Document o f The World Bank

FOR OFFICIAL USE ONLY

Report No: 35969-IU

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED GRANT FROM THE

GLOBAL ENVIRONMENT FACILITY TRUST FUND

IN THE AMOUNT OF US$1.80 MILLION

TO THE

REPUBLIC OF KIRIBATI

FOR AN

ADAPTATION PROJECT - IMPLEMENTATION PHASE (IWP 11)

May 4,2006

Rural Development and Natura l Resources Sector Unit East Asia and Pacific Regon

This document has a restricted distribution and may be used by recipients only in the performance o f their off icial duties. I t s contents may not be otherwise disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

ADB A M I < APL AusAID CCA C C S T DCC ECD EEZ EU GEF GoI< I C IWP ICANGO ICAP LDC MCIC MCTTD MEA MELAD M E Y S MFAI MFED MFMRD M H M S M I S A MLPID MPWU MOP NAPA N A S C N B S A P N D S NGO NEPO NZAID OB 01 PICCAP

(Exchange R a t e E f f e c t i v e a t A p p r a i s a l - D e c e m b e r 12,2005) C u r r e n c y Unit = AUD

1 AUD = US$.075 1 US$ = AUD 1.34

FISCAL YEAR January 1 - D e c e m b e r 33

ABBREVIATIONS AND ACRONYMS Asian Deve lopmen t B a n k All W o m e n o f IGr iba t i (national women's association) Adaptable P rog ram L o a n Austral ian Agency for In ternat ional Deve lopmen t Clunate Change Adaptat ion Climate Change Study T e a m Deve lopmen t Coordmat ion Commit tee Env i ronmen ta l Conservation Division (MELAD) Exclusive E c o n o m i c Z o n e European Union G l o b a l E n v i r o n m e n t Faci l i ty Governmen t o f IGr iba t i I s l and Counci l In ternat ional Waters Program IGr iba t i Associat ion o f NGOs IGr iba t i Adaptat ion P rog ram Least Deve loped Country M i n i s t r y o f Commerce, Industry a n d Cooperatives M i n i s t r y of Communications, T ranspor t and Tourism Deve lopmen t Mult l lateral Env i ronmen ta l Agreements M i n i s t r y o f Env i ronmen t , Lands and Agr icu l ture Deve lopmen t M i n i s t r y o f Education, Youth and Sports M i n i s t r y o f Fore ign A f fa i r s and I m m i g r a t i o n M i n i s t r y o f Finance a n d E c o n o m i c Deve lopmen t Ministry o f Fisheries a n d Mar ine Resources Deve lopmen t M i n i s t r y o f H e a l t h and Med ica l Services Ministry o f In te rna l a n d Social Af fa i rs W s t r y of L i n e a n d Phoen ix I s land Deve lopmen t M i n i s t r y of Pub l i c Works and U t h t i e s M i n i s t r y Operat ional P l a n Na t iona l Adaptat ion P rog ramme of A c t i o n Na t iona l Adaptat ion Steering Commi t tee Na t iona l Biodiversity Strategy A c t i o n P l a n Na t iona l Deve lopmen t Strategies Non Governmenta l Organizat ion Na t iona l E c o n o m i c P lann ing O f f i c e N e w Zealand Agency for In ternat ional Deve lopmen t O f f i c e T e Beret i tent i (Of f ice o f the President) Ou te r I s land Pacific Islands Cl imate Change Adap ta t i on P rog ram

PMU POPS S A P H E S D G I K S I L SNPRA S O P A C SPREP UNCBD UNCCD UNDP UNFCCC

Pro jec t Management Unit Pers i s ten t Organic Po l l u tan ts Sanitation, Public H e a l t h a n d E n v i r o n m e n t I m p r o v e m e n t P r o j e c t Strengthening Decentral ized Governance in K i r i b a t i (UNDP) Sector Investment L o a n Strategic N a t i o n a l Policy and Risk Assessment Unit Sou th Pacif ic A p p l i e d Geosciences Commission Sou th Pacif ic Regional Env i ronmen t Programme U n i t e d Na t ions Convent ion on Biodiversity U n i t e d Na t ions Convent ion to Combat Desert i f icat ion U n i t e d Na t ions Deve lopmen t Programme U n i t e d Na t ions F ramework Convent ion on Clunate Change

Acting V i c e Pres ident : Jef f rey S. Gutman, EAPW Country M a n a g e r / D i r e c t o r : X i a n Zhu, EACNF

Sec to r Manager : H o o n a e I-, EASRD T a s k T e a m Leader : I d a h Pswaray i -R idd ihough , EASRD

KIRIBATI ADAPTATION PROJECT . IMPLEMENTATION PHASE (KAP 11)

CONTENTS

Page

A . STRATEGIC CONTEXT AND RATIONALE ................................................................. 1

Country and Sector Issues (see Annex I$r details) .................................................................. 1

Rationale for Bank involvement ........................................................................................... 3

Higher level objectives to w h l c h the project contributes ....................................................... 4

PROJECT DESCRIPTION (See Annex 4 for further details) ......................................... 4 Lending instrument .............................................................................................................. 4

Project development objective ............................................................................................. 5

Project components ............................................................................................................. 6

Lessons learned and reflected in the project design .............................................................. 7

Alternatives considered and reasons for rejection ................................................................. 7

1 . 2 . 3 .

B . 1 . 2 . 3 . 4 . 5 .

C . IMPLEMENTATION ......................................................................................................... 8

1 . 2 . 3 . 4 . 5 . 6 .

D . 1 . 2 . 3 . 4 . 5 . 6 . 7 .

Partnershp arrangements (if applicable) ............................................................................... 8

Inst i tut ional and implementat ion arrangements (see also Annex 6) .......................................... 9

Monitoring and evaluation of outcomes /results ................................................................. 12

Sustainability and Replicab ility ............................................................................................ 12

Crit ical r i sks and possible controversial aspects .................................................................. 14

Loan/credi t conditions and covenants ............................................................................... 15

APPRAISAL SUMMARY ............................................................................................... 16

Economic and Financial Analyses .................................................................................... 16 Technical ............................................................................................................................ 16

Fiduciary ............................................................................................................................ 17

Social ................................................................................................................................. 17

Environment. , .................................................................................................................... 19

Safeguard policies ............................................................................................................... 19

Policy Exceptions and Readiness ........................................................................................ 20

ANNEX 1 COUNTRY. SECTOR AND PROGRAM BACKGROUND .................................................... 21

ANNEX 2: MAJOR RELATED PROJECTS FINANCED BY THE BANK AND/OR OTHER AGENCIES 36

ANNEX 3: RESULTS FRAMEWORK AND MONITORING ................................................................ 37

ANNEX 4: DETAILED PROJECT DESCRIPTION ............................................................................ 43

ANNEX 5: PROJECT COSTS ........................................................................................................... 51

ANNEX 6: IMPLEMENTATION ARRANGEMENTS .......................................................................... 52

ANNEX 7: FINANCIAL MANAGEMENT AND DISBURSEMENT ARRANGEMENTS ......................... 57

ANNEX 8: PROCUREMENT ARRANGEMENTS ............................................................................... 63

ANNEX 9: SAFEGUARD POLICY ISSUES ........................................................................................ 70

ANNEX 10: PROJECT PREPARATION AND SUPERVISION ............................................................. 81

ANNEX 11: DOCUMENTS IN THE PROJECT FILE ......................................................................... 83

ANNEX 12: STATEMENT OF LOANS AND CREDITS ...................................................................... 84

ANNEX 13: COUNTRY AT A GLANCE ............................................................................................. 85

ANNEX 14: INCREMENTAL COST AND ECONOMIC ANALYSIS ..................................................... 87

ANNEX 15: STAP ROSTER REVIEW .............................................................................................. 95

MAP IBRD #33427

KIRIBATI

Date: April 5, 2006 Country Director: &an Zhu Sector Manager/Director: Hoonae I& Project ID: PO89326 Focal Area: C h a t e change Lendmg Instrument: Specific Inves tment Loan

Team Leader: Idah 2. Pswarayi-kddhough Sectors: General water, sanitation and flood protection sector (60°/o);General public a h s t r a t i o n sector (25%);General agriculture, fishmg and forestry sector (1 5%) Themes: Vulnerabhty assessment and monitoring (P);Climate change (?);Natural dsaster management (P);Other environment and natural resources management (P) Environmental screenmg category: Partlal

I Assessment

ADAPTATION PROGRAM P H A S E I1 - PILOT IMPLEMENTATION PHASE ( I U P 11)

NEW ZEALAND, GOV. OF (EXCEPT I 0.46

P R O J E C T DOCUMENT

0.51 0.97

EAST A S I A AND P A C I F I C

FOR MIN. OF FOR. AFFAIRS) Total:

EASRD

4.34 2.24 6.58

FOR INTERNATIONAL DEVELOPMENT

Responsible Agency: Ministry of Finance & Economic Development PO Box 67 B a i r h , Tarawa, IOlibati Tel : 686 21660 Fax: 686 21307

w A 7 8 9 I 10 I 0 0 0 0

Project implementat ion period: Start June 1,2006 End: June 30,2009 Expected effectiveness date: June 30, 2006 Expected closing date: June 30,2009

- - A n n u a l Cumulat ive

Does the project depart from the CAS in content or other significant respects? Ref: PAD A.3 [ ]Yes N N o

- -.

0.02 0.38 0.50 0.65 0.25 0.00 0.00 0.00 0.00 0.02 0.40 0.90 1.55 1.80 1.80 1.80 1 .so 1.80

Does the project require any exceptions from Bank policies? Ref: PAD D. 7 [ ]Yes N o Have these been approved by Bank management? [ ]Yes [ IN0

~~

I s approval for any pol icy exception sought from the Board? [ ]Yes No

W Y e s [ ] N o

H Y e s [ ] N o

Does the project include any crit ical r i sks rated “substantial” or “high”? Ref: PAD C.5 Does the project meet the Regional criteria for readiness for implementation? Ref: PAD D. 7 - - - - - - . .

Project development objective Ref: PAD B.2, Technical Annex 3 T h e key objective of the proposed Pilot Implementat ion Phase o f I(AP (I(AP-11) i s to develop and demonstrate the systematic diagnosis of climate-related problems and the design of cost-effective adaptation measures, whi le cont inuing the integration of climate risk awareness and responsiveness into economic and operational planning. Lessons learned from I(AP-I1 would b e used to p lan the long-term national response to climate change envisaged for 2008/9 onwards, and would also b e relevant to many other small island states around the world.

G loba l Envi ronment objective Ref: PAD B.2’ Technical Annex 3 T h e global environmental objective of the IL4P I1 i s to assist the GoK in enhancing i t s capacity to p lan and implement adaptation measures to the climate-related issues facing the country, w h i c h wdl also reduce the detrimental impacts of climate change on the fragile a to l l ecosystems o f IGribati. Ths would b e achieved by providing a n essential transitional stage in preparation for the long-term nat ional response to c h a t e change, inc ludmg pilots that wdl generate experience for wider application in I G i b a t i and other small island states.

G loba l benefits would include improved management, conservation, restoration and sustainable use o f biodmersity, such as improved protect ion and management of mangroves and coral reefs w h i c h harbor a wide variety of fish - on w h i c h IGr ibat i i s highly dependent.

Apar t from reduced vulnerabil ity to climate change, climate variability and sea level rise, national benefits would come from stabilizing ecosystems and improving product ive capacity o f mangroves and coral reefs wh ich affect the availability of fish catch, thereby reducing economic vulnerabhty of those dependent on these activities a n d contr ibut ing to poverty reduction.

Project description [one-sentence szmmary of each componeng Ref: PAD B.3.a’ Technical Annex 4 IUP-I1 aims to change the way IGr ibat i handles i t s p lanning and implementat ion o f regular activities so that they better take account of climate risks. T h i s requires progressive reinforcement of adaptation-related programs in the nat ional Government’s budget and sectoral plans, in combinat ion with a process o f participatory adaptation, involving island councils, NGOs, churches, communities,

md indwiduals. T h e priority adaptation investments supported by IUP-I1 will n o t only prov ide m e d i a t e results in terms o f reduced vulnerability, but wdl also help to demonstrate and p romote a Aimate-risk aware approach to planning and design of such activities. A f te r IUP-11, these activities gill b e expanded as par t o f a continued adaptation program, both in scope and in terms of addressing additional sectors.

r h e project would have five b road components:

Zomponent 1: Policy, planning, and in format ion (US$ 1.17 d o n , of wh ich US$0.81 million i s Gnanced from GEF). This component supports three core elements o f al l adaptation efforts in Kiribati. T h e f i r s t element i s awareness raising and consultation. T h e second element i s pol icy coordination and planning, including technical assistance for the n e w Strategic Nat ional Pol icy and Risk Assessment Unit in the Of f ice o f T e Beretitenti; capacity building in Integrated Coastal Zone Management among key government staff; continued mainstreaming into Ministry Operational Plans; and integration o f adaptation into government development programs. T h e third element i s to generate scientific climate risk in format ion and refurbish the capacity of the Meteorological Of f ice with n e w equipment and training of staff.

Component 2: L a n d use, physical structures, and ecosystems (US$ 2.17 d o n , of wh ich US$0.40 million i s f inanced from GEF). This component will contribute to reducing the vulnerability o f t h e c o a s t h e including key publ ic assets and ecosystems, shifting the coastal management practice from a reactive, single technique approach to repairing damage as i t occurs, to a preventative and more technically varied risk mit igat ion strategy, including m o r e at tent ion for environmental sustainability. M o r e specifically, the component would support technical assistance, workshops, and awareness materials for the development and application of improved risk diagnosis and response methods! and improvements in planning and permit t ing processes to guide coastal zone activities; finance design and construction guidelmes, and apply them by implement ing protective measures at a sample of publ ic assets that are at risk; as we l l as finance the monitoring and pilot activities tc protect and restore coastal ecosystems and biodiversity affected by climate change, climate var iabi l iq and sea level rise, including the detrimental effects of current adaptation practices.

Component 3: Freshwater resources (US$ 2.16 million, entirely financed by AUSAID). Th: component includes the development and management of freshwater resources to reduce theh vulnerability to climate variability and climate change. I t will prov ide support for technica assistance, awareness materials, and workshops to update the nat ional water policy, improve watei resource management, and revise building codes to enhance opportunities for rainwater catchmen] and storage. On Tarawa, the component wdl also support the preparation of a master p lan for watei resources on Tarawa, as we l l as the implementat ion o f pilot projects to ident i fy and increase watei resources in freshwater lenses; rainwater collection and storage systems at government anc community buildmgs; and a publ ic awareness and education campaign to change user attitudes. On the Outer Islands, the component will support water resource assessments as we l l as physical improvements in the water supply system in selected locations, and technical assistance to review the feasibhty of non-polluting sanitation systems. Finally, the component wdl establish an Ou te r Is land community development grant scheme for roof catchment and sanitation.

Component 4: Capacity at island and communi ty level (US$ 0.55 d o n , of w h i c h US$0.31 million i s financed from GEF). Ths component will prov ide technical assistance to the Ministry o f In ternal and Social Af fa i rs (MISA) to include adaptation in the Outer Is land Profiles, and training on climate risk management for local governments. Furthermore, i t will finance a pilot program o f small-scale

adaptation investments in two selected Outer Islands, ident i f ied through participatory planning and implemented directly by communities.

Componen t 5: Project management (US$ 0.39 million, o f w h i c h US$0.23 million i s f inanced from GEF). This project component will provide overall support to the project, including project management, accounting, procurement, and running costs of the Project management Unit. I t will also support the mid- term and end-of project review o f IUP-I1 in v iew o f the cont inuing GoK adaptation efforts.

W h c h safeguard policies are triggered, i f any? Ref: PAD D.6 Technical Annex 10 T h e Envi ronmenta l impacts o f the project are expected to b e small. There may b e some small-scale construction associated with the project, but h s i s not expected to have ma jo r negative environmental consequences. As a result, the project has been rated Category B, requir ing a partial EA. However, the increasing and cumulative effects o f coastal infrastructure developments are hkely to b e important, and as such, it will clearly b e advisable to init iate a n environmental management program targeted at the coastal development sector. An integrated coastal management p rog ram would examine the current extent of clunate change adaptation options a n d coastal construction activities and the impacts (both beneficial and adverse) experienced to date. T h e environmental management program should consider the preparation of a Na t iona l EIA Training Program and a series of Codes of Envi ronmenta l Practice for use during the planning, design, construction, a n d operation as we l l as maintenance of al l roads and coastal works in I G b a t i .

T h e two OPs triggered are OP4.01 and OP 4.12. Detai led studies and mit igat ion options have been prepared in both cases.

Significant, non-standard con&tions, if any, for: Ref: PAD C.7 Board presentation:

Loan/credi t effectiveness: N o n e Covenants applicable to project implementation: N o n e

A. STRATEGIC CONTEXT AND RATIONALE

1.

T h e Republic of IGr ibat i i s one of the most isolated Least Developed Countries in the world. With a populat ion of almost 98,000 (2004 est.), it consists of 33 low-lying atol l islands spread over a vast area o f 3.5 d o n km2 of ocean in the central and western Pacific. GNI per capita was US$970 in 2004, but has been declining due to a decrease in revenues from fishing licenses in 2002-2004. IGr ibat i has one o f the hlghest poverty rates in the pacific, and only 10 O/o of the populat ion i s formally employed in the cash economy. Near ly ha l f o f the populat ion lives in South Tarawa, a highly dense area with a populat ion growth of 3 percent per year. At current rates, the national populat ion will increase by 55 O/o

by 2025, placing even greater challenges on the fragile environment. T h e poor atol l soil offers l itt le potent ia l for agricultural development, but the immense area of ocean encompasses some o f the richest fishmg grounds in the world, and, together with revenues from a phosphate-derived t r u s t fund, provides IGr ibat i with i t s most impor tant source o f revenue.

Country and Sector Issues (see Annex I j r details)

IGr ibat i i s one of the most vulnerable countries in the world to climate change and sea level rise. Most o f the l and i s less than 3 meters above sea level and on average only a few hundred meters wide, rendering retreat options untenable. T h e islands are exposed to periodic storm surges and to droughts, and are becoming increasingly vulnerable due to high populat ion concentration, accelerated coastal development, and environmental degradation. T h e 2000 World B a n k Regional Economic Report estimated that by 2050 up to 25-54 O/o of areas in Bikenibeu, South Tarawa and 55-80 O/o of Buariki, North Tarawa, could become inundated. Climate change and sea level rise could also severely affect the m a i n Tarawa groundwater lens, increase the epidemic potent ia l for dengue fever, decrease agricultural productivity, and &vert crit ical tuna resources from IGr ibat i waters. Moreover, climate change i s threatening the marine ecosystems around IGribati, in particular through impacts on the coral reefs surroundmg the islands, with implications for subsistence and small-scale commercial near shore fisheries, failure of the reef to act as a n effective buf fer o f wave energy, and increased island instabllity as sediment resources decline. Overall, in the absence of adaptation, IGr ibat i could face economic damages due to climate change and sea level rise o f US$8-$16 d o n a year by 2050, or 17-34 O/o o f i t s 1998 GDP.

T h e Government o f IGr ibat i rat i f ied the UN Framework Convent ion on C h a t e Change (UNFCCC) in 1995, and cont inued to prepare a n in i t ia l Nat ional Communicat ion (1999) and Nat ional Implementat ion Strategy (2003), with support from the UNDP-GEF funded Pacific Is land Climate Change Assistance Programme. IGr ibat i also participates in regional climate change cooperative activities, such as the Pacific Islands Framework for A c t i o n on Climate Change, Climate Var iabhty and Sea-level Rise (2000). T h e IGr ibat i Adaptat ion Program PUP) started in 2003 under World Bank/Japanese assistance, and has been merged with the UNDP-GEF-suppor ted preparation of a Nat ional Adaptat ion Programme of A c t i o n (NAPA). T h e 2004-2007 Na t iona l Development Strateges identif ied c h a t e change as a key risk to economic growth, and prov ided the basis for the ongoing mainstreaming of adaptation in al l relevant M i n i s t r y Operational Plans. T h e Government of IGr ibat i i s also strongly commit ted to the other Mult i lateral Envi ronmenta l Agreements (MEAs), inc ludmg the Convent ion on Biodiversity and the Cartagena Protocol on Biosafety, the UN Convent ion to Combat Desertification, and the Stockholm Convent ion on Persistent Organic Pollutants.

Along with the other cha te - re la ted r i s k s facing the country, Kiribati's ecosystems also experience extreme vulnerability, particularly of their plant, animal, soil and water resources, and their cultures as we l l their traditional resource-use systems to outside h u m a n induced disturbance and over-exploitation.

1

Given dus , successful atol l development requires that the integrated aspects o f the environment and social conditions, as we l l as external conditions - in relation to stabhty of global economic systems - are taken into account.

Ecosystems: IGr ibat i i s h o m e to a number o f globally impor tant marine biodrversity, including up to 200 species of coral; hundreds of fish species, including threatened species such as the Humphead wrasse (Cheilinus undulates) and Sicklefin L e m o n Shark (Negaprion acutidens); and several threatened turtle species, such as the endangered green turtle (Chelonia mydas) and critically endangered Hawksbi l l turtle (Ehetmochelys imbricata). IGr ibat i also provides a nesting area for a variety o f birds, inc ludmg vulnerable migratory species such as the Bristle-dughed Curlew (Numenius tahitiensis) and endangered species such as Icuhl's Lor ikeet (Vini kuhh) and Phoenix Petrel (Pterodroma alba). In addi t ion to the effects of climate change, coastal degradation and poor mangrove and coral reef management are endangering habitats for t h i s impor tant biodiversity. In the absence o f adaptation, these impacts would translate in the l o s s o f globally important biodiversity, l and degradation, l oss o f marine and coastal habitats and reduct ion in overall natural capital.

Status of threatened ecosystems: Marine resources are generally considered abundant. T h e state o f abundance depends on the health o f the corals, wh ich i s partly determined by the impacts o f higher temperatures on the physical condi t ion o f corals. Coral bleachmg has been observed in several parts o f IGribati, including the Gi lber t Islands, particularly during El Niiio episodes, w h c h already feature the higher sea surface temperature that are expected to occur m o r e frequently when climate change progresses. However, the extent and the severity of current coral bleaching are poorly known. With the assistance of GEF, through UNDP, IGr ibat i prepared i t s Nat ional Biodiversity Strategy and A c t i o n Plan (NBSAP) in 1998. IGr ibat i i s presently also implement ing the NBSAP Add-on Project, o f w h i c h the expected outputs are: (i) extensive consultations with grassroots communities, as we l l as inter-island consultations with al l islands o f IGr ibat i (North, Central and South islands including the L i n e a n d Phoenix Groups); and (ii) a n e w NBSAP, for submission to the Conference o f the Parties (COP) to the Convent ion on Biological Diversi ty (CBD) in early 2006. T h e b a s e h e on the status o f some o f the biodrversity i s s t i l l be ing established.

G iven the potent ia l threats of climate change to the biodrversity o f IQibati, IUP-I1 will contribute to biodiversity conservation in various ways, particularly by improving the attention and need for environmental sustainabhty as par t of coastal protect ion and asset management strategies, and for activities that reduce beach mining; al l of w h c h are supported by strong participatory processes a n d publ ic awareness campaigns. Moreover, IUP-I1 would assist in building a monitoring system, particularly for the coral reefs, w h i c h can also b e adapted for other ecosystems, to strengthen the country's capacity to reduce the ecosystems' vulnerability; supplemented by enhanced access to n e w technologies in coral and ecosystem management (includmg through pilot experiments). T h e monitoring system i s expected to help streamline sustainable integrated systems management into adaptation processes, building on governance aspects that will support the enabling environment needed to make such activities successful, and implement ing the NBSAP objective of integrating biodiversity conservation into the national development process.

Target ecosystems: Target ecosystems are pr imari ly coastal and near-shore marine habitats, particularly coral reef and mangrove systems, w h i c h harbor valuable biodmersity. Specific target areas and ecosystems will b e selected during the f i r s t year o f the project, once MELAD has assessed the existing in format ion i t has, and pr ior i t ized the ecosystems that are most easily supported by the I U P , and that would not b e duplicated by other on-going efforts in the country.

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2. Rationale for Bank involvement

T h e World B a n k has been invo lved in c h a t e change adaptat ion in IGr iba t i since 1999, w h e n it funded a major study on vulnerabi l i ty a n d adaptat ion for the Regional E c o n o m i c R e p o r t 2000. Since that review, adapta t ion a n d risk management have become o n e of the pi l lars of the World B a n k p r o g r a m in t h e Pacific, with suppor t to f i ve country- level projects’ a n d regional strategic assistance. Together with o the r donors a n d regional organizations, t he World B a n k he lped organize two High L e v e l Adap ta t i on Consul tat ions in t h e Pacif ic in 2003-04, w h i c h conc luded tha t adaptat ion needs to b e mainstreamed into na t iona l deve lopment plans, pol ic ies a n d budgets. T h e prepara t ion phase of the IGr iba t i A d a p t a t i o n Program cI(AP-I - see box below), which was the f i r s t World B a n k pilot p ro jec t f d y dedicated to adaptation in the East As ia a n d Paci f ic Region, put those pr inciples to practice. T h e Bank‘s r o l e in adapt ing economic mainstreaming complements the ADB’s p r o g r a m on macro-economic p l a n n i n g a n d water a n d sanitation, a UNDP pro jec t to strengthen decentral ized governance, vulnerabi l i ty m a p p i n g a n d p lann ing activities funded by the European Commission, a n d G E F - f u n d e d activi t ies to i m p l e m e n t various Mul t i la te ra l E n v i r o n m e n t a l Agreements (see i t e m C. 1).

Kiribati Adaptation Program - Preparation Phase (KAP-I)

IUP-I , the preparation phase o f the IUP, had two major objectives: (i) To mainstream adaptation in to national economic planning; and (ii) to prepare a p i lo t Adaptation Project to reduce IGribati’s overall vulnerability t o climate change, climate variabhty, and sea level rise.

M o r e specifically, the project aimed to: (i) carrv out a Nat ional Consultation - which involved all major stakeholders in IGribati (government, NGOs, private sector, and communities) in reaching a consensus on national adaptation priorities and strategies to be mainstreamed in to national economic planning, budget, and sectoral plans. I t also helped stakeholders discuss their roles in implementing adaptation options; (ii) raise Public Awareness - summarise and convey reliable informat ion o n adaptation and risk management to (a) hgh-level pol icy makers; and (b) the general public. This was achieved through simple briefings and seminars for Ministers and Parliamentarians on desirable policy measures, traditional meetings, radlo scripts, and the production of an informat ion video; (i) build CaDacitv in Risk Management, introducing SOPAC’s Comprehensive Hazard and Risk Management process to IG iba t i . C H A R M i s a process o f capacity building and planning that incorporates dlsaster and clunate risk management in to national development planning; (iv) mainstream AdaDtation into Nat ional Economic Planning - incorporating and institutionalizing the recommended mainstreaming activities into Government planning processes, procedures and regulations. T h i s activity built u p o n the results of the national consultation and capacity building to effectively incorporate adaptation and risk management in to economic planning, including the National Development Strategy, sectoral strategies, and public expenditures; and (v) undertake a Social Assessment, to (a) ensure that the national consultation i s fully participatory; (b) produce an assessment o f traditional adaptation options; (c) produce a checkhst of social issues relevant t o the Implementation Phase and ways to address them. Implementation o f I U P - I has been successful and the project i s expected t o close within t h e f i r s t quarter of 2006.

G i v e n i t s comb ina t i on of LDC a n d smal l i s land status, extreme v u l n e r a b h t y a n d good progress in mainstreaming, IGr iba t i i s ideal ly pos i t i oned to become o n e o f the f i r s t countr ies to i m p l e m e n t the n e w GEF Strategic Priority rrPiloting a n Opera t i ona l A p p r o a c h to Adaptat ion”. Lessons learned from h s pilot are expected to become i m p o r t a n t for g loba l strategies on adaptat ion investments, a n d he lp m o v e

’ Kiribati Adaptation Project Preparation, Tonga Cyclone Emergency Recovery Project, Samoa Cyclone Emergency Recovery Project, and Samoa Infrastructure Asset Management Projects I and 11.

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internal incentives towards hazard risk prevention. IUP-I1 was accepted to the GEF’s pipeline on July 12,2004 and approved by the GEF Counci l on November 8-10,2005.

Recognizing that adaptation i s a long term concern, and as a direct follow-up to several studies and initiatives, and with support from the World Bank, the Government of I k i b a t i started the IGr ibat i Adaptat ion Program @UP), with the key goal o f reducing Kiribati’s vulnerabdity to c h a t e change, climate variabllity and sea level rise. T h e program i s envisaged to involve the following phases. Phase I: Preparation (2003-2005; ongoing) - i s intended to mainstream adaptation into national economic planning, prepare a Nat ional Adaptat ion Programme o f A c t i o n a n d design a n intermediate pilot investments phase, IUP-11; Phase 11: Pilot Implementation (2006-2008) i s the focus of the current PAD. I t aims to implement pilot adaptation measures, and consolidate the mainstreaming o f adaptation into national economic planning; and Phase III: Expansion (2009-2015) would gradually scale up the investments p i lo ted under Phase I1 to cover al l major islands and vulnerable sectors o f IGribati. This phase may b e eligible for fundmg under one or more o f the three global funds for adaptation (LDC, Special C h a t e Change Fund and Adaptat ion Fund), complemented by b a s e h e fmancing from the GoICs own budget as we l l as bilateral contributions. Care would b e taken to ensure that there would b e no duplication of activities funded under the GEF Strategic Priority and those funded under the global funds, should they b e accessed. T h e progression of I U P phases i s o u h e d in more detail in Annex 1.

3. Higher level objectives to which the project contributes

T h e Government o f IGribati’s key objective i s to “enhance and ensztre the eqzlitable distribzltion of development ben$ts according t o thepn’naples ofgoodgovernance”. T h e 2004-2007 Na t iona l Development Strategies (NDS) hlghlight c h a t e change as a key risk to economic development, a n d provides for consultation-based measures for climate change adaptation. I t also emphasizes the need to care for the islands’ fragde environment and for sustainable use o f natural resources. On the other hand, the Bank‘s new Four- Year Strategy for the Pacific Islands, published in June 2005, identifies improved hazard risk management as one of the f ive pillars contr ibut ing to the economic growth a n d job creation. Thus, there i s a strong justif ication for IUP-I1 in both the national and World B a n k strategic priorities.

B. PROJECT DESCRIPTION (See Annex 4for farther details)

1. Lending instrument

T h e project i s proposed as a Sector Investment Gran t (SIL). An Adaptable Program L o a n (APL) was considered, but for two reasons it was judged inappropriate: (i) GEF can no longer commi t up front to co-finance all the phases of a n APL, and although t h i s pol icy does not close the door for subsequent phases, each phase must b e developed independently. So although the f i l l program may b e articulated, proposals can only j u s t i f y incremental cost f inancing for the Phase in question; and (ii) as the adaptation financing arrangements under the Least Developed Countries and/or Special Climate Change Fund - w h i c h IGr ibat i hopes to access for Phase I11 o f the Program - are s t i l l evolving, i t was better to prepare t h i s distinct phase and reconsider the lending instrument at a later date.

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Project development objective and key indicators

Project development objective

T h e key objective o f the proposed Pilot Implementat ion Phase of IL4P (IL4P-11) i s to develop and demonstrate the systematic hagnosis of clunate-related problems and the design of cost-effective adaptation measures, whi le continuing the integration o f climate risk awareness and responsiveness into economic and operational planning. Lessons learned from IUP-I1 would b e used to p lan the long-term national response to climate change envisaged for 2008/9 onwards, and would also b e relevant to many other small island states around the world.

Global environment objective

T h e global environmental objective o f the I U P - I 1 i s to assist the GoI< in enhancing i t s capacity to p lan and implement adaptation measures to the climate-related issues facing the country, wh ich WIU also reduce the detrimental impacts o f climate change on the fragile atol l ecosystems of IGribati. This would b e achieved by providmg an essential transitional stage in preparation for the long-term nat ional response to climate change, including pilots that will generate experience for wider application in IGr ibat i and other small island states.

G loba l benefits would include improved management, conservation, restoration and sustainable use of biodiversity, such as improved protect ion and management of mangroves and coral reefs wh ich harbor a wide variety o f f i s h - on wh ich IGr ibat i i s highly dependent.

Apar t from reduced vulnerability to c h a t e change, climate var iabhty and sea level rise, national benefits would come from stabilizing ecosystems and improving product ive capacity of mangroves and coral reefs w h i c h affect the availabdity o f fish catch, thereby reducing economic vulnerability o f those dependent on these activities and contr ibut ing to poverty reduction.

Key indicators include: 0 the establishment o f the Strategic Nat ional Policy a n d R i s k Assessment Unit (SNPRA Unit) as the

lead agency coordmating climate change adaptation a n d related strategic issues; the percentage of climate-affected programs in M i n i s t r y Operational Plans that reflect systematic climate risk management; and consistent use of best practice in the application of risk management, environmental assessment and options analysis to publ ic infrastructure and vulnerabil ity reduct ion measures.

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T h e m a i n biodiversity outcome would b e the mainstreaming of biodiversity concerns into the overall Government development efforts to reduce vulnerabil ity to clunate change, clunate variability and sea level rise, as reflected, particularly, in the third outcome indicator. G i v e n the detrimental impacts of many of the ad-hoc coastal protect ion efforts, such mainstreaming provides major benefits in terms of biodiversity conservation. T h e environmental assessment process would prominent ly include attention for biodiversity, includmg, in relation to the adh t iona l threats posed to these biodiversity resources by climate change.

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2. Project components

IWP-I1 aims to change the way IQribati handles i t s p lanning and implementat ion o f regular activities so that they better take account o f climate r isks. This requires progressive reinforcement of adaptation- related programs in the national Government’s budget and sectoral plans, in combinat ion with a process o f participatory adaptation, involving island councils, NGOs, churches, communities, and individuals. T h e priority adaptation investments supported by IUP-I1 will not only prov ide immeda te results in terms o f reduced vulnerability, but will also help to demonstrate and p romote a climate risk aware approach to planning and design of such activities. A f te r IUP-11, these activities w d b e expanded .as pa r t of a continued adaptation program, both in scope and in terms o f addressing additional sectors.

Component 1: Polig, pLanning, and infomation (US$ 1.17 million). This component supports three core elements o f a l l adaptation efforts in Kir ibat i . T h e f i r s t element i s awareness raising and consultation, including technical assistance to review and redesign frameworks and processes for participation and awareness at nat ional and local level; two-yearly national consultations; regular adaptation-related participatory events; a newsletter, m e d a releases, educational material; and a n annual survey on publ ic attitudes and awareness. T h e second element i s pol icy coordination and planning, including technical assistance for the new Strategic Nat ional Policy and Risk Assessment Unit in the Of f i ce of T e Beretitenti; capacity building in Integrated Coastal Z o n e Management among key government staff; cont inued mainstreaming into M u u s t r y Operational Plans; and integrat ion of adaptation into government development programs. T h e third element i s to generate scientific climate risk informat ion and refurbish the capacity o f the Meteorological O f f i ce with n e w equipment and training o f staff.

Component 2: Land zlse, ph_yscaL stmctzlres, and ecogstems (US$ 2. I7 million). This component w d contribute to reducing the vulnerability o f the coastline including key publ ic assets a n d ecosystems, shifting the coastal management practice from a reactive, single technique approach to repair ing damage as it occurs, to a preventative and more technically varied risk mit igat ion strategy, inc lud ing m o r e attention for environmental sustainability. M o r e specifically, the component would support technical assistance, workshops, and awareness materials for the development and application of improved risk diagnosis and response methods, and improvements in planning and permit t ing processes to guide coastal zone activities, inc ludmg regulatory adjustments, awareness raising, and economic a n d environmental monitoring. Secondly, the component will produce design and construction guidelines, a n d apply t h e m by implement ing protective measures at a sample o f publ ic assets that are at risk, inc lud ing the national hospital and vulnerable coastal areas. Thirdly, the component includes monitoring a n d pilot activities to protect and restore coastal ecosystems a n d biodiversity affected by clunate change, climate variability and sea level rise, including the detrimental effects of current adaptation practices.

Component 3: Freshwater resozlrces (US$ 2.16 million). Ths component includes the development and management of freshwater resources to reduce their vulnerabil ity to clunate variabil ity and climate change. I t will provide support for technical assistance, awareness materials, and workshops to update the national water policy, improve water resource management, and revise building codes to enhance opportunities for rainwater catchment a n d storage. G i v e n that water management problems are most acute on the central island, Tarawa, the component will also support the preparat ion of a master p l a n for water resources on Tarawa, as we l l as the implementat ion of pilot projects to ident i fy and increase water resources in freshwater lenses; rainwater collection and storage systems at government a n d communi ty bddings; and a publ ic awareness and education campaign to change user attitudes. On the Outer Islands, the component will support water resource assessments as w e l l as physical improvements in the water supply system in selected locations, and technical assistance to review the

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feasibihty of non-polluting sanitation systems. Finally, the component wdl establish an Outer Is land community development grant scheme for roof catchment and sanitation.

Component 4: Capacz9 at island and communi9 level (USJ0.55 million). This component w d provide technical assistance to the Ministry o f Internal and Social Af fa i rs (MISA) to include adaptation in the Outer Is land Profdes, and training on climate risk management for local governments. Furthermore, it will finance a pilot program o f small-scale adaptation investments in two selected Outer Islands, identif ied through participatory planning and implemented directly by communities.

Component 5: Pmject management (UJJ0.39 million). This project component will prov ide overall support to the project, inc ludmg project management, accounting, procurement, a n d running costs of the Project management Unit. I t will also support the mid- term and end-of project review o f IUP-I1 in view o f the cont inuing GoI< adaptation efforts.

3. Lessons learned and reflected in the project design

A number o f key lessons are starting to emerge from IUP- I as we l l as from other hazard management initiatives in the Pacific:

C h a t e change and sea level rise need to b e treated as a major economic and social risk, and not j u s t a long-term environmental problem. Addressing short-term vulnerabilities i s the best strategy to prepare for long-term impacts. Adaptat ion should preferably focus on no-regrets strategies. Rather than site-specific structural solutions, adaptation should look for soft options, embedded in sustainable natural resources management. Adaptat ion needs to b e housed within a high level coordinating Ministry, w h i c h needs to effectively coordinate investments across sectoral Ministries and influence nat ional development planning. Adaptat ion needs to b e fully integrated into nat ional economic planning, and the preparation o f sectoral plans and budgets. Adaptat ion investments need to b e in fo rmed by a long-term process that h k s bottom-up consultation with top-down planning and policy. A we l l crafted, country-specific consultation f ramework i s crit ical to ensure that community participation and awareness raising result in changes in behavior.

Alternatives considered and reasons for rejection

T h e ‘do nothing’ scenario: In the absence of adaptation, the economic, social and environmental impacts o f climate change in I G i b a t i could b e severe, with potent ia l economic damages averaging US$8-$16 million a year, equivalent to 17 to 34 percent o f the 1998 GDP (World B a n k 2000 Regional Economic Report). G i v e n these enormous impacts; the potent ia l for adaptation to reduce them; the fact that most of the adaptation measures can b e based upon no-regret approaches; and the Government o f Kiribati’s strong will to act now, the do-nothing scenario was rejected.

The “one-off adaptation investments” scenario: Ano the r alternative would have been to focus only on a few specific adaptation investments, pr imari ly in infrastructure. However, a programmatic approach was strongly preferred given that lessons from experience (in IGr ibat i and elsewhere) show that such one-of f adaptation investments are generally not the most effective, and are o f ten unsustainable. Using a programmatic approach allows measures to b e integrated in government programs and b e h k e d to regulatory changes and raising awareness to change publ ic behavior; i t also

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allows inst i tut ional capacity to b e built; lessons learnt to b e used to refine follow-on activities; and successful pilots to b e replicated.

C. IMPLEMENTATION

1. Partnership arrangements (if applicable)

T h e IUP-I1 pro ject would b e co-financed with the Australian Agency for Internat ional Development (AusAID) and the N e w Zealand Agency for International Development (NZAID), whde the European Union wdl prov ide parallel financing. T h e project wdl b e implemented in close collaboration with parallel initiatives being implemented and/or envisaged by UNDP and ADB, and several GEF- supported programs implemented by UNDP and UNEP.

Australian Agency for International Development (AusAID) and N e w Zealand Agency for International Development (NZAID): AusAID has released AUD$2 million into a Bank-managed t r u s t fund to finance South Tarawa water planning, remedial ac&ons and pilot projects, as w e l l as Outer Islands assessments and systems upgrades for Clunate Change Adaptation. NZAID i s p lanning to contribute NZ$ 1.5 million to IUP-11, pr imari ly for activities relating to coastal infrastructure. T h e Australian Bureau of Meteorology and N e w Zealand Meteorological O f f i ce will b e closely invo lved in the upgrading o f clunate monitoring systems.

T h e European Union (EU): The EU would prov ide IGr ibat i a grant of Euro 2 million (implemented by SOPAC) to establish a environmentally sustainable source o f aggregate from a naturally replenished site inside the lagoon, a necessary condi t ion for the prohibition o f the opportunistic beach mining that i s severely increasing coastal vulnerability. IUP-I1 provides pol icy and planning support for the EU project, including environmental monitoring. T h e EU i s also supporting a SOPAC-led p rog ram for Water Governance in IQribati, wh ich started in June 2005, and i s be ing closely coordinated with the freshwater management component of IUP-11.

United Nations Development Programme (UNDP): UNDP i s implement ing a US$1 million program to Strengthen Decentralized Governance in IGr ibat i (SDGIK). IUP-I1 wdl benef i t from the capacity building activities under t h i s project, and duplication will b e avoided through coordinat ion by the Ministry o f In ternal and Social Af fa i rs (MISA) a n d close collaboration with UNDP.

Asian Development Bank (ADB): T h e ADB has been financing the Sanitation, Publ ic Hea l th and Envi ronment Improvement Project (SAPHE), composed of a US$10.24 d o n loan and U S $ 1.5 million grant. SAPHE, w h i c h i s drawing to a n end, w h i c h comprises a sustained p rog ram o f improvements in water supply, sewerage, solid waste management and environment conservation. T h e freshwater management activities in IUP-I1 will b e closely coordmated with the remaining work under SAPHE, and take account of lessons learned. Coord inat ion wdl pr imari ly b e through the Ministry o f Publ ic Works and Utilities. T h e ADB i s also providing technical assistance to develop Ou te r Is land Growth Centers in the Gi lber t and Phoenix islands. There are clear linkages to adaptation to climate change, and the ADB has indicated it wants to coordinate closely with I(AP to ensure opt imal mutual benefits.

Global Environment Facility - United Nations Development Programme 8z United Nations Environment Programme (UNDP-GEF and UNEP-GEF): I h b a t i i s also undertakmg several initiatives, supported by the GEF and implemented by UNDP and UNEP, to strengthen i t s capacity to implement various multi lateral environmental agreements. G i v e n the close interrelationships between

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adaptation to climate change and proper environmental management o f the fragde ato l l environment, these initiatives closely fit the objectives and activities o f IUP-11.

Besides the preparation of a NAPA, wh ich has been closely integrated with IUP-I , UNDP-GEF i s also supporting a n add-on project to the Nat ional Biodlversity Strategy A c t i o n P l a n (NBSAP) will help to implement a country dr iven Clearing House Mechanism for the UN Conven t ion on Biodiversity (UNCBD), and ident i fy capacity building needs for protect ion o f national biodiversity. UNDP-GEF i s also preparing a Na t iona l Capacity Self-Assessment (NCSA) project, w h i c h consists of a self-assessment of the current capacity constraints to b e able to address global and local environmental issues. As par t of a regional UNDP-GEF supported International Waters Program (IW), executed through SPREP, K i r i b a t i established requirements for marine protected areas, sustainable coastal fisheries, and protect ion of freshwater resources; and undertook several community-based waste management pilots. UNEP-GEF i s supporting I(iribati to prepare a Nat ional Biosafety Framework (NBF) under the Cartagena Pro toco l on Biosafety, and a Nat ional Implementat ion Plan (NIP) for the Stockholm Convent ion on Persistent Organic Pollutants (POPS). Close coordination, complementarily and derivation o f mu tua l benefits between IUP-I1 and these other GEF- funded projects will b e ensured through the Envi ronmenta l Conservation Division (ECD) in MELAD, w h i c h i s responsible for the implementat ion of al l M E A s and related projects, but also provides technical support for interdepartmental climate change issues under IUP-11,. Furthermore, MELAD/ECD will be responsible for a l l IUP-I1 activities that invo lve environmental regulations a n d monitoring. T h e projects ment ioned above primarily focus on analysis, awareness raising, and policy development. I U P - 11’s focus on implementat ion and close linkages to national economic p lanning wdl p rov ide excellent opportunities for mainstreaming of global environmental issues through the coordinat ing mechanisms set up for adaptation to climate change.

2. Institutional and implementation arrangements (see also Annex 6)

Overa l l du-ection and coordination o f the project will b e prov ided by the O f f i c e o f T e Beretitenti (Office of the President, OB) through the Strategic Nat ional Policy and &sk Assessment Unit (SNPRA Unit), w h c h i s be ing established within the OB. T h e Secretary o f the OB wdl head the SNPRA Unit, and act as Project Di rector for IUP-11. In addition, the 2006 budget provides for two senior (Director or D e p u t y Secretary Level) pol icy positions within the SNPRA Unit. T h i s capacity will b e strengthened by IUP-11, wh ich will provide for a third senior position (long-term consultant), responsible for coordinat ion of adaptation and climate risk management throughout the government, and also act as the IUP-I1 Project Coordinator. T h e Project management Unit (PMU), w h i c h wdl carry out a l l day-do- day project management, i s headed by the Project Manager, who reports to the Project Coordinator, and also includes a Finance/Accountant, a Procurement Officer, a m o r e general Project Officer, and a Project Assistant. T h e quality o f project implementat ion will be ensured by the at tent ion a n d capacity built during IUP’s preparation phase. I U P - I project management i s currently carried out by a n a l l I- K i r i b a t i team, wh ich has substantial experience in World Bank financial management, repor t ing and procurement procedures. Both the Project Manager and the F inancelAccountant are expected, to continue in the PMU for IUP-11, t h u s ensuring continuity and retent ion of capacity. Specific components of IUP-I1 will b e managed by key l ine ministries, in particular the M i n i s t r y o f Environment, Lands and Agriculture (MELAD), the M i n i s t r y of Publ ic Works a n d Util i t ies (MPWU), the M i n i s t r y of Internal and Social Affairs (MISA), the M i n i s t r y of Fisheries a n d Mar ine Resources Development (MFMRD), and the M i n i s t r y of Communications, Transport, a n d Tourism Development (MCTTD) .

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Project activityplanningfor implementation: At the higher level, activity planning would b e at the level o f the Ministry Operat ional Plans (MOPs), specifically to ensure that there i s mainstreaming of adaptation at the operational level. T h e MOPs are a key planning tool for a l l Government Ministries and publ ic enterprises; and benef i t from outputs of the Nat ional Consultations. T h e MOPs, will incorporate the add-on investments of IUP-11. T h e enhanced MOPs to b e implemented from 2006 represent the f i r s t generation of MOPs with comprehensive mainstreaming o f adaptation priorit ies across al l climate relevant programs in the key ministries.

Every year, a P rog ram o f Activities to be fmanced by the project will b e prepared prior to implementation. T h e Program o f Activities would b e prepared by the PMU; and submitted to the OB/MFED and the Bank for concurrence, and shared with AusAID and NZAID for comments and suggestions. T h e Program of Activities must take into account the relevant Procurement Plan, wh ich becomes a n appendix. Ths one-time up-front non-object ion should min imize delays in implementation. Exceptions that may require an additional step relate to large investment packages for w h c h m o r e complex economic analyses requiring a comparative cost-benefit analysis would b e done; for example, the r e h a b h a t i o n of the hospital and the causeway. Although the TA to b e h i red would b e expected to carry out the required analyses, it i s impor tant that the Na t iona l Economic and Planning O f f i ce (NEPO) in MFED, who routinely carry out such analyses, are consulted from the activities’ incept ion stage.

T h e National Adaptation Steering Committee (NASC), w h i c h was established during IUP-I, i s responsible for promoting and monitoring coordination among project activities across the implement ing agencies, including the ut ihzat ion and sharing o f technical expertise. T h e NASC i s chaired by the Secretary (S) of the OB, and includes higher level officials from al l key Ministries, as w e l l as representatives o f the K i r i ba t i Counci l of Churches, the IGr ibat i Association o f NGOs (IUNGO), the national women’s organization All W o m e n o f IGr ibat i (AMI<), and the IGr ibat i Chamber o f Commerce. T h e NASC will continue to prov ide overall pol icy analysis, quality cont ro l and advice to the GoK on matters related to climate risk management, covering both NAPA and I U P - I 1 issues and activities. T h e Climate Change Sta& Team (CCST), also established during IUP-I, contains technical officers from al l key departments affected by climate r isks. T h e CCST will continue to prov ide expert analysis a n d technical advice to the GoI< on climate-related matters, as we l l as coordmate scientific activities relevant to the planning and execution of the NAPA and IUP-11.

Over the course of I(AP 11, the detailed institutional and implementat ion arrangements may evolve for various reasons, such as, the need to take account o f new mechanisms for increasing consultation w i h various ministries in the GOK; the need to enhance coordmat ion between stakeholders in general; and for other reasons that may require changes to b e made to the existing coordination framework. For example, I U P I1 calls for the recruitment o f a Project Coordinator, report ing directly to the Secretary of the Office of T e Beretitenti, who wdl monitor the implementat ion of I U P I1 and ensure regular consultation on a cont inuing basis with a l l key stakeholders, inc lud ing OB, other GOK ministries and international donors.

In addition, the GOI< recently established an Outer Is land Project Coordinat ing Commit tee (OIPCC), chaired by the Secretary, M i n i s t r y o f In ternal and Social Af fa i rs (MISA), a n d comprised also o f the Secretaries o f other Mmistries delivering government services to outer islands. Under i t s terms of reference, the OIPCC meets monthly to review the status o f projects in the outer islands; recommends fol low-up actions as may b e required on each project; ensures cost effective and efficient implementation of project related activities; ensures compliance o f a l l projects with Government policies; and reports monthly to Cabinet on the status of al l outer island projects.

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In v iew of the foregoing arrangements, over the course o f the project OB may review the scope, tasks and membership of existing coordinating mechanisms that support I(AP 11, to ensure that these mechanisms remain relevant and effective.

T h e inst i tut ional re lat ionshps are illustrated in the following diagram:

SNPRA: Strategic National Policy and Risk Assessment Un i t

Fzmz'sflow: On receipt of funds, the Ministry o f Finance and Economic Development (MFED) will warrant financial provision to the OB from the Development Fund in accordance with publ ic finance law. T h e OB (through the PMU) will allocate resources to project components to fund specific project activities to b e carried out in accordance with the annual Ministry Operational Plans (MOPs) of h e ministries. These activities will appear in MOPs under the appropriate &visional programmes of ministries in substantially the same form as they appear in the Project Implementat ion Plan. T h e Ministry of Finance and Economic Development (MFED), and particularly the Na t iona l E c o n o m i c Planning O f f i ce (NEPO), will play a n impor tant ro le in the cont inued mainstreaming o f adaptation into MOPs and the 2008-2011 NDS, MOPs monitoring, as we l l as in economic appraisal o f adaptation options.

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Regarding disbursement, project funds w d flow through the Government’s budget and accounting processes. T h e Government N u m b e r 4 Development Project Bank Account will b e used to receive advance funds from the World Bank in AUD. Government Account ing systems w d account for the advance at a n aggregate level but detailed report ing will b e prov ided through a parallel management i n fo rma t ion system maintained by the project implementation unit. There i s also a need to ensure that adequate accountability mechanisms are established for pilot small-scale Ou te r Is land adaptation investments and the proposed Outer Is land grant scheme for communi ty development for water and sanitation. As such, disbursements for these activities would take place only once Procedures Manuals for the implementat ion o f these activities have been developed, and are o f a quality satisfactory to the Bank. Two disbursement categories will be used for the project; one that will be followed by a l l the project, with the exception o f the Outer Is land community development grant scheme for roof catchment and sanitation (in support of the revolv ing fund for the 0 1 s household scheme for roof catchment and sanitation), for which no disbursements would b e allowed from the grant prior to the development and approval of an Procedures Manual, wh ich demonstrates how the funds would b e used a n d accounted for. Expenditure reporting will be against agreed annual activities which will determine eligibility.

3. Monitoring and evaluation of outcomes/results

Overa l l project monitoring and report ing will b e the responsibhty o f the OB, whde the day to day monitoring and evaluation activities would b e carried out by the PMU in the SNPRA Unit. As almost al l project activities will b e integrated and reflected in regular Ministry Operat ional Plans (MOPS), project monitoring will primarily b e based upon MOP progress reports with financial in format ion prov ided by the PMU, complemented by project-specific results monitoring (see Annex 3). MOP progress reports are normal ly required at the end of 4 2 (mid-year) and 4 4 (end year), but for IUP-11- funded activities additional progress reports will b e required at the end o f Q1 a n d 43. T h e h a l f yearly and yearly reports would contain i n fo rma t ion on the project’s progress; f inancial a n d physical, with an explanatory write-up. Quarterly reports from l ine ministries would b e mainly on fund usage and will b e collated by the PMU. A consolidated quarterly IUP-I1 progress repor t will b e submit ted to the NASC, Cabinet, MFED and the WB. T h e reports would b e shared with AusAID a n d NZAID through the Bank. Quarterly reports will also contain implementat ion and work plans for the coming 6 months. Hal fway and at the end o f the project, a n evaluation o f the project will b e conducted, pr imari ly aimed at ident i fy ing lessons learned from the pilot implementat ion phase, w h c h cou ld b e applied to the expansion of the I G i b a t i Adaptat ion Program. Both the PMU and the Is land Development Committees w d regularly monitor progress in the implementat ion o f the small scale adaptation investments.

Implementat ion review m i s s i o n s w d b e carried out, at least twice a year, a n d they would prov ide an opportunity for the donors and the Government to review project progress; develop recommendations and an A c t i o n Plan based on w h c h issues ident i f ied would b e addressed. T h e World B a n k would invi te AusAID and NZAID to participate in the implementat ion review miss ions . Prior to commencing the m i s s i o n s the government and the donors would agree on the implementat ion aspects to b e reviewed.

4. Sustainability and Replicability

Sustainability: There are three key factors that increase the potent ia l for sustainability o f the pilot adaptation investments. First, the nat ional consultation and mainstreaming are directly l inked to the national planning process. In IUP-I , the nat ional consultation was used not only to derive inputs for

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adaptation investment, but also to produce inputs to the 2004-2007 Nat ional Development Strategy and the Ministry Operational Plans. The national awareness and ownershp o f the concepts of vulnerabil ity and adaptation obtained through the two Nat ional Consultations will also increase t h e l ikehhood o f sustainability of activities implemented under the project. This close link i s expected to continue in IUP-11: biennial Nat ional Consultations w d bring key stakeholder groups together to share their experiences, refine priorities, and encourage policymakers to attend to adaptation issues. As bottom up planning and top down program formulat ion becomes progressively institutionahzed within the national p lanning process (and given that many of the concerns o f the Ou te r Islands relate h e c t l y to vulnerabll ity reduction) adaptation investments and concerns are expected to flow naturally from t h i s process.

Second, the proposed placement of I(AP within the Nat ional Strategc ksk Management Unit under the umbrella o f the O f f i ce o f T e Beretitenti i s expected to give i t a permanent institutional ‘home’ with direct access to the Development Coordination Commit tee (composed of Secretaries of al l Government Ministries) and with h e c t responsibility for risk management. T h e access and linkage to high level pol icy makers i s an impor tant asset i f the Unit i s to funct ion at the level of coordination envisaged, in particular driving the preparation and monitoring of the MOPs and coordmating broader adaptation activities wh ich transcend IUP-11, including donor and stakeholder efforts for adaptation.

Thu-d, and with the exception of the island pilots, only adaptation investments wh ich are clearly identif ied as nat ional priorities in the Ministry Operational Plans will b e funded. T h i s , and the fact that the Government will b e contr ibut ing a substantial proportion of the funding for these investments, ensures that the programs are fully institutionalized within the respective Ministries.

As earlier discussed, whde the Government i s expected to cover a substantial proportion o f the costs of avoidmg maladaptation (under the baseline scenario), the alternate scenario assumes that a more complete treatment of these options wdl b e carried out. T h e expectation i s therefore that, the absolute Government contr ibut ion to sectoral investments i s l ikely to b e higher in IUP-I1 than in the future, given that m u c h o f the in i t ia l investment will focus on current vulnerabilities and avoidance of maladaptation. And if climate change impacts intensify, the need for incremental f inancing may also b e higher in the future. However, the process o f mainstreaming adaptation w h i c h was p i lo ted under I U P - I would help ensure that baseline investments would concurrently increase to cover current-day mal-adaptation, thereby increasing the overall sustainability of the program. Moreover, the priority investments proposed for financing will b e activities that entail significant incremental development costs in helping I e i b a t i adapt to the long-term effects of climate change and sea level rise that fit w i h a coherent project that will also deliver global environmental benefits.

ImDortance of technical assistance to imdementat ion and sustainabllitv: T h e project contains a relatively high share of technical assistance, w h i c h i s unavoidable given the current l imi ted technical capacity to address climate change. I U P - I prov ided the building blocks for engagement with the communities and pr ior i t izat ion of adaptation strategies. IUP-I1 will build on t h i s base to increase capacity for implement ing the strategies ident i f ied in IUP-I, inc lud ing integrat ion into regular work in the key l ine ministries. Furthermore, the awareness and behavior change activities that were started under I U P - I need to b e expanded and approached m o r e systematically to address the issues ident i f ied under the scoping consultations under IUP-I , to generate a real behavioral change (partly co-aligned with better provision of alternative solutions to adaptation-related problems, such as beach mining). Once al l o f these processes are in place, and government staf f has implemented adaptation-related programs as par t of their regular responsibilities within their Ministries’ MOPs, they should b e able to continue to apply these improved standards in their work. Furthermore, 85% of the total TA t ime i s

13

allocated to nat ional consultants, coupled t o k t e d inputs o f international TA for in i t ia l t ra in ing of these nat ional consultants and their government counterparts. In t h i s way, the capacity built in national consultants will remain available to t h e government.

Risks

Replicability: Through the IUP, K i r i ba t i would b e one o f the f i r s t countries in the world to pilot adaptation implementation. Hence, lessons learned from I U P (some of wh ich are l isted in section B.3) will b e hlghly relevant for other Least Developed Countries and small island economies. T h e proposed project, the soon to close IUP-I, the NAPA preparation, and various pieces o f World Bank supported sector work have included many provisions for the sharing o f lessons learned. In the past years, the Government o f I h i b a t i has been inv i ted to present the project at the UNFCCC COP in Buenos Aires a n d at the pre-UNFCCC SBI LDC consultations about the LDC fund. Lessons learned have also been incorporated in a World Bank supported Risk Management Pol icy N o t e prepared for the Pacific region, targeting high level decision makers in the Pacific and the donor community. As par t o f the dmemina t ion o f the Policy Note, participatory country level profi les will b e prepared and discussed with interested countries, the results of w h i c h should enrich the NAPA preparation process, and/or adaptation in the countries selected.

Risk Mit igat ion Measures Risk Rating with

At the nat ional level, lessons learned from I U P - I and the NAPA have already contr ibuted significantly to the preparation of the Climate Change Adaptat ion (CCA) strategy that was recently adopted by the Cabinet, and will now b e used as a planning tool for future adaptation activities in the country, including mainstreaming into the MOPS. These lessons will certainly also contr ibute to the AusAID/NZAID country assistance strategy that i s being prepared; and i s expected to pay ample attention to populat ion policies and urban renewal issues (both‘ of wh ich are closely l inked to IG-ibati’s adaptive capacity in the face of climate change).

A clear recognition and commitment from the responsible agencies to the importance o f a t imely creation and staffing of the SNPRA Unit. Once established, the SNPRA Unit should provide continued advocacy to sus ta in publ ic and pol i t ical support for systematic CCA. T h e OB i s responsible for the creation o f the SNPRA Unit. Continue to advocate and b d d on the widespread concern about possible effects of climate change. Capacity budding and advocacy

indeed, whole-of-community-collective will t o adaptation. T h e OB, through the SNPRA Unit would lead the pol icy dialogue; and the

work to create a whole-of-government- and

I U P - I 1 also includes provisions for periodic evaluations to inform the expansion phase of the adaptation program, as we l l as other pilot adaptation initiatives in the region and beyond. IUP-I1 would also include substantial domestic replicabdity, as i t would provide the foundat ion for scaling up and expanding the pilot adaptation investments to the nat ional level under the expansion phase (KAP- III).

Mit igat ion

L

M

5. Critical risks and possible controversial aspects’

Faihre or del9 in establishing SNPRA Unit the OB, MFED and PSO. As specified in GoKs 2005 CCA strategy statement, adaptation depends on strong, politically-supported, focused and effective co- ordination by the newly-established SNPRA Unit under the umbrella o f the OB for i t s success

Failure to secure support and collaboration Of&y CCA Ministties and the communz~. An unambiguous spokesperson or standard-bearer for C C A (and so fo r KAP-11) within the polit ical government does not as yet exist.

14

Failure to strengthen the capah& motivation and funding of localgovernment - an impor tant issue, given that much o f the physical response needed to adapt t o climate change lies within the ambit o f face-to-face contact o f households, communities and enterprises with agencies of government

Tha t serious storm damage orprolonged drought during the per iod of KAP-I1 may force GoK to take short-term r e m e l a l action for humanitarian and polit ical reasons, that would divert resources and public support away from the longer-term and ultimately m o r e cost-effective ways of reducing vulnerability be ing developed under t h i s CCA-based K A P - I 1

Ministries through their MOPS would contribute to coordinated CCA activities. Develop effective, responsive local government capacity to manage CCA across the country, by budding the necessary capacities in local government - activities wh ich have already began with the assistance of UNDP and MISA through their long-term program, to wh ich addt ional resources will b e allocated under KAP-I1 to reinforce and assist t h i s process.

Build capacity o f the agencies to b e mentally and physically prepared to respond promptly to deal with immediate catastrophes, even while developing and prov ing longer-term solutions-using appropriate technical designs in the immediate response that enable integration of the necessary short-term repairs into the longer-term climate-proof upgrade process.

M

S

6. Grant conditions and covenants

Effectiveness condtions: T h e GEF Grant wdl include as a condi t ion o f effectiveness: 0

0

0

that the DCC would approve the project and ensures i t s incorporat ion into the FY06 budget

adopt ion o f the Project Implementat ion Plan acceptable to the Bank by the government adopt ion o f the draft Operations Manual for the project and the pilot small scale 01 adaptation investments schemes procedures manual acceptable to the Bank by the government.

Financial covenants:

0 T h e PMU shall maintain a management in format ion system acceptable to the Bank as a supplement to the Government’s accounting system T h e project financial statements shall b e a u h t e d by auditors acceptable to the Bank a n d on terms of reference acceptable to the Bank T h e audits shall b e conducted in accordance with International Standards on Auhting (ISA) as issued by the IFAC and on terms o f reference acceptable to the Bank T h e annual audited statements and audit repor t shall b e prov ided to the B a n k withm s i x months of the end o f each fiscal year and at the closing o f the project

No disbursements in support of the revolv ing fund for the Ou te r Is land community development grant scheme for roof catchment and sanitation would b e allowed from the grant prior to the development and approval o f a Procedures Manual, w h i c h demonstrates how the funds would b e used and accounted for.

0

0

0

0

Other covenants: 0

0

Prepare and submit a repor t of the monitoring and evaluation results at m id - te rm Take al l measures necessary to ensure that the Project i s implemented in full compliance with the provisions of the Strategic Envi ronmenta l Assessment and the Project Implementat ion Plan and Operations Manual in a timely manner.

15

D. APPRAISAL SUMMARY

1. Economic and financial analyses

Economic bent@ will derive from improved environmental management, inc ludmg the reduct ion in coastal zone degradation, improved water resources management; and a reduct ion in loss of biodiversity, habitats, and f i sh resources. In addition, the intended outcome i s that K i r i ba t i wdl b e equipped with the field-tested engineering designs, information, analytical capacity and technical know- how needed to adapt successfully to climate change in the years ahead. Through the use of these better technologies, publ ic investments should require less maintenance as they become better able to withstand climate variability, climate change, and sea level rise. There are also additional benefits expected from the development and implementation o f alternative l ivellhoods by the communities, wh ich should eventually result in a better standard of living for the beneficiaries. A m o r e comprehensive economic analysis can be found in Annex 14.

Fiscal impact: because the major i ty o f the activities to b e funded are already included as par t of the MOPS, the pro ject would not represent a significant additional fiscal burden for the country. Instead, the project simply provides the additional f inancing that allows the government to expand and reorient the existing programs to reduce vulnerability to climate change. T h e Government has already identif ied provisions in the budget for the existing programs at a n estimated cost of US$ 2.3 milhon, wh ich represents 35% of the total project cost of US$ 6.6 million (including contributions by GEF, AusAID and NZAID). M e d m m te rm fiscal impact o f the project i s l ikely positive as lessons learned are applied in design standards and coastal protect ion and building practices, as w e l l as the priority national investments themselves. T h e use of improved methodologies should result in better adaptation to climate variability, clunate change, and sea level rise, t h u s reducing costs to respond to those impacts. With respect to coastal land use, t h i s should result in longer l i f e spans and lower maintenance for key publ ic assets. Furthermore, the priority national investments in the water sector should reduce the disease burden and associated health service costs related to poor water quality.

2. Technical

IUP-I1 will b d d upon technical guidance developed during IUP-I , including state-of-the-art assessments o f adaptation options for coastal management and the water sector. In addition, the project will compi le a comprehensive c h a t e risk profile, w h i c h will budd upon the current set of climate scenarios for . IGr ibat i . T h e upgradmg of the Meteorological O f f i ce will include the purchase and upgrading o f meteoro logcal measurement instruments w h i c h will b e used to gather key data needed for monitoring and early warning. For coastal management, the in i t ia l phase o f the project wdl prov ide additional resources to refine approaches for preventative rather than responsive coastal management, based upon well-established methodologies for integrated coastal zone management and integrated assessment o f adaptation options. Climate-proofing of publ ic assets will in particular include analysis of soft, i.e., non-engineering solutions. Design parameters for protect ive works will b e based upon f ie ld work and study o f oceanographic data. T h e sustainable lagoon-based aggregate extraction i s par t o f a n associated EU-SOPAC project, w h c h will prov ide the appropriate TA to update a 1998 feasibility study, including extensive technical and environmental assessments before any physical investments are undertaken. In the water sector, most investments will b e based upon well-established technologes whi le m o r e experimental pilot activities - particularly the groundwater recharge and the feasibility study for an artificial water lens, w h c h were based on successful examples in other atolls - will require further technical inputs and evaluation for application in IGribati. The small-scale adaptation activities at the communi ty level are gwded by a clear Procedures Manua l for the pilot small-scale adaptation

16

investments, w h i c h describes the participatory planning that should result in activities that are technically robust and can b e implemented largely on the basis of local knowledge. Lessons learned from the island adaptation pilot activities will b e used to update the Procedures Manual, w h c h could subsequently b e used for all the islands of IGribati. Such updates might include changes in positive and negative l i s t s that define the scope of the potent ia l investments, or specific technical guidance on the implementat ion o f particular activities. All pilot investments in IUP-I1 wiU b e closely mon i to red and lessons learned will b e documented and taken into account in the design o f expanded adaptation investments after IUP-11.

3. Fiduciary

Accredi ted senior specialists assessed the government’s financial management capacity during program preparation and found that satisfactory and acceptable systems are in place to ensure smooth implementat ion o f the project. T h e core financial management arrangements for the pro ject will make use of the Government of Kiribati’s financial management and budget systems supplemented by a parallel i n fo rma t ion system to provide the necessary level o f detailed reporting. In order to maintain the Parallel in format ion system the PMU will require one additional staf f member shortly after the commencement o f the project. With regards to procurement, the general procurement assessment shows that additional procurement capacity i s needed. In particular, it was n o t e d that t he Nat ional Procurement A c t i s quite recent (October 2002), and the implement ing agency has no dedicated procurement staff. And although capacity has been built in the I U P off ice under the ongoing IUP- I project, t h i s has been luni ted to recruitment o f indiv idual consultants and procurement o f goods. U n d e r the proposed project, the procurement scope d b e significantly expanded, as d the level of interaction with other government agencies. Briefly, the following activities to strengthen implementat ion have been agreed: (a) planning ahead for procurement activities; @) contracting of a Procurement Of f icer in the PMU; and (c) contracting o f a Procurement Specialist (to assist in capacity development).

4. Social

Key social issues relevant to the project objectives and social development outcomes

Improving the ab f i t y o f the I - IGr ibat i to adapt to the stresses presented by changes as a result o f climate change i s the key social outcome expected under the project. T h e m a i n strategy for achieving t h i s i s to improve the abh ty of people at the loca l level to interact with officials at is land and national level in ways that al low integration of local level concerns and strategies with island a n d nat ional level responses. In t h i s respect, IUP-I1 i s building upon a series of Nat ional Consultations and a Social Assessment (SA) that examined traditional IGr ibat i society, l and tenure patterns, social a n d cultural organization, pol i t ical organization and patterns o f social and cultural adaptation over time, including in-depth case studies of five islands.

17

Participatory Approach

T h e key stakeholders are the people o f IGribati, local level groups, ins t i tu t ions and organizations, the Is land level pol i t ical and adrmnistrative structures and officials, nat ional level institutions, c iv i l society and donor agencies. T h e people o f IGr ibat i at the local level have been invo lved in the design o f I U P - I1 through nat ional consultations and a social assessment during ICAP-I (see above). T h e Nat ional Consultations brought together Chief Councilors, counci l clerks, government staff on the islands, unimwane representatives (traditional elders), women and youth from each o f the islands of IGribati. T h e f i r s t round of consultations resulted in a catalogue o f the kinds of changes experienced over the last 20-40 years, traditional coping mechanisms; a preluninary assessment of areas where assistance would b e needed; a strategy for further local level consultations; and a shared d e h t i o n of vulnerabllity and adaptation. T h e second round o f consultations resulted in pr ior i t izat ion of vulnerabilities; identif ication o f adaptation strategies; and a classification o f those strategies by level o f urgency. Some urgent strategies could b e undertaken by communities themselves, for the others the consultations designated responsibility to specific government ministries.

Consultations and collaborations with NGOs and other civil society orgamzations T h e Nat ional Adaptat ion Steering Commit tee includes representatives from the IGr ibat i Association of Non-Governmenta l Organizations (IUNGO), the national women’s organization - All W o m e n o f K i r i ba t i (AMAK), the IGr ibat i Counci l of Churches, and the IGr iba t i Chamber o f Commerce. I(ANG0 has participated in several v i s i t s to Outer Islands in order to consul t with village level I- I(iribati to elicit their views and concerns with respect to climate change. NGOs and churches, wh ich occupy a central social position in IGr ibat i society, are expected to play a n impor tan t ro le in the design and implementat ion of the pilot small-scale Outer Is land adaptation investments, as w e l l as in the awareness raising and publ ic consultation.

Institutional arrangements

Although it i s unlikely there wdl b e any substantial resettlement, the inst i tut ional arrangements for resettlement activities are described in the Resettlement Policy Framework. I n s t i h t i o n a l arrangements for the pilot small-scale Outer Is land adaptation investments are described in a detailed Procedures Manual for that subcomponent, including the participatory process by w h i c h vdlages and communities will come to consensus through a n inclusive process o f local level discussion and debate concerning the most pressing concerns facing the communi ty and means by w h i c h those concerns will b e addressed. With the assistance of c iv i l society organizations and the Is land Project Officer, proposals for small- scale adaptation investment grants wdl b e formulated and passed on to the Development Commit tee at the island level and, from there, to the PMU at the national level.

Both the PMU and the Is land Development Committees will regularly monitor progress in the implementat ion of the small scale adaptation investments. T h e implementat ion of the MOPS will b e moni tored by each m i n i s t r y on an ongoing basis. T h e M&E system for the resettlement and land acquisition aspects of the project i s described in the Resettlement Pol icy Framework. A social assessment will b e conducted towards the e n d of the implementat ion phase to determine the social development outcomes achieved under the project, and to ident i fy lessons learned for further adaptation planning.

18

5. Environment

A Strategic Envi ronmenta l Assessment (SEA) has examined the environmental issues that are l ikely to arise under IUP-11. As specific investments to b e undertaken under IUP-I1 have yet to b e designed, the SEA provides a general methodology for environmental screening o f policies and plans; the preparation of environmental impact assessments for various kmds of potent ia l activities, including how best to mit igate any possible negative consequences; and the monitoring o f the implementat ion o f the recommendations o f those EIAs.

T h e project will have some environmental impacts, but in most cases these impacts are not k e l y to b e substantial. In almost all cases the impacts are expected to b e positive over the longer term. There i s an established regulatory environment in K i r i ba t i that mandates certain actions in the case of negative environmental impacts. T h e Envi ronment A c t of 1999 establishes an integrated system o f development control, environmental impact assessment and pollution control. T h e Minister of Environment, Lands and Agricultural Development i s responsible for the due administration and implementat ion of the Act. All development proposals of government ministries, island councils, private developers and non-government organizations must undergo the environmental screening procedures o f the Envi ronment and Conservation Division (ECD) as stipulated in the Env i ronmen t Regulations 2001. T h e screening procedure requires al l project proponents to apply for a permi t to carry out a prescribed development. T h e application form will b e reviewed by ECD to determine whether the proposal requires a n in i t ia l environmental examination (IEE) or a n EIS (a comprehensive EIA study). T h e EIA procedure allows for the project proponent to conduct i t s own EL4 study and implement the ECD approved environmental management p lan o f project activities. T h e ECD would also prov ide monitoring measures for the proponent to implement and for w h c h Nat ional Envi ronment Inspectors would closely monitor environmental compliance of the project. Project activities in a n Ou te r Is land would undergo the same environmental screening system. T h e implementation, management and monitoring o f the local project would b e supervised by the Is land Council, with possible assistance from ECD.

All subprojects under the Pilot Is land Adaptat ion component and any ma jo r activity under the MOPS will undergo environmental screening to determine the l ikely level o f environmental impact. Activit ies wdl b e categorized in a way consistent with B a n k OD4.01.

6. Safeguard policies

Safeguard Policies Triggered by the Project Yes No

Knvironmental Assessment (Ol’/I31’/Gl’ 4.01) [XI [I Natura l Habitats (OP/BP 4.04) [I [XI

Pest Management (01’ 4.09) [I [XI

Cultural Property (OPN 11.03, being revised as OP 4.1 1) [I [XI

Involuntary Resettlement ((Il’/BP 4.12) [XI [I Indgenous Peoples (OD 4.20, being revised as OP 4.10) [I 1x1 Forests (W/m 4.36) [I [XI

Safety o f D a m s (OP/HI’ 4.37) [I [XI

Projects in Disputed Areas (Ol’/l31’/Gl’ 7.60)’ [I [XI

Projects on International Waterways (OP/BP/C;P 7.50) 11 [XI

* By supporting the proposed project, the Bank does not intend to prejudice the f inal determination of the parties‘ claims on the disputed areas

19

T h e Env i ronmen ta l impacts o f the project are expected to b e small. There may b e some small-scale construct ion associated with the project, but t h i s i s not expected to have major negative environmental consequences. As a result, the project has been rated Category B, requiring a part ia l Environmental Assessment (EA). However, the increasing and cumulative effects o f coastal infrastructure developments are likely to b e important, and as such, i t wdl clearly b e advisable to initiate an environmental management program targeted at the coastal development sector. An integrated coastal management p rog ram would examine the current extent o f climate change adaptation options and coastal construct ion activities and the impacts (both beneficial and adverse) experienced to date. T h e environmental management program should consider the preparation of a Na t iona l EIA Training Program and a series o f Codes o f Environmental Practice for use during the planning, design, construction, a n d operation as we l l as maintenance o f al l roads and coastal works in Kir ibat i .

7. Policy Exceptions and Readiness

N o n e .

20

ANNEX 1: COUNTRY, SECTOR AND PROGRAM BACKGROUND

KIRIBATI ADAPTATION PROJECT - IMPLEMENTATION PHASE (KAP 11)

Country background

IGi-ibati i s one o f the most isolated and vulnerable countries in the world. I t consists o f 33 low-lying atolls and small reef islands spread over a vast sea area of 3.5 million km2 in the Western and Central Pacific. In total sea area, from East to West, IGr ibat i i s nearly as wide as the continental Un i ted States, extendmg over 4,000 km and three island groups (Gilbert, Phoenix and L i n e Islands). T h e total land area, however, i s only 726 km2, supporting a populat ion o f almost 98,000 (2004 estimate). H a l f of the populat ion lives in the capital a to l l island of Tarawa (in the Gi lber t Is land Group), a densely populated area with a populat ion growth rate o f 3 Yo per year. T h e populat ion shares a c o m m o n cultural heritage and speaks one nat ional language.

F&. 1. Map OfKzribati, showing the extent ofsea area and remoteness ofthe Outer Islands

Source: http://www.infoplease.com/atlas/county/k,itibati.html

T h e poor atol l soil offers l i t t le potent ia l for agricultural development apart from a few commodities such as copra. At the same time, the vast fishing area provides IQr ibat i with i t s most impor tant source o f revenue in the form of fishing licenses, w h c h amounted to about 23 O/O of GNP in 2001-02. T h e total GDP of IGr ibat i was US$54.6 million equivalent in 2003 or about U S $ 567 per capita. However, because seamen’s remittances and fishing license revenues i s a s i p f i c a n t contr ibutor to IGribati’s economy, GNI i s a m o r e relevant measure o f income than GDP. T h e GNI per capita declined from US$1,040 in 1999 to US$970 in 2004, reflecting the contraction in GNI in 2002-04 due to a decline in fishing license revenues.

Of f ic ia l grants and loans amounted to US$58 million equivalent in the 2000-02 period, or 30 YO of the Government’s annual budget expendtures. Though fishing revenues vary from year to year, the IQr ibat i economy i s stabdized by i t s Revenue Equalization Reserve Fund (RERF) derived primarily from phosphate revenues, w h i c h i s used to balance the budget and was valued at US$335.7 d o n in end-2003. Of f ic ia l external reserves are equivalent to 8 times the annual imports.

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T h e m a i n challenge facing I h i b a t i at present i s the high populat ion growth, averaging 2.1 O/o a year in 1998-04. By 2025, at current rates, the populat ion of I h i b a t i wdl grow to 140-145,000, with Tarawa - already densely populated - supporting at least 70,000 of t h i s population. Thus would place tremendous added pressure on the already fragile atol l environment. T h e concentration of populat ion in Tarawa i s largely due to employment and l ivel ihood opportunities. Currently, only about 10 O/o of the populat ion i s formally employed in the cash economy, and two-thirds o f the jobs are prov ided by the publ ic sector. Ths high reliance on the publ ic sector for job security has been at the core o f the Government’s reluctance to privatize many o f the 28 publ ic enterprises. T h e Government i s currently studying voluntary incentives to attract migrat ion into I G i t i m a t i (Christmas Island) in the L i n e Is land Group (3,500 km east o f Tarawa), wh ich i s under Government land. Though I G i t i m a t i - the largest atol l in the world - comprises ha l f o f the land area of IG iba t i , i t lacks direct air links with Tarawa, and suffers from periodic droughts and poorly developed infrastructure.

Vulnerability

Ki r i ba t i i s one of the most vulnerable countries in the world to the effects o f clunate change and sea level rise. Although it lies outside the cyclone path, most of the land i s less than 3 meters above sea level and lies a long a narrow strip surrounded by sea on both sides. T h e average width of urban Tarawa, for example, i s j u s t 450 meters (see Table 1).

Table 1 Kiribati Main Atolls - Population and Island Width Atol ls and island Population (2000) Widest widths (m) Average widths (m)

M a k i n 1,691 1700 600 B u t a n t a n 3,464 1200 350 Marake i 2,544 2100 500 Aba iang 5,794 800 300 North Tarawa 4,477 1400 500

Maiana 2,048 1100 400 K u n a Aranuka A b e m a m a Nonouti Tabiteuea Nth Tabiteuea S t h O n o t o a B e r n N i k u n a u Tamana Arorae O r o n a (Hull) Teraina (Washington) Tabuaeran (Fanning) K i n t i m a t i (Christmas) 3,431 39,000 7,245**

Sources: L a n d and Stlruy Division (original); Government of Kiribati; IGCI (1999). * wu.w.woildtravclcruide.iict/d:itd/ kir/kii.:isp ** Minimum width of Christmas Island (wivw.woi~kcr~foiicsus.c(,in/3 1 -rnci.htm)

961 966

3,142 3,176 3,365 1,217 1,668 2,732 1,733

962 1,225

30 1,087 1,757

3700 1600 1200 900

2300 2000 940

1800 2600 1100 1100 N /A N/A N/A

1,700 770 710 400 700 650 420 800

1,300 900 800

N/A N/A N/A

T h e islands are exposed to periodic storm surges with a return per iod o f 14 years and to droughts during L a NGia years (about once every 3-4 years). Rainfall above 3,000 mm per year (leading to floods) occurs once every 6-7 years. A d d e d to natural vulnerabil ity there i s also considerable socio- economic vulnerability due to high populat ion growth rates and in-migrat ion into Tarawa, where semi-

22

permanent settlements, rate of development, and environmental degradation are already pronounced, a n d expected to accelerate in the near future.

T h e impacts of climate change are expected to b e severe. In 1999-2000, the World B a n k funded a study of vulnerabi l i ty and adaptation in Tarawa, conducted by experts from the Internat ional Global Change Institute, the Government o f IGribati, the University of Otago, and Eco-wise Environment. T h e study found that climate change and sea level rise are l ikely to lead to severe incremental impacts, disrupting m a j o r economic and social sectors (Table 2). By 2050, in the absence o f adaptation, IGr ibat i cou ld experience potent ia l economic damages of US$8-16 million a year, equivalent to 17-34 percent of the 1998 GDP.

Table 2. Potential Impacts of Climate Change, Variability and Sea Level Rise in Kiribati, 2050

Tjp ojlmpact Physical Impact (in millions o j 1998 Certain0 Annual Damages L v e l o j

US#)

Impact on coastal areas: L o s s of land to erosion

Buar ik i (North Tarawa) Bikenibeu (South Tarawa)

Buar ik i (North Tarawa) Bikenibeu (South Tarawa)

Loss of land and infrastructure to inundation

Loss of coral reefs

Impact on water resources: Change in groundwater thickness (Bonriki lense)

Impact on agriculture: Agriculture Output Loss

Impact on public health: Increased incidence o f diarrheal disease Increased epidemic potential o f dengue fever Increased incidence o f ciguatera poisoning Impac t on public safety and the poor

water-borne or vector-borne diseases Potential increase in fatalities due to inundation and

0.3 to 0.7% 0.6 to 1.3%

18 to 80% 0 to 54 Yo 10 to 40%

19 to 38%

Depends on rainfall scenarios; sea level rise would have negative impact

Expected to increase 22 to 33% 4.6 to 6.1 fold Substantial impact on subsistence crops/fisheries, increased crowding Expected to increase

0.1-0.3

7-12

0.2-0.5

1-3

+

++ + + + +

>8-1/;+

Low

Low

Very Low

Low

Low

Low Low Low

Low

Low

Very

Total Estimated Damages - . -

Furthermore, the study suggested that 18 to 80 Yo of the l and in Buariki, North Tarawa, a n d up to 54% of land in Blkenibeu, South Tarawa, could become inundated by 2050, though the effects of erosion are expected to b e relatively small. T h e combined effect of sea level rise, changes in rainfall, and changes in evapotranspiration due to h g h e r temperatures cou ld result in a 19-38 Yo decline in the thickness of the m a i n groundwater lens in Tarawa. Agriculture product iv i ty - particularly for taro and pandanus - could d e c h e due to storm induced saltwater intrusion into groundwater. Higher temperatures could also increase the epidemic potent ia l for dengue fever by 22-33 Yo, increase the incidence o f ciguatera poisoning and degradation o f coral reefs, and divert crit ical tuna resources away from I h b a t i waters.

23

--. ,mm --. Reef Edge * -

_ _ - e - - - _ _ _ _ _ _ _ ---- -.-_ [ B 1.0m abavsMHWS

Change in annual mean rainfall relative to year 2000

Fig. 2 - Projected Inundation o f Bikenibeu Island (South Tarawa) under Worst-case Scenario

+3% +7% +15% (+I% to +70/0) (+2% to +170/0) (+4% to +46%)

Key A: Present status B: Residual island under a worst case scenario, 2 100; C: Residual island under worst case scenario and storm surge, 2 IO0

Source: World Bank (2000).

Climate change scenarios

T h e IGr ibat i Climate Change Study Team recently adopted a n updated set of climate change scenarios (see Table 3). However, a l l pol icy documents also recognizes that the main impacts of c h a t e change will not b e felt through changes in the annual mean temperature or rainfall, but through i t s effects on the variabhty, includmg return periods o f particular storm surges, intense rainfall, or drought. Hence, c h a t e change adaptation should b e managed by addressing the full range of climate-related hazards, ranging from weather extremes to creeping hazards and long-term trends. IQiP-11 will provide for TA to prepare risk in format ion that includes the whole spectrum o f c h a t e variabil ity a n d climate change, including current re turn periods o f various c h a t e extremes (droughts, extreme rainfall, storm surges, etc), and projected trends therein.

Table 3. Initial planning assumption for climate change on Tarawa I 2025 I 2050 I 2100

1 M e a n sea level rise re lat ive to the leve l in year 2000

+39 c m (+12 to +83 cm) I (::::?26 cm)

Change in annual mean air temperature +0.4 O C + L O O C +2.3 OC re lat ive to year 2000 (+0.3 to +0.5) (+0.8 to +1.4) (+1.3 to +3.5) I

24

Country Strategy

T h e Governmen t of IGr ibat i has shown nearly a decade of commitment to clunate change adaptation. A nat ional Cl imate Change Team was established in 1995 under the U S Country Studies Program. T h e team cont inued i t s work under the GEF-funded Pacific Islands Climate Change Assistance Programme (PICCAP, under UNDP assistance), wh ich supported the preparation o f Ie ibat i ’s in i t ia l Nat ional Communicat ion to the UNFCCC (submitted at the 5th Conference o f the Parties in 1999), as we l l as a C h a t e Change Na t iona l Implementat ion Strategy P I S ) , issued in January 2003. In subsequent years, preparation phase of the IGr ibat i Adaptat ion Program, and the preparatory activities for the Nat ional Adaptat ion Programme of Action, prov ided further consultations and analyses that are currently guiding IGribati’s response to adaptation. In June 2005, the Government o f Kir ibat i adopted the following formal Policy o n Adaptation to Climate Change:

“Warning of the earth 5- climate, with an associated rise in sea level and an increase in the frequeny and seven3 of extreme weather conditions, is current4 occumng and is like4 to continue through this century. The principal cause of these changes is the efect on the earth’s atmosphere of emissions from economic activities in industrialixed countries. International recognition ofthis has led wealthy nations to set up arrangements to help developing countries with the design andjinancing of national programmes of adaptation to climate change.

Kiribati is particular4 vulnerable t o the impacts of climate change, which constitute a mqor strategic risk to the economy and national well-being. The nature ofthe risk has to be specz$ed and appropriate responses developed at national and local levels, Successive Governments of Kiribati have been active in global and regional consultations about the climatic changes taking place and how to deal with them. National expertise has developed and links have been established with the relevant regional and international institutions.

A s Kzribati cannot escape climate change it must adqbt t o it. The adaptation process needs t o give people the best possible chance ofliving decent lives during and byond the period of climate change nowforeseen. A s the impacts of climate change reach into all aspects of/$ in Kiri‘bati, broad public consultation and particzpation in planning and implementation are neededfor sustainable responses. M a 9 departments ofgovernment are involved, requiring both centralpoliy co-ordination and clear delegation of responsibiliij for action. And as the precise speed and extent of future climate change is unknowable, adqbtive responses themselves need to be risk-minimi@ng, flexible andprogressive.

The current statement $National Development Strategies (NDS) 2004-7 identzj?es climate change as a mqor area of developmental concern. I n Ky Poliy Area 1, Economic Growth, Issue 3 states %limate change bringspotentialh cost4 r i d s to economic growth ’, and calls for the development of partinpato ry and cost-efective way of minimieng and managing risk of loss from climate change-related events

The Government ’spoliy aims in respect of climate change are thergore that:

Kzribati should be mental’, physical4 and jinancialh well prepared to deal with whatever climatic trends and events the future m y hold,. this should be achieved through a coordinated, particzpation-based adaptation programme carried out Ly oflcial andprivate agenczes; and externaljinancial assistance should be obtained to meet the costs ofthe national adaptation programme. ”

with t h s Policy Statement, the government adopted a m o r e elaborate C h a t e Change A d a s a t i o n Strategy, w h c h i s implemented, among others, through the IGnba t i Adaptat ion Program. T h e following sections hghlight the background of the Pol icy Statement, C h a t e Change Strategy, the IGr ibat i Adaptat ion Program, as we l l as the current IUP-I1 project.

25

Regional context

T h a t approach to adaptation taken in IGribati, including the mainstreaming of adaptation into economic planning, i s fully consistent with the Framework for Action on Climate Change, Climate Variabilig and Sea Level Rzse in the Pacific Island R e g o n (2000). Under the adaptation objective statement, the Framework l i s t s the following key o u t p u t s :

0 Mainst ream effective and efficient c h a t e change related risk management in nat ional development plans, budgets, sectoral plans, policies and projects I m p l e m e n t integrated adaptation measures and policies at the nat ional and /o r c o m m u n i t y level

0 Strengthen national capacity to deal with and respond to c h a t e related issues a n d mainst ream adaptation in national p lann ing Disseminate in format ion about clunate related issues related economic a n d social impl icat ions to high-level po l icy makers as we l l as the general publ ic.

0 Enhance the methods to help ensure a m o r e effective l inkage between ident i f ied vulnerabiltt ies a n d proposed adaptation measures.

0

T h e Government’s approach i s also consistent with the recommendations o f the f u s t and second Pacific Islands High Level Adaptat ion Consultations (2002 and 2003). T h e 2002 N a d i Communiqui, endorsed by the Pacific Is land Forum, stated that “climate change, climate variabdi~, and sea level rise is notjust an environmental, but also an economic, social, and political issue for Pacz$c Island countries”. T h e Communiqui recommended the following major principles in mainstreaming adaptation:

Integrate risk management in the nat ional development p lanning a n d budget ing process Strengthen capacity for risk assessment a n d risk management Strengthen capacity of the ministr ies of env i ronment to p e r f o r m macroeconomic a n d cost/benefi t analyses Strengthen the capacity of the ministr ies of p lann ing and fulance to internal ize the implications of environmental issues a n d incorporate adaptation and disaster management concerns into the budget a n d p lann ing processes Strengthen inst i tut ional arrangements for high-level national coord inat ion a n d the formulat ion of nat ional policies, strategies and strategic plans Disseminate i n fo rma t ion about cl imate change a n d adaptation a n d related economic a n d social implications to high-level po l i cy makers as w e l l as the w ide r pub l i c I nc lude risk assessment a n d risk management in the formulat ion of projects, programs a n d the development p lan i tse l f

The Kiribati Adaptation Program (KAP)

In 2003, as a direc’t follow-up of the 2000 World Bank Study and the r e g o n a l developments ment ioned above, the Government of IGribati, with support from the World Bank, started the IGr ibat i Adaptat ion Program QUP), with the key goal o f reducing IGribati’s vulnerabil ity to climate change, climate variability and sea level rise. T h e program i s envisaged to involve the following phases:

P Phase I: Preparation (2003-2005). This phase aimed to mainstream adaptation into nat ional economic planning, prepare a Na t iona l Adaptat ion Program of A c t i o n and design a n in termedate pilot implementation phase, IUP-11. All o f these activities were based upon an extensive consultation and process, as we l l as several technical studies in key affected sectors. I t i s be ing

26

funded under a Japan PHRD Climate Change Init iative &JS$645,580), a Nat ional Adaptat ion Programme o f A c t i o n grant under the LDC fund (US$200,000), Government contributions &JS$25,000), and a GEF PDF-B Gran t (US$99,100).

2003 2005

Phase I

Phase II;. Pdot Implementation (2006-2008) i s the focus o f the current PAD. I t aims to develop and demonstrate the systematic diagnosis o f climate-related problems and the design of cost- effective adaptation measures, whi le continuing the integration o f awareness and responsiveness into economic and operational planning. This will b e achieved through cont inued consultation and awareness raising; consolidation o f the mainstreaming o f adaptation into national economic planning; and implementation of pilot adaptation measures to address pressing adaptation issues whi le building capacity in key government ministries, local government a n d communities. Besides the Government o f IGi-ibati’s own contribution, it wdl b e financed by the GEF’s Strategic Priority “Piloting an Operational Appmach t o Adaptation”, with cofinancing from AusAID and NZAID and parallel f inancing from the EU.

2007 2009 201 1 2013

Phase II Phase IIl

Phase III: Expansion (2009-2015) would gradually scale up the investments pi loted under Phase I1 to cover a l l major islands and vulnerable sectors o f Kir ibat i . This phase may b e eligible for funding under one or m o r e of the three global funds for adaptation (LDC, Special Climate Change Fund and Adaptat ion Fund), complemented by b a s e h e financing from the GoISs own budget as wel l as bilateral contributions. Care would b e taken to ensure that there would b e no duplication of activities funded under the GEF Strategic Priority and those funded under the global funds, should they b e accessed. T h e progression of I U P phases i s out l ined schematically below.

IGEF Funding: NAPA Baseline: Japan CC Funds I

Phase III: Expansion Phase I: Phase II:

Preparation Pilot Implementation

SPA Government Government AusAID, NZAID, bilateral contributions EU

LDCF/Spec ia l Climate Change Fund/Adaptat ion Fund

Previous4 National

GEF funded: Communication

Adaptation Investments

I t i s expected that external f inancing for mainstreaming wdl progressively decline as i t i s institutionalized into Kiribati’s nat ional economic planning, whdst financing for adaptation investments would b e expanded to cover a l l crit ical islands and sectors. Successful mainstreaming would not imply that no further investment costs are required, only that adaptation response i s integrated into regular

27

pol icy a n d implementation. Vulnerable countries &e IQr ibat i are quite likely to see rising impacts and incremental development costs due to climate change, almost regardless of the effectiveness and sustainability of early adaptation measures. Mainstreaming i s the best way to: (a) ensure that many low- cost adaptation measures are integrated into government pol icy and thereby become sustainable; and (b) ensure that t he incremental investments needed to adapt to climate change are as effective and efficient as possible. For these investments, the Government of IQribati hopes to gain support from the internat ional community.

Second National Consultation:

Results from KAP-I: Mainstreaming Adaptation into National Economic Planning

I(AP-I has been closely l inked with the preparation of the 2004-07 Nat ional Development Strategy and the Ministries’ 2-3 years Operational Plans (funded partially through ADB assistance). I t i s also being coordmated with the preparation of the Nat ional Adaptat ion Programme of A c t i o n PAPA) funded by GEF under UNDP execution. T h e process fol lowed in mainstreaming i s shown below:

Nat ional Implementat ion Strategy (2003)

First National Consultation: Assessment o f Is land Vulnerabil it ies

fcombleted)

b b Prioritization of Coping Strategies fcombleted)

I I . b

- Integration of Adaptation into 2004-07

fcombleted) National Development Strategy

National Adaptation Programme of Action

/to be combleted in second half o f 2006) ( N A P 4

Initial Technical, Social and Economic Analysis of Adaptation Options

fcombleted)

28

b Climate Change Adaptation (CCA) Strategy

(adopted bJi Cabinet - June 2005)

b

Adaptation Mainstreaming into Ministry Operational Plans

f on -~o in~ )

Pilot investments under RAP-I1 (this PAD)

National Consztltations. Using established risk management tools (Comprehensive Hazard and Risk Management) developed by the South Pacific Appl ied Geosciences Commission (SOPAC), I U P - I held two ma jo r nat ional consultations, wh ich gradually built awareness and commitment for adaptation and climate change. T h e First National Consztltation, held in the Gi lbert and L i n e Is land Groups from' 23 of June to 15 August 2003, brought together Chief Councilors, government staff, clerks, zlnimwane representatives ( t radt ional elders), w o m e n and youth from each of the islands o f ISiribati. K e y results included:

0 Awareness that the changes they faced were not unique to their islands, but shared across the islands A catalogue o f kinds of changes experienced over the last 20-40 years, and t radt ional coping mechanisms used to deal with those changes

A preliminary assessment of areas where people felt they needed additional assistance in coping with their vulnerabilities A strategy to take results back to their islands for further local level consultations A shared and distinctively I-ISiribati def in i t ion o f what i s vztlnerabilig and adaptation

0

0

T h e Second National Conszlltation (November-December 2003) included most of the same stakeholders from the F i r s t Consultation, but also Is land Project Officers. K e y results included:

0

0

Priorit ization o f vulnerabilities identif ied by the island stakeholders Ident i f icat ion of adaptation (coping) strategies for the ident i f ied vulnerabilities

0 A classification of adaptation strategies into (a) those wh ich were urgent and could b e undertaken by communities themselves; @) those w h i c h were urgent and would require outside help, and (c) those w h c h were less urgent and did not need to b e addressed immediately Participants then assigned urgent adaptation strategies for w h c h outside help was required to specific ministries for inclusion in their operational plans

0

Mainstreaming into National Development Strateg. T h e Nat ional Consultations were closely coordinated with the formulat ion of the 2004-2007 Nat ional Development Strategy. Meetings on adaptation were immediately fo l lowed by discussions on the NDS, involving many o f the same stakeholders. As a consequence, adaptation issues are we l l integrated into the NDS, and climate change i s recognized as one o f the key issues potentially affecting economic growth.

In order to implement the NDS mandate to address that vulnerabhty, the I -K i r i ba t i Cabinet recently also adopted the Climate Change Adaptat ion (CCA) Pol icy Statement and Strategy (see above),

With respect to the responsibilities o f the national government, the CCA Strategy adopts a perspective o f mainstreaming adaptation into nat ional economic planning, as reflected in the structure of IUP-11. Furthermore, IUP-I1 provides the resources and technical assistance to establish the participatory planning process envisaged in the CCA strategy, and delivers the external f inancial resources to address, on a pilot basis, the additional cost o f some of the priority adaptation investments ident i f ied under I U P - I .

Mainstreaming into Ministy Operational Plans. Mainstreaming at the operational level i s be ing enhanced by using the outputs of the Nat ional Consultations to inform the formulat ion of the annual M u i s t r y Operational Plans (MOPS). MOPS, w h c h were in t roduced in 2004, are the key p lanning tool for a l l Government Ministries and publ ic enterprises. They are coupled to the government's p rog ram budget

29

(which in t h i s context includes all sources, i.e. recurrent plus development, in kind and cash), and subject to biannual progress report ing to monitor M h s t r y performance. Wh i le in 2004, only a few MOPS reflected adaptation priorities, the 2005 MOPS showed considerable attention for adaptation in many key programs. T h e 2006 MOPs, wh ich will incorporate the add-on investments of IUP-11, will b e the f i r s t generation of MOPs with comprehensive mainstreaming of adaptation priorities across all climate relevant programs in the key ministries. During IUP-11, t h l s mainstreaming process will continue, and adaptation priorities in the key MOPs will b e fine-tuned on the basis of further consultations and technical inputs. Wh i le specific pilot investment activities that are par t o f IUP-I1 wlll only appear in the MOPS for the years in wh ich they are implemented, most of the mainstreaming of adaptation in MOPS programs wlll b e based on recurrent budget resources, and are expected t o become continuous components o f relevant MOPs, fully sustainable after the end o f IUP-I1 (although future specific adaptation investments in the expansion phase would again b e added to the regular level of activity in the MOPS of affected Ministries).

Social, Technical and Economic Assessments. Under complementary I U P and NAPA funding, adaptation investments have been assessed and priorit ized based on technical, social and economic merits (as summarized in Annex 4). In response to the concerns expressed by the nat ional consultations, key technical and economic assessments focused on strategic options for coastal management and freshwater resources. As par t of the coastal vulnerabhty analysis, I U P - I also supported a comparison o f old (post World W a r 11) maps to determine historical rates of island erosion. A comprehensive social assessment “The Sun is Coming Closer to my Island” was conducted based partially on fieldwork in f ive islands (Butaritari, Abemana, I(iritimati, Tamana, and Onotoa). As par t o f the GEF-PDF B preparation grant, a n environmental analysis, regulatory review, l and acquisition framework, fuvther technical assessments, and preparation o f a Procedures Manual for island investments have been carried out. T h e NAPA process i s expected to result in a Nat ional Adaptat ion Program o f A c t i o n in early 2006.

T h e basis for the design of KAP-11’s pilot investments

IUP-I1 component includes a number o f priority publ ic sector adaptation investments in key vulnerable sectors, as ident i f ied and pr ior i t ized in the Ministries Operat ional Plans (MOP). By adding project funds to the Government budget for these investments, the project provides an incentive for a gradual uptake o f adaptation-friendly investments and policies across the development planning o f Kir ibat i .

I U P - I came at a n opportune time, since 2004 marked the f i r s t year that MOPs were introduced in Kir ibat i . E a c h priority p rog ram in sectoral Ministries and publ ic enterprises will have specific program indicators, and should b e supported by the Min is t ry ’s p rog ram budget. These indicators, once developed, will also become the output in&cators for IUP-11, t h u s ensuring that project monitoring i s closely l inked to the national budget.

T h e process for pr ior i t izat ion o f adaptation investments i s explained br ief ly below:

1. Identification of Coping Strategies

During the f i r s t nat ional consultation, representatives from each of the islands ident i f ied the key changes (hazards) experienced over the past 20-40 years, and the coping mechanisms proposed to deal with these changes. An example i s shown below:

30

Hazards Impact

High storm surge Inundat ion : water becomes brackish Erosion: reduction o f land area

2. Adaptation Prioritization and Responsibility Allocation

Coping Strategies

Construct wood embankment Plant mangroves; limit removal o f aggregates

During the second national consultation, island representatives rated the adaptation options and classified t h e m into four categories:

Water Resources:

A = Urgen t adaptation options wh ich can be done by communities themselves (“things that we can do

B = Urgen t adaptation options for wh ich communities need assistance from the Government (“things

C = Adaptat ion option that are less important/urgent (“things that are somewhat less importantlurgent”) D = Adaptat ion options for wh ich there i s s t i l l no need or willingness to implement (“things that we do

nght away’)

that we want to do nght awy, b u t j r which we need assistance”)

notyet need or want t o do”).

MCTI ’D /MEYS Water resources

Only B category options were considered in the process of mainstreaming into the MOPS.

Water Resources:

-Protect water wells -Assess available water -Water pumps and p ipes

Adaptation Option I Priority Category I Rank I Category I Lead Ministry

N o Yes (Med) Yes (Low) Yes p e d ) N o N o

I Awareness raising I B I 1 I General 1 MELAD

-Protect water wells -Assess available water -Water pumps and pipes

B B B

3 4 2

MPWU MPWU MPWU

3. Assessment of Potential Global Environmental Benefits and Incremental Development costs

T h e priority adaptation options were then assessed on a preliminary basis against their potent ia l g lobal environmental benefits, and incremental development costs due to climate change. Not surprisingly, t h i s analysis found that many adaptation investments with significant incremental development costs &d not have s i p f i c a n t global environmental benefits:

Option

Yes (High)

Priority Category

B

B B B

31

Rank Category 7 General

3 4 2

Lead Ministry

MELAD M C T T D / M E Y S

MPWU MPWU MPWU

4. Assessment of T 9 e of Response Required

T h e adaptation opt ions were then div ided into five categories according to the nature of the response:

Changes to government policies and strategies Changes to laws and regulations, with appropriate mechanisms to improve compliance Interact ion o f extension and in format ion services with communities and households F o r m a l engineering and construction works by Government, island councils and contractors I n f o r m a l engineering and construction works by households and communities

(1) (2) (3) (4)

(5)

5. Mainstreaming into the Ministry Operational Plans

T h e adaptation options were circulated to al l relevant W s t r i e s during the process of formulat ion o f their Operat ional Plans, and facilitated by a team o f consultants. T h e investments were checked against the Ministries key programs to ensure that they had a ‘home’. T h e results are summarized in Table 4. T h e 5 major sectoral Ministries that would b e most involved in implement ing adaptation include:

0

0

0

0

0

W s t r y of Environment, Lands and Agriculture Development (MELAD) Ministry of Publ ic Works and Util i t ies (MPWU) M i n i s t r y of Internal and Social Af fa i rs (MISA) Ministry of Fisheries and Mar ine Resources Development (MFMRD) Ministry of Communication, Transport and Tourism Development (MLPID)

T h e Ministry o f Heal th and Medical Services i s closely invo lved in I(AP, but will not b e implement ing specific investments during IUP-11. M o r e in general, i t i s impor tant to emphasize that I(AP-I1 has been selective, and that a future expansion o f the adaptation program will probably not only involve a scalmg up o f I(AP-11’s pilot investments, but also a n expansion to other sectors. Examples include health (includmg vector-borne disease management) and agriculture - both sectors have clear adaptation issues, but were deemed less impor tant wan t water and coastal protect ion (also because improvements in water and sanitation and coastal l and use also address some of the key health and agriculture issues that were identif ied by the national consultations).

To date, the adaptation options emerging from the nat ional consultation have been treated with respect among Government Ministries. Sectoral Ministries have raised no objections to the sharpening and intensifying of their response to the challenges of climate change. However, the pr ior i t izat ion of adaptation options has not yet penetrated very far down to the operational level. Par t o f the p r o b l e m may b e I(AP’s focus on “no regrets” options, rather than expensive, attention-catching solutions to c h a t e change wh ich can excite publ ic imagination. I(AP’s approach i s in effect a n all-pervading but incremental, low-key process, eventually affecting al l key aspects of the Nat ional Development Strategy. I t i s expected that t h i s will b e ultimately m o r e effective than investing large fundmg in only a few high- prof i le investments.

15. Priorithhg and SpeciFng the Investments

T h e next steps in project preparation have been to pr ior i t ize specific adaptation investment, based upon the following criteria:

32

1.

2.

3. 4. Timing/urgency (immediatelcan waitlunknown) 5. No-regrets lyeslno) 6. 7. 8. 9. Participatory (bottom-upltop-down/ both) 10. 1 1.

Degree of adverse effects/vulnerability being addressed (ue y high/ h&b/medium/low/ vey low) (based upon hsk/ vulnerabiLi9 anahsis) Impor tance attached by the national consultations (uey high/ h&b/medium/low/ uey low) (based upon rankings from national consukations) Cost relative to benefits (uey high/high/medium/low/uey low)

Envi ronmenta l impacts lyes/ some/ no/ unknown) Culturally acceptable? lyes/probab&/ma_ybe/no - htpotentialproblems) Leve l of implementat ion (genetic/ secto r-speazcl site-speaJc/ secto r-and-site-speaz~

Synergy with poverty reduction lyeslsomelno) Synergy with other multilateral environmental agreements lyeslsomelno)

T h e outcome o f h s pr ior i t izat ion was used as an impor tant input for the f inal design o f IUP-11, wh ich was based upon solid technical and economic assessments of the priority options. Finally, the nature of IUP-11’s design added another, crucial criterion, namely that the investments h a d to fit within a MOP program ident i f ied by the leadmg Ministry, including allocation of resources from the government’s recurrent budget. Furthermore, in addi t ion to the priority investments, IUP-I1 includes support for continued participatory mainstreaming o f adaptation, w h i c h will not only support the achievement and sustainabhty o f the sectoral investments under IUP-11, but also invo lve a m u c h wider set o f actors in the adaptation process, and set the stage for the expansion of the adaptation efforts,in IG- ibat i during IUP-111.

Furthermore, as can b e seen in Table 4 below, many of the priority adaptation options identif ied by the national consultation invo lve regulatory r e f o r m or improved compliance to existing regulations. T h e legislative and regulatory review (funded by the GEF PDF-B) has recommended several changes to existing regulations and policies. All sectoral investments under IUP-I1 also include elements of regulatory reform, supported by provision o f alternatives for destructive activities (such as beach mining) and awareness raising to foster behavioral change.

33

VI o w r c r * hl - 0 0 - h l 00 2 & 3 R g % % VI hl rr,

m .-. c m ffi a a a a a ffia ffi aff iaa cs ffi

B

T I 0

4 g Y

c1

R 2 3 3 3 , F;

c ffi ffiffi .-.

Lc f f i f f i f f i ffi ffisffi Ec

0 0 0 2 z z z g

ANNEX 2: MAJOR RELATED PROJECTS FINANCED BY THE BANK AND/OR OTHER AGENCIES

KIRIBATI ADAPTATION PROJECT - IMPLEMENTATION PHASE (KAP 11)

The IOribati Adaptation Program i s the f E s t World Bank investment operation in IGribat i .

Lates t Saperuision Ratings Project Sector Issue Addressed Implementation Development

Objective Progress

World Bank-managed: Kir ibat i Adaptation Project Preparation (Kill’-I)

Other Development Agencies: ADB: Water Sector Technical Assistance (ongoing)

EU/SOPAC: Reducing Vulnerabrlity in Pacific A C P States (ongoing)

EU/SOPAC: Pacific Program for Water Governance

UNDP: Outer Is land Governance Assistance (In preparation)

ADB S A P H E project

UNDP/GEF, add-on project for Biodiversity Strategy Action Plan UNDP/GEF, National Capacity Self Assessment UNDP/GEF, through SPREP: International Waters project UNEP/GEF, Persistent Organic Pollutants (POPS) UNEP/GEF, Biosafety Framework ADB: TA related to potential development o f Outer Islands Growth Centers

Adaptation Mainstreaming and S S Preparation o f U P - I 1

Water sector policy and possible follow-up investment Vulnerabil ity mapping; Possible future investment in coastal protection (under EDF) Assistance to improve freshwater resources management, including participatory planning Assistance to improve Outer Island governance Sanitation, Public Health and Environment Improvement Biodiversity conservation

Capacity to implement MEAs International Waters Persistent Organic Pollutants Biosafety Feasibility of population resettlement (particularly to Kirit imati)

36

ANNEX 3: RESULTS FRAMEWORK AND MONITORING

KIRIBATI ADAPTATION PROJECT - IMPLEMENTATION PHASE (KAP 11)

T o develop and demonstrate the systematic diagnosis o f climate-related problems and the design of cost- effective adaptation measures, while cont inuing the integration o f awareness and responsiveness i n to economic and operational planning.

Improved consultation, p lanning and coordmatlon mechanisms to support

Results Framework

tco

SNPRA Unit established within f i r s t year o f implementation as lead agency coordmating C C A and related strategies

Percentage o f clunate-affected MOP programs that reflect systematic climate risk management

Consistent use o f best practice 111 the application o f risk management, enwonmenta l assessment and options analysis, consistent with relevant defined strategic a i m s and policies, t o pubhc infrastructure and CCA vulnerabhty reduction measures

Component One:

Propor t ion o f the adult populat ion o n Tarawa that i s aware o f CCA Number o f NASC meetings with participation o f Director/Senior Assistant Secretary or higher level officials o f at least 4 key ministries

Number o f CCST meetings attended by technical officers o f at least 6 key departments

N u m b e r o f schools that have incorporated climate risk management in their curr iculum

N u m b e r o f church events that incorporate CCA messages

Consultation and awareness raising activities reflect clear role for NGOs and women

Climate risk prof i le p roduced and used in at least three major infrastructure investments

YR 1 gauge institutional progress

YR 2 assess effectiveness and determine whether components need t o b e adjusted

YR 3 feed results and lessons learned into design o f cont inued GoK adaptation program

Component One:

YR1/2/3: assess adjustments to be made to awareness raising and consultation activities

YR3: assess evidence that awareness messages are resulting in the intended behavioral changes

Yr3 : l o w incorporat ion o f CCA messages or impact may indicate need to change the awareness message dissemination or incentives in the project

YR2 : large number o f Steering Commit tee meetings without the intended participants may indicate waning interest in topic or l im i ted understanding on particular m i n i s t r y ’ s ro le in the C C agenda

37

Component Two:

Improved management of climate- related hazards to coasts, public assets and ecosystems

Component Three:

1m;proved sustainability o f freshwater resources

Component Four:

Improved capacity fo r C C A at island government and community level

Component Two :

Pi lot investments are based o n rigorous analysis o f risk treatment options, including economic analysis, environmental and social assessment

Frequency of f looding causing disruption o f hospital services reduced to an acceptable re tu rn per iod

Number o f reports o f coastal and marine ecosystem moni to r ing

Component Three:

Nat iona l Water Strategy (NWS) adopted and reflected in MPWU MOP and PUB business p lan

Master Plan for water o n Tarawa produced and reflected in MPWU MOP and PUB business p lan

N u m b e r o f rainwater collection/storage facilities at government/community buildings Building code includes freshwater collection and storage as a n objective

Percentage reduction in water leakage in target area o n Bet io islet

N u m b e r o f water locations assessed and supply improvements implemented

Component Four:

N u m b e r o f Outer Is land Profi les that contain climate risk in fo rmat ion

N u m b e r o f Is land Councils trained o n CCA roles and responses

N u m b e r o f small scale adaptation investment grants awarded

It grants awarded fo r soft solutions

Component Two:

YRI/YR2 assess awareness o f the communities to the need t o reduce and or ban coastal aggregate mining YR2/3 develop acceptable and cost- effective options for climate proo f ing publ ic assets

YR2-3 compi le lessons learnt f r o m the various activities and use t o improve design o f n e w works, but also f o r use in the expanded climate proo f ing activities

YR2/3 assess detail o f coral monitoring f o r linkage to overall climate change agenda, but also t o improved integrated ecosystem management

Component Three:

YR1/2 and 3 gauge adequacy in linkages in the preparation o f the NWS, MP f o r Tarawa and ongoing consultations to ensure subsequent acceptability by al l stakeholders

YR 2/3 Assess whether the rainwater tanks are mak ing a difference in increasing water availability

YR 2/3 Gauge whether reduction in leakage i s increasing water availability f o r families in target areas

YR 2/3 Gauge capacity o f local authorities in the use o f building codes

~

Component Four:

YR 1/2/3 Gauge understanding o f C C A in the OIs, and intensify awareness campaign if inadequate

YR 2/3 Assess whether criteria to accessing the small scale adaptation investments are we l l understood and adjust as needed

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Support f o r implementat ion o f project activities

KAP-I1 Project management integrated i n to SNPRA Unit in OB Percentage o f project progress reports that are timely and reflect a good understanding o f progress, critical issues, corrective actions, accountability fo r actions and timing. Lessons learned compiled fo r future adaptation program design

YR 1/2/3 Gauge adequacy o f facilities fo r the U P - I 1 office: human and equipment t o support a robust M&E report ing system

YR 1 /2/3 Assess adequacy o f the report ing system for the project in response to the various donor requirements

39

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ANNEX 4: DETAILED PROJECT DESCRIPTION

KIRIBATI ADAPTATION PROJECT - IMPLEMENTATION PHASE (KAP 11)

T h e objective o f ICAP-I1 i s to develop and demonstrate the systematic diagnosis o f climate-related problems and the design o f cost-effective adaptation measures, whde cont inuing the integration of CCA awareness a n d responsiveness into economic and operational planning. Ths objective i s der ived from and governed by the national CCA strategy of June 2005. T h e objective does not require any adh t iona l ma jo r functions to b e per formed by GoK agencies beyond those already established or committed, but it requires performance o f those tasks to b e substantially expanded and improved. ICAP-11’s efforts will b e directed towards changing how existing functions are carried out, by modifying the attitudes, skd ls and practices that govern how people interact with the c h a t e , and strengthening technical and financial capacity for planning and implement ing CCA measures.

ICAP-I1 t h u s provides an essential transitional stage in working out the content o f the long-term nat ional response to climate change. I t will form a developmental bridge in 2006-8 between the in i t ia l NAPA and ICAP-I-sponsored nat ional consultations and assessments o f vu lnerabhty and adaptation options, wh ich have run through 2003-5, and the longer-term countrywide and uni f ied application of CCA responses envisaged for 2008/9 onwards.

ICAP-11’s outputs will consist of changes to CCA-related institutional a n d operational arrangements, and the development and feasibility-proving of financial assistance schemes, design processes and physical works. T h e intended outcome i s that I h i b a t i wd, have the information, analytical capacity and technical know-how needed to adapt successfully to climate change in the years ahead.

T h e project i s designed to prov ide coordinated, mutually reinforcing and progress-monitored action to:

strengthen the foundation for cont inued application o f CCA-based approaches to development at national and local levels nurture long-term publ ic support for and participation in CCA promote whole-of-government co-ordination in planning and operation o f critical programs develop mutually supportive linkages between CCA and other key nat ional development strateges prohbit land uses and activities that destabhze coastal zones and assist those that improve stability throughout I h i b a t i re-establish nation-wide weather monitoring and report ing implement the f i r s t phase of a long-term, CCA-inclusive, p rog ram of freshwater resource development and supply management develop cost-effective climate-proofing of publ ic and private assets and apply the techniques to publ ic assets at risk collaborate with other externally-funded interventions in CCA-related areas, eg, r i s k management, water strategy and building nat ional p lanning capacity.

T h e project addresses those aims through activities in five components, namely: 1 : Policy, planning and in fo rma t ion 2: L a n d use, physical structures a n d ecosystems 3: Freshwater resources 4: Capacity at island and commun i t y level 5: Project management

43

T h e components are described below. T h e project design emphasizes the need for careful study o f problems before undertakmg solutions, and for analysis of the perceptions and attitudes governing people’s behavior before designing interventions to change that behavior. Over the l i fe o f the project the balance of activities s h f t s progressively from surveys and analysis towards implementation of physical improvements.

1. Policv. DlanninP and in format ion

1 .l. Frameworks and processes for particzpation and awareness. M u c h o f CCA and I(AP I1 are about changing people’s attitudes and understanding about the climate and the environment in wh ich social and economic activity takes place. D i f f i cu l t and potentially unpopular choices l ie ahead for governments and communities. T h e process by w h i c h impor tant and sometimes complex issues are canvassed and decided needs to b e carefully designed, so that the process itself builds t r u s t and increases understanding among those involved.

This sub-component comprises the analytical review, and redesign if necessary, of the consultation and participation process in use in IGr ibat i to mobil ise publ ic support for major pol icy initiatives such as CCA. I t i s to b e done as early as possible in the project, as it i s intended to shape and inform several impor tant consultative activities under t h i s and other components. Provision i s made for a combinat ion o f national and international expertise to review the current practice of consultative and participatory planning in IGribat i and propose changes where these appear necessary to improve i t s effectiveness.

1.2. O n e of the strengths of I(AP I1 and i t s companion programme, NAPA, i s the social and pol i t ical foundat ion prov ided by two rounds o f national consultations in 2002 and 2003. Insights gained there have helped to shape the I(AP I1 programme here described. This sub-component a i m s to sustain and b d d on that foundation, creating greater and m o r e competent awareness o f climate change and variabllity, and appropriate responses, throughout the country. T h e activities wdl b e planned and coordinated by the PMU within OB’S SNPRA Unit, with close involvement from other members o f the NASC, including IUNGO, AMAK, and the Counci l o f Churches. T h e design o f the activities wdl b e guided by the outputs of the preceding sub-component.

National consultation, particzpation and awareness.

Four specific consultation-related activities have been ident i f ied during project design. These are:

1.2.1. Twoyearly national consaltations. Further national consultations, with themes and content about aspects o f CCA to b e decided nearer the time, are provisionally scheduled for the thrd quarters of 2006 and 2008. Ths roughly straddles the expected 2007 national parliamentary election and four- yearly review and rol l - fonvard o f Nat ional Development Strategies.

1.2.2. Regalar CCA-basedpartzczpatoy events. As the GoICs CCA strategy emerges in 2005-6 through I U P 11, NAPA and the inclusion o f CCA-related activities in MOPS, regular promot ional and informat ional events will b e organised with sporting, cultural and educational content and a clear CCA message. These will keep CCA in the publ ic mind and convey useful in format ion at several technical and polit ical levels. Appropr iate specialist advisers and trainers will b e obtained as national and international consultants to OB’S SNPRA Unit to work with the I U P I1 and NAPA off ice in preparing and implement ing these events.

44

1.2.3. Newsletter, media releases, and educational material. I t i s expected that a regular CCA newsletter wdl b e established, carrying global, regional and local CCA news and views. Interesting periodic and adhoc m e d a releases wdl keep CCA in the publ ic mind, and collaboration with MEYS’s curr iculum unit will lead to the inclusion of substantial and interesting CCA material in school curriculums. Nat ional and regional TA wdl b e mobl l ized to assist in t h i s activity.

1.2.4. Annual suwy ofpublic attitudes and awareness. T h e general level of CCA-awareness and attitudes to the prospect of changing life-styles and habits in order to adapt to CC wdl b e surveyed annually, f i r s t to establish a baseline for measurement of change, and later to assess the impact both of I(AP I1 and other deliberate interventions, and o f climatic and other events. Nat ional and regional TA will b e combined to design and execute t h i s activity. T h e survey results will inform the design of campaigns a n d consultative/participatory activities for the overall adaptation efforts and at the specific component/act iv i ty level, e.g., management of freshwater resources in South Tarawa.

1.3. Poliv coordination andpianning. As GoISs CCA strategy points out, i f CCA i s to succeed it must reach into almost a l l parts of the publ ic and private sectors, and actions across a w ide f ie ld must b e coordinated so as to complement and support each other. NDS2004-7 and the CCA pol icy and strategy also make clear that climate change i s a key area o f strategic risk for IQribati. For these reasons GoK has decided to place responsibility for planning and co-ordmating CCA in the portfolio of OB and i t s SNPRA Unit. Similar strategic and risk-management considerations apply to populat ion policy, with w h i c h CCA has a close intellectual and practical connection. At the same t ime the cont inued development, under the guidance of MFED’s NEPO, o f the MOP-based government operational p lanning and monitoring system-which s t i l l requires further attention -is necessary for the effective direction and contro l of GoICs man i fo ld activities.

Four activities have also been ident i f ied in &us sub-component, as follows:

1.3.1. Support NJRM in OB with overall responsibilipfor CCA . T h e SNPRA Unit has been established by Cabinet decision in 2005, and will become operational in early 2006. Pressure on the n e w off ice will b e immediate, as i t has to take on ‘strategic risk management’ responsibhty for CCA, populat ion pol icy and disaster management, a l l o f w h c h are waiting for i t s establishment to prov ide them with a n overseeing h e c t o r a t e . Integration of i t s own and other ministries’ CCA responsibilities into the 2006 MOPS will b e a priority concern o f OB/SNPRA Unit, in coordmat ion with the NEPO in MFED. Technical assistance i s being prov ided to OB by AusAID. As IL4P I1 funds become available and the SNPRA Unit gets into i t s stride the coordination, monitoring and report ing of CCA and I(AP I1 progress will become a key activity.

1.3.2. Development ofdsk diagnosis and response process. Earlier in the design process t h i s sub-component was perceived as mainly applicable to coastal zone management and climate-proofing of structures at risk. I t i s now given wider significance under Component 1, comprising the application of risk management techniques and disciplmes to CCA issues generally, under the supervision of the SNPRA Unit. This involves changing the perceptions and attitudes o f practical, technical persons to the p rob lem o f coastal zone management and asset protect ion under CC condt ions.

T h e required s h i f t i s from a reactive, single-technique strategy o f repairing damage as i t occurs, to a preventive and m o r e technically varied risk-mitigation strategy. Training and workshop activities for MELAD and MPWU technical staf f under t h i s sub-component should deliver the development and application o f improved methods of CC-related risk diagnosis and response design. By linkmg t h i s process to other sub-components of IL4P I1 engaged with publ ic consultation a n d part ic ipat ion i t

45

should b e possible to reach many more people, and influence attitudes about the application of CCA to many parts o f nat ional and community life.

1.3.3. Support population and resettlement programmes. T h e strong link between CCA and population pol icy i s stressed in the CCA Strategy. I(AP I1 will provide support to the implementat ion of GoISs populat ion policy, wh ich i s also to b e located in the OB/NSRM portfolio. T h e project will provide fundmg for long-term national and short-term international consultant personnel in 2006-8 to work with GoK staff a n d the national consultative and coordinating institutions concerned with populat ion policy.

1.3.4. Support NASC and CCST. T h e two-tier structure o f coordmat ing committees (NASC and CCST) has p roven valuable in overseeing I U P I and ensuring that project design activities I(AP I and NAPA do not become dsconnected. I t i s impor tant that t h i s machmery i s kep t in good workmg order. I(AP I1 makes provision for the costs o f regular meetings o f both NASC and CCST during the l i fe o f I U P 11.

1.4. Infomation for climate risk management. I(AP I1 aims to prepare people to adapt to climate change. To do this, good-quality in format ion on the nature of climate change must b e regularly made available in understandable form and given wide distribution in the context of consultative and participatory activities. IQr ibat i lacks base-line climatic data in suitable form for publ ic education and use, and has no established process for producing, updat ing and disseminating such informat ion. Ths sub-component will provide short-term international TA to work alongside MELAD s t a f f to set up a n appropriate system, and produce the base-line data in usable and up-datable form.

1.5. This small but impor tant activity i s to restore the national meteorologcal report ing system to operational effectiveness. I t wdl take about s i x months to complete. I(AP I1 provides funds for purchase o f equipment and costs o f training/retraining staff in i t s use. T h e project will b e implemented by the GoK- funded Meteorological Division o f MCTTD, assisted by TA organised in liaison with the World Meteorological Organisation under a regona l programme to support nat ional meteorologcal offices.

Climate monitoring systems. '

2. L a n d use. Dhvsical structures and ecosvstems This component i s crucial to the long-term success of GoISs CCA strategy. I t involves bringing about substantial changes in publ ic understanding and attitudes to land use in coastal zones-effectively most of the land area of IQribati. Activit ies in t h i s component will make changes to the way GoK and local governments intervene to modify or prohibit behavior that threatens coastal stability and the security o f publ ic and private structures and other assets. They wdl include systematic analysis of coastal r i sks and causes of actual damage, leading to establishment o f improved design parameters for coastal-zone construction and m o r e cost-effective physical or behavioral responses to perceived risks. T h e component will include m o r e focused and coordinated assessment of emerging risks to marine and land-based ecosystems, a n d ident i f icat ion o f ways of enhancing their abil lty to adapt to climate change. T h e sub-components and key activities ident i f ied during pro ject design are as follows:

2.1. Integrating Climate Change Adaptation into Land Use Policzes

2.1 .l. Raise awareness, strengthen rgulation and pemitting. T h e effectiveness of GoICs permit t ing operations, overseen by the Foreshore Management Committee, i s ident i f ied as a cause for concern in the CCA Strategy.

46

Immediately, m o r e intensive monitoring and measurement o f existing beach mining activities, w h c h collectively are removing substantial amounts of aggregate from South Tarawa beaches (while providmg a n impor tan t source of income for a significant number o f households) i s required to establish a b a s e h e for change and enable the careful p lanning of tighter and m o r e effective restrictions a n d eventual prohibition.

No t m u c h later, the planned prohibition of beach mining in al l but a very few situations (envisaged for mid-2007) will require stronger implementation and probably some revision of existing legislation, together with m o r e effective co-ordination between nat ional and local governments in South Tarawa. Strong pol i t ical coherence and commitment, assisted by publ ic education and attitude-changing activities under Component 1, will be needed to m o b h e publ ic support and carry through t h l s crucial reform.

For t h l s activity I(AP I1 will provide national and regional TA to help MELAD revise, expand and carry out i t s p lanning and regulating tasks.

2.1.2. Monitor environmental and economic impacts of apgate mining project: As the lagoon mining o f aggregate (planned for late 2006) comes on stream i t s environmental impact will require close monitoring, a n d prompt feedback to enable any adjustments necessary to keep that impact at an acceptable level. This activity will provide a combinat ion o f international and locally recruited TA to set up effective monitoring and assist MELAD to carry i t out.

2.2. Improvingprotection ofpublic assets. This sub-component i s a imed at increasing MPWTJ’s capacity and versaulity in confront ing the impact of clunate change and the existing exposure to risk of damage from severe weather) in respect of publ ic structures-seawalls, port facilities, roads, airfields, schools, hospitals/clinics, houses and workplaces-and making t h i s enhanced capability avadable to the publ ic through the established permit t ing and public-advisory process. Two m a i n activities are ident i f ied in t h i s sub-component:

2.2.1. Develop a ystematic risk, analysis/design response process and revised design parameters for coastal haxard protection. Specific training activities are envisaged for MPWU professional and technical staff, conducted by international TA. Exercises and feasibility studies will demonstrate use of systematic risk analysis, a n d the costs and benefits of alternative design responses, including soft, i e non- structural, solutions.

F ie ld investigations and study of oceanographic and other climatic data (see sub-component 1.4, above) will prov ide specific design parameters, eg for wave heights under storm conditions, that can b e adjusted for changing climatic scenarios to help shape IGr ibat i engineering, structure-sitting and soft-solution designs and CCA strateges.

2.2.2. Improve protection ofkypublic assets at ?irk. As design parameters for protective works emerge they will b e applied to selected publ ic assets in South Tarawa. Sufficient proving in a n 01 environment will also b e carried out to demonstrate feasibhty in m o r e remote and less developed settings.

Reduction of flooding risk at the national hospi ta l at Blkenibeu, incorporat ion o f CCA factors in the design o f the South Tarawa road upgrade project in 2006-7, the improved protect ion o f one or m o r e of the South Tarawa causeways, and the use of n e w seawall designs in economically signtficant locations, would al l b e covered in h s activity.

47

T h e activity embodies sufficient flexibility o f funding allocations to enable it to funct ion as a contingency resource in case of damage from severe weather requiring urgent attention during the pe r iod o f IL4P 11.

2.3. Monitoring and sustaining coastal ecoytems. Climate change i s putting coastal ecosystems under pressure, but there i s l i tt le specific in format ion available on coastal ecosystems in IGribati, nor on whether any changes are mainly attributable to CC, including shoreline movement, or to other factors such as increased pressure from human activity. Tks sub-component will enable the Envi ronment and Conservation Division o f MELAD and the Fisheries Division of MFMRD to undertake wider and m o r e effective monitoring operations. I t will combine international and nat ional expertise to draw together in format ion on the impact o f c h a t e change on coastal ecosystems and shorelines, set up monitoring systems and develop ways to analyse data and p lan systematic responses to identif ied threats. Lump-sum provision i s made for small investments in pilot schemes to protect endangered ecosystems ident i f ied during the monitoring activity.

3. Freshwater resources. This component combines the normal operational commitments of MPWU and the water division of PUB with additional external inputs. These are to b e fmanced by Australian aid through a t r u s t fund established with the World Bank. T h i s i s expected to become operational at the start of 2006, several months before GEF funds become available. Addi t ional inputs to b e financed include national, regional and international TA and the purchase o f equipment and services, inc ludmg contracting o f unskil led labour on water supply projects.

3.1. Update waterpdiy, standards and capabilities to indude CCA. This sub-component i s duected to the whole country. Activities include development o f a Nat ional Water Pol icy to prov ide a 20-30 year f ramework for freshwater resource planning; building capacity in MPWU a n d PUB to adopt a systematic, medium-term approach to water resource development and management incorporat ing in format ion on clunate variability and climate change; revision of nat ional building codes to strengthen aspects relating to freshwater management (including rainwater) and sanitation; and development and promotion of guidelines on rainwater catchment, storage and use.

IL4P I1 activities supporting development o f the Na t iona l Water Policy and other related activities are be ing defined in cooperation with the IGr ibat i component of the EU-funded, SOPAC-executed Pacific Programme for Water Governance

3.2. Soutb Tarawa water plannin& remedial actions and pilot projects. Pressure on the water resources and supply systems of IQribati’s m a i n island i s expected to increase under conditions o f populat ion growth, greater climate variability and cont inuing climate change. T h i s sub-component will assist MPWU and PUB to prepare a master p l a n for water in Tarawa atoll, carry out assessments a n d pilot projects and studies to identify and increase available resources.

Funds w d b e provided to carry out intensive repairs and other measures to reduce losses from the installed systems. Activit ies aimed at increasing future availability of freshwater will include new approaches to obtaining access to known additional water reserves, pilot projects in rainwater collection and storage, and study of the feasibility of creating add t iona l freshwater lens capacity by reclamation o f land.

3.3. Outer Islands assessments and public and private y tem upgrades. Outer Islands freshwater systems are widely in need o f repair and upgrading. Assessment, pr ior i t izat ion and design need to b e promptly

48

fo l lowed by systematic improvement. This sub-component wdl enable t h i s work to b e undertaken incorporat ing climate variability and change factors. A grant scheme based on the success of a somewhat sirmlar scheme in South Tarawa, to assist 01 households to invest in rainwater catchment and storage-and possibly to install water-saving sanitation systems-wdl b e piloted, and if successfd, extended. As t h s sub-component develops m o m e n t u m there will b e scope for allocation and use of addi t ion external funding from other donors who are interested in assisting 01 development and welfare.

4. This component targets administrative and planning capacity a t the sub-national level, wh ich i s critically impor tant to the sustainability o f CCA. With the help o f a major UNDP project2, MISA i s currently in i t iat ing major efforts to improve island-level administration and community participation in governance.

CaDacitv at island and communitv level

Under that project ‘island profiles’ are being updated and expanded, spatial and statistical in format ion i s being put onto a GIS data base; and funds are being sought for 01 ‘growth centre’ p lanning and investment. I t i s very impor tant that these developments are al l fully CCA-conscious and that island- level CCA design responses are we l l coordmated. T h e fullest possible development and use of GIS- based in format ion on the physical condi t ion o f each island i s potentially o f tremendous CCA value.

At national level OB through i t s SNPRA Unit has oversight o f the concern for coordination, sharing o f in format ion and collaboration in project planning and implementation. At island and local government level-including, very importantly, the urban governance o f South Tarawa- responsibility will rest with MISA, assisted by I(AP I1 funding and help with participatory planning and inscollaboration with MELAD on coastal zone management.

Four sub-components ident i f ied in project design are br ief ly described below.

4.1. Local consultations and particz3atoy ksk assessments. Increased efforts at nat ional level to improve publ ic understanding of, and participation in, CCA will need to b e backed up by similar efforts at island and communi ty level. Provision i s made for short-term international and longer P term/periodic national TA to assist in design and conduct o f these efforts and for the cost o f 5-10 meetings to support development and implementation of improved participatory methods in 0 1 s and South Tarawa.

4.2. Training in localgovernment CCA roles and reqonses. Councilors and staf f wdl benef i t from specific training in how to analyse situations arising from CC, and how best to use resources available to them in response. Provision i s made for design and implementat ion of a training programme in selected 0 1 s and South Tarawa. Programme content will also reflect activities taking place under other components o f I U P 11.

4.3. Include CC vulnerabilio in Olprojles. Provision i s made for nat ional and international TA to ensure that CCA-related informat ion i s captured and presented usably in the GIs-based 01 profiles.

4.4. Pilot small scale O I adaptation investments scheme. This activity will test the feasibility of a grant scheme to assist small-scale CCA-related investments by communities in Oute r Islands. Rules for e l ig ibhty and adrmnistration have been developed with WB guidance during I(AP I1 project design, and are

Strengthening Decentralized Governance in Kiribati, a US$lm project over three years

49

described in a Procedures Manual for t h l s activity. Two Outer Islands are being selected for the pilot scheme, chosen to b e representative o f larger, more developed and smaller m o r e remote locations. T h e scheme w d b e managed by MISA in accordance with the Procedures Manual.

5. P r o m a m manapement

5.1. Operation ofprogram management #nit witbin OB. I t i s intended to keep the I(AP I program office in operation and have it seamlessly assume responsibility for I(AP I1 (including the current project manager and the project accountant).

I t will b e particularly important to observe the procurement and report ing requirements of both GoK and WB, the latter acting on behalf o f GEF, AusAID and NZAID. Provision i s made for special training in procurement procedures and for the addi t ion o f a procurement officer and a general project of f icer to the program office staff from the start of 2006 for the l i fe o f IC4P 11.

5.2. Program ofactimxies. A Program of Activities to b e financed from the project wlll b e prepared prior to implementat ion at the beginning o f each year. Worlung on the basis of a Program o f Activit ies should: (i) allow for the operationalization of a simplif ied report ing system; and (ii) speed-up implementat ion as activities for funding are planned for up-front and pre-approved by the B a n k / O B and MFED and shared with AusAID and NZAID for comments and suggestions. T h e Program of Activit ies would b e prepared by the PMU no later than mid-January o f each implementat ion year. T h e Program of Activit ies must take into account the relevant Procurement Plan, wh ich becomes an a p p e n h .

Economic assessmentsfor larger investmentpachugex For some larger investments to b e funded under IC4P 11, comparative cost-benefit analyses are required; for example for the rehabhtat ion of the hospital and the causeway. Although the TA to b e h i red would b e expected to carry out the required analysis, it i s impor tant that the Nat ional Economic and Planning Of f ice (NEPO) in MFED, who routinely carry out such analyses, are consulted from the activities’ inception.

5.3. Review o f U P 11. Financial provision i s made for mid- term and end-of-project reviews o f I(AP 11.

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ANNEX 5: P R O J E C T COSTS

KIRIBATI ADAPTATION PROJECT - IMPLEMENTATION PHASE (KAP 11)

Policy, planning and information Land use, physical structures, and

Project Cost by Component

0.81 0.00 0.00 0.37 1.17 0.40 0.00 0.76 1.05 2.17

Local Foreign Total Project Cost By Component US $million US $million US $million

Policy, p lann ing a n d in fo rma t ion 0.68 0.49 1.17 L a n d use, physical structures, and ecosystems 1.52 0.66 2.17 Freshwater resources 1.31 0.86 2.16 Capacity a t is land a n d commun i t y level 0.46 0.10 0.55 Pro ject Management 0.29 0.10 0.39

Total Baseline Cost 4.26 2.20 6.46 Physical Contingencies 0.08 0.04 0.12 Pr ice Contingencies

Total Project Costs 4.34 2.24 6.58 T o t a l F inancing Requi red

Project Cost by Financier (estimated)

Total Project Costs (Jhtimated) 1.80 1.49 0.97 2.31 6.58

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A N N E X 6: IMPLEMENTATION ARRANGEMENTS

KIRIBATI ADAPTATION PROJECT - IMPLEMENTATION PHASE (KAP 11)

Stakeholder Involvement

K e y stakeholders in the project are all key actors who have a par t to play in the long term mainstreaming of adaptation in national and local p lanning and policies. Strength of the IUP- I process has been the early mobi l izat ion of these stakeholders in a cooperative and coordinated process of awareness, consultation and strategy formulation. This coordinat ion i s expected to b e a central element of al l future phases of I U P as well.

At the island level stakeholders include village populations and subgroups that are actually experiencing the consequences and impacts of changes in their environment and quality o f life, resulting from climate events. This includes households, extended household groups (kainga), traditional vdlage ins t i tu t ions (such as the unimwane or traditional elder male decision makmg body), church groups (especially the IGr ibat i Protestant Church and the Catholic Church), women’s and youth groups, a n d the village populat ion as a whole, w h i c h congregates at the traditional village meeting houses, or maneaba. T h e social assessment and local level consultations mobi l ized these key groups in an in i t ia l assessment o f vulnerabilities and possible coping mechanisms. Representatives from the unimwane, women’s groups, and youth from key populated Outer Islands were present at the two Nat ional Consultations held in Tarawa (for Gi lber t Is land representatives) and IQritimati (for L i n e Is land Group representatives), where their concerns and recommendations were both shared with one another and communicated to the national level.

Other key stakeholders at the Is land Level include the Is land Council, island level church organizations, key subcommittees o f the Is land Counci l (particularly the Development Committee), and locally seconded representatives o f central government (such as the head nurse o f the island c h i c , the Is land Project Officer, agricultural officers and others). M a n y o f these - and notably the C h e f Counci lor (elected head o f the Is land Council) and Ch ie f Clerk - were participants at the Nat ional Consultations.

At the national level key stakeholders include:

0 T h e Nat ional Government as a whole, as represented by the O f f i ce of T e Beretitenti, or Beretitenti, wh ich also chairs the Cabinet.

Nat ional Ministries, particularly those germane to c h a t e change issues, includmg: 0

MFED - Ministry of Finance and Economic Development MELAD - M L n i s t r y o f Environment, L a n d and Agr icul ture Development MPWU - Ministry of Publ ic Works and Util l t ies MISA - Ministry o f In ternal and Social Af fa i rs MFMRD - w s t r y o f Fisheries and Mar ine Resources Development MLPID - Ministry o f L i n e and Phoenix Islands Development MHMS - M i n i s t r y of Hea l th and Medica l Services MCTTD - W s t r y of Communications, Transport and Tourism Development

0 Other Ministries with indirect links to climate change adaptation:

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o o

o

MCIC - Ministry o f Commerce, Industry and Cooperatives MEYS - Ministry of Education, Youth and Sports

MFAI - Ministry of Foreign Affairs and Immigrat ion

0 Civil Society, notably the IQr ibat i Association of NGOs (IUNGO) and i t s constituent members, the women's organization All W o m e n o f I h b a t i (AMAK) and the Counci l of Churches

T h e private sector, as represented by the IQr ibat i Chamber of Commerce 0

These stakeholders have also been ongoing participants in the consultation and planning process, and have h a d several opportunities (as at the Nat ional Consultations) to interact with village and island- wide stakeholders from the Outer Islands. O n e of the key strengths o f I U P - I has been i t s direct support for the Nat ional Development Strategy and MOPS as key tools for mainstreaming - the I U P consultants responsible for mainstreaming were also those assisting MFED with NDS and MOP development.

T h e processes o f local and national consultation, as in i t iated in IUP-I, prov ide a unique opportunity in IGr ibat i for the development o f an adaptation process based on actual needs as expressed from the lowest levels, communicated to and through island-wide bodies and institutions and incorporated at the nat ional level through both pol icy and Ministerial Operat ing Plans. Ul t imately each ma jo r island i s expected to develop mechanisms by wh ich decisions are made concerning adaptation priorities, and a n assessment made concerning w h c h measures can b e implemented by people at the local level, w h i c h require assistance at the island-wide level (through, e.g., the Is land Counci l or Is land Church Councils) and w h c h need to b e communicated to the nat ional level for inclusion in annual budgets. As such, the ICAP process would go hand in h a n d with a strengthening of local governance and participatory planning processes, wh ich i s also expected to b e assisted by a UNDP governance operation.

Finally, GEF, AusAID, NZAID, the World B a n k and, by extension, other donors are impor tant stakeholders both with respect to providmg support for these processes, as we l l as by gaining experience on the modalities by w h c h adaptation to climate change can b e effectively mainstreamed into national development processes. T h e IGr ibat i experience i s providing impor tant lessons w h c h are instrumental in the approach taken by global funding facilities with respect to such issues as incremental funding, and modalities o f cooperation in addressing local and global issues related to climate change.

Coordination between NAPA and KAP and GEF Implementing Agencies

T h e preparation o f IGribati's Nat ional Adaptat ion Programme o f A c t i o n (NAPA), supported by a Least Development Country Fund grant of US$200,000 has been closely l inked to the preparatory work under IUP-I .

T h e merger o f I U P and NAPA processes, though desirable from both the implement ing agencies (World B a n k and UNDP) as w e l l as the Government, has not been a n easy sponsored by UNDP and executed by MELAD. ICAP-Is sponsored by the World by MFED. Ths dual arrangement arose from both nat ional and global forces.

process. NAPA i s B a n k a n d executed

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Historically, climate change issues in IGribat i have been the mandate o f MELAD (and i t s predecessor, the Ministry o f Env i ronmen t and Social Development). MELAD headed the national team under the Pacific Islands Climate Change Assistance Programme (PICCAP) and was responsible for preparing both the Nat ional Communications (1999) as we l l as the Climate Change Nat ional Implementat ion Strategy (2003). G loba l negotiations also favored UNDP as the GEF implementat ion agency for the Na t iona l Adaptat ion Program o f A c t i o n (NAPAs), and MELAD secured a NAPA grant in early 2004.

Whilst MELAD included the bulk of the technical expertise on climate change, it lacked the institutional leverage to influence the programs o f other v i ta l sectoral Ministries, such as Public Works, Internal Affairs, or Fisheries and Natura l Resources. This was recognized both within in IGribati, as wel l as regionally. During early consultations on IUP-I, i t was therefore decided that the O f f i ce of T e Beretitenti would chair the IL4 I "s Adaptat ion Steering Committee, and the M i n i s t r y o f Finance and Economic Development would execute the project. This arrangement worked wel l in mainstreaming adaptation into economic planning, but it worked less we l l in mobi l iz ing the technical experts necessary to priorit ize MOP adaptation investments. In parallel, the NAPA team has mobi l ized t o prepare a NAPA in accordance with strict UNFCCC guidehes.

T h e process o f merging of the two teams has been approved by Cabinet as follows:

T h e NAPA and I U P programs are merged and will result in a single nat ional adaptation strategy covering a full range of responses at government, community and household levels; as wel l as a NAPA to communicate the most urgent and immediate needs to the UNFCCC. T h e I(AP Steering Commit tee has been reestablished under a n e w name, Na t iona l Adaptat ion Steering Commit tee (NASC), under the Of f ice of T e Beretitenti. T h e IL4P Project Management Unit will b e the Secretariat for the Steering Committee. T h e NASC oversees the joint work program for the NAPA and IL4P. T h e existing NAPA Team has become the Clunate Change Study T e a m (CCST), the technical team for the uni f ied program, report ing to the Steering Committee. T h e NAPA Management Unit has been acting as the Secretariat for the CCST. Two separate project management u n i t s have continued to exist to execute I U P - I funds (under MFED) and NAPA funds (under MELAD). T h e Of f ice o f T e Beretitenti i s responsible for overall supervision of the uni f ied climate change program.

These arrangements wdl need to b e closely moni tored with a v iew o f ensuring a fully uni f ied institutional arrangement for IL4P-I1 and beyond (see next section).

O the r GEF-funded projects in IGr ibat i include e n a b h g activities for the Stockholm Convent ion on Persistent Organic Pollutants (POPS), in order to prepare a Nat ional Implementat ion Plan, as we l l as enabling activities for the UN Convent ion on Biodiversity, in order to prepare a Na t iona l Biodiversity Strategy and A c t i o n Plan, and Country Repor t to the UNCBD (managed by UNEP and UNDP respectively, and implemented by the Ministry of Environment, Lands, a n d Agr icul ture Development, MELAD). IGribat i i s also participating in the regional Pacific Invasive Species Management Project (managed by UNDP). Wherever overlaps between these projects and IL4P cou ld occur (for instance in the case of investments related to biodiversity conservation), close coordinat ion would b e sought by the continuous involvement o f MELAD officials in the program.

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Implementation Arrangements for KAP-I1

T h e f inal implementat ion arrangements for ICAP-I1 are as follows (see also the figure below):

Overall Coordination. T h e Of f ice o f T e Beretitenti (President) has overall coordinating responsibilities for ICAP-11. Pro ject management functions will b e housed under the Strategic Nat ional Pol icy and hsk Assessment Unit (SNPRAU). T h e Secretary to the O f f i ce o f T e Beretitenti, who also heads the SNPRA Unit, wdl act as Project Director. Besides her, the SNPRA Unit will have two senior pol icy officers (at D i rec to r level). The project wil l be contributing two additional senior pol icy level positions in the S N P R A Unit: a Senior Strategic Risk Management Officer (at Director level) who would act as Project Coordinator, and whose primary responsibilities would be pol icy and coordination matters related to KAP I1 and implementation o f adaptation strategy; and a senior pol icy position to coordinate and plan action on population issues. The Project Coordinator would liaise with the PMU, which would consist o f a project manager, a project accountant, a procurement officer, a general project officer, mainly charged with monitoring and reporting, and a project assistant.

An Ad@tation/Risk Management Steering Committee (derived from the ICAP-I Nat ional Adaptat ion Steering Committee, NASC) i s responsible for promoting and monitoring coordinat ion among project activities across the implement ing agencies, including the uti l ization and sharing of technical expertise. T h e Steering Commit tee wdl b e chaired by the Secretary for the O f f i ce of T e Beretitenti, and consist of senior officials from the ma in implement ing agencies, and representatives o f ICANGO, AMI<, the Counc i l of Churches, and the Chamber of Commmerce. T h e Steering Cormnittee will report to the Development Coordmat ing Commit tee (DCC), a permanent body composed o f Secretaries of a l l the Ministries, chaired by the Secretary to the Cabinet (based at the Of f ice of T e Beretitenti).

T h e Steering Commit tee will b e assisted by an inter-sectoral Technical Team, responsible for day-to-day technical coordination, and derived from the Climate Change Study T e a m (CCST). T h e Steering Commit tee and Technical Team would b e expected to assisting the Strategic fisk Management Division not only in managing ICAP, but also other hazard risk management initiatives in Kir ibat i .

T h e Of f ice o f T e Beretitenti, through the PMU, would b e responsible for overall project financial management (following existing Government accounting and budget procedures), including audits, financial report ing and allocation of funds to components and activities ident i f ied in the MOPS.

T h e implementing agencies will b e the key ministries/departments invo lved in activities related to climate change and adaptation to c h a t e change. Ths i s expected to include pr imari ly the M i n i s t r y of Environment, Lands and Agriculture (MELAD), the Ministry of Publ ic Works and Util i t ies (MPWU), the Ministry o f Fisheries a n d Mar ine Resources Development (MFMRD), the M i t l l s t r y o f In ternal and Social Af fa i rs (MISA), and the M i n i s t r y o f Commerce, Transport and Tourism Development (MCTTD). E a c h of these agencies will b e responsible for implementat ion of activities contained in their Ministry Operational Plans funded by the project. T h e PMU would support the h e ministries by providing procurement, fmancial management, and project management services. T h e m a i n implement ing agencies would coordinate their activities through the Steering Commit tee and Technical Team, and would share and exchange technical expertise in any instance in w h l c h activities undertaken by one agency are l ikely to affect, or b e affected by, areas addressed by another agency. MISA will b e the leading agency for the Pilot Is land Adaptat ion Component. I(ANG0 and/or the Counci l o f Churches wdl play a n active ro le in facil i tation and awareness. Mainstreaming into the

55

MOPS a n d the 2008-2011 NDS will b e the joint responsibility o f the SNPRA Unit and the Nat ional Economic Planning Of f ice in the M i n i s t r y o f Finance and Economic Development. Furthermore, the Na t iona l Economic Planning Of f ice (NEPO) wdl also play an impor tant ro le in the provision of economic analysis for specific components of IUP-11, in particular the options analysis for adaptation investments.

T h e quality of project implementation will b e ensured by the attention a n d capacity built during IUP’s preparation. I U P - I project management i s currently carried out by a n a l l I - I G i b a t i team and they are experienced in Bank financial management, report ing and in i t ia l procurement procedures. This team i s expected to continue in IUP-11, t h u s ensuring continuity and capacity retention.

Technical oversight will be done at three levels: First, through the national Technical T e a m (currently CCST) and Steering Committee (currently NASC) under the Of f ice o f T e Beretitenti, w h c h reports directly to the Secretary to the Cabinet. Second, the project includes a budget for mid- term and end- of-project review to assess the progress o f implementation in the pilot islands a n d sites chosen by the nat ional adaptation investments. Results of t h i s technical audit would b e used to adjust and improve subsequent implementation. Finally, the World Bank will exercise close oversight of the national investment. In order to do so, the World Bank will evaluate options to minimize travel costs to pilot island sites, includmg, inter alia, contracting out detailed supervision in advance of regular biannual supervision m iss ions .

Institutional Arrangements for KAP-I1

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ANNEX 7: FINANCIAL MANAGEMENT AND DISBURSEMENT ARRANGEMENTS

KIRIBATI ADAPTATION PROJECT - IMPLEMENTATION PHASE (KAP 11)

T h e desired outcome/result o f project financial management (FM) arrangements i s that project funds, including counterpart funds where applicable, wdl b e used for the purposes intended. T h e ident i f ied fmancial management risk, i s of the t r u s t fund proceeds not be ing used for the purposes intended, and i s a result of a combinat ion of country, sector and project specific risk factors. Tak ing into account the risk mit igat ion measures proposed the FM risk r a t i w for this Droject i s moderate.

T h e Government of IGr ibat i (Go10 has expressed a strong preference for the project to follow the no rma l GoI< processes for Development projects. T h e core FM arrangements for the project will make use of the GoK financial management and budget systems w h i c h have been assessed as reliable and robust but w h c h cannot provide management report ing in sufficient detail for project monitoring purposes. A parallel in format ion system wdl therefore b e maintained to provide management informat ion.

Project funds wdl flow through the Government’s budget and accounting processes and b e disbursed against a project code in the Development Budget. Advances wdl b e made directly to the Government’s N u m b e r 4 B a n k Account (the development project b a n k account) and b e accounted for as a v i r tual Special Account. T h e Government uses a warrant system to ensure that funds received are used for the purposes intended. Although the N u m b e r 4 B a n k Accoun t forms par t of the overall Government cash position, the risk of advances being used to finance other short te rm needs o f Government i s low (GoK has reserves in excess of 5 times annual recurrent expenditures). There i s a need to ensure that adequate accountability mechanisms are established for both the Outer Is land G r a n t scheme and the Outer Is land community development grant scheme for roof catchment and sanitation. T h e procedures for the Outer Is land grant scheme have been established, whi le those for the Outer Is land community development grant scheme for roof catchment and sanitation are to b e developed during the f x s t year o f implementation. I t i s therefore recommended that no disbursements for the Outer Is land community development grant scheme for roof catchment and sanitation b e made until the project has submitted to the Bank a satisfactory Procedures Manual.

A single disbursement category WIU b e used in each legal agreement w h i c h will significantly reduce the burden o f report ing for the Government without negatively impact ing on the Bank; however an additional hsbursement category relating to the Outer Is land communi ty development grant scheme for roof catchment and sanitation d b e required so as to a l low monitoring o f the proposed disbursement condition. Initially, disbursement on the project will b e transaction based, however the legal agreements will contain provisions for the adopt ion of repor t based disbursement as i t i s expected that the implement ing agency will reach the necessary standards of report ing and accounting rapidly.

Summary Project Description

T h e primary activities of the Project are: (i) to fund priority adaptation measures mainstreamed into the Ministerial Operating Plans o f K e y Sectoral Ministries; (ii) to fund pilot communi ty based adaptation investments in two pilot islands according to a whole-island approach; (iii) to fund periodic national consultations, awareness, and consultation in islands targeted for the expansion phase; and (iv) to fund training, priority stuhes, and project management.

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Implemen tins En tity

T h e project will b e implemented by the Of f ice of the Beretenti wh ich i s in the process of establishing a Na t iona l Strategic Risk Management Unit. To reduce the incremental burden on the OB, a project management unit will b e established (a feature carried over from the f i r s t phase of the project). T h e PMU will b e responsible for processing of payments / budgets through the Government systems, maintenance of a parallel in format ion system and ensuring that the two systems are reconciled. In addition, the OB may issue departmental warrants to the M i n i s t r y o f Works for i tems that are to b e procured using “Force Account”. T h e PMU will assist the Ministry o f Works in the p roper acquittal o f warrants issued.

T h e PMU located within the I(AP1 project has a senior accountant responsible for the preparation of reports and the processing of payments - i t has been agreed that t h i s person will also b e employed under IUP-11. G iven the expected increase in the vo lume o f transactions, a further member of staf f will b e added to the PMU to assist in general project implementation, including frnancial management.

Kisk Analysis

T h e table be low summarizes the risk analysis. With the appropriate risk mit igat ion measures as o u h e d the overal l risk assessment i s moderate.

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% r: 3

-0 u 2

W Y 4 E

d - A Y

x E: .- a

Budgeting

Prior to project effectiveness the GoK will approve the project through the Development Coordinat ion C o d t t e e for incorporat ion into the FY06 budget document. Development projects are not subject to Parliamentary appropriation per se but once incorporated into the Budget Document, the Min is ter of Finance may issue warrants on receipt o f funds from the Development partner.

On a n annual basis there wdl b e an agreed set of activities derived from the MOPS, against wh ich the project would l s b u r s e .

Funds FIow and Disbursement Arrangements

T h e dagram be low summarizes the fund flow arrangements.

T h e Bank will advance funds in AUD sufficient to meet 4 months of expenditure to a v i r tual Special Account he ld in the GoK N u m b e r 4 Development Budget B a n k Account. As there will b e m o r e than one legal agreement the authorized allocations will need to b e determined for each agreement, but the aggregate should not exceed AUD 500,000. On receipt o f funds, the GoK will issue the necessary warrants to the O f f i ce of the Beretenti who wdl then have the legal authority to expend the funds. T h e PMU will, in the f i r s t place, prepare monthly withdrawal applications on a transaction basis in order to replenish funds expended triggering another cycle of warrants etc. T h e legal agreements would provide for the transition of the project into repor t based disbursement - t h i s would b e expected to happen within the f i r s t year o f the project l i fe once reconcdiation procedures between the Government accounting and project in format ion system has shown t h e m to b e robust.

Country Financing Parameters have not been prepared for IGribati. T h e disbursement percentage will b e set at 100% but the legal agreements will specify that expenditure on certain items (Tax, insurance and in land freight) will not b e eligible for financing from the Trust Funds. Moreover, the government will also b e specifically endorsing to the Bank that they will not b e chargmg these costs to the grants. A special case will b e made in respect o f the reasonable share of the safeguard costs incurred in making materials available on Outer Islands. T h e Bank recognizes that the use of commercial shipping lines by suppliers exposes both the supplier and the DoW to a n unacceptably high level of risk of misappropriation (which cannot b e insured against). In order to mitigate against t h i s risk the Bank agrees that the DoW should assume responsibdity for the supply chain to the Ou te r Islands through charter operations the costs o f wh ich would b e covered under incremental operating costs.

A single disbursement category will b e used in each legal agreement plus additional disbursement categories required for the monitoring of disbursement conditions - the need for addltional l sbu rsemen t categories was considered but in t h i s case i s not justified. T h e key in determining e x p e n l t u r e eligibllity wdl b e the annual activities l i s t derived from the MOPS of L i n e Ministries.

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- T

ICI I - 1

Financial Reporting

T h e OB will b e the implement ing agency for the project and it i s expected that the current project management unit w d transfer to t h i s office and operate under the SNPRA Unit. G iven the increased vo lume o f transactions and the requirement to adrmtllster the Small Grants Scheme it i s recommended that an additional two staff members b e recruited for the PMU (one who would b e an experienced junior accounts person and the other acting in support o f procurement). T h e PMU will therefore require addt ional workmg space and additional equipment (includmg access to the MFED Attach6 accounting system - h s could b e through the existing OB link). Consideration was given t o ut i l lz ing the existing resources available w i h the GoK accounts cadre to undertake the FM work. Tks would have placed an undue burden on the h t e d resources available w h i c h are already over stretched (and m a y b e a cause o f processing delays).

T h e Department of Works (DoW) will play an important ro le in the acquittal o f activities on Outer Islands wh ich will b e managed through the issue o f Departmental Warrants (DW) by the OB. The DW will b e restricted to those items wh ich are requked to b e procured under “Force Account” arrangements on Outer Islands w h c h would typically include labor; loca l materials; local p lant and equipment; and accommodation costs o f supervisors. T h e PMU will need to b e prepared to support the DoW in the process o f acquitt ing these warrants as expenditures wdl not b e eligible for inclusion on a WA until acquittal has been received. T h e DoW will also receive materials procured on their behal f and will b e required to account for the use of these materials (a stock con t ro l system i s already in place wh ich i s capable o f accounting for materials at a Job level) - it will b e a requirement that the DoW provides stock reports and a note wdl b e included in the project f inancial statements indicating the levels o f stock held.

T h e PMU will adapt the systems currently in place for I(AP1 for use in IUP-I1 (a manual cash book supported by Quick Books accounts software) and t h i s will prov ide the necessary financial informat ion. Reports will b e prepared on a quarterly basis and submitted to the B a n k within 45 days of the quarter end. An add t iona l requirement will b e to show reconcil iation as between the project in format ion systems and the accounting records o f Government (includmg reconchat ion o f the Vi r tua l Special Account as represented by the Project Code within the Development Budget). T h e expendture reports would b e against the agreed l i s t o f activities for the financial year.

Accounting Policies and Standards - T h e accounting standard to b e used will b e Financial Report ing under the Cash Basis of Account ing as set out in the Internat ional Publ ic Sector Account ing Standards (IPSAS).

Auditing T h e Of f i ce of the Auditor General under the relevant legislation i s mandated to audi t the financial accounts of Government. I(AP-I1 audited annual reports d b e available to donors not later than 6 months after the end o f each GoK financial year. T h e audit reports wdl b e subject to the same scrutiny process as fo l lowed for other reports issued by the Of f ice o f Auditor General which includes tabling the reports in Parliament.

Supervision Plan T h e overall ratinp for the proiect i s moderate a n d it i s envisaged that after t he f i r s t year of operation FM supervision miss ions would b e required at most on a n annual basis.

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ANNEX 8: PROCUREMENT ARRANGEMENTS

KIRIBATI ADAPTATION PROJECT - IMPLEMENTATION PHASE (KAP 11)

A) General

Procurement for the proposed Project would b e carried out in accordance with the World Bank‘s “Gu idehes : Procurement under IBRD Loans and IDA Credits” dated M a y 2004; and “Guidelines: Selection and Employment of Consultants by World Bank Borrowers” dated M a y 2004, and the provisions stipulated in the Global Envi ronment Facll ity Trust Fund Gran t Agreement and the Australian G r a n t for Cofinancing IGribat i Adaptat ion Project Phase 11. T h e general description of various items under different expenditure category i s described below. For each contract to b e financed by the Grant, the different procurement methods or consultant selection methods, estimated costs, prior review requirements, and t ime frame are to b e agreed between the Recipient and the Bank project team in the Procurement Plan. T h e Procurement P lan wdl b e updated at least annually or as required to reflect the actual Project implementation needs and improvements in institutional capacity.

I. Procurement of Works (US$0.6 million)

(a) ICB procedures shall b e used for procurement of works estimated to cost US$lOO,OOO or m o r e per contract. Works planned for procurement through ICB include beach nour ishment at national hospital, clunate proofing causeway structure and climate proofing vulnerable infrastructure. T h e estimated cost of worked goods to b e procured through t h i s me thod i s less than US$700,000.

International Competitive Bidding:

(b) National Competitive Bidding (NCB): Works estimated to cost more than US$50,000 but less than US$lOO,OOO per contract may b e procured through NCB. T h e current legislation forms a sound basis for NCB and addt ional criteria for acceptabhty o f NCB procedures are not considered necessary.

(c) Shopping (Small Works): T h e Project would finance a number of small works for rainwater collection/storage facilities at communi ty buildings and rainwater collection for groundwater recharge. These works are estimated to cost less than U S $ 50,000 each. Procurement of such smal l works shall b e under lump-sum and/or f ixed pr ice contracts awarded on the basis o f quotations obtained from at least three qualified domestic contractors in response to wr i t ten invitations. T h e invitations for quotat ion shall include a detailed description of the works including basic specifications, the required complet ion date, a n d a form of agreement acceptable to the Bank, a n d relevant drawings where applicable. T h e award shall b e made to the contractor of fer ing the lowest price quotation for the work and who has experience and the resources to complete the contract successfully.

(d) Force Account: Construct ion by the use of the Recipient’s own personnel and equipment will b e used for activities that are u d k e l y to attract any bidders, in particular those in the Ou te r Islands (mainly physical improvements in the water supply system in selected locations under Component 3: Freshwater resources). Refer to I t e m B b e l o w for further details.

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11. Procurement of Goods (US$ 0.G million)

(a) International Competitive Bidding (ICB): ICB procedures shall b e used for procurement of goods estimated to cost US$lOO,OOO or m o r e per contract. Goods planned for procurement through ICB include pipes and fittings for rehabil itation of Bet io distribution and household plumbing system a n d solar pumps, pipes for water supply improvements. T h e estimated cost o f goods to b e procured through t h i s me thod i s less than US$400,000.

(b) National Competitive Bidding (NCB): Goods estimated to cost m o r e than US$50,000 but less than US$lOO,OOO per contract may b e procured through NCB and include rainwater collection/storage facihties. T h e estimated cost of goods to b e procured through t h i s m e t h o d i s less than US$lOO,OOO. T h e current legislation forms a sound basis for NCB and additional criteria for acceptabllity o f NCB procedures are not considered necessary.

(c) Shopping: Goods estimated to cost less than US$50,000 per contract may b e procured through Shopping. T h e estimated cost o f goods to b e procured through t h i s m e t h o d i s less than US$150,000.

(d) Procurement of standardized of equipment or spare parts, to b e compatible with existing equipment, may jus t i f y a d l t i o n a l purchases from the or igmal Supplier. T h e estimated cost o f goods to b e procured through t h i s m e t h o d i s less than U S $ 80,000.

Direct Contracting:

(e) Procurement from IAPSO: Computers and related equipment may b e procured through the Inter-Agency Procurement Services o f the U n i t e d Nat ions (IAPSO). T h e estimated cost of goods to b e procured through t h l s me thod i s less than US$lOO,OOO.

111. Selection of Consultants (US$2.0 millions)

T h e consultant’s services would consist of survey and water resources assessment, w h c h should b e conducted by consulting firms. D u e to the small national consulting industry, short l i s t s o f consultants composed entirely of national consultants shall not b e applicable.

(a) Selection Based on Consultants’ Qualifications (CQS): Regardmg small assignments of rout ine nature, such as survey and assessment of simple nature, qualif ied consultant firms shall b e selected through CQS method. T h e estimated value of consultants selected through CQS m e t h o d would not exceed US$ 0.25 d o n .

(b) Individual Consultants: Approximately fifty indiv idual consultants would b e procured under the Project. They should b e selected through a comparison of qualifications of at least three qualif ied consultants among those who have expressed interest in the assignments or have been approached directly. T h e total estimated cost of the ind iv idual consultants to b e selected through a competit ive process i s U S $ 1.8 d o n s . In addition, with appropriate justifications a n d after concurrence by the Bank, indwidual consultants may b e selected on a sole-source basis in exceptional cases, such as (i) tasks that are a cont inuat ion of previous work that the consultants have carried out and for wh ich the consultants were selected competitively, (ii) assignments lasting less than s i x months; and (c) when the indiv idual i s the only consultant qualif ied for the assignment. Based on the proposed Procurement Plan, selection of consultant to produce climate / weather / sea level risk

64

in format ion and selection of consultant who will provide training at the Meteorological Of f ice may b e done on a sole-source basis.

IV. Small-Scale Adaptation Grants (US$0.4 million)

T h e project will finance a number o f activities under the Capacity at Is land and Community Leve l Component and i t will b e carried out with the active participation o f local communities. A Procedures Manua l (Pilot Outer Islands Investments Scheme Procedures Manual) for &us component, with rules for eligibility and the procedures for selection and disbursement of the grants, including appropriate fiduciary and safeguard measures have been developed. T h e remoteness o f the pilot islands i s a major issue from a n implementation perspective and due to these characteristics, special arrangements were considered. T h e selection criteria and the process for allocation, sample agreements, procurement and disbursement of the grants shall b e in accordance with the Procedures Manual and the following procedures:

(a) Community Participation

i. Goods: Most goods consist o f rehabilitation materials and other related consumables.

e Direct contracting: Because o f the small size of the indiv idual purchases and since a comparison o f prices may not be practical due to quality and distance considerations, procurement of materials costing US$2,500 or less per contract may b e through b e c t contracting from local markets or suppliers.

e Excep t as prov ided above, for goods that are estimated to cost US$15,000 or less per contract, a comparison of three quotations shall b e required. There wdl not b e contracts above US$15,000.

Shopping:

ii. Works: Most grants invo lve only minor rehabllitation works necessary for small repairs and adjustments or water and sanitation arrangements.

e Direct contracting: Because of the small size of the indiv idual contracts and since a comparison o f prices may not b e practical, procurement o f works costing US$2,500 or less per contract may b e through direct labor.

e Procurement of Small Works: Except as prov ided above, for works estimated to cost US$ 20,000 or less per contract, a comparison o f quotations shall b e required. Procurement of such small works shall b e under lump-sum, fmed pr ice contracts awarded on the basis of quotations obtained from at least three qualif ied domestic contractors in response to wr i t ten invitations. T h e invitations for quotat ion shall include a detailed description of the works inc ludmg basic specifications, the required complet ion date, and a form of agreement acceptable to the Bank, and relevant drawings where applicable. T h e award shall b e made to the contractor of fer ing the lowest pr ice quotat ion for the work and who has experience a n d the resources to complete the contract successfully. I f three qualified contractors are not available within the communi ty area, the contract may b e awarded on basis o f two quotations or awarded b e c t l y to a sole qualif ied contractor. There will not be contracts above US$20,000.

65

iii. Individual Consultants: Services to b e prov ided by local consultants will involve training and workshops and will follow the individual selection procedures on the basis of comparison of qualifications.

e Because o f the small size o f the indiv idual contracts and since a comparison o f three qualified candidates may not b e practical, then selection o f individual consultants costing US$2,500 per contract or less may b e through Sole Source.

Sole Source:

a Except as prov ided above, for indmidual contracts that are estimated to US$lO,OOO or less per contract a comparison of three qualif ied candidates shall b e required. There will not b e contracts above US$lO,OOO

Comparison of three qualified candidates:

V. Operational Costs (US$ 0.4 million) Ths i t e m would include communications, utilities, stationary, transportation, accommodation and allowances. T h e procurement of such items would follow implement ing agency’s administrative procedures.

B) Assessment of the agency’s capacity to implement procurement

Procurement activities wdl b e carried out by the Project Management Unit, wh ich wdl b e under the supervision of the O f f i ce of the President/ O f f i c e o f T e Beretitenti (OB). An assessment of the capacity of the Implement ing Agency to implement procurement actions for the project has been carried out by Cristiano Nunes (EAPCO) in July, 2005 and updated by Bisma Husen (EAPCO) in December 2005. T h e assessment reviewed the organizational structure for implement ing the project and the interaction between the project’s staf f responsible for procurement and other Government Agencies.

Based on the assessment, the procurement r i sks are considered to b e “High”. This i s mainly due to the weak procurement capacity. In order to mitigate the risks, the following actions were recommended:

0 At least one staf f should b e designated as the Procurement Assistant. Provisions should b e made for h s / h e r training in international procurement. A Procurement Specialist, with qualifications acceptable to the Bank, should b e recruited to prov ide support to the Project, for a t ime commensurable with the project procurement load. He/she would also b e responsible for assisting the Depu ty Secretary and mentor ing the Procurement Assistant, organizing record keeping, preparing procurement documents, helping in evaluation o f bids/proposals, and contract supervision and management T h e Operations Manual should include a Procurement Section, providmg step-by-step process for managing procurement. I t should also include the Procedures Manual for the Pilot Is land Adaptat ion Component, where communi ty based procurement i s envisaged.

0

0

With regards to the u thza t i on o f Force Account, the M i n i s t r y of Publ ic Works and Uul i t ies (MPWU) would b e responsible for carrying out physical improvements in the water supply system in selected locations under component 3. MPWU has h a d previous experiences with Force Accoun t a n d the Task Team found i t to have the overall capacity to implement such activities. Nevertheless, r i sks were identif ied and mit igat ion actions were included under the Project’s design. Technical assistance for construction supervision has been included. Also, the use o f Force Account would have to b e managed through Departmental Warrants (DW) issued by the OB, so that product iv i ty controls are in

66

place. T h e PMU would monitor MPWU’s performance and ensure that warrants are properly acquitted. T h e MPWU would also manage any necessary storage o f construction materials and, as a result, it has been established that MPWU would provide detailed reports accounting for the use of these materials to the OB (a stock contro l system i s already in place wh ich i s capable of accounting for materials a t a job level).

C ) Procurement Plan

T h e Recipient, at appraisal, developed a Procurement Plan for Project implementat ion wh ich provides the basis for the procurement methods. This plan has been agreed between the Recipient a n d the Project T e a m o n December 23,2005 and i s available at the Of f ice o f the President/ Of f ice of T e Beretitenti (OB). I t will also b e available in the Project’s database and in the Bank‘s external website. T h e Procurement Plan will b e updated in agreement with the Project T e a m annually or as required to reflect the actual Project implementat ion needs and improvements in institutional capacity.

D) Frequency of Procurement Supervision

In a d b t i o n to the prior review supervision to b e carried out from B a n k offices, the capacity assessment of the Implement ing Agency has recommended a yearly supervision m i s s i o n to visit the f ie ld to carry out post review o f procurement actions.

E) Prior Review Thresholds

(a) Prior review by the Bank of Goods and Civil Works will include: (a) a l l International Compet i t ive Bidding; @) f i r s t two contracts implemented through Force Account; a n d (c) f i r s t two contracts awarded on the basis of NCB. T h e remaining procurement will b e subject to post review.

(b) Prior review by the Bank o f consultant services wdl involve: (a) prior review of al l Terms of Reference regardless o f the estimated value; (b) contracts greater than US$lOO,OOO equivalent for consultant services prov ided by firms, (c) selected contracts for i n l v i d u a l consultants (on a n exceptional basis and based on a specific request from the TTL. To b e indicated in the procurement plan); and (d) al l Single Source Selection and Sole Source, regardless o f value. O t h e r procurement of consultant services will b e subject to post review.

(c) All the prior review contracts will b e stated in the Procurement P lan

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Attachment 1

Details of the Procurement Arrangement involving international competition

1. Goods and Works.

(a) Goods a n d Works contracts estimated to cost above U S $ 100,000 per contract and al l D i rec t

@) L i s t of contract Packages (no PQ and Domest ic Preference applied): Contract ing WIU b e subject to prior review by the Bank.

Description

goods: pipes and fittings for rehabilitation o f Betio distribution and household plumbing system - Component 3.2.5 solar pumps, pipes,

Goods Cost Component (US$

equiv.)

190,000 3.2.5

Ref N o . fi Procurement Method

Vorks Ref N o .

WK1

wK2

wK3

Bank's Completion Notes Review Date

I C B 1 190,000 I 3.3.2 etc. for 01 water supply upgrades -

Prior Review 29-Jan-07

_ _ Component 3.3.2

2.2.2

Description

I C B 1 s:w I 11-May-07 I 1 beach nourishment at national hospital (indicative) - Component 2.2.2 climate proofing causeway structure (indicative) - Component 2.2.2 climate proofing vulnerable infrastructure (indicative) - Component 2.2.2

2.2.2

cost (US$)

190,000

228,000

199,120

I C B 1 s:w 1 11-May-07 I 1

Component Procurement Donor Notes Method Review Opening /

Bid receipt c I I I I

2. Consulting Services.

(a) L i s t o f Consulting Assignments with short-list o f international fums.

Ref N o .

FS 1

FS2

FS3

FS4

Description

9ppm n T A 4 to supervise surveys (3+3+3) + 30ppm nTA2 t o carry out surveys (3surveys*2month*5p ersons) - - Component 1.2.4 6ppm to supervise surveying (2+2+2) + 30ppm n T A 2 to carry out survey (3surveys*2month*5p ersons) - Component 3.2.2 4ppm water int'l resource assessment crew (2 persons) + 4ppm local crew for water resource assessments (incl. per diems) - Component 3.2.3 2ppm water resources assessments on 01 (possibly same as firm as 3.2.3) + 12ppm local support for 01 water resources assessments - ComDonent 3.3.1

cost (US$)

54,720

47,880

77,520

56,240

Component

1.2.4

3.2.2

3.2.3

3.3.1

Procurement Method

CQS

CQS

Donor Review

Prior Review

Prior Review

Prior Review

Prior Review

S ign Contract

1-Nov-06

1-NOV-06

1-Oct-06

1-Oct-06

Notes

@) selection of consultants (firms) for assignments regardless o f the amount invo lved wdl b e Subject to prior review by the Bank.

(c)

Consultancy services estimated to cost above US$50,000 per contract and Single Source

Short l i s t s composed entirely o f national consultants: N o n e

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ANNEX 9: SAFEGUARD POLICY ISSUES KIRIBATI ADAPTATION PROJECT - IMPLEMENTATION PHASE (KAP 11)

Introduction:

This annex reviews the social and environmental safeguards issues germane to t h e IGr ibat i Adaptat ion Project 11, a n d notes steps taken during project preparation and to b e taken during project implementat ion to carry out the fiduciary responsibilities with respect to safeguards policies.

There are two safeguards policies triggered under the project. These are OD 4.01: Environmental Assessment, a n d OP 4.12: Resettlement. This annex will deal with each in turn.

A. Resettlement

Following the Nat ional Consultations, the CCST identif ied 10 priority areas for IGr ibat i with respect to adapting to c h a t e change: awareness, water resources, inundation/coastal erosion, health impacts, agriculture, family planning, fisheries, waste management, overcrowdmg, a n d miscellaneous other options. Implementat ion of subprojects in these areas in the pilot islands m a y require some small amount of l and acquisition and possible small-scale resettlement of affected people. Therefore a Resettlement Pol icy Framework has been developed that identifies the principles to b e fol lowed in the event o f l and acquisition, resettlement, and compensation based on Ih iba t i ' s legislation, and the Bank's pol icy on involuntary resettlement.

T h e purpose o f the Resettlement Pol icy Framework i s to provide guidance for the process and intended outcomes of resettlement plans and activities to b e applied to subprojects during subproject implementation. T h e overall principle o f the Resettlement Policy Framework i s to ensure that those people whose livelihoods or assets are directly affected by the project realize benefits as a result of project implementat ion and that al l steps are taken to min imize negative impacts on them.

Institutional Arrangements

T h e MELAD p i n i s t r y o f Environment, Lands and Agricultural Development) i s the lead agency responsible for co-coordinating planning and implementat ion of lands acquisit ion and resettlement. T h e Ministry formulates and manages the resettlement budget and pays compensat ion to the affected people after the Lands Management Division (LMD) has carried out a survey of the assets and trees on the site. T h e LMD i s also responsible for surveying the house sites. T h e MELAD provides the secretariat for the Resettlement Committee.

T h e Resettlement Commit tee was established by the GoK to deal with the resettlement o f Tabuaeran, Teraina and IGr i t imat i islands. T h e Commit tee i s responsible for developing guidelines, eligibility criteria, plans, strategies and priorit ies for the GoK resettlement schemes. T h e Commit tee i s therefore invo lved in the planning and implementat ion of resettlement schemes. T h e Commit tee makes recommendations to the Cabinet for consideration and approval. T h e Commit tee i s a high-level body consisting of the ma in GoI< stakeholders under the chairmanship o f the NIinister of Env i ronmen t Lands and Agricultural Development. T h e members include the Min is ter a n d Secretary of the M u u s t r y for L i n e and Phoenix Development (ML,PD), Secretary MELAD, Secretary M i n i s t r y of In ternal and Social Affairs, Di rector of Lands Management, D i rec to r of Env i ronmen t and Conservation Division, Di rector of W s t r y o f Education, Youth and Sport, a n Economis t from the M i n i s t r y of Finance and Economic Development, C h e f Heal th Inspector, C h i e f Counci lor (Betio Town Council), and the Chief Counci lor (TUC).

70

T h e existing Resettlement Committee has the experience and the capabhty to deal with general resettlement issues, and it can also adequately handle any proposed lands acquisition and resettlement for the IUP. T h e resettlement p lan for the Resettlement Commit tee i s drawn as a joint ef for t by the pr incipal GoK stakeholders, includmg the Lands Management Division and the Environmental and Conservation Division o f the MELAD.

T h e MELAD has the expertise to draw up resettlement plans in l ine with the Bank's RAP procedures, and it i s recommended that the MELAD, in conjunct ion with the other GoI< key stakeholders, and the respective Is land Councils and communities, i s given responsibility in drawing up either the RAPS or the settlement plans for each island community. T h e participation o f island community representatives i s crucial both in the planning and implementat ion stages of these resettlement plans, as noted further below.

The Resettlement Process

Targeting and provision of in format ion are critical to attaining the overall goals o f the Project with particular reference to the project clientele. T h e objective i s to disseminate in format ion about the project to the potent ia l affected population. On those islands where i t i s p lanned that subprojects will b e implemented, a n in i t ia l meeting should b e held before any subprojects are prepared in wh ich Is land residents meet together at the Is land Counci l maneaba. T h e purpose of t h i s meet ing will b e to:

0

0

0

Provide a n overall explanation o f the project and i t s objectives;

Discuss the possible impacts with respect to land acquisition and resettlement;

Expla in that a l l l and will b e acquired voluntarily, the general nature o f compensation and resettlement assistance to b e provided, and the mechanisms for filing and assessing grievances for activities under the project;

Expla in the general process for preparing and submitting proposals for subprojects. T h e details o f t h l s process are dmussed in the Procedures Manual for the pilot small-scale adaptation investments.

0

Subproject Preparation and Screening

On each island the Is land Project Of f icer will b e the key of f ic ia l who wdl work with villages and groups within villages to prepare subproject proposals under the project. Once villages decide on a subproject proposal and the proposal i s prepared in a form that can b e submit ted for evaluation, the proposal will b e passed on to the Is land Development Committee. T h e process o f evaluation by the I D C i s discussed in detail in the Procedures Manual for the pilot small-scale Ou te r Is land adaptation investments. As a pa r t of h s process, for each subproject ident i f ied for possible fundmg under IUP-I1 a screening process should b e carried out to ident i fy the impact o f the subproject with respect to land acquisition, resettlement, l ivel ihood interrupt ion or other impacts on l ivel ihood and/or assets that will trigger the resettlement pol icy framework. I t i s expected that in most cases the impacts on the affected people wdl b e minor - that is, either no people are displaced and less than 10% of their productive assets are affected, or fewer than 200 people are displaced. In such cases a n Abbreviated Resettlement A c t i o n Plan wdl b e prepared. I t i s expected that most subprojects under IUP-I1 will require Abbreviated Resettlement A c t i o n Plans. Where t h i s i s not the case, a full Resettlement A c t i o n Plan must b e agreed and implemented.

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Consultations

Consultations with the local residents will b e a n ongoing feature of the process o f subproject formulation, submission, approval, implementation and monitoring, and will include consistent attention to resettlement, land acquisition and related issues.

Consultations with potential affected people will b e an impor tant par t o f t h i s process. Such consultations will begm with the in format ion and awareness meetings that take place before any subproject proposals are prepared, and continue through the l i fe o f the project. T h e people must b e in fo rmed about their options and rights pertaining to resettlement, consulted on, of fered choices among, and prov ided with technically and economically feasible resettlement alternatives, and prov ided prompt compensation at full replacement for loss of assets because of the project (OP 4.12 para.6a). A consultation framework will b e developed for each subproject that will o u h e exactly how the process of discussion and negotiation will take place.

Survey

As a par t o f the preparation of subproject proposals, a survey will b e conducted to identify the l ikely impact of the subproject with respect to land acquisition and resettlement. T h i s survey wdl b e carried out under the duect ion of the IPO on each island for each subproject. T h e results of t h i s survey will b e included in the subproject proposal submission prov ided to the Is land Development Council. T h e proposal submission will need to include the following informat ion:

1.

2.

3.

For any voluntary contributions o f indiv idual l a n d without compensation, a consent form w h i c h includes the name o f the land donor/s, and details of the contr ibut ion (type, size, location, specified per iod of use etc. as appropriate). This should b e signed (or thumb-printed) by the land donor/s (includmg the male and female heads of the household involved), a n d the chalrperson of the Counci l of Unimane.

For l a n d contributions against compensation, a consent form wh ich includes the name of the land donorls, details of the contr ibut ion (type, size, location, specified per iod o f use etc. as appropriate), and details of the agreed compensation arrangements. This should b e signed by the land donor/s (including the male and female household heads), a nominated representative of the group mak ing the subproject proposal, and the chairperson o f the counci l o f elders (the unimane).

Where the l and donated i s communal land, these forms can b e signed on behal f of the vdlage by a recognized village leader.

i>

ii)

iii)

For sub-projects where land i s donated or prov ided against compensation, the Is land Development Counci l will take the following steps during i t s appraisal of proposed sub-projects:

ver i fy with the l and donor/s that the donat ion i s indeed made on a voluntary basis, that the donor/s is/are the legitimate owner/user o f such lands, and that the l and donor/s is/are fully i n fo rmed of the nature o f the sub-project a n d the implications o f donating the property;

assess that the l and donor does not suffer a substantial l oss affecting his/her economic viabil ity as a result o f the arrangement. Where there i s substantial l oss the sub-project cannot b e approved as proposed (the amount donated should usually not exceed 10% o f his/her land or assets without appropriate Compensation);

assess that the compensation arrangements are appropriate. T h e compensation should b e roughly equivalent to t radt ional compensation arrangements. Where demands are excessive, compensation inappropriate and/or the l a n d donor and the communi ty cannot agree, the IPO and/or Community Facilitators will encourage alternative sites or arrangements. T h e sub- project will not b e approved forfunding by a Small Gran t untd suitable alternative sites are

72

ident i f ied a n d land has been voluntarily made available through the process described above. If no suitable land i s made available through the Voluntary L a n d Contribution process, the sub-project would not b e further processed.

Disclosure of the RAP to the Affected People

A publ ic meet ing will be held in each affected village to inform the affected people about the resettlement and compensation issues. Once a Resettlement Ac t i on Plan i s completed, a public meet ing wdl b e h e l d to dlsclose the exact contents of the RAP to the affected people.

Sign Compensation Contract and Pay Compensation

T h e f inal step of resettlement implementat ion i s agreement o f al l parties to the compensation and related arrangements, and payment o f compensation, if necessary. Alternative forms of compensation, such as allocation o f l and and employment opportunities, will also b e explored.

Source of Funding T h e project will b e responsible for funding al l resettlement and land acquisit ion related expenses. Funding arrangements are discussed in m o r e detail in section 4.

Grievance Redress Mechanism

T h e mechanisms for redressing grievances will also b e presented and explained to the affected populat ion in a publ ic meeting. Af fected people will b e given opportunities to review the survey results and compensation policies during the resettlement planning and implementation. T h e f i r s t step in any grievance procedure will b e negotiation at the vlllage level between the affected persons and island representatives, particularly with the IPO and, through the IPO, with the Is land Council. I f t h l s does not lead to a satisfactory arrangement, the grievance will b e forwarded to the Project Management Of f ice for adjudication. I f t h i s does not result in agreement the affected people shall have the right to pursue the grievance through the cour t system.

Monitoring

I t i s the responsibility of the GoK to make a n assessment to determine that the objectives of the resettlement instrument has been achieved. T h e Bank requires that both a n internal and external monitoring of the project’s progress b e undertaken. T h e details o f the monitoring processes are discussed in Section 12.

This section has covered the basic approaches to b e taken in the event of resettlement and/or land acquisition under the project. For a m o r e complete discussion o f these issues please refer to the Resettlement Policy Framework in project files.

B. Environment

Introduction

A Strategic Environmental Assessment was done as par t of the preparation of IUP-11. T h e SEA was examined the environmental issues that are l ikely to arise under the K i r i b a t i Adaptat ion Program Phase 11, and particularly under Component 1 , Priority Nat ional Adaptat ion Investment, and Component 2, Pilot Is land Adaptation, and makes recommendations concerning how best to undertake environmental assessment of these activities to mitigate any possible negative consequences. As the specific activities to b e undertaken under I U P - I 1 have yet to b e designed, the strategc assessment provides a general methodology for environmental screening of policies and plans, the preparation of environmental impact assessments for various kmds of potent ia l activities and the monitoring of the implementat ion o f the recommendations o f those EMS.

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The CCA Strategy: Rationale and Aims

T h e key pol icy document covering adaptation to climate change in IGr ibat i i s the Climate Change Adaptat ion Strategy. T h e CCA Strategy a i m s to strengthen IGribati’s abh ty to handle c h a t e change by action under eight broad headmgs: integration o f CCA into national planning; external financial and technical assistance; populat ion and resettlement; governance and services; freshwater resources and supply systems; coastal zones and structures; marine resources; and survivability and self-reliance

As par t o f the preparation process for IUP-I1 a number of “soft” community options and interventions have been identif ied as likely areas for possible subprojects:

Planting schemes for coastal erosion control, including, e.g., mangrove replanting or expansion, coastal l and reforestation, p lant ing of ironwood plants (“te nikabubuti”, “te aroua”, etc.) and other steps to stabilize coastal and foreshore areas.

Marine protect ion strategies such as coral replanting and protect ion schemes and establishment o f marine conservation areas

Widening o f channels for wetlands flushing.

Water and sanitation improvements, such as relocation or protect ion o f communal drinking sources, water tank construction and guttering, water pumps and pipes for distribution, etc. Materials would b e prov ided by the grant funding, whi le labour and other inputs would b e prov ided by the communi ty or relevant groups.

Replanting o f food plants and trees or in t roduct ion of additional kinds o f agricultural products and practices, restoration o f inundated large community or extended f a d e s babai pits. Plant ing suitable trees around houses

Community or village waste management system

Control o f vector-borne hsease.

Other projects not ment ioned but wh ich fall within GEF focal area of conserving biodmersity, reducing adverse climate change, and protecting international waters.

Environmental Management

I t i s clear that many o f these options wlll have environmental impacts, though in most cases these impacts are not likely to b e substantial, and in many, if not most, the longer te rm consequences will b e positive. There i s a n established regulatory environment in IGr ibat i that mandates certain actions in the case o f negative environmental impacts. T h e Env i ronmen t A c t 1999 provides for and establishes an integrated system o f development control, environmental impact assessment and pollution contro l for IQribati. T h e Minister of Environment, Lands and Agr icul tural Development i s responsible for the due administration and implementat ion of the Act . All development proposals o f government ministries, island councils, private developers and non-government organizations must undergo the environmental screening procedures of the Env i ronmen t and Conservation Division (ECD) as stipulated in the Env i ronmen t Regulations 2001. T h e screening procedure requires al l project proponents to apply for a pe rm i t to carry out a prescribed development. T h e application form will b e reviewed by ECD to determine whether the particular proposal requires fur ther environmental study in the form of an in i t ia l environmental examination (IEE) or a n E I S (a comprehensive environmental impact assessment PIA] study) report. T h e EIA procedure allows for the project proponent to conduct i t s own ELA study and implement the ECD approved environmental management p l a n of project activities. T h e ECD would also prov ide monitoring measures for the proponent to implement

74

and for w h i c h Na t iona l Envi ronment Inspectors would closely monitor environmental compliance of the project.

A CCA project activity in an Outer Island would undergo the same environmental screening system where the in i t ia l application and subsequent regulatory activities are handled through the Env i ronmen t and Conservation Division. Implementation, management and monitoring of the local project would b e supervised by the Island Counci l involved, with possible assistance from ECD.

T h e central EIA unit o f the ECD can best take on the ro le o f referee and watchdog responsible for issu ing regulatory and technical guidelines, resolving interagency conflicts, dsseminating informat ion, and the like. U n d e r the guidance of the central EIA agency, however, pr imary responsibility for infusing environmental values into project-identif ication and development activities should remain with l ine ministries, sectoral agencies, Island Councils and private businesses.

All subprojects under the Pilot Is land Adaptat ion component and any major activity under the MOPS will undergo environmental screening to determine the hkely level of environmental impact. Activit ies will b e categorized in a way consistent with B a n k OD4.01. A proposed project with likely significant adverse environmental impacts that are sensitive, &verse or unprecedented will require preparation of a full EIA with a n Environmental Management Plan, consistent with the requirements for a Category A project under OD4.01. A proposed pro ject with impacts that are site-specific; few i f any of w h i c h are irreversible; and where mit igat ion measures can b e designed m o r e readily than for Category A projects will b e treated consistent with Category B projects under OD4.01. A project with few or m in ima l environmental impacts will b e treated in a manner consistent with Category C projects, and wdl generally entail only in i t ia l environmental screening.

Key Institutional Players in Environmental Assessment and Monitoring

Planning and implement ing CCA Strategies involves m a n y ministries and agencies with di f ferent technical specializations. Recent institutional changes and developments have helped to streamline and coordinate activities among those ministries and agencies. Central pol icy coordinat ion will b e prov ided by the O f f i ce of T e Beretitenti (OB) through the recently established &vision of Strategic Rsk Management. A technical working group designated the Climate Change Study T e a m (CCST) i s currently based in the Ministry of Environment, Lands a n d Agricultural Development (MELAD) and chaired by a senior MELAD official. This group i s made up of national climate change specialists and officials from the most concerned ministries. CCST monitors climate change nationally a n d globally and assesses the vulnerabhty o f islands and investments or activities to clunate-related risks. CCST reports to the Nat ional Adaptat ion Steering Commit tee (NASC), w h c h i s chaired by the Secretary to the Office of T e Beretitenti (OB) and includes senior officials from concerned ministries and representatives of churches, the national women's organization and non-government organizations. NASC reports to and advises OB, and through OB it advises Cabinet on CCA matters. Cabinet decisions are advised to NASC and implemented by responsible ministries.

Responsibility for operational p lanning and the carrying out o f activities to implement CCA strategy wdl l ie with the relevant technical ministries and publ ic enterprises, but a l l such activities must undergo environmental scrutiny as stipulated in the nat ional environmental screening procedures. These implement ing agencies are Ministry o f Publ ic Works and Util i t ies (MPWU) (water, infrastructure and publ ic buildings), the W s t r y o f Environment, Lands and Agr icul ture Development PELAD) (external liaison on climate change, environmental management and regulation, agricultural extension), and MISA (support to L o c a l Government in urban areas a n d Ou te r Islands), Ministry of Communications, Transport and Tourism Development (MC'M'D) (telecommunications, weather a n d climate monitoring a n d weather forecasting). Each ministry's operational commitments will b e found in the relevant programs in i t s M i n i s t r y Operat ional P lan

75

(MOP), whde the appropriation of local funds and allocation of external a id to these purposes wdl be found in the A n n u a l GoK Budget.

At practical level coordmating committees will b e established as required by the appropriate ministries. T h e Foreshore Management Commit tee of MELAD, with inter-ministry membershlp, i s expected to assist MELAD to discharge i t s environmental regulatory and permi t t ing functions relating to seawalls and foreshore structures. Generally, the regulatory functions o f MELAD and other agencies concerned with land use and structure design appear to b e frequently bypassed by Government developers. This strategy wdl requite the overhaul o f arrangements for co-operation among regulatory agencies and Government ministries to close loopholes through w h i c h unexamined developments can slip, and to avoid unnecessary processing delays or variations in standards.

Improving the capacity and effectiveness o f local government i s crucial to implement ing t h i s CCA strategy. M a n y of the services that most directly affect people’s ability to handle climate variability and change fall naturally to b e delivered at local government level, both in urban areas (South Tarawa) and the Outer Islands. Building standards and densities, waste dlsposal, land p lanning and permitting, land reclamation and community coastal defenses are al l within the remi t of loca l government. IGritimati, where national government has until now been responsible for everything, i s now moving towards provision of services by local government.

Government o f IGr ibat i i s taking steps (not for the f i r s t time, but with a n increased sense of urgency) to strengthen capacity at local level and to equip local governments with m o r e and better in format ion on CCA and related issues. T h e CCA project under design for submiss ion to GEF includes a small grants scheme to assist island-level CCA-dr iven investments, and the possibility o f a id to construct communi ty storm refuges in certain islands i s discussed in the strategy statement.

Public Consultations

Two IGxibati Adaptat ion Program documents prov ide extensive coverage o f the Na t iona l Adaptat ion Consultation, a crucial element of the process o f agreeing on nat ional adaptation priorit ies and benchmarks and the mainstreaming of adaptation into economic planning. There were two national consultation workshops conducted in South Tarawa but with participation from al l Outer Is land representatives, including 28 communi ty consultations in 4 islands, and one consultation on IGxitimati covering the L i n e and Phoenix Islands. T h e documents ‘Report on the Second Na t iona l Consultation he ld at Ot intaai Hotel, Bikenibeu, from 3rd to 6th November 2003’ a n d ‘Social Assessment F ina l Report’ document the inputs and opportunities for vulnerability reduct ion by the various stakeholders themselves that do reflect the real nat ional priorit ies wh ich will have local support once the priorit ies that are identif ied need to b e implemented.

A process of cont inuing consultation implies a commitment by the authorities to listen to the insights and concerns of people and communities and to make a credible and relevant response. T h e f i r s t national CCA consultations in 2003, conducted as a joint NAPA-I(AP exercise, were necessarily broad-based. With the backing o f t h l s strategy statement, future consultations can focus on a few priority concerns, and can a i m at ident i fy ing activities and investments a n d allocating responsibility for taking action. Funds for the cont inu ing consultative process wdl b e p rov ided in the GoI< Annua l Budget, using both local and external funding. Agreed action by GoK on concerns ident i f ied in t h l s way d appear in the appropriate MOPS.

Project Assessment

A simple impact matr ix was formulated to review the b road environmental impl icat ions of the various project proposals. T h e matr ix i s shown in Appendix B of the SEA a n d helps to compare the b r o a d environmental implications across the various projects and provides guidance in ident i fy ing possible

76

cumulative impacts, and interactions between projects that might create enhanced impacts or other problems, such as hazards. I t can also b e used to examine the distributional aspect o f impacts, that is, who i s winning a n d who i s losing from the overall set o f projects.

T h e assessment explicit ly differentiates between the construction phase o f the projects and their subsequent operational phase. I t i s clear that many, i f not a l l the proposed projects are hkely t o have adverse effects a t the construction stage. These are mainly impacts such as noise, dsruption o f dady social and economic activities and the exposure of soil to rainfal l and coastal erosion processes during the construction period.

Most of the adverse effects fall on the local people and the marine environment, wh ich i s entirely as expected; given the CCA projects will take place in coastal areas. There are some indirect effects in the rura l and u rban sectors mainly due to the sand mining and dredging operations w h i c h provide aggregate for r o a d and other infrastructure construction. T h e environmental reserve, by preserving a major area o f comparatively unmodrf ied coastal area (e.g. North Tarawa Conservation Area), i s the only project that would impinge directly on terrestrial and marine natural ecosystem components (soil, fauna and flora). I t can also b e considered to have long te rm benefits for the marine environment since it i s a permanent reserve set aside to compensate for the l o s s o f lagoon reef ecosystems due to the growing number o f lagoon reef dsturbances

In terms o f cumulative impacts, the most obvious one i s the combined effects of the construction phases of al l or several projects i f they were to b e undertaken concurrently. Being in a comparatively small geographical area the construction impacts could b e severe in any particular island. At Tarawa the disruption to traffic and pedestrian access, noise, dust, and the danger o f a substantial increase in the vo lume of sediment drift within Tarawa Lagoon are a ma jo r consideration. Although the timetable for implement ing projects i s largely determined by the availability o f funds, some thought could b e given to the possibhty of co-coordinating the construction phases of certain projects to min imize the potential for social and economic disruption and sedimentation transport. These cumulative impacts are l ikely to b e m u c h less severe in the Outer Islands where populat ion density i s considerably less and the number o f activities d hkely b e less as well.

T h e marine environment is, not surprisingly, the major recipient o f many o f the possible adverse effects of the proposals, largely through the sedimentation problem. However, the combined benefits would b e large i f the proposals were effective. Reduced sewage from seepage and surface run-off, a n d reduced silting in the long te rm as a result o f proper ly drained and sealed roads. At the same time, i t must b e recognized that a substantial contr ibut ion to the sedimentation p rob lem comes from the activity of al l coastal constructions (such as seawalls, causeways and dredging or reef extraction) pigs on beach backyards, removing ground vegetation over large areas and exposing surface soil to erosion by rainfall. A comprehensive approach to managing marine water quality and the sedimentation/erosion p rob lem in South Tarawa lagoon, for instance, will have to include strateges for d e a h g with these issues. O n e way to tackle t h i s i s to involve the communi ty in recognizing a n d solving the problems with the marine environment. Solutions to illegal reef reclamation and coastal infrastructure development will need to b e init iated by the communi ty and enforced by social pressure and sanctions i f they are to b e successful.

Impact Assessment Needs

All the Climate Change Adaptat ion (CCA) proposals would need closer scrutiny for their environmental implications, as stipulated under the Env i ronmen t A c t 1999 despite the efforts made in the rankmg of adaptation options, to weigh up the benefits and Qsadvantages of the various climate change adaptation options.

77

For each proposed subproject under the Pilot Islands Adaptat ion component o f IUP-I1 an environmental screening process should b e undertaken. Ths process would determine the hkely environmental impacts of the proposed activity, and could b e overseen by MELAD, with the cooperation of t h e Island Projects Off icer and the Is land Development Committee. T h e in i t ia l screening would determine if the environmental impacts would b e significant enough to mer i t further study.

If the impacts are considered likely to b e significant, a n Environmental Management Plan would b e formulated to detail the manner in wh ich the environmental consequences of the development would b e mitigated. This EMP would form part o f the subproject documentation and i t s implementation would b e the responsibhty o f government though the various agencies responsible for the sectors in w h i c h the development wdl occur.

For those activities included in MOPS that might entail environmental impacts, in most cases the responsible m i n i s t r y would b e tasked with environmental screening in order to assess the hkely environmental impacts of proposed activities. T h e ministries would b e prov ided assistance as needed from the secretariat.

A social impact assessment might b e considered for the general set of proposals that would alter the physical and social nature of I(iribati Islands. T h e change in location o f coastal d w e h g s (being set back from the beach area, now with a protective seawall), the concentration of Government offices on Oute r Islands, the breakmg up o f family and communi ty u n i t s for resettlement purposes and the concept o f zoning l and for development. T h e nature and extent of the cumulative effects o f these proposals may not b e anticipated by the local communi ty and a social impact assessment would b e a useful vehicle to address any concerns that might b e evident before the proposals go any further.

W h d e not strictly a n impact assessment, a study would b e required to prepare a series of Codes of Envi ronmenta l Practice (COEP) for the Government o f K i r i ba t i use during the planning, design, construction, and operation as we l l as maintenance o f a l l infrastructure projects and coastal works in I(iribati. T h e codes would ensure that minimum environmental standards are m e t and that appropriate procedures are undertaken to reduce the environmental impact o f various activities related to coastal works and services. E a c h o f the phases of a coastal infrastructure project, i.e. planning, design, construction, and operation and maintenance are interrelated and have Qf fer ing potent ia l to effect (either adversely or beneficially) the environment.

T h e overall objective of the codes i s to prov ide a pollution prevent ion approach to general coastal infrastructure works and services, establish guidelines for the mit igat ion o f adverse environmental effects, and wherever possible indicate opportunities for environmental enhancement for, the planning, design, construction and operation and maintenance of the infrastructure projects.

I t i s intended that the development, approval, and subsequent adopt ion of the codes in conjunct ion with the identif ication of project specific issues a n d the preparation o f management a n d mit igat ion plans for those issues will a l low a reduct ion in the dependence on the conventional environmental impact assessment (EIA) system. Codes of Envi ronmenta l Practice are ident i f ied within the framework o f environmental assessment o u h e d in I G b a t i ’ s Env i ronmen t A c t 1999 and the Env i ronmen t Regulations 2000.

Monitoring Requirements

T h e concept o f sustainable development implies a concern to ensure that undesirable changes in the natural social environment are minimized. I m p a c t assessment, a t both the strategic a n d pro ject levels, seeks to foresee such changes and to suggest appropriate m o l f i c a t i o n s to the proposal in question, in order to avoid the changes preQcted. However, forecasting possible changes i s f raught with

78

uncertainty. Sustainable development must therefore, also include the monitoring funct ion - to prov ide in format ion on the actual state o f the environment so that appropriate management responses can b e formulated. This i s a n impor tant issue. Increased economic activity in the pr imary sectors and in the marine environment will only b e sustainable if that increased activity does not begin t o damage the resources on w h i c h it i s based. Monitoring i s the only way h s can b e detected, wh ich i s the f i r s t step in developing a management response.

Therefore, environmental or resource inventories are necessary, w h i c h use indicator variables to characterize the current state o f the environmental sector o f interest. There are considerations about takmg measurements that will allow for spatial and temporal characterization o f existing variability, s o that the inventories have to b e designed carefully, on a scientific, statistical basis. T h e n monitoring activities have to b e designed with equal care, the i n l c a t o r variables are periodically measured and compared with the baseline values to provide the basis for detecting changes.

Monitoring priorit ies in relation to the CCA proposals (and not including strict economic performance monitoring) are:

(a) the marine ecological resources o f Tarawa and around Outer Islands; water quality (turbidity, faecal coliform, etc.); indicator organisms (algae, benduc organisms, diversity o f reef fish, etc.); habitat indicators (health and integrity o f coral, etc.); and, sedrnentation processes adjacent to settlements (and other local populat ion centers).

the physical resources; atmosphere (e.g. air quality and climate, average solar radiation, and wind speed); waves (for calculation of design wave height for seawalls and causeways the following parameters are required: wind speed, wind dnection, effective fetch, wind duration); and, coastline topography to include beach profiles.

(c) the village community, age/sex make-up of the population, household structure, employment characteristics, health i n l ca to rs , publ ic order indicators, attitudmal indicators, and so forth.

Conclusions

T h e strategic environmental assessment ident i f ied a number o f issues:

@)

There i s a basic sustainable development objective evident in the Government o f IGr ibat i Climate Change Adaptat ion Policy, especially as expressed through the CCA strategies. However, there does not seem to have been any formal environmental assessment o f development options during the early stages of the IGr ibat i Adaptat ion Program. Nor did there appear to have been any studies into such parameters as carrying capacities, environmental constraints, etc., that would indicate a n environmental p lanning approach to the development policy.

T h e CCA strategies appear to favor a set o f coastal infrastructure development options. At the same t ime there i s no apparent attempt to integrate these development options into an institutional f ramework that specifically considers the wider coastal developmental p lanning and environmental implications for the nation. An integrated coastal management planning unit strategically placed in the appropriate m i n i s t r y should plan, implement and monitor the climate change adaptation projects.

Most o f the effects o f the various proposed projects wdl probably fa l l on the loca l communi ty and the marine environment. T h e construction phase of most proposed projects would probably lead to increased sedimentation transport in the marine environment, especially near the b d t coastal structures. Social and amenity impacts tend to b e adverse in the short t e r m and positive in the longer term; heal th and general welfare, in particular, are hkely to improve

79

if the proposals are implemented. T h e combined social impacts o f the various proposals affecting t h e host community, itself, could b e quite marked.

d) Agr icul tural and fishing activities would probably benef i t mainly from three proposals (road and causeway constructions, and sanitation and waste management). Loca l communities would benef i t from al l proposals.

In conclusion, t he environmental consequences of the proposed climate change adaptation projects have not been closely examined in the CCA Strategy and nor have the wider environmental implications been considered in the CCA Policy. T h e nature of the proposals, constructing coastal structures, means that there are likely to b e some environmental problems in the short term. T h e increasing and cumulative effects of coastal infrastructure developments are important, and it will b e clearly advisable to initiate a n environmental management program targeted at the coastal development sector. An integrated coastal management program would examine the current extent o f climate change adaptation options and coastal construction activities and the impacts (both beneficial and adverse) experienced to date. T h e environmental management program should consider the preparation of a Na t iona l EM Training Program and a series of Codes of Envi ronmenta l Practice for use during the planning, design, construction, and operation as we l l as maintenance of al l roads and coastal works in Kir ibat i .

I t would also b e advisable to consider the environmental factors that would limit coastal development activities (environmental sensitivities, natural hazards, natural carrying capacities, etc.). Sedimentation and sediment transport play a crucial ro le in the coastal management sector (for instance, Tarawa), and consideration should b e made to commission a sediment budget study o f Tarawa Lagoon, as a start. In h s way, the very features that support coastal development activities can b e managed and protected in the longer term, to sustain the economic viabihty o f the sector.

All CCA project proposals listed in the matr ix would require closer environmental scrutiny through the conduct of project environmental impact assessment. A social impact assessment would b e specifically required for the resettlement project, the decen t rak ing government to Outer Islands proposal and for the host communi ty attitude to the proposed changes to their village landscape a n d functions.

Finally, there should perhaps b e provisions in the CCA Strategy for monitoring key indicators of the marine and physical environment, but also the local host communi ty to the CCA projects. T h e early detection of undesirable changes allows appropriate responses to b e devised and implemented in t ime to avoid major damage to the environment, including the social fabric o f the village and the whole island communities.

80

ANNEX 10: PROJECT PREPARATION AND SUPERVISION

KIRIBATI ADAPTATION PROJECT - IMPLEMENTATION PHASE (KAP 11)

Planned Actual PCN review 09/15/2004 09/29/2004 In i t i a l PID to PIC 10/07/2004 In i t i a l I S D S to PIC 10/06/2004 Appraisal 01/30/2006 12/06/2005 Negotiations 03/14/2006 03/27/2006 B oard /RVP approval 05/30/2006 Planned date of effectiveness 06/30/2006 Planned date of mid- term review 12/15/2007 Planned closing date 06/30/2009

K e y institutions responsible for preparation of the project: T h e Ministry o f Finance and Economic Development (MFED) was the inst i tut ional h o m e for ISAP-I, w h i c h represented the preparation phase o f ISAP-11. Furthermore, the Nat ional Economic Planning Of f ice (NEPO) was responsible for mainstreaming of adaptation into the Na t iona l Development Strategy and the MOPS, and has co-organized the nat ional consultations. T h e Of f i ce of T e Beretitenti (OB) has prov ided the leadership for the Na t iona l Adaptat ion Steering Committee, and has been responsible for pol icy coordination among key ministries, now to b e institutionalized in the form of the SNPRA Unit. T h e Ministry of Social Affairs (MISA) has guided the development of component 4, on local governments and community-level adaptation activities. T h e Ministry of Envi ronment and Agriculture Development (MELAD) has prov ided technical support to the adaptation efforts in IGribati, and has l ed the preparation of the I - IGr ibat i NAPA, including the C h a t e Change Study Team, responsible for pr ior i t izat ion o f adaptation options and establishing climate scenarios. T h e Ministry o f Publ ic Works and Util i t ies has gulded the design of investments in the water sector and for coastal protection, including capacity building elements. T h e IGr ibat i Association of NGOs (IUNGO), the IGr ibat i Counci l of Churches (ICCC), the Na t iona l Women’s Organization (AMAIC), and the Chamber of Commerce have a l l contr ibuted through their participation in the Nat ional Adaptat ion Steering Commit tee a n d the consultations during ISAP-I.

1

Bank staff and consultants who worked on the project i nc luded

81

I B ismaHusen I Procurement SDecialist

Stuart Whitehead Richard Croad I a n Burton M e i Wang Farid Mazhar Patricia IUeystuber Josephme Masanque

I NurulAlam I Procurement SDecialist

Consultant E A S U R Infrastructure Specialist Consultant Independent Scholar Consultant Senior Counsel LEGEA Paralegal LEGEA Consultant TFO Senior Financial Management Specialist MNAFM

I CristoDher Bleaklev I Senior CountrvOfficer

Bank funds expended to date on project preparation: 1. Bank resources: $80,676.92 2. Trust funds (GEF-PDF-B): $82,465.43 3. Total: $163,142.35

Estimated Approval and Supervision costs: 1. Remaining costs to approval: $50,000 - BB 2. Remaining costs to approval: $16,634.57 - TF :GEF PDF-B 3. Estimated annual supervision cost: $75,000

82

ANNEX 11: DOCUMENTS IN THE PROJECT FILE

KIRIBATI ADAPTATION PROJECT - IMPLEMENTATION PHASE (KAP 11)

1. 2. I U P Social Assessment, 2004 3. 4.

Climate Change Adaptat ion Policy and Strategy Statement, 2005

IGr ibat i Adaptat ion Program I1 IBTF, 2005 Detai led Project Implementation Plan, wh ich includes the following commissioned reports and h a n d b o o k

0

0 Coastal Protect ion Measures 0 Water Resources Investments 0 Legislative and Regulatory Review 0

0 Strategic Envi ronmenta l Assessment 0

Various Project Preparation documents, including the Gran t Agreements that funded preparation; mission reports

I S r i b a t i I(AP ksk Rating, 2005

Procedures Manual for Small-scale Adaptat ion Investments on the Outer Islands

L a n d Acquis i t ion and Resettlement Policy Framework

Economic analysis of adaptation to climate change 5.

6. Procurement Plan, 2005 7 .

83

ANNEX 12: STATEMENT OF LOANS AND CREDITS

KIRIBATI ADAPTATION PROJECT - IMPLEMENTATION PHASE (m 11)

(No Information available)

Difference between expected and actual

disbursements Original Amount in US$ Millions

ProjectID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev’d

Total: 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

KIRIBATI STATEMENT OF IFC’s

Held and Disbursed Portfolio In Millions o f U S Dollars

Committed Disbursed

FY Approval Company

IFC IFC

Loan Equity Quasi Partic. Loan Equity Quasi Partic.

Total portfilio: 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Approvals Pending Commitment

FY Approval Company Loan Equity Quasi Partic.

Total pending commitment: 0.00 0.00 0.00 0.00

84

ANNEX 13: COUNTRY AT A GLANCE

,\ , \ , \

Domestic , , savings % ,

\ ,

KIRIBATI ADAPTATION PROJECT - IMPLEMENTATION PHASE (KAP 11)

, 1 Investment > ,

POVERTY and SOCIAL

2002 Population, mid-year (millions) GNI per capita (Atlas method, US$) GNI (Atlas method, US$ billions)

East Lower- As ia 8 middle-

Kir ibat i Pac i f i c income

0.09 8x1

0.08

Average annual growth, 1996-02

Population (%) Laborforce (%)

M o s t recent es t imate ( la tes t year available, 1996-02)

2.5

Poverty (%of population below national PO vefty line) Urban population (%of totalpopulation) 39 Life expectancyat birth (years) 63 Infant mortality(per 1,000live births) 50 Child malnutrition (%of children under5) Access to an improvedmter source (%ofpopulation) 48 Iiliteracy(%ofpopulation age a+) Gross primary enrollment (%of school-age population) a8

Male P 7 Female P 9

KEY ECONOMIC RATIOS and LONG-TERM TRENDS

1982 1992

GDP (US$ billions) 0.03 0.03 Gross domestic investment/GDP 63.3 56.2

Gross domestic savings/GDP -44.1 -45.0 Gross national savings/GDP 60.3 1ff.3

Exports of goods and services/GDP 9.1 P.5

Current account balance/GDP Interest payments/GDP Total debt/GDP Total debt servicelexports Present value of debt/GDP Present value of debt/exports

.. 214

1982-92 1992-02 2001

GDP 0.2 2.8 16 GDP percapita -2.0 0.5 -0.7

(average annual grokfh)

1,838 950

1,740

10 12

38 69 33 '6 76 Q

0 6 x15 x16

2001

0.04

2,411 1,390 3,352

1.0 12

49 69 30 11

81 Q 111 111 1x1

2002

0.04

2002 2002.06

2.8 0.7

STRUCTURE o f the ECONOMY

(%of GDP) Agriculture Industry

Services

Private consumption General government consumption Imports of goods and services

Manufacturing

1982

26.2 8.3 2.0

65.5

90.1 54.0 16.5

1992 2001 2002

25.1 9.2 2.1

65.7

90.9 54.1 lQ.8

1982-92 1992-02 2001 2002 (average annualgrokfh)

Industry 1.2 Manufacturing -0.9

Agriculture 17

Services -0.7

Private consumption General government consumption Gross domestic investment Imports of goods and services

Deve lopment diamond'

Life expectancy

T GNI

capita per 1

I Access to improved water source

-Kiribati Lo wr-middle-income group

Economic rat ios '

Trade

1

Indebtedness

---Kiribati Lower-middle-income group

Growth o f inves tment and GDP (%)

'O T

-5

85

Kiribati

PRICES and GOVERNMENT FINANCE

Domestic prices (% change) Consumer prices Implicit GDP deflator

Government finance (% of GDP, includes current grants) Current revenue Current budget balance Overall surplus/deficit

TRADE

(US$ millions) Total exports (fob)

Copra Fish Manufactures

Total imports (ci9 Food Fuel and energy Capital goods

Export price index (1995-100) Import price index (1995-700) Terms of trade (1995-100)

BALANCE of PAYMENTS

(US$ millions) Exports of goods and services Imports of goods and services Resource balance

Net income Net current transfers

Current account balance

Financing items (net) Changes in net reserves

Memo: ReSeNeS including gold (US$ millions) Conversion rate (DEC, /oca//US$)

EXTERNAL DEBT and RESOURCE FLOWS

(US$ millions) Total debt outstanding and disbursed

IBRD IDA

Total debt service IBRD IDA

Composition of net resource flows Official grants Official creditors Private creditors Foreign direct investment Portfolio equity

World Bank program Commitments Disbursements Principal repayments

1982

5.5 7.4

1982

1982

5 31

-26

6 16

3

1 .o

1982

1992

4.0 3.1

1992

1992

22 55

-33

13 27

7

3 -1 1

1.4

1992

2001

2.4

2001

2001

1.9

2001

2002

2.7

2002

2002

1.8

2002

Inflation (%)

----GDP deflator - 0 - C P I

Export and import levels (US$ mill.) I

1 96 97 98 99 00 01 02 I Exports Imports

I Current account balance to GDP (%)

86

ANNEX 14: INCREMENTAL COST AND ECONOMIC ANALYSIS

KIRIBATI ADAPTATION PROJECT - IMPLEMENTATION PHASE (KAP 11)

The 'Do Nothing' Scenario. A World Bank-funded study in 2000 indicated that in the absence of adaptation, the impacts o f current climate change scenarios in IGr ibat i could b e severe, disrupting ma jo r economic a n d social sectors. Up to 25-54 percent of areas in Bikenibeu, South Tarawa and 55- 80 percent of B u a r h , North Tarawa, could b e inundated by 2050. T h e combined effect o f sea level rise, changes in rainfall, and changes in evapo-transpiration due to higher temperatures could result in a 19-38 percent d e c h e in the thlckness of the ma in groundwater lens in Tarawa. Agriculture product iv i ty - particularly for taro and pandanus - could decline due to storm-induced saltwater intrusion into groundwater lenses. Higher temperatures could also increase the epidemic potent ia l for dengue fever by 22-33 percent, increase the incidence o f ciguatera poisoning and degradation o f coral reefs, and &vert crit ical tuna resources away from IGr ibat i waters. Cont inued degradation i s estimated to result in potent ia l economic damages averaging US$8-$16 million a year, equivalent to 17 to 34 percent of the 1998 GDP.

Along with the other cha te - re la ted r i s k s facing the country, IGribati's ecosystems also experience extreme vulnerability, particularly of their plant, animal, soil and water resources, and their cultures as w e l l their traditional resource-use systems to outside human induced disturbance and over- exploitation. G i v e n this, successful atol l development requires that the integrated aspects of the environment and social conditions, as we l l as external conditions - in relation to stability of global economic systems - are taken into account.

Ecosystems. IGr ibat i i s h o m e to a number of globally impor tant marine biodiversity, including up to 200 species o f coral; hundreds o f f i s h species, including threatened species such as the Humphead wrasse (Cheilinus undulates) and Sicklefin L e m o n Shark (Negaprion acutidens); a n d several threatened turtle species, such as the endangered green turtle (Chelonia mydas) a n d critically endangered Hawksbi l l turtle (Eretmochelys imbricata). IGr ibat i also provides a nesting area for a variety of birds, including vulnerable migratory species such as the Bristle-thlghed Curlew (Numenius tahltiensis) and endangered species such as I<uhl's L o r k e e t (Vini kuhlii) and Phoenix Petrel (Pterodroma alba). In addi t ion to the effects of climate change, coastal degradation and poor mangrove and coral reef management are endangering habitats for t h i s impor tant biodiversity. In the absence of adaptation, these impacts would translate in the loss o f globally impor tant biodiversity, l a n d degradation, l o s s of marine and coastal habitats and reduct ion in overall natural capital.

Status of threatened ecosystems. Marine resources are generally considered abundant. T h e state of abundance depends on the health of the corals, w h i c h i s partly determined by the impacts o f higher temperatures on the physical condi t ion o f corals. Cora l bleaching has been observed in several parts o f IGribati, including the Gi lber t Islands, particularly during El Niiio episodes, w h i c h already feature the higher sea surface temperature that are expected to occur m o r e frequently w h e n climate change progresses. However, the extent and the severity o f current coral bleaching are poorly known. With the assistance o f GEF, through UNDP, IGr ibat i prepared i t s Nat ional Biodiversi ty Strategy and A c t i o n Plan (NBSAP) in 1998. IGr ibat i i s presently also implement ing the NBSAP Add-on Project, o f wh ich the expected outputs are: the extensive consultations that have been undertaken with grassroots communities and inter-island consultations with a l l islands of IGr ibat i (North, Central and South islands includmg the L i n e and Phoenix Groups); and the product ion of a draf t nat ional repor t on IGr ibat i NBSAP, for submission to the Conference o f the Parties (COP) to the Convent ion on Biological Diversity (CBD). T h e baseline on the status o f some of the biodlversity i s s t i l l be ing established.

87

G i v e n the potent ia l threats of climate change to the biodiversity o f Kir ibat i , IUP-I1 wdl contr ibute to biodiversity conservation in various ways, particularly by improving the at tent ion for environmental sustainabhty as part of coastal protect ion and asset management strateges a n d activities to reduce beach mining, supported by strong participatory processes and publ ic awareness campaigns. Moreover, IUP-I1 would assist in bddmg a monitoring system, particularly for the coral reefs, but wh ich can also b e adapted for other ecosystems, to strengthen the country’s capacity to reduce the ecosystems’ vulnerability; supplemented by enhanced access to n e w technologies in coral and ecosystem management (including through pilot experiments). T h e monitoring system i s expected to help streamline sustainable integrated systems management into adaptation processes, buildmg on governance aspects that will support the enabling environment needed to make such activities successhl, and implement ing the NBSAP objective of integrating biodiversity conservation into the national development process.

Target ecoystem. Target ecosystems are primarily coastal and near-shore marine habitats, particularly coral reef and mangrove systems, wh ich harbor valuable biodmersity. Specific target areas and ecosystems will b e selected during the f i r s t year of the project, once MELAD has assessed the existing in format ion i t has and pr ior i t ized the ecosystems that are most easily supported by the IUP, and that would not b e duplicated by other on-going efforts in the country.

The GEEiBaseline Scenario. T h e 2004-2007 Nat ional Development Strategy recognizes the need to develop participatory and cost-effective strategies to manage the risks of climate-related events. Under the baseline sustainable development scenario, these measures would b e l imi ted to programs addressing current-day vulnerabilities, and measures w h c h the government, communities and private sector could a f fo rd to reduce maladaptation: e.g. continued clean-up efforts and waste management in urban Tarawa; reduct ion o f unaccounted-for-water in piping systems; protect ion and/or land reclamation for crit ical infrastructure; and populat ion and settlement management to avoid unsustainable populat ion growth in fragde areas; as we l l as ef for ts to enhance the government’s capacity for planning and coordination.

The Alternative Scenario. T h e objective o f the project i s to develop and demonstrate the systematic diagnosis o f climate-related problems and the design of cost-effective adaptation measures, whi le cont inuing the integration of clunate risk awareness and responsiveness into economic and operational planning. In that context, the alternative scenario supported through GEF financing includes an expansion of selected cha te -a f fec ted government programs to better address climate risks. These priority programs were ident i f ied using nat ional criteria based on solid economic, environmental and social principles. Their expansion aims to address the incremental development costs for K i r i ba t i (incurred and/or exacerbated due to climate change), even though they also y ie ld additional short-term benefits. M a n y o f these additional efforts also generate global environmental benefits by protect ing ecosystems and biodiversity threatened by global climate change and/or current unsustainable ad-hoc response measures to climate-related impacts, particularly in relation to coastal management. Bilateral financing has been arranged to cover the additional costs o f expanding other priority cha te -a f fec ted programs where few global benefits are i nvo l ved (such as in the water sector).

Under the alternative scenario, the GEF would finance the adh t iona l costs of expanding the baseline program to include those activities that also generate global environmental benefits. To ensure opt imal effectiveness and sustainability, these activities would b e fully integrated into the baseline outl ined above. The GEF alternative would add the following crit ical elements:

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G l o b a l benefits include: (i) strengthening o f the Government’s capacity to deal with the global environmental a n d sustainable development consequences o f the increasing climate risks, by fully integrating adaptation into economic planning; (ii) better compliance with obligations stemming from the country’s internat ional commitments for the conservation and sustainable use of biodiversity resources in the country, even in the face of the n e w c h a t e risks; (iii) conservation and sustainable use o f aquatic biodiversity in globally important ecosystems, including through greater involvement o f c iv i l society a n d communities in the planning and management of the aquatic resources, and implement ing actions that reduce the threat to coastal areas and coral reefs; (v) awareness raising among high-level pol icy makers as wel l as the wider public; (vi) development of tools and techniques that will result in sustainable management of c h a t e change r i sks in an integrated and cost-effective manner.

T h e pro ject i s also l ikely to promote positive follow-up at the global scale, inc lud ing the identif ication and promotion of alternative livelihoods to lower the levels o f threat, as w e l l as p romote the development of n e w technologies and methodologies for improved adaptation including the approach to mainstreaming participatory climate risk management into economic planning.

M o r e specifically, i t i s expected that the Government-funded b a s e h e activities comprise about 35% of the total project, whi le bilateral donors prov ide another 38%. T h e GEF contr ibut ion t h u s makes up 27%, w h i c h will b e used for activities that entail significant incremental development costs in help ing IGr ibat i adapt to the long-term effects o f climate change and sea level rise a n d fit within coherent programs that wdl also deliver global environmental benefits. T h e GEF portion o f 27% i s we l l within with the targets for cost-sharing o f the Strategic Priority.

T h e GEF will prov ide a large share of the additional costs to improve the participatory p lanning and mainstreaming of climate change adaptation into government planning, par t of component 1. These costs are assumed to b e largely incremental since they would not need to b e incurred in the absence o f climate change. In the baseline scenario (without climate change), IGr ibat i might institutionalize bottom-up planning and coordmation, but t h i s would not need to include considerations of climate change adaptation.

For component 2, w h i c h deals with adaptation activities relating to land use, physical investments and ecosystem management (all guided by an integrated coastal zone management approach), the GEF would pr imari ly fund the incremental activities related to awareness and sustainable coastal l and use, as w e l l as adaptation activities related to monitoring and conservation of coastal ecosystems that are threatened by c h a t e change. Another par t of t h i s component, that wh ich relates specifically to the protect ion of publ ic assets such as the hospital, causeways, a n d other critical infrastructure; would b e funded by NZAID.

Component 3, wh ich deals with climate risk management relating to freshwater resources, will generate relatively l imi ted global environmental benefits and will b e funded entirely by AusAID.

T h e GEF would support a large par t o f component 4, w h i c h aims to enhance climate risk management by local governments and at the Ou te r Islands o f IGribati. These activities are unl ikely to b e funded under the b a s e h e scenario, g iven that they are largely dr iven by concerns about increasing climate risks. The pilot small-scale adaptation investment scheme, w h i c h i s inc luded in t h i s component, wdl probably contain a mixture o f adaptation efforts, some of w h i c h may not generate global benefits; therefore, NZAID would contr ibute a substantial share of the cost of the scheme.

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Fur thermore , local communi t ies would also contr ibute, largely in the form of labo r a n d loca l materials.

T h e Pro jec t management component, consisting of p ro jec t management a n d the rev iew a n d comp i la t i on o f lessons learnt of IUP-I1 to better prepare for the expans ion of the adaptation program, would not have been needed in a baseline scenario, a n d would b e f u n d e d jointly by the GEF a n d NZAID.

A summary o f the p roposed g loba l a n d loca l benef i ts are presented be low.

Global and local benefits of the proposed project

Measure facilitating the establishment of a coordinated legal, institutional and operational framework (includmg policies and management options) t o enhance the reshence o f national biodiversity and natural systems by reducing their vulnerability to c h a t e change specific investment measures for conserving and restoring coastal ecosystems impacted by c h a t e change; reduction of pressures o n biodiversity arising f r o m habitat conversion induced by c h a t e change impacts, through design and adoption of more effective land and buffer zoning, and countering o f habitat fragmentation through establishment of marine and coastal protection corridors;

specific investment options that would reduce the impacts of c h a t e change on coastal and marine resources, therefore addressing impacts o n coastal and fishing communities;.

reduction of vulnerabhty of water resources through application o f supply and demand measures, together with specific investments in infrastructure for water conservation;

Global benefits Improve coordination and implementation o f global conventions

Maintain ecosystem integrity

Protect biodiversity in coastal areas

Protect feeding and staging grounds and prevent declines in populations of migratory birds.

Protect marine biodiversity Reduce stress o n coastal ecosys tems

Prevent reduction o f staging, feeding and breeding grounds for fish. Minimize impacts o f alteration o f water cycle on coastal flora and fauna.

Local benefits Maximize use o f exist ing institutional assets

Maintain value o f tourism attractions

Maintain eco-tourism assets

Maintain fisheries

Reduce water shortages for agriculture and human use, caused by changes in precipitat ion cycles and saline intrusion in aauifers

Without these measures, not only would t h e global benef i ts not b e real ized but t h e country would b e potent ia l ly facing m o r e severe impacts o f c h a t e change. E v e n with the i m p l e m e n t a t i o n of adaptat ion measures the impacts of g loba l c l imate change will severely af fect these small i s l and nat ions.

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Economic Assessment

T h e economic assessment of a project, including a n adaptation project, follows a n established logic. I t requires a n estimate of the in i t ia l and operating costs of a range of project options; identif ication of the least-cost design over a defined planning period; quantif ication of project benefits and assessment o f r isks; analysis of where the costs and benefits wdl fall; and a comparison o f costs and benefits to determine whether devot ing resources to the project (and sacrificing other uses of the resources in so doing) i s worthwhde. A fuller dscussion o f economic analysis as i t relates to adaptation to c h a t e change i s p rov ided in Annex 7 of the Project Implementat ion Plan.

A conventional economic analysis cannot presently b e applied to IUP-I1 as a stand-alone project, though future adaptation projects that i s likely to result from I U P - I 1 can and will b e analyzed in t h i s way.

IUP-11’s outputs will consist o f changes to CCA-related institutional and operational arrangements, and the development and feasibility-proving o f financial assistance schemes, design processes and physical works. T h e intended outcome i s that I f i i b a t i will b e equipped with the field-tested engineering designs, informat ion, analytical capacity and technical know-how needed to adapt successfully to climate change in the years ahead.

T h e diff iculty with a conventional analysis of IUP-I1 i s that although the project’s estimated costs and fmancing p l a n are clear, IUP-11’s delivery o f i t s intended benefits i s subject to two fundamental uncertainties. These relate to:

0 quantifying the severity and pace o f climatic change over the nex t 20-50 years and the associated r isks that face I h - i b a t i and i t s people, land a n d social and economic assets; and

0 estimating the probable effectiveness of IUP-I1 in delivering changes in land use, protective structures for existing facilities, and a wide range o f other measures that together over t ime may reduce c h a t e risk and the related damage that the country and communities would otherwise suffer

T h e f i r s t uncertainty means that the value o f damage that might b e avoided by implement ing the measures proposed in IUP-I1 cannot at present b e quantif ied precisely enough for a n orthodox economic appraisal. Earlier estimates o f the possible range of losses from climatic events reliably indicate only that these could b e very large. As experience with cha te - re la ted threats to communities and infrastructure throughout the country grows, and data on the physical effects of the changing climate (rainfall patterns, storm severity, sea levels and temperatures) accumulate, a clearer valuation o f the future damage that could b e avoided through adaptation will emerge.

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T h e second uncertainty i s o f i m m e d a t e practical significance. T h e commitment and ef for t of the government, communities, and the private sector i s crit ical to ensuring that IUP-I1 indeed has beneficial results. On the one hand, the expenditure o f the project cost of US$6.6m over three years wdl yield few lasting benefits if stakeholders fa i l to u h e the capacity that the project i s designed to create, in the form of a climate-aware planning environment, improved design and construction capabhty and more secure publ ic assets. On the other hand, fully effective implementat ion of IUP-I1 would significantly reduce r i sks attributable to climate change and, further, would greatly reduce r i s k s that are presently faced irrespective o f c h a t e change. T h e actual benefits o f IUP-I1 will depend to a

4 World Bank RER 2000, Cities, Seas and Storms

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v e r y l a r g e degree on t h e a m o u n t of susta ined e f f o r t d e v o t e d to i m p l e m e n t i n g t h e r e f o r m s that IUP-I1 cal ls for.

In r e c o g n i t i o n of these analy t ica l constraints, t h e p o t e n t i a l bene f i t s o f IUP-I1 by c o m p o n e n t are qua l i t a t i ve l y d e s c r i b e d as fo l lows:

Component

I. Policy, planning, and i n f o r m a t i o n

11. L a n d use, physical structures, and ecosys tems

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111. Freshwater resources

IV. Capacity a t island a n d c o m m u n i t y level

Sub-components (summarized)

Part icipatory processes for awareness, consultations, i n fo rma t ion materials, po l i cy coordination and development programs, i n fo rma t ion for climate risk management

A d a p t i n g l and use (strengthening regulation), i m p r o v e d environmental monitoring, c h a t e - proofing publ ic assets

Upda te water po l icy for climate awareness, imp lemen t c h a t e - a w a r e water supply p lanning in S Tarawa and the Ou te r Islands

L o c a l consultations and part icipatory risk assessments, training in climate-aware local government administration, pilot schemes of adaptation projects in the O u t e r Islands

Expected economic benefits

Greater popular understanding a n d acceptance o f the need to adapt to climate change, and o f the r i sks o f ignoring climate change in investment, habitation, a n d l i ve l i hood decisions; accumulation o f i n fo rma t ion needed to assess c h a t e change a n d i t s impact in IGribati, leading to:

increasing implementat ion o f c h a t e - a w a r e decisions by individuals a n d communities;

reduct ion o f vulnerabiltty and avoidance of damage at a l l levels of society

Reduct ion in beach mining, m o r e effective coastal hazard protection, p ro tec t i on for publ ic assets, monitoring of ecosystems with effective response measures, l eadmg to:

reduct ion of coastal erosion a n d avoidance o f damage to coastal structures and ecosystems

maintenance of l ivel ihoods that might otherwise b e threatened by c h a t e change

avoidance o f dlsaster-induced h t s to economic growth

Protect ion o f exist ing and fu ture pub l i c water resources to ensure sustainable supply throughout IGribati, l eadmg to:

avoidance o f mounting publ ic heal th costs due to insuf f ic ient or contaminated water supply

avoidance o f product iv i ty losses due to water supply- related pub l i c heal th impacts

suppor t for pr ivate sector investment requ i r i ng reliable a n d safe water supplies

Similar to (I) above

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V. Project management

E f fec t i ve national coordination o f KAP-11, project monitoring and review for later stages of implementation

Reinforcement o f implementation o f I U P - I 1 programme elements at all levels o f society, in the urban areas and in the Outer Islands, and periodic review o f the project leading to:

timely changes in project emphasis as indicated by experience to ensure sustained maximum project benefits at least cost over a lengthy period o f t ime

assurance that the project i s being implemented to maximum feasible effectiveness to reduce climate risk to all groups and areas o f IGribati

I t i s impor tant to no te that although IUP-11’s components and sub-components have been carefully chosen to deal effectively with r i sks associated with climate change, a l l of t h e m would stLu b e wor thwhde even in the absence of climate change. Small communities living in ato l l environments have always faced threats from severe weather. T h e processes o f economic development and populat ion increase are making such communities increasingly vulnerable to natural disasters, and will continue to do so even without climate change. T h e impacts of these pressures are clearly discernible in IQribati. IUP-I1 has been designed so that there will b e N o Regrets in the future about expending the resource cost of the project even if the m o r e extreme climate change predictions do not occur, or occur later than predicted.

Although the expected economic benefits in the above table cannot b e quantified, there i s a strong consensus among donors, the government, communities and indv iduals throughout IGr ibat i that they are significant, and that a do-nothmg response to the threat posed by climate carries unacceptable r isks. IUP-I1 calls for the expenditure of approximately US$6.6m. However, as roughly US$2.3m o f t h i s amount (the GoI< contribution) represents resources that might have been spent anyway (with or without IUP-11), the ne t additional resources ‘at r isk ‘ in the event of possible project failure i s approximately US$4.3m prov ided through external support.

Convent ional appraisal indicates that the expenditure of US$4.3m on a public investment project to manage climate risk should return a benefit, in the form of avoidance of damage that would have occurred without the project, worth about US$0.5m per year over 25 years, in order to yield a re turn against in i t ia l cost in excess of 12% (a rate commonly required by donors of publ ic sector projects). As already noted, the climate-related risk that IGr ibat i currently faces, in the form of potent ia l l oss o f lives and livehhoods, brakes on economic growth, climatic risk to and demand pressures on water supply resources and associated threats to publ ic health and human productivity, loss o f l a n d area due to inundat ion and erosion, and undermining o f infrastructure and restricted delivery of services, represent economic costs to I(iribati that are currently not measurable but are worth significantly m o r e than US$0.5m annually.

IUP-I1 has the potential to establish a planning framework and m o m e n t u m for the other elements o f risk reduct ion that will avoid damage to IGr ibat i to a value greatly exceeding the minimum damage avoidance required to make the project a wor thwhi le investment. In t h i s light, IUP-I1 i s a potentially hghly productive use of donor funds, albeit requir ing a substantial counterpart commitment to implement permanent changes to p lanning procedures, l and use regulations, a n d other measures affecting the entire populat ion for the indef in i te future.

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Once the decision has been made to proceed with KAP-11, the most serious risk i s the potential failure by the government and other stakeholders to utl l ize the capacity for clunate-aware planning that IUP-I1 seeks to build, t h u s preventing the country from reaping the max imum or in the extreme case any, benefits from the project. On the positive side the project represents a clear opportunity to manage and substantially reduce climate risk, asserting a valuable degree o f contro l over a threat that will otherwise seriously weaken the country’s prospects.

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ANNEX 15: STAP ROSTER REVIEW

AND RESPONSES TO WORK-PROGRAM ENTRY QUESTIONS

KIRIBATI ADAPTATION PROJECT - IMPLEMENTATION PHASE (KAP 11)

Project Reviewer: I a n Burton - I n d e p e n d e n t scholar a n d consultant. Scientist Emeritus, Meteorological Service o f Canada. Professor Emeri tus University of Toronto.

KEY I S S U E S

Scientific and technical soundness of the project

T h e conceptual basis for the design o f t h i s project conforms to current thinking about adaptation to climate change. I t i s now widely understood that adaptation to climate change should b e fully integrated into the development process and that there should b e very few or no “stand alone” adaptation projects. T h e project bdds upon previous and ongoing work in the f i r s t phase o f the I b i b a t i Adaptat ion Program, and takes a moderate step into implementation. I t i s encouraging to see that the framers of t h i s project have resisted the temptat ion to r u s h into major construction or “concrete” adaptation, and have crafted a b lend of actual adaptation measures on a small scale together with activities to increase awareness o f clunate change r i sks and appropriate responses, and with pol icy coordinat ion and planning. Improvements in monitoring and observing capacity in both meteorological a n d ecological systems add further capacity building elements.

W h e n completed t h i s project will have strengthened the institutional and technical capacity for the implementat ion o f adaptation measures; strengthened publ ic awareness and understanding and hence publ ic support for the necessary adaptation policies; and demonstrated practical adaptation measures in a small number of pilot projects. Ths wdl lay the ground work for a consideration of a m o r e substantial adaptation program in IL4P stage 3.

Identification of global environment benefits

T h e identif ication of global environmental benefits has been a stumbling b lock in the m o v e towards a n orderly process of adaptation to climate change under the UNFCCC. This pro ject substantially overcomes the obstacles by the ident i f icat ion of benefits from the i m p r o v e d management, conservation, and sustainable use o f integrated ecosystems and biodiversity in coastal l a n d and water areas. Ths i s par t and parcel of the wider strategy of achieving sustainable adaptation, inc lud ing the Ou te r Islands and the large marine resources surrounding Kir ibat i . To b e sure there are also many adaptation benefits from the project that fa l l locally, but it i s clearly impractical to draw a sharp l ine between these different kmds of benefits.

H o w does the project fit within the context of the goals of the GEF?

T h e project conforms to the objectives o f the Special Priority for Adaptation, w h c h i s a n e w experimental window established to develop experience in the fundmg of actual a n d practical adaptation measures, or to go a step beyond planning a n d preparing to adapt. (In t h l s sense the SPA and t h i s project are an early example of Stage I11 adaptation as specified in UNFCCC/CP/l995/7/Add.l), and as envisaged in Convent ion Articles 4.lb a n d 4.4.

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Regional context

T h e project i s a n exemplary design for adaptation to clunate change and sea level rise i s small islands. I t i s a ground breaking demonstration of how to integrate adaptation into the development process. Since I G i b a t i i s isolate from i t s nearest neighbors there are n o significant international issues.

Replicability of the project

This project i s a n impor tant pilot and demonstration project for the incorporat ion of practical adaptation measures into development planning. I t provides a m o d e l that could w e l l b e adopted by other small island nations. T h e principles being fol lowed here extend in fact to a1 c h a t e change adaptation projects and mutatis mutandis could b e used in other m u c h larger and non-island countries.

Sustainability of the project

M u c h o f the pro ject could b e described as capacity bddmg in the sense that Components 1 to 4 each contains measures for the change o f practices in planning and implementation, reinforcement of existing programs, and institutional strengthening. Such new capacities are a n essential requirement for any expanded adaptation program that may follow in I(AP - 3. E v e n in the absence of a I(AP 3, if some form of adaptation program i s continued by the Government of I h b a t i (and that seems probably given the involvement o f the Of f ice o f T e Beretitenti) and given the demonstrated commitment to adaptation since 1999), then what has been generated by t h i s project (I(AP 2) wiU certainly b e sustained and used. There may b e some risk that a I(AP 3 does not materialize and that the GoI< loses i t s mot ivat ion and that therefore the enhanced capacity could wi ther and die. O n e safeguard against t h i s i s the publ ic awareness element in the project and the hgh level o f stakeholder involvement. Prov ided that t h i s works as intended it will not b e easy for the GoI< to drop i t s adaptation commitments.

T h e benefits o f the actual adaptation measures to b e implemented under t h i s project (eg. change in the pattern of coastal aggregate mining, furing leaks in the water distribution system) can b e expected to last subject to the n o r m a l requirements of maintenance.

Miscellaneous

This project i s we l l connected and integrated with other focal areas, especially biodiversity, and contributes substantially to environmental management and sustainable development. O n e of i t s most attractive features i s the way it combines project funding from several sources, (AusAID, NZAID, EU, UNDP, and ADB). T h e substantial major i ty of the fundmg for t h i s project in fact comes from the GoK and the above donors, leaving a 27% contr ibut ion from GEF.

T h e project i s unusual in the extent to w h i c h i t involves communi ty level leaders a n d stakeholders. I t i s an innovative and we l l designed project w h c h may we l l b e a key in pioneer ing a pa th to c h a t e change adaptation w h c h can b e fo l lowed by others.

I t i s d i f f icul t for an expert from the STAP Roster who has never set foot in IGr ibat i to b e completely confident in h i s assessment. Without being on the ground and meet ing the personnel invo lved it i s not possible to get a good “feel” for the project. A r e the people in charge really capable, are they committed, and do they have a strong a n d sustained mot ivat ion? T h e pro ject documents go j u s t

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about as far as i s humanly possible to alleviate such concerns through the pr in ted word.

WORK PROGRAM: COMMENTS FROM COUNCIL MEMBERS (REFERENCE TO GEF/C.27/6)

Kiribati: Kiribati Adaptation Program - Pilot Implementation Phase (KAP-11)

COMMENTS FROM F M C E

169. T h e Republ ic of IG iba t i , with a populat ion o f 97,000, consists in 33 low-lying atol l islands spread over 3.5 d o n km2 in central and western Pacific. I t s populat ion will increase by 40% by 2025 and it has l i rmted agricultural resources, i t s m a i n resources being i t s fish reserves. IGr ibat i i s one of the most vulnerable countries of the world to climate change and sea level rise, most of the l and being less than 3 meters above sea level.

170. I t s environment i s threatened in many ways: erosion of the sea shores, destruction of mangroves, diminution of fresh water resources, improper publ ic and private building to prevent disasters, low preservation of f i s h and coral biodiversity.

171. T h e project aims at: (i) developing and demonstrating the systematic diagnosis o f climate-related problems, (ii) designmg cost-effective adaptation measures, (iii) cont inuing the integration of climate risk awareness and responsiveness into economic and operational planning.

172. T h e projects includes f ive complementary components: (1) “Policy, p lanning and informat ion” to raise awareness, carry out consultation and p lan populat ion resettlement, whenever necessary, (2) “Land use, physical structures and ecosystems” to reduce the vulnerability o f the sea-shore and key publ ic assets by developing a risk mit igat ion strategy, (3) “fresh water resources” to reduce the vulnerability of fresh water resources to climate change, inc ludmg a n additional assessment of water resources in Oute r Islands, (4) “Capacity bulldmg at island and communi ty level” to train local government on climate risk management and support small scale participatory projects implemented by beneficiaries, and (6) “Program management” with the establishment o f a PMU close to the O f f i c e o f the President.

Comments 173. T h e project appears relevant to address the crit ical c h a t e issues that the country has to face through a consistent adaptation program.

174. T h e project starts from a previous project carried out by the Word Bank; it demonstrates a good understanding of the specific environment issues o f t h i s kmd of low lying islands with a growing population. T h e proposed components complement each others starting by a better understanding of the present environmental situation and i t s hkely m e d i u m and long te rm evolut ion to make aware pol icy makers and local populations, then designing a practical strategy to protect the sea-shore a n d nearby waters. I t includes a preparation to avoid future disasters attached to improper seashore pub l i c and private building and a series of local environment projects involving the local population.

175. T h e project appears w e l l designed with i t s pro ject management unit (PMU) installed close to the President O f f i ce within the Nat ional Strategic Risk Management Unit and regular l i nks with the operational ministries have been planned to select jointly the adaptation projects to b e financed.

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176. T h e government i s supportive o f the project and has demonstrated during i t s last 10 years i t s commi tmen t to climate adaptation policies. Another positive point i s the s i p f i c a n t financial support p rov ided by N e w Zealand and Australia as we l l as the continuity o f the invo lvement o f the World Bank.

177. Actually, the project may seem a bit oversized for a very small country but w e have to consider that i t has a large replication potential in other Pacific or Ind ian Ocean islands a n d that the tools and solutions developed in t h i s small state are l ikely to serve as a reference on adaptation policies to many other locations. A specific budget for capitalization and dissemination of the experience outside IGr ibat i has been consequently foreseen.

178. T h e cost o f the project must b e balanced in front o f the economic cost of the “no action” option that w d lead to major economic losses for the country (such as decrease of fishing activity and agricultural production, loss of land, destruction o f publ ic and private buildings, diminution of fresh water resources, l oss o f biodiversity, etc.).

179. A World B a n k funded study in 2000 indicated that in the absence of adaptation, the impact of climate change scenarios on IGr ibat i may lead to the loss o f 25% to 55% o f the l a n d surface in major islands and to a 20 to 40% decrease o f the fresh water lens in Tarawa. T h i s cont inued degradation was estimated to result to an economic damage averaging 17 to 34% o f 1998 GDP.

COMMENTS FROM GERlMANy

Comments 180. There i s no doubt, that IGr ibat i i s one of the most vulnerable countries in the world to climate change and sea level rise. T h e project proposal describes a number of useful measures, e.g. the protection, rehabil itation and management o f mangroves. However, it does not clearly address the threat that by 2050 large areas (up to 25-54 O/o o f areas in Bikenibeu, South Tarawa and 55-80 O/o o f Bairiki, North Tarawa), could become inundated and how the project would address this, taking into account the expected population increase. I t i s also not clearly described, how it wdl b e judged whether the proposed measures are really cost-effective. Under “Objectives”, apart from reduced vu lnerabhty to climate change, i t i s mentioned, that climate variabihty and sea level rise could also be reduced. I t appears to b e unrealistic for small islands to really have a n impac t on th is . T h e indicators are st i l l vague and need to be refined. Most o f them describe the mere activities and not the measurable impact, wh ich should b e acheved.

Recommendation 181. Takmg into account the above comments, Germany supports the proposal. Changes should b e made during further planning steps and project implementation.

ResDonses to the questions:

1). I f sea level rise does continue along the h e s of the current worst-case scenarios, IGr iba t i may have to consider other options than the ones implemented under IWP-11. However , g iven the current uncertainties regarding how m u c h sea level rise there will be and how the islands’ ecology and morphology will respond to such changes, i t i s not appropriate for IUP-I1 to address that situation duectly (by moving people, w h i c h would b e highly socially dsruptive, and/or structural coastal protect ion along the entire island, w h i c h would b e prohibi t ively expensive a n d ve ry damaging to the environment).

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In any case, these threats are long-term. T h e strategy in Kiribati, in l ine with regional and international guidance, has been to h k t h i s agenda to immedlate threats that are causing problems right now, but also contribute to reducing vulnerability over time. IUP-I1 contains several such no-regrets initiatives, w h i c h wdl also he lp reduce the long-term threat o f inundation. For instance:

0 the coastal component i s promoting integrated coastal management, w h i c h will facilitate a better choice o f options for coastal protection, wh ich will on the one h a n d protect vulnerable pieces of coastline, and on the other hand help to keep the natural beaches healthy (which might b e able to help accommodate some sea level rise); the regulation o f beach mining i s a crucial aspect, wh ich will also help to reduce both long- and short-term threats; and furthermore, w e do include a subcomponent on populat ion policy, w h i c h might include encouraging people to m o v e away from the most vulnerable and overpopulated parts of Tarawa (the m a i n island, for wh ich the study was done).

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0

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These short-to-medium-term no-regrets strategies for good coastal protect ion will b e combined with strateglc thinking about potent ia l long-term options (which might eventually include relocation). Such thinking processes, including at the community level, will require a long t ime and should not b e hurried.

2) I t i s also not clearly described, how it will be judged whether the proposed measures are really cost-effective.

Cost-effectiveness o f the various activities would b e developed a n d decided on during the options analyses to b e carried out at feasibllity stage, and planned for a l l ma jo r work, such as the roads and hospital rehabilitation. In addition, the PAD, and the project Operations Manua l specifically make men t ion that the technical specialists who would b e carrying out the cost-benefit options analyses must do t h i s in collaboration with the Ministry of Finance and E c o n o m i c Development (MFED), who have a strong vested interest in ensuring cost-effectiveness, particularly g iven that the options used would b e examined for replication on a wider scale. In addition, ensuring cost-effectiveness i s a n underlying pr inciple for the project - wh ich advocates for a no-regrets strategy compared to the potentially higher prof i le and m o r e catchy option involving high cost infrastructure. This strategy, as i s explained in Section 5 of the PAD: Mainstreaming into the Ministry Operational Plans has been one o f the reasons for the slow integration of the I U P activities in the Ministry Operations Plans, by the implement ing Ministries. Addi t ional detail on the importance of cost-effectiveness of the project i s included in Annex 14 o f the P A D : Incremental Cost and Economic Analysis.

3) Under “Objectives”, apart from reduced vulnerability to climate change, it i s mentioned, that climate variability and sea level rise could also be reduced. I t appears to be unrealistic for small islands to really have an impact on this.

Ths i s probably a misunderstanding. T h e idea i s to “reduce vulnerabil ity to climate change, climate variabhty, and sea level rise. Wh i le it could b e read as such, the pro ject does not in tend to reduce sea level rise or reduce climate variability, but to reduce vulnerabihty to climate change, vulnerabil ity to climate variability and vulnerabihty to sea level rise.

4) The indicators are st i l l vague and need to be refined. Most of them describe the mere activities and not the measurable impact, which should be achieved.

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W e have made some changes to the indicators to take t h l s issue into account. However, i t i s impor tan t to clar i fy that the indlcators that are being used are modest, because of the pilot nature of the pro ject a n d t h e short implementation phase of the project. Significant ef for ts are b e i n g put towards changing attitudes o f al l stakeholders and starting up a few investments on a pilot phase. I f the pro ject i s able to cement planning on a whole of government approach, as w e l l as get attitudes of the key stakeholders to more systematically think of the impacts o f carrying on with some of the detrimental activities, and accepting that there are better ways to achieving a result, then that would indeed b e a great step forward for I h i b a t i . In that context, the indicators prov ide a n impor tan t lmkage to the eventual outcomes o f the project, through the integration o f risk management into the development p lanning and implementation of programs in al l cha te -a f fec ted sectors within the Government of IGr iba t i (GoIC). For instance, the second outcome indicator “percentage of climate- affected MOP programs that reflect systematic clunate risk management” provides a link to the Ministry Operat ional Plan (MOP) planning and monitoring arrangements o f the GoI< itself. I f climate risk management i s indeed reflected in the key MOPS, the monitoring o f real project outcomes i s transferred from the I U P project into the planning and monitoring system o f the GoIC, with specific indxators that m a y go beyond what the project can currently envisage. T h e present results indlcators are mainly in tended to monitor the process of getting to that situation of having sufficient awareness and capacity to achieve the broader objective of reducing Kiribati’s vulnerabllity to climate change, climate variabil ity a n d sea level rise.

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TARAWA

Makin

Marakei

MaianaAbemama

Aranuka

NikunauOnotoa

EnderburyKanton

McKean Birnie

Nikumaroro

Rawaki

Teraina

Tabuaeran(Fanning I.)

Kiritimati(Christmas I.)

Malden

Starbuck

MilleniumVostok

Flint

ManraOrona

AroraeTamana

TabiteueaBeru

NonoutiBanaba(Ocean Island)

Butaritari

Abaiang

Kuria

L i n e I s l a n d s

P h o e n i xI s l a n d s

GilbertIslands

Palmyra Atoll(U.S.)

Kingman Reef (U.S.)

Cook Islands(N.Z.)

Tokelau(N.Z.)

AmericanSamoa(U.S.)

Wallis and Futuna Islands(France)

Jarvis I.(U.S.)

Baker I. (U.S.)Howland I. (U.S.)

TONGA

K I R I B A T I

FIJ I

VANUATU

SAMOA

SOLOMONISLANDS

TUVALU

NA

UR

U

MARSHALLISLANDS

PACIFIC OCEAN

Mon

day

Sund

ay

Inte

rnat

iona

lD

ate

Line

10°N

0°

10°S

20°S

0°

20°S

170°E

170°E

170°W 160°W180°

170°W 160°W 150°W180°

KIRIBATI

0 200

0 100 200 300 400 Miles

400 Kilometers

IBRD 33427

FEBRUA

RY 2005

K IR IBATI

NATIONAL CAPITAL

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, o r any endorsemen t or a c c e p t a n c e o f s u c h boundaries.