VZCZCXYZ0025
RR RUEHWEB

DE RUEHSN #0785/01 1151318
ZNR UUUUU ZZH
R 251318Z APR 07
FM AMEMBASSY SAN SALVADOR
TO RUEHC/SECSTATE WASHDC 6018
INFO RUCPDOC/USDOC WASHDC

UNCLAS SAN SALVADOR 000785 
 
SIPDIS 
 
SIPDIS 
 
FOR OES/ENV RACHEL KASTENBERG AND BOB WING 
WHA/EPSC JUN BANDO 
USAID/LAC/RSD JOHN GARRISON 
USTR ENVIRONMENT AND NATURAL RESOURCES MARA M. BURR 
 
E.O. 12958 N/A 
TAGS: EAID ETRD SENV ECON ES
SUBJECT:  El Salvador Bilateral Project Recommendations for use of 
CAFTA-DR Environmental Cooperation Agreement FY 2007 Funds. 
 
REF: STATE 37718 
 
1) Summary:  Per reftel this cable contains Post proposals for 
bilateral projects for use of FY 2007 CAFTA-DR Environmental 
Cooperation Agreement (ECA) funds.  These proposals build on 
priorities presented by El Salvador trade and environment 
representatives during consultative meetings between CAFTA-DR 
country representatives, State/OES and USAID in March 2007.  The 
proposals also build upon work that began with FY 2006 funding.  In 
addition to these bilateral proposals, Post is sending a list of 
regional priorities in a separate cable.  For bilateral programs the 
breakdown in requested funding is as follows. 
 
Institutional Strengthening for Effective Implementation and 
Enforcement of 
Environmental Laws:      $1,180,000 
 
Biodiversity and Conservation:   $90,000 
 
Market-Based Conservation     $1,200,000 
 
Total       $2,470,000 
End Summary. 
 
Introduction 
------------ 
 
2) Posts in the CAFTA-DR countries have been requested to develop 
suggestions for trade-related labor and environment projects 
utilizing $40 million in FY2007 trade capacity building 
funds(reftel). For environmental projects, these funds will be a 
continuation of the $18.6 million of FY 2006 funds. Some of the 
projects outlined build on efforts begun with FY 2006 funds.  All 
the bilateral projects contained in this cable follow Department of 
State guidance that the projects be trade enhancing. Implementation 
of these projects will allow El Salvador to raise environmental 
enforcement standards, allowing greater public access to information 
and greater investor confidence. As a result of history, geography, 
and population, El Salvador faces many more "brown" issues than 
"green" issues and the projects outlined in this cable attempt to 
address these issues in a balanced manner. Post urges that when 
project decisions are made, El Salvador's unique environmental 
challenges be taken into account. 
 
3) With FY 2006 funds now in place and work commencing on selecting 
projects for FY 2007 funds, Post requests that the Department keep 
in mind the number of projects initiated in FY2006. Due to 
congressional reporting requirements, each of these projects needs 
management and oversight, the levels of which do not differ greatly 
depending on the size of the project.   The funds for FY2006 were 
allocated across many elements. Many elements received low levels of 
funding, but still implied a significant management burden on posts. 
Therefore, in order to maximize the use of funds to support our 
partner nations, Post requests a smaller number of total projects, 
each being funded more fully, thereby minimizing overhead costs. A 
more targeted approach to the projects will also ease implementation 
by allowing agencies in the field to concentrate on the management 
of fewer projects and focus on key priorities with the partner 
countries. A planned, targeted approach also is easier to justify to 
Congress. 
 
El Salvador Bilateral Proposals 
------------------------------- 
 
 
¶I.  Institutional Strengthening for Effective 
Implementation and Enforcement of Environmental Laws 
--------------------------------------------- -------- 
 
4) PURPOSE:  This activity will strengthen the ability of El 
Salvador to develop sound environmental regulations and policies and 
effectively enforce existing environmental legislation.  Developing 
and enforcing sound environmental regulations will provide El 
Salvador with an environment attractive to investors.  When combined 
with planned regional programs, this activity will ensure that El 
Salvador does not provide perverse incentives to investors due to 
lax environmental standards or enforcement.  This was the number one 
priority identified during the negotiation of the Cooperative Work 
Program.  It has remained a priority for all countries as evidenced 
by the country presentations at the March 2007 CAFTA-DR 
environmental meeting in San Salvador 
 
5) DESCRIPTION AND JUSTIFICATION:  El Salvador has a relatively new 
Ministry of Environment that is working hard to develop and 
implement regulations across a broad spectrum of priorities. The 
programs outlined here will proactively engage the private sector, 
establish regulations for environmental permitting (including the 
 
administrative procedures for receiving permits), codify the 
sanctions for breaking environmental regulations, and allow for the 
proper management of dangerous and toxic substances.  Long term 
results will be an improvement in environmental standards, 
enforcement of environmental regulations, and a more transparent 
investment climate. 
 
6) EXPECTED RESULTS: 
 
-  Prepared guidelines for administrative and sanctions/fines 
procedures. 
 
-  Establishment of a manual of procedures for processing 
environmental permits. 
 
-  A final draft bill prepared for the management of agricultural 
and industrial chemicals. 
 
-  Establishment of an operational management information system for 
toxic and dangerous chemicals within MARN. 
 
-  20% reduction in operational costs for firms using cleaner 
production procedures. 
 
-  Establishment of three clean production agreements with private 
firms. 
 
-  Cleaner production technologies research and benefits identified 
and publicized. 
 
-  Increase in access to and number of products available in the 
market resulting from cleaner production. 
 
-  Establishment of an environmental evaluation system, including 
land cover and land use mapping capability. 
 
-  100 persons trained in environmental evaluation. 
 
-  Evaluation manuals developed for sectors identified with high 
environmental impact. 
 
-  Five Municipal Environmental Units established. 
 
-  Establishment of a public contact office within MARN for the 
receipt and processing of public complaints. 
 
SPECIFIC ACTIVITIES: 
-------------------- 
 
Strengthen legal and institutional frameworks ($90,000) 
 
7) El Salvador needs to improve its monitoring and enforcement of 
its environmental laws.  Based on GOES priorities, CAFTA-DR FY 2007 
resources will focus on 1) improving administrative and sanctioning 
procedures; 2) developing procedures manual for processing 
environmental permits; 3) drafting laws for the 
management/use/prohibition of agricultural and industrial chemicals, 
and 4) establishing a Management Information System for controlling 
the use of dangerous and/or toxic substances.  These actions will 
provide the teeth that El Salvador needs to ensure businesses and 
individuals comply with environmental regulations.  It will also 
create a transparent mechanism for environmental impact assessments 
and their authorization.   This project will directly support ECA 
work plan priorities 1.1.2, and 1.1.3. 
 
Promote industrial competitiveness and environmental compliance 
through cleaner production.  ($700,000) 
 
8) By leveraging ongoing work being undertaken by the Comision 
Centroamericana de Ambiente y Desarrollo (CCAD) in the region, 
private sector firms in El Salvador will be able to increase 
productivity by adopting cleaner production techniques.   Efforts 
will focus on voluntary clean production agreements, whereby firms 
invest in newer, cleaner technologies in order to reduce firm 
production costs.  The use of voluntary clean production agreements 
will also enhance the ability of MARN to verify compliance with 
pollution regulations.  This project supports ECA work plan 
priorities 3.1.1, 3.1.2, and 3.1.3. 
 
Establish an environmental evaluation system ($220,000) 
 
9) El Salvador includes ecosystems that span the range from mountain 
cloud forests to mangrove estuaries along the coast.  The GOES lacks 
the ability to efficiently review potential impacts, either from 
small enterprises or large state programs.  Sectors that potentially 
produce high environmental impacts such as agriculture are a 
particular concern and need established evaluation criteria.  For 
 
instance the GOES is considering expansion of sugar cane production 
as a source for biofuels production.  Furthermore, the GOES cannot 
systematically assess the impact of proposed land use patterns given 
the lack of a central database.  By establishing an environmental 
evaluation system, El Salvador will be able to make informed, 
science based decisions.  This project will support ECA work plan 
activities 1.1.4 and 1.1.5. 
 
Improve public information and participation ($170,000) 
 
10) As part of its obligations under CAFTA-DR, El Salvador is 
required to ensure public participation in the environmental 
complaints process.   This is one of the most important tenets in 
promoting and maintaining a participatory democracy.  El Salvador 
has established a public information office within MARN.  This 
activity will improve public diffusion of environmental management 
information.  In addition to efforts at a national level, MARN will 
push for the development of Municipal Environmental Units to better 
respond to needs at the local level.  This project will support ECA 
work plan activities 1.2.1, 1.2.2, and 1.2.3. 
 
11) NEW/PREVIOUS WORK:  In September 2005, the President of El 
Salvador launched an effort to promote greater competitiveness with 
an emphasis on the industrial sector.  The Ministry of Economy 
(MINEC) has taken the lead in implementing the National Cleaner 
Production Policy that focuses on the development of economic 
incentives for cleaner production and the promotion of voluntary 
agreements to improve environmental compliance.  In addition, MINEC 
has developed a Technical Assistance Fund to promote the adoption of 
energy efficiency and cleaner production practices.  USAID also 
funded CAFTA environment public awareness promotion efforts that 
included the development and mass distribution of a background 
pamphlet explaining CAFTA requirements and also provided support to 
a technical library for the Ministry of the Environment. 
 
12) ESTIMATED COST:  The estimated cost of the four components 
described above is $1,180,000. 
 
13) LOCAL BUY IN:  CAFTA-DR Article 17.4 establishes the need for 
flexible voluntary mechanisms to improve environmental performance. 
CAFTA-DR governments have recognized cleaner production as a key 
priority for cooperation in Sections 1.1.9 and 4 of the ECA Work 
Plan.  These activities respond directly to the top priorities 
established by the GOES at the April 2007 CAFTA-Dr environment 
meeting in El Salvador.  USAID worked with MARN in series of formal 
work sessions to refine El Salvador's CAFTA-DR priorities.  USAID 
prime counterpart was MARN's Office of International Cooperation and 
its director, Rina de Jarqun. 
14) PUBLIC DIPLOMACY: These activities will provide many 
opportunities to highlight USG efforts to ensure the success of 
CAFTA-DR and help El Salvador comply with Chapter 17 commitments. 
 
II. Biodiversity and Conservation 
--------------------------------- 
 
15)  PURPOSE: This activity will strengthen the ability of El 
Salvador to effectively implement CITES agreement responsibilities 
and ensure existing Salvadoran wildlife conservation laws are 
consistent with CITES.  It will also improve interagency 
coordination on CITES issues. 
 
16) DESCRIPTION AND JUSTIFICATION:   Illegal trafficking in wildlife 
species is widespread throughout Central America, but El Salvador's 
current capacity for complying with CITES requirements is weak. 
Existing Salvadoran wildlife conservation laws and regulations were 
established prior to CITES and are not always consistent with CITES 
standards.  When it comes to enforcement actions, interagency 
communication and coordination is generally poor.  The GOES has 
proposed the establishment of an inter-institutional committee of 
Ministry personnel and law enforcement entities to meet CITES 
commitments.  The GOES is also exploring the creation of a 
centralized service for keeping and rehabilitating rescued wildlife. 
 Lastly, the GOES currently does not have any policy tools that 
permit effective management of invasive or exotic species. 
 
17)  EXPECTED RESULTS: 
 
-  El Salvador's current wildlife regulation framework will be fully 
reviewed and inconsistencies with CITES identified and appropriate 
national changes made. 
 
-  40 officials from customs, police, and attorney general offices 
trained in CITES enforcement.  Appropriate government institutions 
will understand their role in implementing wildlife conservation 
laws and coordinate actions effectively. 
 
-  An effective wildlife rescue center will be operating. 
 
 
-  Policy changes will permit the effective management of exotic 
species. 
 
18) US POLICY OBJECTIVES: As signatories to CAFTA-DR, participating 
countries are required to comply with existing environmental laws, 
regulations and/or agreements.   Furthermore, as signatories to 
CAFTA-DR, countries are required to implement and improve compliance 
with multilateral agreements to which they are a party.  This 
project will address three activites identified in the ECA work plan 
as follows: 
 
19) Activity 1.3.1. Strengthen capacity for national implementation 
of CITES, RAMSAR, the Montreal Protocol and other relevant MEA's to 
which we are all Party, including by disseminating procedures for 
their implementation and undertaking public awareness campaigns. 
 
20) Activity 1.3.2. Provide training and capacity building to 
Scientific and Management Authorities, Customs authorities and 
national police to enhance implementation of CITES. 
 
21) Activity 1.3.3. Develop programs and projects to provide 
economic instruments to protect wildlife at the regional and 
national levels. 
 
This project meets the requirements under the Natural Resources and 
Biodiversity and Clean Productive Environment Elements of the Joint 
State/USAID Framework. 
 
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, NOAA, DOC, NASA) 
and other organizations.  Thanks to USAID's early work with EPA and 
CCAD, effective environmental laws and regulations were developed 
and most of the Environment Ministries in the region were created. 
USAID successes include the framework regulation for waste water, a 
regional manual for environmental inspections, and the harmonized 
administrative procedures for sanctions for environmental crimes. 
 
23) ESTIMATED COST: The estimated cost of this activity is US 
$90,000. 
24) LOCAL BUY IN:   This project was developed in close consultation 
with El Salvador's Ministry of Environment.  It is one of the top 
three priorities of the GOES. 
25) PUBLIC DIPLOMACY:  This activity would provide a venue to 
increase the visibility of USG efforts to promote wildlife 
conservation within El Salvador and El Salvador's commitment to 
comply with CITES requirements. 
 
III.  Market based conservation in Montecristo National Park 
--------------------------------------------- ---------- 
 
26) PURPOSE:  This activity will improve El Salvador's capacity to 
effectively manage biodiversity and natural resources within GOES 
priority protected areas.  Management capacity includes the ability 
to identify and prioritize biodiversity threats, the establishment 
of effective interventions that both conserve eco-systems, ability 
to generate revenue from protected areas, and ability to monitor 
results.  This is one of El Salvador's top three priorities. 
 
27) DESCRIPTION AND JUSTIFICATION:  Montecristo National Park is one 
of El Salvador's most important national parks and natural areas. 
This park, in the far northwest of the country, borders Guatemala 
and Honduras. Possessing mountain tropical forest and pine-oak 
woodlands, it is one of the jewels in the Salvadoran protected area 
system.  But the park is under pressure from threats that include 
human encroachment, poor management practices, and a lack of 
conservation incentives for surrounding communities.  The Ministry 
of the Environment currently manages park operations.  Tourism, now 
very limited, has great potential for revenue generation. 
Opportunities for local residents to engage in revenue-creating 
conservation activities (guide services, retail sales, etc.) are 
needed.  Considerable scope exists for alliances with private sector 
tourism operators and local businesses. 
 
28) EXPECTED RESULTS: 
 
-  Enhanced park budget though allocation to the park of a portion 
of park visitor and concession fees. 
 
-  Improved park infrastructure that minimizes potential negative 
environmental impact from construction and/or increased tourism. 
 
29) 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 activities that include: 
 
30) Activity 3.2.1.  Improve visitor infrastructure and services to 
increase tourism while better protecting the resources. 
 
31) Activity 3.2.2.  Promote alternative livelihoods based on 
sustainable resource use for communities within and near protected 
areas. 
 
32) Activity 3.3.1.  Promote activities directed towards 
strengthening the capacity of the Region to identify, produce and 
trade in environmental goods and services. 
 
33) This project fits under the Economic Growth Objective, 
Environment Program Area.  It meets the requirements under the 
Natural Resources and Biodiversity Element of the Joint State/USAID 
Framework. 
34) NEW/PREVIOUS WORK: USAID is currently implementing a 
biodiversity conservation project with similar goals within the 
western region of the country (an area that does not include the 
area described in this project).  USAID received $600,000 in FY 2006 
CAFTA-DR funds to advance biodiversity and conservation goals under 
this project.  USAID has considerable experience working on tourism 
and sustainable management of natural resources in the region.  This 
project complements World Bank efforts to create ways to create 
revenues for environmental services and the Interamerican 
Development Bank tourism initiative. 
35) ESTIMATED COST: The estimated cost of this activity is 
$1,200,000. 
36) LOCAL BUY-IN: This is a top priority of the GOES.  The Minister 
of Environment personally asked the U.S. Ambassador to El Salvador 
for assistance in carrying out the activities described here. 
Furthermore, during the March 2007 CAFTA-DR environment meeting, El 
Salvador representatives endorsed continuing work in trans-boundary 
watersheds such as Trifinio (Guatemala, El Salvador, Honduras) which 
includes Montecristo National Park. 
 
37) PUBLIC DIPLOMACY: The activities described here represent some 
of the most visible 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 and benefits of such programs have 
proven to be enormous. 
 
Glazer