506050 - GEF Inka Terra

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Environmental Review Summary

Project Number

506050

Date ERS Disclosed

Jan 20, 2004

Country

Peru

Region

Latin America and the Caribbean

Environmental Category

B - Limited

Status

Completed

Sector

Other (For Non-Investment Projects)

Industry

Infrastructure

Department

Advisory Services

Project Description

Global Environmental Fund (GEF) financing of $725,000 will be used to catalyze the self-financing of the 10,000 hectare Inka Terra Ecological Reserve (IER) for biodiversity conservation and sustainable development for the local communities. The IER is located in the state of Madre de Dios, Peru, 15 kilometers northeast of Puerto Maldonado. The project is expected to provide a replicable model for engaging the private sector in achieving financial sustainability for protected areas. Funding with go the Inka Terra Association (ITA or the sponsor), a non-profit set up to manage the IER. The specific activities to be financed with GEF funds are:

Forest Management and Conservation Plan. The IER will be divided into usage zones based upon the ecological characteristics of each area. After carrying out considerable on-the-ground assessments, a written Forest Conservation and Management Plan will be drafted. It will detail how the reserve should be utilized (or not utilized) in each area. This program component will be developed in collaboration with the Missouri Botanical Garden (MOBOT).

Community Partnerships for Conservation & Development. The project will establish formal agreements with the four local communities concerning conservation and use of the forest. These agreements will include specific provisions for controlling and monitoring hunting, fishing, and tree cutting. They will also include support for the community in developing conservation-based enterprises:

technical assistance programs with the four local communities on crop rotation, pest control and soil management (including drainage techniques to avoid damage from flooding);
establishment of two tree nurseries in each of the four local communities;
establishment of two small-scale fish aquaculture operations in each of the four local communities;and
implementation of community-based programs to breed animals, such as chicken, ducks capybaras, and peccaries, for local consumption.

Long-Term Conservation Finance through Ecotourism Development. To ensure long-term financial sustainability of ITA’s conservation and community development activities, this project will develop four new ecotourism attractions in the 200 hectares of forest owned by Inka Terra as well as within the 10,000 hectare reserve: (i) Palm Forest Tour; (ii) Canopy Walk; (iii) Primate Rescue Center; and (iv) Giant Otter Observation Tour

Education and Training. An environmental awareness-raising program will be carried out with local stakeholders. At least four workshops on forest conservation and sustainable use will be held each year for men, women and youths who come from groups that constitute both threats and opportunities for forest conservation (e.g., colonists, loggers, teachers, unions, public officials).

Environmental and Social

The sponsor has presented plans to address these impacts to ensure that the proposed project will, upon implementation of the specific measures agreed, comply with applicable host country laws and regulations and World Bank/IFC requirements. The information about how these potential impacts will be addressed by the sponsor/project is summarized in the paragraphs that follow.

The project is focussed on the Inka Terra Ecological Reserve (IER), which is a 10,000 hectare private concession associated with the Inka Terra Peru (ITP) ecotourism company. Over the last 25 years, ITP used the concession in association with its Reserva Amazonica Lodge as an ecotourism attraction and for scientific research. The concession is now managed by the sponsor, the Inka Terra Association. At some time in the last 10 years, settlers moved into the reserve. Twenty five families now live in the reserve. They received legal title to approximately 400 hectares of land within the reserve, a title which supersede that of the sponsor. The project will not displace the current residents of the reserve.

As detailed in the description, the project seeks to curb - but not eliminate - harvesting of timber, hunting, and fishing in the reserve. The target will be to limit harvesting to sustainable levels. Current local community usage does not severely impact resources. Rather, the threat comes from gold miners and others who are not from the local communities. The project will reduce current and future use on the natural resources of the reserve through agreements with local communities that replace harvesting of wild resources with conservation-friendly activities and improved agronomic practices. The agreements will also enlist the communities in guarding against outside threats. The project will carry out this transfer using through consultation with the community, in stages, and with monitoring of livelihoods to ensure that what may be given up is replaced and that the replacements are sustainable. The sponsor has undertaken considerable consultations with the four communities in and around the IER. The activities and enterprises described in the Community Partnerships for Conservation & Development component of the project were developed in consultation with the communities.

The people in the local communities are not considered indigenous peoples within the context of this project. They are recent migrants to the area from the highlands of Peru and do not have ancestral ties to the land. They also speak Spanish as their primary language and no longer maintain ties to customary communities.

The project will not involve the conversion of natural habitat. In the development of the eco-enterprises, consulting biologists will lay out the tours in a way to balance interesting sites for observation with protection of biodiversity. The Forest Management and Conservation Plan will provide management of the IER based upon the ecological characteristics of different parts of the reserve. In short, the project will provide protection to the natural habitat.

Any solid waste generated by the project will go be carried out of the Reserve and deposited in the landfill used by the Reserva Amazonica Lodge. IFC found the landfill acceptable during its appraisal of the Inka Terra investment. ITA will ensure that the generation of domestic wastewater is minimized within the reserve by using composting toilets or other means.

The potential major impacts on the IER may come from regional impacts separate from the project and the communities participating in it. The known major threats are from road construction, which has increased illegal timber harvesting in the reserve, and artesanal gold mining, which has contaminated the local aquatic food chain with mercury. The management of the IER is planning to control illegal timber harvesting with the assistance and surveillance of the local communities. The impacts from mining will be addressed through an awareness campaign directed at the miners. The campaign will elucidate the harmful effects of mercury on the environment and will promote less harmful alternatives.

Indicators to be monitored as part of the project will include community livelihood, increases in endangered species populations, tree replanting, fish and domestic animals produced and instances of illegal logging. Local communities will participate in the monitoring program, particularly with respect to use of natural resources by both themselves and outsiders.

Conclusion & Monitoring

IFC will evaluate the project''s compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing the annual monitoring reports (AMRs) prepared for the project, which will cover ongoing performance of project-specific environmental, health and safety, and social activities as reflected in the results of periodic and quantitative sampling and measuring programs. Periodic site supervision visits will also be conducted.

This Environmental Review Summary (ERS) is prepared and distributed in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board of Director’s decision. Any documentation that is attached to this ERS has been prepared by the project sponsor or in conjunction with the project sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content. The following ERS is disclosed in accordance with IFC's Disclosure of Information Policy that went into effect September 1998.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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