VZCZCXRO6060
RR RUEHHM RUEHLN RUEHMA RUEHPB RUEHPOD
DE RUEHSJ #2071/01 3532206
ZNR UUUUU ZZH
R 192206Z DEC 07
FM AMEMBASSY SAN JOSE
TO RUEHC/SECSTATE WASHDC 9296
INFO RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHINGTON DC

UNCLAS SECTION 01 OF 04 SAN JOSE 002071 
 
SIPDIS 
 
STATE PLEASE PASS TO AID 
AID FOR SLAMPMAN, JHESTER, AND JGARRISON 
TREASURY FOR KBERG 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: SENV EAID EFIS ENRG ES XM
SUBJECT:  GREEN FUNDS MEET GREENBACKS:  REDLAC IX CONSIDERS 
PUBLIC-PRIVATE ALLIANCES 
 
REF: STATE 030914 
 
¶1.  SUMMARY:  Enterprise of the Americas Initiative (EAI) and 
Tropical Forest Conservation Act (TFCA) debt for nature funds met on 
the margins of the ninth meeting of the Western Hemisphere Network 
of Environmental Funds November 13-15.  In addition to governance 
issues, fund managers explored lessons learned through partnerships 
with the private sector, international institutions, and civil 
society.  USAID's Global Development Alliance, the AID-supported 
Gulf of Honduras Mesoamerican Reef project (MAR), and environmental 
fund experiences in Peru, Bolivia, El Salvador and Jamaica received 
particular attention.  The EAI/TFCA funds provide particularly rich 
opportunities for promoting mission ESTH and public outreach 
priorities.  END SUMMARY. 
 
¶2.  The Salvadoran Enterprise of the Americas Initiative Act (EAI)/ 
Tropical Forest Conservation Act (TFCA) Funds administrator 
Enterprise of the Americas Fund El Salvador (Fondo de la Iniciativa 
de las Americas El Salvador- FIAES) hosted the ninth meeting of 
REDLAC, the Western Hemisphere network of environmental funds, 
November 13-15 in San Salvador.  The U.S. organized a November 12 
side meeting for U.S.-backed funds founded under EAI and TFCA.  Both 
meetings focused on opportunities for promoting public-private 
partnerships with the private sector and civil society. 
 
BUSINESSES AND ENVIRONMENT FUNDS SCOUT OUT COMMON GROUND 
--------------------------------------------- ------ 
 
¶3.  AID's TFCA/EAI coordinator Scott Lampman and Global Development 
Alliance coordinator Melanie Oliviero encouraged funds to 
contemplate relationships with the private sector and other 
non-traditional partners.  Such partnerships tap changing resource 
flows - the public funds/private resources ratio for financial flows 
shifted from 70/30 to 15/85 between 1970 and 2005.  A continuum of 
environmental fund services could include managing grants, revolving 
funds, loan guarantees, green investing, micro-credit, venture 
philanthropy and market-based exchanges.  To date, AID's GDA mounted 
600 alliances with 1,700 partners, leveraging USD 5.8 billion with 
an AID investment of USD 2.1 billion.  Funds can take advantage of 
"push" and "pull" factors that encourage the private sector to seek 
out cooperation. 
 
¶4.  Risk is the chief "push" factor sparking private sector interest 
in environmental protection.  A World Business Council for 
Sustainable Development representative flagged water shortages, 
climate change, ocean overexploitation, and habitat and biodiversity 
loss as factors encouraging companies to measure and internalize 
environmental costs and benefits through cleaner production 
strategies (reducing costs by reducing inputs and wastes), 
environmental risk management processes, and triple accounting, 
which captures the industry bottom line with regard to finances, 
environment and social priorities.  The Dutch Fund for Nature 
Development's Ivo Mulder pointed to a growing interest among 
financial institutions to take into account biodiversity risks as 
businesses tap green market niches, face environmental due diligence 
concerns, and freshen their corporate image.  He cited incremental 
but groundbreaking techniques like Rabobank's scrutiny in lending of 
corporate social responsibility policies, Goldman Sach's use of 
biodiversity benchmarks, or Calvert's biodiversity criteria in 
casting proxy votes. (See www.biodiversityeconomics.org for 
"Biodiversity: The Next Challenge for Financial Institutions.") 
 
¶5.  On the "pull" side, fund activities may complement core 
operations of private sector partners (as well as religious 
organizations, remittance senders, consumer organizations, and 
international organizations), enhancing workforce development and 
competitiveness; ensuring a sustainable supply of inputs; achieving 
a more secure business environment and promoting sound environmental 
practices; boosting local economic opportunities, creating jobs and 
stabilizing local society; and improving the company's image.  Funds 
can offer expertise in grant-making; build capacity among community 
partners; convene civil society; stimulate national dialogue; and 
measure results.  The Colombian EAI Fund, the Fund for Action on 
Environment and Childhood (Fondo para la Accion Ambiental y la Ninez 
- FPAA), explored a range of examples drawn from examples in Mexico, 
Brazil and Colombia to illustrate public-private partnerships from 
philanthropy (giving) through transactional (exchange of value) to 
integrative (joint planning) cooperation with civil society. 
 
¶6.  Experiences explored in the course of the week included: 
 
--  EAI Peru (Fondo de las Americas Peru - FONDAM) entered into an 
agreement with Yanacocha Mining Company's to administer a 
state-mandated USD 31 million fund.   The deal boosted FONDAM's 
profile, honed its skills, stimulated confidence among other 
possible donors, and generated new resources. 
 
 
SAN JOSE 00002071  002 OF 004 
 
 
-- Peru's National Fund for Areas Protected by the State (Fondo 
Nacional Para Areas Protegidas por el Estado - PROFONANPE) 
highlighted its agreement with PlusPetrol Peruvian Corporation to 
establish a fund linked to the controversial establishment of a 
liquefied natural gas facility near Paracas National Park.  It will 
support implementation of a park master plan, science research, 
environmental education, and tourism. 
 
-- The Environmental Fund for Jamaica reviewed efforts to complement 
the EAI fund by recruiting partners like USAID or the UNDP GEF small 
grants program to support follow-on funding.  The Jamaican 
representative recommended educating the fund board about 
partnerships, cultivating the fund image, addressing the private 
sector in their own terms, and adding value by pinpointing 
appropriate grantees. 
 
--  El Salvador's SalvaNatura reviewed the evolution of its 
relationship with Shell, transforming a donor into a partner 
underwriting park management in El Imposible protected area and 
supporting TV shorts.  The relationship opened the door to Phillip 
Morris and Grupo El Roble support for further land purchases in 
protected areas. 
 
--  Salvadoran geothermal power producer LaGeo, whose scientific 
research defined reforestation and other mitigation priorities (risk 
reduction); whose community investment programs promoted workforce 
training and alternative crop promotion (improving labor quality); 
and whose outreach promoted environmental education and animal 
rescue centers (promoting the company image). 
 
--  Salvadoran hydro power producer CEL. Its social programs 
mitigated dam construction impact through relocation of people, 
promotion of new tourism activities and fish stock replenishment. 
It addressed risk by promoting wind and solar research, capturing 
carbon offsets and strengthening flood control and watershed 
management, and promoted cleaner production by harvesting 
soon-to-be-inundated vegetation in the dam basin. 
 
 
CREATING A SPLASH - A MARINE RESOURCES CASE STUDY 
------------------------------------------- 
 
¶7.  USAID official Barbara Best discussed protection of Gulf of 
Honduras reefs through the Meso-American Reef Project (MAR), a 
USAID-United Nations Foundation partnership implemented by the 
International Coral Reef Action Network (ICRAN - itself a UNEP 
project in cooperation of 6 NGOs) and 300 institutions in Mexico, 
Belize, Guatemala and Honduras.  Over its life, MAR administered a 
USD 1.6 million fund that benefited 1,000 direct beneficiaries on 
watershed management, sustainable fisheries and sustainable tourism 
projects.  Best focused on the Honduran lobster fishery, which is 
allegedly exporting undersized lobster in El Salvador and Panama and 
is allegedly poaching lobster in Nicaraguan waters in a way that 
places its Nicaraguan divers at risk.  Given the lack of incentives 
for collaboration among Gulf of Honduras fishermen, support from 
major buyers proved more useful than working with producer 
organizations. In this case, donors helped broker dialogue between 
the private sector and NGOs by coordinating a common "request" from 
environmentalists to industry; guiding the integration of business 
and environment needs; and convoking dialogue.  Best cited various 
lessons learned, including: 
 
-   Alliances take time and can involve high transaction costs, 
steep leaning curves, and slow confidence -building among partners. 
--  Agreements with a trade association and a particular industry 
"champion" partner can encourage broader cooperation from other 
companies. 
--  Prospects for success grow when NGO personnel are familiar with 
the industry, when the project reduces risks to human health or 
environment, or when a sector seeks to implement international 
standards to meet the scrutiny of international markets. 
--  Consultative processes boost buy-in.  Voluntary codes of conduct 
can encourage more formal rule-making as participants subsequently 
seek level playing fields. 
--  Success is marked by continuing engagement after limited 
commitments have ended. 
 
¶8.  The ALCOA Foundation, which promotes conservation and 
sustainability, global education, children's health, and community 
and business partnerships, provided further suggestions on 
approaching the private sector: 
--  Review prior projects funded by the private sector partner to 
ensure an understanding of its priorities. 
-- Describing proposed results in terms of outputs, short-term 
impact and long-term impact; 
--  Convey a project's strategy as a story and explain the onward 
strategy after funding runs out. 
 
SAN JOSE 00002071  003 OF 004 
 
 
 
BEST PRACTICES AND FUND GOVERNANCE 
---------------------------------- 
 
¶9.  Organizers of two studies on financial management and 
administrative best practices sponsored requested cooperation of the 
REDLAC funds in conducting surveys.  REDLAC expressed full 
cooperation with the study and requested a partnership with the 
study sponsors. 
 
--  Daniel Sacaccardi presented a proposal by the Conservation 
Finance Alliance, the Wildlife Conservation Society, and Common Fund 
to survey environmental fund practices and performances in managing 
monies. The Financial Benchmarking study would produce a baseline 
for environmental fund financial management and compare general 
trends in the sector, allowing for individual funds to grade 
themselves and make adjustments accordingly. 
 
--  Barry Spergel and Philippe Taieb are commissioned by the 
Conservation Finance Alliance to test the assumptions of a 1999 GEF 
Report assumptions on conservation trust funds.  The exercise will 
identify administrative best practices, develop methodologies for 
measuring the biodiversity impact of such funds, and identify 
conditions for success. 
 
¶10.  Lampman explored lessons learned during the evaluation process, 
encouraging funds to seek out new opportunities that fit their 
expertise.  These included updating strategic plans; developing 
fundraising strategies to offer services for or attract support from 
third parties; developing strategies to boost their profiles; 
rationalizing administrative costs, especially with regard to 
streamlining project awards or operational procedures; making use of 
new information technologies; and improving the measurement and 
reporting of impacts.  He considered the role of the Board, 
stressing the need to clarify areas of responsibility and ensure new 
board members are trained in Board operations. 
 
ABOUT REDLAC 
------------ 
 
¶11.  The Network of Latin American and Caribbean Environmental Funds 
(Red de Fondos Ambientales de Latinoamerica y el Caribe - REDLAC) 
counts as members of 20 funds in 14 countries in order to share best 
practices, seek out financial mechanisms and facilitate civil 
society participation.  The funds manage US 836 million in sinking 
funds, endowments and revolving funds and have financed 10,000 
projects.  Participating funds included the Environmental Foundation 
of Jamaica; the Fondo para la Accion Ambiental y la Ninez (FPAA- 
Colombia); Fondo Patrimonio Mundial (Colombia); Fondo de la 
Iniciativa para las Americas (FIAES - El Salvadaor); Fundacion 
Proteccion y Uso Sostenible del Medio Ambiente (PUMA- Bolivia); 
Fundacion para el Desarrollo del Sistema Nacional de Areas 
Protegidas de Bolivia (FUNDESNAP-Bolivia);  Fondo del as Americas 
(Peru); Fondo Nacional para Areas Naturales Protegidas por el Estado 
(PROFONANPE - Peru); Protected Areas Conservation Trust 
(PACT-Belize); Fundacion Natura (Panama); Fideicomiso para la 
Conservacisn en Guatemala; Fundacion Vida (Honduras); Suriname 
Conservation Foundation; Fondo Ambiental Nacional (Ecuador); GEF 
Small Grants Program; Fondo Brasileno para la Biodiversidad 
(FUNBIO); Fondo Nacional del Medio Ambiente (FNMA - Brazil); Fondo 
Naconal para la Conservacisn de la Naturaleza (Guatemala); Fondo 
Mexicana para la Conservacisn de la Naturaleza (FMCN); and MAR. 
U.S.-supported funds from Bangladesh, Botswana, Costa Rica, Paraguay 
and the Philippines also participated. 
 
COMMENT:  LINKING FUND AND EMBASSY PRIORITIES 
--------------------------------------------- 
 
¶12.  El Salvador's EAI/TFCA fund, FIAES, expressed an interest in 
leveraging its activities with opportunities available to Embassy 
San Salvador.  In El Salvador and elsewhere, EAI/TFCA funds can 
benefit from tools available to U.S. missions and provide public 
outreach opportunities.  REO recommends that Post ensure that 
EAI/TFCA boards are kept aware of Mission tools, public outreach 
opportunities, and project linkages.  EAI/TFCA projects are an 
excellent public outreach platform that can serve to educate Mission 
officials, bolster grassroots contacts, and burnish the U.S. image. 
Missions might consider using DVC facilities to encourage discussion 
between funds, government officials and/or U.S. experts to address 
key issues that Funds encounter as they carry out their work.  Funds 
may be a source for names of outstanding local leaders for IV and 
VOLVIS programs.  Other programs providing common ground may 
include: 
 
-- Embassy Science Fellow Program:  EAI/TFCA Funds may be grappling 
with science issues linked to prospecting, climate change 
mitigation, application of remote sensing information or geographic 
 
SAN JOSE 00002071  004 OF 004 
 
 
information systems, etc.  Posts may wish to consult with the 
EAI/TFCA funds whether the Embassy Science Fellow Program (reftel) 
could be a vehicle for making the technical expertise of a 
particular U.S. agency available to the Fund or its partners for an 
extended period of time. 
 
-- American Fellows Program (www.partners.net):  Managed by the NGO 
Partners of the Americas, the American Fellows Program offers to 
place a mid-level government official (city, provincial or regional) 
in a counterpart office for up to six months to work as part of that 
office's team - so long as the candidate speaks the language of the 
receiving country.  EAI/TFCA funds facing particular challenges in 
working with government partners may benefit from expertise derived 
from exposure to U.S. practices. 
 
--  Project GLOBE (www.globe.gov):  For countries with a Global 
Learning and Observation to Benefit the Environment (Project GLOBE) 
Agreement, it might be possible to bolster Fund activities through a 
partnership with GLOBE schools.  The program could make available to 
the Funds GLOBE tools and techniques to monitor various parameters 
relevant to forest conservation. 
 
--  Earth Day(www.earthday.gov):  It is never too early to consider 
what public outreach activities could be linked to Earth Day, 
commemorated by the U.S. on April 22.  The EAI/TFCA Funds are a 
natural partner for commemorative events like arts, music or essay 
contests, field trips for partner schools, good news stories for the 
press, or similar activities.  Embassy inquiries of fund activities 
around April 22 might identify new opportunities to which Earth Day 
events can be linked. 
 
--  Site Visits:  Funds frequently have close ties with protected 
areas managers and community organizations with sustainable tourism 
or sustainable production components.  Visits to fund-supported 
activities could boost the morale of its partners, draw local 
attention to the difference U.S. support can make, and provides an 
opportunity to check that U.S. funds are being used properly.  CLOs 
might consider whether Embassy community members might be interested 
in supporting partner organizations by visiting protected lands or 
taking advantage of recreational activities organized by EAI/TFCA 
Fund partners.  Commissaries might consider carrying crafts or foods 
prepared by Fund partners and beneficiaries.  Post recognition 
boosts the standing of the Funds and its partners and emphasizes the 
grass-roots benefits of U.S. support for host countries.  End 
comment. 
 
LANGDALE