Document of

The World Bank

FOR OFFICIAL USE ONLY

,;A/ 3 LI 3 - / A/ /tReport No.8603-IND

STAFF APPRAISAL REPORT

INDONESIA

SECOND FORESTRY INSTITUTIONS AND CONSERVATION PROJECT

JUNE 5, 1990

Country Departmant VAsia Regional Office

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CURRENCY EQUIVALENTS(As of March 1990)

Currency Unit - Rupiah

$1.00 = Rupiah (Rp) 1,795Rp 1 million - $557

FISCAL YEAR

April 1 - March 31

WEIGHTS AND MEASURES

1 kilometer . 0.62 miles (mi)1 square kilometer (km2 ) - 100 ha - 0.39 sq. miles1 hectare (ha) - 2.47 acres (ac)1 kilogram (kg) - 2.2 pounds (lb)1 metric ton (ton) = 1.10235 short tons (2.000 lbs)

0.9843 long tons (2,240 lbs)1 cubic meter (cu m) - 35.3 cubic feet

INDONESIAN FIVE-YEAR PLANS

Repelita V - Fifth Five-Year Plan, 1989-94

ABBREVIATIONS

BAPPEDA - Provincial Level Planning AgencyBPKP - Directorate of State AccountancyDBH - Diameter at Breast HeightDepartemen - Department, synonymous with Ministry in IndonesiaFICP I - Bank assisted Forestry Institutions and Conservation I ProjectGOI - Government of IndonesiaGOJ - Government of JapanHPH - Concession AgreementITTO - International Tropical Timber OrganizationIUCN - International Union for Conservation of NatureMAI - Mean Annual IncrementMOF - Ministry of ForestsPH - Directorate General of Forest UtilizationPHPA - Directorate General for Nature ConservationPPIU - Project Planning and Implementation UnitPP - Presidential Directive for Implementing StatuteTFAP - Tropical Forestry Action PlanRRL - Directorate General for Soil Conservation and RehabilitationTGHK - Consensus Forest Land Use PlanUUPK - Basic Forest Law (UU No. 5/1967)UU - Statute (Undang-Undang)

FOR OFFICIAL USE ONLY

INDONESIA

SECOND FORESTRY INSTITUTIONS AND CONSERVATION PROJECT

Table of Contents

Page No.

1. INTRODUCTION .... . . . . . . . . . . . . . . . . . . . . . 1

II. THE FORESTRY SECTOR . . . . . . . . . . . . . . . . . . . . . 1

Role in the Economy .1... . . . . . . . . . . . . . . . . IForest Resources . . . . . . . . . . . . . . . . . . . . . . IForestry Planning and Management . . . . . . . . . . . . . . 2Processing. Markets and Exports . . . . . . . . . . . . . . 6Fiscal Policy. 7Forestry Products Trade Policy . . . . . . . . . . . . . . . 8Sectoral Problems and Constraints . . . . . . . . . . . . . 9Government's Sectoral Objectives and Strategies . . . . . . 11

III. DANK INVOLVEMENT IN THE SECTOR AND LESSONS LEARNT . . . . . 12

Bank Involvement in the Sector . . . . . . . . . . . . . . 12Lessons Learn from Previous Forestry . . . . . . . . . . . . 13Rationale for Future Bank Involvement and Proposed Strategy 13

IV. THE PROJECT ..... . .. . . . . . . . . . . . . . . . . 14

Project Objectives and Strategy . . . . . . . . . . . . . . 14Project Description . . . . . . . . . . . . . . . . . . . . 14Concession Management and Inspection . . . . . . . . . . . . 15Reforestation (Forest Plantations) . . . . . . . . . . . . . 16Forestry Research .17Conservation .17Policy Advisory Service .18Role of Women . . . . . . . . . . . . . . . . . . . . . . . 18

V. PROJECT COSTS AND FINANCING . . . . . . . . . . . . . . . . 19

Project Costs .19Financing .19Procurement .21Disbursements .22Accounting and Audits .23

This report is based on the findings of an appraisal mission comprising ofMessrs. T.P.N. Sinha, Orhan Baykal, Colin Rees, and Wawan Mulyawan whichvisited Indonesia in March/April 1990. Mr. Akihiko Nishio also assisted inthe preparation of the report.

This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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Page No.

VI. ORGANIZATION, MANAGEMENT AND IMPLEMENTATION . . . . . . . . 23

Coordination . . . . . . . . . . . . . . . . 23Forest Concession Management . . . . . . . . . . . . . . 23Reforestation . . .. . . . . . . . . . . . .. . . . . 23Forestry Research . . . . . . . . . . . . . . .. . . . . 24Conservation . . . . . . . . . . . . . . . . . . . . . . . . 24Policy Advisory Service .... . . . . . . . . .. . .. . 24Project Implementation Plans and Status . . . . . . . . . . 24Monitoring and Evaluation . . . . . . . . . . . . . . . . . 24

VII. PROJECT IMPACT . . . . . . . . . . . . . . . . . . . . . . . 25

Benefits/Cost Effectiveness of InstitutionalStrengthening Components .... . . . . . . . . . . . . . 25

Project Risks . . . . . . . . . . . . . . . . . . . . . . . 27

VIII. AGREEMENTS REACHED AND RECOMMENDATION . . . . . . . . . . . 27

TABLES IN THE TEXT

Table 5.1 Project Costs Suwmary .. . . . . . . . . . . . 19Table 5.2 Financing Plan . . . . . . . . . . . . . . .. . . . . . 20Table 5.3 Procurement Arrangements ... . . . . . . . . .. .. . 20

ANNEXES

Annex 1 Progress of FICP I (Loan 2930-IND)Annex 2 Forestry Policy MatrixAnnex 3 Concession Management - Terms of ReferenceAnnex 4 National Master Plan for Plantations Component

- Terms of ReferenceAnnex 5 Research Component - Terms of ReferenceAnnex 6 National Parks Investment Consultants - Terms of ReferenceAnnex 7 Project Costs and DisbursementAnnex 8 Organization ChartAnnex 9 Implementation ScheduleAnnex 10 List of Related Documents and Data Available in the Project File

MAP: IBRD 22351

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INDONESIA

SECOND FORESTRY INSTITUTIONS & CONSERVATION PROJECT

LOAN AND PROJECT SUMMARY

Borrower t Republic of Indonesia

Beneficiary s Not applicable

Loan Amount : $20.0 million equivalent

Terms : Repayable in 20 years, including 5 years of grace, atthe Bank's standard variable rate.

Project Description s The main objectives of the proposed project are toreduce tha pace of deforestation and to sustain andmaximize the long-term benefits from Indonesian forestresources by addressing critical needs in the areas ofconcession management, resource mobilization from theforestry sector, nature conservation, reforestation ofdegraded lands, and technology development to supportsectoral programs. The proposed project consists of(a) strengthening of inspection, monitoring andsupervision of concessionaires logging activities onabout 50 million ha of production forests to improverevenue collection and ensure compliance withenvironmental regulations of the Government;(b) development of a master plan, formulateincentives, evaluation criteria and supervisionsystems for reforestation activities on about 10million ha degraded lands to increase the efficiencyof GOI's program for reforestation; (c) development ofa national forestry research station for EasternIndonesia in Irian Jaya and prepare a forestryresearch master plan; (d) with active participation oflocal people, development of plans and models forconservation and multi-sectoral sustainable use ofmangrove resources, and for the improved management often national parks; and (e) provision of a high-leveland experienced adviscz and short-term experts for theMinister of Forestry to assist with strategic planningand policy review and implementation.

Benefits and risks s Economic and environmental benefits are expected from:(a) improved forestry management leading to asustained longer-term production from the forestrysector; (b) improved resource mobilization from thesector for national and sectoral development; (c) moreefficient investment planning and selection whichwould reduce investment costs while increasingbenefits; and (d) more effective conservation ofIndonesia's valuable tropical rain forest resource.

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The main project risk would be the innovative natureof the concession management component whereinspection agencies from the private sector would beengaged to assist the Government in improving revenuecollection and compliance with environmentalguidelines. While a similar approach has been usedfor customs in Indonesia, this would be the firstapproach in the forestry sector. The risk will beminimized by keeping project size small and startingwith only three provinces initially. The benefits/costs of the new system would be carefully monitoredand evaluated and the system will be expanded onlyafter positive results are convincingly demonstrated.There might be some delays in completing theconservation plans thtt reflect adequately the viewsand needs of local people. The Government will enlistthe assistance of the NGO community to facilitate thedialogue on these plans.

Estimated Costs: /aLocal Poreign Total-----*$ million) -------

Research 5.6 4.0 9.6Concession Management 6.5 4.2 10.7Reforestation 1.4 1.9 3.3Conservation 1.1 1.4 2.5Policy Advisory Service 0.2 0.8 1.0

Total Base Costs 14.8 12.3 27.1

Physical Contingencies 1.2 0.8 2.0Price Contingencies

2.4 1.6 4.0

Total Costs 18.4 14.7 33.1

/a Inclusive of duties, taxes and reserved procurement amounting to$4.4 million equivalent.

Financing Plan.

Local Foreipn Total-- ($ million) -------

Government 10.8 1.0 11.8Japanese Grant Facility 0.3 0.2 0.5ITTO 0.0 0.8 0.8IBRD 7.3 12.7 20.0

Total 18.4 14.7 33.1

Disbursements

1991 1992 1993 1994 1995-(--------------- million) ---------------

Annual 2.5 3.5 5.0 5.0 4.0Cumulative 2.5 6.0 11.0 16.0 20.0

Hap: IBRD 22351

INDONESIA

SECOND FORESTRY INSTITUTIONS AND CONSERVATION PROJECT

I. INTRODUCTION

1.1 This report appraises the proposed Second Forestry Institutions andConservation Project in Indonesia. The project was identified in October1989, and prepared by the Government between November 1989 and February 1990with some assistance from the Bank. Project preparation vas completed inFebruary 1990 and the Project was appraised in Harch 1990. This reportsummarises the findings and conclusions of the appraisal mission.

II. THE FORESTRY SECTOR

Role in the Economy

2.1 Indonesia is well endowed with forest resources which cover morethan half of its land area, and constitute the world's second largest area oftropical forests after the Amazon. Forestry activities account for less than3 percent of GDP in current prices and employ some 0.5 million persons, butthe sector is much more important in export trade where it contributes$3 billion per annum (over 25 percent) to the non-oil exports and is currentlythe most important source of such exports. Contribution of royalties andfees from the forestry sector are estimated at about Rp 630 billion($350 million) in 1989. Forest products provide most of rural energy needsthrough firewood and charcoal, and housing construction material. Indonesianforests are also important ecologically, constituting one of the world's mostbiologically diverse areas with more than 500 species of mammals, 1,500species of birds, and 10,000 species of trees. These forests play asignificant role in protecting Indonesia's watersheds, preventing soil erosionand ensuring a sustained flow of irrigation and drinking water for downstreampopulation.

Forest Resources

2.2 Size. Indonesia's forest area is variously estimated at between 100and 114 million ha. Precise resource data are not available and this has beena most significant constraint on planning and the management of the sector.Improved resource assessment was initiated under the Bank-assisted ForestryInstitutions and Conservation I Project (FICP I, Loan 2930-IND of April 20,1988) and preliminary indications are that the forest area is at the lower endof the 100 to 114 million ha range.

2.3 Natural Forests. Indonesian forests have been classified into sixmajor forest types, of which the tropical rain forest is the most significant,covering three quarters of the forest area. This consists mainly of timberspecies of the Diptocarpaceae family, in particular Shorea (Meranti),Dipterocarpus (Keruing), Hopea (Merawan) and Dryobalanops (Kapur). Theseforests, particularly in the Western Indonesian archipelago, are rich in

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commercial species which average 50 to 90 cu m per ha, at diameter (DBH) above50 cm, out of a total volume of about 260 to 300 cu m per ha for all species.The average annual growth in the volume of commercial species in naturalforests is currently estimated at 1.1 cu m per ha. Indonesia's naturalforests are subdivided into four usage/conservation categories (para. 2.7), ofwhich the production forests account for about 44 percent. These forests havethe potential, if properly managed, to produce 25 to 50 million cu m per annumon a sustainable basis, and to support $3 to 4 billion per annum in exports.However, this considerable resource and export potential is threatened becauseof several sectoral problems (para. 2.20).

2.4 Plantations. Indonesia has a long history of forest plantationswhich were started in the 19th century. Currently the total area ofplantations is estimated at around 1.8 million ha, about half of which ismainly teak. The balance are fast growing species suitable for pulpwood, andwith some work on tree improvement they could perhaps produce rough lumber andplywood veneer logs for plywood cores. Under the current five year plan,Repelita V, GOI has an ambitious plan to increase forest plantation area by1.5 million ha. Progress in meeting this target has been poor so far. TheGovernment's policy is to encourage establishment of forest plantations onlyon the already deforested and degraded lands which total more than 20 M ha.However, not all such lands are suitable for plantations because of poorsoils, infrastructure and land tenure problems and careful selection of sitesis essential. To encourage reforestation of these lands, GOI wishes to giveincentives through fiscal policy measures, land lease arrangements, andimproved resource information and analysis. A presidential regulation,PP7/1990 of March 16, 1990 will give a right to plantation production, HPHTI,for 35 years renewable up to 70 years and encourages increased private sectorparticipation. Within this improved policy framework, the proposed projectwill assist in improving resource information, analysis, and supervision.

2.5 Location. Over 95 percent of Indonesian forests are in the sparselypopulated Outer Islands, with the islands of Kalimantan, Irian Jaya andSumatra accounting for most (over 80 percent) of the forest area. Productionforests in Kalimantan and Sumatra are the richest in commercial hardwoodspecies, and they account for over 75 percent of Indonesia's productionpotential for logs of commercial species.

Forestry Planning and Management

2.6 Institutions. The Basic Forestry Law (UUPK) of 1967 gave theauthority over Indonesian forests to the Ministry of Agriculture and Forests.In 1983, the Ministry was split and a separate Ministry of Forests (MOF) wasformed with the authority to plan and manage Indonesia's forestry sector. TheMinistry has Directorates-General responsible for forest utilization, forestrehabilitation and soil conservation, and nature conservation. It also hassupport agencies for research and inventory, and a Secretariat-Generalresponsible for planning, budgeting and manpower development. MOF employsabout 17,000 persons, most (60 percent) of whom are in the Directorate-Generalfor Reforestation and Land Rehabilitation. The responsibilities and staff ofMOF have increased rapidly, and there is an urgent need to strengthen MOF'scapacity by establishing appropriate policies and procedures for forestmanagement, by increasing its information, planning and monitoring capacity,and by staff training and in-service experience. Under FICP I, a human

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resource development plan is being prepared and will be ready by the end of1991.

2.7 Forestry Planning Policy. HOF has prepared a Consensus Forest LandUse Plan (TGHK) for each province, classifying forest lands into the followingfour categories:

(a) Protection forest, which accounts for 30 million ha (21 percent offorest lands), has been set aside for the protection of criticalwatersheds, and to prevent soil erosion logging is not permitted inthese forests;

(b) Conservation forest, which accounts for 19 million ha (13 percent),has been set aside to protect biological diversity of flora andfauna, and in these areas also logging or hunting is not permitted;

(c) Production forest, which accounts for 64 million ha (44 percent),has been allocated for forestry production and the major portion(over 53 million ha) of this is under forestry concessionarrangements (para. 2.10), managed typically by the private sectorunder MOF regulations and supervision; and

(d) Conversion forest accounting for 31 million ha (22 percent) has beenallocated for agricultural production, and accordingly in theseareas clear felling of trees and conversion to agricultural usage ispermitted.

2.8 Forestry Land Use Plans. Though the forestry land use policy issound in that it recognizes the multiple role of forest lands, includingconservation and protection needs for which one-quarter of Indonesia's landarea (a third of the forest area) has been set aside, the implementation ofthis policy and resulting TGHK forestry land use plans need to be improved.The TGHK plan was prepared by consensus between Provincial Agriculture,Forestry, Lands (Agraria), Public Works, Planning (BAPPEDA) and Transmigrationagencies, but was based on out-dated maps and poor forestry and lano resourceinformation. FICP I is updating forest resource information for areas underforest. For the degraded and deforested areas, base maps, soil, land systemsand land use data has been collected under the Bank-assisted Transmigration VProject (Loan 2578-IND) and the ADB-assisted Land Resource Evaluation andPlanning Project. This information now needs to be used for better planningof reforestation activities.

2.9 Production Forest Management - Production. The utilization ofproduction forests increased rapidly between 1968 and 1979, and log productionincreased from a level of 5.2 million cu m to 25.3 million cu m, at the rateof 15 percent per annum. Since then, log production has fluctuated in the 13to 37 million cu m range in response to export demand and trade policy(para. 2.16). The forests also produce a range of secondary forest productsincluding rattan, fuel, wood/charcoal, silk, turpentine and resins. Of theserattan is commercially the most significant with a production of about 40,000tons in 1985.

2.10 Production Forest Management - Concession Agreement. While allforest lands are owned by the State, the extraction, processing and sale of

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logs from the forests is done mainly by the private sector under forestconcession arrangements. The concessions are granted by MOF for a minimumarea of 35,000 ha and a maximum period of 20 years. Forestry concessionscover 83 percent of production forest area (53 million ha) with anaverage area of about 100,000 Oa per concession. The concession agreement andGovernment regulation obliges the concessionaire tos

(a) Conduct a forest resource survey and a feasibility study for theextraction of logs and processing activities (if any);

(b) Implement measures for forest protection;

(c) Respect rights of indigenous tribal population for collection offorest products for their own consumption;

(d) Prepare annual operational plans, along with five year and 20 yearmanagement plans that are acceptable to GOI;

(e) Prepare environmental impact assessment (EIA) for areas to be loggedand to take mitigation measures where adverse impact is anticipated;

(f) Follow MOF guidelines for log extraction, which in line with MOFDecree of 1981, allows extraction of trees with minimum diameter(DBH) of 50 cm, leaving behind at least 25 trees per ha ofcommercial species with DBH more than 20 cm to act as seed trees fornatural regeneration;

(g) Restock forest through enrichment planting of commercial speciesafter logging;

(h) Mark boundaries and develop suitable forest roads; and

(i) Post a performance bond to guarantee compliance.

2.11 Production Forest Management - Performance. In practice theimplementation of forest management policy and the compliance with the aboveconcession agreement regulations have been poor. MOP has recently been moreaggressive in taking actions to fine concessionaires and cancel concessionagreements when wrong doing by concessionaires is discovered. Also forenvironmental reasons, MOF has announced a policy to restrict logging innatural forests to a level not exceeding 32 million cu m per annum. To ensurecompliance with improved and environmentally oriented policies of MOF, andalso to sustain Indonesia's export oriented wood industries, the monitoringand control of logging activities in production forests has to bestrengthened. The proposed project would assist with this.

2.12 Conservation Forest Management. Though Indonesia has classified athird of its forest area, some 49 m ha, as protection and conservation forest,these areas are coming under population pressure. The construction of newroads is bringing larger areas of the previously inaccessible forest withinreach of settlers. Consequently, settlers are increasingly encroaching onconservation areas. Even where adequate legal instruments exist for thecontrol of encroachment, they are either not enforced or only partiallyapplied since they conflict with local or traditional customs. These problems

could result in irreparable losses to both Indonesia and the world communityat large. New approaches are required and PHPA needs to strengthen itsrelationship and services to the population in areas around the natureconservation areas, for instance, by creating buffer zones for the benefit ofthe local population. This will create incentives for them to preventencroachment. PHPA should also cooperate with local and internationalscientists to monitor and study rare and endangered species in these areas,e.g. Komodi lizard in NTT, Bali starling in Bali Barat, and Orang Utan,Sumatran tiger, and rhinoceros in Sumatra, so that it is better able torespond to any emerging problems threatening their survival. For creatinggreater awareness, appreciation and support for nature conservation inIndonesia, PHPA should strengthen its services and facilities for localtourists at those national parks that are close to population centers in Javaand Bali. Management plans for these activities have now been developed forthe highest priority areas with help from FAO/IUCN, but architectural anddetailed design work for support facilities have not been integrated with themanagement plan. In many cases, excessive construction activities areplanned. Management plans and facility designs for national parks need to bereviewed with a view to scaling down plans for facilities construction, inline with carrying capacity of the national parks and the availability ofoperation and maintenance funds. The proposed project will assist in thereview and revision of existing plans before new facilities are constructed.

2.13 Protection Forest (Watershed) Management. Owing to populationpressure, deforestation and increased cultivation of annual crops on steepslopes, Indonesia is increasingly facing problems of soil erosion, lose ofproductivity of agricultural land, siltation of river basins and dams,flooding, and consequent environmental and economic degradation. The problemis most severe in Java, but is also accelerating in the Outer Islands. GOI,with UNDP assistance, has identified 81 watersheds of which 39 are consideredpriority areas, and of these 22 are considered to be in a highly criticalcondition. The conservation of watersheds poses a difficult problem. It isdifficult to resettle population from the critical slopes. However, agro-forestry activities that are financially viable and ecologically appropriate,are limited and have to be developed through location-specific adaptiveresearch. While appropriate recommendations have been developed for severalareas in Java, further research in the Outer Islands will be required.Support for agricultural activities in several of these watersheds has beenprovided by USAID and the Bank, in particular under the Upland AgriculturalDevelopment Project (Loan 2474-IND) and FICP I. Experience with theseactivities have shown the importance of inter-agency co-ordination,strengthening technical support and involving farmers in decision making.Further support for watershed conservation activities is planned under theproposed National Watershed Conservation and Management Project (FY93) forwhich GOI intends to seek Bank assistance after completion of projectpreparation.

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Processina, Markets and Exports

2.14 Mechanical Wood Processing. Indonesia's wood processing industry isdominated by sawmilling and panel products industries, which together produceabout 17 million cu m per annum of processed wood products, with sawmillsproducing about 10 million cu m per annum. The main problem in the sawmillingindustry is the low economic viability of some mills (30 to 40 percent of thetotal) that are running at below 50 percent capacity utilization due to avariety of reasons including management, location, and the type of machineryin the mills. It is expected that competition will force less efficient millsto close, while efficient mills will continue to add capacity. A recentincrease in sawnwood export taxes (para. 2.20) will put pressure on theprofitability of the less efficient mills and assist in the restructuring ofsawmill industry. Indonesia's plywood industry with a production level of 6.5million cu m per annum is efficient and is now operating at full capacityutilization on a two-shift basis. Partly due to the rapid increase inproduction and exports and a market recession, the export price for hardwoodplywood was depressed and this was affecting industry profitability. SinceIndonesia now accounts for about 70 percent of the hardwood plywood exportmarket, and the price elasticities of demand and supply are typically between0.3 and 0.7 (absolute values), Indonesian manufacturers are finding itadvantageous to limit export volumes to support prices and profitability. GOIis also restricting the addition of new plywood manufacturing capacity toconserve resources. Consequently, prices and industry profits have improved.The plywood industry faces a shortage of qualified technicians, and hasselectively employed expatriates to overcome the shortage. This has helpedgenerslly in maintaining good quality and capacity utilization. A WoodIndustry Study financed under the Bank-supported BAPINDO V Project (Loan 2277-IND) is helping 001 identify key constraints in the industry. The mainrecommendations are that:

(a) forest concessions and primary industries should function asintegrated units until an efficient wood distribution system isdeveloped;

(b) efficiency and capacity utilization of the existing industriesshould be improved before new capacity is added;

(c) secondary industry should not be integrated with forest concessionsand should be in locations nearer market; and

(d) information and log distribution should be improved.

The Government has endorsed these recommendations, and is now consideringactions to implement them.

2.15 Pulp and Paper Industry. Indonesia currently has 38 pulp and papermills with an installed production capacity of about 1.4 million tons forpaper and 0.75 million tons for pulp. Between 1985-89, the growth in capacitywas dramatic for both paper (14 percent per annum) and pulp (25 percent perannum). The capactty utilization of paper mills has improved from 59 percentin 1985 to about 82 percent in 1989, and consequently production has increasedby 23 percent per annum. This has made Indonesia a net exporter of paperproducts. Capacity utilization of both pulp and paper mills is low due to

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technical and management problems. Effluent control in older mills has alsobeen neglected and it is expected that some of the older inefficient millswill have to close. A recently approved Bank loan for IndustrialRestructuring Project (Loan 3040-IND of June 1989) will address theseproblems. In planning future investments in forest plantations for supplyingthe pulp and paper industry, MOF must be careful to support only thoseplantations that are within marketable distance of efficient andenvironmentally sound pulp and paper mills, to avoid the risk of investing inplantations for which the main market outlet disappears after the trees havematured. Any feasibility study for plantation investments must analyze marketprospects, including prospects for pulp and paper mills that would purchaselogs from the proposed plantation. The proposed project would assist indeveloping plans for reforestation consistent with these market andenvironmental considerations.

2.16 Export Markets. Indonesia has emerged as the world's biggestexporter of processed tropical hardwoods, and in 1988 its exports reached alevel of about $3 billion. The growth in exports has been rapid (30 percentper annum), and has been fueled mainly by the ban on log exports and theexpansion of plywood exports, which now forms over two-thirds of Indonesia'swood product exports. The main markets for Indonesian plywoods are Japan(25 percent), China/Hong Kong (21 percent), and United States (12 percent).For the future, it is expected that growth of wood product exports will be at3 to 4 percent per annum in overall volume, though some segments such asfurniture, which are small currently, may show growth rates in excess of10 percent per annum. The future export marketing strategy of Indonesiashould emphasize increasing export value through increases in woodutilization, local value added, and quality improvements. This will ensurethat increases in export values are maintained without over-cuttingIndonesia's valuable tropical rain forests.

2.17 Local Market. Prior to 1980 the processed wood products went mainlyto local markets, which accounted for over 75 percent of total production.Since then local consumption has increased at about 5 percent per annum, inline with the general growth in local incomes, but the share of localconsumption has dropped below 50 percent owing to the much more rapid growthin exports. The structure of local demand is the opposite of export demand,and is mainly for sawnwood, which accounts for about 80 percent of the totaldemand for processed wood products. This is typical of the pattern in lowerto middle income countries. In the next decade local consumption of sawnwoodis expected to increase by 2 to 4 percent per annum, and of plywood by 3 to6 percent per annum.

Fiscal Policy

2.18 The level of tax and royalty collections from the forestry sectorwas quite low until 1987 when total revenue excluding value added tax (VAT)amounted to Rp 283 billion or about $5 per cu m of log. Even includingestimated VAT collection of about $2 per cu m, the level of tax and royaltycollection of about $7 per cu m was low compared with profits (rent) of theindustry of $30 to 40 per cu m of log. During discussions in 1987/88regarding FICP I, the Bank recommended doubling of the level of taxes androyalty. GOI has acted promptly on the recommendation. In 1989, MOFannounced an increase in reforestation fee from a level of $4 per cu m to a

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level of $10 per cu m by 1990. Export taxes on sawnwood have also been raisedsubstantially, but this has been done not for raising more revenue, but as aninstrument of industrial and trade policy (para. 2.20). While tax rates havebeen raised, the collection of revenue needs to be strengthened with twoobjectives. The first is to increase resource mobilization for nationaldevelopment through a higher rent recovery; and the second is to applyforestry fees, royalties and taxes to improve efficiency of wood utilization.Revenue collection suffers because currently MOF has only a few poorlytrained, equipped and motivated field staff who are unable to effectivelymonitor concessions extending over Indonesia's vast production forest area.Furthermore, royalties are measured based on mill output, which gives littleincentive to improve wood utilization, and also allows under reporting of logconsumption. Because of the under reporting, revenue collection has sufferedand the annual loss in revenue is estimated at about $200 million. There isnow an urgent need to improve monitoring of log extraction activities in theconcessions through improved inspection service.

Forestry Products Trade Policy

2.19 Indonesia's trade policy for forestry products has been dominated bysuccessive bans on the export of primary products such as hardwood logs andrattan. Starting in 1980, GOI began restricting log exports to encouragelocal processing and employment creation, and by 1985 log exports were totallybanned. This decision has been controversial. On the one hand, log exportban has been criticized for reductions in log production from a level of about25 million cu m ia 1980 to a level of 13 million cu m, two years later, and acorresponding reduction in export revenues. Others have pointed out that thedrop was temporary, and that with the development of a relatively efficientand export oriented plywood industry, log production and forestry sectorexports have recovered to former levels. Similarly, some have welcomed thetemporary reduction in logging due to log export ban as an environmentallysound policy because of a concern about forestry resource depletion (para.2.21). Under the Bank-assisted FICP I, the impact of the log export ban onthe efficiency of sawmilling and plywood industry has been analyzed. Thetentative conclusions are:

(a) The log export ban helped to support a rapid establishment of amodern and relatively efficient plywood industry which hascontributed to the increase in factor productivity of capital andlabor at rates higher than in USA and Canada, and is therefore asuccessful example of infant industry policy;

(b) Factor productivity of wood has not increased because the fiscalpolicy environment until 1989 was not supportive (please seepara. 2.18);

(c) Price of raw material should be increased through higher rentcollection on raw material to provide incentive for better materialutilization.

GOI should improve revenue collection to capture a larger portion of the rentand also to improve efficiency of the industry.

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2.20 More recently, at the end of 1989, GOl increased the level of exporttaxes on rough sawnwood to a level of over 100 percent. The tax has beendesigned to discourage export of rough sawnwood, and to encourage export ofmore value-added secondary processing activities. This will force therestructuring of the inefficient sawmilling industry (para. 2.14) by reducingits profitability. To the extent that more value-added secondary industry isdeveloped, it will be in-line with the recommendations of the wood industrystudy. However, there is a danger that exports will be reduced in the short-run, and the protection of the secondary processing industry could lead toinefficient industrialization. ¢OI should review the impact of high exporttaxes after a couple of years of experience with a view to reducing the levelof tax and effective protection if needed to improve efficiency.

Sectoral Problems and Constraints

2.21 Forest Resource Depletion. While Indonesian forests are large,there is a growing concern that the forestry resources are being depleted at arapid pace of about one million ha (1 percent) per annum. At the current rateof depletion the economic value of forests will be exhausted in about 40years. In addition to the loss of timber, the loss of forest area also posesserious environmental problem because of irreversible lose of the rich geneticdiversity of Indonesian forests, the erosion of soil, and the siltation ofdams and waterways. Some of the contributing factors are discussed below.

2.22 Logging Damage. Studies have shown that about 10 to 50 percent ofthe remaining stand after logging is damaged due to careless loggingpractices, and the loss of productive forest area is estimated at about 0.2million ha per annum. Survey of logging practices under the Bank assistedFICP I has confirmed that the damage to the forest and soil cover due tologging is quite serious and extensive. The main problems are the carelessroad construction and log extraction from forest to the road or river(skidding). The FICP I study recommends that technical skills ofconcessionaires should be upgraded and environmentally sound logging and logtransport standards enforced. The proposed project would assist inimplementing these recommendations.

2.23 Shifting Cultivation. While traditional forms of shiftingcultivation, with rotations of over 20 years, are environmentally sound andsustainable, the shorter rotation shifting cultivation is not. Because ofpopulation increase in the Outer Islands of Indonesia, where most of theforests are located, shorter rotation shifting cultivation is increasinglyleading to degradation of forest lands into low fertility grass lands (alang-alang). The forest area lost due to shifting cultivation is estimated between0.3 and 0.5 million ha per annum. Issues regarding shifting cultivation arebeing studied under FICP I, and the recommendations of the study would beimplemented under future Bank supported agriculture and forestry projects.

2.24 Conversion to Agricultural Use. GOI has had an ambitioustransmigration program under which half a million families migrated to theOuter Islands during the previous plan period (1980-84), and settled on 2.5million ha of forest land. Similarly, other agricultural developmentprograms, such as the tree crops NES programs, have also led to the clearingof up to 100,000 ha of forest land per annum for agricultural usage.Recently, GOI has slowed down these programs but it is still expected that

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conversion to agricultural use will take up between 0.2 and 0.5 million ha offorest land per annum. While conversion to agricultural use is to some degreeinevitable in the face of increasing population and demand for food andagricultural commodities, such conversion needs to be well planned to ensurethat it does minimal damage to the environment. For instance, criticalwetlands which act as breeding grounds for large numbers of species of fishand migratory birds need to be protected. Agricultural development strategyshould put less emphasis on increasing production through increases in area,and more on increasing production by making better use of existingagricultural areas through their intensified development and increased yieldper unit area. This, for instance, is being done under the Bank supportedFisheries Support Services Project (Loan 2773-IND) which will increase shrimpproduction by increasing yields from existing ponds rather than increase thearea of shrimp ponds by converting critical wetlands. Under the fisheriesproject some support is also being provided to the Ministry of Population andEnvironment for developing agricultural development strategies that will beless destructive of the environment. Similarly, under GOI's TransmigrationProgram, there is greater need to emphasize increasing productivity ofexisting areas (second stage development) and to put relatively less emphasison creating new settlements. The Bank is supporting such an approach throughassistance for the preparation of the proposed Transmigration Second StageDevelopment Project, which will concentrate on further development and moreintensive land use in existing transmigration areas rather than the conversionof new and virgin forest areas.

2.25 Forest Fires. Because of increasing population near forests,inappropriate forms of shifting cultivation, logging residues, and alsonatural causes, forest fires are increasing. Generally these fires do notspread far because of humid conditions in tropical rain forests. But, in someyears, unusually dry conditions do cause extensive damage, as was the case in1983184 when about 3.5 million ha of forests in East Kalimantan weredestroyed. In some areas, the forest fires are deliberately started byencroachers to convert forest land to grass lands for cattle grazing.Estimates of forest area lost range between 0.1 and 0.2 million ha per annum.The encroachers are quite often brought into the forests by ill-planned roads.GOI has now issued a decree which requires environmental impact assessment ofproposed development projects including roads.

2.26 Forestry Research. Prior to 1983, forestry research was under theMinistry of Agriculture and Forests, and suffered because of the higherpriority given to rice research. Consequently, annual funding for forestryresearch has been less than $2 million (0.2 percent of exports), one of thelowest levels in the Asia-Pacific Region. The research is currentlycentralized at Bogor in Java, and does not focus on basic technical issuesconcerning forestry management problems of the Outer Islands where mostIndonesian forests are located. Therefore the current level of understandingof the development and regeneration of tropical rain forests in Indonesia ispoor, and this hampers the ability of the forestry research service to offereffective advice on techniques to support sustainable management ofIndonesia's forests. Furthermore, with increasing population pressures in theOuter Islands and the inevitable reduction in production forest area. Thismay eventually require the establishment of higher-yielding forest plantationsin the Outer Islands. To support this, forestry research must expand adaptivetrials for the screening of exotic species. This would include fertilizer

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trials, end use tests, and the measurement of yield, establishment cost, andpest/disease vulnerability. Another priority area for research is theregeneration and growth of natural forest under alternative logging andmanagement regimes. This would include measurements of regeneration on siteswith varying intensity of logging, levels of mechanization in logging andskidding, and post-logging silvicultural practices. This will allow researchto advise the forestry service and concession holders on cost-effectivepolicies and techniques for the management of Indonesian forests, keeping inmind financial, economic, ecological and anthropological concerns. Researchin these priority areas is constrained by a shortage of adequately trainedmanpower, research funds and facilities in most of the Outer Islands. NewRegional research stations have been constructed in two (Sumatra andKalimantan) of the three major forest areas of the outer islands, but thethird major area, Irian Jaya, is poorly serviced. The proposed project wouldassist in alleviating these constraints and meeting forestry research needs.

Government's Sectoral Ob3ectives and Strategies

2.27 In line with its broader economic development objectives, GOI'sobjectives in the forestry sector are to conserve and sustain naturalresources for longer-term benefit of the nation through higher income andemployment for the people. Specifically, in its Repelita V, GOI isemphasizing:

(a) Improvement of the management of natural forests and plantations tosustain their productivity for the futurel

(b) Increase in non-oil export revenues through increased exports ofvalue-added forestry products;

(c) Conservation of watersheds to ensure uninterrupted flow of water forirrigation and urban consumption:

(d) Protection and conservation of wildlife, genetic resources innatural forests, and scenic and recreation areas; and

(e) Reforestation of about 10 million ha of the 20 million ha ofdeforested and degraded lands, of which about 1.5 million ha will beundertaken within the Repelita V period and the balance of about8.5 million ha partly during the Repelita V period and partlythereafter.

Within the framework of the objectives and the national five-year developmentplans (Repelita), MOF has formulated a number of programs and performancetargets in priority areas. The most important of these program involveimproved concession management, nature conservation, reforestation andplantation establishment, research, and administration development. GOI isnow seeking support for this program from external donors including the Bank,ADB, and several bilateral donors. While the Bank and other donors areexchanging information to ensure complementarity of their assistance, moreneeds to be done by MOF to coordinate donor assistance. For this purpose, MOPis organizing several round table meetings of donors under the framework ofthe Tropical Forestry Action Plan (TFAP). Bank is supporting this effort ofMOF by the preparation of background documents for TFAP meetings (para. 3.1).

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III. BANK INVOLVEMENT IN THE SECTOR AND LESSONS LEARNT

Bank Involvement in the Sector

3.1 A Bank forestry sector identification mission in 1985 discussedsectoral priorities with GOI, which resulted in the Bank's first forestryproject, the Forestry Institutions and Conservation Project (FICP),emphasizing institutional strengthening, sectoral policy improvement,information collection for better forestry sector planning and conservationefforts. The Project is in the second year of its implementation and progressis good. The main achievements of the first project have been in policy andinstitutional reforms, particularly fiscal and concession policy (Annex 1).These reforms include:

(a) Research. A forestry research council was established in October1988 and a dialogue has been started with private sector,universities, and other Ministries to define research prioritiesmore sharply in line with user requirements.

(b) Fiscal Policy. GOI has announced 150 percent increase in the levelof taxes/royalties from $4 per cu m of round log in early 1989 to$10 per cu m by June 30, 1990;

(c) Inventory. A forest inventory users group including all theDirectorates-General in MO0 and private sector, has been set up toimprove the relevance of information collection and itsdissemination;

(d) Nature Conservation. A Directorate of Extension has been set up toencourage broader participation in conserving and managing forestresources.

Ce) Industrial Policy. In the wood industry sector, GOI has alsoadopted a policy of increasing production value through improvedefficiency and value-added activities rather than through theprocessing of more logs.

(f) Coordination. Inter-Departmental coordination committees have beenset up to improve coordination of policy and operations regardingwatershed conservation, environmental protection, and control ofshifting cultivation.

(g) Concession Policy. MOF has announced several measures to improveconcession management, including strengthening of inspection,integration of concessions and processing, and restriction on annuallog extraction to a level of 32 million cu m. The forestry sectorpolicy studies have demonstrated serious problems in logging andrecommended better enforcement of environmental guidelines, andstrengthening of technical capacity of concessionaires. Support forthis is proposed under the proposed project.

(h) TFAP. GOI has organized a Tropical Forestry Action Program (TFAP)discussion in May 1990 based on strategies and action plans nowbeing developed under Bank assisted FICP I; and

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(i) Reforestation. GOl has announced improved land lease arrangementsfor forest plantations, according to which leases will be grantedfor 35 years and can be extended to 70 years.

3.2 Along with the FICP I, the Bank also initiated an environment sectorstudy focussing on land, water and forest management issues in 1987 andfollowing discussions in 1988 a grey cover sector report was issued in 1989(Report No. 7822-IND of June 5, 1989). The project and sector reportrecommendations were consistent.

Lessons Learnt from Previous Forestry Projects

3.3 While no evaluation report for a forestry project in Indonesia isavailable as yet, several such reports have been completed for Bank-assistedforestry projects in other countries, such as the OED report No. 7952 ofJune 30, 1989 for an Ivory Coast Forestry Project (Loan 1735-IVC), and the OEDReport No. 7953 of July 29, 1989 for a Mali Forestry Project (Credit 0883-MLI). These evaluation reports have common themes which are also applicableto forestry sector operations in Indonesia. For example, experience withthese forestry operations point to the need for a more thorough marketevaluation before investments are made in forest plantations. In some cases,as for the Mali 'roject, they also suggest a more thorough Leview of landtenure status and resolution of any conflicts before investments are made.The need to ensure active participation of the local people is also one of thecommon themes. These lessons, which are also applicable to Indonesia'ssituation, have been taken into account in formulating Bank's assistancestrategy for the forestry sector in Indonesia.

3.4 While the initial request from MOF was for Bank support for a$400 million project, about half of which was for forestry plantations, theBank and the Government have now agreed on a more cautious and phasedapproach, in line with the lessons learned from other Bank supported forestryprojects (para. 3.3). Accordingly, the proposed project includes a thoroughevaluation of site specific land tenure and marketing problems forreforestation (forest plantation) investments.

Rationale for Future Bank Involvement and Proposed Strategy

3.5 A strong forestry sector is important to the Indonesian economybecause of its role in export earnings, Government non-tax revenues, ruralenergy consumption, and environmental protection. The Bank supported FICP Ihas progressed well, and the studies done under the project have pointed tothe urgent need to improve concession management and revenue collection fromthe forestry sector. The results from the first project have also pointed tothe need for improved planning of reforestation and conservation activities,and for an accelerated program in forestry research to improve the technicalbasis for concession, reforestation and conservation management programs. Theproposed project will help implement the recommendations emerging from thefirst project. The Bank is well placed to assist in the continuing policy.fiscal and institutional reforms in the sector, and the Bank's associationwith the proposed project will provide a suitable vehicle for such assistance.Bank's assistance strategy within a policy matrix framework is described ingreater detail in Annex 2.

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3.6 The Bank is also planning a Land Resource Planning and ManagementSector Report (FY 91) which will review forestry land use planning andallocation policies and procedures within the framework of a multi-sectoralnational land/spatial planning. Support for watershed protection, which alsoinvolves agriculture, is planned tb ough a free-standing watershedluplandsproject (FY 93).

IV. THE PROJECT

Project Obiectives and Strategy

4.1 The primary objectives of the proposed project are to reduce thepace of deforestation and to sustain and maximize long-term benefits from theforest resources in Indonesia. Strategies to achieve these objectivesinclude:

(a) Better management of production forest (concessions) to reducelogging damage and to sustain the productive and regenerativecapacity of these forests for the longer-term;

(b) Increase in resource mobilization for national development andreforestation through improved collection of forestry royalties andfees;

(c) Improve the efficiency of future reforestation activities throughimproved site selection and planning;

sd) Improve the technical basis for reforestation and concessionmanagement through applied and adaptive research; and

(e) Improve the management of nature conservation areas through betterplanning.

Project Description

4.2 The proposed project will include the following components:

(a) Concession Management and Inspection. Logging damage to forests andenvironment in forest concession areas would be reduced through:(i) improvement of the management of forestry operations byconcessionaires of about 50 million ha of production forests,including the training of managers and staff in better planning oflogging, skidding, and road construction; and the development of animproved wood accounting system; and (ii) introduction of animproved concession inspection and audit system, such system toestablish the amount of logs extracted as a basis for royalty andfee assessment and collection, and to ensure that environmentalguidelines and appropriate silvicultural practices are followed;

(b) Reforestation. Indonesia plans to invest about $2 billion for thereforestation of degraded lands. To ensure efficient and timelyinvestment, a national master plan for reforestation of about

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10 million ha, including a review and evaluation of land tenurestatus of sites, and incentive, financing and control mechanisms,will be prepared;

(c) Forestry Research. Planning and management of research would beimproved through: (i) strengthening of the Borrower's Agency forForestry Research and Development by improving planning,programming, monitoring, evaluation, financial and economic analysisskills; and (ii) the first phase of a multi-phased plan forestablishment of a regional forestry research and training center atManokwari, Irian Jaya, including construction of buildings forlaboratory, staff housing and office and training facilities,provision of related equipment and furniture, training of researchstation staff and establishment of a forestry research program onabout 11 sites for research on forest ecology, silviculture, treeimprovement, fire protection and nature conservation, includinglivelihood needs of the local people, through the activeparticipation of the people therein.

(d) Conservation. The National Conservation Plan for terrestrial andmarine conservation will be reviewed and revised. Improvedmanagement and investment plans for ten national parks and bufferzones around the parks will be developed, with active participationof the local people. An integrated plan for the sustainablemultiple-use of mangrove forests and a conservation management planfor a mangrove reserve will be prepared; and

(e) Policy Advisory Service. The Minister of Forests' policyformulation and his supervisory duties will be assisted by theprovision of a highly qualified and experienced resident forestryadvisor, and short-term technical assistance.

Concession Management and Inspection

4.3 The proposed concession management component will have two parts:(a) extension support for improved management of forestry operations byconcessionaires; and (b) inspection and audit of concessions to ensure thatforestry operations are being done in an environmentally sound and sustainablemanner and that logs are measured and accounted for accurately to provide asound basis for collecting Government revenues. The improved concessionmanagement and inspection systems will initially be implemented in the threeprovinces of Riau, East Kalimantan and Maluku and then extended country-wide.

4.4 Concession Management. Technical and operational guidelines forimproved planning of logging, skidding, and road construction will bedeveloped. This will be used for training and extension of improved skills toconcessionaire's managers and staff. A simple but fairly accurate woodaccounting system would also be developed to improve internal control of woodflow by concessionaires. To this effect, the project will provide 58 monthsof internationally recruited expert services, and 68 month of locally engagedexpert services. The detailed TORs are in Annex 3.

4.5 Concession Inspection and Audit. The proposed project will developand introduce improved concession inspection and audit system to ensure that

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environmentally sound and sustainable logging and log extraction techniquesare followed by concessionaires, and also to ensure that they report on logextraction volume accurately. In view of the current shortage of well trainedfield staff within MOF, an external inspection service will be engaged as aninterim measure to carry out inspection and audit while MOF field staff istrained. The inspection service will use a mixture of remote sensing, aerialphotography and on-ground field checks in forests, transport nodes and inmills to establish the amount of logs extracted as a basis for royalty and feeassessment and collection, and also to ensure that environmental guidelinesand silvicultural practices are followed. As inspection services play acrucial role in the success of this project and given constraints on GOI'sability to make significant increases in the MOF's budget, some Bank financingof the recurrent expenditures is desirable, to ensure that the necessary fundsare available during the critical start-up phase. Accordingly, the proposedproject provides financing for 85 percent of the recurrent cost up to June 30,1992 and 45 percent thereafter.

Reforestation (Forest Plantations)

4.6 To ensure that GOI's plan for reforestation of degraeed anddeforested land is carried out efficiently, a national master plan forreforestation of about 10 million ha will be prepared after assessing thesuitability of alternative sites from environmental (both ecological andsocial), market and economic perspectives. Land tenure status of sites willbe evaluated to assess availability of sites. The incentive, financing andcontrol mechanisms will also be reviewed and improved upon to ensure that theplanned $2 billion in investments is carried out in an efficient andenvironmentally sound manner. The plans will be prepared at two levels,national and provincial. For this purpose, existing land capability and landuse information for degraded and deforested lands will be assembled in acomputer (PC) based Geographical Information System (GIS), and the informationupdated based on recent remote sensing information (LANDSAT V and SPOT)acquired under FICP I. Computers are commonly used in Indonesia in generaland HOF in particular. Therefore, the proposed technology is appropriate tolocal conditions. Decision rules and criteria will be developed andintroduced for efficient site selection using GI$ data. A system of regularupdating of the data will also be established to keep the information currentand relevant. Separate plans will be developed for conservation orientedreforestation and the production oriented plantations. At negotiations,assurance was obtained that the reforestation plan and proposals for improvedincentives, financing and control mechanisms will be completed for 1.5 millionha by October 31, 1991, and for the remaining 8.5 million ha by October 31,1993. These proposals and plans will be discussed with the Bank andsubsequently implemented after taking into account comments from the Bank.The detailed TORs are in Annex 4.

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Forestry Research

4.7 The forestry research component of the proposed project will beimplemented as a part of a continuing long-term institutional developmentprogram and would support GOI's efforts to further strengthen the Agency forForestry Research and Development (APUD)'s research management throughspecific actions to improve planning, programming, monitoring, evaluation,financial and economic analysis skills. Planning and management of researchwill be improved by developing a research master plan focused on high priorityneeds. Management reforms will be implemented by making the forestry researchcouncil and its policy unit operational. At negotiations, assurances wereobtained that the research council will meet at least twice a year, and thatminutes of council meeting will be provided to the Bank within one month ofthe meeting. Research information communication will be strengthened throughseminars, workshops and collaborative research trials with concessionaires.

4.8 In support of a change in GGI's policy to re-orient forestryresearch towards the Outer Islands and Eastern Indonesia, where most(95 percent) of Indonesia's forests are located, the proposed project willsupport the first phase of a multi-phased plan for the establishment of aregional forestry research and training center in Irian Jaya, at Manokwari.For this, 6,800 sq mt of buildings for laboratory, staff housing and officeand training facilities will be constructed. Equipment and furniture will beprovided. Staff for the research and training center (about 20) will be givenfurther training. Eleven research plots, for research on forest ecology,silviculture, tree improvement, fire protection and nature conservation,including livelihood needs of the local people through active participation ofthe people therein, will be established. Short-term technical assistance (71months will be provided) for establishing research program, and for on-the-jobtraining of research staff.

Conservation

4.9 Currently, there is a keen interest amongst donor community toassist 001 with the implementation of conservation oriented projects, butoften GO0 is unable to make use of the assistance because of a lack of wellprepared projects. The proposed conservation component will be designed tofill this gap, by (a) reviewing and revising National Conservation Plan forterrestrial and marine conservation; (b) developing a better and perhaps lowercost management and investment plan for ten high priority national parks andbuffer zones around the park with active participation of the local people;and (c) improving conservation of wetlands through the development of anintegrated plan for mangrove conservation and by strengthening PHPA capacityto implement mangrove forest conservation. The national park and wetlandconservation components are described in greater detail below.

4.10 National Parks Investment. The ten selected parks are welldistributed throughout Indonesia and are representative of different bio-geographic zones, both terrestrial and marine. They include two each in Java(Gunung Gede, Pulau Seribu); Sumatra (Vay Kambas and Bukit Barisan);Kalimantan (Tanjung Puting and Kutai); Irian Jaya (Teluk Cendrawasih, andWassur) and one each in Sulawesi and Maluku (Lore Lindu and Manusela). Otherhigh priority national parks such as Kerinci Seblat and Bunakan have not beenincluded since they are expected to be covered in other projects. For the

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proposed ten parks, while investment plans exist, in most cases they tend tobe too ambitious and expensive. At negotiations, assurance were obtained thatthese investment plans will be scaled down to more manageable size consistentwith environmental carrying capacity and operations and maintenance fundingrealities. Buffer zone proposals will also be developed, where needed, toensure that needs of local people, including the collection of firewood bywomen, are met without having to encroach on the nature reserve. NGOs wereconsulted during the design of this component, and it is expected that theywill also be involved during the review of management plans.

4.11 WetlandlMangrove Conservation. Indonesia's wetlands have enormousimportance both from economic and bio-diversity conservation points-of-view.In particular, mangrove swamp forests are important for protecting coastalareas from erosion and also for rearing marine and brackish water fishes whichsupport Indonesia's important export oriented (1989 exports of about$800 million) fisheries industry. The mangrove swamps are threatened becauseof over-exploitation by mangrove chipping, charcoal, and aquacultureindustries. The proposed project will develop an integrated plan forsustainable multiple-use of mangrove forest in conjunction with localcommunities and NGOs, to be available for Bank review by September 30, 1991(Annex 9). Conservation management plan for a mangrove reserve will also bedeveloped and its first phase implemented. Guidelines will be developed byconsultants for use by MO0 staff.

Policy Advisory Service

4.12 The proposed project will strengthen policy formulation andimplementation by providing a highly qualified and experienced residentforestry advisor to the Minister for a period of three years. The advisorwill assist with policy review and ensure that the Minister is presented withviews not only from within the Ministry, but also from other sectors such asfinance, industry, agriculture, planning, NGOs, as well as newly emergingglobal concerns regarding protection of tropical forests and environment whichcould affect future development of the forestry sector. The advisor will beresident in Indonesia for three years. Short-term specialist assistance ofabout 24 months will be available for analysis of specific policy issues.

Role of Women

4.13 Women forestry specialists are also employed by MOF in all areas offorestry, but very few of them are at managerial level. At negcotiationsassurances were obtained that MOF will (a) review the participation of womenforestry specialists as a part of the ongoing Human Resource DevelopmentStudy; and (b) give satisfactory representation to women in the selection ofcandidates for foreign training in forestry research under the proposedproject.

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V. PROJECT COSTS AND FINANCING

Proiect Costs

5.1 The proposed project is estimated to cost Rp 59 billion($33.1 million) of which Rp 5.7 billion is in duties and taxes, andRp 26.4 billion ($14.7 million) in foreign exchange (Table 5.1). Base costsare calculated on March 1990 prices based on recent quotations. Physicalcontingency estimates range between 5 and 10 percent for an overall average ofabout 7 percent. Price contingencies are based on estimated annual localinflation of 7 percent (1990), and 6 percent thereafter; and estimated annualforeign inflation of 5.4 percent (1990), and 4.3 percent thereafter.

Table 5.1s PROJECT COSTS SUMMARY

RD Billion $ Million Z SLocal Foreign Total Local Foreign Total For. Base

Rxch. Cost

Research 10.0 7.3 17.3 5.6 4.0 9.6 42 36Concession Management 11.6 7.5 19.1 6.5 4.2 10.7 39 39Forest Plantations 2.4 3.4 5.8 1.4 1.9 3.3 58 12Conservation 2.0 2.5 4.5 1.1 1.4 2.5 56 9Policy Advisory Service 0.4 1.5 1.9 0.2 0.8 1.0 79 4

Total Base Costs 26.4 22.2 48.6 14.8 12.3 27.1 46 100

Physical Contingencies 2.2 1.5 3.7 1.2 0.8 2.0 40 8Price Contingencies 4.3 2.8 7.1 2.4 1.6 4.0 39 15

Total Costs la 32.9 26.5 59.4 18.4 14.7 33.1 44 122

/a Includes taxes, duties and reserved procurement amounting to $4.3 millionequivalent.

Financing

5.2 The proposed IBRD loan of $20 million will finance 70 percent oftotal project costs net of duties and taxes ($3.2 million) and reservedprocurement ($1.2 million). The loan will finance 86 percent of foreignexchange and 40 percent of local costs, and will be at the Bank's standardvariable interest rate for a term of 20 years including 5 year grace (Table5.2). GO0 has agreed to contribute $0.5 million as an untied grant for theproject. A condition of effectiveness of the loan will be the effectivenessof the Japan Grant Agreement. ITTO has approved a grant of $3.8 million outof which about $0.8 million will be used for overseas training under theproject.

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Table 5.2: FINANCING PLAN($ million)

IBRD GOJ GOI ITTOAmount 2 Amount 1 Amount 2 Amount 2 Total

Civil Works 3.0 55 2.4 45 5.4Equipment and Furniture 1.5 71 0.6 29 2.1Planting costs 0.7 60 0.5 40 1.2Inspection 5.0 52 4.7 48 9.7Vehicle 1.4 100 1.4Incremental Operating Costs 1.3 100 1.3Technical Assistance 6.8 83 0.5 6 0.9 11 8.2Training 3.0 79 0.8 2 33.1

Total 20.0 60 0.5 2 11.81a 36 0.8 2 33.1

Table 5.3: PROCUREMENT ARRANGEMENTS /a($ million)

Procurement MethodICB LCB Other NA Total

Civil Works 5.4 5.4(3.0) (3.0)

Equipment and Furniture 0.8 0.8 0.5 2.1(0.7) (0.5) (0.3) (1.5)

Planting costs 1.2 1.2(0.7) (0.7)

Inspection 9.7 9.7(5.0) (5.0)

Vehicles lb 1.4 1.4(0.0) (0.0)

Incremental Operating Costs 1.3 1.3(0.0) (0.0)

Technical Assistance 8.2 8.2(6.8) (6.8)

Training 3.8 3.8(3.0) (3.0)

Total 0.8 6.2 21.0 5.1 33.1(0.5) (3.5) (12.8) (3.0) (20.0)

/a Costs are inclusive of contingencies, duties and taxes. Figures in parenthesesindicate expected disbursement from the proposed Bank Loan.

/b Reserved Procurement.

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Procurement

5.3 Procurement arrangements are summarized in Table 5.3 and discussedbelow.

5.4 Civil Works ($5.4 million). These consist of small officebuildings, housing and associated infrastructure, scattered over severalsites. These works will be procured following LCB procedures in which foreigncontractors are eligible to participate. LCB procedures are justified becausethese works are small and scattered, contract sizes are expected to be of lessthan $2.0 million each.

5.5 Equipment and Furniture ($2.1 million). About $0.8 million worth ofequipment will be procured following ICB procedures in accordance with BankGuidelines. In bid comparison the domestic manufacturers will be allowed a15 percent preference or the level of import duties, whichever is lower.$0.3 million worth of office furniture is small in size, Indonesia is a lowcost producer and exporter of furniture. with many suppliers ensuringcompetition. Therefore, LCB procedures in which foreign suppliers will beeligible to participate will be the most cost-effective procedure and will befollowed. Small contracts for equipment, each of less than $200,000 in value,will also be procured following LCB procedures. Procurement of small off-the-shelf items, each of less than $20,000 in value, will be procured afterinviting quotation from at least three suppliers. These will not exceed $0.5million in total value.

5.6 Forestry Research Plots ($1.2 million). This will consist of treeplanting and nursery activities of Government forestry research agency atscattered sites using hired labor at GOI's standard wage rate (i.e. therelevant local market wage rates) and procedures which are consideredsatisfactory to the Bank.

5.7 Inspection Services ($9.7 million). The inspection services will beprocured after inviting proposals from prequalified firms following BankGuidelines for hiring of consultants.

5.8 Vehicles ($1.4 million). Following GOI regulations, vehicle importis not permitted, and the project will procure locally assembled vehicles.Because of reserved procurement, these vehicles will not be financed by theBank. In addition, at negotiations, assurances were obtained that vehicleswill be provided in accordance with the schedule in Annex 7.

5.9 Other ($13.3 million). Consulting services ($8.2 million) will beprocured following Bank Guidelines for hiring of consultants.Training ($3.8 million) will be at institutes acceptable to the Bank. Theremaining costs ($1.3 million) will be for incremental operating costs.

5.10 Contract Review. After an initial review of standard civil worksbidding documents by the Bank for LCB contracts, only bidding documents forcontracts estimated to exceed $500,000 will be reviewed prior to issuance.This will result in prior Bank review of four documents covering about80 percent of the value of contracts. Similarly for equipment, all biddingpackages estimated to cost over $200,000 will be reviewed prior to issuance.This will result in Bank review of two documents covering over 60 percent of

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the value of contracts. All consultant contracts will be subject to priorreview by the Bank. The remaining contracts will be reviewed on a randombasis after award of contracts.

Disbursements

5.11 Disbursements under the proposed IBRD loan are expected to becompleted by June 30, 1995, about five years after Board Presentation. ThisIs somewhat shorter than the typical disbursement period for agriculturalprojects in Indonesia, and forestry projects Bank-wide. The shorter period isexpected, because of the better than expected disbursement performance underFICP I and the smaller size of the proposed project which will simplifyproject implementation (Annex 7).

5.12 Disbursements from the proposed IBRD loan will be made fort

(a) 55 percent of expenditures on civil works;

(b) 100 percent of foreign expenditure; 100 percent of localexpenditures (ex-factory cost); and 65 percent of other goodslocally procured;

(c) 60 percent of planting costs under the forestry research program;

(d) 85 percent of expenditures on inspection services up to June 30,1992, and 45 percent of expenditures, thereafter;

(e) 100 percent of expenditures on technical assistance; and

(f) 100 percent of expenditures on training.

5.13 Disbursements for training ($3.0 million), and research plots($0.7 million) will be based on Statements of Expenditures (SOB). Inaddition, disbursements ($0.5 million) for the purchase of items of less than$60,000 (para. 5.5) will also be on the basis of SOEs. These SOEs will beprepared by MOF and detailed documentation will be kept at headquarters inJakarta. At negotiations, assurances were obtained that these SOEs will beaudited and that the supporting documentation will be made available to theBank for review during supervision. Disbursements for other components($15.8 million) or 79 percent of loan amount will be based on fully documentedwithdrawal applications.

5.14 To facilitate disbursement administration, loan withdrawalapplications will be aggregated as far as possible, and will not be for lessthan $50,000 equivalent. In addition, a Special Account (SA) will be set upin the Bank of Indonesia (BI) with a maximum of $1.0 million, equivalent toabout four months' disbursement.

- 23 -

Accounting and Audits

5.15 Separate project accounts, clearly indicating the various sources ofreceipts and expenditures by functional categories for their respectiveproject components, will be maintained by MOF in Jakarta. The accountlng andinternal audit procedures of MOP is satisfactory. MOF has an internal auditoffice which continuously audits its accounts. Strict budget control ismaintained based on standard unit costs, and expenditure beyond budgetedamounts is difficult. As required by GOI regulations, MOF accounts areaudited annually by the Directorate of State Accountancy (BPKP). Atnegotiations, assurances were obtained that unaudited project accounts andSOEs will be submitted for audit and to the Bank within five months of fiscalyear-end, and the audit report made available to the Bank within nine monthsof the fiscal year. The report would include a separate auditors' opinion onSOE, verifying that the related expenditures were made for the agreed purposesof the project.

VI. ORGANIZATION, MANAGEMENT AND IMPLEMENTATION

6.1 General. The proposed project will be implemented by the Ministryof Forests (MOF).

Coordination

6.2 MOF will have the overall responsibility for project coordination,and for this purpose a Project Coordination Committee (PCC) has been set up,with the Minister as Chairman and the Directors General and Agency heads asmembers. A project liaison office has been formed under the Director ofPlanning. This office will help implementing agencies in: (a) solving anyproblems concerning project accounting, budgeting and procurement procedures;and (b) channelling disbursement requests and progress reports to the Bank.Furthermore, the policy coordination relating to the forestry sector will beimproved by expanding the Joint Ministerial Forum for Forestry Development,consisting of the Ministries of Forests, Public Works, Agriculture,Transmigration and Industry, by including, inter alia, the Ministries ofPopulation and Environment and Manpower.

Forest Concession Management

6.3 The Directorate General for Forest Utilization (PH) will beresponsible for the implementation of forest concession management component.Under the Secretary PH, Project Planning and Implementation Unit (PPIU) willbe responsible for procurement of goods and services. The external inspectionservice will report to the Director General through the Director of ForestProduction. At negotiations an assurance was obtained that a contractsatisfactory to the Bank for the inspection services will be signed beforeDecember 31, 1990.

Reforestation

6.4 The Directorate General for Reforestation and Rehabilitation (RRL)will be responsible for the implementation of the Forest Plantations

- 24 -

component. Within RRL, the industrial plantation plan will produced by theDirectorate of Industrial Plantations, and a plan for the reforestation ofdegraded forest lands will be the responsibility of the Directorate ofRegreening and Reforestation. The Secretary RRL will ensure coordination andwill also head a PPIU for RRL. At Provincial level, Kanwil 1/ as therepresentative of MOF, will be responsible for technical coordination. TheSecretary RRL as head of PPIU will organize regular review meetings.

Forestry Research

6.5 The Agency for Forestry Research and Development (AFRD) will beresponsible for the implementation of the Forestry Research Component. WithinAPRD, the Director of the Center for Forestry Research and Development will beresponsible for the development of facilities in Irian Jaya, and relatedtraining and technical assistance. The Secretary of AFRD will be responsiblefor coordinating the preparation of a master plan for forestry research. Atnegotiations, an assurance was obtained that consultants for the preparationof forestry research master plan will be engaged prior to December 31, 1990.

Conservation

6.6 The Directorate General of Forest Protection and Nature Conservation(PtPA) will be responsible for the Conservation component. The Director forNational Park will be responsible for the National Parks component, and theDirector for Nature Conservation for the Mangrove Forest Conservationcomponent. The Secretary PHPA will head the PPIU for conservation and will beresponsible for overall coordination. PPIU will also be responsible forengaging consulting services. At negotiations an assurance was obtained thatconsultants for conservation will be hired before December 31, 1990.

Policy Advisory Service

6.7 At negotiations, an assurance was obtained that a highly qualifiedand experienced resident forestry advisor will be appointed to the Minister'sOffice by December 31, 1990 for three years to assist the Minister in policyformulation and supervision. This advisor will report to the Minister on aregular basis.

ProJect Implementation Plans and Status

6.8 The proposed project will be implemented over a four year periodstarting July 1, 1990. Detailed terms-of-reference for key consultancies havebeen prepared and agreed with GOI. The detailed design for civil works willbe prepared during the first year of the project for construction in thesecond year. The implementation schedule for key project actions (Annex 9)has been discussed with GOI and was confirmed at negotiations.

Monitoring and Evaluation

6.9 Project monitoring will be done by Project Planning andImplementation Units (PPIU), and these have been already created for all

1| MOF's province level office.

- 25 -

project components. A project liaison office has been set up for overallproject monitoring and liaison with outside agencies. The PPIU and theliaison office will issue quarterly progress reports showing physicalachievements of the project on indicators such as hiring of consultants,number of persons trained, status of master plan preparation, forest revenuecollected, establishment of research plots, and infrastructure constructed.These reports will also include explanations for major variations in plans,expenditures and disbursements, as well as detailed plans for the next quarterand any revisions in longer term plans.

6.10 Project evaluation will be done in several stages. A mid-termevaluation of the project will be started by September 30, 1992, and completedby March 31, 1993. The evaluation report will review the implementationexperience of the proposed project, including but not limited to, cost-effectiveness, timeliness, sustainability, and expected benefits and relevanceof the proposed project. It will take into account the experience gained,including recommendations and detailed plans for carrying out the remainingparts of the proposed project. A project completion report (PCR) will bestarted by June 30, 1994, and completed not later than six months after loanclosing. In addition to recording physical and financial achievements of theproject and explaining major deviations from plans, these evaluation reportswill also assess quality of project outputs and the benefits that would accruefrom the project. At negotiations, appropriate assurances were obtained onthese reporting requirements and mid-term evaluation schedule. These reportswill be prepared by the project liaison office with assistance from PPIU, andconsultants.

VII. PROJECT IMPACT

Benefits/Cost Effectiveness of Institutional Strengthening Components

7.1 The benefits from institutional strengthening components aretypically large relative to costs, but such benefits are often difficult toquantify. Therefore, during the project preparation/appraisal stage specialcare has been taken to ensure cost effectiveness of proposed investments forinstitutional strengthening. For instance, the initial proposal for forestryresearch and training was for an investment of over $30 million. During thepreparationlappraisal stage, the cost was reduced by over 65 percent bypostponing lower priority activities. Similarly investments in constructionof facilities in national parks were postponed until a revised and more cost-effective plan is prepared.

7.2 While the benefits from institutional strengthening components aredifficult to quantify, some attempt has been made to relate the size of thesecomponents to the size of sectoral assets and investments, which will benefitfrom these components. In all cases, efficiency increases of one percent orless are sufficient to justify the costs of these components, and it is highlylikely that actual efficiency increases due to project components will farexceed these levels.

7.3 Forestry Research. The proposed investment in forestry researchwill bring additional benefits by developing techniques for improvedproductivity of both natural and plantation forests consistent with

- 26 -

environmental and social welfare considerations. Under current silviculturaland logging practices, the Indonesian natural forests are estimated to producean average annual increment of about one cu m per ha, which is far below thepotential of such forests. Considering that Indonesia's production forestsare worth over $6 billion, even a one percent productivity increase due toimproved research efforts would bring benefits valued at over $60 million inpresent value terms. This is far in excess of incremental forestry researchcosts of about $10 million.

7.4 Concessions Manaement. The FICP I studies have shown that morethan half of the 32 million ml log production is not reported for royaltycalculations. With improved inspection, log measurement and control thepotential revenue gain for the whole country will be over $200 million perannum, and for Riau, East Kalimantan and Maluku, the additional revenue wouldbe more than $20 million per annum, which is far in excess of the cost ofinspection. Additional benefits will come from the sustainable management ofthe production forest, and reduced rate of deforestation. The improved taxcollection system will create incentives for better utilization of wood.These will produce incremental benefits which are estimated at over$40 million per annum. This again is far in excess of the cost of concessionmanagement.

7.5 Reforestation. Improved planning of reforestation will improve theefficiency of an investment program of about $2 billion. Even if theefficiency increase were a modest 1 percent the resulting benefit of about$20 million will be far in excess of the cost of improved planning($3 million).

7.6 Conservation. The proposed conservation component will have wideranging benefits. Improved investment planning is expected to reduce the costof Nationa' Park development by scaling down the ambitious park infrastructuredevelopment plans, while enhancing conservation and benefits to local peoplethrough more effective buffer zone development. The improved plans will alsohelp att.act grant funds for National park development. Additional benefitsare expected from the conservation of mangrove swamp forest. This includes(a) protecting coastal areas from erosion; (b) rearing of marine and brackish-water fish fingerlings which supports the important export-oriented fisheriesindustry; and (c) providing fire-wood on a sustainable basis to localcommunities.

7.7 The policy and implementation advisory component will assist MOF'seffort to broaden forestry sector policy planning and implementation effort byinvolving a broader range of views and by attracting more external resourcefor the implementation of important forestry sector programs for conservationand sustainable use of forestry resources.

- 27 -

Pro3ect Risks

7.8 The main project risk would be the innovative nature of theconcession management component where an inspection agencies from the privatesector would be engaged to assist the Government in improving revenuecollection and compliance with environmental guidelines. While a similarapproach has been used for customs in Indonesia, this would be the firstapproach in the forestry sector, and may encounter resistance and/or becomedifficult to be established effectively. The risk will be minimized bykeeping project size small and starting with only three provinces initially.The benefits/costs of the new system would be carefully monitored andevaluated and the system will be expanded only after positive results areconvincingly demonstrated. There might be some delays in completing theconservation plans that reflect adequately the views and needs of localpeople. The Government of Indonesia will enlist the assistance of NGOscommunity to facilitate the dialogue on these plans.

VIII. AGREEHENTS REACHED AND RECOMMENDATION

8.1 At negotiations, the following assurances were obtained andincorporated in the Loan Agreements

(a) The reforestation plan and proposals for improved incentives,financing and control mechanisms will be completed for 1.5 millionha by October 31, 1991, and for the remaining 8.5 million ha byOctober 31, 1993. The plans and proposals will be discussed withthe Bank and subsequently implemented after taking into accountcomments from the Bank (para. 4.6)t

Cb) The forestry research council will meet at least twice a year toreview plan and progress, and the minutes of council meetings willbe provided to the Bank within one month of the meeting (para. 4.7);

(c) Plans for the parks will be consistent with environmental carryingcapacity and operational and maintenance funding realities, and theplans for the buffer zones will improve the livelihood needs oflocal people (para. 4.10).

(d) MOF will review (i) participation of women forestry specialists as apart of the ongoing Human Resource Development Study; and (ii) givesatisfactory representation to women in the selection of candidatesfor foreign training in forestry research (para. 4.13);

(e) Vehicles for the purposes of the project will be provided by MOF inaccordance with a schedule acceptable to the Bank, (para. 5.8);

(f) Contracts for inspection services, forestry research, policyadvisory service, and conservation will be signed before December31, 1990 (paras. 6.3, 6.5, 6.6 and 6.7); and

(g) A mid-term evaluation of the project will be started by September30, 1992 and completed by March 31, 1993 (para. 6.10).

- 28 -

8.2 A condition of effectiveness of the Loan will be the effectivenessof the Japan Grant Agreement (para. 5.2).

8.3 With the above agreements, the proposed project is suitable for aBank loan of $20 million, at the Bank's standard variable interest rate, tothe Republic of Indonesia for 20 years, including a grace period of fiveyears.

- 29 - ANNEX 1Page 1 of 2

INDONESIA

SECOND FORESTRY INSTITUTIONS AND CONSERVATION PROJECT

ProRress of PICP I (Loan 2930-IND)

The Forestry Institutions and Conservation Project (FICP) becameeffective in July 1988, on schedule. Since then, the main achievements havebeen in the areas of policy and institutional reform, in line with Bank pre-appraisal and appraisal mission recommendations and conditionalities. Theseactions includes

(a) Research. A forestry research council was established in October1988 and a dialogue has been started with private sector,universities, and other Ministries to define research prioritiesmore sharply in line with user requirements. As a result, anagreement between OF and the industry association has been signedregarding cooperation on forestry research. The Government hasadopted a plan which will progressively increase the participationof private sector in funding of forestry research. Under thisimproved policy framework increased support for research is nowneeded;

(b) Fiscal Policy. GOt has announced 1502 increase in the level oftaxesiroyalties from US$4 per m3 of round log in early 1989 to US$10per m by June 30, 1990;

(c) Inventory. A forest inventory users group including all theDirectorate-Generals in MO0 and private sector, has been set up toimprove the relevance of information collection and itsdissemination. In addition, the first phase of national inventorywas started this year and is expected to be completed by 1990;

(d) Nature Conservation. A Directorate of Extension has been set up toencourage participation in conserving and managing forest resourcesin cooperation with the Forestry Department, and consultants havebeen engaged to develop proposals for addressing the needs of peoplearound park boundaries through buffer zone development. Thisprovides the basis for expanded Bank support for nature conservationas suggested by the Environment Sector Report;

(e) Industrial Policy. In line with the pre-appraisal missionrecommendation, disincentives for the construction of pulp millshave been removed, encouraging the broadening of industrial base.In the wood industry sector, GOI has also adopted a policy ofincreasing production value through improved efficiency and valueadded activities rather than through the processing of more logs.Following improvement in the policy framework, the Bank has provided

ANNEX 1-30 - Page 2 of 2

a loan for the Industrial Restructuring Project (Loan 3040-IND ofJune 1, 1989) vith support for pulp and paper industry;

(f) Coordination. Inter-Departmental coordination comuittees have beenset up to improve coordination of policy and operations regardingwatershed conservation, environmental protection, and control ofshifting cultivation. A joint inter-departmental conference washeld for the first time in 1989 to improve coordination;

(g) Concession Policy. The Minister has announced several measures toimprove concession management, including strengthening ofinspection, integration of concessions and processing, andrestriction on annual log extraction to a level of 32 million m3.The forestry sector policy studies have demonstrated seriousproblems in logging and recommended better enforcement ofenvironmental guidelines, and strengthening of technical capacity ofconcessionaires. Support for its implementation would be providedunder the proposed FICT II; and

(h) TFAP. GOI has announced its intention to organize a TropicalForestry Action Program (TFAP) discussion in 1990 based onstrategies and action plans now being developed under Bank assistedFICP.

Annex 2Pegs I of 7

DOOEUSECM FORESIRY aIN UTIINA amCNSEc^VATNN PSECT

,MFi rUiCY NiRIX

Mor Policy Ar's Oblestlvegflsse ON Actloee Beak Assistance

A. Forest Led Use Forost lands servo tultiple 00C has zoned torest lands 1. Bonk assisted Forestryplanning objectives Including in four categories nature Institutions and Conservation

conservstion of genetic conservation (13), watershed Project (FICP) to helpingdiversity, watershed pro- protection (21K), production to updatelinfonmtion throughtection for sustained water (443) and conversion (22K), but satellite imagry and ground-supply production of based on out-datod informs- truthing.timebr and non-ttiber tion. Consequently 19 M haforest products for use by of lands classified as 2. Durlng proposed sector reviewthe industry *nd houshold., permanent forost area xre of Land U Pllnniana ndand as a source of ne without forest covor whileo men a onth eonk wouldagricultural lnnd to *cco- 15-19 M he of are onod for iissti I;n clarifyingmodate population increse, agriculture Is under closed Institutional roles In

canopy forest. land use planning.

1 An issue to whether foretry 00C noods to: B. Proposed Second Forestry Insti-lanismi planning In necoe- tutions and Conservationsery or It should be loft to 1. Udto forest informtion; (FICP rn would assist In themarket forces. Because preparation of a Hationalof oxternaities Involved 2. Prop4r new forest land Master Plan for ForestIn eem of the functions uiiijTins; and Plantations.such as nature conserva-tion and watershod pro- 3. ClnrTty Institutionaltection, 001 cannot rely reponsibilittes for landsimply on pricing and uso. (G0 has formed amerkst mochanisms for spatial/land uso planningland allocation, and coinission beaded byzoning of foret lands Is BAPPENAS Chaibran toesential for environ- roview this end othermental reasons. land use planning isues).

2. A related Issu Iswhether MOF77rovinclalGovernment, or newlycreated WM s*hould takethe load In load usepilnning. This IsouwilI be examined duringa forthcoming sectorreview.

Annex 2Page 2 of 7

Kaw Policy rea AbIcieslssmee Actions Bak Assistance

S. Production Forest The man objectivs are 00C reconizes that there 1. Under FICP AMR with theConcession Manage- to provd wood products for is a serious problem and help or T;nsultants hasmast the xport oriented forest has accordingly *groed tot roviewed Incentive/control

products industry (1968 _frameork.export of usSf biio0n) and 1. Reviow concession systmfor local use on a *swstain- ineontiv- and control The main conclusions *ro:ablo basis. In the past, framework.production from concesions a. The returns on Investmenthas not beon on a sustainable 2. Strenstenf oreemont In sustainable mngsm_ntbasis loading to a rapid rate of concession agreements. are mtarinal with substan-of deforestation (one million tial risk due to long rots-ha per annum). This has tIon eyclo In natural forestraisd the Issue whether the (80 to 80 years), andconcession ;i;im and Its private investoro ould notIncentives framework Is have the Incentive to Mnagoadequate, and how the systm forest on a sustainabloIs to be impleented. basis, even If the forests

wero givn on long loese orsold.,

b. G0I should maintain naturalforest evnthough returnsare mrginal (around 101)beoeues of the additionalnon-quantifiable ewelron-mental benefits; and

c. the concession system needsto be enforced better, withstrongor limitation on areas10oggd each yer.

2. Propos d fPl Il wil hlpimple mnt rleomndationscoming out trom )ncentivo/polley studies under Forestry IProject, lnitiolly In a fewProinces and this will befine-tuned and expandedunder ftCP III Project.

Annex 2Page 8 of 7

KAw Policy Ares Objecttveflters -01 Actioe O&ak Asstotancu

C. Fiscal Policy the notion as the owner of Following reconndations 1. Under FICP the fiscal policyforest resource should it a of Forestry I Project pro- is beIng annlyzed and tntfar share of the rent fro appra is l osslon, C0I particular tho level of rent.harvesting of forest. In increased roforestation levy Following confirmation of thethe pest 00G collection of by 76X In 1869, and has level of rent further fiscalrent wms poor, and amounted announced a similar ineres e masures are possible.to lose then USS1O/cu.- of for 1990. The colloctlonlog compered with a rent of of the tax noeds to beUSU3O to 40 cu.s The texos/ Improved to reduce leakage 2. Under proposed FICP IIroyalty woero baed on end and to give Incentive for A III tax collection systemproduct which did not give better wood utilization. would be strengthneod tosufficient incentive to tho reduco lakage, and a nowindustry for bettor rw system of moasuremnt ofmaterial utilization, area harvestod and logs

produced will be Introducedsnd tested.

Annex 2Page 4 of 7

MoW POOtev ArIa Oblott$_esu GO Actign 1oank Assistsnc.

S. Trad PolIcy Main 400 objectivoe are: sO? has banned export of 1. Undr FICP Ohe tr poliy1. Increase Exports off iciently. los and seml-f isted ain prticular the imac

rattan to consrve reourco otog expert bn tn ing2. Consrve Roeeoure. *nd encoure local value nalye. The tentativ con-

added. At the ed of 1is9 clasion are:8. BSlene distrtions cauOs 001 also introduoe a high

by tariff and non-tariff export tax on onftine . Log export ben resultedbriers on proceesed goode swn wood with the sleiiar In a rapid establishmentgood In importing coun- objective. Whtile restrictions of a modern nd relativelytries. For Instance, on ratten and n wood efficient plywood Industrythe main hardwood importing export. are recent, log export which has continue tocountry4 Japn levies a ban was fully effective In incroee factor producti-1CX teritf on import of 1986, and Its Impact ham now vity of capitol and labor athardwood plywood, but no bon evaluated (Bank assis- rates hghor than in U.S.A.tariff on log Imports. tance pors. 1). GOt needs to and Canad, and is thereforeThe main istoo Is that reduce protection by: (a) a successful oxmplo ofwhilo the objectives of increasing raw aterial price intant Industry policy;consorving reeources an through higher rent eol Ie-incresed value added are tion; and (b) consider b. Factor productivity of woodgod, there io a dangr replacing non-tariff export has not increed becausthat Intfnt Industry pro- barelor by tariff barretr, fisal policy environmenttection could le1d to an until 1989 was notinefficiant industry, supportive (pleas se C);

and

c. Price of raw mterial shouldbe incroasd through higherrent collection on rawotterial to provide incen-tive for batter mterialutilization.

2. Unrder proposed FICP II AIll tax/royalty collectionwoiuld be Improved.

S. A review of the iqact of tradebarriors on sawnwood and smi-finihed rattan should becarried out by the Bank aftera few years experience, pos-sibly in 1991/92.

Annex 2Pa" 5 of 7

_ s PolicS Ares Oblecti ve_lesoI Actton Bea Assistace

E. Forestry Research The main objective sro to 00G ha. up to now concentra- 1. Undor FICP forestry reserchImprove regeonrtion In logged ted Ita reserch offort In is b 'ing strengthoned Inover forest snd to Improve Javs, whereas the min forest Sumatra and K elTintan; andproduction from forest are amr in the outerplantatioms. slands of Sumatra, 2. Under FICP I, a regional

Kalimantan *nd Irian Jaya. rerch *tntion .iI1 beIn the future, 00C noeds to constructed In Iran Jays.put more emphasis on rsearchIn Sumatra, K limantan andIrian Jays

Iw

Annex 2Page 6 of 7

Kew Pollyc Area Oblecthv.smues GOI Actions Bask Assistanc

F. Nature Conservation The main objective Is tho In the past 00e hag paid 1. Under fICP fIve nationslprotection otf_ genet div e- littie attention to naturo park plans were reviewed*Ity .*s*ource of genes for conservation but devoloped and *re now being imple-agricultural1 medicine and a series of national and mented. Bufferzoneforestry research and dave- More detailed protected planning has also been startedlopmnt The main issue is area management pIne. Very for the first timo lnbalancing nature conservation few of the have been Indonesia.needb with needs of Iocal i plemonted. Tho plans needpopulotions that may be to be reviewed/rovised to 2. Under proposed FICP II,dependent on the resourco. make thm more cost-o fec- roviews and reformulation

tive and to make thm of dditional plans willsuitable for foreign funding be done with a views toand implementation. Implementation under FICP III.

I

Annex 2Pogo e of 7

SKu Pollcy Ares Oblfttlveeth /Ia_ GOI Acties aitsh AssIstam

G. Institutional Main GOI objectivo ts to Recognising these problems, 1. Bank assisted FICP Is helping,Development Policy establish functional and MOf has: (1) Decided to through eries ot studies to

effective Institutions move staff to the main identify tho cop and thcapable of formulating forest greas In the outer magnitud of tasks that needand Implementing resource Islands and for this purpose, to be undertakn forutilization, conservation regional rosearch and Institutional Improvement.and anagement programs in training centers haveline with the Coverneent's been constructed in 2. FICP II will establishpolicies. The main problems Sumatra and Kalimantan systems which will be thehave been: (1) The and one Is now planned basis of future institu-concontration of W F staff for Irian Jaya; tional restructuring undorIn Java, whereas the main (2) Roorganized the Ministry tho Forestry III Project,forest areas in tho outer in 1988/89 *nd added new and this will include aIslands of Sumatra. Directorate of Extension comprehensive human resourcesKalimantan and Irian Jaya; to improve services; and devolopment progrom.(2) MOF staff rolationship (3) Started tho formulationwith local population has of a comprehensive Humanbeen poor; and (3) MOF Rosource Devolopmentstaff devolopment has been Plan.poor because of a lack ofwell thought out plan andtraining needs assessment.

-J

- 38 -

ANNEX 3Page 1 of 4

INDONESIA

SECOND FORESTRY INSTITUTIONS AND CONSERVATION PROJECT

TERMS OF REFERENCE

Introduction

1. The Government of Indonesia has requested financial assistance from theWorld Bank to implement a Second Forest Institutions and Conservation Project.The Project aims to forest management, planning and conservation with anobjective of establishing and maintaining an economically and environmentallysound resource management system. The project consists of five maincomponents:

(a) Formulation and implementation of a Concession hanagement system;

(b) Formulation of a Naster Plan for Plantation Establishment;

(c) Formulation and revision of Nanagement Plans for SelectedNational Parks and Wetland Areas;

(d) Formulation of a Master Plan for Forest Research and Establishmentof a Research Station in Irian Jaya; and

(e) Provision of a High-level Advisor to the Minister of Forest.

2. This TOR deals with the Concession Management Component, which theGovernment of Indonesia intends to implement under a contractual arrangementwith an eligible consulting firm.

Background

3. Indonesia's forest area is variously estimated at between 100 to 114million hectares. Precise resource data is not available. Improved resourceassessment is now being done under the Bank assisted Forest Institutions andConservation Project (FICP Loan 2930-IND). The current annual output ofindustrial wood produced from the Production Forest and Conversion Forest isabout 32 million m3. Utilization of the forest for production of commercialwood is mainly undertaken by the private sector operating under concessionarrangements made with the Ministry of Forest (MOF). The concessionaires areresponsible for formulating general forest management plans, five yeardevelopment plans and annual operational plans in line with guidelinesprovided by the MOF to ensure sustainability of resources and protection ofenvironment. MOF is responsible for allocation of concessions and monitoringtheir utilization through its central (Directorate General for ForestUtilization) and provincial organizations (KANWIL) in collaboration with theProvincial Forest Departments (DINAS). The main objective of the control ofMOF is to ensure that the sustained yield management principles are observed,

-39- ANNEX 3Page 2 of 4

environment is protected and revenues are realized.

4. The studies carried out under the Forest Institutions and ConservationProject have confirmed the observations of the Ministry that performances ofthe concessionaires and the forestry organizations responsible for controlneeds improvement. The main problem can be described in general terms that theconcessionaires are not observing governments guidelines thus results are:decline in resource productivity, loss in government revenues andenvironmental deterioration.

Objective

5. In response to these observations the Government of Indonesia decided tostrengthen its concession management syst_m with the objective of establishingan effective and comprehensive management system capable of capturing maximumrevenues based on accurate accounting of wood production and assessment oftrue value of logs while ensuring that forest resources are utilized in linewith principles of sustained-yield management and environmental protection.

Strategy

5. In view of urgency attached to the proper management of forest resourcesand the anticipated time lag to improve present institutional capability theGovernment of Indonesia decided to hire services of a firm to develop andimplement: (a) a wood administration (log accounting) system; and (b) forestoperations inspection system in the short run-and develop sustainable forestmanagement systems and demonstrate their implementation in the intermediate-run. The ultimate objective of the Government is evolve theshort/intermediate-run institutions into more permanent ones. The firm,therefore, is also expected to identify alternative long-term institutionalarrangements and provide training programs for all parties (public andprivate) accordingly.

Descrintion of Task

6. Design of Wood Administration (Log Accountina) System. The consultantwill design and test a streamlined and cost effective log measurement,recording and log flow control system. This system should provide relevantinformation :

(a) to verify that all logs, both in the forest and various points oftransfer, are produced from the trees marked and felled within thecoup area approved by the PH;and

(b) to calculate volume of wood in terms of species groups, assortmentclasses (i.e. sawlogs, peelerlogs, etc.) and quality classes asspecified by the rules and regulations issued by MOF in order toestablish a base for revenue calculation;

7. The consultant will design and cost an organization (organization chart,job description, qualification and experience of staff, infrastructurerequirement, means of mobility etc.) for the implementation of the system. Hewill describe, in detail, procedures for scaling/log measurement, logidentification, recording, documentation for log transport, etc. He will also

-40- ANNEX 3Page 3 of 4

describe methodology of determining intensity of control measures,responsibilities of parties and remedies to be taken in case of nonconformity.

8. Design of Revenue Assessment and Collection System. The Consultant willreview the current revenue collection system (royalties, Reforestation Fees,etc.) and will formulate an improved Revenue Assessment and Collection System.The Consultant will formulate methodology and procedures for estimating thenet value of the wood removed or cut in the concession in order to establish abase for MOF and the concessionaire to agree upon their respective margins.The methodology will describe sources of production data, production costinformation, and information to be used for assessing the market value oflogs. The related procedures will describe types of payments by theconcessionaire, time and frequency of payments, and recommend remedies in caseof breach of agreements.

9. Design of Forest Operations Inspection System. The consultant willreview the present system of forest operation inspection as described byvarious laws, decrees and orders and assess the effectiveness of itsimplementation with a view of designing an improved and cost effectiveinspection system. He will:

(a) analyze and identify general and specific objectives of intendedcontrol;

(b) design model plans for; (i) General Forest Management Plan; (ii)Five-Year Development Plan; and (iii) Annual Operation Plan,define the purpose of the each plan and describe type of datarequired, source of data, methodology of data processing andformat of report, specify qualifications and experience requiredto prepare such plans and the procedures for plan review, approvaland revision;

(c) design and describe in detail systems in terms of clear proceduresand methodology for the assessment of concessionaires performancein implementing such plans, define remedies need to be taken incase of breach and unauthorized deviations in implementing suchplans;

(d) define organizational structure, in terms of organization chart,personnel requirement, job descriptions, qualifications andexperience, equipment, mobility and infrastructure needs, specifyresponsibilities and duties of parties .

10. The consultant, after discussing and obtaining the approval of abovesystems from the MOP, will implement (a) Log Administration System; (b)Revenue Collection System ; and (c) Forest Operations Inspection System. Forthis purpose he will prepare a general program consisting of detailed annualprograms described by:

(a) concessions to be covered;

(b) staff to be employed;

- 41 -

ANNEX 3Pate 4 of 4

(c) type, number and timing of reports; and

(d) cost estimates.

Institution Building and Training

11. The consultant after completion of the design stage will prepare aperspective program for the development of the MOF institutions to superviseconcession management and,in cornection with this, the consultants willprepare and implement, after discussions and approval of MOF andthe World Bank, a program to train staff of NOF and DINAS, concessionaires andothers regarding the implementation of above mentioned systems.

Timing

12. The design stage is estimated to be completed within a period of sixmonths. Implementation will commence immediately after completion of designstage following the reviews by the Government of Indonesia and the Bank andapproval by the Government and will continue fo- a period of three years.

Ltoca&in

13. The MOF has selected two provinces; Riau, East Kalimantan and Maluku forcommencing implementation of the (a) Log Management System; and (b) ForestOperations Inspection System. Full implementation of the Revenue CollectionSystem should be an integral part of above mentioned systems. However theconsultant should formulate a phased program to commence implementation ofwhole or part of the Revenue Collection System in all provinces.

- 42 -Annex 4Page 1 o0 3

INDONESIA

SECOND FORESTRY INSTITUTIONS AND CONSERVATION PROJECT

NATIONAL MASTER PLAN FOR PLANTATIONS COMPONENT

Draft

Terms of Reference

Background

The Government of Indonesia (GOI) has requested financial assistancefrom the World Bank (as Loan) and group of donors (as grant funding) toimplement a forestry project, The Forestry Institutions and Conservation IIProject (FICP II), of which preparation of the National Master Plan for ForestPlantation is a component.

The objective of the Government is to improve forest management andutilization practices, especially those carried out by the private sectorunder concession management, and expand the productive resource base throughestablishing new plantations. The Government policy in conducting economicactivity in forestry sector is to encourage private investment and managementin market related activities while retaining responsibility of sustainingcollective value and benefit stream from forest resources under theresponsibility of the Government, through the Ministry of Forest.

In view of steadily increasing local demand for wood products,prospects for maintaining economic gains in serving world wood markets, andthe existence of large anthropogenic grasslands and degraded forest areas, theGovernment wants to asses the potential of expanding its industrial woodproduction base in order to adopt a long term development program. However,available data on land resources in terms of location of land suitable forplantation establishment, its production potential, and current use is notadequate to ensure correctness of policies to be adopted and investments to besupported. To remedy this the Governments wants to formulate a NationalMaster Plan for Forest Plantations.

National Master Plan for Forest PlantationsObjectives

The long-term objective of formulating a National Master Plan forForest Plantations is to sustain and expand economic activity supported bywood products obtained from forest resources while repairing environmentaldamages occurred by poor resource utilization practices in the past.

The immediate objectives are:

(a) to determine size, location, suitability of land forestablishing industrial plantations,

(b) to assess investment requirements;

- 43 -Annex 4rage z orT J

(c) to identify institutional, legal and procedural improvements;and

(d) to establish a sustainable planning and monitoring system inthe headquarters of the Ministry of Forest as well at provincelevel.

Desin

The component would require execution in two stages. The first stagewould be:

(a) establishing a data base using existing information, especiallythose generated by forest studies have been executed under theon going Bank-assisted Forest Institutions and ConservationProject;

(b) upgrading/enhancing this data base by developing species/sitesmatch information;

(c) developing management alternatives expressed in terms ofestablishment technology, cost and yield;

(d) developing economic criteria and identification of social andenvironmental constraints;

(e) designing a decision (problem solving) system by integrating theabove (economic criteria and constraints) into the data

(f) generating alternative long term developmentoptions defined in terms of costs and benefits(economic, financial, social and environmental);

(g) preparing a matrix to illustrate financial,institutional, legal prerequisites for adopting agiven development alternative; and

(h) establishing National Master Plan for ForestPlantations by training national staff on the joband delivering a complete and sustainable system.

The second stage would be establishing program development capabilityat provincial level in order to ensure implementation of the National MasterPlan for Forest Plantation as an integral part of the National DevelopmentPlans (REPELITAs). This would be attained by:

(a) Building technical and institutional capabilityfor program/project preparation at province level;and

(b) identifying formal linkages between provincial andcentral agencies.

- 44 -Annex 4Page 3 of 3

,Personnel. To assist in formulating National Master Plan for ForestPlantation of the FICP II the following inputs will be required:

- 81 staff-months of international personnel; and

* 124 staff-months of national personnel;

A detailed description of the Personnel inputs is included in Annex 4, Table 1.

£gauiment. The consultant will prepare system specifications for GISto be installed at the headquarters and the equipment required at provincelevel. Procurement, installation and maintenance will be the responsibilityof the Government of Indonesia.

Irafrin±. The Consultant will have the responsibility of trainingcounterpart staff on the job. Consultant will prepare and execute trainingcourses and workshops for the provincial level system operators, surveyors andprofessional staff to be engaged in the preparation of provincial levelprc;rams in the selected four provinces.

Renorting. Consultant will submit 3 monthly progress reports to theMinistry of Forest and a Final Evaluation Report at the end of their contract.

_ 45 - ANNEX 5Page 1 of 3

INDONESIA

SECOND FORESTRY INSTITUTIONS AND CONSERVATION PROJECT

RESEARCH COMPONENT

Terms of Reference

1. Research Management Specialist

Location: AFRD, FRDC, Bogor

Duration ofAssignment: 6 months

Qualification: Post-graduate degree in Forestry or related subject

Experiences Minimum of ten years experience in the management offorestry research systems at both institutional andnational levels, preferably in a developing country.Similar experience in a combined forestry andagricultural institution or agricultural institutionalone may be judged appropriate. Knowledge of theIndonesian language desirable.

Position: Specialist in research management techniques, policyguidelines, national level planning and implementationstrategies to prepare a policy and master plan forforestry research in Indonesia; reporting through theDirector FRDC to Director General APRD.

Responsibilities: (a) Assisting in the allocation, review and revision ofresearch priority ratings to ensure that research isresponsible to forestry sector goals and the long-termdevelopments plans of GOI;

(b) Constructing methodologies for improved cooperationbetween AFRD, universities public corporations(Inhutanis) and the private sector (concessionaires) inthe conduct of research programs;

(c) Preparing an initial Master Plan for forestry researchand setting a timetable and guidelines for its periodicreview;

(d) Developing a national Forestry Research System throughthe integration of university, staff, the public andprivate sectors, bilateral and multilateral technicalassistance teams, regional and subregional centers;

-46 - ANNEX 5Page 2 of 3

(e) Encouraging multi-disciplinary approaches to researchproblems and developing procedures for updating inter-institutional research and networking arrangements withregional and International research institutions;

(f) Exploring alternative sources for funding researchoperating costs (taxes or levies on production,contractual research, generation of funds from researchfacilities and services);

(g) Exploring alternative institutional arrangements forconducting forestry research including privatization orforming a corporation to enable more flexibility insetting salaries and budgets for research than iscurrently the case within government service;

(h) Interacting with the high-level advisor the Minister ofForestry (to be provided under the Project) on researchpolicy matters;

(i) Making effective the Research Council and Policy Unitby suggesting changes in chairmanship, membership andfunction and convening a meeting of the Council beforethe end of the consultancy, to consider recommendationsand research policy and to present a draft Master Planfor comments and suggestions by the Council.

2. Research Plannina and Programming SDecialist

Locations AFRD, FRDC, Bogor

Duration ofAssignments 2 years

Qualifications Post-graduate degree in Forestry or related subject

Experience: Minimum of 10 years experience in planning andprogramming research activities. Knowledge of theIndonesian language desirable.

Position: Specialist to work with both the Director General, AFRDand the head of the FRDC, Bogor on detailed planningand programming of forest research.

Responsibilities, (a) Implementing more effective research planning byrelating program to identified priorities;

(b) Arranging procedures for updating the Master Plan atfive-year intervals synchronized with Indonesia five-year planning periods (in conjunction with the ResearchManagement Specialist, See No. 1 above, with whom thereshould be at least two months overlap);

- 47 - ANNEX 5Page 3 of 3

(c) Developing further a research management informationsystem, including a national research project(computerized) for all traceable past, current andplanned projects at all institutions engaged inforestry research in Indonesia (an inventory ofinstitutions and research workers reportedly has beenmade).

(d) Improving the monitoring and evaluation of research byintroducing periodic external reviews and establishingpeer review committees at research institutions;

(e) Advising on personnel management and developmentprograms;

(f) Identifying training requirements for approved researchprograms and administrative and service tasks;

(g) Advising on staff training, recruitment andreallocation in response to program needs;

(h) Promoting the participation in research networkingarrangements with other research institutions bothnational and international (in conjunction with andfollowing the departure of the Research ManagementSpecialist);

ii) Improving accounting and auditing practicesparticularly for contract research (if this procedureis adopted) and for projects funded by agenciesexternal to government;

(j) Devising standard proformas for planning, organizing,staffing, directing and controlling research carriedout under different categories of funding;

(k) Assisting GOI with preparation of the researchcomponent for World Bank Forestry III;

(1) Elaborating TORe for Consultants (outlines inAppendix 2);

(m) Conducting on-the-job training for planning,coordinating, accounting, reporting, researchinformation systems, management of contract research asrequired; and

(n) Improving communication of research results byorganizing a schedule of seminars and workshops forgovernment and industry.

- 48 - Annex 6Page 1 of 10

INDONESIA

SECOND FORESTRY INSTITUTIONS AND CONSERVATION PROJECT

TERMS OF REFERENCE FOR NATIONAL PAMS INVESTMENT CONSULTANTS

The consultants selected to undertake work on the national parksinvestment component of Forestry II, will consist of a small multidisciplinarycore team of expatriate experts, plus Indoensian consultants. The team wouldsystematically undertake the short term planning needs and be responsible forthe actual revision of management plans for 10 selected national parks. Foreach plan the core team would be joined by PHPA counterparts drawn from thepark; these would be the same counterparts expected to work later withimplementation teams functioning under Forestry II or III. Planners fromPHPA's National Park/Recreation Forests would work closely with the core teamto monitor progress and also to gain experience needed to provide guidanceand evaluation for Indonesian consultants doing future plan preparation andrevision.

The core team would consist of the following members:

Proiect Manager-ex2satriate (12 months)

Oualifications: Extensive experience in natural resourceconservation project management, preferably in southeast Asia;ideal background would include national park planning andleadership of multidisciplinary teams; excellent communication andleadership skills, cross-cultural sensitivity and the ability toprovide on-the-job training to counterparts.

SQooe of work

*A actively participate in a scoping workshop helping determinepriority ranking of national parks for potential investment

* assume project leadership and assist in identification andrecruitment of remaining team members, manage projectfinances and equipment, and coordinate necessaryadministration

* provide coordination of efforts of all team members, ensuringtheir contributions meet project objectives, standards ofquality, and are produced on time

* provide periodic progress reports to PHPA Directorates andmake necessary adjustments in the plan of operations

* maintain necessary contacts with. the Conservation AdvisoryCommission established under FICP II

* actively participate in field activities as team leader

- 49 - Annex 6Page 2 of 10

* ensure timely production of updated management plans for the10 selected national parks (such plans might include themanagement prescription detailed in an appendix to thisannex) and their selective implementation as operationalplans under Forestry II

* provide guidance to local consultants, particularly those whomay not be familiar with operational planning and nationalpark management

* provide assistance and guidance as needed in pilot projectsto be implemented with funds in the present project

* organize and delegate leadership in workshops where revisedmanagement plans (operational plans) are presented to localPHPA staff, officials and community leaders

* provide on-the-job training to assigned PHPA counterparts

i encourage commitment to management plan implementation byPHPA providing legalized status of approved plans

Marine Park SDecialist-exnatriate (4months)

Oualifications: Extensive field experience in the planning andmanagement of tropical marine conservation areas, preferably insoutheast Asia; ideal background would include practicalexperience in marine area tourism, facilities operations, andmultiple use management of marine buffer zones; cross-culturalsensitivity and the ability to work within a team effort in bothoffice and field conditions are imperative; an ability to provideon-the-job training to counterparts is required.

Sgogeof W£ork

* serve as specialist team member under the leadership of theProject Manager

* provide the team's principal review and recommendations ofmanagement plans for Pulau Seribu Marine National Park, TelukCendrawasih (and additional areas as directed by the scopingworkshop) and selective implementation of the plans underFICP II

* provide recommendations on activities in other national parkswith significant coastal resources eg. Tanjung Puting

* actively participate in team field work, providing leadingrole where the study is related to marine resources

Annex 6- 50 - Pg 0

* provide assistance and guidance as needed if activitieswithin a marine area have been selected for implementationwith funds under the present project

* participate in or lead one or more presentation workshopsdesigned to review final operational plans

* provide on-the-job training to appropriate PHPA counterparts

Environmental Assessment Snecialist/Ecologist-local (8 months)

OualificAtions: Trained biologist or ecologist with experience inthe environmental impact review of development activitiesprograms, especially in ecologically-sensitive areas such as parksand reserves; ideal candidate would be a biologist or naturalresources specialist trained in environmental assessment in avariety of habitats in Indonesia; English language speaking andwriting ability is highly desirable; ability to function as amember of a team both in the office and the field, and cross-cultural sensitivity are essential.

Scope of Work

* serve as specialist team member under the leadership of theProject Manager

* provide the team's basic expertise in the environmentalimpact review of development activities in or proximal to thepriority parks (for example review of existing roads, trailand building design engineering and habitat or species-specific management and protection proposals)

* provide major input on recommendations to proceed with ormodify activities proposed in the management plans

* actively participate in the team's field work

* provide specific recommendations for protecting environmentalvalues of parks with management plans for immediateimplementation

* participate in or lead one or more workshops to present draftoperational plans in or close to the concerned parks

* provide on-the-job training to assigned PHPA counterparts

Park Planner/Landacale Architect-local (8 months)

Oualifications: Experience in the design of physical facilitiesfor administration, protection and tourism within conservation

Annex 6-51 - Page 4 Ot 1u

areas in Indonesia; ideal candidate would be a trained landscapearchitect with strong background in design of roads, trails andbuildings in ecologically sensitive areas, with special attentionto locally appropriate architectural styles and buildingtechniques; English language ability in speaking and writing isdesirable; cross-cultural sensitivity and the ability to functionwithin a team both in the office and the field are essential.

Scope of Rork

* serve as specialist member of the team under leadership ofthe Project Manager

* provide the team's primary review of existing designengineering studies, and assist in recommendations to acceptor modify such designs before implementation

* assist the team in developing guidelines for future PHPA usein contracting out design engineering work

* actively participate in the team's field work

* provide specific recommended design modifications forprotection of environmental values if physical developmentactivities in pilot parks are selected for immediateimplementation

* participate in or lead workshops to present draft operationalplans in or close to the concerned parks

* provide on-the-job training to assigned PHPA counterparts

Bufferzone Sgecialist-local 8 months

Qualifications: Experienced rural sociologist or social sciencediscipline related to rural development with sustained useobjectives; ideal candidate would have a background in multipleuse activities around conservation areas, a knowledge ofIndonesian rural social structures, and experience in involvinglocal residents and leaders in joint decision-making for resourceuse; English language speaking and writing ability is desirable;cross-cultural sensitivity and the ability to function within aplanning team in both the office and the field are essential.

Scope of WrkA

* serve as a specialist team member under the leadership of theProject Manager

* provide the team's principle input in recommending practicalbufferzone management activities in the operational plans of

Annex 6-52 - Page 5 of 10

the priority parks 'close coordination with Forestry Ibufferzone activities is essential)

* provide recommendations for additional site-specific studiesand/or field testing trials of bufferzone alternatives to beundertaken within Forestry III or other implementation phases

* actively participate in the team's field work

* provide specific recommendations on buffer zone activities ifsuch activities are selected for implementation in some areaswith funding from the bufferzone component under Forestry I

* participate in or lead workshops to present draft operationalplans in or close to the concerned national parks

* provide on-the-job training to assigned PHPA counterparts

Short Tero Consultants-local (19 month) -

Oualifications and Scone of Work: To be decided during theproject. Examples would include: advise on remote sensingaquisition, community participation, fisheries management.

- 53 -AN:EX 6Page 6 of r0

INDONESIA

SECOND FORESTRY INSTITUTIONS AND CONSERVATION PROJECT

OUALIFICATIONS AND SCOPE OF WORK OF MANGROVE CONSERVATION CONSULTANTS

Project team Leader:

24 months; expatriate.

The team leader will be responsible for the scientific and technicalmanagement and implementation of the project.

Specific tasks will include:

1. To be responsible for the scientific and technical aspects ofproject implementation as outlined in the project document.

2. To coordinate and supervise the project activities.

3. To coordinate project implementation with the PHPA and coordinatecooperation with other Indonesian agencies and NGOs involved.

4. To coordinate and manage the scientific and counterpart projectstaff.

5. To develop workplans for all activities in conjunction with projectstaff and counterpart agencies.

6. To identify suitable Indonesian consultants for involvement inexecution and implementation of specialized project activities.

7. To consult and where appropriate develop cooperation with otherrelevant wetland related projects of PHPA and AWB.

8. To pay special attention to the integration and consideration ofrelated socio-economic and rural development aspects in projectimplementation.

9. To supervise the financial management of the project with assistancefrom the resident administrative staff.

Oualifications recuired:

- (MSc or equivalent in rural development sciences or equivalentprofessional working experience.

- At least five years experience of carrying out socio-economicassessments and rural development in tropical coastal areas.

- 54- MTEX 6Page 7 of 10

Reasonable understanding of principles of agro-forestry and/orecological processes in tropical coastal areas.

Experience in project development and coordination.

Fluent in English and proficient in Indonesian (or willing tolearn).

Experience in leading multi-disciplinary teams.

Coastal Conservation SDegialist

A total of 18 mouths; expatriate.

The Coastal Conservation Specialist will be responsible for developmentof guidelines for mangrove conservation, coastal reserve managementplanning and first stage infrastructure development for (reserve)management for one key mangrove reserved.

Specific tasks will include:

1. To establish criteria for the selection of an existing protectedmangrove area for conservation management planning.

2. To select the site for management planning and implementation inconsultation and cooperation with PHPA and other relevant Indonesianauthorities and NGOs.

3. To cooperate with the other team members and consultants in thedevelopment of guidelines for mangrove management integratingforestry exploitation, conservation and sustainable use of othermangrove forest resources.

4. Development of a conservation management plan including a detailedbufferzone development and management design for the selected keymangrove reserve in conjunction with local communities, NGOs andauthorities.

5. To coordinate first stage reserve management implementation forbasic infrastructural development.

6. To contribute and participate in the projects workshops and trainingevents, including on-the-job training of counterparts and reservemanagement personnel.

7. To regularly report on activities, scientific results, managementresults and the cooperation with the local communities, NGOs andauthorities to the project team leader.

55 - A.MX 6Page 8 of 10

Oualifications recuired:

- MSc in natural sciences or equivalent professional workingexperience.

- Experience of information review, coastal wetland survey techniques.

- Experience in bufferzone development/management.

- At least one year's experience in tropical coastal wetlands.

- Fluent in English and proficient (or willing to learn) Indonesia.

- Experience in running field survey teams and report preparation.

- Willing to work in difficult rural field conditions for long periodsof time.

Land-use 2lanning expert/conservation ilanner

A total 12 months; expatriate.

The land-use planning expert(s) will be responsible for the developmentof guidelines for integrated land-use and conservation planning inmangrove areas and will utilize and test these guidelines in two pilotprojects.

Specific tasks will include:

1. To establish criteria for the selection of two key mangrove areasfor the implementation of integrated land-use and conservationplanning as outlined in the project document.

2. To select the two mangrove sites for integrated land-use andconservation planning in consultation and cooperation with PHPA andother relevant Indonesian authorities and NGOs.

3. To cooperate with other team members and consultants in thedevelopment of guidelines for mangrove management, integratingforestry exploitation, conservation and sustainable use of othermangrove forest resources.

4. To implement multi-sectoral land-use and conservation planning inthe two selected areas in conjunction with local authorities, localNGOs and local communities and with assistance of Indonesianconsultants, using and testing the guidelines as outlined in theproject document.

5. To contribute to and participate in the project's workshops andtraining events, including on-the-job training of counterparts.

-56- ANIREX 6

Page 9 of 10

6. To regularly report on activities, scientific results, land-useplanning results and the cooperation with Indonesian counterpartagencies and local communities to the project team leader.

Oualifications required:

- lMSc or equivalent in a discipline related to resource assessment andland-use planning, or equivalent professional experience.

- Thorough understanding of ecological processes in tropical coastalareas.

- Knowledge of principles of socio-economic evaluation.

Experience with community development and/or working with peoplefrom developing countries.

- Preferably fluent in Indonesian and English (or willing to learn).

- -Experience in running field survey teams and report preparation.

- Willing to work in difficult rural field conditions for shortperiods.

Local Consultants (Short Term)

A total of 24 months for Indonesian consultants is planned.

Specific terms of reference will be established by the project team aftersite selection and preliminary inventory of problems and specializedtasks. It is anticipated that a total number of 5 to 10 differentspecialists will be employed as consultants on a short-term (1-6 months)basis, pending needs for specialist input.

It is expected that consultancy input will be in the followingdisciplines:

HltOxlogist:

Responsible for assessing the hydrologic functions of the selected sites,and their contribution to maintaining important environmental services,including: mitigation of storm and flooding hazards, maintenance ofgroundwater resources, control of surface water flows, water pollutioncontrol, etc.

- 57 -A.1EX 6Page 10 of 1U

Resource Economist:

Responsible for examining the social and economic significance of thefunctions of the selected wetlands and the environmental and pecuniaryresources derived from them. An example of a specific case study might

be the assessment of the environmental and economic impact of extensiveshrimp pond siting in mangrove, or the impact of intensification ofshrimp pond production.

Fishery ExZert:

Responsible for assessing specific fishery functions of the selectedsites.

Soil Scientist

Responsible for assessing specific aspects of soils, in particularpotential occurence and impact of acidification.

Buffer Zone Management SRecialist

Assistance for the preparation of buffer zone management planning,particularly in relation to the needs of local communities.

- 58 -

INDONESIAANNEX 7

SECOND0 FORESTRY INSTITUTINS AND CONSERVATION PROJECT Page 1 o

PIROJEC COSTS AnD DISUURDIZN

gattonal Ka trPMfrFrs tns'j ________01

Deswiplkx Qabstity vat it" so" casu MRP mlion) ea. code, (US$ 00U)Clod coo

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No 3 I 100 321.? 324 0 0 116 70 0 0 0 10no 3 3 3 3 33 110 9.9 20 20 30 333 217 37 17 I7 72 323

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C. TonkiAl Asistan.1. hillSa11gCL3AmSp"IgILw W-. 38 33 24 314 3710 4.7 139 310 310 102 3050 305 M91391 90 19

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&6-4a3lO - - -I - 9271 3133340 2923392 337 731362 363773

D.LI_aS=h~~~~ l~Oo 2 4 9 I 33 3800 3.6 7 34 29 29 74 4 1 3 44

NfO 4 9 36 34 441 10m 9.0 16 72 144 144 39S 10 40 0 903

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I Ao. & Seo.t Pr~iafrAp- ~~~~no 200 1001 0010000 0to so 0.3 Is 2 21 21 99 30 35 3s is Ssbb" ~~~~~no 200 209 200 200 No 10 0.44 7 , 7 7 7 29n 4 4 4 4 34W

SW140101 G D) 21 3 34 34u 32XT1 4 39 39 to 71

TOTAL DvEa s 1fA T 3br 383 317 1338 76? s2m 749 3M3 711 457 2991

I. INCRBMNTAL OP. COM7

A. SA*ffA6n3MMMireSh

Spum -&S 4 a 34, 14 44 3000 3.9 7 4 29 29 79 4 6 14 34 4Smamommicamr.%w 3k 4 4 34 36 40 3000 351 7 7 29 29 12 4 4 34 34 40

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Suhah (U A) 22 361 303 303 2621 34 20 16 6 19 46

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c. car opetaihs co"(O OOIly.so3 4 9 36 36 44 710 :,J3 1 3 332 19 t3 6 32 2 33

TOTAL INCR.0? COP STS 23 61 3se 394 447 37 16 so 306 24

TOTAL COMCPON4ENT COST 33 3I", 313 I 60 76 10304I an9 13 33

59

AM= 7Page 2 of

Forest" Research 01

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3m Ss" MD 3$9 no 4 2003MA 4" 449 440 350 Wa

a, I 30A 310A 0 0 so 0 is a 0 M 200I I LI&O So" 0 6 aw 0 269 0 a ISO 0 M

1.1howmidAndlo4bul an I 1, is" 2doi a 0 2091 01 30 01 0 ISO 1 4 IftSib-T44010C) I . a 0 S1W a I lim 0 0 ml 0 1 "o

D. vebma a D) Z- 1 41 4 a to I" US SI tu in "I 3n 0 74 74 n M

L M PM lawiamS, - molmim Rh 3 3 toko 179J a 0 0 M uo 0 a 0 306 300V4' MWM*M"Tgbb VA 6 4 M 12L? 0 0 0 7$4 M as 40

Cbmww"" EA I 1 7&0 in.? 0 0 0 126 126 : 70 70CANK"" EA I I 7" ML? 0 0 0 In tu ol 0 0 74 70

0 0- 0 is" is" ol 0 ol 001 No.P. Teebgufa-M* we soomit mm 4 6 tsA 2L9 ta a 0 0 ta 90 0 0 0 goFA16MWWbWT#GVWWb* Wm 3 12 9 Z4 13i 24.2 73 291 us 0 $42 41 la 122 0 324r"mr-d'acmult"; Wm 3 3 DJ 24.2 a 0 0 73 73 0 0 0 41 41SmdT4dw*wC=wdvw mm 6 4 13J 24.2 0 0 0 145 145 0 a 0 or $I

mim 6 11 13.5 24.2 0 0 145 14S 0 to $Irgncmwdl mm 2 2 aj 34.2 0 0 : 4B 49 a 10, 27 v

a I "W 6 6 MS 24.2 0 0 a 14S 145 0 0 of StrmmwAw"w Wm 6 4 I&S 2u a 0 0 145 to 0 0 a $IromaRLUmin mm 3 s Di 3u 4 0 0 73 In a 0 0 a 41wvmldmmm� NM 11 11 Di 242 145 145 0 a $1omp , Wm 3 3 Di U.2 :- :- 73 73 0 41 4.3Wb-TddGF) 224 2" 210 2! 1717 131 in in 3541 go.

0. BimsdooAXAowo PM 19 246 U? de 2.5 43 o m tios tosd mi 0 Sol 613 031 lawISM-DWO PM to 25 so 91 2.0 U 0 n 90 to 327 0 n A to In11006 LOWMO "M 4 140 30 to Si L7 SI$ 399 M 0 $17 a iso UI a MBob-TaISIOG) I 1 113 IM t3M 00 3135 E Xg 7401 40 am

TarALbriMTWMTCM 01 SW 41MI 4M IWI. 40 070, 4MI IIW 91'n

gjmmmw�op, am$

qpwfimwdumtw� sm 0 so M S39 $0 100 1 3M 4501

["rALCO190tam vaws as 2M las 4m1 274 M

£600 012K 959K V919 914 K16 OM OM t019 £1 91N?Sj#JW W

a 11 0t 0 0 it a2 3? 0 0 08? 0010 Vt I sniUdO ASGI

Isl0s 2IK 919 319 016 61961 £91 9119 2319 999? SLUAkaul.am iW.Oj

Ks2 0 01 0 a LU6 0 214 0 gill pip

S 0 0 0 a i1 0 0 0 SI 051 £51 I I Pt~wset? 0 act 0 0 on 0 06 0 0 003 u4£ U% IC ON ICl a 0 II 0 0 2110 2110 0 r£1o1 o 01 ON01 CI OW£9o 0 LIP 0 0 Ott 0 0ct 0 0 01l 119? at 09 am"mSt 0 SI 0 0 a 0 a1 0 0 521 £0181 I I ONIt a0 Is 0 0 02 0 01 0 a 00?t ILL 2 1 OMa 0 a 0 0 09 0 09 0 0 02 till Kt QC OMIt 0 12 0 0 K 0 at 0 0 55 90 a St OK55 0 91 0 0 001 0 ac010 0 0V 31 U9 t a9m

"a 9111 £6 got ? 0 111111 4m yISt 21K 0 __A__ ___ ____ ___ __

MUt ff4 Opt 516 0 961 6s2 2192 al- 0 PAPs-

at10 0 U?i 0 La 0 0 La 0 69p 01£? It VW 19313011 0 0 at? 0 tot 0 0 tot 0 29? 65tt 1 2t Wa osrJ0 0 0 V5 0 0? 0 0 01 0 WV a"£ £ 2 PUS93ma2 0 0 £a 0 a9 0 0 a9 0 292 m 00 &3 1 1931 LI 0 0 it 0 a9 0 0 Sp 0 It? OKg 651 2 me1I93tmv9? 0 0 511 0 tZ 0 0 92 0 22 6111 I 193V I-A Iu--Ra a 0 £2 0 VP 0 0 09 0 292 65 t9Ms-1121 311Waa2 0 0 £a 0I90 0 0 0 292 *m 001? 2 FM193tu-nmOK2 WI? Kt K9 0 6 3 511 U 0 "Il 6001 01 0? 1 1 GMan £0? OIL Kt 0 mg1 OSI Ott U 0 091 mi K 0 L 1 OKGMa

I0 I I I I £0 ILl

3 a 0 a 0 5091 0 0 0 1 r9t 01K£? t S mg£2 0 0 0 £2 09 0 0 0 Sp9 r 291 6111 2 Ms wbAW

it 0 0 0 5091£ 0 0 0 U £ f 292 t651 t 2 193If W

So 0 0 0 St a1 0 0 0 a £t ml a Zs Wato 0 0 0 to 5910 0 0 of1 r9t 65239 9 Wa -pfto 0 0 0 to Pt10 0 0 59? en am119 9 we91omIt 0 0 0 5091 0 0 0 IL 192 ow 651 1 PMWamp"19 0 0 0 5091a 0 0 0 IL rp 292 6511 1 Wa -OSit 0 0 0 0091£ 0 0 0 " ro 292 521 1 WaawfANIs 0 0 0 to Pt10 0 0 59? 292 65119 9 rW a_I_______

U 0 0 0 U £6 0 0 0 £4 r Mu2 6 11I £1 0 0 0 59101c 0 0 0 01 29 out 9 9 Wa SW

£1 0 0 0 rot1a 0 0 0 01 SI9 a"4 9 9 Wa

U 0 0 0 U £9 0 0 0 £9 22 65w? t 9 mg3to 0 0 0 Is 5910 0 0 59 rot292 t 651 9 WaMLI 0 0 0 59101t 0 0 0 01 4I1 01£? 9 9 NM a

arg Ott m Ki - - - - -co (vtl0OttLot a U etU USo us 6 Kt 46 5 Kut out II 11 ti to t 1901n 0I 0? of Os tic 5? 9? O 06 06 WS 05m 92 2 2 01 0 Ii'?tL WI K 91 91 t o 01 925 59 5 U WI ow 60 219 91 91 cc 19so9 ml a1t05? OS ilcm 65 6 et D l 41 £651 19 a1 a1 aI 9 on

33100 jmwm.1

oosin) 'M'3 -0 (Wam" ~ wpoo vmugq i.n ui u150="n

uoyz3.p.ui pS UWI3U3)469 UOTGSS*UODo

-09-

- 61 -

ANNEX 7Page 4 of 8

National Parks\Advisor - __ _ 01

D. dpd_ . a- -. a_m __c_ma_ie) __CoOOP

Usk 9m 9t2 9a m "m TON Us 3U K1 19191 9% l 9am Tow 90m 9"ml92193 939M4 T4t1

L tNVBSM CO ___ _

_ v. 6W 2 9 a 26 2e o2 45W 04 otWNL Wa s a 4 20 U24 2 3 0 0 41 t4 0 o 34

2.t Lo wffBP. A& 404"3W. _ 21 44 IS 35 0 0 34 S o4 0 0 o2_A1__Aes"* W I s 5 21 49 Is 25 0 a 34 5 14 0 0 25§_b_rdn* "a521 4_9 I 2m 0 0 3o o £4 0 0 2o

a" 4 o 26 21* 4 3 St a 0 0 n 14 I i o a 7*

45 0 * 0 ~~45 as 0 0 0 2sVdoo0 34 20 0 0 0 30

diu0 11_2 lb0 a n O a a O 0 0 19

we I WM51 2.2 33 0 0 0 25 t9 0 0 0 toa 1 3 94 S O 0 0 0 3 0 0 0 2

Wodk 3 wrf n Vd2 54 9 0 9s IS 30 * 0 so

cbovwu Vam 54 249 25 @ O 3_100 32 Ohi

.__ _ _ _ __ is __ n 0 o 0 9 40 0 0 50

896aI G A) 61P ON 45 0 a" 3 0se 26 2s 0 lo0

! ia CII oo* I .nv.Iw 2 a1 9 24 am 2L9 tI 26 26 0 ON 4s to 129 0 3600hdosCamw. 2 U 9 24 Dt5 249t 2U 29 M 0 S 41 1I2 tZ

2. vA E{Wa 4 4 I 0 t 2 2 0 0 4

C. Vd 0 0 0 2 1 0 0 O 1maflhSU.. V_E 45 0 0 45 s5 0 0 25

3. -o

iOWAWTMWM _ T_ 4 0 0 4 2 0 0 0 2

D%wTnbkg VWa i 4 0 0 9 3 2 0 0 S

| a~p SWaT_ V9 tt 0 o 0 2 t t0 0 0 IS

304 vww tt~~~~~~~~~~I 22 0 0 39 t0 II 0 0 2?P'Iuw_ YEa 5 9 4 0 Is I s 2 0 t0

_mmS lmbsa Vww . _9 9 0 0 .1s 5 s 0 0 tO

'Wbtou I GO) - -MI 6253 464 0 1397 14 31959I 01 778

TOrAL 111134254 COST 882 £301 300 0 20II 492 702 284 0 ISn$

ii. ma. mm oeA. Nd. SkOP. e

I1 A Tr Van 27 36 14 0 79 tS 20 9 0 44_ *_ Vd l i 9 5 0 #1 4 s 3 0 12

I q _m v a 2 s5 2 0 9 £ 3 o 0 sL. Cm. AiMv. Op. t

Vdddoop"m V*V 4 s 5 4 a2 2 2 10&t=mb vwa 2? $4 45 0 2 IS 30 25 0 la

| & _ I.L Va 14 14 0 n 3 4 * 5 0 22

_____ ~~ ~~~~ ~~ ~~ ~~~~~ ~~2 2 2 2 I I It 4

?OTALfhCL it 3S - = - = - = = t t2 11 0 3 441 750 o It67

ITOrALPAm&A DvUOR I on l= 5s9 5 1 ml 82 334 31 10

_ 62 -

.. ~~M

Wetland/ Mangrove Conservation 01

Dssoipdm Q=Aft Usk U*k DMCOMa(Itp miaa) am co" (USS 000)cold Qft

Uul g gm91 am UN914 Tohi uS 1M1 N gem gm0939 am 1NM Total 90m9 911991am931 TOWag.~~~~~~~~~gw-~~~~~~~

3qm0a *0 0 10. u40 O6s la tS to oa a toGodeloo AG* 45 40 to0 03 I 7 4 0 0 a

: ~ ~~~~~~~~~~~~~~~~~~to etu st o 0 0 a t

Ka a 0W 0. 3 0 0 0 I Is 02 a 0 80

Mdn to4 o us 04 2 Is 0 a 40 to t2 0 0 27_mobw U 90 9 890 0 0 U9 21 921 0 0 sFa VAd 70 to 0 0 i2 10 1O 0 0 t0

_alilkswelbobw van 9 0 0 to 0 to 0 0 to_ 1 1X 50 40 90 3ao jdm 0 88 0 0 88 0 80 0 0 n0

A_tUN"mmmb 9 IS 0 0 s 10 t0 0 0 totVauP a 9 0 t o 0 0 to 0 20 0 0 s0

Ci_i-awn 6 6 a sm 94 $4 9 0 0 18 O 10 a 0 10t_t_ ~ ~~~~ V2 9 t - OO m 9 18 O 3 14 0844t

1_-m3 V- O 82 00 9O $4 14 0 0O 20 O 0 40

T_ Qm S 9 82 V. 9A 2?1 0o0 too is 42 0 0 10d. law OMW9 2 U 24 10 3e it a 32 o u e 24 is 0 a4

TOrALl.VWIw4 00W so as 85 0 a I it16" 1m l 0 Si 0 40

I _____ 8 2 Is 0 0 S4 10 20 0 0 60,_*. 1 0s I 18 4 O 0 0 9

mm aTmb - __s 14 _9 tt It a 13 92 0 8 8) 0 0 21

vwho ~~~~~~~~9 Is 0 5 27 S1 10, 0 0 Ls%ftsTAL a* 0=IfS so_ISi 0 93

TOTAL VMCL ( O M.=01 its 870. 83 0. 25) a. go 8 0 14Itoo

TOrAL MAN_ RO WI ml 701 o 0 I .4I ni om 91 o 0 3i

TOTAL Vh_Uff WI 1 14191 783 1 4O 1 n I9 1 4 O 21 1

- 63 -

ANNEX 7Page 6 of 8

Policy AdvisorgM xrice 01

Duuipliua QuauY WUt Wt Rm Cq (Rp MWht) Bm CoS (USS 000)

Iuh gm em a" " o =$ Rn m geml T" l T 0t91 |n 92M _m T*W

1. nwnff COSFSLaItimx 6tat b 2 a Ct 3 5K 269 la so la 4 go to0 ISO go S40LUM14m a__om* I C a 3 2 24 OM 24.2 3414 7t 73 34 1 14t 41 324It. Votimm vwm26 14 0 0 0 20 0 0 0 sO4.11 8 _ - 4 31 t e 61 tl IJ IA 31 22 22 IIa 43 32 4 36$.<1111D*_ IW * lI tl ii 39 34 4 4 4 3

TOTAL UNVWUT C001 291 4 4461 21 1746 1331 336 MD0131 972

UI. _cI. com1. 9 9 9 9 36 S S S 20

_2.Tmt_to_ 16 2_ 2? is 90 tO is to s0

TOTWL D6C. Or. 0015 2 36, 2 VI U2, U 20 20 U 70

TOTALc m =wT I ml61 ml9 am US to70 340 3a ml0 In 1304t

- 64 -

INDONESIA ANNEX 7SECOND FORESTRY INSTITUTIONS AND CONSERVATION PROJECT --------

Page 7 of 8Disbursement Schedule(X'S$ million)

Disbursement Indonesia Comparitive ProfileBank --------------------------------- Agriculture Bank-wide ForestryFY Semester Semester Cumulative % (%) (%)

1991 I 1.00 1.00 5.00 0.00 0.00II 1.50 2.50 12.50 3.00 3.00

1992 I 1.50 4.00 20.00 6.00 10.00II 2.00 6.00 30.00 10.00 14.00

1993 I 2.00 8.00 40.00 .14.00 22.00II 3.00 11.00 55.00 22.00 . 26.00

1994 I 2.50 13.50 67.50 26.00 34.00II 2.50 16.00 80.00 34.00 42.00

1995 I 2.00 18.00 90.00 42.00 50.00II 2.00 20.00 100.00 50.00 58.00

1996 I 62.00 66.00II 70.00 74.00

1997 I 78.00 82.00II 90.00 90.00

19%8 I 98.00 98.00II 100.00 100.00

ANE 7- 65- Page of8

NDOERSIA

SECOND FORESTRY INSTITUTIONS AND CONSERVATION PROJECT

Proposed Loan Allocation

Amount of the 2 ofloan allocated Expenditures

Category (US$ M) to be financed

1. Civil Works 2.8 552. Equipment and furniture 1.4 1002 of foreign

expenditure;10O of local

expenditures(ex-factory cost);and 652 of othergoods locallyprocured.

3. Planting costs 0.6 604. Inspection service 4.7 852 up to June 30,

1992; and 452thereafter

5. Technical Assistance 6.6 1006. Training 2.9 1007. Unallocated 1.0

Total 20.0

ORGANIZATION CHART

THo VOtEST DEPARThEN? ORCOAIZAtlO SthUC YRE

Hir,iater

|lnspectorase Ceneral |SZtZ Geea

DLrectorate C-neral Dtrectorate General of Dtrectorate General of Agency or Forest Agency for Forestry

of Forant Refor etation and Yoreut Prot-ctlon and and Land Use Research and

Utilszation Lnd Rehabilitation Nature ConservatLon lnventory Development

| Secretary F | Secretarr F | S cretary Secretary Secretary

birtectorate for Drcectorate for Centre for Foreat Centre for Forestry

Planning txten lon Extension Inventory Research and

Development

Directorate for DLreetorate for Directorate for (Centre for Happing Centre for Forestry

Forest Reforestation Forest Protection land Survey Products Research

Exploitation and Development

Directorate for | Directorate for Directorate for Ceatre for Forest

Forest Products LSotl Conservation nature Conservatton Land Use

Processing Iapptna s

laD

_ 67 -

ANNEX 9Page 1 of 12

INDONESIASECOND FORESTRY INSTITUTIONS AND CONSERVATION PROJECT

NATIONAL MASTER PLAN FOR FOREST PLANTATIONS

IMPLEMETATION SCHEDULE

1 ADVERTISE 6.00 WeeksSched Start: Jul 2, 1990 Sched Finish: Aug 10, 1990

* 2 REVIEW AND SELECTION 4.00 WeeksSched Start: Aug 13, 1990 Sched Finish: Sep 7, 1990

* 3 CONTRACT AWARD 2.00 WeeksSched Start: Sep 10, 1990 Sched Finish: Sep 21, 1990

* 4 OFFICE SET UP 4.00 WeeksSched Start: Sep 24, 1990 Sched Finish: Oct 19, 1990

…== ------------------------------5 INITIAL DATA GETHERING 4.00 WeeksSched Start: Oct 22, 1990 Sched Finish: Nov 16, 1990

…___ ------------------------------* 6 PROJECT MANAGEMENT 52.00 Weeks

Sched Start: Oct 22, 1990 Sched Finish: Oct 18, 1991. ------------------------------

7 ESTABLISH DATA BASE 8.00 WeeksSched Start: Nov 19, 1990 Sched Finish: Jan 11, 1991

… _--- --- --- ---- --- --- ---8 ECONOMIC STUDIES 40.00 WeeksSched Start: Nov 19, 1990 Sched Finish: Aug 23, 1991

…____ ------------------------------9 SILVICULTURAL STUDIES 12.00 WeeksSched Start: Jan 14, 1991 Sched Finish: Apr 5, 1991

…_ _ _____ __ ___ _ _ _ _ _ _ …......10 ECOLOGIC STUDIES 8.00 Weeks

Sched Start: Jan 14, 1991 Sched Finish: Mar 8, 1991… _-------- --_ ------ -------- .

11 SOCIAL STUDIES 12.00 WeeksSched Start: Jan 14, 1991 Sched Finish: Apr 5, 1991

…--_ .- -- -- -- -- -- -- -- -- -12 WATERSHED STUDIES 12.00 Weeks

Sched Start: Jan 14, 1991 Sched Finish: Apr 5, 1991- ------------------------------

13 DECISION FORMULAS 8.00 WeeksSched Start: Apr 8, 1991 Sched Finish: May 31, 1991

_ _ _ _ __ _ _ ___ ___ _ _. ._- _- _____-___ …__ - ._____.-_

14 DEVELOPMENT ALTERNATIVES 4.00 WeeksSched Start: Jun 3, 1991 Sched Finish: Jun 28, 1991

- 68 -

ANNEX 9Page 2 of 12

15 PREPARE NAPS 8.00 MonthsSched Start: Jan 14, 1991 Sched Finish: Sep 12, 1991

.............. .... _ __ . ... _ _. --- -- -- --- -- -- --- -- --

16 SEMINAR 2.00 DaysSched Start: Jul 1, 1991 Sched Finish: Jul 2, 1991

17 POLICY PAPER 4.00 WeeksSched Start: Jul 3, 1991 Sched Finish: Jul 30, 1991

18 SEMINAR-Il 3.00 DaysSched Start: Jul 31, 1991 Sched Finish: Aug 2, 1991

…_ _.__.____ ___ __ __ ___ _ __.....…......_...................19 NATIObUAL PLAN 8.00 Weeks

Sched Start: Aug 5, 1991 Sched Finish: Sep 27, 1991

- 69-ANNEX 9Page 3 of 12

INDONESIASECOND FORESTRY INSTITUTIONS

AND CONSERVATION PROJECTPROVINCIAL PLANTATION PROGRAMS

IMPLEMENTATION SCHEDULE…____- -_- -- - - -____-_-__-_-_-__-_-_-_

1 SELECT PROVINCE 1 0.00 DaysSched Start: Oct 28, 1991 Sched Finish: Oct 28, 1991

2 OFFICE SET UP 4.00 WeeksSched Start: Oct 28, 1991 Sched Finish: Nov 22, 1991

…__. -------------------------------3 STABLISH DATA BASE 4.00 WeeksSched Start: Nov 25, 1991 Sched Finish: Dec 20, 1991

= . _ _ _ _ _ .__ _ _ __ . .-- - _- __- __- _- ___-__ -_4 TRAIN SYSTEM OPERATORS 4.00 WeeksSched Start: Nov 25, 1991 Sched Finish: Dec 20, 1991

= -_ _ _ _ _ __ _ _ _ _ _ _ _ _ --------------------------- _-_ -5 TRAIN EXECUTIVES 2.00 WeeksSched Start: Nov 25, 1991 Sched Finish: Dec 6, 1991

. -------------------------------6 PREPARE MANUALS 8.00 WeeksSched Start: Nov 25, 1991 Sched Finish: Jan 17, 1992

….…_ _ _ _ _ _ _ _ . .- - - - -- - - - --_-_-_7 TRAINING SOCIO-ECONOMICS 3.00 WeeksSched Start: Jan 20, 1992 Sched Finish: Feb 7, 1992- -------------------------------8 TRAINING SOIL-SITE 3.00 WeeksSched Start: Jan 20, 1992 Sched Finish: Feb 7, 1992

9 TRAINING WATERSHED 3.00 WeeksSched Start: Jan 20, 1992 Sched Finish: Feb 7, 1992

10 WORKSHOP 1 1.00 WeekSched Start: Feb 10, 1992 Sched Finish: Feb 14, 1992

11 DATA BASE UP DATE 12.00 WeeksSched Start: Feb 17, 1992 Sched Finish: May 8, 1992

12 TRAINING PLANNING 4.00 WeeksSched Start: May 25, 1992 Sched Finish: Jun 19, 1992

13 FIVE-YEAR PLAN 1 4.00 WeeksSched Start: Jun 22, 1992 Sched Finish: Jul 17, 1992

._. _ . .…__

14 SELECT PROVINCE 2 0.00 WeeksSched Start: Feb 14, 1992 Sched Finish: Feb 14, 1992

- 70 -

ANNEX 9Page 4 of 12

15 0 m CE SET-UP 2.00 WeeksSched Start: Feb 17, 1992 Sched Finish: Feb 28, 1992

16 TRAINING(SOCIO/SOIL/WATERSHED) 3.00 WeeksSched Start: Mar 2, 1992 Sched Finish: Mar 20, 1992

17 TRAINING OPERATORS/EXECUTIVES) 4.00 WeeksSched Start: Mar 2, 1992 Sched Finish: Mar 27, 1992

18 ESTABLISH DATA BASE 4.00 WeeksSched Start: Mar 2, 1992 Sched Finish: Mar 27, 1992

19 WORKSHOP 2 1.00 WeekSched Start: Mar 30, 1992 Sched Finish: Apr 3, 1992

20 UP DATE DATA BASE 2 12.00 WeeksSched Start: Apr 6, 1992 Sched Finish: Jun 26, 1992

21 TRAINING PLANNING 2 4.00 WeeksSched Start: Jul 20, 1992 Sched Finish: Aug 14, 1992

22 FIVE-YEAR PLAN 2 6.00 WeeksSched Start: Aug 17, 1992 Sched Finish: Sep 25, 1992

23 SELECT PROVINCE 3 0.00 WeeksSched Start: Apr 3, 1992 Sched Finish: Apr 3, 1992

24 OFFICE SET UP 3 1.00 WeekSched Start: Apr 6, 1992 Sched Finish: Apr 10, 1992

25 ESTABLISH DATA BASE 3 3.00 WeeksSched Start: Apr 13, 1992 Sched Finish: May 1, 1992

26 TRAINING (ALL) 6.00 WeeksSched Start: Apr 13, 1992 Sched Finish: May 22, 1992

27 WORKSHOP 3 1.00 WeekSched Start: May 25, 1992 Sched Finish: May 29, 1992

28 UP DATE DATA BASE 3 12.00 WeeksSched Start: Jun 1, 1992 Sched Finish: Aug 21, 1992

29 PLANNING TRAINING 3 4.00 WeeksSched Start: Sep 28, 1992 Sched Finish: Oct 23, 1992

30 FIVE YEAR PLAN 3 6.00 WeeksSched Start: Oct 26, 1992 Sched Finish: Dec 4, 1992

- 71 -ANNEX 9Page 5 of 12

31 SELECT PROVINCE 4 AND 5 0.00 WeeksSched Start: Dec 4, 1992 Sched Finish: Dec 4, 1992

._ ____ _..___ ....... _ ... ____................................ ----- -- - ----- -- ----

32 OFFICE SET UP 4,5 2.00 WeeksSched Start: Dec 7, 1992 Sched Finish: Dec 18, 1992

33 DATA BASE ESTABLISHMENT 4,5 4.00 WeeksSched Start: Dec 21, 1992 Sched Finisti: Jan 15, 1993

34 TRAINING 4,5 4.00 WeeksSched Start: Dec 21, 1992 Sched Finish: Jan 15, 1993

35 WORKSHOP 4,5 1.00 WeekSched Start: Jan 18, 1993 Sched Finish: Jan 22, 1993

36 DATA BASE UP DATE 4,5 12.00 WeeksSched Start: Jan 25, 1993 Sched Finish: Apr 16, 1993

37 PLANNING TRAINING 4,5 4.00 WeeksSched Start: Apr 19, 1993 Sched Finish: May 14, 1993

38 FIVE-YEAR PLAN 4,5 6.00 WeeksSched Start: May 17, 1993 Sched Finish: Jun 25, 1993

39 SELECT PROVINCE 6,7,8 2.00 WeeksSched Start: Jan 25, 1993 Sched Finish: Feb 5, 1993

40 OFFICE SET UP 6,7,8 2.00 WeeksSched Start: Feb 8, 1993 Sched Finish: Feb 19, 1993

41 ESTABLISH DATA BASE 6,7,8 4.00 WeeksSched Start: Feb 22, 1993 Sched Finish: Mar 19, 1993

42 TRAINING 4.00 WeeksSched Start: Feb 22, 1993 Sched Finish: Mar 19, 1993

43 WORKSHOP 6,7,8 1.00 WeekSched Start: Mar 22, 1993 Sched Finish: Mar 26, 1993

44 DATA BASE UP DATE 6,7,8 12.00 WeeksSched Start: Mar 29, 1993 Sched Finish: Jun 18, 1993

45 PLANNING TRAINING 6,7,8 4.00 WeeksSched Start: Jun 28, 1993 Sched Finish: Jul 23, 1993

- 72 - ANNE9

Page 6 of 12

. . ._............................ *.......................................... . ......... ................. ...............

46 FIVE-YEAR PLAN 6,7,8 6.00 WeeksSched Start: Jul 26, 1993 Sched Finish: Sep 3, 1993

... ..... ................ ............................ _. .. ............ . ............................. .....

47 SUBMIT FIVE YEAR PLANS 0.00 WeeksSched Start: Mar 1, 1994 Sched Finish: Mar 1, 1994

73 - ~~~~~ANNEX 9Page 7 of 12

INDONESIASECOND FORESTRY INSTITUTIONS AND CONSERVATION PROJECT

CONCESSION MANAGEMENT

Implementation Schedule

1 PREPARE TOR 2.00 WeeksSched Start: Apr 18, 1990 Sched Finish: May 1, 1990

2 GET GOV. CLEARANCE 1.00 WeekSched Start: May 2, 1990 Sched Finish: May 8, 1990

3 CLEAR WITH BANK 1.00 WeekSched Start: May 14, 1990 Sched Finish: May 18, 1990

4 SIGN LOAN 0.00 MonthsSched Start: Jul 2, 1990 Sched Finish: Jul 2, 1990

* 5 ADVERTISE 45.00 DaysSched Start: Jul 2, 1990 Sched Finish: Aug 31, 1990

* 6 EVALUATE 1.00 WeekSched Start: Sep 3, 1990 Sched Finish: Sep 7, 1990

* 7 GOV. CLEARANCE 2.00 WeeksSched Start: Sep 10, 1990 Sched Finish: Sep 21, 1990

* 8 BANK CLEARANCE 2.00 WeeksSched Start: Sep 10, 1990 Sched Finish: Sep 21, 1990

9 SIGN CONTRACT 1.00 WeekSched Start: Sep 24, 1990 Sched Finish: Sep 28, 1990

* 10 ESTABLISH OFFICE 2.00 WeeksSched Start: Oct 1, 1990 Sched Finish: Oct 12, 1990

* 11 PROJECT MANAGEMENT 42.00 MonthsSched Start: Oct 15, 1990 Sched Finish: Apr 8, 1994

12 DESIGN WOOD ADMIN. 6.00 MonthsSched Start: Oct 15, 1990 Sched Finish: Apr 12, 1991

13 DESIGN OPERATION INSPECTION 6.00 MonthsSched Start: Oct 15, 1990 Sched Finish: Apr 12, 1991

14 DESIGN FOR.MAN. INS.SYS 6.00 MonthsSched Start: Oct 15, 1990 Sched Finish: Apr 12, 1991

- 74 - ANE 9

Page 8 of 12

. .. ... _. .......................................................... ...... ............ .....

15 PREPARE INSTITUTION DEVELOPNENT PROPOSAL3.00 MonthsSched Start: Oct 15, 1990 Sched Finish: Jan 11, 1991

~~~~ ._. ................................................................ ..... ............. .

16 PREPARE TRAINING PROGRAMS 2.00 MonthsSched Start: Feb 13, 1991 Sched Finish: Apr 15, 1991

............................. I----- ----- ----- ----- ----- ----- ----- ----- ----- -----

17 INTERIM REPORT/GOVERNMENT REVIEW 1.00 MonthSched Start: Apr 16, 1991 Sched Finish: May 15, 1991

18 IMPLEMENT WOOD ADMIN 34.00 NonthsSched Start: May 15, 1991 Sched Finish: Mar 11, 1994

19 IMPLEMENT OPERATION INSPECTION 34.00 MonthsSched Start: May 15, 1991 Sched Finish: Mar 11, 1994

20 TRAINING 34.00 MonthsSched Start: May 15, 1991 Sched Finish: Mar 11, 1994

21 IMPLEMENT FOREST MANAGEMENT 34.00 MonthsSched Start: May 15, 1991 Sched Finish: Mar 11, 1994

22 FINALISE ALTERNATIVE ORG. PROPOSALS 3.00 MonthsSched Start: Jul 1, 1993 Sched Finish: Sep 29, 1993

ANNEX 9- 75 ~ Page 9 of 12

INDONESIASECOND FORE3TRY INSTTTUTIONS AND CONSERVATION PROJECT

NATIONAL PARKS INVESTMENTImplementation Schedule

_.__.........___. _......... .......... .......................... _........................... .

1 DRAFT TOR 0.00 DaysSched Start: Mar 28, 1990 Sched Finish: Mar 28, 1990

2 SHORT LIST 0.00 MonthsSched Start: Jun 4, 1990 Sched Finish: Jun 4, 1990

* 3 CLEAR SHORT LIST 4.00 WeeksSched Start: Jun 4, 1990 Sched Finish: Jun 29, 1990

* 4 ADVERTISE 1.00 WeekSched Start: Jul 2, 1990 Sched Finish: Jul 6, 1990

* 5 RECEIVE PROPOSAL 1.00 MonthSched Start: Jul 9, 1990 Sched Finish: Aug 7, 1990

* 6 EVALWATION OF PROP. 2.00 WeeksSched Start: Aug 7, 1990 Sched Finish: Aug 21, 1990

* 7 BANK CLERANCE 2.00 WeeksSched Start: Aug 21, 1990 Sched Finish: Sep 4, 1990

* 8 CONTRACT SIGNING 1.00 MonthSched Start: Sep 4, 1990 Sched Finish: Oct 4, 1990

* 9 ESTABLISH OFFICE 1.00 MonthSched Start: Oct 4, 1990 Sched Finish: Nov 2, 1990

* 10 PARK PLANNER/PM ARRIVES 0.00 MonthsSched Start: Nov 2, 1990 Sched Finish: Nov 2, 1990

11 MARINE PARK SPEC ARRIVES 0.00 MonthsSched Start: Nov 2, 1990 Sched Finish: Nov 2, 1990

12 ENVIRONMENTAL ASSESSMENT SPEC. ARRIVES 0.00 MonthsSched Start: Nov 2, 1990 Sched Finish: Nov 2, 1990

13 PREPARE MANAGEMENT PLANS OF PARKS 3.00 MonthsSched Start: Nov 2, 1990 Sched Finish: Feb 1, 1991

14 REVIEW MANAGEMENT ASPECTS OF MAN.PLANS 8.00 MonthsSched Start: Nov 2, 1990 Sched Finish: Jul 4, 1991

- 76 - ANNEX9Page 10 of 12

* 15 REVISE MANAGEMENT PLANS 10.00 MonthsSched Start: Nov 2, 1990 Sched Finish: Sep 3, 1991

16 LANDSCAPE ARCHITECH ARRIVES 0.00 MonthsSched Start: Nov 2, 1990 Sched Finish: Nov 2, 1990

17 INFRASTRUCTURE DESIGNING 8.00 MonthsSched Start: Nov 2, 1990 Sched Finish: Jul 4, 1991

18 BUFFER ZONE SPEC. ARRIVES 0.00 WeeksSched Start: Nov 2, 1990 Sched Finish: Nov 2, 1990

19 PREPARE BUFFERZONE PLANS 8.00 MonchsSched Start: Nov 2, 1990 Sched Finish: Jul 4, 1991

20 NATIONAL CONS. PLAN ADVISOR ARRIVES 0.00 MonthsSched Start: Sep 17, 1990 Sched Finish: Sep 17, 1990

* 21 PROGRAM DEV.& IMPLEMENT. 24.00 MonthsSched Start: Sep 3, 1991 Sched Finish: Aug 31, 1993

22 CONSERVATION FUNDING ADVISOR ARRIVES 0.00 MonthsSched Start: Sep 17, 1990 Sched Finish: Sep 17, 1990

23 INV.PROG. BUDGETING 24.00 MonthsSched Start: Sep 17, 1990 Sched Finish: Sep 11, 1992

24 IMPLEMENTATION/MANAGEMENT ADVISOR ARRIV.0.00 MonthsSched Start: Sep 17, 1990 Sched Finish: Sep 17, 1990

25 IMPLEMENT NATIONAL CONSERVATION PLAN 24.00 MonthsSched Start: Sep 17, 1990 Sched Finish: Sep 11, 1992

26 MARINE CONSERVA./MANAGEMENT ADVISOR ARR.O.OQ MonthsSched Start: Sep 17, 1990 Sched Finish: Sep 17, 1990

27 POLICY AND PROGRAM DEVELOPMEN 24.00 MonthsSched Start: Sep 17, 1990 Sched Finish: Sep 11, 1992

- 77 -

ANNEX 9Page ll of 12

INDONESIASECOND FORESTRY INSTITUTIONSAND CONSERVATION PROJECT

WETLANDS/MANGROVE CONSERVATION

Imlementation Schedule

1 TOR 0.00 MonthsSched Start: Mar 28, 1990 Sched Finish: Mar 28, 1990

2 SHORT LIST 0.00 WeeksSched. Start: Aug 3, 1990 Sched Finish: Aug 3, 1990

3 CLEAR SHORTLIST 2.00 WeeksSched Start: Aug 3, 1990 Sched Finish: Aug 16, 1990

4 INVITE PROPOSALS 2.00 WeeksSched Start: Aug 17, 1990 Sched Finish: Aug 30, 1990

5 RECEIVE PROP PROPOSALS 2.00 MonthsSched Start: Aug 31, 1990 Sched Finish: Oct 31, 1990

6 EVALUATE 2.00 WeeksSched Start: Oct 31, 1990 Sched Finish: Nov 14, 1990

7 BANK CLERANCE 2.00 WeeksSched Start: Nov 14, 1990 Schad Finish: Nov 28, 1990

8 SIGN CONTRACT 1.00 MonthSched Start: Nov 28, 1990 Sched Finish: Dec 27, 1990

9 ESTABLISH OFFICE 1.00 MonthSched Start: Dec 27, 1990 Sched Finish: Jan 28, 1991

10 TEAM LEADER 0.00 MonthsSched Start: Jan 28, 1991 Sched Finish: Jan 28, 1991

11 DATA REVIEW/DESK STUDY 1.00 MonthSched Start: Jan 28, 1991 Sched Finish: Feb 27, 1991

12 ESTABLISH DATA BASE&INTEGRATED PLAN 6.00 MonthsSched Start: Feb 27, 1991 Sched Finish: Aug 28, 1991

13 COASTAL CONSERVATION SPECIALIST ARRIVES 0.00 MonthsSched Start: Apr 1, 1991 Sched Finish: Apr 1, 1991

14 IDENTIFY CAND.SITES 3.00 MonthsSched Start: Apr 1, 1991 Sched Finish: Jun 28, 1991

- 78 -ANNEX 9Page 12 of 12

15 PREPARE MANG. PLANS 15.00 MonthsSched Start: Aug 28, 1991 Sched Finish: Nov 25, 1992

16 DATA BASE FOR MULT./MULT SEC,AREAS 3.00 MonthsSched Start: Jul 1, 1991 Sched Finish: Sep 27, 1991

17 LANDUSE PLANNER ARRIVE 0.00 MonthsSched Start: Sep 27, 1991 Sched Finish: Sep 27, 1991

18 PRAPARE PILOT AREA PLANS 6.00 MonthsSched Start: Sep 30, 1991 Sched Finish: Mar 27, 1992

19 START IMP.PILOT PLANS 6.00 MonthsSched Start: Mar 30, 1992 Sched Finish: Sep 25, 1992

20 TAINING SPEC.ARRIVE 0.00 MonthsSched Start: Nov 1, 1991 Sched Finish: Nov 1, 1991

- 21 PREPARE TRAIN PROG & MATERIALS 3.00 MonthsSched Start: Nov 1, 1991 Sched Finish: Jan 30, 1992

* 22 TRAINING 12.00 MonthsSched Start: Jan 31, 1992 Sched Finish: Jan 28, 1993

- 79 -

ANNEX 10Page 7 of 7

INDONESIASECOND FORESTRY INSTITUTIONS AND CONSERVATION PROJECT

LIST OF REIATED DOCUMENTS AND DATA AVAILABLEIN THE PROJECT FILE

A. Selected Reports and Studies on the Sector

A.1 Environment Sector Report (Report No.7822-IND ofJune 5, 1989)

A.2 Forestry Institutions and Conservation Project SAR(Report No. 7002-IND of February 19, 1988)

A.3 FICP Forestry Studies

- Forestry Concessions in Indonesia by Gray andHadi, July 1989

- Outlook and Prospects for Forest Plantations byDavis, October 1989

- Environment and Conservation Aspects byWeir & Manan, November 1989

- Efficiency of Indonesia's Industries byConstantino, January 1990

- Fiscal Policies by Gray and Hadi, April 1990

B. Selected Working Papers

B.1 - Forestry Research

B.2 - Foresty Plantations

B.3 - Concession Management

B.4 - Nature Conservation

B.5 - High Level Advisor

B.6 - Project Costs

B.7 - Benefit Calculations

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