VZCZCXYZ0003
RR RUEHWEB

DE RUEHSN #0637/01 0672043
ZNR UUUUU ZZH
R 082043Z MAR 06
FM AMEMBASSY SAN SALVADOR
TO RUEHC/SECSTATE WASHDC 1410
INFO RUEHGT/AMEMBASSY GUATEMALA 4198
RUEHMU/AMEMBASSY MANAGUA 1952
RUEHSJ/AMEMBASSY SAN JOSE 3388
RUEHDG/AMEMBASSY SANTO DOMINGO 0586
RUEHTG/AMEMBASSY TEGUCIGALPA 0523

UNCLAS SAN SALVADOR 000637 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR OES - CJACKSON AND LSPERLING; WHA/EPSC - 
FCORNEILLE; USAID/LAC/RSD - JGARRISON 
 
E.O. 12958: N/A 
TAGS: EAID ETRD LAB SENV ES CAFTA
SUBJECT: CORRECTED COPY - EL SALVADOR PRIORITIES FOR 
ENVIRONMENT PROJECTS THAT SUPPORT CAFTA-DR IMPLEMENTATION 
 
REF: SECSTATE 26123 
¶1.   Summary: As requested in reftel, this cable contains 
Post priorities for CAFTA-DR environment activities for FY 
¶2006. The proposals described here build upon a consultative 
process that began almost six months ago and reflect a 
consensus view on El Salvador's key environment needs and 
related regional priorities.  They are: 
-- Creating Income Incentives to Support Sustainable 
Management and Conservation in Critical Salvadoran Protected 
Areas: $1,100,000 
-- Environmental Law Compliance and Enforcement: $2,750,000 
-- Improve Private Sector Compliance with Environment 
Legislation: $1,750,000 
-- Enhancing Public Participation in CAFTA-DR Environmental 
Compliance: $660,000 
-- Expand Countries' Compliance with Multilateral 
Environmental Agreements: $1,150,000 
-- Creating Incentives for Improved Management of Critical 
Biodiversity-rich Watersheds: $1,800,000 
 
A separate cable contains post's summary of CAFTA-DR labor 
needs.  See concluding comment at end of this telegram.  End 
Summary. 
 
¶2.   Nearly six months ago, Post began a consultative 
process to identify key labor and environment trade capacity 
needs in El Salvador for FY 2006 and beyond.  This process, 
consisting of consultations with Government colleagues, 
regional integration institutions, and the private sector, 
identified several priority needs.  To develop the project 
proposals requested in reftel, Post also relied heavily on 
the priorities in the CAFTA-DR Environment Cooperation 
Agreement. 
 
¶3.   The proposals presented here represent a consensus view 
from State and USAID bilateral and regional officers of key 
USG projects that will help El Salvador and other countries 
in the region meet the requirements of CAFTA-DR environment 
provisions.  Post recognizes that El Salvador is, in many 
ways, in a unique position vis--vis other CAFTA-DR 
countries in its efforts to implement CAFTA-DR and its 
relationship with the United States.  El Salvador led the 
fight within the region for ratification by Central American 
signatories.  El Salvador was the first country for which 
the treaty entered into force with the U.S. (on March 1, 
2006).  Also, the US Mission in El Salvador has a strong 
regional presence and serves as the base for regional 
offices of USG agencies such as Department of Commerce and 
USAID.  As a result, the proposals presented here include 
both those that focus exclusively on El Salvador as well as 
some that recognize the benefits of working regionally to 
address environment issues of particular concern to El 
Salvador and its neighbors. 
 
¶4.   It is more efficient, from a USG budget perspective to 
offer some CAFTA-DR assistance from a regional platform. 
More importantly, there is a need to harmonize environmental 
regulations, procedures and information systems at a 
regional level to make sure that all countries adhere to the 
same minimum standards and compete on a level playing field. 
 
--------------------------------------------- ----------- 
¶5.   TITLE: Creating Income Incentive to Support 
Sustainable Management and Conservaton in Critical 
Salvadoran Protected Areas 
--------------------------------------------- ---------- 
 
¶6.   PURPOSE: The Activity will develop alternative income 
sources and incentives to manage and conserve biodiversity 
and natural resources within selected critical areas of El 
Salvador. 
 
¶7.   DESCRIPTION AND JUSTIFICATION.  Population pressures, 
coupled with uncontrolled and unsustainable economic 
activity, are degrading the natural resource base of El 
Salvador and leading to the irreplaceable loss of plant and 
animal species.  Fuel wood is the primary source of cooking 
energy for approximately 70% of the rural population and 
current requirements exceed sustainable yield levels for 
present forest cover.  Deforestation, the destructive use of 
pesticides, agricultural practices that degrade the soil 
base and domestic pollution are carried out with little 
regard for downstream inhabitants or the natural habitat 
that supports biodiversity.  These conditions also threaten 
the economic potential of hundreds of thousands of local 
 
residents in one of the most biodiversity rich areas of the 
country, Ahuachapan and Sonsonate (the proposed activity 
area).  More than a third of El Salvador's protected areas 
are within the proposed activity area.  Outside the 
protected areas, natural forests are often fragmented 
"islands."  Conserving biodiversity will demand efforts to 
link together these protected areas and fragmented forests 
with biological corridors and buffer zones. 
 
¶8.   In this activity, USAID El Salvador will promote 
sustainable management within protected areas, biological 
corridors, and buffer zones by using market access and 
increased income as incentives for rural residents to carry 
out long term conservation practices.  Such incentives 
include certified products, alternative income sources such 
as tourism, and non-traditional income opportunities that 
are less environmentally destructive.  Local capacity to 
carry out integrated natural resource and biodiversity 
conservation will be developed and mechanisms for users to 
pay for environmental services will be introduced. 
 
¶9.   Expected Results: 
 
--  Increase in annual income of $1.5 million for local 
residents through increased market access, alternative 
employment, crop diversification, and non-traditional income 
opportunities. 
 
--  Generation of $50,000 per year for payment for 
environmental conservation of critical protected areas. 
 
--  75% of residents living in protected areas, buffer 
zones, and biological corridors will adopt environmentally 
sustainable farming methods or benefit from non-traditional 
income-earning opportunities. 
 
¶10.  Specific Activities: 
 
-- Green Certification.  Green certification mechanisms will 
be used to promote certified product market access and 
improve agricultural practices that support conservation. 
Coffee certification will be the principal focus due to the 
conservation importance of shade forests and the economic 
importance of coffee.  In addition to providing a 
significant amount of firewood as coffee plants are pruned 
to manage the shade, tree cover on coffee farms protects 
some of the better but erosion-prone volcanic soils and 
improves watershed stability. 
 
--   Non-Traditional Income Alternatives.  By introducing 
alternatives to traditional farming, USAID will help reduce 
the current pattern destruction of forests, soil, and 
biodiversity habitat.  Eco-tourism mechanisms will be 
developed to provide jobs, training, and increase 
environmental awareness amongst populations residing within 
protected areas, buffer zones, and biological corridors. 
 
--   Financial Mechanisms for Conservation.  Financial 
mechanisms for conservation will be developed using tariffs 
and user fees to pay for local implementation of 
conservation activities.  The Ministry of Agriculture is 
carrying out a rural modernization program and will be a key 
partner for generating financial resources for conservation 
efforts.  Other options will be explored to support the 
financing of environmental services.  This activity will 
support local capacity and awareness of the need to pay for 
and carry out conservation interventions. 
 
¶11.  US POLICY OBJECTIVES.  This activity specifically 
addresses the ECA work plan section 2, "Development and 
promotion of incentives and other voluntary and flexible 
mechanisms to encourage environmental protection, including 
the development of market initiatives and economic 
incentives for environmental management needs, and includes 
activities to improve implementation and improved compliance 
with multilateral environmental agreements."  It will also 
support the GOES Ministry of Environment and Ministry of 
Agriculture goals of sustainable conservation of protected 
areas and rural modernization. 
 
¶12.  NEW OR PREVIOUS WORK. This activity will build on 
USAID's previous integrated water resource management 
Activity (AGUA) that successfully linked the demand for 
clean water to the conservation of the Activity's three 
major watersheds.  It will also support the new GOES water 
 
law expected to be presented later this year, which contains 
provisions for financing environmental services through 
water use tariffs. 
 
¶13.  ESTIMATED COST.  $1,100,000 for FY 2006 (Biodiversity 
DA) 
 
¶14.  LOCAL BUY-IN.  A consultative process was carried out 
with the Government of El Salvador including its Ministries 
of Environment and Agriculture, the National Water Agency, 
the Social Investment Fund for Local Development (FISDL), 
and organizations working in the activity area.  The 
government has specifically requested assistance in 
conservation and management of biodiversity and natural 
resources.  USAID will work with the Ministry of the 
Environment, the Ministry of Agriculture, and FISDL as well 
as potential partners with other organizations such as the 
Canadian Development Agency (ACDI), the World Conservation 
Union (IUCN), and the Spanish Development Agency (SECI). 
 
¶15.  PUBLIC DIPLOMACY.  The goals of the Central American 
Free Trade Agreement (CAFTA-DR) include support of 
environmental conservation along with increased economic 
growth and trade.  This activity responds by providing the 
opportunities for rural residents to increase their incomes, 
while developing sound practices for the long term 
conservation of biodiversity and natural resources in some 
of the most critical conservation areas of El Salvador. 
 
--------------------------------------------- ----------- 
¶16.  TITLE: Environmental Law Compliance and Enforcement 
--------------------------------------------- ----------- 
 
¶17.  PURPOSE:  This activity will strengthen the ability of 
El Salvador, Costa Rica, Guatemala, Honduras, Nicaragua and 
the Dominican Republic to enforce existing environmental 
legislation.  This was the number one priority identified by 
the parties during the negotiation of the Cooperative Work 
Program. 
 
¶18.  DESCRIPTION AND JUSTIFICATION: Environmental law 
enforcement within the CAFTA-DR countries is weak. Existing 
institutions within the countries have limited human and 
financial resources, and many lack the necessary authority 
to enforce laws. Existing legal frameworks often lack the 
implementing regulations and procedures, hindering 
implementation. In addition, current environmental laws 
throughout the region need to be harmonized to reduce trade 
barriers brought about by differing standards and systems. 
While the challenge of meeting the obligations of CAFTA-DR 
and other agreements falls primarily on the national 
governments of each country, a regional approach is 
essential to harmonize implementation across borders.  USAID 
will work with EPA and relevant government ministries by 
using the CCAD regional environment platform.  This approach 
will build continuity through administration changes; build 
on positive experiences in some countries; and offer 
economies of scale as similar themes can be handled by the 
same team of experts. 
 
¶19.   Expected Results: 
 
-- At least one environmental regulation or administrative 
procedure developed per country each year of the activity. 
 
-- At least 50 government officials/trainers trained in each 
country on how to use relevant environmental management 
principles and tools, including the use of regulatory and 
administrative incentives, as well as voluntary measures. 
 
-- Each government has completed an internal assessment and 
plan on how they can more efficiently use the resources they 
have for environmental management. 
 
¶20.  Specific Activities: 
 
-- Eliminate law enforcement gaps.  Help Governments develop 
the needed legislation to fill existing legal gaps in 
environmental legislation.  Work will focus on priority 
sectors as defined by the trade Ministries in each country. 
 
-- Strengthen the capacity of authorities to apply existing 
environmental protection procedures.  Authorities charged 
with environmental protection, natural resource protection, 
and pollution control and prevention face capacity problems. 
 
USAID will strengthen the countries in the region to 
identify and effectively prosecute environmental crimes 
using each country's environmental legislation. 
 
-- Define environmental law enforcement process.  USAID will 
work with judicial authorities and environmental agencies to 
help develop enforcement procedures, from investigation and 
gathering of evidence, to building a case, to determining 
how to prosecute a case and presenting that case and 
evidence effectively to a judicial body.  The training will 
focus on the importance of working with other national 
enforcement entities to build successful cases. 
 
-- Train key staff in environment management tools. USAID 
will train authorities in relevant environmental management 
principles and tools, including the use of regulatory and 
administrative incentives. Develop a strategy to create or 
use financial/economic incentives to contribute to 
environmental protection in productive sectors. 
 
-- Provide technical assistance to governments to assist 
them in internalizing management costs in national and local 
municipal budgets. National Governments need to internalize 
the costs of environmental law enforcement.  Adequate 
operating budgets are necessary so that Environment 
Ministries and other entities have the means to carry out 
inspections (staff and operating expenses). 
 
¶21.  US POLICY OBJECTIVES.  As signatories to CAFTA-DR, 
participating countries are required to improve and 
effectively enforce their existing environmental laws. 
Article 2 of the Environment Chapter under CAFTA-DR 
establishes that a party "shall not fail to effectively 
enforce its environmental laws, through a sustained or 
recurring course of action or inaction, in a manner 
affecting trade between the Parties, after the date of entry 
into force of this Agreement."  The ECA work plan identifies 
environmental law enforcement as a priority under section 
1.1 "Strengthening Environmental Law Compliance and 
Enforcement Systems: Support the strengthening of national 
systems for effective enforcement of Parties' environmental 
legislation, including administrative and judicial 
procedures."  It is a key USG policy goal that this 
commitment be met. 
 
¶22.  NEW/PREVIOUS WORK.  USAID has built a strong foundation 
for policy work throughout the region, working in close 
collaboration with bilateral and regional organizations 
including CCAD, local and international NGO's, USG agencies 
(DOI, EPA, USDA, DOI, NOAA, DOC, NASA) and other 
organizations.  Thanks to USAID's early work with EPA and 
CCAD, a framework document to develop effective 
environmental laws and regulations was developed and served 
as the base for creating most of the Environment Ministries 
in the region.  CCAD and EPA collaborated to develop an 
environmental law textbook and developed a regional law 
network.  Model legislative frameworks and regulations have 
been developed on several environmental topics.  The 
experience these actors have gained working in the region 
will allow us to quickly target assistance to fill 
legislative gaps and address law enforcement priorities in 
each country.  FY 2005 funds will be used to develop a 
baseline needs assessment. 
 
¶23.  ESTIMATED COST. $ 2,750,000 in FY 2006 ESF ($1,250,000 
for technical assistance provided by USAID and EPA and 
$250,000 per country to address country-specific 
constraints).  A similar investment should be considered for 
FY 2007. 
 
¶24.  LOCAL BUY IN.  Local authorities identified 
"Strengthening each Party's environmental management 
systems, including strengthening institutional and legal 
frameworks" as first priority in the Cooperative Work 
Program.  The Cooperative Work Program was formulated 
through interagency coordination among the Ministries of 
Environment and Trade of each of the countries in the region 
and based upon joint and consensual decisions.  On the 
ground activities will be developed regionally or 
nationally, depending on local capacity. 
 
¶25.  PUBLIC DIPLOMACY.  This project would provide a venue 
to increase the visibility of USG efforts to 
conserve/maintain the environment in Central America and the 
Dominican Republic. 
 
 
--------------------------------------------- ----------- 
 
¶26.  TITLE:  Improve Private Sector Compliance with 
Environmental Legislation 
 
--------------------------------------------- ----------- 
 
¶27.  PURPOSE:  This activity will improve the private 
sector's environmental performance and competitiveness by 
providing flexible incentives for them to adopt clean 
production technologies in their production processes. 
USAID will spearhead public-private partnerships that 
leverage private sector resources to achieve voluntary 
compliance with national environmental laws. 
 
¶28.  DESCRIPTION AND JUSTIFICATION: Contamination from 
industry poses a serious risk to the region's ability to 
comply with CAFTA-DR.  The private sector plays an 
influential role in determining whether governments develop 
and implement legislation that addresses environmental 
hazards.  The implementation of voluntary mechanisms to 
enhance environmental performance will bring together the 
private sector and Government as partners to reduce 
contamination.   This program will create public private 
partnerships that will encourage voluntary compliance with 
environmental legislation.  It will enlist the private 
sector in making investments that both improve environmental 
performance yet also have a direct impact on firm 
competitiveness. 
 
¶29.  Expected Results: 
 
-- Net reduction in energy consumption and expenditures. 
 
-- Net reduction in wastewater generation from production 
processes and improved solid waste management through the 
more efficient use of inputs. 
 
-- Public employees and private sector businesses more 
knowledgeable about best practices that will improve 
environmental performance. 
 
-- Net savings in production costs due to more efficient 
processes. 
 
¶30.  Specific Activities: 
 
--  Develop public-private partnerships. Public-private 
partnerships will be developed to facilitate the transfer 
and adoption of cleaner production technologies.  USAID will 
promote voluntary and flexible mechanisms to encourage 
public/private partnerships for environmental protection, 
including the development of market incentives and economic 
incentives for environmental management. 
 
-- Increase access to clean production financing.  One of 
the biggest limitations businesses face is the lack of 
capital available in the region to make clean production 
improvements.  The clean production Development Credit 
Authority establishes a non-traditional line of credit for 
private sector companies in the region interested in making 
clean production improvements.  The Development Credit 
Authority reduces the risk banks face by providing partial 
loan guarantees.  USAID proposes to increase the available 
credit under the Development Credit Authority and expand 
coverage to include the Dominican Republic and Guatemala. 
 
-- Promote clean production best practices.  USAID will 
promote clean production schemes in productive processes, 
applying best practices to improve efficiency in the use of 
raw materials and inputs.  USAID will promote incentives by 
creating a program to recognize private sector success and 
performance through national environmental innovation 
awards, in cooperation with other donors 
 
¶31.  US POLICY OBJECTIVES.  The Governments in the region 
recognize that incentives and other flexible and voluntary 
mechanisms can contribute to the achievement and maintenance 
of environmental protection.  The Cooperative Work Program 
stresses under Article 1.1.8 which stresses the need to 
strengthen the private sector's ability to comply with 
environmental legislation.  US policy interests are best 
served by a cooperative effort between the private sector 
and government. 
 
 
¶32.  NEW/PREVIOUS WORK.  USAID has already established a 
regional clean production Development Credit Authority 
(scheduled to end in 2010) and funds a clean production 
expert at CCAD who works with the Clean Production Centers 
in each country (many of them funded by USAID bilateral 
programs) to encourage private sector businesses to make 
clean production improvements. The clean production 
Development Credit Authority provides a partial loan 
guarantee to banks to encourage loans in clean production. 
USAID El Salvador recently started a clean production 
activity with the World Environment Center, to promote 
private sector led clean production in El Salvador.  This 
activity will complement efforts by providing funding to 
disseminate best practices and develop public private 
partnerships so that government authorities, clean 
production centers, banks and the private sector work in 
harmony to promote voluntary compliance with existing 
environmental laws. 
 
¶33.  ESTIMATED COST.  $ 1,750,000 in DA Energy funding 
and/or ESF for 2006.  A similar amount will be needed for FY 
¶2007.   USAID is already investing $600,000 in clean 
production activities in El Salvador in FY 2005.  USAID also 
plans to spend $100,000 this year to fund a clean production 
expert at CCAD to work closely with banks and clean 
production centers to encourage the private sector to apply 
for loans. 
 
¶34.  LOCAL BUY-IN.  Chapter 17 of CAFTA-DR (Article 17.4) 
establishes the need for flexible voluntary mechanisms to 
improve environmental performance and environmental 
cooperation to facilitate the development and transfer of 
appropriate technologies.  Demand for clean production 
technologies is increasing throughout the region because 
energy costs make businesses less competitive in global 
markets.  We expect to leverage at least $1 million from the 
private sector through a public private partnership. 
 
¶35.  PUBLIC DIPLOMACY.  This activity provides public 
visibility through the Environmental Innovation Prize for 
Clean Production.  As Environment Ministries have 
enthusiastically embraced clean production as a way of 
addressing the twin goals of reduced pollution and increased 
competitiveness, USG public diplomacy efforts can highlight 
these "win-win" solutions. 
 
--------------------------------------------- ---------- 
 
¶36.  TITLE: Enhancing Public Participation in CAFTA-DR 
Environmental Compliance 
 
--------------------------------------------- ---------- 
 
¶37.  PURPOSE:  This activity will help Costa Rica, the 
Dominican Republic, El Salvador, Nicaragua and Honduras 
comply with CAFTA-DR provisions on increased public 
participation in environmental matters. 
 
¶38.  DESCRIPTION AND JUSTIFICATION.  Historically, the CAFTA- 
DR countries have had limited experience in encouraging 
public participation in environmental matters. Furthermore, 
the capacity to effectively manage and respond to citizen 
complaints regarding alleged environmental law violations 
varies significantly between countries.  Yet, CAFTA-DR 
establishes a number of requirements for public 
participation and communication.  Under the CAFTA-DR 
Environment Chapter, the countries must receive public 
complaints and make them available to the public.  Signatory 
countries are required to develop systems to investigate 
alleged violations of its environmental laws and to 
establish a national consultative or advisory committee. 
This activity will help the Dominican Republic, Costa Rica 
and other Central American nations comply with these 
provisions. 
 
¶39.  Expected Results: 
 
--  Build national capacity to respond to citizen 
complaints. 
 
--  Create a designated environmental information center 
within each Ministry of Environment that will provide public 
access to information. 
 
 
¶40.  Specific Activities: 
 
--  Establish a functioning Trade and Environment Office in 
each country to manage environmental claims.  The CAFTA-DR 
agreements require that signatory countries establish Trade 
and Environment Offices once the treaty enters into force. 
To help governments meet this requirement, USAID will 
provide assistance to develop administrative procedures and 
capacity to respond to communications and complaints 
received either directly under Chapter 17 or through the 
SIECA Citizen Submissions Unit.  USAID will strengthen 
existing systems for environmental claims used by civil 
society to help reduce the response time for responding to 
and investigating citizen complaints.  USAID will also help 
establish points of contacts in other Ministries to handle 
and follow through on complaints.  We will purchase critical 
computer equipment, software and web based communications to 
manage and track environmental complaints. 
 
--  Enhance environmental information available to the 
public.  Most countries do not have a resource center where 
the public can easily access information, severely limiting 
the ability of the public to initiate a complaint or raise 
issues of concern.  In order to support each country's 
citizen submission process and their newly established trade 
and environment offices, USAID will help develop an 
environmental information center in each Environment 
Ministry.  The purpose of these information centers will be 
to provide and distribute information about CAFTA-DR to the 
general public and provide a one stop shop on laws, 
regulations, procedures and other information companies and 
private citizens need in order to comply with each countries 
environmental legislation when setting up a business.  The 
centers will provide the countries with the ability to 
disseminate environmental information, including information 
on environmental impact assessments and the procedures 
required to obtain an environmental permit.  The countries 
would be obligated to provide the staffing for the 
information center.  USAID will provide some of the basic 
infrastructure (computers, office equipment) and funding for 
informational materials and public campaigns.  USAID will 
provide training and technical assistance to government 
officials to improve communication and outreach through the 
development of websites, and other media. 
 
¶41.  US POLICY OBJECTIVES:  This component will assist the 
Parties in meeting the public consultation and participation 
obligations set out in the CAFTA-DR.  This activity will 
support the creation or strengthening of entities in the 
region responsible for addressing the roles established in 
articles 17.5 and 17.6 of the CAFTA-DR and in the ECA.  The 
national units established (for citizens submissions and 
providing environmental information and information on CAFTA- 
DR) established through this regional approach, will provide 
information about Chapter 17 under CAFTA-DR and the ECA in a 
harmonized and consistent manner.  Specifically this 
activity will address Cooperative Work Program articles: 
 
-- Strengthen technology and installed capacity in 
connection with the training of personnel in the offices 
designated as Points of Contact by the countries of the 
region. 
 
-- Strengthen the ability of the Parties; response 
mechanisms to public communications with the Ministries of 
Environment and Trade or their equivalent. 
 
-- Promote training and information sharing activities as 
well as develop and disseminate materials to promote public 
awareness of the environmental provisions of the CAFTA-DR 
and ECA. 
 
-- Strengthen the management of, and access by the public to 
environmental information in the region. 
 
¶42.  NEW/PREVIOUS WORK: EPA has received funding to design 
an information system for public communications and 
establish a monitoring system.   Matching funds are needed 
to cover local costs such as the purchase of equipment, 
replicate materials, coordinate efforts regionally and 
dedicate staff to the effort.  The national information 
centers proposed here will feed into the Regional 
Environmental Information System known as SIAM which was set 
up with support from the World Bank and USAID through NASA. 
USAID/El Salvador provided support to the local Environment 
 
Ministry to establish such an information center in 2004 
which can be used to quickly jump start the process. 
USAID/El Salvador also developed environmental information 
materials which can be adapted for use in other countries. 
The 2004 ESF funds designated to address these issues are 
not enough to adequately address the needs of each Ministry. 
USAID's regional program will take advantage of existing 
efforts (such as the CAFTA-DR environmental manual and the 
information center established with funding from USAID in El 
Salvador) to reduce overall costs that would be incurred if 
this effort were undertaken individually in each country. 
 
¶43.  ESTIMATED COST:  $660,000 of FY 2006 ESF ($110,000 per 
country).  Each CAFTA-DR country Environment Ministry will 
be asked to submit a proposal on how they would like to 
utilize the allotted funding to address their priority needs 
in establishing information/citizen submission units.  Each 
ministry will be required to provide information on 
counterpart contribution they will provide for the project 
and how these centers will become sustainable. 
 
¶44.  LOCAL BUY-IN:  The proposal was discussed conceptually 
with El Salvador and Nicaragua key government officials in 
January.  With CAFTA-DR now in force in El Salvador (and 
hopefully soon in the other countries), the need to 
establish the proposed offices is urgent. 
 
¶45.  PUBLIC DIPLOMACY:  Inaugurating information centers and 
contact point offices in each country will provide a 
tangible means for the US and participating countries to 
show that positive steps are being taken to address public 
participation needs established by CAFTA-DR. 
 
 
--------------------------------------------- -------------- 
¶46.  TITLE:  Expand Countries' Compliance with Multilateral 
Environmental Agreements (MEAs) 
--------------------------------------------- -------------- 
 
¶47.  PURPOSE:  To help CAFTA-DR countries meet their 
obligations under the following critical Multilateral 
Environment Agreements: CITES, UNFCC and Montreal Protocol. 
 
¶48.  DESCRIPTION AND JUSTIFICATION: Effectiveness at 
complying with Multilateral Environment Agreements (MEAs) is 
low due to limited resources and lack of trained personnel. 
One of the major risks posed by the establishment of common 
borders under CAFTA-DR is regulation of the transport of 
endangered species and hazardous chemicals.  This activity 
will ensure that countries have the tools and systems so 
that they can meet their obligations under the following 
multilateral agreements: CITES, UNFCC, and the Montreal 
Protocol.  A regional approach provides a more consistent 
platform to ensure Ministries do not lose direction when 
Governments change. 
 
¶49.  Expected Results: 
 
-- Effective enforcement mechanisms of at least three key 
international environmental agreements will be established 
and working. 
 
-- Customs officers will better understand their role in 
enforcing environmental laws, including international 
agreements and domestic implementing legislation.  By the 
end of the strategy period at least six customs officer 
trainers will have developed the skills to provide training 
to their fellow officers in each country on these subjects. 
 
-- The CAFTA-DR countries will improve their performance in 
meeting CITES obligations.  Harmonized procedures and 
regulations for implementing CITES will be in place. 
Scientific and Management Authorities will have sufficient 
capacity to document population status to meet CITES 
obligations. The police, customs officers, and general 
public will have basic awareness and knowledge of CITES. 
Updated regional lists of endangered flora and fauna will be 
available. 
 
¶50.  Specific Activities: 
 
-- Regional Mechanisms for Effective Enforcement of MEAs. 
MEA implementation is hindered by missing procedures.  A set 
of procedural road maps will be developed and tailored to 
meet each country's specific legislative conditions.  USAID 
 
will help strengthen the registration and procedures for the 
sound management and transboundary movement of pesticides, 
hazardous materials, substances and wastes, including 
procedures for Prior Informed Consent.  Regional norms will 
be developed in some specific instances (such as chemical 
importation and use), where they are lacking.  Informational 
materials will be prepared regarding waste, toxic chemicals, 
endangered species and biodiversity, and ozone-depleting 
substances.  Linkages at the national level between key 
enforcement stakeholders, customs officers, customs training 
institutes, national focal points for MEAs, judges, and 
prosecutors will be strengthened. 
 
-- Build capacity for effective enforcement.  Law 
enforcement officers (customs, police, judges) lack the 
tools and knowledge to effectively enforce existing 
legislation related to MEAs.  Training materials will be 
customized for the CAFTA-DR countries, and customs officials 
will be trained in the recognition of species listed on 
CITES Appendices.  Harmonized procedures and regulations for 
implementing CITES will be developed. Regional lists of 
endangered flora and fauna will be updated and published. 
Guidelines for the population estimates necessary for proper 
compliance will be developed.  Police, customs officers, and 
the general public will be educated and provided with 
training through multi-media outreach campaigns. 
 
¶51.  US POLICY OBJECTIVES: As signatories to CAFTA-DR, 
participating countries are required to implement and 
improve compliance with multilateral agreements to which 
they are all party.  This project will address three actions 
identified in the ECA work plan as follows: 
 
-- Strengthen capacity for national implementation of CITES, 
RAMSAR, the Montreal Protocol and other relevant MEAs to 
which we are all Party, including by disseminating 
procedures for their implementation and undertaking public 
awareness campaigns. 
 
-- Provide training and capacity building to Scientific and 
Management Authorities, Customs authorities and national 
police to enhance implementation of CITES. 
 
-- Develop programs and projects to provide economic 
instruments to protect wildlife at the regional and national 
levels. 
 
-- Strengthen the enforcement of restrictions on trade in 
ozone depleting substances under the Montreal Protocol and 
the development of innovative mechanism for encouraging 
cross boundary engagement in reducing the use of such 
substances. 
 
¶52.  NEW/PREVIOUS WORK: USAID has built a strong foundation 
for policy work throughout the region, working in close 
collaboration with the Central American Governments through 
CCAD.  USAID has worked with CCAD and EPA to promote 
knowledge of relevant MEAs and harmonization of regulations 
and procedures.  In collaboration with EPA and NASA, USAID 
is helping countries meet the United National Framework 
Convention on Climate Change (UNFCCC) requirements to 
produce a report on their greenhouse gas emissions through 
the development of tools and improvements in data quality. 
Activities planned here complement the UNDP GEF activities 
on climate change, the World Bank efforts on payments for 
environmental services, and the Spanish Cooperation's 
biodiversity conservation work. 
 
¶53.  ESTIMATED COST: $1.15 million of FY 2006 ESF and DA 
(with $150,000 for each CAFTA-DR country and $250,000 for 
regional core costs). USAID requests DA Biodiversity and NRM 
funding in order to include Costa Rica.  Matching funds will 
be provided from national governments through CCAD.  This 
activity will work in close coordination with other USG 
agencies through USAID's existing interagency agreements to 
provide specific training and technical assistance that is 
not available in the region.  Other project partners and 
implementers may include Environment and Trade Ministries, 
Agriculture, and Customs staff, and local and international 
NGOs. 
 
¶54.  LOCAL BUY-IN: As the activity is designed to meet 
national government requests for assistance through CCAD. 
Proposals were shared with CCAD as the representative agency 
for all the Ministers of Environment for the CAFTA-DR 
 
countries. 
 
¶55.  PUBLIC DIPLOMACY: A public diplomacy strategy is 
already incorporated through planned public outreach 
campaigns. Opportunities for public diplomacy would come 
from key workshops and materials published and disseminated. 
 
--------------------------------------------- -------------- 
¶56.  TITLE:  Creating Incentives for Improved Management of 
Critical Biodiversity-rich Watersheds 
--------------------------------------------- -------------- 
 
¶57.  PURPOSE: This activity will enhance market incentives 
for improved natural resource management in Costa Rica, 
Guatemala, Honduras, and Nicaragua and build the basis for 
sustainable financing in three watersheds of high 
biodiversity importance (utilizing DA biodiversity and 
agriculture funds). 
 
¶58.  DESCRIPTION AND JUSTIFICATION: Central America has 
exceptional biodiversity that needs to be conserved for both 
its current economic value and potential future value.  The 
future growth of the region depends on the health of its 
natural resource base.  For example, sustainable flows of 
income from tourism and the availability of clean water 
supplies are both directly related to environmental health. 
However, there are insufficient financial resources to fully 
fund and implement protected area and watershed management 
plans.  Governments rarely allocate adequate funds for the 
environment during the budget process, and current policies 
rarely allow for significant generation and retention of 
fees for management at the local level.  There are few 
incentives for local producers to manage their natural 
resource base themselves.  Recognizing the considerable 
potential of tourism and non-traditional agricultural and 
forestry products, this activity will help build market- 
based incentives for improved natural resource management. 
 
¶59.  Expected Results: 
 
-- Improve visitor infrastructure at 10 target sites. 
 
-- Reduce environmental infractions by the tourism sector. 
 
-- Reduce resource degradation by six communities within and 
near protected areas. 
 
-- Increased trade of sustainably produced environmental 
goods and services. 
 
-- Increase the level of sustainable financing available for 
resource management. 
 
-- Increase the level of sustainable financing made 
available for resource management through "payment for 
environmental services." 
 
¶60.  Specific activities: 
 
-- Improvement of tourism infrastructure.  Visitor 
infrastructure, such as trails, observation towers, and 
information centers, will be improved at priority sites 
identified by Tourism and Environment Ministries.  Guides, 
and other service providers, such as hotel staff, and 
transportation providers, will be trained in best practices. 
 
-- Increased options for sustainable income generation. 
Many rural residents have few income generation options, a 
pattern that encourages adoption of environmentally 
destructive agricultural practices.  USAID will build on its 
experience in identifying and promoting alternative 
livelihoods for communities near protected areas. Community 
members will be provided specialized technical assistance 
and vocational training. Where possible, assistance will be 
provided in establishing market access for natural products 
from communities living near protected areas. 
 
-- Helping governments remove barriers that keep funds from 
reaching protected areas.  The activity will address policy 
constraints that prevent funds from getting to where they 
are needed for improved management.  It will also address 
capacity limitations that prevent local residents from 
identifying, producing and trading in environmental goods 
and services. 
 
-- "Payment for Environmental Services" as a concept for 
improved management will be promoted with selected local and 
national governments, building on the existing experience at 
sites in Costa Rica, Honduras, Nicaragua and Guatemala. 
Payments for Environmental Services will be implemented at 
selected target sites.  Environmental payment service 
systems will be reviewed by experts, and their findings will 
be discussed at public meetings. Findings of evaluations 
will be provided to NGOs, the general public, as well as 
national and local government. 
 
¶61.  U.S. POLICY OBJECTIVES: This activity directly 
addresses priorities established by the signatories of CAFTA- 
DR in the ECA work plan that highlights the need for 
sustainable financing for natural resource management. 
Specifically, it addresses ECA work plan sections that 
include: 
 
-- Improve visitor infrastructure and services to increase 
tourism while better protecting the resources. 
 
-- Promote alternative livelihoods based on sustainable 
resource use for communities within and near protected 
areas. 
 
-- Promote activities directed towards strengthening the 
capacity of the Region to identify, produce and trade in 
environmental goods and services. 
 
-- Promote and implement market schemes for environmental 
services. 
 
-- Validate and promote at a regional level the use of 
evaluation methodologies for environmental payment services 
systems. 
 
¶62.  NEW/PREVIOUS WORK:  USAID has experience working on 
tourism, payments for environmental services, and 
certification of environmental goods in the region.  USAID 
has worked in close collaboration with the CA governments 
through CCAD.  Some examples include the development of a 
tri-national ecotourism route in the Gulf of Honduras and 
the development of public use plans for protected areas.  In 
the agriculture sector, USAID support for sustainably 
produced gourmet coffee led to the sale of 6.6 million 
pounds of certified organic coffee and over 237,000 tons of 
certified environmentally friendly bananas.  In addition, 
over 60,000 cubic meters of certified timber products were 
sold.  In this activity, USAID will build upon this 
foundation and work on these issues through local 
organizations.  Activities complement the World Bank efforts 
on payments for environmental services and the Interamerican 
Development Bank work on tourism. 
 
¶63.  STIMATED COST:  USAID requests $1,800,000 in FY 206 
DA Biodiversity funds to fund the first year o this 
activity.  For FY 2007, an additional $1,60,000 request 
will be made.  Matching funds will e provided from national 
governments and other dnors working with CCAD. This 
activity will also everage a 25 percent from Conservation 
Internatinal who has an extensive network of local partners 
in the region. 
 
¶64.  LOCAL BUY-IN: Proposals wee shared with CCAD as the 
representative agency for all the Ministers of Environment 
for the CAFTA-DR countries. This proposal is endorsed by 
CCAD. 
 
¶65.  PUBLIC DIPLOMACY STRATEGY: The activities described 
here represent some of the most visible and valued USG 
investments in the region.  By directly working with 
communities around protected areas, USAID can positively 
influence the livelihoods of thousands of individuals and 
demonstrate that free-trade agreements, environmental 
progress and income growth for the poor are not 
incompatible.  In the past, the public diplomacy 
opportunities of such programs have proven to be enormous. 
 
¶66.  Comment. Post appreciates the opportunity to provide 
input into environment TCB programs.  Regional buy-in to the 
process is of vital importance, and we believe the programs 
outlined will encourage the maximum benefit and compliance 
with the CAFTA-DR agreement.  We understand that the 
interagency group is working to obligate the funding for FY 
2006 as equitably and as rapidly as possible.  Post hopes 
 
that future project requests will provide as much time as 
possible to work with the CAFTA-DR governments, business and 
NGO communities to develop these project ideas.  We also 
wish to ensure that projects have the ability to access 
follow-on funding in future years to make sure that 
commitments negotiated within CAFTA-DR are complied 
with.  Overall compliance with the letter and the spirit of 
the FTA are our goals, and some projects will require a 
several year commitment to see them through to their 
conclusion.  We look forward to the backing of the 
interagency group for these programs. End Comment. 
 
 
Barclay