................... 154. Assessment of Risk to Development Outcome......................................................... 255. Assessment of Bank and Borrower Performance ..................................................... 256. Lessons Learned ....................................................................................................... 277. Comments on Issues Raised by Borrower/Implementing Agencies/Partners .......... 28Annex 1. Project Costs and Financing.......................................................................... 30Annex 2. Outputs by Component ................................................................................. 32Annex 3. Economic and Financial Analysis................................................................. 36Annex 4. Bank Lending and Implementation Support/Supervision Processes ............ 40Annex 5. Beneficiary Survey Results ........................................................................... 42Annex 6. Stakeholder Workshop Report and Results................................................... 42Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR..................... 43Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders....................... 49Annex 9. List of Supporting Documents ...................................................................... 50

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A. Basic Information Country: Argentina Project Name:

Native Forests & Protected Areas Project

Project ID: P040808 L/C/TF Number(s): IBRD-40850,IBRD-4085A,IBRD-4085S

ICR Date: 12/28/2007 ICR Type: Core ICR Lending Instrument: SIL Borrower: GOA Original Total Commitment:

USD 19.5M Disbursed Amount: USD 15.8M

Environmental Category: B Implementing Agencies: APN Secretaria de Ambiente y Desarrollo Sustentable Cofinanciers and Other External Partners: B. Key Dates

Process Date Process Original Date Revised / Actual Date(s)

Concept Review: 02/17/1995 Effectiveness: 07/08/1997 07/08/1997 Appraisal: 03/31/1996 Restructuring(s): 07/14/2003 Approval: 09/05/1996 Mid-term Review: 10/02/2000 Closing: 06/30/2005 06/30/2007 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Moderately Satisfactory Risk to Development Outcome: Low or Negligible Bank Performance: Moderately Satisfactory Borrower Performance: Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings

Quality at Entry: Moderately Satisfactory Government: Satisfactory

Quality of Supervision: Satisfactory Implementing Agency/Agencies: Satisfactory

Overall Bank Performance: Moderately Satisfactory Overall Borrower

Performance: Satisfactory

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C.3 Quality at Entry and Implementation Performance Indicators Implementation

Performance Indicators QAG Assessments (if any) Rating

Potential Problem Project at any time (Yes/No):

Yes Quality at Entry (QEA):

None

Problem Project at any time (Yes/No):

Yes Quality of Supervision (QSA):

None

DO rating before Closing/Inactive status:

Moderately Satisfactory

D. Sector and Theme Codes

Original Actual Sector Code (as % of total Bank financing) Central government administration 47 47 General agriculture, fishing and forestry sector 5 5 Law and justice 4 4 Other social services 22 22 Roads and highways 22 22

Theme Code (Primary/Secondary) Biodiversity Primary Primary Environmental policies and institutions Primary Primary Export development and competitiveness Primary Primary Law reform Primary Primary E. Bank Staff

Positions At ICR At Approval Vice President: Pamela Cox Shahid Javed Burki Country Director: Pedro Alba Gobind T. Nankani Sector Manager: Ethel Sennhauser Constance A. Bernard Project Team Leader: Robert Ragland Davis Michael McGarry ICR Team Leader: Francis V. Fragano ICR Primary Author: Francis Fragano Zhong Tong Lyle Morton Takako Mochizuki

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F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The objectives of the project are to: (a) assist SRNyDS in prioritizing its proposed actions dealing with native forests; (b) facilitate the development of an incentive and regulatory framework that encourages public and private decision-makers to internalize more fully within their decision-making process the full range of social costs and benefits associated with their actions affecting native forests; (c) develop a plan for transforming the Argentine National Parks Administration into a world-class park management organization; and (d) increase the environmentally sustainable level of tourism in selected National Parks. Revised Project Development Objectives (as approved by original approving authority) Not Applicable. (a) PDO Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : To reform the policy, legal and regulatory framework affecting native forests

Value quantitative or Qualitative)

No current legislation. The only legislation on Native Forests is from 1948.

Management of SAyDS aware of and committed to reform at the federal level; a similar stage has been reached at the provinces

The project and SAyDS have now developed new draft legislation on native forests which has passed COFEMA (representing prov inces) the camara de diputados and the senate.

Date achieved 07/08/1997 12/31/2000 11/30/2007 Comments (incl. % achievement)

Indicator 2 : To generate and disseminate information on the native forests of Argentina in order to enable all actors, public and private, to contribute to their improved management and conservation


Absence of a national inventory and accessible information regarding native forests area, threats and protection priorities for the country.

Govt, NGOs and public have greatly improved knowledge of information regarding native forests area, threats and

Govt., NGOs and Public have increased access to forest inormation. (National inventory and forest atlas are complete and di sseminated widely

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protection priorities for the country.

to stakeholders.)


Indicator 3 : To begin transformation of APN into a world-class parks administration


no plan

Consensus reached on plan, detailed blueprint for implementation, plan prepared and agreed for reforming APN

Plan and blueprint are complete and approved by APN formally.


Indicator 4 : Increased capacity of four national parks in Patagonia (Lanin, Nahuel Huapi, Los Alerces, and Los Glaciares)


no management plans and incomplete infrastructure in parks (Lanin, Nahuel Huapi, Los Alerces, and Los Glaciares)

Improved mgt. plans approved, training, concession reforms, and infrastructure complete. Increased revenues in four target parks.

All four management plans complete 3 training events and 40 major infrastructure works complete.


Indicator 5 : A PIU in place and capable of assisting SAyDS to handle procurement, accounting, and other aspects of project implementation in an efficient manner acceptable to Bank


no PIU

PIU in place and capable of assisting SAyDS to handle procurement, accounting, and other aspects of project implementation in an efficient manner acceptable

PIU is fully staffed and functioning well. Technical, procurement and FM are satisfactory.

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to Bank Date achieved 07/08/1997 06/30/1998 06/30/1998 Comments (incl. % achievement)

(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised

Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Component A: Studies of federal and provincial policies, laws & regulations completed; obstacles prioritized; and revised federal legislation and regulations drafted (%)

Value (quantitative or Qualitative)

(0%): no studies completed

(100%): all required studies complete, draft law complete

All required studies complete, law and legislation drafted.


100%

Indicator 2 : Component A: Federal level workshops to obtain feedback on studies and prioritize approach (N#)


(0%): 0 (100%): 2 1


50%: second workshop not required.

Indicator 3 : SubComponent A (1):Component A: Studies of provincial policies, laws & regulations completed; obstacles prioritized; and revised provincial legislation and regulations drafted (%)


(0%): no studies completed

(100%): all required studies complete

All required studies complete


100%

Indicator 4 : Component A: Provincial level workshops to discuss the proposal. (N#) Value (quantitative or Qualitative)

(0): no workshops (100%): four workshops Nine workshops

Date achieved 07/08/1997 06/30/2001 06/30/2002 Comments 160%

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(incl. % achievement) Indicator 5 : Component A: Study tour participants (N#) Value (quantitative or Qualitative)

0 20 37 workshops conducted and two study tours


A proxy estimate of 90% is given. For efficiency the project conducted 30+ national training exercises and workshops and 2 study tours.

Indicator 6 :

Component A: Plan and agenda for approval and implementation of new policies prepared. (%)


0% - no plan/agenda 100% - draft plan and agenda complete

Draft plan and agenda are final and delivered.


100%

Indicator 7 : Component A: Purchase of Satellite Images. (N#) Value (quantitative or Qualitative)

0 images procured 160 images procured

237 images procured (exceeds target).


172.5%

Indicator 8 : Component A: Contracts for both Phase I & II Lead Firm of inventory, database and hired training. (%)


no contracts contracts completed

contracts signed (1999) and completed in 2005


100%

Indicator 9 : Component A: Ecosystem map produced. (%) Value (quantitative or Qualitative)

no map ecosystem map complete ecosystem map

complete


100%

Indicator 10 : Component A: Workshop on Inventory methodology complete. (N#) Value no workshops seven workshops 7 workshops

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(quantitative or Qualitative)

completed completed


100%

Indicator 11 : Component A: Ground truthing completed. (%) Value (quantitative or Qualitative)

no ground truthing 100% complete 100% complete


100%

Indicator 12 : Component A: Inventory completed (%) Value (quantitative or Qualitative)

(0) (100%) 100% completion


100%

Indicator 13 : Component A: Map and report produced for follow-up monitoring. (N#) Value (quantitative or Qualitative)

(0) 100% 100%


100%

Indicator 14 : Component A: Procurement of vehicles and equipment (%) Value (quantitative or Qualitative)

0 100% 100%


100%

Indicator 15 : Component A: Database Management Unit (DMU) formed. (N#) Value (quantitative or Qualitative)

0 1 unit formed 1 unit formed


100%

Indicator 16 : Component A: Database and lead firm contracted and database management unit designated/installed

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0 100% 100%


100%

Indicator 17 : Component A: DMU staff trained in the system. (N#) Value (quantitative or Qualitative)

0 3 17


567% achievement

Indicator 18 : Component A: Chaco study completed. (%) Value (quantitative or Qualitative)

0 100% 100%


100%

Indicator 19 : Component A: Chaco workshop completed. (%) Value (quantitative or Qualitative)

no workshops one workshop 1 workshop


100%

Indicator 20 : Component A: Finalize technical and eligibility criteria for research proposals, and complete guidelines for us and management of funds


no guidelines 100% - guidelines completed 100%


100%

Indicator 21 : Component A: Research implemented and under monitoring. (%) Value (quantitative or Qualitative)

0 research underway 100% - 6 projects final 85% - 5 projects of

6 completed


85%

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Indicator 22 : Component B: Issues report on park models and consensus workshops completed Value (quantitative or Qualitative)

0% 100% report completed 100%


100%

Indicator 23 : Component B: Blueprint for implementing a reformed APN complete Value (quantitative or Qualitative)

no blueprint blueprint complete blueprint completed


100%

Indicator 24 : Component B: Implementation plan for reforming APN completed Value (quantitative or Qualitative)

no implementation plan Implementation plan complete and approved

Implementation plan is complete and approved


100%

Indicator 25 : Component B: Current Management Plan completed and approved (N#)


no management plans updated (Lanin, Nahuel Huapi, Los Alerces, and Los Glaciares)

all four management plans updated (Lanin, Nahuel Huapi, Los Alerces, and Los Glaciares)

all four management plans updated (Lanin, Nahuel Huapi, Los Alerces, and Los Glaciares)


100%

Indicator 26 : Component B: Control posts built Value (quantitative or Qualitative)

0 10 control post built 6 Control posts

built


60%

Indicator 27 : Component B: Volunteer housing built Value (quantitative or Qualitative)

0 9 housing units 9 housing units complete

Date achieved 07/08/1997 06/30/2003 06/15/2007

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Comments (incl. % achievement)

100%

Indicator 28 : Component B: Mountain refuges built Value (quantitative or Qualitative)

0 5 mountain refuges built reprogrammed

Date achieved 07/08/1997 06/30/2003 06/30/2004

Comments (incl. % achievement)

During the course of the implementation, project decided to prioritize investments in the observation posts/trails and historical structures over the construction of mountain refuges. This shift is reflected by higher completion rates of indicators 29, 30

Indicator 29 : Component B: Observation posts/trails built/rebuilt Value (quantitative or Qualitative)

no trails 6 trails and posts completed 8 trails and posts

completed


133%

Indicator 30 : Component B: Historical structures restored Value (quantitative or Qualitative)

no historical structures restored

two historical structures restored 3 historical

structures restored


150%

Indicator 31 : Component B: Ranger quarters built Value (quantitative or Qualitative)

no Ranger quarters built 3 Ranger quarters 3 Ranger quarters built


100%

Indicator 32 : Component B: Road Rehab in NH (no. km) Value (quantitative or Qualitative)

no rehabilitation of road in Nahuel Huapi

117 kms rehabilitated 117 kms

rehabilitated


100%

Indicator 33 : Component B: Road new (no. km) Value (quantitative or Qualitative)

no new roads 30 kms new roads no new roads (6 bridges built on Nahuel Huapi road)

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APN requested to build 6 bridges instead of new roads as these were more urgent for the road system itself

Indicator 34 : Component B: Training programs Value (quantitative or Qualitative)

no new training programs 100% training 10% of training complete


3 international study tours conducted to US (2) and Costa Rica (1)

Indicator 35 : Component B: Vehicles and equipment purchased Value (quantitative or Qualitative)

0 Vehicles and equipment purchased 100% 100%


100%

Indicator 36 : Component C: PIU organized and staffed Value (quantitative or Qualitative)

no PIU PIU 100% organized and staffed

PIU 100% organized and staffed


100%

Indicator 37 : Component C:PIU staff contracted (p/m)


no contracts

apx avg for two PIUs in final year was estimated at apx. 120 person mts

72 mts (A) and 91 mts (B) for total of 163 mts in 2006


+100%

Indicator 38 : Component C: PIU Vehicles purchased (No.) Value (quantitative or Qualitative)

no PIU vehicles two vehicles activity dropped


activity dropped

Indicator 39 : Component C: PIU Eqpt. procured Value no PIU eqpt 100% of PIU 100% eqpt

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(quantitative or Qualitative)

acquired for joint PIU

purchased


100%

Indicator 40 : Component C: Mid-Term Review Value (quantitative or Qualitative)

No MTR MTR complete MTR complete on schedule


100%

Indicator 41 : Component C: Implementation Completion Report (no.)


no ICR ICR complete

Draft Borrower's Implementation Completion Report delivered for Bank's review


100%

Indicator 42 : Component B: Visitor Center built Value (quantitative or Qualitative)

0 11 7


64%

G. Ratings of Project Performance in ISRs

No. Date ISR Archived DO IP

Actual Disbursements (USD millions)

1 12/16/1996 Satisfactory Satisfactory 0.00 2 06/18/1997 Satisfactory Satisfactory 0.00 3 12/15/1997 Satisfactory Satisfactory 0.37 4 05/26/1998 Satisfactory Satisfactory 0.91 5 12/17/1998 Satisfactory Satisfactory 1.69 6 04/29/1999 Satisfactory Satisfactory 2.73 7 10/19/1999 Satisfactory Satisfactory 3.68 8 04/26/2000 Satisfactory Satisfactory 4.93 9 11/15/2000 Satisfactory Satisfactory 6.28

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10 05/14/2001 Satisfactory Satisfactory 7.40 11 12/12/2001 Satisfactory Satisfactory 7.90 12 05/15/2002 Satisfactory Satisfactory 8.14 13 09/05/2002 Satisfactory Satisfactory 8.14 14 09/24/2002 Satisfactory Satisfactory 8.14 15 12/20/2002 Unsatisfactory Unsatisfactory 8.41 16 05/16/2003 Unsatisfactory Unsatisfactory 8.41 17 07/28/2003 Satisfactory Unsatisfactory 8.45 18 12/10/2003 Satisfactory Unsatisfactory 8.82 19 02/24/2004 Satisfactory Unsatisfactory 9.03 20 05/28/2004 Satisfactory Unsatisfactory 9.34 21 11/02/2004 Satisfactory Unsatisfactory 10.07 22 12/07/2004 Satisfactory Unsatisfactory 10.20 23 04/19/2005 Moderately Satisfactory Moderately Satisfactory 10.59 24 07/30/2005 Satisfactory Moderately Satisfactory 11.06 25 05/01/2006 Moderately Satisfactory Moderately Satisfactory 12.31 26 12/27/2006 Moderately Satisfactory Moderately Satisfactory 13.84 27 06/25/2007 Moderately Satisfactory Moderately Satisfactory 15.71

H. Restructuring (if any)

ISR Ratings at RestructuringRestructuring

Date(s)

Board Approved

PDO Change DO IP

Amount Disbursed at

Restructuring in USD millions

Reason for Restructuring & Key Changes Made

07/14/2003 N U U 8.45 Establish PIU in APN following change in Ministry

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I. Disbursement Profile

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1. Project Context, Development Objectives and Design (this section is descriptive, taken from other documents, e.g., PAD/ISR, not evaluative)

1.1 Context at Appraisal (brief summary of country and sector background, rationale for Bank assistance) At the time of appraisal, Argentina had scarcely recognized the need to address the issue of public goods and services derived from its native forests, with the exception of conservation through its national protected areas system. The recently completed Forestry Sector Review (Report No. 11833- AR, dated April 26, 1993), pointed to the need to improve the policy framework around issues of native forests and protected areas, generate information for the appropriate management of the same, and improve the public management of native forests areas. Information on native forests was scarce, and Argentina could not count on a solid research and information base on which to base its analysis of policy options, making it difficult to develop realistic plans or political consensus on critical issues of natural resource management. The country lacked a comprehensive inventory of its native forests, as well as any environmental or economic analysis of the threats to that resource or the economic opportunities therein. In addition, a recent analysis of management effectiveness in Argentina’s protected areas estimated that less than 21 percent of the area under protection was acceptably managed while nearly 50 percent received little or no management whatsoever. At appraisal, the area of native forest in Argentina with commercial potential was estimated at 15 million hectares and produced approximately 1.5 million M3 of wood per annum, equal to about 40 percent of the country’s annual production. Preliminary studies showed much of the country’s land to be degraded by water and wind erosion. This was due, in part, to overgrazing and the destruction of the perennial vegetative cover. Desertification in parts of the Chaco was identified as one of the more problematic aspects of the degradation trend. Only about 4.4 percent of the national territory (about 12.1 million hectares) was protected, 22 percent of this being in protected areas in national parks and the remaining 78 percent under provincial or other control. However, many of the provincial protected areas were in reality “paper parks”, with no active management or day-to-day management presence. The Bank’s country assistance objectives and strategy for dealing with native forests and the protected areas system was defined through a series of intensive mission contact beginning in 1992, leading to a Forestry Sector Review, this continued into the identification, preparation and appraisal of this project. The Project was in line with the 1995 CAS, current at the time of project preparation. The CAS had three objectives: (a) consolidating structural reform; (b) reducing poverty and strengthening social services; and (c) rebuilding infrastructure. Under rebuilding infrastructure the CAS includes inter alia lending for forestry, enhancing the regulatory framework in forestry, and improving the management of native forests. The Project was the Bank’s first free-standing project aimed at improved management and conservation of native forests and protected areas in Argentina. As a part of the Agricultural Services and Institutional Development Project the Bank had previously supported a small sub-component for forestry research (US$1.9 million). The Forestry Development Project, meanwhile, focused on forest plantations, timber processing industries and agroforestry.

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1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved) The project was conceived prior to the use of the Results Framework within the Bank. The overall objective of the project was to develop and to implement an appropriate state role in the conservation and management of native forests and the development and management of the protected areas system. The intermediate objectives or outcomes of the project are to: (a) assist SRNyDS (now SAyDS) in prioritizing its proposed actions dealing with native forests; (b) facilitate the development of an incentive and regulatory framework that encourages public and private decision-makers to internalize more fully within their decision-making process the full range of social costs and benefits associated with their actions affecting native forests; (c) develop a plan for transforming the Argentine National Parks Administration into a world-class park management organization; and (d) increase the environmentally sustainable level of tourism in selected National Parks. The project objectives align with the objectives identified with for each of the three components of the project, described below in Section 1.5. Impact indicators were developed for each of the objectives. Specific performance indicators were also developed during preparation.

Component Objective Impact Indicator Component A – Native Forests

To reform the policy, legal and regulatory framework affecting native forests To generate and disseminate information on the native forests of Argentina in order to enable all actors, public and private, to contribute to their improved management and conservation

Management of SRNyAH aware of, and commited to, draft legal proposals for federal reform. SRNyAH, policy makers and NGOs have improved level of knowledge concerning: (i) native forests, (ii) extent and nature of areas under threat, (iii) priority areas for protection, (iv) causes of deforestation, and (v) options for improved management and conservation.

Component B – Protected Areas To begin transformation of APN into a world class parks administration

Consensus reached on “vision for reformed APN.” Blueprint for implementing vision prepared. Plan prepared to implement blueprint of the vision.

Increased capacity of four national parks in Patagonia (Lanin, Nahuel Huapi, Los Alerces, and Los Glaciares)

Improved park management plans prepared and approved; infrastructure investments completed; training to improve park management completed and improved concessions policies implemented APN revenues increased to justify project investments.

Component C – Project Implementation A PIU in place and capable of assisting SAyDS to handle procurement, accounting, and other aspects of project implementation in an

A PIU in place and capable of assisting SAyDS to handle procurement, accounting, and other aspects of project implementation in an

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efficient manner acceptable to Bank efficient manner acceptable to Bank

1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification

Not applicable.

1.4 Main Beneficiaries, (original and revised, briefly describe the "primary target group" identified in the PAD and as captured in the PDO, as well as any other individuals and organizations expected to benefit from the project) The principal beneficiaries of the project were the government institutions responsible for sustainably managing native forests and protected areas, the populations that those institutions serve, in particular the rural populations that live within and near the native forests and protected areas included in the project, and the public in general. The rural populations benefited from improved natural resource management and from local economic growth. Visitors to the national parks also benefited from improvements to the physical infrastructure at the parks as well as improved park management and conservation of their natural resources. The general public was a recipient of the goods and services provided by the country’s forests and protected areas.

1.5 Original Components (as approved) The project had three components: (A) generation and dissemination of research and information; (B) protected areas; and (C) project implementation. Total project costs at appraisal amounted to US$30 million; US$19.5 million IBRD and US$10.5 million from GoA. Component A – Generation and Dissemination of Research and Information (US $13.4 million; US$7.9 million from IBRD and US$5.5 million from GoA) This component was designed to address weaknesses and deficiencies in the policy, legal and regulatory framework on native forests. It had the following three subcomponents: (1) reform of the policy, legal and regulatory framework affecting native forests; (2) a national inventory of native forests, and establishment and operation of a related database; and (3) applied research and studies to facilitate the improved management and conservation of native forests and protected areas. Subcomponent A1: Policy, Legal and Regulatory Reform – The objective of this subcomponent was to update the regulatory and legal framework which SAyDS works within as the responsible agency for managing native forests at the federal level. The subcomponent included provisions for a detailed study of existing federal legislation and regulations affecting the use and conservation of native forests in order to identify the main obstacles to their better management. The subcomponent also stipulated that the study would be followed by workshops for representatives of the public and private sectors and NGOs, the objective of which was to obtain feedback on the study and agree on a hierarchy of problems. Subcomponent A2: National Inventory of Native Forests and Management of a Related Database– The objective of this subcomponent was to: (a) complete an inventory of native forests, including their biodiversity in carefully selected areas, and (b) to develop and manage a related

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database so that SAyDS would have the capacity to store, retrieve, analyze and publish reliable information related to its mandate governing native forests. Subcomponent A3: Applied Research and Studies to Facilitate the Improved Management and Conservation of Native Forests – The overall objective of this sub-component was to provide additional building blocks to SRNyAH in its efforts to develop a strategy for discharging the federal responsibility with respect to native forests. Based on the information generated from the inventory, SRNyAH developed and managed an applied research and studies program to (a) identify the geographic areas of native forests most threatened with loss and destruction; (b) select from the set of areas so identified the subset with the highest priority for protection; (c) identify the principal forces leading to loss and destruction in the subset with the highest priority for protection; and (d) develop and elaborate the options, including, where feasible, a cost-benefit analysis for actions recommended, which SRNyAH would exercise to improve the management of these priority areas, particularly when all or part are privately owned. Component B – Protected Areas (US$10.3 million; US$7.3 million from IBRD and US$3.0 million from GoA) Argentina was the first country in Latin America to create a national park system. At the time of inception the system consisted of 30 protected areas covering 2.8 million ha (1% of the total national land area). Tourism generated by the parks system is a significant and growing part of the economy, though visitation to and revenues from the parks is highly unequal; the four Patagonian parks included in this project generated 44% of all park revenues in 1994. The National Parks Administration (APN) suffered generally from a shortage of funding, which had resulted in under-investment in park infrastructure. APN’s own studies pointed to the need for improved protected areas management, institutional strengthening and training and a strengthened national system of protected areas. The objectives of the Protected Areas Component were: (a) to prepare a plan for modernizing APN and transforming it into a world-class park management organization; and (b) to increase the capacity of four national parks in Patagonia to accommodate a greater number of tourists without damaging their environment. (The four selected parks were: Lanín, Naguel Huapi, Los Alerces and Los Glaciares.) To this end, the Protected Areas Component was divided into two sub-components: (1) the development of a plan for the modernization of APN; and (2) specific infrastructure developments and management strengthening in four selected parks in the Patagonian region. Subcomponent B1: Development of Modernization Plan for APN – The general objective of this subcomponent was to support studies and activities which are aimed at developing an agreement on a vision and subsequent draft implementation plan for the transformation of APN into a world-class parks administration. The subcomponent did not include financing for the implementation of project activities due to the uncertainty and difficulty associated with, among other things, the costs that could be accrued in such an effort prior to reaching an accord on the visioning and planning process. Subcomponent B2: Infrastructure Development and Management Strengthening in Four Selected National Parks – The general objective of this subcomponent was to finance the development of basic infrastructure and to strengthen the capacity of four national parks selected in the region of Patagonia: Lanín, Nahuel Huapi, Los Alerces and Los Glaciares. The parks were selected on the basis of their ecological importance and the critical role that each of them plays in protecting the water resources of the region.

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Component C – Project Implementation (US $2.2 million; US$2.2 million from IBRD) This component strengthened the capacity of Directorate for Native Forests (DRFN) of SAyDS and APN to manage and coordinate project implementation by establishing a PIU which would assist the managers of DRFN and APN in implementing the project. Following the transfer of APN to the Secretary of Tourism, a PIU with a separate special account was established there.

1.6 Revised Components There were no revisions to the project components themselves.

1.7 Other significant changes (in design, scope and scale, implementation arrangements and schedule, and funding allocations) Institutional arrangements – The Native Forest/Protected Areas project was originally designed to work through the Secretariat of Natural Resources and Human Environment (SRNyAH). SRNyAH established a single PIU, responsible for the coordination of project implementation, working with the staff of the Directorate of Forests (DB) and the semi-autonomous National Parks Administration (APN). The DB and APN, responsible for the native forest and protected areas components, respectively, were both within the SRNyAH. Following a series of institutional reorganizations in the environment ministries, in 2001 APN was transferred to the Ministry of Tourism. At that time, SRNyAH was renamed as the Secretary of the Environment and Sustainable Development (SAyDS). The transfer of APN to the Ministry of Tourism had implications for the implementation of the project. Once transferred, the Protected Areas Component experienced significant constraints in the timely flow of funds from SAyDS (which held authority for the special account) for routine operations. This constraint was eventually resolved by establishing a separate special account for APN and separate procurement authority. Very late in the project (2007) SAyDS was transferred to the Jefatura de Gabinete de Ministros, where it remains at this time. However, no negative impacts on the project were incurred as a result of this shift. Project Extensions – The project had 3 extensions. These were for 12, 9, and 3 months for a total of 24 months beyond the original closuring date. Impacts of the fiscal and political crises of 2001 – 2003 on the project had slowed progress during those years. However, following the crisis the project had recouped its momentum and showed good signs that it could successfully accomplish its objectives, providing it was granted more time. The first two extensions were linked and were processed in response to a request from the borrower for a full 21-mt. extension. The first (12-mt.) extension contained triggers for the second (9-mt.) extension and stipulated that only work underway or contracted and projected to be concluded in the additional 9-mt. period could be included in the second extension. The triggers were primarily directed at Subcomponent B2’s infrastructure works, which were progressing slowly. Nevertheless, all subcomponents benefited from the first two extensions, as the draft law was submitted to congress (A1), the inventory completed (A2), two additional applied research projects completed (A3) and the modernization plan approved

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(B1) during the 21 months. The third extension was requested strictly to finalize four major infrastructure works which were over 90% complete and could be finished within 3 months (The works were completed at the end of that period.). Amendment of Disbursement Category Allocations – In July 2003, an amendment was made to the loan agreement which included a reallocation of funds, along with a change in the percentage of expenditures to be financed by IBRD and the establishment of a separate PIU and special account for APN (following its transfer to the Ministry of Tourism). The reallocations were as follows:

• Consultants’ services, disbursement category (1)(a) – increased from USD 590,000 to USD 715,000;

• Workshop and training tours, disbursement category part (1)(b) – increased from USD 126,000 to 210,000;

• Consultants’ services, disbursement category part (2)(a) – increased from USD 3,324,000 to 3,626,500.

• Vehicles, remote images, equipment, software, workshops, disbursement category (2)(b) – decreased from USD 941,000 to 774,500;

• Applied Research and Studies, disbursement category (3)(a) – decreased from USD 2,910,000 to 2,437,000;

• Workshops, disbursement category (3)(b) – decreased from USD 90,000 to 85,000.

• Consultants’ services, disbursement category (6)(a) -- decreased from USD 1,520,000 to 893,000;

• Vehicles and equipment, disbursement category (6)(b) – decreased from USD 119,000 to 59,500;

• Consultants’ services, disbursement category (8)(a) –new disbursement category at USD 760,000 for the APN PIU; and

• Vehicles and equipment, disbursement category (8)(b) –new disbursement category at USD 59,500 to support APN’s new PIU.

2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry (including whether lessons of earlier operations were taken into account, risks and their mitigations identified, and adequacy of participatory processes, as applicable) In the early 1990s, Argentina was emerging from a period of hyperinflation and economic instability, and was confronted with the challenge of promoting economic growth. One of the more promising areas identified with potential for growth was the forestry sector. With this in mind, the government sought ways to narrow the gap between existing and potential sustainable levels of production. At the government’s request, the Bank initiated a review of the sector in 1992, leading to a Forestry Sector Review (Report No. 11833-AR, dated April 26, 1993). This provided the foundation for the identification, preparation, and appraisal of the project. The review noted that the major issues and challenges confronting Argentina’s forest sector were inter-alia the need to improve the policy framework around issues of native forests and protected areas, generate information for the appropriate management of the same, and improve the public management of native forests areas. Information on native forests was scarce, and Argentina

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could not count on a solid research and information base on which to base its analysis of policy options, making it difficult to develop realistic plans or political consensus on critical issues of natural resource management. The country lacked a comprehensive inventory of its native forests, as well as any environmental or economic analysis of the threats to that resource or the economic opportunities therein. The Bank’s support for economy-wide policies and actions necessary for the improvement of Argentina’s forestry potential was pursued as part of the country dialogue and economic work program. It was determined that the Bank could be of significant assistance to the government in helping it to develop and implement an appropriate state role in forestry and conservation. Project Preparation The Bank team was composed of economists, foresters, protected area specialists and other technical experts. The FAO CP played an important role in providing technical experts to work side-by-side with the national counterparts in the project formulation. The project was well conceived and had a sound technical design that targeted the issues and constraints derived from the sector review report. Lessons learned incorporated: At the time of assessment, the Bank had lent over US$2 billion for forestry projects and projects with forestry components. Despite this resume, the Bank had only one existing Implementation Completion Report (ICR) and no Project Audit Reports (PAR) for the forestry sector in Latin America & the Caribbean. An internal Operations Evaluation Department (OED) study (1991) concluded that the frontier for development in the forest sector lay in institutional and human resources as well as research and information systems. The design of the Native Forests/Protected Areas project was closely aligned with these findings. The project also heeded the lessons learned from other Bank and non-Bank projects – that native forests and other wildlands are a resource capable of being managed for multiple outputs, including environmental services, and that the government has a key role to play in protecting critical habitat. Rationale for Bank Involvement: The project provided a vehicle for pursuing one of the three pillars of the 1995 CAS for Argentina: rebuilding infrastructure, which included inter alia lending for forestry, enhancing the regulatory framework in forestry, and improving the management of native forests. It achieved this objective by enhancing the policy, legal and regulatory framework governing native forests, by addressing information constraints to the sustainable use of native forests and the conservation of biodiversity through investments in physical infrastructure in key parks, and by supporting the modernization of APN. Because forestry was a relatively new area for investments in Argentina, Bank experience in other countries was instrumental in helping the Argentines prepare for the proposed project. Project Design One important factor contributing to the project’s success was the decision to base the project’s design on the comprehensive sector study of 1995. The study included a review of government policy and regulation in the forestry sector, institutional structure and capacity, research capacity and extension services, plantation management, and environmental sustainability. The project

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design aimed to address shortcomings in these areas, strengthen weaknesses, and mitigate constraints existing in the forestry sector. The project’s success demonstrates the importance of carrying out a sector review to identify issues and constraints in the early stages of preparation. Risk Assessment: The major risks and uncertainties included the danger that the institutions charged with executing the project would not be up to the task and that the government commitment of funds to achieve long-term goals would not be sustainable in the face of short-term fiscal constraints. These risks were mitigated by funding for training of government professionals and technicians, and augmenting capacity with specialized consultants needed to fill critical gaps in staffing. The risk of fiscal constraints was mitigated successfully by emphasizing the importance of national parks to become more self sufficient. Borrower Commitment: A key factor in the project’s success was overall good government support, with the project closing with a high degree of support from both SAyDS and APN, as line agencies. However, during the crisis years, the government commitment was hard to ascertain – both IBRD and counterpart funding were severely constrained, and project progress slowed. IBRD expenditures dropped from US $2.5 million in 2001 to US $0.7 million in 2002. Scarce government funds were shifted from the executing agencies to social relief programs. At the same time, the line agencies maintained, albeit with difficulty, marginal rates of progress during the crisis. In contrast, as the crisis began to abate in 2004, both agencies, and APN in particular began to regain their footing and implementation rebounded strongly.

2.2 Implementation (including any project changes/restructuring, mid-term review, Project at Risk status, and actions taken, as applicable) Economic and Political Collapse 2001-2002 – By the end of 2001, capital flight led to the imposition of banking controls, a policy that proved highly unpopular and the cause of massive protests. In December 2001, President De la Rúa resigned and was succeeded by several interim presidents in the month after his resignation until President Duhalde was appointed by the national congress to complete the existing presidential term through May 2003. During the interim presidencies, the parity between the peso and the dollar was abandoned, and the government announced that it would not service its external debt (except for that with the IFIs). Meanwhile, the country continued to sink into a deeper recession, with GDP falling by 11 percent in 2002. The social costs of the crisis were profound, with poverty affecting more than 50 percent of the population by July 2002. The crisis had an immediate and significant impact on project implementation. In face of the ensuing economic and institutional chaos, national and provincial authorities turned their attention to crisis management and many programs were postponed due to lack of adequate fiscal resources and mounting social tensions. At the same time, the 2001 crisis severely affected the legitimacy of government, resulting in the evaporation of much political capital. Given the highly unfavorable implementation environment, the achievements of both of the components are particularly noteworthy, as are the institutions which struggled to see them through closure. During the economic crisis, the project’s execution was considerably below expected rates and the project was considered at risk, as was most of the Argentina portfolio. With 50% of the

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population haven fallen below the poverty line, the government was compelled to shift scarce funds to avert or mitigate social crises. Consequently, across the board budget cuts were experienced in the project and sector, and the line agencies were left with little recourse. However, with assistance from the Bank team, the agencies made successful appeals for additional funding to the Ministry of Economy and Production and the President’s Chief of Cabinet. In addition, the Bank agreed to an amendment of the loan agreement to increase the percentage of IBRD resources required for implementation from 60% to 100% for Consultant Services, under disbursement category (2)(a); from 60% to 100% for Research and Studies, under disbursement category (3) (a); and from 67% to 80% for Civil Works, under disbursement category (5) (c). This helped to boost implementation, as lesser amounts of scarce counterpart funds were required for implementation. The Bank team was also supported by the Country Lawyer and the Lead Procurement Specialist, who helped the client to find a solution to the stalled contract for the national forest inventory. The team also worked with the government to form a separate PIU and special account for APN, which had been transferred to the Secretary of Tourism. All of these measures were instrumental in boosting implementation and helping the project to meet its objectives. Although the peso was pegged to the dollar at a 1:1 ratio at effectiveness, the peso devalued to nearly 3.6-to-1 in 2002 and remains today at about 3.1 to 1. The devalued peso, along with low rates of inflation (avg 8%) between 2003 and 2006, resulted in lower rates of disbursements in the project in US Dollars, even as the country emerged from the crisis and the project began to recover lost ground in implementation. This is because most of the project’s expenditures were in Argentine Pesos and US Dollar equivalent costs were much lower after the crisis compared to the cost estimates at appraisal. The graph below shows the disbursements in US dollars before and after the crisis relative to the dollar-equivalent in pesos.

Cumulative Disbursements

0.0

10.0

20.0

30.0

40.0

50.0

60.0

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Year

Mill

ions

USDPesos

Figure 1. Cumulative Disbursements in USD and AR Pesos

While the economic crisis created financial difficulties for the Argentine state and directly impacted project budgets, conversely it helped to stimulate an increase in international tourism. Improvements to the National Park system, including the four parks strengthened by this project, capitalized on this increase in tourism and increased revenues for APN. Revenues and visitation

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rates for the four target parks increased significantly relative to the park system as a whole. Total revenues from the four parks in the Native Forests/Protected Areas project increased from 36% of total park revenues in 2000 to 53% in 2006. Similarly, visitation rates in the four parks increased from 29% of total park visits in 2000 to over 45% in 2006. Despite the very difficult macroeconomic context, the federal and provincial governments took extraordinary measures to contain the fiscal situation during 2002. The government also agreed on a transition program with the IMF, covering the period January through August 2003. By then, Argentina began to emerge from the depth of the crisis. Economic growth rebounded, reaching 8.8 percent growth in GDP in 2003. This growth can be understood as a function of the country’s improved competitiveness due to the currency devaluation of 2002, favorable international market and financial conditions, and improved fiscal management. Personnel Changes - Personnel changes were incurred during implementation; however this rarely impacted implementation, since most of the core technical staff were retained. Over the course of project implementation, the National Director for Component A changed six times and the National Director for Component B changed four times.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization

(a) M&E design— The project design includes indicators for project monitoring. The design was simple, straightforward and easily understood by the agencies and the Bank staff. Both components provided good background information to support their measurements.

(b) M&E implementation— Both APN and SAyDS collected the relevant data throughout the project cycle and developed annual reports of indicator progress. Information from field supervisions was used to augment the indicator reports. Both SAyDS and APN’s PIUs collected the data for the monitoring. Given the nature of the project, the arrangements were satisfactory. The data were generally considered good. Periodicity could have been improved to produce quarterly reports had more funding been available to the line agencies for the task. Only one particular obstacle to monitoring was encountered – as infrastructure contracts were frequently packaged to include more than one type of work, contracts required post reviews by the team and APN to identify discrete works relative to the individual indicators and their associated progress.

(c) M&E utilization— The PSRs and ISRs were regularly updated with the monitoring and evaluation information, which proved to be a useful tool for the team in its supervision and to provide the needed feedback and guidance to the implementing agencies on where to focus their efforts. The M&E was particularly important in the post-crisis period to clearly demonstrate to high-level administrators of the line agencies areas to target for improvement. The M&E effort was the first for both agencies, and they have demonstrated the knowledge obtained through the project by building high-quality indicator sets for a proposed new operation.

2.4 Safeguard and Fiduciary Compliance (focusing on issues and their resolution, as applicable)

Fiduciary

Three supervision missions to the project were carried out by the Regional FM and Procurement Teams in 2002, 2004 and 2006. The conclusions of the supervision missions were that the project’s overall FM and procurement performance was satisfactory. Some weaknesses, mainly

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related to the lack of timely counterpart funding, partly caused by the 2001-2002 economic crisis and some errors in the exchange rates applied to convert expenditures paid in pesos into dollars, were identified by the FM supervision missions. Funds flow difficulties were identified within APNs bureaucracy and FM guidance was useful in order to bring these to the attention of the agency and help to resolve them. However, the identified weaknesses did not materially affect project performance and were satisfactorily addressed by the PIU through the completion of an agreed action plan. The project had no cases of misprocurement nor (financial disqualification problems) accountability issues in any of the financial auditing reports.

Safeguards

Environment Assessment (OP 4.01) : The project was rated as a category “B”. It aimed to promote improved environmental management of native forests and protected areas, the effects of which were designed to be overwhelmingly positive. Small infrastructure works within Component B were the main focus for environmental management and monitoring. To manage this, prior to the execution of the works, APN carried out specific environmental assessments according to the potential for environmental impacts per National Law 22.351 and APN resolution no. 16/94, which were completely consistent with OD 4.01. The requirements and administrative procedures for the assessments are outlined in APN’s Reglamento para la Evaluación Impacto Ambiental en Areas de la Administración de Parques Nacionales. EIAs and mitigation plans were reviewed and cleared by the team’s environmental specialist for the relevant works. APN performance for the reviews and environmental management was consistently complete and of high quality. The Bank supervision team included biologists and foresters trained in the applicable Bank safeguards policies.

Natural Habitats (OP 4.04): The project was designed to have positive impacts on the environment, and to bolster the capacity of the government to manage and protect natural resources and biodiversity. The protection of natural habitats was a major focus of the Protected Areas Component. All activities under this component aimed to increase the conservation capacities of the government level institution while enhancing the local community involvement and benefit-sharing from park improvements, infrastructure and increased tourism. Infrastructure works in national parks incorporated Bank standards for EA and EIA for relevant activities. APN has shown excellent compliance with Bank standards, and has a set of protocols for works in Parks which are comparable and applicable for all projects through its Reglamento para la Evaluacion de Impacto Ambiental en Areas de la Administracion de Parques Nacionales. These standards apply for all works whether or not they are financed by the Bank. The native forests component resulted in new legislation which includes a moratorium on forest clearing, and requires compliance of provinces to develop land use capability plans and employ sustainable forest management techniques for forestry – which is the first legal reform for native forests in 60 years. Supervision missions visited each park and applied research site during the course of implementation, and the project was consistently found to be in compliance.

Forestry (OP 4.36): The project was conceived and formulated according to the 1992 World Bank Forestry Policy (OP 4.36) which was the applicable corporate policy instrument regarding forestry at the project’s inception. The project was under implementation for five years before the revised OP and strategy were approved in 2002, notably at the height of Argentina’s economic crisis. The project was completely consistent with the new World Bank Strategy in both spirit and substance, and had a strong environmental focus – there was no commercial harvesting included in the project, and the project did not work in tropical areas. Restructuring the project in order to

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conform to the new OP and strategy was not necessary. During the course of implementation, a forester participated in each mission, and the project was found to be consistently in compliance. Cultural Property (OP 11.03) : The project was consistent with the safeguard in that it sought to directly improve protection of cultural properties included in the project parks. Three historical structures were renovated. Bidding documents and contracts required that the original materials should be favored for structural improvements and that the original architectural layout and design remain unchanged. Updated management plans included the works along with public consultation to ensure transparency in the process with stakeholders, despite these works being on federal land. In the case that replacement of materials was required; for example, decayed timbers; new lumber had to be of the same specifications and species (to the extent possible) as the originals. APN provided works inspectors, through the project, to ensure contractor compliance and Bank supervision missions carried out physical inspection of works.

2.5 Post-completion Operation/Next Phase (including transition arrangement to post-completion operation of investments financed by present operation, Operation & Maintenance arrangements, sustaining reforms and institutional capacity, and next phase/follow-up operation, if applicable) Post-Completion, Transition Arrangement and Sustainability of Reforms: Component A. The Government of Argentina considered the sustainable development of the forestry sector an important part of its national economic development strategy. Prior to project completion, the government proposed a second IBRD forestry project to continue to strengthen the capacity of the DB, reform policies and regulations, strengthen forestry research and develop ways to combat deforestation, especially in the Chaco. The project, Argentina Sustainable Natural Resource Management Project, presently under preparation, will aim to achieve all these objectives. The project supported the development of the first revision of the 1947 forest law, which was successfully passed by Congress and ratified by the Senate in November 2007. This new legal framework provides the means for providing incentives for sustainable forest management and conservation of the country’s native forests and is a major contribution of the project. It includes a hard-won moratorium on forest conversion until provinces can comply with new standards for sustainable forest management and scientific techniques of land use planning. Training for DB staff has improved their management capacity for working in forestry policy and planning, and in forest monitoring. The impact of this legislation is enhanced by the recognition of the environmental services provided by forests. The recognition goes beyond a mere statement of principles, by establishing a fund (Fondo Nacional para el Enriquecimiento y la Conservación de los Bosques Nativos) to pay for forest environmental services. The fund is to receive 2% of the agricultural export tax and a minimum of 0.3% of the national budget in addition to other national and international donations it may receive to pursue its goals. This could mean compensations available for forest protection and sustainable management in the order of US$300 million according to some estimates. The results of the national forest inventory and the forestry database have been broadly disseminated and are found on SAyDS’s Web site, which facilitates user access and fosters cross-cutting applications according to a diverse set of user needs. The provinces of Misiones, Chaco, Salta, S. del Estero, Tucuman, Jujuy, Formosa, Cordoba, Santa Fe, Neuquén, Rio Negro, Chubut,

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Santa Cruz, and Tierra del Fuego are actively using the data in the management of forests. The DB also carried out a pilot exercise to update its methodology for carrying out the inventory on a decentralized basis within the Chaco ecosystem, a model which is planned for replication throughout the country. The formation of specialized working groups, the installation of trials, and the consolidation of lines of research represented a form of sustaining the achieved results. The DB through the project developed a strategy for research implementation, with a long-term planning focus. Each of the applied research projects has a 30-year monitoring plan. The UMSEF, National Forest Monitoring Unit developed by the project has been completely absorbed by the government and is now financed and supported by the DB as an official forest monitoring service. It will continue to provide important updates on forest state and change, necessary for providing timely information on forest for conservation, production, and environmental services; such as forest watersheds and carbon sequestration. The information and conclusions derived from the study on the Chaco region are now being used to set the stage for a new Bank-government effort for regional development planning and to bring deforestation under control through the combined efforts of a consortium of actors at the federal and provincial levels, as well as private land holders. Component B. APN has demonstrated a high level of commitment to the sustainability of the project objectives. This includes the required levels of funding and personnel for the maintenance, care and use of the facilities and equipment provided by the project to support the project’s objectives of increasing the capacity of the parks to accommodate a greater number of tourists without damaging the environment. Budgets for the 4 parks have steadily been increasing through closure and revenues from the four parks supported under the Native Forests/Protected Areas project rose from a total of US $5.6 million in 2000 to a total of US $25.3 million in 2006. As a percentage of total park revenues for 2000 and 2006, those figures represent a jump from 35 percent to 53 percent, respectively.

Table 1. Budget for Project Parks at Preparation and Close of Project

Budget 1995

AR$ Budget 2007

AR$ Los Alerces Nacional Park: 1,400,000 2,603,516 Lanin National Park 2,000,000 5,146,370 Nahuel Huapi Nacional Park 3,900,000 6,950,569 Glaciares Nacional Park 355,000 2,319,627 Total AR$ 7,655,000 17,020,082

By the end of the project (2007) the government provided substantial contingents of personnel for maintenance, conservation and administration, as follows:

Table 2. Personnel Assigned to Project Parks in 2007

Park Rangers Administrative

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Personnel Los Alerces Nacional Park: 28 35 Lanin National Park 54 71 Nahuel Huapi Nacional Park 63 104 Glaciares Nacional Park 19 25 Total Personnel 4 Parks 164 235

APN reached consensus on a “vision for a reformed APN”; a plan which was signed into agreement with the Subsecretary of Public Management (Subsecretaría de la Gestión Pública) on October 29, 2004 in order to strengthen its commitment toward implementation. The management plan objectives includes increasing the protected areas system to cover 5% of the country, integrating cultural values and social aspects surrounding parks, increasing decentralization of parks administration, greater financial sustainability of the parks system, as well as measures to modernize the on-ground management of parks personnel and providing secure visitation among others. That strategic vision then was translated into a detailed implementation plan that guides current planning and management. An objective reflection of this commitment to the modernization plan is found in the 2008 APN budget, which states among its objectives “To advance in…the implementation of the Institutional Modernization Plan incorporating new management guidelines and providing a response to the functional requirements that derive from the incorporation of new protected areas.”1 APN’s first progress report on the implementation plan was approved by the Dirección General de Coordinación Administrativa (Informe No.352/06). Finally, in April 2007, APN approved (through Resolución No.074) the Modernization Plan, which serves as the basis for strengthening the agency that now manages over 3.5 million hectares of protected areas. As a result of the modernization and more favorable economic conditions, the institution is benefiting on several levels. Human resources have increased almost 50%, from 772 in 2003 to the present level of some 1148 personnel (of which half are estimated to be field personnel) to cover the new needs and vision of the parks system, providing outreach to communities and visitors in addition to increasing protection of core areas. The budget has tripled from AR$28 million in 2002 to AR$89 million in 2007 and projected to be AR$131 million in 2008. Increasing revenues are being generated from park visitation, concessions and other external sources providing an important hedge against future economic crises that may arise. The decentralization efforts include the creation of several regional delegations that manage much of the day-to-day needs of the parks while the incorporation of community management has advanced significantly through the establishment of co-management regimes including Lanin National Park (one of the parks of PDO 4) that should be models for other Latin American countries. Next Phase: The government of Argentina has requested Bank assistance for a new project which will build on the achievements of the Native Forests/Protected Areas project. While the project helped Argentina confront many central issues in the sector and to develop a consensus on priorities, it did not address the inter-agency coordination between federal and provincial actors needed for a comprehensive approach to forest management. This incomplete policy agenda provides the

1 http://www.mecon.gov.ar/onp/html/presutexto/proy2008/jurent/pdf/P08E107.pdf accessed 3 Dec 07

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rationale in part for the next project and will be incorporated as an activity under the new operation. The proposed follow-on operation, the Sustainable Natural Resource Management (SNRM) Project is currently under preparation, and is designed to improve the sustainable and efficient management of forest resources, conserve biodiversity in protected areas and forest landscapes,, and integrate small producers into forestry development and conservation. In forestry, the project would focus on (i) developing cohesive policy and institutional instruments at federal and provincial levels supportive of investments in sustainable forestry and conservation (ii) supporting efficiency gains by making research and extension more competitive and responsive to user needs and (iii) promoting the integration of resource-poor small and medium sized producers into sustainable forestry and forest conservation. Concerning protected areas, the government has produced the Federal Strategic Plan for Sustainable Tourism (PEFTS) in 2005 that provides the guiding principles for the sector over the next few years. In this respect, national parks are considered a key element in conserving the natural resource base for sustainable economic development. The new project is also underpinned by the UN Convention to Combat Desertification and its national level implementation or national action plan (NAP), and the components for biodiversity conservation of the proposed project are consistent with the National Biodiversity Strategy adopted in 2003 by the Secretary of Environment and Sustainable Development (Resolution 91/03). The new project would key on these by aiming to strengthen management capacity of eleven priority protected areas and to upgrade APN’s capacity in Buenos Aires. These parks have been identified as having high potential, but lack the management capacity and infrastructure to provide needed levels of protection to biodiversity while serving increased numbers of tourists. The current (2006) Argentina CAS refers to promoting agricultural growth, reducing rural poverty, and improving environmental management. The CAS highlights the importance of the forestry sector, while emphasizing that “Argentina's growth has long been, and will continue to be, based in significant part on its tremendous natural comparative advantages”.2 In this respect, the project maintains a high degree of consistency and relevance with the present CAS and concerns of the country.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation (to current country and global priorities, and Bank assistance strategy) The project has a high degree of relevance to current country priorities and to the overall Bank assistance strategy for Argentina. The project’s design, objectives and implementation are completely consistent with current development priorities, including the current Argentina CAS, and that relevance is further reflected by the development of a follow-on operation, the Argentina Sustainable Natural Resource Management (SNRM) Project. Government commitment to the protected areas and native forests sectors have increased. APN’s budget has increased from AR$28 million in 2002 to AR$89 million in 2007 and projected to be AR$131 million in 2008.

2Argentina Country Assistance Strategy, May 4, 2006, Report No. 34015-AR, pg. 146.

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Estimates are that the new forests law will provide as much as US $300 million dollars to help manage the country’s native forests in sustainable ways. The Government of Argentina places a high priority on improving the management and conservation of native forests and protected areas. These sectors are the basis of significant economic activity and are the source of innumerable positive externalities which benefit the economy. However, the unsustainable use of Argentina’s resources furthers environmental trends that are “still of great concern,” according to a recent World Bank co-sponsored publication Argentina: State of the Environment 20053.

3.2 Achievement of Project Development Objectives (including brief discussion of causal linkages between outputs and outcomes, with details on outputs in Annex 2) PDO 1: To reform the policy, legal and regulatory framework affecting native forests When the project was designed, the law governing native forests in Argentina dated to 1947. In order to reform the regulatory and legal framework around native forests, the project worked to generate reliable information on the area of forests, related threats, management alternatives and production potential. The project financed studies of policies, laws, and regulations at the federal and provincial levels to target policy weaknesses in the country. The studies assessed existing federal and provincial legislation and regulations affecting the management, exploitation, transportation, processing, and exporting of commercial products from forests, and identified the main obstacles to the efficient functioning of the sector, including related environmental consequences. Based on the conclusions derived from the studies, the project supported the drafting of federal legislation while ensuring consistency with Argentina’s environmental laws and regulations. The major impact resulting from this work was the “Ley de Presupuestos Minimos para la Proteccion Ambiental de Bosques Nativos”, which was developed as a draft under the project. The proposed law was submitted to Congress in April 2007 (Ref. 1568-D-2007) and passed by the Argentine Congress in October and ratified by the Senate in November of the same year. The law establishes a moratorium on deforestation for one year and prohibits the felling of high-conservation value forests. It also sets forth the minimum standards for provincial forestry policies and creates the basis for incentives to protect native forests including the payment for environmental services. In the period while the bill was stalled in the Senate, grass roots organizations rallied to support it, including Greenpeace, la Fundación Vida Silvestre Argentina, la Fundación Ambiente y Recursos Naturales (FARN), la Fundación Proteger, Movimiento Campesino de Santiago del Estero (MOCASE) and the Organización de Naciones y Pueblos Indígenas en Argentina (ONPIA) as well as the major productive forestry sector organization, la Asociación Forestal Argentina (AFOA). The organizations helped to collect 1 million signatures from private citizens to support the new law. Jorge Cappato, National Coordinator for the IUCN and Director of the NGO Proteger in Argentina noted that the support for the law was, “…one of the most important achievements of the citizens of Argentina and NGOs…to support the general welfare of the country…”

3 Brown, A. et al. 2006. La situación ambiental argentina 2005, Fundación Vida Silvestre Argentina

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The impact of the new legislation is enhanced by the recognition of the environmental services provided by forests. The recognition goes beyond a mere statement of principles, by establishing a fund (Fondo Nacional para el Enriquecimiento y la Conservación de los Bosques Nativos) to pay for forest environmental services. The fund is to receive 2% of the agricultural export tax and a minimum of 0.3% of the national budget in addition to other national and international donations it may receive to pursue its goals. This could mean compensations available for forest protection and sustainable management in the order of US$300 million according to some estimates. PDO 2: To generate and disseminate information on the native forests of Argentina in order to enable all actors, public and private, to contribute to their improved management and conservation. Argentina is now one of only two countries in Latin America to have an updated and comprehensive native forest inventory – the other being Mexico. The project financed and successfully executed the First National Inventory of Native Forests, covering a total area of 33.2 million ha. The inventory has provided key data for both the technical justification for modifying the forestry law as well as for civil society to understand the impacts of deforestation on the natural resources of the country as well as its contribution to global climate change. Prior to the existence of the inventory, the estimates of remaining forests were quite high, leading to complacency regarding their conservation and sustainable use. The inventory rectified this situation by providing objective information of the true forest coverage according to ecosystems. The inventory revealed that there were 33.2 million hectares of forests in the country, 70% of which are located in the Parque Chaqueño, 11% in the Salva Tucumano Boliviano, 8% in the Espinal, 6% in the Patagonian Andes, and 4% in the Selva Misionera. Targeted studies on deforestation were carried out in the Yungas, Chaco and other areas, and provided the information needed to determine the country’s deforestation rate and identify its root causes – a task that had never before been possible to accomplish in a technically sound way. In fact, the new information on deforestation generated by the project showed a very high rate of loss of native forests, one of the highest in the region, at .06 - .07% per year (200,000 ha annually) – principally due to clearing for agricultural crops, particularly soybeans and cotton, in the Parque Chaqueño. The new information on forest state and change provided the foundation for an informed and substantive policy discussion on native forest issues that has lead to a new legal framework for forest management and forest incentives, and sets the stage for substantive policy reform in the future. Non-governmental organizations utilized the data produced by the inventory for their education and awareness campaigns surrounding the efforts to reform the forestry law and reduce the deforestation rate. The general public and specialists benefit from the inventory through current estimates of deforestation, technical studies and alerts regarding forest fire damage and fragmentation among other relevant forestry themes. The project also provided the technical capacity to the government needed to carryout future assessments. The governments (national and provincial) presently use the inventory information and statistics database as a basic instrument for policy development and planning at national and regional levels. At closure, 14 different provincial forestry authorities (Misiones, Chaco, Salta, S. del Estero, Tucuman, Jujuy, Formosa, Cordoba, Santa Fe, Neuquén, Rio Negro, Chubut, Santa Cruz, and Tierra del Fuego) reported they were using the inventory materials in their forest planning and management. The information has also had global outreach given that the Food and Agriculture Organization of the United Nations used the data as a critical input to its Global Forest Resource Assessments 2000 and 2005. The inventory will also be a key instrument to

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implement the new forestry law that requires forests be classified in each province according to their relevance for conservation and management and will establish the patterns for future land use in these regions. The inventory information content and quality is considered very high. The inventory consisted of two phases (a) remote sensing mapping of forests at the national level and (b) the field inventory applied on six forest strata defined as Forested Regions (Parque Chaqueno, Selva Misionera, Selva Tucumano Boliveano, Bosque Andino Patagonico, Monte and Espinal). The remaining portions of the country outside these strata were defined as regions of non forest, and were not included in the sample frame. A separate detailed inventory was also conducted for the area of Caldén and Ñandubay which fell outside of the forested regions but contain a small forested area of high conservation value where there are threatened stands of Proposis spp. Information generated by the inventories includes areal statistics; volumetric data for different ecosystems; and maps of forest areas at national scale, regional and provincial levels. The related computer database has been published on the internet. Considering the size of Argentina, the successful completion of the inventory was a major accomplishment. To further support the inventory effort, the US Government, through a cooperative agreement with the US EPA and the DB, helped the Argentine government evaluate the inventory and its results. The review was conducted by Dr. Andrew Gillespie, former National Leader of the US National Inventory for the US Forest Service. He reported that “no significant weaknesses are noted in the current design and implementation [of the inventory]. The UMSEF staff and the staff of the Proyecto Bosques Nativos y Areas Protegidas are commended on their successful implementation and completion of a complicated program…” In order to systematically archive and make public the results of the new forestry information and other forestry themes, the project supported the creation of the National Forest Monitoring Unit (UMSEF), which is now developing and managing information and materials necessary for continuous updating of the national inventory. The unit and staffing costs have now been completely absorbed by the Forests Directorate and receives a high level of institutional support. The UMSEF generates and manages multiple databases which allow it to store, recover, analyze and publish reliable information relative to the state of native forests and its changes. The project also piloted the development of a decentralized database management center in Chaco Ecosystem, where deforestation problems are most severe. The decentralized data collection instrument is setting the stage for greater provincial involvement through their participation, while increasing their linkages to the federal system. As a result of the project, the UMSEF has a website for dissemination of forestry information , http://www.ambiente.gov.ar/, and has published the Forestry Atlas of Argentina, in both technical and scholastic versions, as well as a 7 volume bound set of inventory reports for technical users. The inventory reports are available in their entirety on the UMSEF Website. In addition to the inventory, the project produced high quality analytical studies on the social, economic, environmental, demographic and productive qualities of critical forest ecosystems. By identifying appropriate techniques and alternatives for improved forest management on both public and private lands, the research studies provided SAyDS a scientific foundation for a public policy concerning the conservation and management of native forests and the formulation of the new legislation. In addition, the studies were prioritized with producers in order to address relevant issues in the forestry and other productive sectors. The research will provide important inputs to forest management for the implementation of the new forests law as well. Prior to this

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effort, there were essentially no scientific studies on native forest management and there was a dearth of knowledge on forest economic analyses, regeneration studies and the application of new forms of silviculture. Based on the advances achieved in the sector, the project was invited to and attended the International Union of Forest Research Organization (IUFRO) World Congress in 2005 in order to present the findings of this important new research. The research was carried out through five applied research sub-projects: (i) Applied forest management in the Semi-Arid Chaco, (ii) Applied forest management in the Sub-Humid Chaco, (iii) Agro-forestry systems for the Espinal ecosystem, (iv) Agro-forestry systems for the Patagonian Andes, and (v) Forest management alternatives for Tierra del Fuego. By the end of the project established 33 demonstration plots over 650 ha of forests – each with a 30-year monitoring plan. A proposed sixth project was not implemented. The project also carried out a baseline study of the Chaco forest ecosystem, where deforestation was found to be the highest, and funded some of the first studies on the potential for payments of forest environmental services. Bound reports are available for technical users, as is a video of the research. All reports are on the agency’s internet site. The applied research project in Tierra del Fuego’s lenga, Nothofagus pumilio, forest pioneered the development and application of silvicultural techniques in forest-harvest areas in order to enhance the re-generation of the forest cover and enhance biodiversity. Given that estimates are that 1000 ha per year of these forests are logged in Tierra del Fuego, the research provides an important alternative to help balance the extraction of wood fiber with ecological concerns, while helping to ensure the long-term sustainability of the forests. The results of this study were published in The Journal of Technology Management and Innovation in September 2007. The applied research experiment in Patagonia developed agroforestry systems with Nothofagus antarctica in two separate research plots, one in Chubut and the other in Santa Cruz Province. N. antarctica forests cover about 360,000 ha, and the research showed that about 70% of these areas have potential for the installation of agro-forestry systems. The systems incorporated both sheep and cattle into the plots along with the trees. Because the livestock industry is a principle activity in these areas, the agro-forestry systems developed provide alternatives to farmers to maintain their traditional activities, while helping to mitigate impacts on the forest ecosystems in which they occupy. Two applied research activities were carried out in the Chaco, one in the semi-arid area and the other in the sub-humid area. The Chaco eco-region is the second largest forest ecosystem in South America, second only to the Amazon – much of it is highly degraded and it is presently the locus of the country’s deforestation. Providing viable alternatives for the sustainable use of the forests is critical to help thwart these changes. Within the semi-arid Chaco, the subproject conducted baseline studies on forest composition and socio-economic profiles of people living in the target areas, as well as research on growth and yield, applied silvicultural techniques, non-timber forest products and wood technology within in ten research plots. Most of the research focused on determining growth rates and management regimes for several species of Prosopis, which is the predominant tree genus in the sub-region. Non-timber products studies showed a range of uses of five different species of Prosopis including food, forage and medicinal uses, as well as industrial applications of chemical extracts (tannin). Within the sub-humid Chaco, researchers focused on the development of silvo-pastoril systems, given the predominance of cattle ranching in the area. However, the experiments were inconclusive for these areas, and the systems developed showed low rates of return (7% or less).

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As is the case in Patagonia and parts of the Chaco, one of the principal land uses is cattle ranching in the Espinal Ecosystem, and the research there centered on how to balance this practice with sustainable forest management. The research was highly successful in developing viable models for the Espinal. The study identified potential commercial uses for several species of Prosopis one species of Acacia and several others, which could help to encourage farmers to maintain tree cover on their lands, rather than converting them completely to pasture. The study developed the regimens for thinnings, prunings, site preparation and control of undesirable species within the silvo-pastoril systems. Rates of return for these systems are considered acceptable, increasing the probability of adoption by producers. PDO 3: To begin transformation of APN into a world class parks administration Argentina has the longest tradition of parks management of Latin America, having created the first park in 1922 and established a Parks Administration in 1934. However the scope of its work had increased substantially through the creation of many new parks in the 1980’s and 1990’s while the nature of parks management changed in these decades to focus on the needs of both conservation and recreational use of natural resources. The focus of the APN component was to provide the skills and planning needed to confront new challenges in conservation, a growing parks system, and increased visitation. The project supported the development of a new vision and plan for APN as a whole, a process which culminated in a new Strategic Plan for the agency in addition to the infrastructure investments and improvements in park management, which are described below (PDO 4). APN undertook several studies with support from the project to develop the proposal and process for modernization of the institution. These included thirteen different institutional analyses and studies that looked at a range of aspects from personnel policies to concessions. However, the process experienced setbacks in bringing conclusion to the reform agenda during several government transition periods. First was the transfer of APN from SRNyHA to the Ministry of Tourism and second was the economic crisis, which consumed the government from 2001-2003. These periods were constrained by five changes of APN Presidents and lack of institutional stability during the crisis that impeded institutional reform and project advances. Despite these constraints and thanks to its high caliber human resources base as well as political commitment by the Board of Directors, APN reached consensus on a “vision for a reformed APN”; a plan which was signed into agreement with the Subsecretary of Public Management (Subsecretaría de la Gestión Pública) on October 29, 2004 in order to strengthen its commitment toward implementation. The management plan objectives includes increasing the protected areas system to cover 5% of the country, integrating cultural values and social aspects surrounding parks, increasing decentralization of parks administration, greater financial sustainability of the parks system, as well as measures to modernize the on-ground management of parks personnel and providing secure visitation among others. That strategic vision then was translated into a detailed implementation plan that guides current planning and management. APN’s first progress report on the implementation plan was approved by the Dirección General de Coordinación Administrativa (Informe No.352/06). Ultimately, in April 2007, APN approved (through Resolución No.074) the Modernization Plan, which serves as the basis for strengthening the agency that now manages over 3.5 million hectares of protected areas. Finally, APN’s successful evolution towards a world-class parks institution is demonstrated by its recent organization of the Latin American Parks Congress with the World Conservation Union, IUCN. This conference is organized only once every decade to review advances with the World

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Conservation Congress objectives and goals. The Congress provides a forum for discussing and reviewing regional experiences and provides guidance for reaching agreed conservation and sustainable development objectives. APN effectively held the Congress in Bariloche in 2007, hosting over 2000 conservation professionals, NGO and indigenous group representatives. PDO 4: Increased capacity of four national parks in Patagonia The impacts of this PDO are threefold; the effective strengthening of the management and protection capacity of four key protected areas of the national parks system, improving the services provided to visitors linked to the improved financial sustainability of APN, and providing greater economic opportunities and incentives for local communities based on sustainable use and management of natural resources. The protected areas component of the Native Forests and Protected Areas project focused on four high visibility parks in Patagonia: Lanin, Los Alerces, Nahuel Huapi and Glaciares that total 2.1 million hectares; around 75% of the parks system coverage at the time of appraisal. The project financed training to improve the overall management of the four parks and management plans for each park were approved through Resolutions by the APN Board of Directors. Although progress in this area was delayed by the administrative and institutional challenges to implementation that resulted from the economic crisis and the institutional changes, the project team rallied following the crisis starting in 2003, completing 90% of the projected works by closure. The infrastructure investments greatly enhanced the quantity and quality of infrastructure and services available at the four parks, and improved the visitors’ experience. Revenues and visitation rates increased significantly at each. Revenues from the four parks supported under the Native Forests/Protected Areas project rose from US $5.6 million in 2000 to US $25.3 million in 2006. As a percentage of total park revenues for 2000 and 2006, those figures represent a jump from 35 percent to 53 percent, respectively. Whereas visitation to national parks had been flat or declining in the 1990s, they rose rapidly during the project’s tenure. The project was able to successfully capitalize on the increase in tourism to Argentina after the economic crisis, and visitation rates to the four parks in the project rose over 300% from the inception of the project to its closure. The national parks system has also grown over the last decade from 2.8 million hectares to cover over 3.5 million hectares at present in 33 protected areas. Based on this growth and the success of the investments in the four parks (in addition to other investments in five parks through a semi-blended GEF project), APN is currently designing a new project of investments for 11 national parks that will substantially complete strengthening of the parks system and provide a high level of management capacity and services for visitors and communities around these areas.

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303,076

1,196,055

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

Inception Close of Project

Annual Visitation in Project Parks

Figure 2. Comparison of annual visitation in project parks – inception and closure

3.3 Efficiency (Net Present Value/Economic Rate of Return, cost effectiveness, e.g., unit rate norms, least cost, and comparisons; and Financial Rate of Return) The following summary is to evaluate the efficiency of the project, including cost effectiveness analysis and financial analysis. Cost effectiveness: During the project appraisal, an economic analysis (economic rate of return) for the project as whole was not conducted, nor were estimations of cost effectiveness. Given the economic benefits derived from the project are not quantitatively measurable, a cost effectiveness analysis was carried out ex-post to evaluate the benefits of the project. The project applied modern technology in implementing project activities. Preparation of the native forest inventory used satellite technology to stratify the country’s land cover and develop a sampling frame for forests, where field measurements were carried out. This greatly improved the efficiency of the effort. GIS technology was also applied in the development of the relational databases and maps, making it possible to readily calculate statistics, update maps and load information onto the internet. The Native Forest Inventory has provided a key instrument for the government policy makers for strategic planning for forestry sector. The project improved the infrastructure in four national parks in Patagonia and introduced modern management methods to the park administration and helped to put APN on track to becoming a world-class management organization. The economic benefits generated from the Project were (i) institutional strengthening for government institutes (SAyDS and APN); (ii) human resource development for government officials, whose working efficiency improved and are able to provide better service; and (iii) the tourists receive better services from the improved park facilities and services. Efficiency: The project development objectives were fully achieved and almost all project activities were completed by project closure. Due to the impact of economic crisis, which slowed project progress for two years, the project completed the implementation in ten years. The total

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project costs at the end were 69 percent of the original estimation. The main activity which did not fully use the estimated budget (32 percent) was applied research under component A, Native Forests. However, the subcomponent of applied research has reached its overall development objective (see annex 1). The main reason the disbursements were low for the Applied Research was the failure to implement one of the sub-projects and the devaluation of the Argentina Peso, which resulted in lower costs (e.g., training, labor and local materials). The researchers’ labor cost was a third of the estimated costs during project preparation. Financial analysis: The SAR (Annex C) provided a financial analysis for the four project parks in the Patagonia region that have specific investments in works and a clear link to financial sustainability of the parks system. The results of the analysis showed that the investments would be financially viable: the financial rate of returns were 13 percent, 16 percent, 11 percent and 36 percent respectively for investments in Nahuel Huapi, Lanin, Los Glacares and Los Alerces National Parks. The financial analysis results and comparisons are as follows: National Parks FIRR At Appraisal (%) FIRR at ICR (%) Lanin 16 13 Nauel Huapi 13 17 Los Alerces 36 15 Los Glacares 11 57 The high financial rate of return (FIRR) for the national park of Los Glaciares was due to the high annual increase rate of visitation and the corresponding entrance fees. The FIRR for Los Alerces was lower than estimated because the visitation did not reach the expected level, due largely to its isolated location. However, the overall impact of the project intervention in the 4 parks as a whole was overwhelmingly positive. The analysis indicates that the project has made a significant contribution to the sector development and the country’s economic development. Given the period of economic crisis, the project overcame great difficulties to finally achieve its development objectives. The methodology and models developed under the project provide tools for the future in regard to the forestry sector development. The Native Forest law also provides significant tools, including the use of economic incentives to pay for environmental services of forests, for the country to sustainably manage its native forest resources. The strengthening of the four national parks in Patagonia in regard to physical infrastructure and management met the goal of ensuring the parks are financially sustainable. (Detailed analysis is in annex 3, Economic and Financial Analysis)

3.4 Justification of Overall Outcome Rating (combining relevance, achievement of PDOs, and efficiency) Rating: Moderately Satisfactory

The project achieved virtually all of its development objectives, which are still considered relevant in the 2006 CAS. Some of the work carried out by the project, for example the national inventory, new national legislation for forests and the very high quality infrastructure works, were state-of-the-art and conform to the highest expectations. However, the tenure of the project at 10 years was excessive, in part due to the impact of the economic crisis. Its efficiency in the conduct of the work before and during the crisis years was below expected standards while some specific products such as works in the parks, training and research projects were not 100% completed.

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The project should therefore be considered moderately satisfactory. Although the achievements were high and continue to provide positive impacts and externalities, it is balanced by the fact that the efficiency was variable and even low during the early and mid-periods of implementation.

3.5 Overarching Themes, Other Outcomes and Impacts (if any, where not previously covered or to amplify discussion above) (a) Poverty Impacts, Gender Aspects, and Social Development Not applicable (b) Institutional Change/Strengthening (particularly with reference to impacts on longer-term capacity and institutional development) Component A By increasing the quality and quantity of information that SAyDS administers, as well as its ability to validate and disseminate that information, the project significantly strengthened the institution’s ability as an advocate for the sustainable native forest policy measures and provides a platform for implementation of future payment for environmental services and other incentive structures to be developed. The studies give SAyDS’s policy recommendations the underlying scientific support that was previously absent and provided civil society with awareness and the means to inform their decisions. Non-governmental groups found in the information objective reasons to rally public opinion in favor of the protection of the remaining forest resources in Argentina. The new law “Ley de Presupuestos Minimos para la Proteccion Ambiental de Bosques Nativos”, which is a product of the project, is providing for the first major reform of the native forest sector since 1947 and provides SAyDS with the basis for institutional improvements and the incorporation of real tools for enforcement and providing incentives for forest conservation and sustainable management. Component B The Modernization Plan, as well as the works contracted under the project, have strengthened the APN. The plan has provided a vision for the institution to embark upon long-term growth with a clear objective of protecting key ecosystems while providing the mechanisms for communities to benefit in the conservation process. The 2008 budget has increased by AR$40 million over the last year to AR$131 million with important additions in field personnel and infrastructure investments. Furthermore, the infrastructure investments have improved the visitor experience while management at the institutional and park level recognize the opportunity for greater financial sustainability of the parks system through the increase in revenues. (c) Other Unintended Outcomes and Impacts (positive or negative) In the course of the approval of the new forest legislation, there was considerable lobbying from opposition groups seeking to restrain government intervention in the Chaco. The focus of the opposition was to prevent government intervention that would restrict private citizens from converting forests to agricultural lands (mostly for soybean cultivation). Conversely, the stalled legislation brought more focus to the deforestation problem, and groups supporting the new legislation gathered over one million signatures in favor of the new law. The television media picked up on the new law and has aired special features on the previously unrecognized problem of deforestation.

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops (optional for Core ICR, required for ILI, details in annexes)

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Not applicable.

4. Assessment of Risk to Development Outcome Rating: Low The risks to development outcome are low given that the support for the project’s activities has been embraced and supported by the government. The country approved new legislation for the protection and sustainable management of its forests, a formal resolution to modernize the national parks administration, adequate levels of funding for maintaining the new park infrastructure and performing conservation activities and government funding of the new inventory unit and for implementing the forest protection legislation.

5. Assessment of Bank and Borrower Performance (relating to design, implementation and outcome issues)

5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry (i.e., performance through lending phase) Rating: Moderately Satisfactory The Bank’s performance in identifying, preparing and appraising the operation was moderately satisfactory. Even though the resulting project was highly pertinent to both Bank and country priorities, some shortcomings were discovered during implementation that could have been avoided. The Bank conducted an appropriate diagnosis of the current state of native forest management, highlighting the need for a highly participative process, fundamental for a country with diverse environmental systems and potentially conflictive natural resource management issues. In addition, The Bank correctly focused its efforts on strengthening the institutional and human resources of the forestry and protected areas sectors. Nevertheless, the Bank underestimated the complexity of the process of legislative reform and the implementation arrangements in APN at appraisal were less than satisfactory, and resulted in a slow startup of the Protected Areas Component. The project was approved with an 8-year implementation period, based on the standard disbursement profile at the time for Argentina. While the rationale may have been sound, a tighter timeframe for implementation might have helped to focus the work and encourage more rapid implementation. (b) Quality of Supervision (including of fiduciary and safeguards policies) Rating: Satisfactory As a consequence of the long implementation period, three task managers managed the project. The Bank team developed a strong collaboration with the Borrower. The team’s experience and technical quality contributed substantially to the success of implementation and monitored the progress. On average, supervision missions were carried out two or three times a year with over 20 supervision missions in total. The combined knowledge of the Bank team in addressing similar forestry problems in other countries and situations strengthened, enriched, and helped to guide the project’s evolution. The team included foresters, economists, biodiversity specialists, institutional specialists and one forest inventory specialist. During the financial crisis, the Bank team worked diligently with the PIUs to keep the project from failing. During that period, while counterpart and IBRD resources were sharply reduced

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during the crisis years, the project was one of few Bank-financed projects that made progress and received at least some government counterpart funding. To help mitigate the effects of shortages of counterpart funds, in 2003 the team processed an amendment to increase the percentage of IBRD resources required for implementation from 60% to 100% for Consultant Services, under disbursement category (2)(a); from 60% to 100% for Research and Studies, under disbursement category (3) (a); and from 67% to 80% for Civil Works, under disbursement category (5) (c). In addition, the Bank team successfully helped the line agencies in their appeals to the Ministry of Economy and Production for additional funding. Compounding difficulties during the crisis, the largest contract (for the national inventory) was jeopardized when two parties of a three part consortium abandoned the work. The Team worked with the Country Lawyer and Lead Procurement Specialist in the Region and their counterparts within the line agency for several months, successfully guiding the government on an acceptable means of re-initiating work and completing the contract. The FAO-World Bank Cooperative Programme (FAO-CP) made strong contributions to project supervision as well providing key technical supervision that would not have otherwise been available. The Bank team included biologists and foresters trained in both social and environmental safeguards. These skills helped to prevent problems in these areas, and guide the implementation of the project. Fiduciary staff were routinely involved in missions and conducted four independent fiduciary supervision missions. (c) Justification of Rating for Overall Bank Performance Rating: Moderately Satisfactory In consideration of the ratings for preparation and supervision (above), the overall rating is considered moderately satisfactory.

5.2 Borrower Performance (a) Government Performance Rating: Satisfactory In general, the Government of Argentina supported project preparation and implementation. They gave priority to forestry development and conservation, and collaborated with all work required by the Bank. The government supported the new law for native forests protection and sustainable management from its development in the project and afterwards during its successful presentation in the congress and senate. During the crisis years the government provided counterpart funds to the extent possible, and helped the line agencies when called upon to do so. Following the crisis, when actual allocations to the line agencies were below requested amounts the Ministry of Economy and the President’s Chief of Cabinet worked to provide additional funding. (b) Implementing Agency or Agencies Performance Rating: Satisfactory The PIUs were composed of qualified technical professionals and administrative staff. Based on the number and diversity of programs, subprojects, and activities implemented under the project and supervised by the PIU, it was highly efficient in its work. They also collaborated with the National General Auditor in project audits, and incorporated comments received into its operations. Within the framework of constraints experienced during implementation, the line agencies are to be commended in their tenacity and retention of focus and for bringing the majority of the work to successful closure.

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Collectively, the PIU staff demonstrated a high degree of dedication to their work and during the project’s lifetime conducted 37 workshops, and processed 149 separate contracts. (c) Justification of Rating for Overall Borrower Performance Rating: Satisfactory Overall borrower performance is considered satisfactory given the level of government commitment during the project’s tenure to provide the funding for execution, satisfactory performance of the line agencies, including the high levels of results obtained and the high sustainability of impacts generated. There were no cases of corruption, misprocurement nor safeguards violations during the project’s tenure.

6. Lessons Learned (both project-specific and of wide general application) Wide General Application: Lesson One: Development is not a linear process, though Bank-financed projects expect them to be. Although the project was fraught with setbacks, delays and even reversals during implementation, it managed to produce highly relevant impacts for the forestry and protected areas sectors by closure. The time-bound production-line process for producing outputs and the achievement of impacts envisioned at inception and codified in the SAR was overly mechanistic. The Bank, as an institution, needs to ensure that its instruments, philosophy and approaches to development are sufficiently flexible to adapt to changing country conditions, while maintaining an acute focus on development objectives. Lesson Two: Natural resources management where several levels of government and multiple mandates exist requires additional efforts in developing collaborative partnerships. Component A was largely a ‘preparatory’ operation to help strengthen the fledgling Directorate of Forests. In this respect, it made a significant contribution. However, presently there are four federal agencies involved in forestry issues, as well as the provinces and there are no coordination mechanisms in place. Experience with the project highlighted the complexity of issues underlying the sustainable management of privately owned native forests and deforestation in a country as large as Argentina. It laid bare the disconnect between the various institutions responsible for native forests including: the disconnect between government institutions and stakeholders, the absence of a shared vision at federal and provincial levels vis-à-vis the future role of native forests, while the limited capacity and mandate of the federal Native Forests Directorate highlighted the importance of developing collaborative partnerships to address native forest issues. Although it can be difficult and costly to pursue a rigorous campaign of dialogue and open communication with stakeholders (taking into account the amplitude and diversity of actors in the Argentine context), inter-sectoral and multi-stakeholder dialogue is fundamental to achieving support for the development and implementation of public policies at the national level. Project Specific: Lesson Three: Although natural resource management problems require immediate attention, the technical, legal, and social groundwork must be performed to develop effective measures over the short and long-term. Although deforestation and degradation of natural resources in Argentina has been recognized for decades by sector specialists, their concern was not translated into effective action to mitigate these impacts because of a lack of recognition by decision-makers,

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politicians, and civil society. The project approach of developing scientifically and technically accurate inventories made clear the dimension and speed of the problems being faced by Argentina’s native forests. This information was then disseminated at several levels from school-children to NGOs and forestry specialists translating into public campaigns, while draft legislation provided the basis for government to respond effectively to the problem. Lesson Four: Tourism can be a positive force and successful investment in flagship protected areas may generate benefits for the entire protected areas system The investments in the four Patagonian parks under the project were highly successful in their outcomes for the individual parks. In addition to the conservation of biodiversity, they saw increases in their fees collected, improved infrastructure and equipment for their personnel, and enhanced visitor experiences. These conditions create a favorable image for decision-makers as sound investments for the national budget and interest is generated at the national level tourism agencies and from local governments in other regions that would like to benefit from similar investments in parks within their localities. This is occurring presently with the new Bank operation under preparation with APN for 11 national parks. Lesson Five: Applied research projects are successful when attention is given to stakeholders and producers needs, but weak local capacities may hinder execution and sustainability. The project provided for many research projects that were developed to address real needs of producers facing challenges in regard to degradation of natural resources, sustainable production, and forest management. These experiences are being widely disseminated both nationally and internationally. However, those projects that were located in poorer ecoregions where the capacities of beneficiaries, academic institutions, government agencies, and NGOs was weaker, faced more problems ranging from a lack of consensus regarding thematic approaches, to the rate of disbursement and implementation. Good environmental baseline information is not available in these areas generally, making it more difficult to target research approaches adequately, however participatory approaches and consultation processes may improve the focus and selection of interventions.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies Component A, Native Forests From Miguel E. Pellarano, SubSecretary of Planning and Environmental Policy: I have read the Final Evaluation Report (ICR) for the Native Forests and Protected Areas Project and am in agreement in general with its content. As Subsecretary of Planning and Environmental Policy, I believe the project has succeeded in making fundamental reforms to the national policy concerning the protection, restoration and sustainable development of the native forests of Argentina as well as improving the welfare of the citizens that rely on them. I take this opportunity to thank the World Bank, and especially the Task Manager, for their consistent support and collaboration in the furthering of our common goals. Bank comment: Agreed. Component B, Protected Areas From Hector M. Espina, President of the National Parks Administration:

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Having read the Final Evaluation Report (ICR) for the Native Forests and Protected Areas Project I confirm my agreement with its content. As President of the National Parks Administration, I consider this is a successful project, which has contributed significantly to the technical and institutional development of the national parks managed by APN. Bank comment: Agreed. (b) Cofinanciers (c) Other partners and stakeholders (e.g. NGOs/private sector/civil society)

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Annex 1. Project Costs and Financing

(a) Project Cost by Component (in USD Million equivalent)

Components

Appraisal Estimate (USD millions)

Revised Estimate (USD

millions)

Actual/Latest Estimate (USD

millions)

Percentage of Latest Appraisal

Component A. Generation and Dissemination of Research an

Information

(a) Policy, Legal and Regulatory Reform 0.9 1.3 1.25 139

(b) Inventory ad Database Management 7.5 7.23 6.94 93

(c) Applied Research and Studies 5.0 1.62 1.60 32

Component B. Protected Areas (a) Modernization of APN 0.8 0.3 1.41 176 (b) Investments in APN Parks 9.5 7.3 8.10 85

Component C. Project Implementation 2.2

(a) For Component A (ASyDS) 2.66 1.49 (b) For Component B (APN) 0.05 Baseline Costs 25.9 20.84

Physical Contingencies 0.9 Price Contingencies 3.2

Total Project Cost 30.0 20.84 69 Project Preparation Fund

Total Financing Required

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(b) Financing

Source of Funds Type of Cofinancing

Appraisal Estimate

(USD millions)

Actual/Latest Estimate

(USD millions)

Percentage of Appraisal

Component A Borrower 5.5 3.20 51 International Bank for Reconstruction and Development

7.9 8.08 86

Subtotal 13.4 11.28 72 Component B

Borrower 3.0 1.86 62 International Bank for Reconstruction and Development

7.3 7.70 105

Subtotal 10.3 9.51 Component C

Borrower 1.6 International Bank for Reconstruction and Development

0.6 *

Subtotal Physical contingencies 0.6 Price contingencies 2.1

Grand Total 30 20.84 69 Borrower 10.5 5.06 48 International Bank for Reconstruction and Development

19.5 15.78 81

*Component A cost estimates include IBRD US$1.7 million for Component C and Component B cost estimates include IBRD US$0.28 million for Component C.

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ANNEX 2. Outputs by Component

Component A

Subcomponent A.1

Contributions to Policy, legal and regulatory reform: a) Comprehensive policy study “Recommendations for a National Forest Policy Framework

for the Sustainable Development of Native Forests of Argentina”; b) Policy studies, workshops and consensus building at the federal and provincial levels for

the identification of priorities and needs for new legislation for the country’s forests, and an appropriate incentive system for sustainable use;

c) 250 forestry experts from SAyDS and from the provinces participated in over 30 training events;

d) 1,197 people attended 29 seminars to disseminate information and receive feedback on the National Forestry Policy Framework and applied research needs; Attendees at these events included representatives from civil society, local, provincial and national government and concerned citizens

e) 6 regional seminars on proposed framework for new legislation; f) 9 technical seminars on proposed framework for new legislation with a total of 541

persons attending and 332 institutions; 146 private firms, and 37 NGOs represented; g) 250 secondary school science teachers from Santiago del Estero Province participated in

the design of training materials for students and a pilot training program to incorporate native forest and biodiversity issues into middle school science curriculum;

h) With project support, SAyDS conducted 20 informational events across the country. These public events helped increase awareness of the technical, scientific and economic factors that form part of a policy of protection, conservation, restoration and improvement of native forest resources;

i) Methodological reviews of schemes for payments for environmental services related to forests;

j) Training of government in Payment for Environmental Services k) Economic analyses and agreement with the Ministry of Economy for federal funding for

incentives for sustainable forest management (Ref. no. 70-571/02) and inter-agency agreement with SAyDS for the incentive system;

l) Processing and presentation of the signed agreement between SAyDS and MECON to the JGM;

m) Draft federal law for Native Forests and Related Biodiversity (approved by Provinces through COFEMA, Congress and Senate) (Ref. 1568-D-2007) and successful interaction and consensus building with the provinces that led to its approval.

n) Plan and agenda for a national forest policy

Subcomponent A.2

National inventory and Database: Support included:

a) The procurement of 237 satellite images and their analysis, including ground truthing; b) Preparation of six eco-regional maps of forest areas and 23 provincial forest maps at a

scale of 1:250,000.

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c) Ecoregional reports on forests for Selva Misionera, Bosques Andino Patagónicos, Parque Chaqueño, Selva Tucumano Boliviana, Monte and Espinal and a specialized inventory of Calden and Nandubay

d) During the second phase, systematic field sampling of 360 primary sample units provided detailed information on forest areas by species groups, by province and by region.

e) Information on standing volumes of the main species by province and region and development of algorithms to determine volume.

f) Field crews worked for 3 years in the conduct of the field sampling (scientific measurement of representative areas of trees and forests), often in rugged terrain and harsh field conditions from the sub-polar Nothofagus forests of Tierra del Fuego to the sub-tropical forests of Yungas and Misiones, and the arid forests of the Parque Chaqueño.

g) The Project supported the creation of a database and a geographic information system (GIS). Associated activities included: (i) preparing a standard methodology for collecting data; and (ii) establishing a unit within the Forests Directorate to handle the task through the provision of training and equipment (computers and telecommunications equipment).

h) Other products include: Forest Atlas, Forest Atlas – scholastic version, Deforestation study of Yungas and Chaco en the Salta Province 1984-2001, Forest fragmentation study in the Bermejo Watershed, Deforestation study of the Yungas Biosphere, Forest Maps of Futaleufu, West Formosa, and Jujuy Model Forests, Carbon and Biomass study of the Chaco and Yungas, Carbon study in the province of Tucuman, Website with all inventory products available to public, Expert review of national inventory in collaboration with US Government

Subcomponent A.3

Applied research documents and project activities: a) Comprehensive scientific and technical review of Chaco Ecosystem (11 volume bound

set) b) Guidelines for conduct of applied research projects; c) Two pre-feasibility studies for forest research in the Chaco; d) Applied research project – Alternatives for sustainable forestry in the Espinal Ecoregion; e) Applied research project – Alternatives for sustainable management of forests in Tierra

del Fuego – Forest Management of Nothofagus pumilio; f) Applied research project – Alternatives for sustainable management of forests in

Patagonia – Agroforesty with Nothofagus antarctica; g) Applied research project – Forest management in the Semi-Arid Chaco; h) Applied research project – Forest management in the Semi-Humid Chaco; i) Instructional video of the Applied Research Projects; j) CDs and Databases available to technical users on applied research projects. k) 6 Regional Seminars to disseminate results of Applied Research with a total of 214

participants

Subcomponent B.1

Studies, consultation documents and plans for modernization of APN: a) Putney, Allen. 1998. Informe de Consulta sobre Capacidad Institucional, Acciones

Prioritarias y Programa Preliminar de Implementación. b) Denga, Elena Margarita. 2001. Informe Antecedentes y situación Actual del Ente. c) Denga, Elena Margarita. 2001. Informe Diagnóstico y Lineamientos.

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d) Cardenas, Lic. Marcelo. 2003. Relevamiento Administrativo de la Administración de Parques Nacionales.

e) APN. 2004. Vision for a Reformed APN. f) Subsecretaria de la Gestión Pública . 2005. Plan de Modernización. g) Marchegiana, Eduardo Javier. 2005. Plan Estratégico de la APN. h) Marchegiana, Eduardo Javier. 2005. Breve Relato de las Actividades desarrolladas Sobre

Planificación Operativa. i) Marchegiana, Eduardo Javier. 2005. Equipamiento Regional 2005. j) Marchegiana, Eduardo Javier. 2006. Síntesis Descentralización Operativa Administración

de Parques Nacionales. k) Farfán, Heber. 2006. Sistematización del Proceso de Elaboración del Plan Estratégico l) Farfán, Heber. 2006. Apuntes Estratégicos, Plan de Acción y Operaciones Principales. m) Farfán, Heber. 2006. Desarrollos y propuestas tendientes a operacionalizar el plan

estratégico n) Farfán, Heber. 2006. Programa de Trabajo. o) APN. Approval of Modernization Plan. Resolution No. 074.

Subcomponent B.2 40 infrastructure development and management projects in the four parks (Nahuel Huapi, Lanin, Los Alerces and Glaciares), including

a) 6 control (guard) posts; b) 7 visitor centers; c) 9 facilities for volunteer housing; d) 8 trails and overlooks; e) 3 renovations of historical buildings; f) Rehabilitation of 117 km of roads; and g) 6 bridges

Equipment for improved parks management was also procured and included:

a) Computers – 39 complete units with multiple i/o devices, hardware and software b) Communications eqpt.- 44 (radios and telephones) c) Vehicles - 29 d) Boats - 13 e) Furniture – multiple sets for administrative offices, guard posts, and rangers quarters in

each of 4 parks Management plans were updated for each of the 4 parks:

a) Plan de Manejo de Parque Nacional Nahuel Huapi b) Plan de Manejo de Parque Nacional Los Alerces c) Plan de Manejo de Parque Nacional Lanin d) Plan de Manejo de Parque Nacional Los Glaciares

Training Events:

a) Study tour to the US National Park Service in Virginia b) Study tour to the US National Park Service in Alaska c) Study tour to CATIE Costa Rica

(Each of the parks saw an increase in its staff, which allowed for sustainability of improved management of the parks’ natural resources and enhancement of visitor services.)

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Component C The PIU of each agency was composed of qualified technical professionals and administrative staff. Based on the number and diversity of programs, subprojects, and activities implemented under the project and supervised by the PIU, it was highly efficient in its work. The PIU staff demonstrated a high degree of dedication to their work and during the project’s lifetime processed 149 separate contracts. Each collaborated with the National General Auditor in project audits, and incorporated comments received into its operations.

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Annex 3. Economic and Financial Analysis (including assumptions in the analysis) During the project appraisal, an economic analysis for the project as whole was not carried out. The SAR (Annex C) provided a financial analysis for the four project parks in the Patagonia region that have specific investments in works and a clear link to financial sustainability of the parks system. The results of the analysis showed that the investments would be financially viable: the financial rate of returns were 13 percent, 16 percent, 11 percent and 36 percent respectively for investments in Nahuel Huapi, Lanin, Los Glacares and Los Alerces National Parks. For the ICR, the economic analysis sought to evaluate the economic benefits generated from Component A and B, Native Forests and Protected Areas (the four National Parks in Patagonia), and the financial analysis is to reassess the results of the original financial analysis by using actual data. Economic analysis Component A The main achievements/results of the component included (i) support for the proposed law for the protection of native forests; (ii) completion of a Native Forests Inventory; and (iii) applied research on sustainable management of native forests. The principal beneficiary is the government agency, SAyDS, which is responsible for establishing sector policies and strategies for promoting the sustainable management of native forests. The training and technical assistance, including various studies, strengthened the capacity of the agency and provided the basis for the recently approved forestry law. The forest inventory provided detailed information on native forest coverage providing the government and decision makers with an objective tool for decision-making in regard to native forest protection and to inform the new legislation. One of the applied research studies supported by the project provides an economic analysis of several alternative uses of forest lands which provides insight into the importance of sustainable forest management. Without any management, the output of timber was valued US$300 per hectare over a 14 year period. With a sustainable management and subsidy the output of timber more than doubles and was valued at $700 per hectare; and this practice can provide continuous returns in a sustainable way. Converting land for soybean field increased the output value, estimated at US$3,000 per hectare, but this high value output is estimated to last only five years. Another study shows that integrated production with livestock production (e.g., cattle ranching), honey production and sustainable forestry management methods plus a subsidy can generate an output value of US$3,100, and the practice is sustainable for maintenance of native forests. Component B The main economic benefits included: (i) strengthening of APN staff’s capacity; (ii) increases in tourists visiting the parks; and (iii) incentives to local economies and local rural inhabitants, primarily those who invest in small businesses (restaurants, tour guides, souvenir shops, etc.). Through training activities and technical assistance targeting to strengthen capacity of the staff of the APN, their working efficiency has improved vis a vis improved working conditions, updated management and planning tools, new vehicles, communication and computer equipment, and infrastructure investments, which ensures the efficient use of financial and human resources.

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The increase in visitation to the national parks is linked to the country’s booming tourism industry. Since 2000, the total number of visitors has increased by more than 30 percent annually. Among the four parks, the highest increase rate has been in Lanin National Park. In 2002, visitation to this park increased by 170 percent relative to the previous year, and it has kept increasing annually at a rate of 30 percent. The other three parks also maintain high rates of increase of visitation, ranging between 30-80 percent. However, one of the important factors for this phenomenal growth was the devaluation of Argentina currency; the Peso. The country has become one of the regions favorite tourist attractions. The projects contribution to the increase in visitations was to provide adequate tourist capacity through the improvement in the physical facilities (e.g., visitor center, volunteer housing, road and path, water fountains and sanitation) and information provision. The tourists enjoy the natural scenery and wildlife of the parks as well as outdoor activities (skiing, fishing, hiking, etc.), while the improved facilities make their stay comfortable and pleasant. The re-visitation rate has reached 15% in 2007. As more and more tourists visit these parks, the local people have begun engaging in small businesses and service provision to the visitors. These include restaurants and tour guide services among others. The park administration collects management fees from the business within the protected areas. The financial data shows that the revenue from fees collected exceeded 30% of the total park revenue. These activities have helped to promote local economic development. On the other hand, the local people also come to appreciate the importance of conservation increasing their support for the environmental protection activities of APN. Financial analysis During appraisal, a financial analysis was carried out to evaluate financial viability of the four project parks. The analysis was based on the assumption and estimation of park revenue, investment costs and operational costs. The incremental revenues for each park, “with” and “without’ were derived from a study and projection. Of course, no one was able to predict the financial crisis that occurred two years following project approval and there was no way to predict that the parks would be benefit or be harmed. Main Assumptions on the Revenues and the Costs The financial analysis below calculates the financial rate of return for each park the project supported. Then the results were compared to the results of the analysis in the original SAR. The analysis uses actual data collected by the project management unit in regard to the investment costs, as well as APN data for the parks revenue and operational costs. The investment costs were compiled from the project data and these costs covered the project investment activities. Since the implementation was delayed for three to four years, the resulting costs are lower than planned due to the devaluation of Argentine pesos. The investment costs include construction works (visitor centers, historical rehabilitation, trails and road), vehicle, boat, and equipment, training and technical assistance. The incremental revenues include two sources: entrance fees and park management charges to businesses and services. The incremental operational costs include park administration staff salaries, operation and maintenance of control posts, visitor centers, volunteer housing, mountain

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refuges, and guard housing, maintenance of road and trails, operation and maintenance of vehicles and boats. The streams of incremental revenue and costs are run over a twenty year period. The actual data on annual revenue and operation costs are used up to the year 2006, and an estimation of revenue stream is made from the year 2007 onward. The annual increase in the rate of visitation is projected at ten percent with the project and 4.5 percent without project. Reassessment of the Evaluation during the Appraisal Comparing the actual data on revenue and costs with the data used in the financial analysis in the SAR, some overestimation and underestimation is noted. The overestimated data regards the annual revenue with the project in three national parks: Los Alerces, Nahuel Huapi, and Lanin. The actual revenue generated was about 45-70 percent of the estimated revenue. The underestimated data includes annual revenue in Los Glaciares. The actual revenue generated was 50 - 100% higher than estimated originally. The incremental operational costs were generally also underestimated as compared to the actual data reflects during project implementation. The Results of Financial Rate of Returns (FIRR) The cash flow calculation shows that three of the four parks are financially viable and robust. The financial rate of returns for all four National Parks of Lanin, Nahuel Huapi, Los Alerces, and Los Glacares is 13 percent, 17 percent and 57 percent respectively. The financial rate of return of Los Alerces National Park was 15 percent and did not reach to the estimated because the visitation did not reach expected levels until the year 2004. Notably, Los Alerces is the most isolated of the four parks. The high rate of return of Los Glaciares National Park was because of its high annual increase in the rate of visitation (168 percent in 2003). The sensitivity analysis shows that the model is most sensitive to the variation of revenue and less sensitive to the variation of costs, especially to investment costs because the investment costs always occur during the early years. Comparison FIRR at Appraisal and at ICR Parks FIRR At Appraisal (%) FIRR at ICR (%) Lanin 16 13 Nauel Huapi 13 17 Los Alerces 36 15 Los Glacares 11 57 Conclusion The analysis indicates that the project has made a significant contribution to the sector development and the country’s economic development. Given the period of economic crisis, the project overcame great difficulties to finally achieve its development objectives. The methodology and models developed under the project provide tools for the future in regard to the forestry sector development. The Native Forest law also provides significant tools, including the use of economic incentives to pay for environmental services of forests, for the country to sustainably manage native forest resources. The strengthening of the four national parks in Patagonia in regard to physical infrastructure and management has met the goal of ensuring the parks are financially sustainable.

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Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members

Names Title Unit Responsibility/ Specialty

Lending Michael McGarry Senior Economist retired TTL Robert Kirmse Senior Forestry Specialist* ECSSD Co-TTL Alain Tobelem Senior Economist retired Luis Constantino Sector Manager* MNSSD Steven Schonberger Lead Operations Officer* EASRE

Richard A. Owen Senior Forestry Officer Bank/ FAO-CP Forestry

Random Dubois Senior Investment Officer Bank/ FAO-CP

Jim Barborak Consultant FAO-CP * shows current title and unit

Supervision/ICR

Robert Davis Senior Forestry Specialist, TTL LCSARLeadership, Forestry, Biology and Protected Areas

Antonio Leonardo Blasco Financial Management Specialist LCSFM Financial Mangement

Ana Maria Grofsmacht Procurement Analyst LCSPT Procurement

Alejandro Solanot Financial Management Analyst LCSFM Financial Management

Ricardo Larrobla Consultant LCSEN Institutions and Protected Areas

Richard A. Owen Senior Forestry Officer FAO Forestry

Alejandro Roger Solanot Consultant LCSFM Financial Management

Zhong Tong Agric. Economist LCSAR Economist

Francis Fragano Consultant, ICR Leader LCSARSafeguards, Biodiversity, Protected Areas

Lyle Morton Junior Professional Associate LCSEN JPA Takako Mochizuki Consultant LCSAR Operational

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(b) Staff Time and Cost Staff Time and Cost (Bank Budget Only)

Stage of Project Cycle No. of staff weeks USD Thousands (including

travel and consultant costs)Lending

FY95 13.91 FY96 192.58 FY97 7.93 FY98 0.00 FY99 0.00 FY00 0.08 FY01 0.00 FY02 0.00 FY03 0.00 FY04 0.00 FY05 0.00 FY06 0.00 FY07 0.00

Total: 214.50 Supervision/ICR

FY95 0.00 FY96 0.00 FY97 Data not available 22.50 FY98 Data not available 75.82 FY99 Data not available 73.74 FY00 18 81.20 FY01 13 83.39 FY02 11 91.36 FY03 8 101.49 FY04 13 115.97 FY05 9 77.16 FY06 15 80.15 FY07 6 23.90

Total: 75 826.68

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Annex 5. Beneficiary Survey Results (if any) Not applicable. Annex 6. Stakeholder Workshop Report and Results (if any) Not Applicable.

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Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR

Proyecto de Bosques Nativos y Áreas Protegidas Informe de Cierre y Resultados

Resumen del Informe del Prestatario Objetivo del Proyecto Los objetivos del proyecto son los siguientes: (a) ayudar a la SRNyAH a asignar prioridades a sus acciones propuestas referentes a los bosques nativos; (b) facilitar el desarrollo de una estructura de incentivos y normas que aliente a los decisores, tanto públicos como privados, a internalizar más completamente dentro de su proceso de toma de decisiones, el espectro completo de beneficios y costos sociales asociados a sus decisiones y acciones que afecten a los bosques nativos; (c) desarrollar un programa para transformar la APN en una organización de administración de parques a nivel mundial y (d) incrementar el nivel de turismo ambientalmente sustentable en cuatro parques nacionales: Lanin, Nahuel Huapi, Los Alerces y Los Glaciares. Componentes del Proyecto e Impactos Componente A – Generación y Diseminación de Investigación e Información Este componente apoya las acciones e inversiones tendientes a generar información con un alto contenido de sentido de bien público referente a los bosques nativos y las áreas protegidas. El Componente A cuenta a su vez con tres subcomponentes: Subcomponente A1: Reforma del marco político, legal y regulatorio que afecta a los bosques nativos buscando la elaboración de una propuesta que adecue la política forestal nacional, de manera de impulsar el manejo sustentable de los bosques nativos y las áreas protegidas, incluyendo la conservación de su biodiversidad. Subcomponente A2: Inventario nacional de bosques nativos y áreas protegidas y manejo de la correspondiente base de datos buscando crear y mantener actualizada una base de datos que constituya el Sistema Nacional de Evaluación Forestal, obteniendo información confiable sobre la ubicación, extensión y biodiversidad de los Bosques Nativos y reforzando la capacidad de la SAyDS para almacenar, analizar, recuperar y publicar dicha información. Subcomponente A3: Investigación aplicada y estudios para impulsar el mejoramiento del manejo y conservación de los bosques nativos y de las áreas protegidas con el objetivo de proporcionar a la SAyDS las bases de una política de conservación, manejo y aprovechamiento de los Bosques Nativos mediante la identificación de las regiones amenazadas de destrucción, la selección de las áreas cuya protección sea prioritaria, la identificación de las causas de la deforestación en las áreas prioritarias y el desarrollo de alternativas de manejo mejorado, en propiedad pública o privada. Impactos Al analizar las prioridades de desarrollo actuales y las circunstancias al momento de la realización del presente ICR, se concluye que existe una elevada pertinencia total de los objetivos del Proyecto. Esto significa que los objetivos, diseño e implementación de la operación resultan en alto grado consistentes con las prioridades de desarrollo actuales. En cuanto a las prioridades de gobierno, tal pertinencia con los objetivos de la operación queda evidenciada a partir de la promulgación de la Ley General del Ambiente Nro. 25.675/02, que establece los presupuestos mínimos para el logro de una gestión sustentable y adecuada del

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ambiente, la preservación y protección de la diversidad biológica y la implementación del desarrollo sustentable.4 Subcomponente A1: Reforma del Marco Político, Legal y Regulatorio que Afecta a los Bosques Nativos. El resultado en la ejecución del Subcomponente A1 fue SATISFACTORIO En base a los estudios detallados acerca de la legislación federal y demás normas existentes que afectan el uso y la conservación de estos bosques, se identificaron los principales obstáculos para su manejo mejorado, incluyendo aquellos que impiden la internalización de los valores ambientales en la toma de decisiones públicas y privadas. Esta tarea se vio enriquecida por la participación del sector público, el sector privado y una cantidad importante de instituciones y organizaciones del Tercer Sector, lo que permitió llegar a un Anteproyecto de Ley de promoción al uso sustentable de los recursos forestales nativos que reúne la visión del conjunto de actores a nivel nacional. Subcomponente A2: Inventario Nacional de Bosques Nativos y Areas Protegidas y Manejo de la correspondiente Base de Datos. El resultado en la ejecución fue SATISFACTORIO El proyecto ha logrado completar un inventario de bosques nativos, al mismo tiempo que se ha podido desarrollar y manejar una base de datos de manera que la SAyDS cuente con capacidad para almacenar, recuperar, analizar y publicar información confiable referida a su misión de administrar los bosques nativos. La institucionalidad lograda por la UMSEF y la generación de nodos regionales a partir de ella, significan logros de gran relevancia en la sostenibilidad de los objetivos del programa, aun finalizado el plazo de ejecución del Proyecto. Subcomponente A3: Investigación Aplicada y Estudios para Facilitar la Mejora del Manejo y la Conservación de Bosques Nativos. El resultado en la ejecución fue MODERADAMENTE SATISFACTORIO La ejecución de este Subcomponente permitió contar con los elementos informativos necesario para desarrollar una estrategia que permita cumplir con la responsabilidad federal hacia los bosques nativos. Estos elementos se corresponden con la información generada a partir de Estudios Integrales de las Regiones Forestales del país que fueron vitales para identificar las áreas geográficas de los bosques nativos más amenazadas de pérdida y destrucción, establecer prioridades de intervención, identificando las fuerzas principales que conducen a la pérdida y destrucción en este sub-grupo de protección prioritaria. Productos del Componente Se destacan algunos de los productos más resaltantes del Componente A. Entre ellas se citan: Entrenamiento de 250 especialistas técnicos de la SayDS a través de 30 actividades; sensibilización a casi 1200 personas a través de 29 actividades y seminarios sobre bosques nativos; desarrollo del borrador de Ley de Bosques Nativos y su discusión en diferentes instancias; producción de mapas de bosques e informes ecorregionales; un atlas forestal nacional y materiales didacticos e informativos sobre bosques; un sistema de GIS para el inventario. Componente B – Áreas Protegidas Este componente busca fortalecer tanto la institucionalidad de administración de las áreas protegidas como la infraestructura y capacidad de conservación en áreas clave de la Patagonia.

4 N.b.: El informe de cierre del prestatario fue preparado previo a la promulgación de la Ley de Presupuestos Mínimos para la Protección Ambiental de Bosques Nativos.

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Subcomponente B1: Desarrollar un programa para transformar la APN en una organización de administración de parques a nivel mundial. Este subcomponente ha enfocado en diferentes análisis, talleres y estudios para mejorar la capacidad de gestión a través de un Plan de Modernización para la APN que guiaría su labor a futuro buscando la consolidación del Sistema Nacional de Áreas Protegidas. Subcomponente B2: Incrementar el nivel de turismo ambientalmente sustentable en cuatro parques nacionales: Lanin, Nahuel Huapi, Los Alerces y Los Glaciares. Este subcomponente se ha concentrado en obras como reparación de caminos, puentes, edificios de administración y protección y centros de interpretación para turistas y pobladores. Al mismo tiempo se ha mejorado el marco de planificación de estas áreas a través de la actualización de los planes de manejo de los parques. Impactos Resultado del Componente B: SATISFACTORIO Al analizar las prioridades de desarrollo actuales y las circunstancias al momento de la realización del presente ICR, se concluye que existe una elevada pertinencia total de los objetivos del Proyecto. Esto significa que los objetivos, diseño e implementación de la operación resultan en alto grado consistentes con las prioridades de desarrollo actuales. Las Obras realizadas han implicado beneficios al sector turismo, Centros de Visitantes, Pasarelas, Muelles, y todas las Obras que implican infraestructura en general, dándole al turista mayor información y comodidad en su visita. Así mismo hubo beneficios en el Manejo y la Conservación de la biodiversidad, esto se refleja en las Obras de Viviendas para Guardaparques, Viviendas para Voluntarios, Puestos de control etc. Estás Obras implican mayor presencia en las Áreas Protegidas tanto del personal de la APN, como de los voluntarios que realizan un gran aporte en la prevención de incendios y el control general. Los dos subcomponentes (B1 y B2) contienen actividades de elevada relevancia para los objetivos del Proyecto. Las perspectivas de sostenibilidad (sostener o mantener en el tiempo) de los resultados alcanzados son considerables. APN, a partir de la ejecución del Proyecto, ha manifestado incrementos en la recaudación anual por el cobro de accesos (entradas) como así también un incremento total por el cobro de diferentes ítems (a saber: accesos, alquileres, multas, venta de pliegas, venta de bienes, arrendamiento de tierras, etc.). El Plan de Modernización fue Aprobado mediante Resolución del Honorable Directorio de la APN N°74/07 Durante el desarrollo del Plan de Modernización se contrataron varias consultorías, las mismas realizaron análisis de situación de la institución y entregaron informes finales, pero nunca se concretó un Plan de Modernización. Durante 2006, se contrató una nueva consultoría con fondos locales a la que se le encomendó sintetizar lo actuado y realizar un informe final que incluya el Plan de Modernización. Este fue entregado a fines de 2006 y aprobado por el Honorable Directorio en abril de 2007. Productos del Componente Se destacan algunos de los productos más resaltantes del Componente B: Trece estudios de análisis para la modernización de APN, seis puestos de guardia, siete centros de visitantes, ocho senderos, nueve alojamientos de voluntarios, vehículos, lanchas, equipos de comunicación y computadoras para los parques y planes de manejo actualizados para los cuatro parques.

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Diseño, Implementación y Aplicación de Monitoreo y Evaluación (M&E) Componente A Durante la etapa de implementación se identificaron satisfactoriamente un conjunto de indicadores seguimiento y control que resultaron de gran utilidad para monitorear el avance del Proyecto en sus diferentes etapas de ejecución. En todos los casos, los indicadores significaron una fuente de información valiosa sobre la marcha del proyecto útil para la toma de decisiones, pero principalmente sirvieron a los fines del monitoreo y seguimiento de la ejecución de la aplicación de los fondos en referencia a los objetivos acordados con el prestamista. Los métodos de recolección de datos fueron implementados y garantizados por la misma coordinación del Proyecto mediante la generación interna de información, hecho que se tradujo en una satisfactoria aplicación de los indicadores y en un producto final esperado. El uso dado a los mecanismos diseñados para el monitoreo y evaluación del Proyecto ha sido satisfactorio en cuanto a que sirvieron como guía y referencia para la asignación de tareas y la planificación para el cumplimiento de los objetivos del proyecto. Se destaca la objetividad y precisión metodológica de los acuerdos de M&E. La calidad y confiabilidad de los datos utilizados, su recolección y posterior uso es altamente satisfactoria. Se destaca la apertura de la información y la completitud de los datos proporcionados por la coordinación del proyecto a los fines del Informes Final de Resultados. Sostenibilidad de las Inversiones Componente A Se a generado un Plan de Sustentabilidad de las actividades del Componente A del Proyecto concluido, el que pone de relieve un conjunto de propuestas de acciones para garantizar los logros y extender los resultados de cada uno de los Subcomponentes. El personal afectado al proyecto ha mantenido sus funciones para garantizar la permanencia de los resultados y el cumplimiento definitivo de los acuerdos. A tal fin, se ha completado durante la ejecución del proyecto una serie de actividades de capacitación y divulgación Componente B El proyecto ha permitido que la APN resulte fortalecida significativamente, ya sea por la cantidad y calidad de información que administra sobre los parques nacionales argentinos, como por el proceso de participación. Es necesario mencionar que otro aspecto importante que impacto al Cambio Institucional en forma positiva fue el incremento de los trabajadores en los distintos parques. Progresivamente se ha notado un incremento en la cantidad de trabajadores en cada uno de los parques. Lecciones Aprendidas Componente A Cabe destacar que la participación de organizaciones, instituciones y actores privados afecta positivamente la implementación del Proyecto y contribuye mejorando la posibilidad de extender los resultados a todo el territorio nacional mediante los mecanismos de participación e incidencia pública en la divulgación, toma de consciencia y cambio de cultura de la sociedad para con los bosques nativos. Componente B La adecuada articulación de gestión entre la coordinación del Proyecto y las autoridades de línea de la APN constituyó un factor determinante en la eficacia de la implementación en la etapa final del proyecto. Otras lecciones incluyen: necesidad de una adecuada articulación entre el Ministerio de Economía, la APN y la Jefatura de Gabinete de Ministros, así como el apoyo político suficiente por parte de la APN; una unidad de implementación da agilidad por su pequeña

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dimensión; pero en ocasiones hubo que contratar consultorías para la realización de proyectos, generando las mismas altos costos y no siempre buenos productos; el Proyecto debe ser consensuado de manera que los cambios políticos institucionales no afecten su normal desarrollo y; necesidad de agilizar contrataciones y adquisiciones entre el Banco y APN. Bibliografía Material extraído y resumido de los siguientes informes: Guida, Esteban. 2007. Evaluación del Cierre del Proyecto Bosques Nativos y Áreas Protegidas,

Componente A. SAyDS. Gomez, Nancy. 2007. Evaluación del Cierre del Proyecto Bosques Nativos y Áreas Protegidas,

Componente B. APN.

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Letters from implementing agencies regarding the ICR:

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Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders

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Not applicable

Annex 9. List of Supporting Documents Brown, A. et al. 2006. La Situación Ambiental Argentina 2005, Fundación Vida Silvestre Argentina Gomez, Nancy. 2007. Evaluación del Cierre del Proyecto Bosques Nativos y Áreas Protegidas, Componente B. APN. Guida, Esteban. 2007. Evaluación del Cierre del Proyecto Bosques Nativos y Áreas Protegidas, Componente A. SAyDS. Pastur, Guillermo et al. 2007. Harvesting adaptation to Biodiversity Conservation in Sawmill Industry: Technology Innovation and Monitoring Program in the Journal of Technology Management and Innovation. Volume 2 (3). STCP. 2005. Evaluación Del Cumplimiento De Los Objetivos del Proyecto Bosques Nativos y Áreas Protegidas, Componente A: Generación y Diseminación de Investigación e Información. BIRF – 4085 – AR. SAyDS. The World Bank. 1995. Argentina Country Assistance Strategy, Report No. 14278-AR The World Bank. 2006. Argentina Country Assistance Strategy, Report No. 34015-AR.

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