BENEFIT SHARING AT SCALE: Good Practices for Results-Based Land Use Programs COPYRIGHT © 2019 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the govern- ments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org. Cover: ©Sarah Fretwell/World Bank ©Binyam Teshome/World Bank ACKNOWLEDGEMENTS This report was written by Joanna Durbin, Danielle King, Mike Korchinsky and Mwangi Githiru Natasha Calderwood, Zachary Wells, and Fabiano Godoy of Kenya: Kasigau Corridor REDD+ Project Conservation International and made possible by financial Andrianina Rakotosoa, Belizava, Johnnah Ranariniaina, and support from the Forest Carbon Partnership Facility and the Lanto Andriamampianina BioCarbon Fund Initiative for Sustainable Forest Landscapes. Madagascar: Makira Project The authors are very grateful to the following people who Dil Raj Khanal provided insights on their experiences of benefit sharing in the Nepal: Community Forestry cases that were reviewed through interviews and emails, and Braulio Andrade by providing access to reports and other documentation. Peru: Alto Mayo Protected Forest Nguyen Chien Cuong Beth Adams, Kali McCoy, Paul Ryan, and Simon Roberts Vietnam: Payment for Forest Environmental Services Australia: Emissions Reduction Fund Steve Wentzel Alberto Tavares, Bojan Auhagen, and Christiane Ehringhaus Zimbabwe: Kariba REDD+ Project Acre, Brazil: System for Incentives for Environmental Services Katie O’Gara and Shalindra Dilhan Mylvaganam provided Angela Albernaz Skaf, Victor Salviati, and André Ferro guidance and supervision of this study. Amazonas, Brazil: Bolsa Floresta The document benefited from reviews by Agustin Silvani, Diji Gilmar Navarrete Chacón and Ricardo Ulate Chandrasekharan Behr, Erik Johnson, Franziska Haupt, Gina Costa Rica: Payments for Environmental Services Program Cosentino, Keith Lawrence, Neeta Hooda, Stavros Papageor- Carolina Rosero and Free de Koning giou, and Vince McElhinny. Cassandra Kane and Delia Dreher Ecuador: Socio Bosque Program provided very helpful assistance with editing and graphics. Genoveva Martinez and Herless Martinez uatemala: Forestry Incentives Programs Rezal Kusumaatmadja Indonesia: Katingan Peatland Restoration and Conservation Project 1 Contents 4.3 Institutional, Financial, and Governance Arrangements.................. 50 4.3.1 Key Considerations for Abbreviations.............................................. 3 Institutional, Financial, and Governance Arrangements.... 50 1. Executive Summary............................... 5 4.3.2 Findings from the Cases about 1.1 Introduction........................................................ 5 Institutional, Financial, and 1.2 Approach.............................................................6 Governance Arrangements..... 51 1.3 Lessons Learned and Good Practices...... 7 4.3.3 Good Practices for Institution- 1.3.1 Cross-Cutting Issues...................... 7 al, Financial, and Governance Arrangements............................. 63 1.3.2 Beneficiaries and Benefits...........8 4.4 Stakeholder Participation ...................... 64 1.3.3 Institutional, Financial, and Governance Arrangements..... 10 4.4.1 Key Considerations for Stakeholder Participation...... 64 1.3.4 Stakeholder Participation.......... 11 4.4.2 Findings from the Cases about 1.3.5 Monitoring, Evaluation, and Stakeholder Participation...... 65 Adaptive Management............. 13 4.4.3 Good Practices for 1.4 Conclusions....................................................... 14 Stakeholder Participation........71 2. Introduction.......................................... 15 4.5 Monitoring, Evaluation, and Adaptive Management...............................................72 3. Approach...............................................20 4.5.1 Key Considerations for 3.1 Methods Adopted........................................ 20 Monitoring, Evaluation, and 3.1.1 Review of Earlier Analyses and Adaptive Management.............72 Development of Analytical 4.5.2 Findings from the Cases about Approach....................................... 20 Monitoring, Evaluation, and 3.1.2 Identification of Cases ............... 21 Adaptive Management.............73 3.1.3 Structured Overview of 4.5.3 Good Practices for Monitoring, Each Case...................................... 21 Evaluation, and Adaptive 3.1.4 Lessons Learned from Management................................78 the Cases.......................................22 5. Conclusions........................................... 79 3.1.5 Good Practices Drawn from Cases and Earlier Analyses....22 References................................................. 81 3.2 Introduction to the Cases.........................22 Appendixes................................................85 3.3 Limitations of the Study.......................... 30 Appendix 1: Overviews of Cases of Benefit Sharing......................................... 85 4. Lessons Learned & Good Practices.... 31 Appendix 2: Summary Table of Good 4.1 Cross-Cutting Issues .................................. 31 Practices, Illustrative Examples, 4.2 Beneficiaries & Benefits............................ 33 and Reference to the FCPF and 4.2.1 Key Considerations Related to ISFL Requirements for Beneficiaries and Benefits...... 33 Benefit-Sharing Plans............................115 4.2.2 Findings from the Cases about Appendix 3: Guiding Questions Beneficiaries and Benefits...... 33 for Interviews............................................132 4.2.3 Good Practices for Beneficiaries and Benefits................................. 48 2 ABBREVIATIONS AMPF Alto Mayo Protected Forest – Peru (Bosque de Protección Alto Mayo) ANAC Acre Business Agency – Brazil CAMPFIRE Communal Areas Management Program for Indigenous Resources – Zimbabwe CEVA Commission of Validation and Monitoring – Brazil CDSA Agency for Development of Environmental Services – Brazil CFUGs Community Forestry User Groups – Nepal CGI Carbon Green Investment – Zimbabwe CI Conservation International ERF Emissions Reductions Fund – Australia FAS Sustainable Amazonas Foundation – Brazil (Fundação Amazonas Sustentável) FCPF Forest Carbon Partnership Facility FONAFIFO National Forestry Financing Fund – Costa Rica (Fondo Nacional de Financiamiento Forestal) FPDF Forest Protection and Development Funds (provincial level) – Vietnam GIZ German Agency for International Cooperation (Deutsche Gesellschaft für Internationale Zusammenarbeit) IMC Institute of Climate Change and Environmental Services Regulation – Brazil INAB National Forestry Institute – Guatemala ISFL BioCarbon Fund Initiative for Sustainable Forest Landscapes NGO nongovernmental organization PES payment for ecosystem services PFES Payment for Forest Environmental Services – Vietnam PINFOR Forestry Incentive Program – Guatemala (Programa de Incentivos Forestales) PINPEP Small Landowner Incentive Program – Guatemala (Programa de Incentivos para Pequeños Poseedores) PSA Payments for Environmental Services Program – Costa Rica (Pago por Sistemas Ambientales) REDD+ Reducing emissions from deforestation and forest degradation, the role of conservation, sustainable management of forests, and enhancement of forest carbon stocks in developing countries REM REDD Early Movers Programme RMU PT Rimba Makmur Utama – Indonesia SBP Socio Bosque Program – Ecuador SERNANP National Service of Natural Protected Areas – Peru SISA State System of Incentives for Environmental Services – Brazil (Sistema Estadual de Incentivo a Serviços Ambientais) SRI Intensive Rice Cultivation System UNFCCC United Nations Framework Convention on Climate Change VNFF Forest Protection and Development Fund (national level) – Vietnam VOI Community management associations – Madagascar (Vondron’Olona Ifotony) WCS Wildlife Conservation Society 3 4 ©Nadege Mazars/World Bank 1. Executive Summary 1.1 Introduction Benefit sharing, in this context, does not refer to benefits that may stem from the design and Land use is a complex topic with real impacts on implementation phases of the program, but people’s lives and on social, environmental, and specifically to benefits provided to stakeholders economic outcomes. during the results-based financing phase of a land use program. Land use initiatives that receive payments for verified emission reductions are growing ap- Many factors influence a program’s arrange- proaches within the land use toolkit. In most ments for sharing benefits and contribute in cases, these programs are designed not solely various ways to synergies and tradeoffs in for environmental outcomes, but they also aim effectiveness, efficiency, and equity. to generate sustainable development benefits. This study’s objective is to synthesize good The activities that are implemented depend practices for benefit sharing in jurisdictional-lev- greatly on context and on the strategies iden- el, results-based land use programs based on tified to reduce greenhouse gas emissions—for an analysis of large-scale programs and other example, by reducing deforestation and forest relevant initiatives that involve benefit sharing degradation, conserving forests, and enhancing focused on forests, land use, natural resources, carbon stocks. and/or climate change. These complex programs need to provide This analysis is designed to support government incentives for further emission reductions and and program staff in developing and implement- results-based finance to build support and ing benefit-sharing arrangements for jurisdic- legitimacy among diverse stakeholders and also tional-level results-based land use programs, to respect the rights of landowners and other including under the Forest Carbon Partnership stakeholders who contributed to the emission Facility (FCPF) and the BioCarbon Fund Initiative reductions. The way that results-based finance for Sustainable Forest Landscapes (ISFL). This is used within a program—and how incentives document provides lessons learned and good and benefits flow to stakeholders—is generally practices emerging from the cases analyzed in referred to as benefit sharing. order to inform programs, depending on their For the purposes of this analysis, the following context. This analysis is not intended to pro- definition of benefit sharing is adopted: vide guidance on how to design and implement benefit-sharing arrangements. The FCPF and Benefit sharing is the intentional transfer of the ISFL funds have their own requirements for monetary and nonmonetary incentives (goods, benefit sharing; they also provide guidance for services or other benefits) to stakeholders for preparing benefit-sharing;1 plans that comply the generation of environmental results (such with these requirements.2 as greenhouse gas emission reductions) funded by revenues derived from those results. 1 The FCPF’s Methodological Framework and the ISFL ER Program Requirements, respectively. 2 Note on Benefit Sharing for Emission Reductions Programs Under the FCPF and ISFL. 5 EXECUTIVE SUMMARY CONTINUED 1.2 Approach results-based land use programs using the following three criteria: (1) the program employed A review of earlier analyses of benefit sharing in benefit sharing and/or incentive allocation for a forest and land use programs helped identify an results-based program; (2) the program present- initial set of good practices and lessons learned, ed was already working at a large scale or had and supported identification of four key themes clear potential to scale up to a jurisdictional level; around which the case analysis was structured:3 and (3) the program had been functioning for at least five years. • beneficiaries and benefits; A long-list of potential cases was generated • institutional, financial, and governance based on these criteria, author knowledge, and arrangements; recommendations from participants and observ- • stakeholder participation; and ers to the FCPF and the ISFL. While some rele- • monitoring, evaluation, and adaptive vant experience exists in non-natural resource management. management sectors, such as extractives and infrastructure, a sufficient range of varied cases A series of cases were identified as relevant was found in the forest and land use sector, to providing lessons learned and good prac- which were the primary focus of the study. tices related to benefit sharing in large-scale FIGURE 1.2: Geographic Distribution of Cases; each pin signifies one case 3 Chandrasekharan Behr et al. 2012; Costenbader 2011; Davis, Nogueron, and Javelle 2012; Hite 2015; IUCN 2009; Lee et al. 2018; Peskett 2011; Pham et al. 2013; and World Bank 2009. 6 The cases were short-listed and ultimately frameworks, the drivers and history of land finalized based on an exercise that determined use change, and the political agenda. whether sufficient documentation, resources, • Tensions related to the purposes and access to contacts could be obtained to of benefit sharing: Benefit sharing ensure that lessons could be gleaned and deeper arrangements also depend heavily on the analysis could be conducted through remote objectives of the program and the sources desktop research and interviews, given that site of finance, and consider that landowners visits were not within the scope of this report. and other actors who produce the goods and services from which results-based Care was taken to ensure that the cases rep- finance is derived may arguably have a resent a diversity of geographies, approaches, right to a share in the benefits. Determining and contexts in order to generate good practices what share should go to which beneficiaries relevant for a diverse audience. Of the 13 cases is complex and reflects tensions between analyzed in this study, three are located in Afri- whether benefits are seen as incentives ca, four in Asia/Oceania, and six in Latin Amer- for future performance and/or rewards ica, ranging in size from 200,000 to 16 million for past performance; whether they are hectares. They include an assortment of national based on rights to lands and resources programs, subnational jurisdictional programs, that generate the goods and services and/ and programs not aligned with jurisdictional or on the costs of implementing actions boundaries. that generate them, including opportunity Literature review and interviews enabled iden- costs; and whether they include the costs tification of lessons learned; these were then of facilitators and intermediaries, and/ compared, contrasted, and—where appropri- or incentives for those who could hinder ate—aggregated to identify good practices. This further results. analysis is not an evaluation of the cases, but • Importance of good governance: Several rather a study to identify lessons learned and attributes of good governance recurred good practices that would be useful in informing repeatedly as important issues for benefit the design of benefit-sharing arrangements. sharing: –– Participation – not only for beneficiaries in defining the form of benefits, but 1.3 Lessons Learned and also including other stakeholders more Good Practices broadly in designing, implementing, and evaluating benefit sharing, and in governance processes and decision 1.3.1 CROSS-CUTTING ISSUES making; –– Transparency – transparent information The review of cases identified a wealth of lessons on eligibility and conditions for receiving learned and good practices, which are sum- benefits, the finance received and marized for each theme in Sections 1.3.2–1.3.4. delivered, implementation costs, and how In addition, the following cross-cutting issues decisions are made and implemented, emerged that recur repeatedly in the thematic which provides a basis for building trust, sections, where they are elaborated in more support, agreement, and legitimacy; detail: –– Accountability – through effective and • Dependence on context: Benefit sharing transparent oversight mechanisms that takes many forms and depends heavily ensure benefit sharing is governed and on the context, particularly on the land implemented as agreed; tenure regime, the legal and institutional 7 EXECUTIVE SUMMARY CONTINUED –– Equity and inclusion – in the design and and efficiency in meeting the objectives at the implementation of benefit sharing in least cost. This analysis considers the perceived a manner that is fair, impartial, and status of different actors and their different inclusive, ensuring nondiscrimination with access to power and recognition. For example, regard to women and vulnerable and/or some indigenous peoples consider themselves to marginalized individuals and groups; and be rights holders rather than stakeholders, but –– Effectiveness and efficiency – in meeting may have relatively little influence on decision the agreed objectives for benefit sharing, making. ensuring that benefits reach beneficiaries Generally, across the cases, some trade-offs are in a timely manner while minimizing apparent between: costs. • Effectiveness and equity – for example, • Trade-offs: Comparing different cases benefit sharing that is designed to be highlighted the ways that different more effective by providing benefits that approaches to benefit sharing in different work as incentives for all the key actors is contexts led to trade-offs between likely to be more inclusive and potentially effectiveness, efficiency, and equity. more equitable, but can create tensions by • Adaptive management: Since benefit channeling some benefits to actors who are sharing is complex and involves many not seen as legitimate rights holders (e.g., competing interests, it is hard to envisage recent migrants to the area, political elites, all the ramifications in the design phase. or larger landowners). In addition, the context often changes • Effectiveness and efficiency – for example, throughout these long-term programs. benefits based on performance may be Every case involved some change to more effective but they often need more address challenges. Having the capacity complex procedures and methodologies to monitor and adapt benefit sharing was that can increase monitoring costs needed seen as critical to success. to assess conditionality of benefits. 1.3.2 BENEFICIARIES AND BENEFITS • Efficiency and equity – for example, a All the cases reviewed have primary objectives simple program with cash payments and that are environmental—such as the protection straightforward eligibility requirements— of forests and other ecosystems, the sustainable for example, linked to land tenure—may management of forests, and the enhancement exclude vulnerable and marginalized people. of carbon stocks. In addition, most of the pro- grams also have social objectives, including, for The review of cases helped to identify the example, improving well-being; reducing poverty; following key issues related to beneficiaries and generating employment in rural areas; improv- benefits: ing access to social, educational, and health • The overriding importance and associated services; and building capacity for sustainable complexities of land and resource tenure in natural resource management and to cope with identifying beneficiaries climate change. • The importance of understanding potential In all cases, the identification of beneficiaries barriers to participation, often linked to and the types of benefits they receive depends land and resource tenure heavily on understanding the key actors and • The possibility of differentiating benefits for the type of incentives that will be most effective different groups for greater effectiveness in achieving the overall program’s objectives; and inclusion equity within legal, social, and cultural contexts; 8 • The need to understand costs and benefits contributions with respect to the objectives for different actors to ensure that benefits of benefit sharing. This approach should really are perceived as benefits consider monetary and/or nonmonetary • The consideration of whether individual or and individual and/or community community benefits are most appropriate benefits as appropriate, bearing in mind that greater complexity could increase • The consideration of whether monetary or operational and transaction costs for nonmonetary benefits are most appropriate delivery of benefits. • The importance of beneficiary participation • Conditionalities for benefits: Specific in defining the benefit package outcomes can be facilitated by making • How the timing of the delivery of benefits benefits performance-based, by linking can affect their effectiveness them to clear commitments in a conservation agreement and/or by requiring Based on lessons learned on these topics from an investment plan for the use of monetary the cases, the following good practices were benefits received. Conditions should be identified: clear, with monitoring to assess compliance • Identifying beneficiaries: Careful analysis and consequences or penalties consistently should be conducted to identify which applied when the conditions are not met. actors should receive incentives for • Participatory identification of benefits: behavior change to achieve the objectives Benefits should outweigh opportunity of benefit sharing and which should be costs and the efforts and inputs needed rewarded because of their rights and to participate in the program, so a cost contributions to generating the goods and benefit analysis for different stakeholder services linked to results-based finance. groups can be helpful. However, this may • Eligibility criteria: Although land and not be easy, so participatory identification resource tenure can provide a clear and of benefits—enabling the beneficiaries to legitimate basis for determining the decide on the benefits they receive—is eligibility of beneficiaries, care should often the most effective approach. be taken to include key actors with • Monetary benefits: Monetary benefits overlapping rights and to recognize can provide strong incentives by giving customary rights. beneficiaries decision-making control about • Barriers to participation: Eligibility how they spend the cash they receive. requirements should not exclude target Monetary benefits can be efficiently groups and benefit packages should delivered where beneficiaries have bank be sufficiently attractive to encourage accounts, and they are generally more participation; special attention should be appropriate where there is clear land tenure paid to vulnerable and marginalized groups and landowners have the capacity to and existing inequities. implement activities on their own land. • Targeting benefits: Allocations, weighting, • Nonmonetary benefits: Nonmonetary or quotas can be effective for targeting benefits can be targeted to achieve social specific beneficiary groups and for meeting or environmental objectives but, to be specific objectives. effective, beneficiaries should identify the benefits and have the capacity to benefit • Differentiated benefits: A differentiated from them. Capacity is also needed to approach can be effective, providing deliver nonmonetary benefits, which can different types and/or amounts of benefits be more challenging administratively and to different groups of beneficiaries logistically. recognizing their different rights and 9 EXECUTIVE SUMMARY CONTINUED • Individual versus community benefits: tutions and beneficiaries have adequate capac- Although benefits to individual households ity and are operating under clear institutional, can be appropriate and effective in some financial, and governance arrangements. Clear contexts, community benefits can reinforce and transparent legal frameworks support this and reward collective responsibilities and collaboration, so it is important that they are can ensure that all community members— strong while remaining adaptable for changing including the vulnerable and marginalized— contexts. share in the benefits. The review of cases helped identify the following • Revenue-generating benefits: Benefits in key issues for institutional, financial, and gover- the form of revenue-generating activities nance arrangements: are often popular and can help ensure long- term sustainability if there is good market • The importance of legal frameworks as access, but care should be taken in their a basis for the transfer of benefits and in design to link revenue-generating success defining institutional arrangements; to the maintenance of the forest or other • The variety of roles involved in benefit environmental objectives to avoid perverse sharing and how varying capacities can or unintended outcomes. impact effectiveness and efficiency; • Timing of benefits: The timing, duration • The need for accountable structures to and consistency over time of benefits can manage the flow of finance for benefit have an important impact on effectiveness, sharing; bearing in mind that some activities may • The importance of the timing and source require up-front investment (such as tree of finance, including the need for significant planting) whereas later delivery provides finance up front to establish benefit- an opportunity to link benefits with sharing mechanisms; performance. • The need to understand transaction costs 1.3.3 INSTITUTIONAL, FINANCIAL, and the trade-offs associated with reducing AND GOVERNANCE ARRANGEMENTS these costs; and • The need for grievance and redress Institutional, financial, and governance arrange- mechanisms specifically focused on benefit ments contribute to the efficiency of benefit sharing. delivery. However, processes for decision mak- ing about the design and oversight of benefit Based on lessons learned from the cases on sharing are also critical for effectiveness to these topics, the following good practices were ensure that benefit sharing supports the pro- identified: gram’s overall objectives. Furthermore, gover- nance arrangements are crucial for equity and • Legal framework: Benefit sharing should inclusiveness. Although more complex programs be grounded in a clear legal framework targeting different drivers of change and provid- to support and enable the necessary ing different types of benefits to different actors agreements and collaboration. may support more effective delivery of envi- • Flexibility to enable adaptation: Despite ronmental results, the arrangements required being based on a clear legal framework, to implement these programs often entail an some flexibility in the legal and institutional increased management burden and accompany- arrangements is needed—for example, ing higher transaction costs. defining them through regulations rather than laws—to be able to make Collaboration is key, given the many roles and adjustments in beneficiaries, benefits, responsibilities required to implement benefit institutional composition, and activities sharing. Programs are most efficient when insti- 10 over time such that the program can • Grievance and redress mechanisms: respond to lessons learned and changes in Benefit-sharing mechanisms should have context. clear, accessible, impartial, culturally • Service providers: Substantial technical appropriate, easy-to-understand grievance and administrative capacity is needed and redress mechanisms that operate in a to administer benefit sharing in a timely manner. way that effectively and equitably distributes resources. Partnerships with 1.3.4 STAKEHOLDER PARTICIPATION nongovernmental organizations (NGOs), Stakeholder participation is key for all stages of private sector actors, and others to provide benefit sharing—design, implementation, and services and build capacity can be helpful evaluation—to ensure that it responds to the to improve efficiency and effectiveness needs and interests of the full range of stake- while also benefiting from local knowledge holders. Participation involves communications, and presence. consultations, participation in governance and • Existing or new institutions: It is often implementation, and processes for feedback most efficient and effective to capitalize grievance and redress. It can encompass a on existing institutions if they have spectrum of participation ranging from provid- the legitimacy, capacity, and thematic ing information to stakeholders and requesting relevance to the program—strengthening their feedback to making them equal partners in these where necessary—given that new governance and decision making. laws and institutions require significant time, resources, and political will; otherwise, Every case highlighted the importance of partici- establishing new institutions may be more pation. Stakeholder participation is key for: appropriate. • Equity—to ensure that benefit sharing is • Up-front finance: Significant financial perceived to be fair; resources are often required up front to • Effectiveness—to ensure that the right cover the many costs associated with benefits are delivered to the right people at designing and initiating a program— the right time to achieve the objectives; and conducting adequate stakeholder input, • Efficiency—to ensure that cost-efficient documenting baselines, establishing new processes are identified and implemented. institutions, implementing activities— before results-based payments can be In addition, transparency and providing clear made. information to stakeholders about benefit sharing in a format they understand is essential • Transparency around financial for building trust with stakeholders and seeking management: Regular audits can build their support for the entire program. Participa- trust and participation in the program, but tion can also help avoid conflicts and misunder- they can also increase overall operating standings. costs. Adopting a simple approach to calculating, monitoring, and delivering Consultations and stakeholder participation benefit transfers helps enable wider public take time and resources and require a willingness understanding. to share power and influence with stakeholders. • Transaction costs: Transaction costs should Participation is meaningful only if the benefit be assessed, both to reduce them where sharing adapts to stakeholder input. There is of- possible and to adequately budget for them ten a tendency to limit stakeholder participation so as to not undermine project efficiency due to budget, time, capacity, or political will, but and effectiveness. the cases reviewed repeatedly demonstrate the benefits of effective stakeholder participation. 11 EXECUTIVE SUMMARY CONTINUED The review of cases helped identify the following when stakeholder input influences the key issues related to benefit sharing: design of benefit-sharing arrangements, • The importance and complexity of and requires sufficient time, resources, and identifying who the stakeholders are and willingness to share power and influence understanding how they are affected by or with stakeholders. Consultations should can influence benefit sharing. be conducted as part of an iterative process for design, enabling participating • The advantages of meaningful stakeholder stakeholders to consider proposals and participation and considering different confer with others in their group before approaches to ensuring that it happens. providing further input. This process is • The need to not only encourage but ensure valuable not only during initial design but the inclusion of women, indigenous peoples, also periodically during implementation to and marginalized and/or vulnerable groups. support adaptations and improvements • The importance of disclosure and to benefit sharing. Consultation is not transparency, and effective ways to share the same as obtaining free, prior, and information. informed consent, which is essential for the participation of indigenous peoples Based on lessons learned from the cases on and other groups with collective rights these topics, the following good practices were to lands and resources in programs that identified: affect them, whereby consent must be given through their own decision-making • Stakeholder analysis: Prior to designing processes after consultation. benefit sharing, all groups that may • Planning, time, and resources: Effective be affected by benefit sharing or can stakeholder participation requires influence its outcomes should be identified significant time and resources and is often and mapped to understand their needs underbudgeted. A stakeholder engagement and interests, their capacities and their plan should include the steps involved rights, and variations within the groups and the resources, time, and other inputs and relations between groups, including needed, as well as measures to ensure any historical conflicts or alliances. This effective stakeholder participation. stakeholder analysis helps to improve • Participation in governance: Including the design of the consultation processes, beneficiaries in governance structures to identify beneficiaries and appropriate with decision-making and oversight roles benefits, and to develop governance and deepens the opportunities for effective institutional arrangements. Stakeholder participation in design and implementation analyses should be updated periodically of benefit sharing—ensuring that while benefit sharing is implemented and beneficiaries influence benefit sharing to the context changes. respond to their needs and interests— • Stakeholder consultation: Consultation of and helps to share information with beneficiaries is critical to determine the beneficiaries. Legitimate representatives type of benefits that are appropriate and should be identified by the group they how they should be delivered. Consultation represent. of a full range of stakeholders— • Measures to ensure social inclusion: Specific including beneficiaries—is also helpful measures should be adopted to facilitate with institutional and governance and ensure the participation of women, arrangements, processes for stakeholder indigenous peoples, and marginalized and/ participation, and monitoring and or vulnerable groups that may otherwise be evaluation. Consultations are meaningful excluded—for example, through separate 12 meetings or other approaches that Monitoring and sharing results is also key for address barriers for participation, through legitimacy, which hinges on adequate transpar- quotas for participation in activities and ency and feedback on operational performance governance bodies, through allocations of to beneficiaries. benefits, and by designing subprograms that specifically target activities and At times it may seem necessary to measure and benefits for certain groups. monitor environmental outcomes only when, for example, the primary objective is to generate • Disclosure: Public disclosure of information emission reductions. However, nearly all the cas- about the overall financial envelope for es include a range of environmental and social benefit sharing, the amounts distributed objectives for benefit sharing and some form to each stakeholder group in different of monitoring is important for all objectives. geographic areas, the per hectare or other In addition, measuring outcomes across other rate used for monetary benefits, and the dimensions such as human well-being or good nonmonetary benefits delivered promotes governance can be important for beneficiaries, transparency and builds trust. donors, and implementers, and can attract more • Transparency and providing information: finance and/or increased participation. Beneficiaries and potential beneficiaries need to understand the purpose of benefit The review of cases helped identify some key sharing, the opportunities to participate, recurring themes for monitoring, evaluation, and the eligibility criteria, the conditionalities adaptive management: for receiving benefits, the results • The monitoring and evaluation of benefit- achieved, and how to provide feedback or sharing implementation and impacts— submit a complaint. This requires active including socioeconomic impacts—is dissemination of information tailored to critical for program managers and for each stakeholder group in a format that stakeholders to ensure compliance with they understand—for example, using donor and program rules and regulations, local languages, providing information to increase support and participation, and, through public meetings and stakeholder most importantly, to support program representatives, and paying special improvements over time. attention to provide information to women • Adaptive management informed by sound and vulnerable and/or marginalized people. monitoring and evaluation systems enables Adequate, prior information is essential continual improvements in effectiveness, to enable potential beneficiaries to decide efficiency, and equity by informing the whether to participate in programs that design and execution of beneficiary groups, affect them, and it is critical for obtaining benefits packages, financial management, the free, prior, and informed consent of delivery of benefits, and a variety of other indigenous peoples and other groups with factors. collective rights to lands and resources. Based on lessons learned from the cases on 1.3.5 MONITORING, EVALUATION, these topics, the following good practices were AND ADAPTIVE MANAGEMENT identified: • Socioeconomic monitoring: The inclusion An underlying finding from the cases is that con- of socioeconomic impacts in monitoring texts—in terms of regulations, demographics, and evaluation systems, as opposed to threats, and more—are guaranteed to change, solely in environmental outcomes, is useful so having a monitoring and evaluation system for improving effectiveness and can foster that supports adapting to these changes is support from politicians, donors, and other critical to improving effectiveness and efficiency. stakeholders. 13 EXECUTIVE SUMMARY CONTINUED • Simple approaches employing local people: This report demonstrates the advantages of Monitoring is best kept as simple and learning from experience. This study was con- practical as possible while still being ducted rapidly, largely through document review adequate. Beneficiary participation in enhanced with interviews primarily with people monitoring activities in exchange for paid involved in benefit-sharing design and imple- wages can also constitute an important mentation, as well as with people involved in the local benefit. programs more broadly. More in-depth analysis • Adaptive management: Adaptive would help to further deepen the learning. In management of the design and addition, people involved in designing benefit implementation of benefit-sharing sharing would benefit from other opportunities arrangements based on the results of to learn from experiences including exchange monitoring and evaluation is critical for visits, facilitated exchange, and learning work- improving effectiveness, efficiency, and shops. Exchange and learning will become equity over time. Piloting of benefit sharing even more valuable as more jurisdictional-level can help facilitate adaptive management results-based land use programs start imple- during the design phase. mentation. 1.4 Conclusions This study collected a wealth of lessons learned that helped identify a broad set of good practic- es for benefit sharing by analyzing, comparing, and contrasting a diverse range of long-standing programs across different geographies. These programs have been implemented in different contexts, with various objectives and approach- es. The good practices identified from these cases are grounded in real experiences and are illustrated through many examples. The good practices identified through this process are not intended to provide a full set of guidance on how to design and implement benefit sharing but are offered as a reference to support the country-specific processes that are needed. They do not cover every important aspect of benefit sharing but provide consid- erations that can help contextualize the many elements and options for these complex mech- anisms. 14 2. Introduction Land use is a complex topic with real impacts on This study’s objective is to synthesize good people’s lives and on social, environmental, and practices for benefit sharing in jurisdictional-lev- economic outcomes. el, results-based land use programs based on analysis of large-scale programs and other Land use initiatives that receive payments for relevant initiatives that involve benefit sharing verified emission reductions are growing ap- focused on forests, land use, natural resources, proaches within the land use toolkit. In most and/or climate change. This analysis is primarily cases, these programs are designed not solely designed to support government and program for environmental outcomes, but also aim to staff developing and implementing benefit generate sustainable development benefits. The sharing arrangements for jurisdictional-level activities that are implemented depend greatly results-based land use programs by building on on context and on the strategies identified to earlier studies and drawing from the experiences reduce greenhouse gas emissions—for example, of large-scale programs that have been imple- by reducing deforestation and forest degrada- mented for several years. tion, conserving forests, and enhancing carbon stocks. This study is pertinent now because over 20 countries are developing jurisdictional-scale These complex programs need to provide emission reductions and land use programs incentives for further emission reductions and under the Forest Carbon Partnership Facility results-based finance, to build support and (FCPF) and the BioCarbon Fund Initiative for legitimacy among diverse stakeholders, and Sustainable Forest Landscapes (ISFL). Benefit to respect the rights of landowners and other sharing is an important component of these stakeholders who contributed to the emission programs and many countries are in the pro- reductions. The way that results-based finance cess of developing benefit-sharing plans that is used within a country—and how incentives describe arrangements for the use of finance to and benefits flow to all stakeholders—is general- create effective incentives to address drivers of ly referred to as benefit sharing. deforestation and land use change. Under such arrangements, emission reductions and further For the purposes of this analysis, the following finance are generated while also contributing definition of benefit sharing is adopted: to the sustainable development goals of the programs and ensuring that benefits flow to Benefit sharing is the intentional transfer stakeholders equitably. of monetary and nonmonetary incentives (goods, services, or other benefits) This document provides lessons learned and to stakeholders for the generation of good practices emerging from the cases ana- environmental results (such as greenhouse lyzed in order to inform programs, depending gas emission reductions) funded by on their context. This analysis is not intended to revenues derived from those results. provide guidance on how to design and imple- ment benefit-sharing arrangements. The FCPF Benefit sharing, in this context, does not refer and the ISFL funds have their own requirements to benefits that may stem from the design and for benefit sharing;4 they also provide guidance implementation phases of the program, but for preparing benefit-sharing plans that comply specifically to benefits provided to stakeholders with these requirements.5 during the results-based financing phase of a land use program. 4 The FCPF’s Methodological Framework and the ISFL ER Program Requirements, respectively. 5 Note on Benefit Sharing for Emission Reductions Programs Under the FCPF and ISFL. 15 INTRODUCTION CONTINUED Benefit sharing needs to address a complex This report aims to support results-based land range of factors. Land use decisions affect use programs—those that receive finance linked economies through agriculture, forestry, mining, to the goods and services they produce. For and infrastructure, and these decisions impact example, the international policy framework people’s social and cultural attachments to land. for reducing emissions from deforestation and A diverse range of stakeholders is affected by or forest degradation and the role of conservation, can influence the use of land. Their relationships sustainable management of forests, and en- to the land and to each other contribute to the hancement of forest carbon stocks in developing complex dynamics of land use change. Land use countries (REDD+)—agreed to by parties to the is significantly influenced by rights to land and United Nations Framework Convention on Cli- resources, including both statutory and custom- mate Change (UNFCCC)—involves the transfer ary rights, the extent to which those rights are of finance to developing countries based on their protected, and the management practices and performance reducing greenhouse gas emis- uses of land and resources. These rights may sions from deforestation and forest degradation, be in conflict or overlapping as a result of the along with several “plus” or additional activities. history of land use and balances (or imbalances) These additional activities include the sustain- of power between groups in the past and the able management of forests and the conserva- present. tion and enhancement of forest carbon stocks. Developing-country governments are leading the To add to the complexity, other land use prior- design of their national REDD+ strategies and ities—such as reducing deforestation—may be implementation arrangements, and are defining counter to past or ongoing land use practices how they will use the results-based payments and policies that aim to “improve” what is seen that they will receive. as “unproductive” land; for example, by clearing forest. There are various considerations for the use of results-based finance in REDD+ and other land All potential strategies to change land use need use initiatives that receive payments for verified the support and buy-in of diverse stakeholders emission reductions. It is important to reinvest to achieve their goals. They may involve “sticks” funds received into activities and associated such as changes in land use zoning and regula- management costs to generate more emission tions combined with strengthened enforcement, reductions and additional results-based pay- and “carrots” in the form of incentives for individ- ments. These activities are context-specific and uals, groups, companies, and even governments depend on the strategies that have been identi- to adopt new activities. fied to reduce deforestation and forest degrada- tion and to conserve forests and enhance carbon Most land use programs involve a combination stocks. They are likely to involve activities that of strategies that depend heavily on the complex directly reduce emissions, such as tree plant- local and national context of land use. Since laws ing and enforcement of rules about protecting and policies set a framework for land use but forests, as well as activities that create enabling usually do not entirely control it, many land use conditions, such as strengthening governance. programs have a strong focus on incentives to encourage rights holders and other stakeholders On the other hand, in addition to reducing to change the way they use land. A diverse set emissions, consideration is also likely to be given of programs, including those involving payment to using the finance in a manner that builds for environmental services, have experience support and legitimacy for programs among designing and implementing incentives for land diverse stakeholders and generates sustainable use change. development benefits. A critical consideration is that landowners and other stakeholders who contributed to the emission reductions have 16 rights in relation to the results-based finance; While not all of the cases reviewed are jurisdic- therefore, using the funds to provide incentives tional-level results-based land use programs, and rewards for stakeholders and rights holders they do all offer helpful insights into experiences can be an effective way to build support and with benefit sharing that can help inform the de- legitimacy for programs. sign of benefit sharing in jurisdictional programs, including those that support the implementation When determining the use of results-based of national REDD+ strategies. finance, it is important to take into consider- ation that marginalized groups, including women The study assessed how programs address and indigenous peoples, may be less likely to issues of effectiveness, efficiency, and equity, participate in program activities and in benefit which vary across countries and contexts. sharing because of a history of their exclusion. In addition, vulnerable groups may be less able to participate because of a lack of capacity or Effectiveness: Performance with respect access to resources needed for participation. to environmental, social and economic Frequently, marginalization and vulnerability go objectives hand in hand. The participation of marginalized Efficiency: The level of associated costs and vulnerable groups is often important for per unit of outcome effectiveness as well as for reasons of equity and to achieve the social objectives of the program. Equity: Fairness with respect to partici- pation in decision making and allocation Several types of programs in the forest and land of benefits and costs between different use sector were considered in this study and stakeholders analyzed to identify relevant lessons learned and good practices, including: • Payment for ecosystem services programs, whereby individuals, communities, or Findings from previous relevant studies were also organizations receive monetary and/ consulted, both to inform the approach of this or nonmonetary incentives in exchange study and to build on previous analysis. These for managing their land in a way that publications provided useful insights, such as maintains or improves ecosystem services; the importance of understanding the trade-offs between using funds to create incentives for fur- • Community forest management programs, ther action to generate emission reductions and whereby communities are collectively using the funds to ensure equity and legitimacy, responsible for maintaining or improving and the need to consider vertical and horizontal the quality and/or quantity of forests they dimensions of benefit sharing between national are responsible for managing through and subnational levels of government, NGOs, formal tenure or other forms of land use and the private sector as well as between and rights; and among local communities (IUCN 2009). • Large-scale REDD+ projects, whereby governments, NGOs, or private sector Pham et al. (2013) adopted an analytical lens companies coordinate and implement assessing effectiveness, efficiency, and equity activities, in agreement with landowners, of benefit-sharing mechanisms and identified that reduce deforestation and forest numerous risks for project-level benefit sharing degradation and produce verified emission that are also pertinent for jurisdictional pro- reductions that are sold as offsets on the grams, including: unclear and insecure land ten- voluntary market. ure; under-representation of certain stakeholder groups; failure to consider lessons derived from 17 INTRODUCTION CONTINUED experience; lack of policy learning mechanisms nities than the clarity, security, and breadth across sectors, scales, and time; the advantag- of statutory and customary rights held by the es and disadvantages of decentralization and community. devolution; and the implications of scale and definitions of forest. They identified opportu- Benefit sharing also includes approaches for nities for mitigating these risks and concluded rewarding and incentivizing site-level activities that successful benefit sharing depends on within a large-scale jurisdictional. Emerging having clear objectives, procedural equity, and an approaches to “nesting” forest carbon projects inclusive process, as well as a rigorous analysis into larger-scale REDD+ programs are rele- of the options for benefit sharing with respect to vant for benefit sharing in jurisdictional-level the objectives. results-based land use emission reductions programs. In most cases, the lack of spatial A number of other studies provided insights detail in the reference levels against which for this analysis, including Chandrasekharan emission reductions are calculated, the treat- Behr et al. (2012), which considered lessons ment of leakage or displacement of emissions learned from community-based natural resource outside the program area, and the methods used management and partnership arrangements to monitor results across the jurisdiction make in the forest sector. Costenbader (2011) drew it difficult or impossible to attribute quantified lessons from three national policy approaches emission reductions to individual land units. In- for benefit sharing: payment for ecosystem stead of allocating reference levels and enabling services, participatory management, and the landowners to transfer emission reductions and sharing of concession revenues. World Bank receive results-based payments directly, many (2009) provides insights into developing and jurisdictional programs are likely to reward and maintaining collaborative arrangements in the incentivize landowners through benefit-shar- forest sector and guidance on how to implement ing agreements (Lee et al. 2018). Although the key factors that influence contract-based forest nesting of site-scale projects into jurisdictional partnerships and benefit-sharing arrangements. programs is relevant to benefit sharing, none of While these studies focus on lessons learned and the cases analyzed in this study involved explicit associated recommendations for benefit sharing nesting arrangements, so these arrangements in the forest sector, they can provide lessons are not further addressed in this report. that are relevant more broadly for results-based jurisdictional-level land use programs. Guidance documents that aim to support the development of benefit-sharing mechanisms Secure tenure rights are widely recognized as an for REDD+ provide a range of recommended essential foundation for rural development and good practices for benefit sharing that were provide a basis for enabling forest communities considered in this study. For example, Peskett to participate in benefit-sharing mechanisms. (2011) considers the design of benefit sharing in Tenure rights are often an eligibility requirement the context of national REDD+ systems and the for participation in benefit sharing and can possible implications of different benefit-sharing significantly influence the bargaining power of arrangements for poor and vulnerable people. forest communities and the extent to which they Hite (2015) provides design options for benefit can claim a share of the benefits from forest sharing focused specifically on outcome-driven management and ecosystem services (World incentives based on three different models: pay- Bank 2019b). Davis, Nogueron and Javelle (2012) ments for services, managed funds, and collab- analyzed institutional mechanisms that could be orative resource management, with a series of used for REDD+ benefit sharing in five countries series of steps to help structure benefit-sharing and concluded that the type of institutional arrangements for effective incentives to improve mechanism is less important in determining REDD+ outcomes. the magnitude of benefits received by commu- 18 Collectively, these previous studies informed –– Stakeholder participation the approach of this analysis to ensure relevant –– Monitoring, evaluation, and adaptive issues were addressed and to minimize duplica- management tion of efforts. Each area above explores key considerations, This report is structured as follows: describes the findings illustrated by the different cases with detailed examples provided in boxes, • Section 3: Approach explains the and lists good practices identified from the methodology adopted for the study, analysis. including literature reviews, interviews, and analysis, in addition to an introduction • Section 5: Conclusions reflects on the key to the 13 cases referenced as illustrative takeaways and how this study and learning examples throughout the report and from other experiences can assist countries a description of some of the study’s developing benefit-sharing mechanisms. limitations. • Appendixes • Section 4: Lessons learned and good practices describes the findings of the analysis along four key themes: –– Beneficiaries and benefits –– Institutional, financial, and governance arrangements ©Yo Fauzan/World Bank 19 3. Approach This report analyzes large-scale programs and • Institutional, financial, and governance other relevant initiatives that involve benefit arrangements: How benefit sharing is sharing to illustrate good practices for benefit structured and implemented, including: sharing in jurisdictional-level results-based land –– Legal frameworks use programs, building on earlier work on the –– Institutional arrangements and funding topic. This section describes the methods for structures for receiving, managing, and identifying the key themes of the report as well disbursing funds as the identification and approach for analyzing the cases. –– Funding sources and timing of finance –– Structures and processes for delivery of benefits to beneficiaries, including use of 3.1 Methods Adopted intermediaries –– Decision-making structures and processes 3.1.1 REVIEW OF EARLIER ANALYSES AND DEVELOPMENT OF ANALYTICAL –– Mechanisms for transparency, oversight, APPROACH and accountability –– Grievance and redress mechanisms Reviewing earlier analyses helped in identify- ing an initial set of good practices and lessons • Stakeholder participation: How learned, and supported the identification of four stakeholders participate in design, key themes around which the analysis of cases implementation, and evaluation of benefit was structured (Figure 3.1a): sharing, including: • Beneficiaries and benefits: Who are the –– Consultations on the design of benefit- beneficiaries and what do they receive, sharing arrangements including: –– Participation in decision making and –– Types of beneficiaries oversight –– Eligibility criteria for participating in –– Disclosure and active dissemination of benefit sharing information about benefit sharing –– Types of benefits (e.g., monetary or –– Measures taken to ensure the meaningful nonmonetary) participation of women and vulnerable and/or marginalized groups –– Variations in benefits between different stakeholder groups –– Mechanisms for ongoing consultation and feedback, as well as for grievance –– Conditionality for benefits (e.g., based on and redress performance) • Monitoring, evaluation, and adaptive –– Allocations of funds or benefits to each management: How results are monitored, group, including vertical allocation evaluated, and used, including: between national and local levels and horizontal allocation among communities –– The types of results that are monitored or households, and the rationale for these and evaluated allocations –– Methods for monitoring and evaluation, including comprehensiveness, accuracy, sensitivity, and frequency 20 –– The results of benefit-sharing cases vant experience exists in non-natural resource across all objectives—for example, in management sectors, such as extractives and terms of emission reductions, protection/ infrastructure, a sufficient range of varied cases management of ecosystems and was found in the forest and land use sector, maintenance of ecosystem services, and which were the primary focus of the study. human well-being The cases were short-listed and ultimately –– Modifications made over time to the finalized based on an exercise that determined design, implementation, and evaluation whether sufficient documentation, resources, of benefit sharing, including the process and access to contacts could be obtained to and rationale for changes ensure that lessons could be gleaned and deeper analysis could be conducted through remote FIGURE 3.1A: Four Key Themes of the Analysis desktop research and interviews, given that site visits were not within the scope of this report. Beneficiaries and Benefits Care was taken to ensure the cases represent a diversity of geographies, approaches, and Stakeholders Participation contexts in order to generate good practices relevant for a diverse audience. Institutional, Financial, and Governance Arrangements 3.1.3 STRUCTURED OVERVIEW OF EACH CASE Monitoring, Evaluation, and Adaptive Management After the cases were identified, a literature review of existing resources and documenta- tion was conducted in response to the research The analysis of the large-scale initiatives was themes and questions (see Section 3.1.1). The then conducted following the four steps outlined documents reviewed were either found online in below, based principally on literature review and general Internet searches or provided for anal- interviews. ysis by program staff and partners. A variable amount of literature was available for each 3.1.2 IDENTIFICATION OF CASES case. A considerable number of documents and analyses were found for some of the longer-term A series of cases were identified as relevant to publicly funded and national programs—for ex- providing lessons learned and good practices ample, the Payments for Environmental Services related to benefit sharing in large-scale Program (PSA) in Costa Rica. The only public results-based land use programs using the documents found for more recently established following three criteria: private sector REDD+ projects were those 1. Benefit sharing and/or incentive allocation required for validation and verification against for a results-based program; the Climate, Community & Biodiversity Stan- dards—for example, the Kariba REDD+ Project in 2. Large scale or with clear potential to scale Zimbabwe. up to a jurisdictional level; and 3. Functioning for at least five years. The documents used for analysis of each case are listed in the overviews of the cases presented A long list of potential cases was generated in Appendix 1. based on these criteria, author knowledge, and recommendations from participants and observ- ers to the FCPF and the ISFL. While some rele- 21 APPROACH CONTINUED 3.1.4 LESSONS LEARNED FROM THE an in-person meeting held at the World Bank on CASES March 20, 2019, and through an online survey in April 2019. To complement existing documentation and re- search, interviews were conducted with individu- als involved in each of the cases. The aim was to interview at least one person involved in program 3.2 Introduction to design and management and, if possible, to con- the Cases duct interviews with additional people who have a beneficiary perspective or a donor perspective. Thirteen initiatives were identified for this study In several cases, the interviewees needed to get based on the criteria described above. They were government and/or project owner permission to spread across Africa (three cases), Asia/Oceania participate in the analysis. (four cases) and Latin America (six cases) (see Figure 1.2a). Lessons learned were identified and document- ed for each of the cases based on the literature Together these represent a diversity of geogra- review and interviews, which provided a wealth phies, types, and contexts: of information about each case. Interviewees • Six are national programs, two are provided insights into challenges they have statewide programs, and five are not encountered, changes that have been made, and associated with jurisdictional boundaries what they think has contributed to successes or problems. • Half involve results-based finance • Areas range from 200,000 hectares to For information on guiding interview questions, more than 16 million hectares please refer to Appendix 3. Key information on each case is outlined below (see Table 3.2a); more detailed overviews of each 3.1.5 GOOD PRACTICES DRAWN case are included in Appendix 1. Permission has FROM CASES AND EARLIER been given by the relevant department or other ANALYSES program owner for inclusion of all the selected cases in this report. Identifying lessons from each case produced a plethora of key observations, which were com- pared and contrasted across the cases, group- ing together lessons that provided insights on common themes. Good practices were identified where features recurred across several cases and seemed to contribute to their success—for example, where changes were made to address challenges, and where interviews or analyses suggested features that were believed to have contributed to the success of benefit sharing. Reference was also made to both (1) lessons learned from previous studies and (2) topics sug- gested by government and civil society actors involved in designing benefit sharing for FCPF and ISFL programs, as well as donors, through 22 Table 3.2a. Summary of Cases Program & Objectives Years of Types of Beneficiaries Scale of Funds & Scale of Area Location Operation & Benefits Beneficiaries Included Emissions Re- To reduce emis- The Fund Beneficiaries are busi- The ERF was es- National—not duction Fund sions at the lowest was initiated nesses, governments tablished in 2014 measured (ERF), Austra- cost over the through the (state, municipality), with $A 2.55 billion in land area lia (national period to 2020 Carbon Farming and landowners. to purchase emis- but in carbon scale). and contribute Act of 2011, sion reductions. As abatement—37.7 Benefits are Australian toward Australia’s with the first of 2018, there were million tons by carbon credit units 2020 emission auction under 477 projects under 2018. that can be sold to the reductions target the ERF taking contract to the government, on the sec- of 5 percent below place in 2015 government (with ondary market, or used 2000 levels by $A 1.8 billion of the for voluntary emission 2020 funds committed). reductions. It is difficult to determine how many beneficiaries equate to 477 projects. System of To protect and Nine years: Beneficiaries are family The primary Initiatives within Incentives for conserve forest 2010–present. groups, private enter- component—ISA SISA have vary- Environmen- by establishing a prises, or cooperatives. Carbono—has ing scopes, but tal Services system to value 21,000 beneficia- the primary— Benefits are monetary, (SISA), Acre, ecosystem ser- ries as of 2017. ISA Carbono—is including tax or credit Brazil. vices and facilitate statewide (16.4 incentives as well as SISA has received the distribution million hect- direct payments international fund- of associated ares).. ing of €35 million benefits . (US$39.65 million) from the German government and £17 million (US$20.7 million) from the U.K. gov- ernment through 2017 under the REDD Early Mov- ers Programme. . Bolsa Floresta, To conserve 11 years: 2008– Beneficiaries are 39,946 people in 16 state con- Amazonas, forests, avoid present. residents of selected 9,598 families with servation units Brazil. deforestation, and sustainable develop- 1,260 Brazilian covering over 11 improve the wel- ment reserves. reais (US$321) million hectares fare of residents in disbursed annually as of 2018. Benefits include small selected sustain- per family as of cash incentives to able development 2018. families, income- gener- reserves in the ating projects, trainings, state of Amazonas community events, and planning workshops. 23 APPROACH CONTINUED Table 3.2a. Summary of Cases Program & Objectives Years of Types of Beneficiaries Scale of Funds & Scale of Area Location Operation & Benefits Beneficiaries Included Payments for Forest Law 22 years: 1997– Beneficiaries are More than National—1.26 Environmen- No.7575 recognizes present. landowners, including US$600 million million hectares tal Services four environmental indigenous peoples. has been invested of land are Program services provided in the program. registered under Benefits are cash pay- (PSA), Costa by forest ecosys- Nearly 18,000 PSA the different ments differentiated by Rica (national tems: (1) mitigation contracts have modalities of the project modality. scale). of greenhouse gas been signed as of program (forest emissions; (2) hy- the end of 2018. protection, natu- drological services; ral regeneration, (3) biodiversity reforestation, conservation; forest manage- and (4) provision ment) as of the of scenic beauty end of 2018. for recreation Around 300,000 and ecotourism. hectares are The law provided under an active the regulatory PSA contract in basis to contract a given year. landowners for the services provided by their lands. The country’s PSA program provides the mechanism to achieve this. Socio Bosque (1) To conserve 11 years: 2008– Beneficiaries are com- Since 2008, the National—1.6 Program (SBP), native forests present. When munities and house- government of million hectares Ecuador (na- and other native an agreement is holds. Ecuador has made are protected tional scale). ecosystems to signed, annual US$83 million through the Benefits are direct protect their eco- payments are in incentives program. cash payments made logical, economic, made for 20 payments as part biannually based on cultural, and years. of the program. the number of hectares spiritual values; Nearly 2,800 conserved, type of eco- (2) to significantly individual and col- system, and beneficiary reduce deforesta- lective agreements (community or individual tion and associ- have been signed, household ated greenhouse representing gas emissions, and roughly 190,000 (3) to improve the people. well-being of farm- ers, indigenous peoples, and other groups living in the country’s rural ar- eas with the aim of benefiting between 500,000 and 1 million people. 24 Table 3.2a. Summary of Cases Program & Objectives Years of Types of Beneficiaries Scale of Funds & Scale of Area Location Operation & Benefits Beneficiaries Included National For- PINFOR: To 21 years Beneficiaries of PINFOR 880,000 people Nation- estry Incentive increase forest inclusive of both are mainly forest directly benefited al—383,000 Programs: stocks available programs: landowners, and for from the PINFOR hectares of land Forestry Incen- for exploitation by PINPEP they are small program, and were covered PINFOR was tive Program the forestry sector, landowners. Municipal- 250,000 have under PINFOR operational (PINFOR) improve sus- ities, cooperatives, and directly benefit- (plantations and 1998–2016. and Small tainable forestry communities are also ed from PINPEP natural forest Landowner production, and PINPEP began eligible. (up to the end management). Incentive Pro- incentivize the pro- in 2007 and has of 2017). The As of the end of Benefits are annual cash gram (PINPEP), tection of natural no mandated government of 2017, 115,000 payments based on the Guatemala forests. end date Guatemala has hectares of land amount of land enrolled, (national invested around are included PINPEP: To in- the type of program scale). US$364 million in in PINPEP crease forest cover, implemented, the year both programs to (plantations, with additional ob- of implementation, and date. agroforestry and jectives of generat- adherence to a forestry natural forest ing employment management plan. management). in rural areas and promoting gender equity. Katingan (1) To protect and Nine years: Beneficiaries are com- 34 village commu- 305,669 Peatland Res- restore 149,800 2010–present, munities residing in the nities and a popu- hectares (core toration and hectares of peat- with plans to project zone. lation estimated in areas: 149,800 Conservation land ecosystems, continue until 2010 to be 43,000 hectares; buffer Benefits are revolving Project (Katin- and generate an 2070. people living in zones: 155,869 funds and microfinance gan Mentaya average 7,451,846 11,475 households. hectares) in for small and medi- Project); tons of greenhouse Mendawai, um enterprises, grant Mendawai, gas emission Kamipang, funding for education Kamipang, reductions annu- Seranau and and health programs, Seranau, and ally; (2)to improve Pulau Hanaut and grant funding for Pulau Hanaut quality of life and subdistricts of institutional strength- subdistricts of reduced poverty of Katingan and ening and training Katingan and the project-zone Kotawaringin opportunities. Kotawaringin communities; and Timur districts, Timur districts, (3) to stabilize Central Kaliman- Central healthy popula- tan. Kalimantan, tions of faunal and Indonesia. floral species in the project zone and enhance natural habitats and ecological integrity through ecosys- tem restoration. 25 APPROACH CONTINUED Table 3.2a. Summary of Cases Program & Objectives Years of Types of Beneficiaries Scale of Funds & Scale of Area Location Operation & Benefits Beneficiaries Included Kasigau A two-phase 14 years: 2005– Beneficiaries are ranch 14 ranches (total 203,784 hect- Corridor REDD+ project present (with owners, the project 4,185 shareholders) ares (30,168 REDD+ Project, (scaled up in Phase 2 added implementer, and com- and six commu- hectares in Taita-Taveta second phase) in 2010). munities living in the nity groups (with Phase 1 plus County, Kenya. with the follow- project area. 92,500 people in 173,616 hectares ing objectives: (1) 21,500 house- in Phase 2). Benefits are cash reve- To protect the holds). nue distributed among dryland forests the beneficiaries. that form a wildlife corridor between the Tsavo West & Tsavo East Nation- al Parks, reducing human-wildlife conflict; (2) to conserve import- ant biodiversity in these dryland for- ests; (3) to provide alternative sus- tainable livelihood and development opportunities; and (4) to prevent greenhouse gas emissions from slash-and-burn agriculture. ©Binyam Teshome/World Bank 26 Table 3.2a. Summary of Cases Program & Objectives Years of Types of Beneficiaries Scale of Funds & Scale of Area Location Operation & Benefits Beneficiaries Included Makira Project, (1) To avoid emis- 14 years: 2005– Beneficiaries are 49,000 people Makira Natural Analanjirofo, sions of 38 million present. communities, the estimated in Park 372,470 SAVA, and tons of CO2e government, the Wildlife project zone in hectares and Sofia Regions, over the 30-year Conservation Society 2009, US$412,813 community Madagascar. project period; (WCS), the manage- provided for com- managed green (2) to maintain ment of the protected munity projects belt 351,037 the ecological area, the Makira Carbon from 2015 to 2017; hectares. integrity of the Company, and the Tany unclear how many Makira landscape Meva Foundation. people have bene- and its connec- fited directly. Benefits are a percent- tivity with other age of the revenues protected areas from carbon credits, of Northeastern including funds for Madagascar; (3) to nonmonetary conser- ensure mainte- vation, natural resource nance of ecological management, and com- services;(4) to munity development ensure survival of initiatives. threatened species present in the area; and (5) to empow- er the surrounding local communities to manage their natural resources sustainably and address their food security and sub- sistence needs. Community To achieve sustain- 30 years: 1989– Beneficiaries are 2,907,871 million 2,237,670 hect- Forestry, able management present. The Community Forest User households (more ares as of May Nepal (national of forest resources program was Groups. than a third of 2019, covering scale)* by converting started based the national nearly 37% of the Benefits are the right accessible national on the Master population) in total forest area to manage and sell forests into Com- Plan of Forestry 22,266 Commu- in Nepal. forest resources, as well munity Forests in Sector 1989. nity Forestry User livelihood improvement a phased and wise Groups (CFUGs), funded by the forest manner. Addition- of which there are management revenues. ally, to improve 1,072 women-only the social and eco- committees as of nomic condition of May 2019. US$13.7 the poor, women, million total Dalits (a socially annual profit was marginalized estimated for all group), indigenous CFUGs across the peoples, and other country in 2011. specified ethnic groups. 27 APPROACH CONTINUED Table 3.2a. Summary of Cases Program & Objectives Years of Types of Beneficiaries Scale of Funds & Scale of Area Location Operation & Benefits Beneficiaries Included Alto Mayo To promote 12 years: 2007– Beneficiaries are settlers By the second 3rd 182,000 hect- Protected the sustainable present. REDD+ and communities. party project ver- ares in the core Forest (AMPF), management of project started ification in 2016, area. 430,000 Benefits include Peru. the AMPF and in 2008 with 848 settlers (60% hectares includ- technical assistance to its ecosystem plans to con- of population) had ing buffer zone. improve coffee cultiva- services for the tinue to 2028. signed conserva- tion and sale of other benefit of the local Some activities, tion agreements. livelihoods activities, the populations and including To date the project creation of government the global climate. conservation indirectly benefits service hubs, and im- agreements, 240,000 people. proved access to health started in 2007. There is a portfolio and education services. of donors who support the AMPF through REDD+ (carbon credit trading). In par- ticular, outside of the protected area, support is provided by internation- al aid agencies and the private sector, including for investments in indigenous terri- tory, buffer zones, and conservation initiatives outside the buffer zones. To date, US$24 million in carbon credit revenue and US$14.7 million in investments has been provided by donors. It is projected that an additional US$9.1 million will be provided through 2022. 28 Table 3.2a. Summary of Cases Program & Objectives Years of Types of Beneficiaries Scale of Funds & Scale of Area Location Operation & Benefits Beneficiaries Included Payment (1) To improve Eight years: Beneficiaries are the From 2011 to 2015, National—5.3 for Forest forest quality 2011–present. suppliers of forest US$324.3 million million hectares Environmen- and quantity, (2) services, including raised in revenue of watershed tal Services to increase the funds, households, and and US$225 forest protected/ (PFES), national economic cooperatives. million (5.2 trillion managed up to Vietnam. contribution of the Vietnamese dong) 2015. Benefits are per hectare forestry sector, disbursed to direct cash payment (3) to reduce the 506,298 house- state’s financial holds receiving burden for forest PFES payments. protection/man- agement, and (4) to improve social well-being. Kariba REDD+ (1) To reduce Seven years: Beneficiaries are com- 334,518 people. 784,897 hect- Project, Mata- emissions from 2011–present, munities, the project ares. beleland North, deforestation and with plans to proponent, the Carbon Midlands, forest degradation; continue until Green Investment (CGI), Mashonaland (2) to maintain 2041. the Kariba REDD+ West and wood supply for Trust, a Community and Mashonaland domestic use; Project Sustainability Central, Zim- (3) to contribute Fund, the environmental babwe. to community management, safari op- development and erators, and a longevity poverty alleviation; fund. (4) to improve Benefits are nonmon- access to social, etary in the form of educational, and support for health health services; (5) clinics and schools, and to build commu- conservation manage- nity capacity to ment activities training, improve natural as well as monetary resource man- benefits based on car- agement and bon revenues. cope with climate change; and (6) to sustain and en- hance biodiversity. * The program in Nepal does not include benefit sharing of finance based on results; however, it is included as a case study to draw lessons learned from community-based programs.s 29 APPROACH CONTINUED 3.3 Limitations of This study’s results should therefore be interpret- ed with these caveats in mind, especially that the Study the opinions gathered were not representative of the full suite of stakeholders, particularly Several limitations of the study are important to beneficiaries. keep in mind, including: • This was a desktop study complemented Overall, it is also important to note that this by interviews without site visits to the was not an evaluation of the cases. Rather, this selected cases to gather and check study focused on identifying what factors con- information or conduct interviews first- tributed to success and also what factors were hand. changed through adaptive management over time to improve the benefit-sharing component • It proved quite challenging to identify of each program. individuals to interview. It was even more challenging to actually conduct the This document is not intended to provide guid- interviews considering time restrictions ance explaining how to design and implement and the lack of availability of interviewees. benefit sharing, or even a complete compendium • The analysis relies heavily on the of all good practices. It focuses on the lessons perspective of program managers learned and good practices emerging from the since it was challenging to identify and cases selected. contact beneficiaries, and those who were interviewed were identified by the program managers and not selected randomly from the group of beneficiaries. • Documentation on both quantitative information and reflections on lessons learned varied greatly among cases, with some providing much more insight than others. ©RPBaiaoRPBaiao/Shutterstock 30 4. Lessons Learned & Good Practices 4.1 Cross-Cutting Issues Tensions related to the purposes of benefit sharing: Benefit sharing is heavily dependent The review of cases identified a wealth of lessons on the objectives of the relevant program, which learned and good practices that are explored in nearly always include social objectives as well as detail in the following sections: 4.2 Beneficiaries environmental ones, such as reducing emissions. and Benefits; 4.3 Institutional, Financial, and Furthermore, the source of finance can impact Governance Arrangements; 4.4 Stakeholder Par- the way that benefits are shared since govern- ticipation; and 4.5 Monitoring, Evaluation, and ments may spend their own finances as directed Adaptive Management. In addition, some general by their legislators, and philanthropic funds may and cross-cutting points emerged are introduced be spent according to the agreement with the here; these recur repeatedly in the thematic donor, whereas landowners and other actors sections below where they are illustrated with who produce the goods and services from which examples from the cases. results-based finance is derived may arguably have a right to a share in the benefits. Determin- Dependence on context: Benefit sharing takes ing what share should go to which beneficiaries many forms and depends heavily on context. is complex and reflects tensions between wheth- The land tenure regime and coherence with er benefits are seen as: customary rights; the legal and institutional frameworks at national and local levels; the driv- • Incentives for future performance and/or ers of land use change related to local, national, rewards for past performance and global economies; the political agenda; and • Based on rights to lands and resources many other contextual factors all shape benefit that generate the goods and services and/ sharing. The history of land use and land tenure or on the costs of implementing actions are likely to provide important considerations that generate them, including opportunity for benefit sharing and raise questions about costs whether benefit sharing may reinforce or help • Including costs of facilitators and address past inequities, such as those resulting intermediaries and/or incentives for those from historical expropriation of land. who could hinder further results See Figure 4.1a. for some of the considerations for benefit sharing related to its purpose. In many cases, a hybrid approach is adopted that reflects some or all of these factors, as explored in Section 4.2. 31 LESSONS LEARNED & GOOD PRACTICES CONTINUED FIGURE 4.1A.: Considerations Affecting Benefit Sharing Program Objectives Rationale for Benefit Sharing Environmental Social Rewards for past Incentives for future performance performance Finance Source Rights to Rights to Results-based, linked land & goods & Costs Facilitators Government Philanthropic resources services to goods & services Statutory and customary Indirect Enablers and Beneficiaries (owernship, management (opportunity) inhibitors Landowners Producers Governments NGOs Private & use) and direct sector (inputs & effort) Importance of good governance: While there is • Effectiveness and efficiency – in meeting no universally agreed definition of good gov- the agreed objectives for benefit sharing, ernance, several widely recognized attributes ensuring that benefits reach beneficiaries in recurred repeatedly as important issues for a timely manner while minimizing costs. benefit sharing: Trade-offs: Comparing and contrasting differ- • Participation – not only for beneficiaries ent cases highlighted the ways that different ap- in defining the form of benefits, but also proaches to benefit sharing in different contexts including other stakeholders more broadly led to trade-offs between effectiveness, efficien- in designing, implementing, and evaluating cy, and equity, which are explored further in each benefit sharing, and in governance section below, and particularly in Section 4.2. processes and decision making; • Transparency – transparent information Adaptive management: Since benefit sharing is on eligibility and conditions for receiving complex, involving many often-competing inter- benefits, the finance received and delivered, ests, it is hard to envisage all the ramifications in implementation costs, and how decisions the design phase. In addition, the context often are made and implemented, which changes throughout these long-term programs. provides a basis for building trust, support, Every case involved some change to address agreement, and legitimacy; challenges. Having the capacity to monitor and adapt benefit sharing was seen as critical to • Accountability – through effective and success. Examples of changes that were made transparent oversight mechanisms that are included in every section and adaptation is ensure benefit sharing is governed and explored further in Section 4.4. implemented as agreed; • Equity and inclusion – in the design and implementation of benefit sharing in a manner that is fair, impartial, and inclusive, ensuring nondiscrimination with regard to women and vulnerable and/or marginalized individuals and groups; and 32 4.2 Beneficiaries & circumstances where people who need to change behavior and incur costs do not Benefits own the land. • What is perceived to be fair and acceptable 4.2.1 KEY CONSIDERATIONS by all stakeholders, since equity in benefit RELATED TO BENEFICIARIES sharing is key to building support for the AND BENEFITS program among key stakeholders. Key considerations for the identification of bene- • The relative power and influence of ficiaries and benefits relate to the eligibility crite- different stakeholders to negotiate the ria for participating in benefit sharing, the types terms of their engagement. of benefits shared (e.g., monetary or nonmone- tary), and whether the benefits vary for different 4.2.2 FINDINGS FROM THE stakeholder groups, as well as any conditions CASES ABOUT BENEFICIARIES required for accessing benefits (e.g., based on AND BENEFITS performance). It is also important to consider what proportion of funds or benefits are allo- 4.2.2.1 General observations cated to each group, including vertical allocation between national and local levels and horizontal All the cases reviewed have primary objectives allocation among communities or households, that are environmental—such as the protection and the rationale for these allocations. of forests and other ecosystems, the sustainable management of forests, and the enhancement The identification of beneficiaries and the bene- of carbon stocks. In addition, most of the pro- fits they receive depends significantly on: grams also have social objectives, including, for • The overall purpose of the program and example, improving well-being; reducing poverty; whether benefit sharing is intended to generating employment in rural areas; improv- support a change in behavior related to ing access to social, educational, and health land use; for example, to protect forests or services; and building capacity for sustainable plant trees. natural resource management and to cope with • The actors who need to receive incentives climate change (see Table 3.2a). to change their land use, including ways In all cases, the identification of beneficiaries and to balance or outweigh the costs of lost the types of benefits they receive depends heavi- opportunities and the effort required to ly on understanding the key actors and type of make this change. incentives that will be most effective in achieving • The source of finance for benefit sharing. these overall program objectives; equity within When the source of finance is derived legal, social, and cultural contexts; and efficiency from goods and services, then rights and in meeting the objectives at least cost. Generally, ownership related to those goods and across the cases, some trade-offs are apparent services need to be respected to ensure between: that benefits flow back to those who • Effectiveness and equity – for example, provided them. benefit sharing that is designed to be • The extent to which rights to own, more effective by providing benefits that manage, and use land and resources work as incentives for all the key actors is provide an appropriate basis for benefit likely to be more inclusive and potentially sharing. Consideration should be given to more equitable, but can create tensions by whether tenure is unclear or overlapping, channeling some benefits to actors who are the importance of customary rights, and not seen as legitimate rights holders (e.g., 33 LESSONS LEARNED & GOOD PRACTICES CONTINUED recent migrants to the area, political elites, Land ownership is frequently used to determine or larger landowners). eligibility to participate in benefit sharing (see • Effectiveness and efficiency – for example, Box 4.2a) and improving land tenure security benefits based on performance may can be an important benefit. Multiple reasons for be more effective but often need more the importance of land and resource tenure in complex procedures and methodologies benefit sharing include: that can increase monitoring costs needed • Benefit sharing in land use programs to assess conditionality of benefits. usually aims to create incentives for land • Efficiency and equity – for example, a use change and landowners often control simple program with cash payments and land use change. straightforward eligibility requirements— • Land tenure can provide clear criteria for for example, linked to land tenure—may determining eligibility, especially if the exclude vulnerable and marginalized people. process for establishing land tenure is widely accepted and legitimate. The review of cases helped identify some • The transfer of benefits to beneficiaries key and recurring issues for beneficiaries and needs to be based on a clear legal benefits: framework, which can be provided by land • The overriding importance and associated tenure. complexities of land and resource tenure in • If the source of finance for benefits involves identifying beneficiaries the transfer of goods or services derived • The importance of understanding potential from land use, such as emission reductions barriers to participation, often linked to or water services, then landowners may land and resource tenure have a legal right to receive benefits and • The possibility of differentiating benefits for clarity of land tenure is critical. different groups for greater effectiveness • Security of land tenure can affect and inclusion bargaining power and consequently the • The need to understand costs and benefits amount and type of benefits that are for different actors to ensure that benefits shared. really are perceived as benefits • Improved land tenure security is highly • The consideration of whether individual or valued and can be perceived as a benefit community benefits are most appropriate (see Box 4.2g). • The consideration of whether monetary Land and resource tenure is not always clear and or nonmonetary benefits are most unequivocal. Although countries such as Costa appropriate Rica have relatively clear land ownership that has facilitated their benefit-sharing programs, in • The importance of beneficiary participation other countries, such as Madagascar and Peru, in the defining the benefit package the local communities that use the forest do not • How the timing of when benefits are have formal land ownership. In these cases, legal delivered can affect their effectiveness. instruments—in the form of forest management contracts in Madagascar and conservation 4.2.2.2 Land and resource tenure agreements in Peru—have helped recognize land and resource management rights as a basis for Understanding who has the rights to own, benefit sharing (see Boxes 4.2a and 4.2b). In manage, and use land and resources emerged several countries, such as Costa Rica and Ecua- as an important issue in all the cases, consistent dor, indigenous peoples have collective rights to with findings from other relevant studies (Davis, land and resources, which are accommodated Nogueron, and Javelle 2012; World Bank 2019b). in benefit sharing because they receive different 34 treatment from the neighboring landowners that 4.2.2.3 Barriers to participation have individual titles to their land. In Australia, a lot of Emissions Reduction Fund (ERF) projects In several cases, eligibility criteria or other re- are on Crown Land where both government and quirements for participation were found to have indigenous peoples need to provide consent. This excluded some important actors, so changes led to the development of special procedures to were made to address these barriers to partici- facilitate participation in areas with unclear or pation. For example: complex land tenure. • In Guatemala, the PINFOR requirement for proof of title to at least 2 hectares of land Box 4.2a. Addressing Land Tenure Barriers and Opportunities for Participation in Benefit Sharing Alto Mayo Protected Forest (AMPF), Peru: Conservation agreements provide a model for addressing the absence of land tenure through the security of a contract. The conservation agreements approach (see Box 4.2b) is thought to be a fundamental driver of success in the Alto Mayo landscape, where illegal settlement has driven deforestation and conflict between settlers and park authorities. It provides a mechanism for the participation of illegal settlers in the AMPF through the establishment of legally binding conservation commitments. Signatories co-design their own benefits packages by discussing their assets, priorities, and opportunities with government and implementation partners. Land title was not a legal option in this scenario, but land security was achievable if settlers complied with the regulations of the protected area. Makira Project, Madagascar: Where communities have customary collective rights on government land, a legally established association and a forest management contract can help establish collective rights and responsibilities as a basis for benefit sharing. Since 2004, 75 communities around Makira Natural Park have each formally established a community management association, Vondron’Olona Ifotony (VOI), that has signed a contract with the government to manage forests in the buffer zone surrounding the park. These associations provide a formal structure to represent each community with respect to benefit sharing from carbon revenues. The management plans annexed to the forest management contracts include community responsibilities for forest protection—such as patrols and reports of any illegal activities—and identify the community’s priorities for development projects. The establishment of a VOI and a forest management contract are the eligibility criteria for participation in benefit sharing, and communities know that they will become ineligible for participation if their contract is revoked because they do not implement their forest protection responsibilities. PINFOR and PINPEP, Guatemala: Options for participation that address land tenure barriers are important where relevant. PINFOR was a National Forestry Incentive Program that was operational from 1998 to 2016 and largely focused on increasing the country’s forestry stocks. Eligibility was restricted to landowners able to demonstrate proof of title to at least 2 hectares of land. This resulted in the majority of incentives going to larger private landowners. PINPEP is a Small Landowner Incentive Program that was initiated in 2007 in response to demands for broader participation. It allows access to forestry and agroforestry incentives for people without formal land tenure but who can prove that they have a legal right of possession. The minimum land size requirement is only 0.1 hectares, which allows poorer families who do not have much land to also participate. 35 LESSONS LEARNED & GOOD PRACTICES CONTINUED Box 4.2b. The Conservation Agreements Approach In many parts of the world, communities are using their land, water, and other natural resources in unsustainable ways—simply because there is no economic alternative. When conservation offers concrete benefits to rural farmers and local communities, protecting the environment becomes an increasingly viable and attractive choice. Conservation International (CI) developed the conservation agreements approach in 2005 specifically to deliver economic alternatives for communities who seek to reverse nature degradation. The conservation agreement model offers direct incentives for conservation through a negotiated benefit package in return for conservation actions by communities (Figure B4.2b.1). Thus, a conservation agreement links conservation funders—governments, bilateral agencies, private sector companies, foundations, individuals, and so on—to people who own and use natural resources. Benefits typically include investments in social services such as health and education as well as investments in livelihoods, often in the agriculture or fisheries sectors. The concept of a conservation agreement is to adjust incentives (reduce, increase) based on compliance with commitments in the actual contract. It should be noted that social services are not types of benefits that can be easily adjusted, as they are generally considered to be human rights (as per the UN Declaration on Human Rights, articles 25 and 26). In the Alto Mayo (AMPF) case, these services are provided in the buffer zone rather than the core zone of the protected area. Benefits can also include direct payments and wages. The size of the benefit packages depends on the cost of changes in resource use, as well as conservation performance. Rigorous monitoring verifies both conservation and socioeconomic results. CI and partners work with communities that agree to protect their natural resources, as well as the benefits they provide, in exchange for a steady stream of compensation from investors, and are currently managing 200 agreements with communities and nearly 2,000 agreements with families, conserving 2.7 million hectares of important ecosystems and directly benefiting 90,000 people. FIGURE B4.2B.1.: Conservation Agreements Approach COMMUNITY ACTIONS COMMUNITY BENEFITS Examples Examples Pressures • Manage hunting • Wages for patrolling Community on Natural • Conduct patrolling and • Market access for local enter- Needs Resources monitoring prises • Implement a land-use plan • Technical training and physical • Protect threatened species inputs • Education funds 36 excluded a significant share of the country’s involved some form of differentiation of benefits smallholders, so PINPEP was designed for different groups to address issues of effec- specifically to enable broader participation tiveness, equity, and/or efficiency. of people with smaller land holdings (as small as 0.1 hectares), including those Where benefit sharing aims to create incentives without formal land title (see Box 4.2a). for land management—for example, tackling drivers of deforestation—it is quite likely that • In Costa Rica, formal title was a different types of actors will need to be engaged requirement for participation in the and they will be motivated by different types Payments for Environmental Services of benefits (see Box 4.2c). In the AMPF in Peru, Program (PSA), which excluded many illegal settlers needed to be engaged because poorer farmers with smaller land holdings their agricultural practices were directly causing who do not have formal title but who deforestation in the program area. In addition, collectively have significant impacts. The the nearby indigenous peoples also needed to be program was amended to accept proof engaged because they were indirectly contribut- of right of possession in lieu of title in ing to deforestation by renting their land to out- some circumstances to enable broader siders who deforested the land. In SISA in Acre, participation. Brazil, benefit-sharing arrangements explicitly • In Australia, the high transaction costs recognize the role that indigenous peoples have for participation in the Carbon Farming played historically and continue to play in main- Initiative proved challenging for smaller- taining forests on their land and includes them scale projects to participate, so changes as beneficiaries for reasons of equity as well as were made during the design of the effectiveness. In both cases, the different groups subsequent ERF to facilitate aggregation: receive quite different benefits. In Peru, the illegal the project proponent no longer needs to settlers receive rights to remain in the protected hold the carbon sequestration rights (i.e., area and technical support for improved cof- to own or have a property interest in the fee farming, while the indigenous peoples have project area) but can be another entity that prioritized support for retaining and recovering has a contract with the landowner, and traditional practices. In SISA in Acre, Brazil, the standard arrangements are established for indigenous peoples get support for indigenous transferring rights from households and agroforestry agents and for cultural heritage small businesses to a project aggregator activities, while other beneficiaries get technical (Commonwealth of Australia 2014). training and economic tax and credit incentives. Barriers to participation may also be designed Initially broad, the Costa Rica PSA has evolved intentionally to exclude some people—for exam- considerably over the years and moved toward ple, to avoid perverse incentives. In Amazonas, a greater degree of targeting, with differentiated Brazil, beneficiaries of Bolsa Floresta need to payments for agroforestry, natural forest regen- provide proof of residence in the area for at least eration, sustainable forest management, and two years to avoid the perverse incentive of hav- forest protection. In Bolsa Floresta in Amazonas, ing more people moving to the area to access Brazil, different types of individual or collec- benefits. tive action are incentivized by providing some benefits to individual households for sustainable 4.2.2.4 Differentiation and targeting of bene- production activities and some to communities fits for different groups to improve social conditions such as education and health. Providing uniform benefits to all beneficiaries may be simple to communicate and relatively In Ecuador, with the Socio Bosque Program easy to administer, but all the cases reviewed (SBP), smaller landholders and communities 37 LESSONS LEARNED & GOOD PRACTICES CONTINUED Box 4.2c. Tailoring and Targeting Benefits to Specific Beneficiary Groups Alto Mayo Protected Forest (AMPF), Peru: Benefits need to be tailored for specific beneficiary groups and to address specific drivers of environmental change. The Alto Mayo program initially focused on the AMPF and illegal settlers who drove deforestation through coffee cultivation. Much of the benefit package emphasized technical support to shift coffee cultivation to more sustainable and more productive practices. Later, the program expanded to include indigenous peoples adjacent to the protected area where communities were facing declining socioeconomic conditions and cultural values linked to high deforestation in their territories. This required defining a new, specific theory of change related to drivers of forest loss on indigenous peoples’ lands, often resulting from renting land to outsiders who then cleared forest for agriculture. The process was participatory, following principles of free, prior, and informed consent, and reflected the Shampuyacu community’s Life Plans (community- driven assessments of their collective needs and desires, that incorporate cultural, environmental, and developmental elements, and provide a participatory management framework for addressing issues of relevance to the communities and for guiding external partnerships with those who would wish to support them), which also had to be created. Social and gender considerations were very intentional here, with the community prioritizing support to retain and recover traditional practices. The process employed a conservation agreement approach, like the one in the protected area, but tailored to the indigenous peoples. State System of Incentives for Environmental Services (SISA), Acre, Brazil: For both equity and effectiveness, it can be important to recognize the contributions of actors who have maintained forests and provide incentives for ongoing protection as well as incentives for behavior change in those causing deforestation. Beneficiaries in the State of Acre are defined by the SISA legislation based on the provision of ecosystem services using the stock and flow approach, and by rewarding stakeholder groups that contribute to protecting forests (stock) as well as to reducing deforestation (flow). This approach takes into consideration that the conservation of about 87 percent of Acre State’s forest cover is mainly the result of protection by its inhabitants, and not only the reduction of activities that cause deforestation. The benefits include establishing economic, tax, and credit incentives and creating enabling conditions (e.g., capacity building) for the program’s beneficiaries, aiming to promote and develop sustainable activities. For indigenous peoples the benefits also involve direct payment to indigenous agroforestry agents to protect their territory and foster sustainable land management and to indigenous peoples’ organizations to implement cultural heritage activities (KfW 2017). continues next page receive a higher per hectare payment. In Amazo- to a particular group (see Box 4.2d). In Nepal, nas, Brazil, women (mothers of families) receive this is done by requiring that Community Forest a monthly payment as part of the Bolsa Floresta User Groups allocate at least 35 percent of their package and special social and environmental income to improve the livelihoods of poor people, training and inputs—for example, on practices Dalits (members of a socially marginalized of agriculture for which women are typically are group), indigenous peoples and ethnic groups, responsible. and women. Guidelines for implementing com- munity forestry specify how poor and marginal- Another way to promote inclusion and to target ized individuals and groups should be identified benefits to specific beneficiaries is to intentional- using a participatory well-being ranking to iden- ly provide a greater proportion of overall benefits tify those with limited access and control over 38 Box 4.2c. continued Bolsa Floresta, Amazonas, Brazil: A combination of benefits can be tailored and targeted, providing collective and individual incentives, including for specific stakeholders such as women. Beneficiaries in the Bolsa Floresta program in the State of Amazonas are eligible for funding from each of four subprograms: (1) communities receive an average of 415 Brazilian reais (US$106) per family annually to implement sustainable production activities; (2) communities receive another 160 Brazilian reais (US$41) per family on average annually to improve the social conditions of the communities (e.g., education, health, transportation); (3) associations of settlers receive an average of 85 Brazilian reais (US$22) per family annually to support these associations; and (4) women (mothers of families) receive 600 Brazilian reais (US$153) annually for living in the conservation unit, to be used however they choose (FAS 2017). All the beneficiaries participate in a series of workshops that explain individually the rights and obligations if they voluntarily decide to participate in the program. Socio Bosque Program (SBP), Ecuador: Differentiated payments can be used to target a particular beneficiary group such as poorer households. One of the aims of the SBP is to improve the socioeconomic condition of the poorest among the rural population. From 2008 to October 2011, the incentive scale applied by the SBP provided US$30/hectare annually to landowners for up to 50 hectares of forest land enrolled. To encourage farmers with smaller forest land areas to participate, the incentives were increased to US$60/hectare annually for private landholders with fewer than 20 hectares of land overall, not just forest. Payments for Environmental Services Program (PSA), Costa Rica: Differentiated payments can provide incentives for different activities. The PSA program differentiates between project types that are subject to different conditions, including payment amounts. For example, forest conservation contracts provide for equal annual payments over the 10-year lifetime of the contract. In contrast, timber plantation and reforestation contracts front-load most of the payment into the early years of the contract: 50 percent of the payment is paid in the first year, 20 percent in the second year, 15 percent in the third, 10 percent in the fourth, and 5 percent in the fifth. Meanwhile, planting trees in agroforestry systems is accounted and paid on a per tree, rather than per hectare, basis. social, economic, physical, natural, and human 4.2.2.5 Individual versus community benefits resources. Community Forest User Groups sub- sequently report on how they have improved the Whether benefits go to individuals or to commu- livelihoods of the identified groups—for example, nities depends heavily on the context, including through preferential employment on community whether or not local people make resource forestry activities. In Costa Rica, the PSA targets management decisions collectively; whether beneficiaries that help meet development and they have shared aspirations on the objectives of biodiversity objectives by prioritizing areas of the program; which actors and type of activities low development indices and high conservation are targeted; and the land and resource tenure importance using a point-system for weighting regime and how this determines which actors and prioritizing applications. The PSA also sets have rights to benefits. quotas for women and indigenous peoples’ com- In the Latin American countries featured in munity groups to ensure that they receive a set these cases, the benefits tend to go to individual share of the overall PSA benefits. landowners who get incentives to implement activities on their own land and have rights to 39 LESSONS LEARNED & GOOD PRACTICES CONTINUED Box 4.2d. Targeting Benefits to Specific Groups Through Allocations, Weighting, and Quotas Payments for Environmental Services Program (PSA), Costa Rica: Weighting and quotas can be used to target benefits to certain areas of the country and certain groups of beneficiaries. In 2010, the National Forestry Financing Fund (FONAFIFO) moved from a system in which contracts were awarded on a first-come-first-served basis to any submission that meets the basic requirements to a point-system for weighting and prioritizing applications. This new evaluation matrix prioritizes areas of low development indices and high conservation importance (e.g., biological corridors), in addition to favoring small farms. It also sets quotas for women and indigenous peoples’ community groups, stipulating a minimum number of contracts to be awarded to these generally marginalized groups. Community Forestry, Nepal: Benefit sharing can effectively reduce poverty and social inequity if these goals are explicit and requirements are in place to ensure a minimum allocation of benefits to vulnerable and marginalized groups. Community forestry in Nepal has been explicitly designed to be pro-poor. Community forest guidelines require that 35 percent of the income generated by Community Forest User Groups be used to improve the social and economic condition of the poorest households, Dalits (socially marginalized group), indigenous peoples and ethnic groups, and women through livelihood improvement programs. Guidelines for implementing community forestry specify how poorer and marginalized individuals and groups should be identified using participatory well-being ranking to identify those with limited access and control over social, economic, physical, natural, and human resources. There are also requirements for including women, poorer individuals, indigenous peoples, and socially marginalized groups in the decision-making process (Gilmour 2016). benefits from goods and services produced from cooperative comprised of only those communi- their own land. Exceptions are found where indig- ty members who have signed agreements. The enous peoples have collective rights to land and cooperative has the dual features of allowing their benefits are provided to the collective group for collective benefits—which increase efficien- of rights holders (for example in the SISA in cy—and providing a market access mechanism Acre, Brazil, PSA in Costa Rica, Socio Bosque in for coffee farmers. Over time, the cooperative Ecuador, and AMPF in Peru). In Amazonas, Brazil, becomes more self-sustaining, with a business the beneficiaries are living in protected areas model focused on shade-grown coffee that where land is owned by the state, so there is no depends on forest conservation. The program individual land ownership and an atypical mix of is moving toward a model of signing communal individual and community benefits are provided agreements in order to engage all the residents (see Box 4.2c). in the area. The program began at the individual level to introduce, test, and build support for the In Peru, the illegal settlers in the AMPF do not approach with people most open to collaboration have individual land ownership but receive ben- with park authorities. By 2019, the program was efits as individual households through conserva- managing over 900 individual agreements and tion agreements negotiated on a household ba- required a great deal of administrative oversight. sis. Benefits are received in the form of training It has also expanded to include two communal and inputs for coffee growing, and are dependent agreements with indigenous peoples adjacent to on households respecting their conservation the core protected area, in the buffer zone. commitments. Support is also given to a coffee 40 For the Katingan Mentaya Project in Indonesia, ability of resources depends on many factors. benefits generally target the whole community, Benefits received as a group need to be shared although “anchor farmers” have piloted “no-burn- equitably within the community, avoiding elite ing, no-chemical” practices on their private land. capture, and they need to be perceived by If these farmers are successful, then others will enough community members as an incentive for be supported to adopt similar practices. changing behavior. Even if incentives are real, the management of collectively owned and man- In the Kasigau Corridor REDD+ Project in Kenya, aged resources has often been shown to be more some of the benefits go to the ranch owners effective under certain conditions—for example, (landowners) who are individuals or groups act- where community members agree to rules for ing as companies; membership of the companies protection or sustainable resource use, they can is based on different forms of share ownership, enforce the rules and protect the resources from and some of the benefits go to communities outside encroachment, and they can detect and living in the project area. Elected members of penalize infractions (Ostrom 1990). the communities serve on a Location Carbon Committee, which decides on the allocation of 4.2.2.6 Monetary versus nonmonetary benefits among project proposals submitted by benefits community-based organizations. Projects that benefit the broader community are preferred Across the cases, most examples of monetary to individual payments because the amount benefits occur in places where beneficiaries are received to date would only provide US$5-8 per individual landowners with bank accounts. Bolsa person per year, which would be insignificant Floresta in Amazonas, Brazil, provides an inter- at an individual level. Moreover, many times esting example where cash transfers are made the individuals owning shares of a ranch do not even in remote areas where indigenous and necessarily reside in the area, making individual traditional peoples do not have bank accounts monetary benefits more appropriate than the and where there is no individual land tenure. collective nonmonetary benefits preferred by the Sustainable Amazonas Foundation (FAS), which communities. implements Bolsa Floresta, has partnered with Bradesco Bank to enable easy registration for While sharing benefits with individuals seems to a bank account by beneficiaries who meet the be adopted and effective in all places where in- Bolsa Floresta eligibility requirements. Benefi- dividuals own land, community benefits can rein- ciaries receive a debit card and can access their force and reward collective responsibilities where monthly payments when they go to the local forests are a common interest. Protection or municipal center. sustainable management of larger forest areas can be more effective when communities work In most cases, the benefits that go to a commu- together to establish and enforce agreements nity rather than to individuals are provided as about their maintenance, management, and nonmonetary benefits. This enables the delivery protection. The Community Forestry program of a diverse range of different goods and services in Nepal demonstrates another advantage of that can be targeted to meet the needs and sharing benefits with communities rather than interest of the community, such as social ser- individuals, as poor and marginalized households vices, revenue-generating activities, and cultural were found to be more likely to share in benefits priorities. The benefits can also be targeted to delivered to the community as a whole because support the implementation of activities that of the elite capture that can occur when benefits contribute to the desired land management, are shared with individuals (Gilmour 2016). such as seedlings and tools for tree planting or technical support to convert an unsustainable Whether community benefits are effective in land use into a more sustainable one. This was strengthening the management and sustain- the case for communities in the Kasigau Corridor 41 LESSONS LEARNED & GOOD PRACTICES CONTINUED Indri lemur in Makira Natural Park, Madagascar (©Johnnah Ranariniaina/Wildlife Conservation Society) REDD+ Project in Kenya, as described in the of Madagascar, there were significant delays in previous section (4.2.2.5), which implements delivering nonmonetary benefits where villages nonmonetary community projects by prioritizing are very remote (up to three days’ walk from proposed ideas for projects based on the com- the nearest transport) and where much of the munity’s collective needs. population is illiterate (see Box 4.2d). Table 4.2a summarizes some of the advantages and chal- Although cash payments are sometimes made lenges of providing monetary and nonmonetary to community associations for management on benefits. behalf of the community, there are risks of mis- management if governance and financial man- Although improvements to services such as agement is not transparent and effective. Cash clean water supply and access to health care is sometimes paid to individuals within an overall and education seemed to be perceived as package of primarily nonmonetary community welcome benefits, the improvements may not benefits, often for daily wages. For example, in endure without longer-term support from relevant the Makira Project in Madagascar, the communi- government departments or the improvements ty forest management associations receive cash could potentially undermine government payments that are paid to the individuals who provision of these services in general. Where conduct patrols for surveillance and monitoring initiatives provide infrastructure for schools Makira Natural Park. and health care clinics, consideration needs to be given to the staffing and operational costs While nonmonetary benefits can be better target- to ensure they are functional. In cases where ed to different types of benefits or incentives, increased security of land tenure is provided as a several interviewees mentioned that their delivery benefit—such as for illegal settlers in the AMPF can be more complicated than anticipated. The in Peru (see Boxes 4.2a and 4.2b) and for villages scale of challenges involved and the capacity to in Katingan Mentaya Project in Indonesia (see implement nonmonetary benefits seem to vary Box 4.2g)—questions arise about the extent to greatly among countries. In the Makira Project which these rights will be protected and whether 42 Table 4.2a. Some Advantages and Challenges of Monetary and Nonmonetary Benefits ADVANTAGES CHALLENGES Monetary benefits • Efficient to administer if payments are made • Difficult where target beneficiaries do not have bank directly to bank accounts accounts and would have difficulty accessing the cash • Transparent • Hard to target benefits for specific activities—for • Quick delivery example, for capacity building and for social services • Low transaction costs • Potential for mismanagement of community funds • Can ensure that all beneficiaries receive their share • Require robust local governance structures and of benefits financial management for community funds • Empowers beneficiaries to decide on their own • If smaller benefits packages are divided among many priorities for use of funds individuals, the incentive realized on a per capita • If large enough, can be a significant incentive to basis may not be perceived as significant produce the desired behavior Nonmonetary benefits • Easier to target benefits to support specific • Delivery of nonmonetary benefits can be challenging activities and capacity building, such as training logistically for revenue-generating activities or seedlings for • Delivery of specialized training or inputs can require plantations skills or inputs not available locally, increasing costs • Can ensure that all community members benefit, • Significant support may be needed to facilitate depending on the type of benefit community agreement on priorities and ensure effective delivery of the benefits, often requiring an intermediary • Transaction costs can be high • Delivery of benefits can be slow • Benefits delivered may not be successful if they do not respond to local interests, or have not been well conceived or implemented—for example, if the implementing organization does not have the required skills • The amounts spent and value of the benefits may not be transparent, causing mistrust • Benefits may need support from and coordination across government departments to be effective and sustainable there will be enforcement of the new rights by 4.2.2.7 Revenue-generating versus social government authorities against encroachment. projects For many types of nonmonetary benefit, coor- dination is needed across several government A diverse range of nonmonetary benefits were departments to ensure that benefits are effec- encountered in the cases, generally falling into tive and sustainable (Box 4.2e) the categories of: • Revenue-generating activities that aim to directly increase the incomes of beneficiaries; 43 LESSONS LEARNED & GOOD PRACTICES CONTINUED Box 4.2e. Examples of Nonmonetary Benefits • Infrastructure: Rehabilitation of schools and health clinics (Makira Project, Madagascar; Kariba REDD+ Project, Zimbabwe); infrastructure for irrigated rice cultivation, offices for community management associations (Makira Project, Madagascar); rehabilitation of bore holes, road maintenance (Kariba REDD+ Project, Zimbabwe); access to clean water, construction of latrines, solar energy (Katingan Mentaya Project, Indonesia); rehabilitation and construction of crop storage facilities, cocoa and fish drying structures, markets, buildings for community meetings (Bolsa Floresta, Amazonas, Brazil); coffee-related storage and processing facilities, eco-bathrooms (AMPF, Peru) • Services: Subsidies for health care practitioners and teachers’ salaries; subsidies for school fees, health care supplies, and educational materials (Kariba REDD+ Project, Zimbabwe); health care practitioners, health care supplies, and educational materials (Katingan Mentaya Project, Indonesia); government service hubs to improve access to health and education (AMPF, Peru); ambulance boats and radio equipment for emergencies (Bolsa Floresta, Amazonas, Brazil) • Inputs: Materials for beekeeping (Makira Project, Madagascar; Kariba REDD+ Project, Zimbabwe), vanilla cultivation (Makira Project, Madagascar; Katingan Mentaya Project, Indonesia), bamboo and cashew cultivation (Katingan Mentaya Project, Indonesia), firewood plantations (Kariba REDD+ Project, Zimbabwe), organic gardening (AMPF, Peru; Katingan Mentaya Project, Indonesia) • Capacity building: For fuelwood plantations, early burning fire management and anti- poaching (Kariba REDD+ Project, Zimbabwe); rice and vanilla production (Katingan Mentaya Project, Indonesia; Makira Project, Madagascar); rubber agroforestry, microfinance, fish ponds (Katingan Mentaya Project, Indonesia); coffee cultivation and cooperative development, and organic gardening (AMPF, Peru); participatory planning, financial management, and leadership of community associations, artisanal products, tourism, fisheries management, guarana, acai and banana cultivation, Brazil nut commercialization, community forest management and timber production including support for certification (Bolsa Floresta, Amazonas, Brazil) • Enterprise support: Non-timber forest product cooperatives, native fish aquaculture company (SISA, Acre, Brazil); village enterprises for the fabrication of composite flooring from rattan and bamboo, and for coconut palm sugar production (Katingan Mentaya Project, Indonesia); coffee cooperative development (AMPF, Peru) • Market access: Access to local markets for vegetables, composite flooring, rubber, and vanilla (Katingan Mentaya Project, Indonesia); access to international markets for coffee (AMPF, Peru) • Securing land tenure: Supporting villages to get formal recognition and tenure over forest land (Katingan Mentaya Project, Indonesia), supporting illegal settlers to avoid eviction from a protected area by remaining in compliance with the laws of that area (AMPF, Peru) • Revolving funds*: Village funds for micro finance (Katingan Mentaya Project, Indonesia) • Employment*: Daily wages for patrols and monitoring (Makira Project, Madagascar; Kariba REDD+ Project, Zimbabwe); for community fire patrol for four months of dry season (Katingan Mentaya Project, Indonesia); for road maintenance and for early burning fire management (Kariba REDD+ Project, Zimbabwe) * Although revolving funds and employment involve cash transfers, they are typically included as part of a package of nonmonetary benefits. 44 • Social services that aim to directly improve Katingan Mentaya Project aims to support a the well-being of beneficiaries; transition to a new local economy where com- • Infrastructure such as roads that can munities can prosper without deforestation. improve livelihoods indirectly; and However, there is greater assurance that revenue generation will reinforce the program’s objectives • Institutional capacity strengthening for if the communities’ success depends on main- administration, financial management, and taining the forest and is not just compatible with governance. it. For example, in Peru, the shade-grown coffee in the AMPF relies on maintaining the forest Several programs found that revenue-generat- cover, and, in addition, the coffee growers retain ing activities were popular and could be easier their right to stay in the protected area only if to implement than some other types of project. they help protect the remaining forest. There are In Amazonas, Brazil, the representatives of the also market incentives to protect the forest, as community associations decided to allocate the certified coffee commands a significant more funds to revenue-generating activities and premium that would be lost if deforestation reduce the funds for social projects. This was leads to a loss of certification. requested at the Bolsa Floresta community leaders meeting in 2014, where participants noted their preference to shift the focus toward 4.2.2.8 Costs, benefits and incentives building capacity for self-reliant income gen- eration, with the idea that communities would It is important to note that the benefits that at some point be able to fund their own social are shared are only perceived as benefits by the projects. In the Makira Project in Madagascar, beneficiaries, and can be effective incentives Intensive Rice Cultivation System (SRI) and other for behavior change only if they outweigh the cultivation and revenue-generating activities perceived costs. have seemed to be the nonmonetary projects There were few examples among the cases of that have worked best, in part because the thorough assessments of opportunity or imple- community members have the capacity to mentation costs for each type of beneficiary. implement them. In contrast, infrastructure In Costa Rica, the floor price for the first PSA projects have been among the most challenging. payments was based on the opportunity cost Revenue-generating projects can be challenging of keeping one cow on a hectare of land (deter- if new technologies, skills, and inputs are needed, mined to be US$40 per hectare). This amount and if new products are introduced for which has been adjusted over time, using the country’s the market is untested. In Indonesia, it was consumer price index as a reference (Chaves appropriate to implement revenue-generating and Chacón 2017), and PSA payments for forest projects only in the least remote areas around protection now range from US$64 to US$80 per the Katingan Mentaya Project, which had the hectare per year. Benefit sharing, in most cases, easiest transport access to markets (see Box seemed to be based on willingness to pay and 4.2f). Revenue-generating projects may also willingness to accept—meaning that the amount disproportionately benefit people with greater or type of benefit is offered, or in some cases ne- education, wealth, and power. gotiated, and beneficiaries are given the option to participate at will. While revenue-generating projects can contrib- ute to sustainability, they could also produce In Australia, the ERF is operated through auc- results inconsistent with the overall goal of the tions that are designed to purchase emission program—for example, if increased wealth is reductions at least cost, selecting the lowest invested in activities that threaten forest conser- bids submitted. Landowners or project propo- vation. In Indonesia, benefit sharing in the nents tend to submit their lowest price bids by taking into account the costs they will incur and 45 LESSONS LEARNED & GOOD PRACTICES CONTINUED Box 4.2f. Revenue-Generating Activities Can Provide Effective and Sustainable Benefits but Require Market Access The Katingan Mentaya Project has emphasized community-based business development through the establishment of revolving funds for microfinance to support small-scale economic activities, as well as funding small and medium enterprises with business objectives that are consistent with peat conservation and restoration. Pilot activities include business development in areas such as fabricating rattan and bamboo composite, producing coconut palm sugar, rubber and vanilla agroforestry, producing organic rice, establishing fishponds, managing livestock, and processing salvaged wood. The project team provides business development expertise to support development of locally owned businesses based on local natural resources and help them access markets. The aim is for carbon finance to provide a bridge to a low-carbon economy that does not rely on continued deforestation. However, market access is key. In some cases, the project can help initially by purchasing products, such as produce from the vegetable gardens for their own staff, or by helping to find buyers. Some more remote villages will not be able to access markets competitively. In those places, benefits have been provided as grants to improve basic infrastructure. These grants and technical expertise from the project team have helped the villagers to leverage Village Funds provided by the government. For example, in one case the project provided a solar powered water pump to improve the effectiveness of a water tower that had been built with government funds. Box 4.2g. Increased Security of Land Tenure Can Be Perceived as a Significant Nonmonetary Benefit The Katingan Mentaya Project is piloting a program of assistance to allow villages to seek formal recognition and tenure over forest estate land in the immediate vicinity of the village. The project facilitated two villages (Mendawai and Telaga) to design and propose to government a “Village Forest” (Hutan Desa) application seeking clearer management rights on between 2,000 and 10,000 hectares of forest estate land in the buffer zone of the project area, adjacent to those villages. If successful, the village forest license will grant the village a 30-year concession license to manage the forest in that area sustainably. As part of the application process, the village must outline a restoration and sustainable use plan for the area (including forest and hydrological restoration). The challenges of assisting villages to obtain village forest licenses vary from village to village, and the approach must always be tailored to the exact circumstances and desires of the village in question. Typically, the process includes lengthy initial discussion, further participatory mapping, formulation of a detailed land use plan for the targeted area, and formulation of a village business unit (if one does not already exist), followed by formal application to the Ministry of Forestry (PT RMU 2017). 46 Box 4.2h. Auctions Can Help Adjust and Optimize the Amount Provided for Benefits In Australia, the Emissions Reduction Fund (ERF) does not assess, monitor, or pay for any results other than emission reductions. However, the auctions that are used to select projects are designed to purchase emission reductions at the least cost since project proponents tend to factor in other benefits when bidding for a contract. The Clean Energy Regulator invites bids from registered projects that have already shown they meet methodology and ownership requirements. Participants submit a bid specifying a price per ton of emission reduction and the lowest-cost projects are selected. Participants cannot see what other companies are bidding as bids are “sealed” or secret. Successful participants are paid the price that they bid once they submit audited reports demonstrating the volume of emission reductions achieved after project implementation. The non-carbon benefits reduce the level of funding required from the ERF to make projects viable, and the competitive nature of the auction process creates incentives for project proponents to submit their best bids, taking non-carbon benefits into account. In this way the ERF provides financial support for cost-effective emission reductions and may generate other project benefits (Commonwealth of Australia 2014). the potential other benefits that the project may 4.2.2.9 Participatory identification of benefits generate for them (see Box 4.2h). A critical way to ensure that benefits are really The auction approach relies on beneficiaries perceived as benefits is to give the beneficiaries having the capacity to assess their own costs decision-making power over the form of the and benefits, which may not be feasible in all benefits. When benefits are monetary, the ben- countries. It also results in different amounts eficiary generally has complete control and can being paid to each beneficiary, which may not be decide how to spend their money. Exceptionally considered acceptable. in Ecuador, beneficiaries of the SBP are required to submit an investment plan to explain how Rigorously aligning benefits with opportunity the cash they receive will contribute to poverty cost can be challenging, particularly when the alleviation and local development (see Box 4.2i). desired nonmonetary benefits are difficult to quantify. In the AMPF in Peru, for example, it was All the cases involved some process for partic- hard to apply the standard conservation agree- ipatory identification of nonmonetary benefits. ment approach that aims to benchmark incen- Program implementers from Bolsa Floresta in tives against the opportunity costs of changing Amazonas, Brazil, the Makira Project in Mada- behavior for the surrounding indigenous peoples. gascar, and the Kariba REDD+ Project in Zim- In addition to technical support related to agri- babwe all stressed that listening to beneficiaries culture, which can more easily be defined mon- and being able to adapt the benefits based on etarily, these communities requested benefits their inputs were among their most import- related to the recovery of traditional knowledge, ant lessons learned. Insights into participatory a benefit that is hard to quantify in pure dollars structures and process are provided in Section terms in order to equate to the cost of producing 4.3 on stakeholder participation. more desirable environmental outcomes (Podvin 2017). 47 LESSONS LEARNED & GOOD PRACTICES CONTINUED Box 4.2i. Including Requirements for Participatory Decision Making About Use of Funds for Monetary Benefits to Communities Can Help Promote Positive and Equitable Social Outcomes One of the aims of the Socio Bosque Program (SBP) is to have direct and verifiable benefits for poverty alleviation and local development. To help achieve this, each SBP beneficiary must develop a family or community investment plan that outlines how they will use the monetary incentive. Spending on education, health care, and infrastructure development is encouraged. The investment plan is also intended as a tool for more transparent decision making within communities (for indigenous peoples’ collective benefits) and to reduce the risk that some community members are misinformed about the program’s details or excluded from its benefits (Fehse 2012). Community groups are therefore requested to document the internal decision making related to the application to the SBP using communal land and the community agreements on how they use the incentive. The SBP provides training to communities to strengthen their capacity for the preparation, implementation, and evaluation of their investment plans. 4.2.2.10 Timing and duration of benefits Inconsistent or unreliable delivery of benefits can degrade trust and reduce their effectiveness (see The timing of benefits can have an important Box 4.2j). In the Makira Project in Madagascar, impact on effectiveness. Where benefit sharing delays in the delivery of expected benefits were aims to create incentives for behavior change, demotivating for the beneficiaries (see Box 4.3b). it can be effective to link the benefits to results; however, some activities, such as tree planting, This type of uncertainty is not uncommon, and need significant investment up front. It can be points to the uneven bargaining power between challenging to provide benefits up front if the the recipients and the government or manager program receives only results-based finance, as in these programs, where the latter can enter is usually the case for land use emission reduc- into noncompliance with no penalty, but not tions programs. the reverse. Where negotiation is more robust, agreements can account for the possible factors The duration of benefits can have an import- that could hinder benefit delivery and can involve ant impact on the sustainability of the desired a variety of mitigation measures or sanctions to behavior change (see Box 4.2j). The conservation incentivize the government or program manager agreements approach in the AMPF in Peru em- to pay on time—for example, through escala- phasizes defining a benefit package that can be tion clauses, where the amount due increases adjusted (increased or decreased) based on the depending on the length of the delay. community or individual’s compliance with their conservation commitments. If all benefits are delivered up front, there is no longer an incentive 4.2.3 GOOD PRACTICES FOR to comply. If monitoring and penalties for non- BENEFICIARIES AND BENEFITS compliance are clear by decreasing or eliminat- • Identifying beneficiaries: Careful analysis ing the benefits, the coupling between incentive should be conducted to identify which and behavior can be maintained. It should be actors should receive incentives for noted, however, that independent of timing, behavior change to achieve the objectives some benefits—such as a subsidy for a teach- of benefit sharing and which should be er’s salary or delivery of a basic service—cannot rewarded because of their rights and their easily (ethically or logistically) be adjusted. 48 Box 4.2j. Considerations About the Duration and Consistency of Incentive Payments Both of the forestry incentive programs in Guatemala (PINFOR, PINPEP) provide payments for between 3 and 10 years (depending on the project modality), and the same parcel of land cannot be re-registered. The National Forestry Institute (INAB) provides incentives that are short term and meant to promote the adoption of sustainable forestry practices that lead to long-term income generation opportunities (e.g., through agroforestry, forest plantations, etc.). INAB also approves a longer-term management plan. However, there is a concern that the short-term duration of the incentives poses potential challenges both to long-term forest protection and to the viability of plantations. For plantations, short-term incentives leave a potential gap between the end of the incentives and the plantation reaching a mature age. With natural forest protection it could create a situation where a landowner ends up deforesting (even if it is illegal), because they do not want, or cannot afford, the unproductive asset (Kuper 2014). By contrast, Ecuador’s SBP has agreements with a term of 20 years, and the agreement is automatically renewed if the landholder does not opt out. However, SBP beneficiaries are required to protect and conserve the area included in their contract (i.e., maintain intact forest cover) and therefore have fewer opportunities to generate additional revenue from the standing forest assets. Twenty years was therefore seen as a period that was long enough that it would require changes in practices and outlook and would have a greater chance that conservation would continue after the initial term (de Koning et al. 2011). Both the PINFOR and PINPEP programs in Guatemala and the SBP in Ecuador are financed through the national budget, with PINFOR and PINPEP receiving 1 percent of the state budget, and the SBP’s budget allocated each year by the Treasury. Both programs have experienced difficulties with making payments on time because of the lack of availability or approval in funding. In 2014, maintenance phases of several PINFOR projects were legally canceled by the INAB as a result of insufficient funds. Critics argue that PINFOR’s community and protection projects were disproportionately selected for cancellation while privately owned plantations remained a priority (von Hedemann and Osborne 2016). In Ecuador, in mid-2015, the payments were temporarily delayed and were not reinstated until 2017. The Ministry of Environment explained that the delay was the result of fluctuations in the price of oil that impacted state revenues. These budgetary uncertainties and payment delays can impact the level of trust that people have in participating in the programs as it leads them to question the long-term value of taking part and the commitment of government to maintain the stated level of benefits. contributions to generating the goods and • Barriers to participation: Eligibility services linked to results-based finance. requirements should not exclude target • Eligibility criteria: Although land and groups and benefit packages should resource tenure can provide a clear and be sufficiently attractive to encourage legitimate basis for determining the participation; special attention should be eligibility of beneficiaries, care should paid to vulnerable and marginalized groups be taken to include key actors with and existing inequities. overlapping rights and to recognize • Targeting benefits: Allocations, weighting, customary rights. or quotas can be effective for targeting specific beneficiary groups and for meeting specific objectives. 49 LESSONS LEARNED & GOOD PRACTICES CONTINUED • Differentiated benefits: A differentiated benefits are implemented and have the approach can be effective, providing capacity to benefit from them. Capacity different types and/or amounts of benefits is also needed to deliver nonmonetary to different groups of beneficiaries to reflect benefits, which can be more challenging their different rights and contributions with than monetary ones, both administratively respect to the objectives of benefit sharing. and logistically. This approach should consider monetary • Individual versus community benefits: and/or nonmonetary and individual and/ Although benefits to individual households or community benefits as appropriate, can be appropriate and effective in some bearing in mind that greater complexity contexts, community benefits can reinforce could increase operational and transaction and reward collective responsibilities and costs for delivery of benefits. can ensure that all community members— • Conditionalities for benefits: Specific including the vulnerable and marginalized— outcomes can be facilitated by making share in the benefits. benefits performance-based, by • Revenue-generating benefits: Benefits in linking them to clear commitments in the form of revenue-generating activities a conservation agreement, and/or by are often popular and can help ensure long- requiring an investment plan for the use term sustainability if there is good market of monetary benefits received. Conditions access, but care should be taken in their should be clear, with monitoring to assess design to link revenue-generating success compliance and consequences or penalties to the maintenance of the forest or other consistently applied when the conditions environmental objectives to avoid perverse are not met. or unintended outcomes. • Participatory identification of benefits: • Timing of benefits: The timing, duration, Benefits should outweigh opportunity and consistency of benefits over time costs and the efforts and inputs needed can have an important impact on their to participate in the program, so a cost- effectiveness, bearing in mind that some benefit analysis for different stakeholder activities may require up-front investment groups can be helpful. However, this may (such as tree planting), whereas later not be easy, so participatory identification delivery provides an opportunity to link of benefits—enabling the beneficiaries benefits to performance. themselves to decide on the benefits they receive—is often the most effective approach. 4.3 Institutional, • Monetary benefits: Monetary benefits Financial, and Governance can provide strong incentives by giving Arrangements beneficiaries decision-making control about how they spend the cash they receive. 4.3.1 KEY CONSIDERATIONS FOR Monetary benefits can be efficiently INSTITUTIONAL, FINANCIAL, AND delivered where beneficiaries have bank GOVERNANCE ARRANGEMENTS accounts, and they are generally more appropriate where there is clear land tenure Formal, well-structured institutional arrange- and landowners have the capacity to ments for governance and for financial and implement activities on their own land. other management underpin benefit sharing. • Nonmonetary benefits: Nonmonetary The different institutional and legal arrange- benefits can be targeted to achieve social ments depend greatly on the overall program’s or environmental objectives but, to be objectives, technical alignment, funding sources, effective, beneficiaries should identify which capacity, available resources, and other factors. 50 Good governance in relation to these institution- The review of cases helped identify key issues for al, financial and governance arrangements is key institutional, financial, and governance arrange- in enabling the effective, efficient, and equitable ments: delivery of benefits to beneficiaries. • The importance of legal frameworks as a basis for the transfer of benefits and in The key questions for institutional, financial, and defining institutional arrangements; governance arrangements include: how benefit sharing is structured and implemented; how de- • The variety of roles involved in benefit cisions are made; how funds are received, man- sharing and how varying capacities can aged and disbursed; how benefits are delivered impact effectiveness and efficiency; to beneficiaries; and what entities are involved • The need for accountable structures to and why. Many different roles are required to manage the flow of finance for benefit implement and oversee benefit sharing and the sharing; entities filling those roles vary greatly depending • The importance of timing and source of on the context. finance, including the need for significant finance up front to establish benefit- 4.3.2 FINDINGS FROM THE CASES sharing mechanisms; ABOUT INSTITUTIONAL, FINANCIAL, • The need to understand transaction costs AND GOVERNANCE ARRANGEMENTS and the trade-offs associated with reducing these costs; and 4.3.2.1 General observations • The need for grievance and redress mechanisms specifically focused on benefit Institutional, financial, and governance arrange- sharing. ments contribute to the efficiency of benefit delivery. However, processes for decision mak- 4.3.2.2 Legal and institutional frameworks ing about the design and oversight of benefit sharing are also critical for effectiveness to The importance of sound, clear legal frame- ensure that benefit sharing supports the pro- works as a foundation for benefit sharing was gram’s overall objectives. Furthermore, gover- a resounding theme across all cases. Legal nance arrangements are crucial for equity and frameworks are critical for delivering any form inclusiveness. Although more complex programs of benefits, since benefits are usually transferred targeting different drivers of change and provid- based on an agreement and, in all cases, legal ing different types of benefits to different actors frameworks either defined or heavily influenced may support more effective delivery of envi- eligibility for and conditionality of benefits. ronmental results, the arrangements required to implement these programs often entail an Legal frameworks also determine institutional increased management burden and accompany- arrangements, particularly for jurisdictional gov- ing higher transaction costs. ernment-led programs, defining which entities are involved, their roles and responsibilities, and Collaboration is key, given the many roles and how they interact. Institutional frameworks sup- responsibilities required to implement benefit port essential collaboration across entities, given sharing. Programs are most efficient when insti- that benefit sharing is often interdisciplinary, tutions and beneficiaries have adequate capac- involving multiple ministries or agencies that are ity and are operating under clear institutional, diverse in both mandate and level. financial, and governance arrangements. Clear and transparent legal frameworks support this The absence of clear legal and institution- collaboration, so it is important that they are al frameworks can significantly hamper the strong while remaining adaptable for changing establishment of formal benefit-sharing mech- contexts. anisms. For example, while pilot benefit-sharing 51 LESSONS LEARNED & GOOD PRACTICES CONTINUED activities have been initiated for the Katingan development activities supported by the project Mentaya Project in Indonesia, a formal bene- and required the establishment of new institu- fit-sharing mechanism has not yet been estab- tions such as the Location Carbon Committee lished because of the lack of clear government and community-based organizations to en- regulations about benefit sharing for ecosystem sure the fair and transparent implementation restoration concessions generating revenues of those resources, since communities had no from the sale of carbon credits. previous experience or capacity for implementing these types of projects. Legal frameworks have different forms, ranging from laws and regulations, such as the SISA law While a sound legal and institutional framework in Acre, Brazil, to individual contracts and agree- is key, it is still important to maintain some ments, such as the conservation agreements level of flexibility to support and enable adap- used in the AMPF in Peru. As described in Section tive management of the program in response 4.2.2.2, the eligibility requirements and legal basis to changing contexts or conditions. In Australia, for participating in benefit sharing are often even though the ERF is established by law, some related to land and resource tenure, recognizing of the details are clarified in regulations, which that these rights are legally recognized and usu- allows some flexibility given that regulations can ally commonly understood (although not always be more easily changed. Changes in drivers of viewed as legitimate, as discussed in 4.2.2.2). deforestation or degradation, political contexts, demographics, levels of finance, and other fac- In some cases, existing legal and institution- tors can all impact the effectiveness and equity al frameworks are used to facilitate and/or of benefit-sharing arrangements, so the ability implement benefit-sharing arrangements. In to adapt is key (see Box 4.3a). Zimbabwe, the Communal Areas Management Program for Indigenous Resources (CAMPFIRE) Political support is a key enabling condition for program in the 1990s established that local many programs, particularly for government-led communities represented by Rural District national or jurisdictional programs, and is vital Councils are the legal beneficiaries of natural for establishing new legal and institutional resources. The Kariba REDD+ Project is based frameworks and for adapting existing ones. In on the laws and by-laws that were established the Payment for Forest Environmental Services under the CAMPFIRE program and adopted (PFES) program in Vietnam, support from inter- similar benefit-sharing allocations between the national donors enabled the program team to private sector and the districts and communities. both conduct pilots and raise awareness among policy makers and potential buyers of services. In other cases, new legal frameworks and insti- By demonstrating success and raising aware- tutional structures were established specifically ness over this period, the Ministry of Agriculture for the benefit-sharing arrangements. In Acre, and Rural Development was able to develop buy- Brazil, the structure and framework for SISA in from actors at the national level. This strong were formalized by law in 2010 and included support enabled the program to secure enough the creation of several SISA-specific institutions up-front investment from the various ministries such as the Institute of Climate Change and En- at an early stage—before payments began vironmental Services Regulation (IMC). Similarly, coming in—to set up the program and start in Madagascar, the roles and responsibilities as implementation. This support has also led to the well as the carbon revenue-sharing allocations PFES program being institutionalized by law, and management mechanism for benefit sharing which enables even more government support for the Makira Project were formalized through and alignment from other ministries. a national government decree. In Kenya, com- munities around the Kasigau Corridor REDD+ Political will can be such a catalyzing factor that Project area identify the types of community in some cases—for example, with the SBP in 52 Ecuador—it was important to capitalize on this itate the benefit-sharing arrangements helps support to advance the overarching framework to ensure continuity across changes in elected for the program despite not having every detail governments and administrations. For example, figured out in advance. Rather, it preferred to get the legal provisions, strong political support, and started quickly, making any necessary changes positive experiences of beneficiaries for SISA in at a later stage based on “learning-by-doing.” Acre, Brazil, the PSA in Costa Rica, and the SBP in Ecuador have helped ensure longevity of these Having a strong legal framework and formal programs despite changes in political contexts institutions established to manage and facil- over time. Demonstrating human well-being and Box 4.3a. Importance of Enabling Flexibility Through the Legal Framework and Institutional Arrangements Underpinning Benefit Sharing The well-defined legal framework underpinning the SISA model was established by law in 2010 and is notable and innovative in that its design has enabled the program to be flexible for a variety of changing contexts. Indeed, the overall objective of the program is itself relatively general: to protect and conserve forest by establishing a system to value ecosystem services and facilitate the distribution of associated benefits. In design and practice, the program is deeply grounded in the principle of stock and flow. Two types of stakeholder groups are rewarded: those who contribute to protecting forest stocks (i.e., the ‘stock’) and those who contribute to reducing deforestation (i.e., the ‘flow’). Under the REDD Early Movers (REM) Programme, specific institutions were developed at the state level, but most of the benefits flow to beneficiaries through pre-existing community development– oriented institutions. This has supported success of the program for several key reasons: • Designing an overarching framework under which different projects nest helps benefits reach multiple types of stakeholders and supports a wide variety of strategies. SISA is a platform or framework with programs implemented and funds distributed through a variety of individual mechanisms, including results-based REDD+ projects, associations that produce and process forest products, vertically integrated poultry systems, and more. As such, SISA is able to distribute funds to many types of stakeholders (from individual households to cooperatives) and also to flexibly direct funds to a variety of different strategies and activities through these implementing agencies in a way that is flexible and more easily modified. • This flexibility to adjust strategies has also been critical for managing the varied expectations from the many donors involved in this program. Being able to distribute benefits through projects that focus on the specific interests of donors can add a layer of complication, but with appropriate planning and coordination this has strengthened the relevance of the program for a much broader group of potential donors. Establishing an overall financial structure with rules and regulations makes financial compliance clear and allows donors to align their requirements to this system. • Utilizing this framework of an overarching platform through which many existing projects are supported has allowed the program to capitalize on Acre’s decades of experience in community development initiatives. It has been very efficient to incorporate these existing projects into the framework given, in many cases, they are already located in relevant geographies and the implementers and beneficiaries have relevant expertise. This factor has also contributed to reduced transaction costs, given that higher-level management of SISA can focus more on institutional and financial management, and less on thematic expertise for implementation of specific strategies. continues next page 53 LESSONS LEARNED & GOOD PRACTICES CONTINUED Box 4.3a. continued • This structure is resilient across changes in policies and politicians, given the overarching principles are relatively non-partisan, the structure is supported by firm regulation, and the specific strategies employed and activities invested in are flexible. The popularity of the program among beneficiaries has also generated support from politicians across political parties. Moreover, the management and oversight bodies involved are mostly new, SISA- specific institutions, which has helped the program persist despite uncertainty or instability caused by other contextual factors outside the program (e.g., changes in government). For example, the REDD Early Movers (REM) program only disburses funds to SISA through the Institute of Climate Change and Environmental Services Regulation (IMC) – which coordinates the implementation, regulation, and monitoring of SISA – thereby contributing to the persistence of this institution. Keeping these many sub-programs and projects aligned can be challenging, at times posing risks to effectiveness and efficiency; therefore, coordinated cross-sectoral oversight is required to maintain an overall strategic focus. livelihood benefits can also be an effective way be the manager of funds or a separate to foster support across political divides. entity) –– Entity making decisions about the 4.3.2.3 Roles, responsibilities, and capacity form of nonmonetary benefits (could be the beneficiaries themselves, a Many different roles are needed to design, multistakeholder body that includes oversee, implement, monitor, and fund benefit beneficiary representatives, or an entity sharing (see Figure 4.3a), and the entities that fill that consults with beneficiaries) these roles vary based on context and capacity. –– Intermediary that supports delivery of These roles may include serving as: nonmonetary benefits (optional) • Donor or off-taker that finances the –– Beneficiary that participates in the program; in the case of emission reductions program to generate results and receive programs, off-takers may purchase the benefits emission reductions units generated –– Entity responsible for monitoring and through the program evaluation of benefit sharing • Entity that receives finance from the In different cases, an entity may play one or international or national level and transfers more roles, or certain roles are not needed—for finance to the manager of funds example, where benefits are monetary, no inter- • Manager of funds disburses funds, mediary is needed. following the defined rules and regulations The capacity of the organizations that play for benefit sharing, to any of a number of these roles influences efficiency and effective- entities determined by the program: ness in terms of both implementation of activ- –– Governance body that makes decisions ities and financial management. When organi- about the principles, rules, allocations, zations are well-structured and have adequate and rates of benefit sharing, and capacity with relevant technical expertise, oversees adherence to these decisions benefits are delivered to beneficiaries more effi- –– Entity checking eligibility and/or ciently, thereby improving overall effectiveness conditionality to receive benefits (could of activities. 54 FIGURE 4.3A: Examples of Roles Involved in Benefit Sharing Donor off-taker Entity that receives finance Governance body Manager of Entity responsible that makes decisions funds for monitoring and about principles, rules, evaluation allocations, rates, etc. Intermediary Entity that Entity that makes checks nonmonetary eligibility and $ (e.g. for decisions about the form of nonmonetary benefits) conditionality benefits Beneficiary During the design of the ERF in Australia, it was with these bodies to enable them to play a criti- recognized that state, territory, and other local cal support and oversight role; however, in prac- governments could play an important role in the tice, lack of capacity, involvement, and oversight program as aggregators of projects that target from government staff (despite receiving funds) households and small businesses. However, the hampers project success. requirements for participation in the ERF are complex because of the methodologies needed In addition, the capacity of beneficiaries also in- to ensure the integrity of carbon accounting, and fluences efficiency and effectiveness. Implement- local governments have not generally had the ing a system of benefit sharing with participants capacity to play an aggregation and facilitation where the majority have not completed sec- role. ondary education, do not have bank accounts, and/or have difficulty meeting their basic needs In Zimbabwe, the technical and administrative presents significantly more challenges than support of the Rural District Councils should fa- working in a more developed country where in cilitate delivery of benefits to local communities a more developed country where the population in the Kariba REDD+ Project. Similarly, in Mad- often has access to resources like education and agascar, the local Waters and Forests agents banking infrastructure. Alternatively, having par- should provide technical support and oversight ticipants with relatively lower capacity requires for the forest management contracts around the supporting agencies with adequate resources Makira Project area. In each case, 20 percent of to be more involved with the necessary alloca- the revenues from carbon credit sales is shared tion of resources to support such involvement. 55 LESSONS LEARNED & GOOD PRACTICES CONTINUED Related to this, it can also be important that Bank, Procter & Gamble, Coca-Cola, and entities that deal directly with beneficiaries have others; a local presence. This has been demonstrated • As a project implementer—as in the for delivering nonmonetary benefits to benefi- Katingan Mentaya Project in Indonesia, ciaries in Indonesia for the Katingan Mentaya the Kasigau Corridor REDD+ Project in Project, in Madagascar for the Makira Project, Kenya, and the Kariba REDD+ Project in in Peru for the AMPF, and in Zimbabwe for the Zimbabwe; Kariba REDD+ Project. For this reason, in some • As an off-taker—an entity that purchases contexts, it may be most efficient and effective emission reductions units—as in the case for local NGOs or private sector actors to play a of Disney and BHP for the AMPF in Peru; service provider role (see Box 4.3b). • As a service provider—as in Australia, Sometimes governments may opt not to serve where private sector organizations help in any of these roles because of the importance landowners produce proposals to access of high capacity and/or because of a lack of the ERF; well-suited government entities. In these cases, • As a beneficiary—as is the case of privately NGOs or private sector actors may formally or managed forestry plantations in PINPEP informally act as service providers or as interme- or PINFOR in Guatemala or private coffee diaries between government agencies and ben- cooperatives in the AMPF in Peru; or eficiaries. See Box 4.3c for examples of different service providers used in various cases. • As part of benefit delivery—as is the case for the Katingan Mentaya Project Indeed, there are many different roles the private in Indonesia, where community producer sector can play in benefit-sharing arrangements, private enterprises either form part of or including: support revenue-generating benefits such • As a donor—as in Amazonas, Brazil, where as the production of rattan or bamboo funders of Bolsa Floresta include Bradesco flooring, or coconut palm sugar. Box 4.3b. Challenges Delivering Benefits to Beneficiaries with Relatively Lower Capacity In Madagascar, many of the communities around the Makira Project are in isolated areas (some are up to three days’ walk from the nearest transport) and over half of the heads of households are illiterate. Although Tany Meva, the entity charged with managing and disbursing funds, originally requested detailed and costed proposals for nonmonetary benefits, many community management associations (Vondron’Olona Ifotony, or VOIs) sent brief descriptions for their proposed use of the community funds (in one case just “need school”). To overcome this barrier, Tany Meva staff had to visit villages to help the communities to develop a full project proposal by establishing project feasibility and estimating costs. In some cases, communities were able to get support from someone with a higher education level to prepare a project dossier, which led to their project being prioritized. Tany Meva typically provides advances to communities to implement planned activities, and based on technical and financial reports, a second installment can be requested. Alternatively, Tany Meva would purchase the materials and organize their transport to the communities. This led to significant backlog and delays in delivery of benefits. In some cases, agreed incentive payments for patrols were not made for up to six months, which reduced community motivation to protect the forest and led to complaints from the communities. 56 Box 4.3c. Examples of Different Types of Service Providers Supporting Benefit Sharing In Ecuador, the Socio Bosque Program (SBP) has established cooperative alliances with civil society organizations (e.g., NGOs and indigenous peoples’ organizations) to increase its effectiveness. In collaboration with the Ministry of Environment, these organizations support local families and communities interested in participating in the SBP by providing information on the program and preparing documentation for applications. In several cases, additional activities are implemented, such as training forest rangers, support on financial planning and management, or investment in compatible productive activities such as agroforestry or ecotourism. In Australia, a new type of private sector has emerged to provide administrative services as a “carbon service provider” to support the development of projects and enable landowners to access finance from the Emissions Reductions Fund (ERF). In order to participate in the ERF, project proponents must develop detailed documentation explaining how they will deliver emission reductions using approved methodologies and how they have the legal right to undertake the project. Since ERF funding is based purely on the volume of emission reductions generated, the carbon accounting requires a high level of integrity; it is also relatively complex to demonstrate additionality and to meet other requirements of approved methodologies. Landowners do not generally have the time and skills to prepare the documentation needed, so the service providers can help with preparing reports, conducting monitoring, organizing audits, submitting reports, and, in some cases, they also take on risk by submitting projects and contracting with landowners. In Costa Rica, the National Forestry Financing Fund (FONAFIFO) has established collaborative agreements with numerous NGOs as part of the Payments for Environmental Services Program (PSA). NGOs give support to the PSA beneficiaries during the application process and can provide technical expertise on the development of the management plans, implementation of project activities, and the monitoring of compliance with the agreed-upon land use. In Peru, Conservation International Peru has an administration contract with National Service of Natural Protected Areas (SERNANP) to manage the Alto Mayo Protected Forest (AMPF). This gives the NGO a strong mandate when negotiating and otherwise engaging with the local communities and project partners. A few other civil society organizations contribute to various technical parts of the project based on a diversity of expertise required. Park rangers patrol the Alto Mayo Protected Forest. (©Thomas Mueller) 57 LESSONS LEARNED & GOOD PRACTICES CONTINUED 4.3.2.4 Financial management accuracy of reported financial management activities. In Bolsa Floresta, all financial activities A transparent and accountable financial man- involving public funding are audited by the ex- agement system is key for efficiency and also ternal firm PricewaterhouseCoopers. This audit builds trust and support not only among bene- is then subject to approval by the FAS Supervi- ficiaries, but also across government ministries sory Board and Board of Directors, before being and departments and with donors. For a bene- reviewed by the Amazonas State Prosecutor and fit-sharing mechanism to work, both the entities accounting court (tribunal du contas). The rigor contributing funds to the program and those of the Bolsa Floresta auditing process reflects receiving benefits need to feel that the system is the level of legitimacy needed for such a complex legitimate and fair in the distribution of benefits. state program with many funders (and associ- Indeed, transparency is important through the ated requirements) and diverse activities over various levels of financial management (see Box a large geography implemented through many 4.3d). actors. One of the core components of sound financial In some cases, beneficiary participation in deci- management is ensuring transparency in how sion-making bodies related to financial manage- the funds are managed and disbursed. In Ama- ment enhances transparency (see Box 4.3e). zonas, Brazil, information regarding types and amounts of benefits and numbers of beneficia- 4.3.2.5 Timing and sources of finance ries in each conservation unit participating in Bolsa Floresta is publicly available on the FAS The level and timing of financing required to website along with a complete list of beneficia- establish and implement benefit sharing are im- ries for the Bolsa Floresta Familiar subprogram. portant considerations for the success of benefit In Kenya, the actual benefits distributed against sharing. the benefit-sharing plan are regularly reported to all primary stakeholders of the Kasigau Corridor Several cases highlighted a need for significant REDD+ Project, including information about the up-front finance to design and begin implement- sales of the emission reduction units generated ing benefit sharing. This is most directly linked to from the project. two key factors, which demonstrate the need for paying close attention to financing well before Another component is the inclusion of an implementation begins: first, the establishment oversight mechanism to verify compliance and Box 4.3d. Improving Transparency While Reducing Transaction Costs Beneficiaries in the Payment for Forest Environmental Services (PFES) program are spread across the country with payments disbursed to village funds, household groups (of up to 20 families), cooperatives, and individual households, making the disbursement of payments a substantial task. The program was originally designed with electronic payments used only for groups; however, with an increasing number of people online and with access to electronic banking, an electronic payments system to individual households is being piloted with support from the German Agency for International Cooperation (Deutsche Gesellschaft für Internationale Zusammenarbeit, or GIZ) and the U.S. Agency for International Development (via the Vietnam Forests and Deltas Program). This development was requested by ministries to improve transparency of financial management between provincial funds and beneficiaries. As an added benefit, the pilots of this electronic system have demonstrated reduced transaction costs. 58 Box 4.3e. Beneficiary Representation in Financial Decision Making The Makira Project in Madagascar is implemented on government-owned land including Makira Natural Park and the buffer zone where local communities have established community management associations (Vondron’Olona Ifotony, or VOIs) and signed forest management contracts with the government. The VOIs are represented on six VOI platforms for each sector of the project area, and the platforms, in turn, constitute a VOI federation. The Wildlife Conservation Society (WCS) is the designated manager of Makira Natural Park; Makira Carbon Company, a wholly owned subsidiary of WCS, is responsible for the marketing and sale of verified emission reduction credits generated by the project. In 2015, the Tany Meva Foundation was appointed to manage and disburse funds allocated to communities and to park management from the sale of credits. Tany Meva requests proposals from all the VOIs for the use of community funds, which are collected by the VOI platforms, screened for feasibility by a Local Technical Committee composed of the presidents of the six VOI platforms, the WCS, and Tany Meva, and then prioritized by the VOI federation. A steering committee composed of representatives of the Ministry of Environment responsible for Forest, the National REDD+ Coordination and Climate Change Coordination offices, the WCS, and the VOI federation reviews and approves annual work plans and budgets for the use of funds for the communities proposed by Tany Meva. of the benefit-sharing mechanism generally requires significant resources; and second, fre- quently the implementation of activities needs to occur before results-based finance is received and disbursed, creating a lag in delivery of the resources needed to incentivize or implement activities. In many situations, the design of benefit sharing requires the development of new institutions and governance arrangements, which requires time and capacity from the agency designing the program. In addition, beneficiaries may require inputs (monetary and/or in-kind) to begin imple- menting activities in pursuit of the program ob- jectives. However, when finance for benefit shar- ing is linked to performance, cash does not flow into the program until improved performance is achieved and measured. For example, significant financial resources were needed at the beginning of the Kasigau Corridor REDD+ Project in Kenya to conduct community consultations, design the implementation strategies and benefit sharing, establish new multistakeholder governance structures, and complete the required processes to be able to raise finance from the sale of emis- sion reductions. Lack of government participa- Zebra inside Kenya’s Tsavo National Park (©Charlie Shoemaker) 59 LESSONS LEARNED & GOOD PRACTICES CONTINUED tion early in the project necessitated fundraising inclusion of long-term financing mechanisms for these activities by the project implementer, can also be strategic (see Box 4.3f). That said, Wildlife Works. Similarly, in Acre, Brazil, one of another common theme worth noting is that the the biggest factors contributing to the success source of funding has some influence on the of the SISA program is the initial cash flow and design and implementation of the program. support for institutional strengthening from the Funding through corporate social responsibility REM program. allocations, for example, can be quite restrictive as companies have specific issues they want to Programs found different ways to secure the finance that fit with their business priorities. For necessary up-front funding, often through a example, in Bolsa Floresta in Amazonas, Brazil, combination of blended donor financing and Samsung has been a supporter of education government budgets (Table 4.3a). In the PFES activities specifically relating to the use of program in Vietnam, international donors funded technology. pilots to demonstrate success and raise aware- ness about payments for environmental ser- 4.3.2.6 Transaction costs vices. With this, the Ministry of Agriculture and Rural Development was able to secure buy-in There are always costs associated with the from various ministries at an early stage, which transactions involved in benefit sharing; these in- were able to collectively allocate resources to set clude registering as a beneficiary, demonstrating up the PFES and begin implementation before that conditionality requirements are met, and finance from private water supply companies, receiving benefits. While some of these costs hydropower plants, and tourism companies vary based on context, there is also variation began coming into the system. associated with the design of the program and the type of benefits being delivered. Blended finance and flexibility to secure new sources of finance can also be very useful in Several factors related to project context or sustaining programs in the long term and/or in design can contribute to higher transaction supporting a variety of different strategies. The costs. In the AMPF in Peru, implementing a Box 4.3f. Use of Blended Finance to Support Benefit Sharing In Amazonas, the financing model had to change in 2015 when the initial state public funding for Bolsa Floresta Familiar had been distributed and it was clear that REDD+ and payment for ecosystem services would not provide sufficient ongoing finance. The financing strategy was reoriented toward philanthropic funding from businesses and foundations, initially in Brazil and then internationally. A trust fund has also been established, whereby the interest generated is used to finance the monetary disbursements while the base endowment is maintained. FAS has been particularly successful in securing partnerships for Bolsa Floresta that generate shared value for both beneficiaries and the funder. This has included partnerships with companies such as Bradesco Bank, which provides banking technology to reach remote communities, which in turn expands their customer base, and Coca-Cola, which supports planting and harvesting guarana (a fruit native to the Amazon region), and then in turn purchases all the products. FAS serves as an intermediary, connecting and bridging the gap between beneficiaries and partners. Despite this new fund-raising role, FAS has managed to keep overhead low at 17 percent. 60 Table 4.3a. Sources of Funds for Each Case PROGRAM SOURCE(S) OF FUNDS ERF, Australia State budget SISA, Acre, Brazil State budget, GIZ, the Amazon Fund (managed by BNDS Brazilian Development Bank), REDD Early Movers (REM; results-based finance for emission reductions managed by KfW Development Bank of the German government, with funding from the govern- ments of Germany and the United Kingdom) Bolsa Floresta, Philanthropic funds and state budget (until 2015) Amazonas, Brazil PSA, Costa Rica Allocation of revenue generated from the country’s tax on fuel, with additional sources from bilateral or multilateral donors as well as through private sector investment via payment for ecosystem services (e.g., carbon, water) SBP, Ecuador State budget, with some additional finance from REM (KfW and the government of Norway), Global Climate Fund (GCF), Global Environment Facility (GEF), and private sector investment (minimal investment through carbon offsets) PINFOR and State budget PINPEP, Guatemala Katingan Mentaya Philanthropic funds for project partners and private investment and revenues from the Project, Indonesia sale of carbon offsets on the voluntary market for project developer Kasigau Corridor Private banks and finance institutions (e.g., International Finance Corporation, Nedbank REDD+ Project, Group, BNP Paribas) supported project development, followed by funds from the sale of Kenya carbon offsets on the voluntary market starting in 2011 Makira Project, Philanthropic funds and revenues from the sale of carbon offsets on the voluntary Madagascar market Community Funds generated by each Community Forest User Group from the sale of forest prod- Forestry, Nepal ucts AMPF, Peru Philanthropic funds and revenues from the sale of carbon offsets on the voluntary market PFES, Vietnam Private water supply companies, hydropower plants, and tourism companies pay a fee at a fixed rate Kariba REDD+ Philanthropic funds and revenues from the sale of carbon offsets on the voluntary Project, market Zimbabwe 61 LESSONS LEARNED & GOOD PRACTICES CONTINUED tailored benefit-sharing approach that responds beneficiaries, and FAS has collaborated with to complex conditions at the local scale through Bradesco Bank on new banking technologies to conservation agreements with individual house- improve efficiency in direct delivery of monetary holds and communities of indigenous peoples is benefits. In Acre, Brazil, a key factor in SISA’s effective. However, this model necessitates rel- relatively low overheads was the incorporation atively higher transaction costs due to the large of existing activities and projects into the SISA number of geographically disbursed individual or model. While the SISA law and certain coordina- grouped beneficiaries with unique context-spe- tion and oversight entities were established spe- cific opportunity costs of behavior change cifically for the program, many of the projects in addressed via many different agreements. In which the program invests already had estab- the Makira Project in Madagascar, the relatively lished structures and years of operating experi- low capacity of participants to engage in the ence. Efficiency was optimized in SISA not only program, in addition to their extreme geographic by aligning with this existing deep experience in remoteness, makes delivery of in-kind benefits community development projects, but moreover logistically difficult and led to a significant bur- by capitalizing on the specific technical expertise den on the intermediary, the Tany Meva Foun- of these already-established projects. dation, in its delivery of benefits. In Guatemala, PINPEP consists of many low-value transactions, One commonly desirable scenario is to employ with an overhead based on the percentage of local people to help deliver the project (e.g., funds administered as opposed to the number of as paid extension agents, trainers, monitors, contracts issued (15 percent). In both PINPEP in rangers). This type of arrangement is frequently Guatemala and the Makira Project in Madagas- seen by communities as an important incentive, car, the overhead percentages for administration particularly in remote areas where jobs are rare. have not been sufficient to comfortably cover These people also speak the language, under- transaction costs associated with efficient deliv- stand the culture, know the key people, and ery of monetary or in-kind benefits. can require less travel/housing and other costs associated with external project personnel—not On the other hand, several factors can contrib- to mention that this scenario can engender own- ute to lower transaction costs, mostly related ership and empowerment. to how benefits are delivered and to a relatively simple program design. The PSA program in Aggregating beneficiaries may also reduce Costa Rica initially imposed very high transac- transaction costs. In the PFES in Vietnam, tion costs on participants, requiring applicants sometimes households are organized into groups to fulfill several separate requirements, many of such that one transaction is divided among ben- which—such as providing proof that they do not eficiary households by a representative of the owe anything to the national health system— group, instead of having individual transactions had nothing to do with their ability to provide for each household. The program is also piloting environmental services (Pagiola 2008). These electronic payments to further reduce trans- requirements are now much more streamlined, action costs in remote areas as more people by linking the National Forestry Financing Fund have access to electronic banking. In the ERF in (FONAFIFO)’s databases to those of other gov- Australia, high transaction costs for participa- ernment agencies. In Bolsa Floresta in Amazonas, tion proved challenging for smaller-scale projects Brazil, FAS services extremely remote communi- to participate in the Carbon Farming Initiative, ties and incorporates nonmonetary training and so changes were made during the design of the social infrastructure programs, yet has managed subsequent ERF to facilitate aggregation. The to keep their overhead at 17 percent, including project proponent also no longer needs to hold covering costs of fundraising. This is attributable the carbon sequestration rights (i.e., own or have to two primary factors: a standard formula is a property interest in the project area) but can applied for determining benefits for different be another entity that has a contract with the 62 landowner, and standard arrangements are es- and/or potentially noncompliant issues. Such tablished for transferring rights from households information is critical to enable adaption of the and small businesses to a project aggregator. design and implementation of benefit sharing to manage these issues. Moreover, grievance The delivery of nonmonetary benefits tends to mechanisms are often required by donors and/or be a less efficient way of delivering benefits to by legal regulations. beneficiaries, necessitating higher transaction costs. In Zimbabwe, the Kariba REDD+ Project The project manager of the Kasigau Corridor has been able to deliver significant nonmonetary REDD+ Project in Kenya, Wildlife Works, im- benefits to communities including—for example, plements an ongoing process of stakeholder the rehabilitation and maintenance of 198 bore- engagement with multiple venues for providing holes and the maintenance of 1,200 kilometers input, including a formal system for submitting of road. While the carbon revenues allocated to grievances. This formal set of procedures is the communities covered the costs of materials well-documented and consistently communicat- and labor, these were insufficient to cover the ed to support transparency. Moreover, Wildlife true costs of implementation, so the projects Works took measures to design the grievance were made feasible and successfully imple- mechanism to be accessible, easy to under- mented with additional technical and logistical stand, and culturally appropriate. In Acre, Brazil, support and oversight from the Carbon Green an independent ombudsman receives complaints Africa team. from beneficiaries and ensures that they are addressed. This position was specifically created However, nonmonetary benefits are not always in the State Attorney General’s office as part of more costly to deliver if a few large, communal the SISA regulations. projects are implemented. For example, in Kenya, the communities around the Kasigau Corridor Grievance mechanisms are a component of REDD+ Project have all opted to implement proj- stakeholder participation and engagement, as ects at the community level to be most efficient further described in Section 4.4, in addition to in their receipt of benefits, given that the alter- supporting and enabling adaptive management, native of individual household monetary benefits as described in Section 4.5. would have been low and the communities per- ceived a greater reward for communal projects. 4.3.3 GOOD PRACTICES FOR It is also important to incorporate some level of INSTITUTIONAL, FINANCIAL, AND adaptive management in how monetary pay- GOVERNANCE ARRANGEMENTS ments are disbursed to minimize transaction • Legal framework: Benefit sharing should costs over time (see Box 4.3d). be grounded in a clear legal framework to support and enable the necessary 4.3.2.7 Grievance and redress mechanisms agreements and collaboration. • Flexibility to enable adaptation: Despite The incorporation of a system for collecting, being based on a clear legal framework, managing, addressing, and reporting complaints some flexibility in the legal and institutional from beneficiaries and other participating enti- arrangements is needed—for example, ties related to benefit sharing is critical to ensure defining them through regulations that specific cases of stakeholder concerns rather than laws—to be able to make about unfair treatment or noncompliance are adjustments in beneficiaries, benefits, appropriately addressed. Such a system also institutional composition, and activities provides stakeholders and those responsible for over time such that the program can managing and overseeing benefit sharing with respond to lessons learned and changes in information about harmful, negative, unforeseen, context. 63 LESSONS LEARNED & GOOD PRACTICES CONTINUED • Service providers: Substantial technical appropriate, easy-to-understand grievance and administrative capacity is needed and redress mechanisms that operate in a to administer benefit sharing in a timely manner. way that effectively and equitably distributes resources. Partnerships with nongovernmental organizations (NGOs), 4.4 Stakeholder private sector actors, and others to provide Participation services and build capacity can be helpful to improve efficiency and effectiveness while also benefiting from local knowledge 4.4.1 KEY CONSIDERATIONS FOR and presence. STAKEHOLDER PARTICIPATION • Existing or new institutions: It is often Stakeholder participation is key for all stages most efficient and effective to capitalize of benefit sharing—design, implementation, on existing institutions if they have and evaluation—to ensure that it responds the legitimacy, capacity, and thematic to the needs and interests of the full range of relevance to the program—strengthening stakeholders. Participation can encompass these where necessary—given that new a spectrum of different levels from providing laws and institutions require significant information to stakeholders and requesting time, resources, and political will; otherwise, their feedback to making them equal partners in establishing new institutions may be more governance and decision making. appropriate. • Up-front finance: Significant financial This section intentionally does not focus only on resources are often required up front to beneficiaries, as participation needs to include cover the many costs associated with other stakeholders who are not currently ben- designing and initiating a program— eficiaries but who are potentially affected by or conducting adequate stakeholder input, could influence the success of benefit sharing. documenting baselines, establishing new Key considerations for stakeholder participation institutions, implementing activities— relate to how stakeholders are consulted about before results-based payments can be the design of benefit sharing, how they partic- made. ipate in decision making and implementation, • Transparency around financial and how they are informed through disclosure management: Regular audits can build and active dissemination. Considerations include trust and participation in the program, but the extent to which the full range of stakehold- they can also increase overall operating ers participates, and the measures taken to en- costs. Adopting a simple approach to sure participation of women and vulnerable and/ calculating, monitoring, and delivering or marginalized groups. A functioning grievance benefit transfers helps enable wider public and redress mechanism that is accessible and understanding. impartial is a critical element, as well as ongoing • Transaction costs: Transaction costs should mechanisms for consultation and feedback from be assessed, both to reduce them where beneficiaries and other stakeholders. possible and to adequately budget for them so as to not undermine project efficiency Plenty of documentation exists about general and effectiveness. lessons learned and good practices for stake- holder participation, so this section focuses on • Grievance and redress mechanisms: findings about participation from the cases spe- Benefit-sharing mechanisms should have cifically related to the success of benefit sharing. clear, accessible, impartial, culturally 64 4.4.2 FINDINGS FROM THE • The importance of disclosure and CASES ABOUT STAKEHOLDER transparency, and effective ways to share PARTICIPATION information. 4.4.2.2 Identifying and understanding 4.4.2.1 General observations stakeholders Every case highlighted the importance of partici- A fundamental first step of benefit sharing is pation. Stakeholder participation is key for: to conduct a good analysis of stakeholders, • Equity—to ensure that benefit sharing is identifying which groups are potentially affected perceived to be fair; by benefit sharing as well as which groups can • Effectiveness—to ensure that the right influence its success. This step may need to be benefits are delivered to the right people at revisited periodically if the program or the con- the right time to achieve the objectives; and text changes. It is also important to understand relationships between stakeholders and how • Efficiency—to ensure that cost-efficient these affect perceptions of equity. This is not processes are identified and implemented. always straightforward, and an understanding of the historical context and any past or ongoing In addition, transparency and providing clear conflicts or alliances is integral. In the Kasigau information to stakeholders about benefit Corridor REDD+ Project area in Kenya, existing sharing in a format they understand is essential tribal conflicts and tensions between communi- for building trust with stakeholders and ensuring ties with longer ties to the project area and more their support for the entire program. Participa- recent migrants generated a complicated web tion can also help avoid conflicts and misunder- of stakeholders (Githiru 2016). Moreover, many standings. ranch owners with land title no longer lived local- ly, which contributed to conflict between them Consultations and stakeholder participation take and the resident communities. Designing the time and resources, as well as real willingness project required a delicate balance of ensuring to share power and influence with stakeholders. everyone’s voice was heard while not appearing Participation is meaningful only if the benefit to give preferential treatment to a particular sharing adapts to stakeholder input. There is of- group. ten a tendency to limit stakeholder participation due to budget, time, capacity, or political will, but Another key component to designing effective the cases reviewed repeatedly demonstrate the benefit sharing through effective participation benefits of effective stakeholder participation. is conducting a stakeholder mapping process to understand the interests and influence of The review of cases helped identify some key each group of stakeholders, as well as how they and recurring issues for stakeholder participa- are organized, make decisions, and share and tion related to benefit sharing: understand information. In the AMPF in Peru, • The importance and complexity of negotiating conservation agreements with identifying who the stakeholders are and individual families as opposed to with entire understanding how they are affected by or communities allowed the Peruvian parks service can influence benefit sharing. and their technical partners to gain a deeper • The advantages of meaningful stakeholder understanding of the lives of the illegal settlers in participation and considering different the landscape. The design and negotiation phase approaches to ensuring that it happens. involved significant consultation and dialogue • The need to not only encourage but ensure with each individual family, providing a depth of the inclusion of women, indigenous peoples, material from which to generalize more replica- and marginalized and/or vulnerable groups. ble approaches later. Stakeholder mapping is 65 LESSONS LEARNED & GOOD PRACTICES CONTINUED often best conducted with stakeholders together (see Box 4.4a). These consultations have gone rather than at the household level to help under- beyond the scope of gathering input on bene- stand the strengths and weaknesses of relation- fits that go directly to the group and cover the ships between stakeholders. design of all aspects of benefit sharing. In Acre, Brazil, the SISA legislation was designed with inputs from targeted consultations with different 4.4.2.3 Importance of and approaches to meaningful stakeholder participation stakeholder groups through workshops, semi- nars, and meetings, as well as online comment Many cases illustrated the advantages of submissions. In Australia, the ERF was designed extensive stakeholder consultation in the with inputs from a series of public online con- design of benefit sharing and provided different sultations through an iterative design process, approaches that have been successful complemented by additional informal consul- Box 4.4a. Different Approaches to Consultation State System of Incentives for Environmental Services (SISA), Acre, Brazil: Deep stakeholder engagement is needed not only to design an appropriate benefit-sharing mechanism, but moreover to generate sufficient buy-in to support longevity and success of implementation. The SISA framework and legislation benefited from a comprehensive, transparent, and long-term participatory consultation process over the course of 2009 and 2010. This process included making the proposal available for public comment through the state government portal, in addition to soliciting specific input from hundreds of people through technical seminars, workshops, and one-on-one meetings with a variety of stakeholders (civil society groups, indigenous peoples, farmers, extractivists, government agencies, international agencies, carbon companies, and others). Overall, more than 300 comments and recommendations were submitted for consideration (EDF 2010). Moreover, given that stakeholder groups are not homogeneous, this process was grounded in ensuring stakeholder interests were not only listened to but also adequately responded to and acted on. Additionally, designing the program and developing safeguards in a participatory manner—including having resources specifically allocated to ensure participation from all relevant stakeholders (e.g., potential beneficiary groups who are geographically remote and less accessible)—helped build understanding and ownership, which ultimately enabled greater participation and social support for SISA. The Emissions Reduction Fund (ERF), Australia: Formal and informal processes for outreach are important to ensure good participation and reduce conflicts. The ERF was designed over several years based on experiences from the Carbon Farming Initiative through a series of formal consultations requesting written comments on terms of reference, and then a green paper before producing a white paper outlining the design of the program and responding to comments received (Commonwealth of Australia 2014). This meant that people were generally well informed about the design of the legislation. The government also publishes regular web updates and sends information to mailing lists. This approach has been successful in getting feedback from carbon service providers, but not so much from landowners who have other preoccupations. To learn from landowners, the government team responsible for the ERF visits areas with a lot of projects or where there are conflicts to meet with landowners informally to explain the rules and process and respond to questions. There are sometimes tensions within communities because of a lack of understanding of the additionality rules that may mean some people are eligible and others nearby are not. 66 tations with landowners, a critical stakeholder associations. This approach has helped ensure group that did not engage as much in the online that local people receive the benefits they want process. and that their perceptions of equity are inte- grated into the allocations of benefits. Similarly, These examples from SISA and the ERF em- in Bolsa Floresta in Amazonas, Brazil, elected phasize that effective consultation takes time, representatives from the conservation units that different and targeted approaches may be participate in twice annual leadership meetings needed to ensure that key stakeholders under- that review reports of benefit sharing, playing an stand the proposals and provide their input, and oversight role, and can change allocations across that responding to comments showing stake- benefit types. This participation has built trust holders how their input influenced the program among the beneficiaries through transparent is extremely important. A stakeholder engage- and legitimate governance structures. ment plan that lays out all the steps involved, along with the resources, time, and other inputs 4.4.2.4 Measures to ensure gender and social needed, is important for effective stakeholder inclusion participation. Marginalized groups are often less likely to Consultation is not the same as obtaining free, participate in program activities and in benefit prior, and informed consent, which is essential sharing as a result of a history of exclusion, and for the participation of indigenous peoples and vulnerable groups are less able to participate other groups with collective rights to lands and because of lack of capacity or access to resourc- resources in programs that affect them. All the es needed for participation. Frequently, mar- cases involved voluntary participation of indi- ginalization and vulnerability go hand in hand. vidual landowners and community groups such The participation of marginalized and vulnerable that consent was obtained that appeared to be groups is often important for effectiveness and free from coercion. However, it was not always also for reasons of equity and achievement of clear the extent to which consent followed a the social objectives of the program. Facilitating decision-making process defined by the groups and ensuring social inclusion was an explicit aim themselves and that they possessed full infor- in several of the cases, specifically concerning mation prior to making their decision. the inclusion of women, indigenous peoples, and Where stakeholders participate in monitoring vulnerable and/or marginalized groups in benefit and evaluation of benefit sharing, they can learn sharing. The measures adopted to include these about the broader design of benefit sharing, groups varied greatly, ranging from ensuring about its implementation strengths and chal- representation in consultations to mandating lenges, and about impacts. quotas for participation and designing subpro- grams specifically targeting certain groups. Some cases also illustrated the advantages of deeper stakeholder participation, beyond Nepal provides perhaps the strongest example of consultations, to a role in governance including mainstreaming social inclusion into the foun- oversight and decision making about benefit dation of the program by focusing on achieving sharing (see Box 4.4b). In the Makira Project in proportionate representation of women and Madagascar, beneficiaries participate in decision indigenous peoples in local decision-making making about the nonmonetary benefits their bodies—Community Forest User Groups. The community receives, and in prioritization of ben- Community-Based Forestry Program adopts efits across different communities. They partic- an explicitly pro-poor approach by applying a ipate through elected representatives in a tiered well-being ranking through a participatory pro- structure through regional platforms and an cess to identify those with limited access to and overall federation of community management control over resources (social, economic, physical, 67 LESSONS LEARNED & GOOD PRACTICES CONTINUED natural, and human) and therefore most in need information on how this was done in practice, of benefiting from the program (see Box 4.4c). and several simply grouped women and other marginalized groups together for program design There was a general lack of compelling evidence and implementation. However, some strong of gender-sensitive program design and imple- examples do exist of programs taking measures mentation among most of the cases. Several specifically and solely pertaining to inclusion of programs described promoting gender equal- women (see Box 4.4d). ity in documents and interviews but lacked Box 4.4b. Advantages of Beneficiary Participation in Decision Making About Benefits Makira Project, Madagascar: Beneficiary participation in decision making about the use of funds allocated to beneficiaries is important for equity. A formal tiered structure for community representation from the local to the national level helps to ensure effective participation. A fixed allocation of 50 percent of revenues from the sale of carbon credits from the Makira Project is allocated to communities. The communities identify their plans for the use of these funds to support forest protection and socioeconomic activities in their management plans annexed to their forest management contracts. However, not all community development plans can be financed immediately so decisions about how to use the community carbon funds are made through a prioritization process involving community representatives at different levels. The communities are organized into community management associations (VOI), which are, in turn, members of a VOI platform that is established for each of the six sectors around Makira Natural Park. VOI proposals for the use of funds, based on the activities identified in their management plans, are collated by the VOI platforms. The presidents of each platform participate in a Local Technical Committee that reviews and prioritizes all proposals. They take into account the effort that each VOI has made to fulfill their forest protection responsibilities and how much support that community has received to date. Although the data exist to allocate funds annually for each VOI based on the amount of deforestation at their site, this approach was rejected by the VOI platforms as not being perceived to be fair. The platforms elect a president of the VOI federation who, along with one representative from each of the three geographical regions in the Makira Natural Park, represents them in a Makira steering committee, chaired by the government, which makes the final decision about the use of funds by approving an annual work plan and budget for the community carbon funds. Community participation in decision making has been important to ensure that local perceptions of equity are integrated into the allocation of funds and to facilitate sharing information with beneficiaries the about the rationale for decision making about allocations. Bolsa Floresta, Amazonas, Brazil: The over 40,000 beneficiaries of Bolsa Floresta are organized and represented through a tiered structure with elected officials at each level: the community level, the reserve level, and for the entire program across all 16 reserves. The governance of Bolsa Floresta includes a leadership meeting of 40 to 70 presidents, vice presidents, and treasurers of the grassroots organizations established for each of the 16 reserves. These are umbrella organizations (associaçao mãe), which are formally established and composed of the leaders of community-level associations, mostly informal. These meetings take place twice a year, usually in Manaus, and last for five days. The leadership meetings provide a unique space for open evaluation and discussion of Bolsa Floresta, with a focus on challenges and solutions. These meetings also provide a unique space for the leaders to engage in direct debate with high-ranking government officials, thus empowering them to claim their rights (Viana and Salviati 2018). 68 Box 4.4c. Measures to Ensure Inclusion of Indigenous Peoples, Women, And Marginalized and/or Vulnerable Groups Katingan Mentaya Project, Indonesia: The project strives to reduce barriers limiting the participation of indigenous peoples and vulnerable and marginalized groups. This has involved three strategies: (1) actively targeting the participation of poorer and marginalized groups in planning processes and decision making through differentiated approaches to participation and information sharing (e.g., community message boards, meetings in different times and locations, one-on-one interviews, flyers, gender-disaggregated focus groups), recognizing that these groups often lack the means and/or encouragement to attend and participate in project meetings and activities; (2) encouraging participation and transparency in order to reduce the risk of elite capture by making records publicly available and ensuring representative participation, particularly of marginalized people; and (3) ensuring that marginalized groups have the capacity and sufficient resources—both human and financial—to enable them to implement activities successfully. State System of Incentives for Environmental Services (SISA), Acre, Brazil: The ISA Carbono Program includes an Indigenous Land Management Program that is designed specifically for indigenous peoples; it includes an Indigenous Agroforestry Agents program, which is a platform for participation, communication, and capacity-building focused on implementing agroforestry activities with indigenous peoples. An indigenous working group, which represents 12 indigenous peoples’ community associations, and a working group comprised entirely of women provide input based on their perspectives under the Commission of Validation and Monitoring (CEVA). Payments for Environmental Services Program (PSA), Costa Rica: The program has made special contractual arrangements to encourage the participation of indigenous peoples, successfully including 21 of the country’s 24 indigenous peoples’ territories in the program. This increased accessibility to submit proposals for contracts has led to growing annual demand to include indigenous lands under PSA contracts supported by the FONAFIFO point- system for prioritizing areas of low development indices and high conservation importance. This active inclusion of indigenous peoples’ territories is further enforced by quotas, which are set for both indigenous peoples’ community groups and women, in addition to a more generous size allowance of 800 hectares per indigenous peoples’ community contract (as opposed to a maximum 300 hectares for individual landowners). Nepal: The Community-Based Forestry Program mandates that each Community Forest User Group’s management committee is made up of 50 percent women and also has proportionate representation from other marginalized groups (indigenous peoples, minority ethnic groups, poor, and/or socially marginalized groups), along with promoting regular communication and public auditing and hearings. Community Forest User Groups are required to allocate at least 35 percent of their income for poverty alleviation specifically focused on socially marginalized groups, indigenous peoples, and women. 69 LESSONS LEARNED & GOOD PRACTICES CONTINUED Box 4.4d. Gender-Specific Programming Bolsa Floresta, Amazonas, Brazil: Bolsa Floresta Familiar, one of the four subprograms that makes up Bolsa Floresta, provides a monthly direct monetary transfer to female heads of households. This incentive—the largest disbursement from any of the four subprograms at 600 Brazilian reais (approximately US$150) per year—is provided for use at the discretion of the female head of household and is contingent upon a commitment to good forest management practices, including zero net deforestation. Katingan Mentaya Project, Indonesia: The microfinance component of the project is implemented through local community groups, known as Kelompok Swadaya Masyarakat, which are often made up entirely of women. Utilizing these groups not only encourages and builds capacity for local entrepreneurship, but also empowers women by vesting them with financial management authority. 4.4.2.5 Information sharing and participation and involvement of people in their transparency community organizations, and reduced intra- community conflicts (Perafán and Pabón 2019). Disclosing information so that it is publicly accessible and actively sharing information with Beyond information about the benefits, several stakeholders in a format that they understand cases illustrate the importance of making sure are essential for transparency and for building that benefit sharing is well understood by benefi- trust and support for benefit sharing. Finan- ciaries and other stakeholders. In the Kasigau cial information about the overall envelope of Corridor REDD+ Project in Kenya, documenting a benefits, the amounts of benefits shared with common, shared understanding of benefit shar- each group in each geographic area, and all the ing with the landowners with statutory rights nonmonetary benefits delivered are publicly dis- but also with communities living on the land closed in most cases. Where monetary benefits with customary rights was important to build are shared, the rates paid per hectare or per trust and encourage stakeholder engagement. In household are usually disclosed, without iden- Bolsa Floresta in Amazonas, Brazil, the recate- tifying each beneficiary and the amounts they gorization of the program into four subprograms have received. with distinct objectives (income generation, community infrastructure, community strength- Sharing information and ensuring transparency ening, and family support) helped facilitate com- and accountability within beneficiary groups munication and understanding among potential is also important. Large cash injections into beneficiaries, partners, and donors about the communities with a weak institutional structure different ways they could participate. and little experience with the cash economy may have an adverse effect, leading to corruption, Several cases illustrated the importance of a elite capture, and social upheaval. The SBP in formalized process of providing information to Ecuador requires that communities develop a beneficiaries—beyond disclosing information financial and activity accountability report each publicly—to ensure that the beneficiaries and semester, which tracks progress against the other stakeholders have received and under- community investment plan and must be shared stood the information. In the Makira Project in with community members and approved by the Madagascar, the elected representatives of the community assembly. This has helped strength- community management associations partici- en traditional governance structures, increased pate in meetings to review and approve benefits 70 and share this information with the people they represent. Similarly, in Bolsa Floresta in Amazo- Box 4.4e. Public Hearings and Audits nas, Brazil, the elected representatives of each Can Be Effective Ways to Share and Receive Information conservation unit provide a conduit for infor- mation sharing and decision making. Decisions of the leadership council usually take at least a Public hearings can promote year, allowing time for discussion and feedback transparency and provide effective from the grass roots between the twice annual feedback to local communities: meetings. In the Kariba REDD+ Project in Zimba- In Community Forestry in Nepal, Community Forest User Groups are bwe, information is shared in quarterly newslet- required to hold a public hearing as ters published in English, Tonga, and Shona, the well as public auditing at least once local languages. In Community Forestry in Nepal, a year, during the general assembly information is shared through annual public of Community Forest User Groups, to hearings and public audits of each Community inform users about group programs, Forest User Group (see Box 4.4e). This approach income, expenditure, sale and can be very effective where some of the popu- distribution of forest products, group lation is illiterate and people are used to getting decisions, and implementation status. information aurally through local meetings rath- In addition, income, expenditure, er than in written form. programs, and decisions of the group are shared on a regular basis through posting information in public places. 4.4.3 GOOD PRACTICES FOR STAKEHOLDER PARTICIPATION • Stakeholder analysis: Prior to designing benefit sharing, all groups that may participation, and monitoring and be affected by benefit sharing or can evaluation. Consultations are meaningful influence its outcomes should be identified when stakeholder input influences the and mapped to understand their needs design of benefit-sharing arrangements, and interests, their capacities and their and requires sufficient time, resources, and rights, and variations within the groups willingness to share power and influence and relations between groups, including with stakeholders. Consultations should any historical conflicts or alliances. This be conducted as part of an iterative stakeholder analysis helps to improve process for design, enabling participating the design of the consultation processes, stakeholders to consider proposals and to identify beneficiaries and appropriate confer with others in their group before benefits, and to develop governance and providing further input. This process is institutional arrangements. Stakeholder valuable not only during initial design but analysis should be updated periodically also periodically during implementation to while benefit sharing is implemented and support adaptations and improvements the context changes. to benefit sharing. Consultation is not • Stakeholder consultation: Consultation of the same as obtaining free, prior, and beneficiaries is critical to determine the informed consent, which is essential for type of benefits that are appropriate and the participation of indigenous peoples how they should be delivered. Consultation and other groups with collective rights of a full range of stakeholders— to lands and resources in programs that including beneficiaries—is also helpful affect them, whereby consent must be with institutional and governance given through their own decision-making arrangements, processes for stakeholder processes after consultation. 71 LESSONS LEARNED & GOOD PRACTICES CONTINUED • Planning, time, and resources: Effective submit a complaint. This requires active stakeholder participation requires dissemination of information tailored to significant time and resources and is often each stakeholder group in a format that underbudgeted. A stakeholder engagement they understand—for example, using plan should include the steps involved local languages, providing information and the resources, time, and other inputs through public meetings and stakeholder needed, as well as measures to ensure representatives, and paying special effective stakeholder participation. attention to provide information to women • Participation in governance: Including and vulnerable and/or marginalized people. beneficiaries in governance structures Adequate, prior information is essential with decision-making and oversight roles to enable potential beneficiaries to decide deepens the opportunities for effective whether to participate in programs that participation in design and implementation affect them, and it is critical for obtaining of benefit sharing—ensuring that the free, prior, and informed consent of beneficiaries influence benefit sharing to indigenous peoples and other groups with respond to their needs and interests— collective rights to lands and resources. and helps to share information with beneficiaries. Legitimate representatives should be identified by the group they 4.5 Monitoring, represent. Evaluation, and Adaptive • Measures to ensure social inclusion: Specific Management measures should be adopted to facilitate and ensure the participation of women, 4.5.1 KEY CONSIDERATIONS FOR indigenous peoples, and marginalized and/ MONITORING, EVALUATION, AND or vulnerable groups that may otherwise be ADAPTIVE MANAGEMENT excluded—for example, through separate meetings or other approaches that Key questions concern the types of results that address barriers for participation, through have been monitored and evaluated, in terms quotas for participation in activities and of effectiveness, efficiency, and equity, includ- governance bodies, through allocations of ing how monitoring has been executed and by benefits, and by designing subprograms whom. The complexity of benefit sharing can that specifically target activities and make it difficult to design monitoring and evalu- benefits for certain groups. ation systems that are adequately informative, • Disclosure: Public disclosure of information diverse, and robust, while still ensuring that this about the overall financial envelope for component is not overly burdensome for the benefit sharing, the amounts distributed program. to each stakeholder group in different geographic areas, the per hectare or other What is measured and how is likely to depend rate used for monetary benefits, and all the to some extent on the source of finance for nonmonetary benefits delivered promotes benefit sharing—for example, philanthropic or transparency and builds trust. corporate social responsibility funders may prioritize indicators aligned with their mission. • Transparency and providing information: Specific reporting may be required for the use of Beneficiaries and potential beneficiaries public funds. Where benefit sharing is financed need to understand the purpose of benefit by results-based payments, specialized moni- sharing, the opportunities to participate, toring may be required. For example, transfer of the eligibility criteria, the conditionalities emission reductions usually requires a specific for receiving benefits, the results approved methodology. achieved, and how to provide feedback or 72 How the results from monitoring and evaluation including socioeconomic impacts—is are used for adaptive management is another critical for program managers and for critical component of the implementation of stakeholders to ensure compliance with benefit-sharing arrangements. As discussed donor and program rules and regulations, in previous sections, although a legal basis is to increase support and participation, and, necessary to build these programs, it must most importantly, to support program remain flexible enough to incorporate learning improvements over time. and respond to changes over time. This ability to • Adaptive management informed by sound adapt is key in improving effectiveness, efficien- monitoring and evaluation systems enables cy, and equity over time, and the factors that continual improvements in effectiveness, are monitored influence these adaptations. efficiency, and equity by informing the design and execution of beneficiary groups, 4.5.2 FINDINGS FROM THE CASES benefits packages, financial management, ABOUT MONITORING, EVALUATION, delivery of benefits, and a variety of other AND ADAPTIVE MANAGEMENT factors. 4.5.2.2 Systems for monitoring and 4.5.2.1 General findings evaluation The underlying finding from the cases is that The monitoring and evaluation of benefit-sharing contexts—in terms of regulations, demograph- implementation and impact is a key component ics, threats, and more—are guaranteed to for any benefit-sharing arrangement. It can change, so having a monitoring and evaluation provide an overall understanding of performance system that supports adapting to these changes with respect to objectives, and variations in is critical to improving effectiveness and efficien- time and space, which provides key information cy. Monitoring, and sharing the results, is also for those responsible for the program and its key for legitimacy, which hinges on adequate financing, including government, donors and transparency and feedback to beneficiaries of implementing agencies. It also informs assess- operational performance. ments of performance and compliance of the implementing agencies and the beneficiaries At times it may seem necessary to measure and with respect to agreements between benefi- monitor environmental outcomes only when, for ciaries, governments, implementing agencies, example, the primary objective is to generate service providers, donors, buyers of resulting emission reductions for further results-based goods and services. Finally, it informs adaptive finance. However, nearly all the cases include management to improve effectiveness, efficiency, a range of environmental and social objectives and equity. for benefit sharing (see Table 3.2a), and some form monitoring is important for all objectives. While it may seem obvious, it is also worth In addition, measuring outcomes across other noting that regardless of whether payments are dimensions such as human well-being or good based on a standard formula for participation governance can be important for beneficiaries, or based on a quantified, attributable result, it is donors, and implementers, and can attract more important not only to monitor environmental in- finance and/or increased participation. dicators such as emission reductions or reduced deforestation but also to assess socioeconomic The review of cases helped identify some key impacts. Information on socioeconomic impacts and recurring themes for monitoring, evaluation, is important for building buy-in and support and adaptive management: among beneficiaries and at political levels, and • The monitoring and evaluation of benefit- for attracting donors or partners more inter- sharing implementation and impacts— ested in funding development-related activities. 73 LESSONS LEARNED & GOOD PRACTICES CONTINUED In Amazonas, Brazil, the monitoring of social be adjusted. The number of indicators was re- impacts in the Bolsa Floresta program has been duced to adapt to local capacity, and indicators critical for some donors to be able to justify con- were reoriented toward impacts in beneficiary tinued funding of the program, given that their communities. ultimate objective for investment is related to holistic sustainable development and not solely One method for increasing stakeholder partici- a reduction in emissions and environmental deg- pation and ownership is to involve beneficiaries radation. Monitoring social indicators can also themselves in monitoring and evaluation efforts. improve the overall efficiency and effectiveness In Amazonas, Brazil, including leaders and of programs by helping influence changes to individuals from beneficiary communities in the strategies, benefit packages, or other compo- planning and implementation of monitoring ac- nents (see Box 4.5a). tivities has not only strengthened participation in the program, but has also helped embed more A recurring topic from the cases is the trade-off of the communities’ actual priorities and inputs between cost and utility in monitoring and eval- in the process. In some cases, this has an added uation systems, as is common across disciplines bonus in that paying jobs may be created for for many types of projects. It can be difficult to monitoring; these are an in-kind benefit funded, strike a balance between monitoring enough generally, through the implementing agency. to inform adaptive management and, in some cases, comply with donor requirements, while On the other hand, having monitoring activities not overburdening the program with a highly executed by an independent entity can help resource-intensive monitoring and evaluation strengthen monitoring, particularly for perfor- component. In Acre, the original SISA safeguard mance-based benefits. In Costa Rica, the PSA monitoring system included 52 indicators; how- created a system of third-party monitoring and ever, after the first monitoring cycle, it was clear verification to decrease the amount of effort to stakeholders that the number of indicators and cost spent on in-house capacity building and the focus on program processes needed to for monitoring. Regentes forestales (certified forest engineers) are responsible for creating Box 4.5a. Socioeconomic Monitoring Can Help Improve Design of Benefits In Peru, the options provided for local people to select as nonmonetary benefits around the Alto Mayo Protected Forest (AMPF) changed a lot over time as implementers gained a deeper understanding of the social roots of the environmental problems in the area. Following an initial focus on coffee production, it was not until social surveys were done that the implementers understood that even though incomes were improving, beneficiaries were still dissatisfied. There were much more fundamental barriers to human well-being that needed to be addressed, principally derived from living without land tenure security and in conflict with the law as illegal settlers in a protected area. The program had to branch out from addressing only deforestation through improving coffee yields to helping the local population to get tacit approval from the government to live in the protected area. This enabled the settlers to gain compliance with government stipulations but without access to all the services they desired, as the government would not provide these services in the protected area. In this sense, the REDD+ program provided an opportunity to address not only economic drivers of deforestation but also fundamental issues surrounding security of home and place and peace with the park authorities. This, in turn, made conservation not only possible, but more efficient. But it was only through social survey work that this approach was developed and the benefit packages were adjusted. 74 forest management plans with landholders and priorities are adjusted approximately every five annually verifying compliance with the plan be- years to respond to other needs or gaps as they fore benefit payment is disbursed. Critically, this are identified. system requires a system of accreditation and regular auditing of the regentes themselves— Some cases started with implementation as well as some additional monitoring by the through pilots to test what works best in the program—and regentes who are found to have context and incorporated adjustments into the inappropriately certified compliance risk losing final design of the arrangements for the full their license. scope of the benefit-sharing program. This was the case in the PFES in Vietnam (see Section Regardless of the monitoring structure, it is 4.3.2.3), in addition to in Guatemala’s PINPEP important to have oversight in and verification program, where in both cases pilots were con- of monitoring activities and results, as in Costa ducted not only to better understand how to de- Rica (as described in the previous paragraph. The sign the program but moreover to build political level of rigor in monitoring is also related to the will and buy-in among government entities and source of financing; for example, when selling other stakeholders. emission reductions on the international market, a certain level of quality control and standard- The type of monitoring also has some influence ization is required so that buyers have trust in on what type of adaptations can be made. As the process and in what they are buying. described in Box 4.5a, holistic environmental and socioeconomic monitoring in the AMPF in Peru enabled renegotiation (or even cancellation) of 4.5.2.3 Adaptation over time agreements on an annual basis. This process of informing and improving the strategies and Adaptive management is a core tenet of good associated benefits packages contributes to practices for implementation of nearly any an overall improvement in effectiveness and type of project, and this holds particularly true efficiency of the program and is an important for benefit sharing in which tradeoffs between element of the conservation agreement model. efficiency, effectiveness, and equity are to be minimized for the best all-around results. While On the other hand, care needs to be taken that adaptation is important, there is a tension be- adaptive management does not introduce the tween needing to enshrine benefit sharing in law risk that participants may not understand fu- while still being able to adapt (see Section 4.3.2.2 ture rule changes or may be concerned about an and Box 4.3a). overly flexible approach that could lead to them unexpectedly losing rights and access to their The framework for Costa Rica’s PSA incor- forest resources, a particularly sensitive issue porates adaptive management practices so with indigenous peoples. that changes can be made to improve results when gaps are observed. Initially, the PSA was A selection of specific examples of adaptive an untargeted program, but biodiversity and management from the cases is presented in socioeconomic priorities have been incorporated Figure 4.5a. into the application process to enable increas- ing targeting of the program over time. To most effectively improve biodiversity conservation as well as equity, FONAFIFO currently prioritizes areas where conservation hotspots have been identified, as well as districts where there is a rel- atively low Social Development Index (under 43 percent), as opposed to approving applications in the order in which they are submitted. These 75 LESSONS LEARNED & GOOD PRACTICES CONTINUED FIGURE 4.5a.: Examples of Adaptive Management PINFOR & PINPEP, Guatemala PINPEP was initiated From 1998 to in 2007, and allows 2016, eligibility access to forestry and This resulted in the majority of through PINFOR agroforestry incentives incentives going to larger private was restricted to for people without landowners, amid growing demand landowners able to formal land tenure but for broader participation. demonstrate proof who can prove that they of title to at least 2 Additional Information: have a legal right of hectares of land. Section 4.2.2.2, Box 4.2a possession to at least 0.1 hectares. PSA, Costa Rica The program now accepts proof of right of This prevented the participation Formal title was of actors who did not have possession in lieu of title a requirement for formal land title. in some circumstances, participation in enabling the poorest, Additional Information: the PSA. smallest farmers to Section 4.2.2.3 participate. Biodiversity and socioeconomic priorities have been incorporated into the application process to enable increasing targeting of The program was not maximizing the program over time. effectiveness in terms of improving FONAFIFO currently biodiversity conservation as well as The PSA was initially prioritizes conservation equity. developed as an hotspot areas, as well Additional Information: untargeted program. as counties where there Section 4.2.2.3 is a relatively low Social Development Index. These priorities are adjusted approximately every five years as other needs or gaps are identified. 76 AMPF, Peru The AMPF initially AMPF benefit sharing focused incentives on was expanded to include illegal settlers in the indigenous peoples adjacent High deforestation continued protected area who drove to the protected area. This in areas around the AMPF deforestation through required defining a new, accompanied by declining social coffee cultivation. Much specific theory of change conditions and cultural values for of the benefit package related to drivers of forest adjacent indigenous peoples. emphasized technical loss on indigenous peoples’ Additional Information: support to shift coffee lands, often resulting from Section 4.2.2.4, Box 4.2c cultivation to more renting land to outsiders sustainable and more who then cleared forest for productive practices. agriculture. Bolsa Floresta, Amazonas, Brazil TThe financing strategy was reoriented toward philanthropic funding from businesses and foundations, In 2015, the initial state funding The financing model had been distributed and it was initially in Brazil and for Bolsa Floresta was clear that PES/REDD+ programs then internationally. A initially based on state would not provide sufficient trust fund has also been public funding and ongoing finance. established, whereby the antificpated REDD+ interest generated is used Additional Information: payments. to finance the monetary Section 4.3.2.5, Box 4.3f disbursements while the base endowment is maintained. ERF, Australia The subsequent ERF Australia’s Carbon facilitates aggregation—so The high transaction costs for Farming Initiative was the project proponent no participation proved challenging designed with relatively longer needs to hold the for smaller-scale landowners to stringent requirements carbon sequestration rights participate. and processes for but can have a contract Additional Information: participation, including with the landowner—with Section 4.3.2.6 a requirement that the standard arrangements project proponent is the for transferring rights to a landowner. project aggregator to help reduce transaction costs. 77 LESSONS LEARNED & GOOD PRACTICES CONTINUED 4.5.3 GOOD PRACTICES FOR • Adaptive management: Adaptive MONITORING, EVALUATION, AND management of the design and ADAPTIVE MANAGEMENT implementation of benefit-sharing arrangements based on the results of • Socioeconomic monitoring: The inclusion monitoring and evaluation is critical for of socioeconomic impacts in monitoring improving effectiveness, efficiency, and and evaluation systems, as opposed to equity over time. Piloting of benefit sharing solely in environmental outcomes, is useful can help facilitate adaptive management for improving effectiveness and can foster during the design phase. support from politicians, donors, and other   stakeholders. • Simple approaches employing local people: Monitoring is best kept as simple and practical as possible while still being adequate. Beneficiary participation in monitoring activities in exchange for paid wages can also constitute an important local benefit. ©Ankulibaba/Shutterstock 78 5. Conclusions This study collected a wealth of lessons learned in establishing conditionalities for benefits. that helped identify a broad set of good practices Some cases illustrated ways to target benefits for benefit sharing by analyzing, comparing, and to certain groups and adopt a differentiated contrasting a diverse range of long-standing approach by providing different benefits to programs across different geographies. These different groups. The review of cases helped to programs have been implemented in different understand the advantages and challenges of contexts, with various objectives and approaches. monetary versus nonmonetary benefits, of The good practices identified from these cases individual versus community benefits, and of are grounded in real experiences and are illus- revenue-generating benefits in different contexts. trated through many examples. The cases underscored the importance of Some cross-cutting issues recurred through- legal frameworks as a basis for the transfer of out the analysis, particularly the importance of benefits and in defining institutional arrange- context in shaping benefit sharing—for example, ments. A number of roles are required for benefit context related to land tenure regime, legal and sharing, some of which can be fulfilled by service institutional frameworks, the drivers and history providers including NGOs and private sector of land use change, and the political agenda. actors. Many cases build on existing institutions, Each case demonstrated tensions related to strengthening these where necessary. Transpar- the purpose of benefit sharing in shaping the ency and accountability are particularly import- rationale for it, considering the objectives of ant for financial management. Good practices the program and the source of finance, whether also include the need for sufficient up-front benefits are intended to provide incentives for finance to design benefit sharing and to estab- future performance or rewards for past perfor- lish the legal and institutional frameworks, and mance, and the extent that benefits are based the need for appropriate grievance and redress on rights to lands and resources and on costs for mechanisms to support benefit sharing. the implementation of the activities that gen- erate goods and services from which finance is Every case highlighted the importance of stake- derived. Good governance is particularly import- holder participation and the need to pay atten- ant for benefit sharing, related to participation, tion to the identification of stakeholders; to de- transparency, accountability, equity and inclu- signing effective consultations; and to planning sion and effectiveness and efficiency. The cases stakeholder participation, allocating sufficient illustrated many examples of trade-offs between time and resources. Several cases demonstrate effectiveness, efficiency, and equity. All of the the advantages of stakeholder participation in cases demonstrated the importance of adaptive the governance of the benefit-sharing mecha- management to address challenges and chang- nism. Transparency is key for legitimacy, and ing context. good practices cover the need for public disclo- sure and for effective information sharing with The cases showed the overriding importance of beneficiaries and other stakeholders. land and resource tenure in identifying beneficia- ries and benefits and illustrated how security of Facilitating and ensuring social inclusion was an land tenure can affect bargaining power and explicit aim in several of the cases, specifically consequently the amount and type of benefits concerning the inclusion of women, indigenous that are shared. Good practices that emerged peoples, and vulnerable and/or marginalized from the cases include the need to take care in groups in benefit sharing. However, there was a identifying beneficiaries, in establishing eligibility general lack of compelling evidence of gender- criteria, in avoiding barriers to participation, and sensitive program design and implementation among most of the cases, though some strong 79 CONCLUSIONS CONTINUED examples exist of programs taking measures ations that can help think through the many specifically and solely pertaining to the inclusion elements and options for these complex mecha- of women. nisms. In the case of the FCPF and the ISFL, these funds have requirements for benefit Monitoring and evaluation is critical for program sharing,6 as well as guidance,7 for preparing managers and for stakeholders to ensure com- benefit-sharing plans that comply with these pliance, to increase support and participation, requirements. and to support program improvements over time. Good practices include the importance This report demonstrates the advantages of of socioeconomic monitoring as well as environ- learning from experience. This study was mental monitoring, the advantages of simple conducted rapidly, largely throug h document approaches to monitoring, employing local review enhanced with interviews of people people where possible, and the critical impor- mostly involved in benefit-sharing design and tance of adaptive management. implementation. More in-depth analysis would help deepen the learning. In addition, people The good practices identified through this involved in designing benefit sharing would process are not intended to provide a full set benefit from other forms of learning from of guidance on how to design and implement experience including facilitated exchange visits benefit sharing but are offered as a reference and learning workshops. Exchange and learning to support the country-specific processes that will become even more valuable as more jurisdic- are needed. They do not cover every important tional-level results-based land use programs aspect of benefit sharing but provide consider- start implementation. 6 The FCPF’s Methodological Framework and the ISFL ER Program Requirements, respectively. 7 Note on Benefit Sharing for Emission Reductions Programs Under the FCPF and ISFL. 80 References Arriagada, R. A., E. O. Sills, P. F. Ferraro, and S. Congreso de la Republica de Guatemala. 2010. K. Pattanayak. 2015. “Do Payments Decreto Número 51-2010. Pay Off? 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Washington, DC: World Bank.   83 INTRODUCTION CONTINUED 84 ©Sarah Fretwell/World Bank Appendixes Appendix 1: Overviews of Cases of Benefit Sharing Australia: Emissions Reduction Fund (ERF) Acre, Brazil: System of Incentives for Environmental Services (SISA) Amazonas, Brazil: Bolsa Floresta Costa Rica: Payments for Environmental Services Program (PSA) Ecuador: Socio Bosque Program (SBP) Guatemala: Forestry Incentives Programs (PINPEP and PINFOR) Indonesia: Katingan Peatland Restoration and Conservation Project (Katingan Mentaya Project) Kenya: Kasigau Corridor REDD+ Project Madagascar: Makira Project Nepal: Community Forestry Peru: Alto Mayo Protected Forest (AMPF) Vietnam: Payment for Forest Environmental Services (PFES) Zimbabwe: Kariba REDD+ Project 85 OVERVIEWS OF CASES OF BENEFIT-SHARING CONTINUED Emissions Reduction Fund (ERF) LOCATION: Australia (national scale) PAPUA INDONESIA NEW GUINEA AREA: The Fund is not measured in land area, TIMOR-LESTE but rather best measured in carbon abate- ment—37.7 million tons delivered by 2018. Coral Sea NORTHERN YEARS OF OPERATION: The Fund was initiated TERRITORY QUEENSLAND through the Carbon Farming Act of 2011, with the AUSTRALIA first auction under the ERF taking place in 2015. WESTERN AUSTRALIA SOUTH AUSTRALIA SCALE OF FUNDS & BENEFICIARIES: The ERF NEW SOUTH WALES was established with $A 2.55 billion to CANBERRA purchase emission reductions. As of 2018, there VICTORIA were 477 projects under contract to the govern- INDIAN OCEAN ment (with $A 1.8 billion of the funds committed). TASMANIA It is difficult to determine how many beneficiaries equate to 477 projects. IBRD 44452 | JUNE 2019 GOALS: The fund’s primary objective is to reduce emissions at the lowest cost over the period to 2020 and contribute toward Australia’s 2020 emission reduction target of 5 percent below 2000 levels by 2020. A. BENEFITS AND BENEFICIARIES The ERF is based on an auction process wherein project proponents submit bids specifying the price per ton of carbon emissions reduced and the governments select the cheapest. Beneficiaries are businesses, governments (state, municipal), and landowners who can deliver verified emission reductions within eligible project categories including energy efficiency, waste management, revegetation, livestock management, and savanna fire management. Aggregators can work with multiple stakeholders to aggregate smaller projects into bigger bids. The Fund has even driven the emergence of an industry of carbon service providers —for project management, carbon accounting, and legal and financial aspects. To date, most land sector projects have been vegetation activities such as regenerating native forest, controlling savanna burning, and improving agricultural practices. The Fund is structured to seek the most financially efficient reductions, so it does not prioritize social benefits such as poverty reduction. The benefits are simply monetary payments delivered to proponents of the cheapest projects against Australian carbon credit units. The carbon credits can be sold to the government, sold on the secondary market, or used for voluntary emission reductions (with reputational co-benefits for businesses). Other co-benefits such as improved water quality, reduced erosion, and savings from better energy efficiency may be reported by project proponents. 86 B. INSTITUTIONAL, FINANCIAL, AND GOVERNANCE ARRANGEMENTS The Fund is designed and directed by the government under the purview of the Minister for the Environ- ment. The Clean Energy Regulator administers the program, reports to the minister, and takes direction from the minister on general matters. The regulator also manages a public register where information on specific projects is published. Some of the governance arrangements come from the pre-existing Carbon Farming Initiative, including methods and standards for project verification. C. STAKEHOLDER PARTICIPATION Significant feedback was taken during the design of the Fund, particularly from business and the community. A Terms of Reference and a Green Paper on design features were created for public comment. An expert advisory group was also formed to help ensure appropriate design. The government also publishes regular web updates (e.g., after each auction), which allows participants to manage their bids based on most recent trends. The Fund process itself is participatory, as fundamentally it involves a public auction to generate and award the most financially efficient projects for emission reductions, with interested and eligible parties designing their own initiatives and giving their best bids. D. MONITORING, EVALUATION, AND ADAPTIVE MANAGEMENT Monitoring is focused on verification of emission reductions—for example, that they are real and additional. The Fund does not actively monitor co-benefits. An independent committee advises the government and there is quite high scrutiny. For example, requirements on additionality are quite high and the Fund must seek ways to balance rigor with participation. Because it is a legislative scheme, however, changes cannot be made quickly. RESULTS REPORTED: As of 2018, eight auctions have been held between 2015 and 2018, driving the contracting of 193 million tons of carbon dioxide equivalent (CO2e) from 477 projects, of which 37.7 million tons have been delivered and purchased by the government. The average contracted price is $A 12. 87 OVERVIEWS OF CASES OF BENEFIT-SHARING CONTINUED System Of Incentives For Environmental Services (SISA) R.B. DE GUYANA VENEZUELA French Guiana LOCATION: Acre, Brazil COLOMBIA SURINAME (Fr.) ATLANTIC OCEAN AREA: Initiatives within the SISA have varying scopes, but the primary—ISA Carbono— is statewide (16.4 million hectares). ACRE BRAZIL YEARS OF OPERATION: 2010–present SCALE OF FUNDS & BENEFICIARIES: The PERU BRASILIA primary component—ISA Carbono—has BOLIVIA 21,000 beneficiaries as of 2017. SISA has received PACIFIC OCEAN international funding of €35 million (US$39.65 CHILE PARAGUAY million) from the German government and ATLANTIC £17 million (US$20.7 million) from the U.K. OCEAN government up to 2017 under the REDD Early ARGENTINA Movers Programme. URUGUAY IBRD 44453 | JUNE 2019 GOAL: To protect and conserve forest by establishing a system to value ecosystem services and facilitate the distribution of associated benefits A. BENEFITS AND BENEFICIARIES SISA is not a program, but rather a legal framework that complements REDD activities by pursuing com- prehensive protection of the Amazon. The ISA Carbono Program enables funding of many subprograms, each with at least one of three general components: (1) stock-and-flow—to protect forests and reduce reforestation; (2) programmatic—to share benefits and enable REDD+; and (3) provider-beneficiaries—to legitimize ongoing activities through the SISA program. ISA Carbono is a jurisdictional REDD+ program under SISA with 21,000 beneficiaries that supports generating sustainable forest-based revenue. The ISA Carbono Program has further supported COOPERACRE, a cooperative run by rubber tappers and commu- nity leaders to process and market products. Beneficiaries include family groups, private enterprises, cooperatives, and others, with the requirement of property ownership or resource use rights and participation in a SISA program. They must also be an organization, promote gender equity, and live in areas critical to reducing deforestation, or continuing forest protection in the case of the Indigenous Land Management Program. Benefits vary greatly, from tax or credit incentives to direct payments, as do the level of benefits. B. INSTITUTIONAL, FINANCIAL, AND GOVERNANCE ARRANGEMENTS The different SISA projects have been supported by a variety of funding sources (including the World Wildlife Fund, the German development bank KfW, and the World Bank). For example, from 2012 to 2016, the ISA Carbono Program alone received €25 million (US$28.2 million) in results-based financing from the German government (BMZ and BMU through KfW) to support institutional strengthening of the SISA and ISA Carbono programs, as well as implementation of ISA Carbono subprograms. Funds flow from donors to the State Forest Fund (FEF) in Phase 1 and the State Planning Secretary (SEPLAN) in Phase 2, and from there it is distributed to the various implementing agencies: the Institute for Climate Change & Regulation of Environmental Services (IMC), the Commission Validation and Monitoring (CEVA), the Company for the Development of Environmental Services (CDSA), the Acre Business Agency (ANAC), and others. The imple- 88 menting agencies then implement funds according to the benefit-sharing subprograms and the respective contractual agreements, implementing policies and distributing incentives to beneficiaries at the local level. While this institutional arrangement with many implementing agencies is complex, it was designed to pro- mote stability, transparency, consistency, and trust across the many activities and actors involved in SISA, and each agency fills a specific role. Only 10–30 percent (depending on the contract with donors) of funds are used for enabling policies and the operations, management, and improvement of SISA. C. STAKEHOLDER PARTICIPATION The framework for the SISA legislation was developed over the course of a comprehensive, transparent, and highly participatory consultation process with a wide range of stakeholders, including but not limited to civil society groups, indigenous peoples, farmers, extractivists, government agencies, nongovernmental organi- zations, scientists, and carbon market companies. After this process, the SISA law passed with wide public support. Special attention was paid to defining and monitoring the application of safeguards, for which stakeholder participation was critical and continues to be important as adaptations are made. SISA also has a special subprogram focused on indigenous peoples and separate working groups for indigenous peoples and now women (introduced in 2016) to ensure their equitable participation in programs. D. MONITORING, EVALUATION, AND ADAPTIVE MANAGEMENT National large-scale deforestation data are publicly available, and are complemented by Acre’s Produce- Protect Platform, which monitors annual progress toward overall performance goals, with a focus on forest cover change and carbon emissions. Because projects are implemented through a variety of instruments and agencies, significant attention is paid to ensuring continuity of strategic focus for the overall SISA portfolio. By including both stakeholders who contribute to protecting forests (stock) and stakeholders who contribute to reducing deforestation (flow) in addition to stakeholders in all areas—not only those currently identified as “high risk”—the program is able to maintain enough flexibility to adapt to a variety of factors. RESULTS REPORTED: Comparing the decades 1996–2005 and 2006–2015, the annual average deforestation rate across the state decreased by 60 percent, representing avoided emissions exceeding 127 million tons of carbon dioxide equivalent (CO2e). REFERENCES Acre. 2010. The State System of Incentives for Environmental Services. Law No. 2.308. October 22. Governor of the State of Acre. Duchelle, A., M. Greenleaf, D. Mello, M. F. Gebara, and T. Melo. 2014. “Acre’s State System of Incentives for Environmental Services (SISA), Brazil.” In REDD+ on the Ground, edited by E. Sills, 33–50. Bogor: CIFOR. EDF. 2010. The Acre State System of Incentives for Environmental Services (SISA). Washington, DC: EDF. KfW. 2017. REDD+ in the State of Acre, Brazil: Rewarding a Pioneer in Forest Protection and Sustainable Livelihood Development. Frank- furt: KfW Development Bank. Medeiros, M., P. Jezek, A. Tavares, A. P. Kanoppa, E. de Deus, M. Brandão, R. Mello, K. Souza, and S. Hutchinson. 2018. Mecanismos financeiros inovadores para conservação desenvolvimento sustentável: Remuneração de resultados de REDD+ no Acre. Rio Branco, Brasil: WWF-Brasil. Mendoza, E., and D. Nepstad. 2018. Institutional Innovations for a Low Carbon Economy in the Amazon. Part 1: Description of the New Industries and Cooperative of Acre State. San Francisco: Earth Innovation Institute. Novo Acre. n.d. Acre & Its Commitment to Produce, Value & Reduce CO2 emissions. Rio Branco, Brasil: Novo Acre. WWF. 2013. Environmental Service Incentives System in the State of Acre, Brazil. Rio Branco, Brasil: WWF. WWF. 2015. Development of Social and Environmental Safeguards in Acre. Rio Branco, Brasil: WWF. 89 OVERVIEWS OF CASES OF BENEFIT-SHARING CONTINUED Bolsa Floresta R.B. DE GUYANA VENEZUELA French Guiana SURINAME (Fr.) COLOMBIA LOCATION: Brazil (State of Amazonas) ATLANTIC OCEAN AREA: 16 state conservation units covering over AMAZONAS 11 million hectares as of 2018 BRAZIL YEARS OF OPERATION: 2008–present PERU BRASILIA SCALE OF FUNDS & BENEFICIARIES: 39,946 BOLIVIA people in 9,598 families with 1,260 Brazilian PACIFIC OCEAN reais (US$321) disbursed annually per family PARAGUAY CHILE as of 2018 ATLANTIC OCEAN ARGENTINA URUGUAY IBRD 44454 | JUNE 2019 GOALS: The program aims to conserve forests, avoid deforestation, and improve the welfare of residents in selected sustainable development reserves in the state of Amazonas. A. BENEFITS AND BENEFICIARIES The benefits include a small cash incentive in exchange for committing to zero net deforestation and par- ticipating in community-level integrated conservation and development projects to improve livelihoods and prepare communities to meet increasing deforestation pressures. The program is implemented by FAS, supervised by the state government, through four subprograms: in- come generation—maximizing the generation of income from sustainable production in and around stand- ing forests; community infrastructure—collective activities to improve education, health, communication, or transportation; community strengthening—to strengthen and increase participation in associations and social organizations; and Bolsa Floresta Familiar—a monthly payment mandated by state law for environ- mental services to people living in the conservation units, mostly women (86 percent in 2018). Potential beneficiaries must attend a workshop on topics including sustainable development, climate change, and others, after which they are invited to formally sign a commitment to join the program. In addition to committing to zero net deforestation, the families must meet a set of specific criteria and pre- requisites, including: families must have been living in the protected area for at least two years, they cannot deforest riverine areas or primary forest, they must send their children to school, they must participate in workshops, and others. From 2010 to 2015, in addition to individual family benefits, collective benefits included support for 2,424 income-generating projects, 900 events with community organizations, 460 community planning work- shops, and 260 trainings for beneficiaries on income-generating projects. B. INSTITUTIONAL, FINANCIAL, AND GOVERNANCE ARRANGEMENTS Bolsa Floresta was institutionalized by state law in 2007, after which FAS was established to implement the program, with each subprogram funded through a varying combination of public-private sources. As of 90 2016, FAS had partnered with over 210 organizations, about half for implementation of projects and half as financiers. A Bolsa Floresta Evaluation Committee composed of social and indigenous peoples’ leaders elected from each of the conservation units, NGOs, academics, FAS, and the state government meets once or twice annually to review the strategies and the results. The work plan and budget are approved by the FAS board, which includes the state government; the budget for the Bolsa Floresta Familiar is mandated by state law. In terms of the scale of investments, an initial investment of 60 million Brazilian reais (US$15.3 million) was provided by the government of Amazonas, Banco Bradesco, and Coca-Cola to create an investment fund for the Bolsa Floresta Familiar subprogram, while an initial investment of 19 million Brazilian reais (US$4.8 million) was provided by the Amazon Fund (national public fund) in 2010 for the income-generating and community-strengthening subprograms, with another 31.5 million Brazilian reais (US$8 million) in 2016. All financial activities are audited by the external firm PricewaterhouseCoopers, then subject to approval by the FAS Supervisory Board and Board of Directors, before being reviewed by the Amazonas State Prosecu- tor and accounting court. C. STAKEHOLDER PARTICIPATION As part of the Bolsa Floresta annual cycle, two workshops are held each year that provide opportunities for beneficiaries to provide input on design and implementation of the program and to capture lessons learned. Transparency is also a key component of the program: Information regarding types and amounts of benefits and numbers of beneficiaries in each conservation unit is publicly available on the FAS website, along with a complete list of beneficiaries for Bolsa Floresta Familiar. Beneficiaries participate in program monitoring and evaluation. D. MONITORING, EVALUATION, AND ADAPTIVE MANAGEMENT Yearly reports are produced and shared on the FAS website detailing the overall impact of interventions for indicators including the number of families benefiting, children in school, participants in events, and others, in addition to monitoring deforestation and fire within the 16 conservation units included in the program. Compliance with the agreements is monitored by field teams with support from local leaders; this has already led to the termination of some agreements with participants who have deforested without autho- rization or were no longer residing within the program area. There is also an annual participatory evaluation seminar where the beneficiaries serve as evaluators. RESULTS REPORTED: As of 2018, the program has contributed to improved livelihoods of 39,946 people. During the first five years of implementation (2008–2013), the rate of deforestation in the 16 conservation units decreased by 37 percent, and between 2014 and 2015, while the rate of deforestation in conservation units with Bolsa Floresta decreased by 35.5 percent, the rate of deforestation in conservation units without Bolsa Floresta increased by 13.9 percent and the rate of deforestation in Amazonas in general increased by 42.4 percent. REFERENCES Bakkegaard, R. K., and S. Wunder. 2014. “Bolsa Floresta, Brazil.” In REDD+ on the Ground, edited by E. Sills, 51–67. Bogor: CIFOR. Brito, A., G. de Lima Ferreira, J. Budi, M. Rodekirchen, and P. de Sa. 2019. Projeto Bolsa Floresta: Relatório final de avaliação de efetivi- dade. Brasil: GIZ and BNDES. FAS. 2017. Relatório de atividades 2016. Manaus: Fundação Amazonas Sustentável. FAS. 2019. Relatório de atividades 2018. Manaus: Fundação Amazonas Sustentável. Viana, V., and V. Salviati. 2018. Bolsa Floresta Programme, Brazil. London: International Institute for Environment and Development. 91 OVERVIEWS OF CASES OF BENEFIT-SHARING CONTINUED Payments For Environmental Services (PSA) Lago de LOCATION: Costa Rica (national scale) Nicaragua NICARAGUA AREA: A total of 1.26 million hectares of land ALAJUELA Caribbean Sea have been registered under the different activi- ties of the program (forest protection, reforesta- GUANACASTE HEREDIA tion, natural regeneration, forest management). CO STA RIC A LIMÓN ~300,000 hectares are maintained under active SAN JOSÉ CARTAGO contract each year. PUNTARENAS SAN JOSÉ YEARS OF OPERATION: 1997 to present SCALE OF FUNDS & BENEFICIARIES: Around PUNTARENAS US$600 million have been invested in the PACIFIC PANAMA OCEAN program to date. A total of 17,800 payment for ecosystem services contracts have been signed as of the end of 2018, with ~8,000 active contracts currently in place. IBRD 44455 | JUNE 2019 GOALS: Costa Rica’s Forest Law No.7575, enacted in 1996, recognized four environmental services provided by forest ecosystems: (1) mitigation of greenhouse gas emissions; (2) hydro- logical services; (3) biodiversity conservation; and (iv) provision of scenic beauty for recreation and ecotourism. The law provided the regulatory basis to contract landowners for the services provided by their lands. The country’s Payments for Environmental Services Program (PSA), established the following year, provides the mechanism to achieve this. A. BENEFITS AND BENEFICIARIES Initially, formal land title was a requirement for participation, but the program was amended to also accept proof of right of possession for 10 years or more in lieu of title in certain circumstances. Eligibility conditions are linked to the scale of projects, which have to be less than 300 hectares. A minimum land size qualification threshold of 10 hectares has been adopted in order to be consistent with the mini- mum legal area of a “forest” as defined by the Forestry Law. In 2010, the National Forestry Financing Fund (FONAFIFO) moved to a point-system for weighting and prioritizing applications. FONAFIFO now prioritizes areas of low development indices and high conservation importance (e.g., biological corridors, forests in im- portant watersheds). It also sets quotas for women and indigenous peoples’ community groups. In the case of indigenous peoples’ communities, it allows up to 800 hectares in a single contract. PSA contracts are usually 5–10 years long and the program differentiates between project types that are subject to different terms and conditions, including payment and annual distribution amounts. For example, payments range from ~US$41 per hectare per year (for a 5-year contract) for natural forest regeneration to a cumulative sum of ~US$1,000 per hectare for a 15-year reforestation contract, with most of the payment frontloaded into the early years of the contract. Forest protection ranges from US$64 to US$80 per hect- are per year and agroforestry systems are paid at US$1.3/tree, rather than on a per hectare basis. 92 B. INSTITUTIONAL, FINANCIAL, AND GOVERNANCE ARRANGEMENTS The program is operated by FONAFIFO, which has a dedicated PSA department that coordinates all activities related to the PSA guidelines, technical procedures, the payment process to beneficiaries of PSA contracts, and evaluation and monitoring of the program. The PSA is ultimately administered by the government of Costa Rica, which sets FONAFIFO’s priorities and determines payment levels; the Ministry of Finance approves FONAFIFO’s budget annually. However, day-to-day operations are governed by a board of directors. In addition, FONAFIFO is a fully decentralized agency and has eight regional offices. FONAFIFO has the authority to sell carbon credits that are a product of the PSA program. C. STAKEHOLDER PARTICIPATION FONAFIFO has established collaborative agreements with NGOs as part of the PSA program. NGOs can provide support with the application process where needed, carry out compliance monitoring with the agreed-upon land use, and provide technical support for timber plantation start-up and maintenance. The PSA program has made special arrangements for contracting with indigenous peoples, thereby making the program much more accessible to these groups. Out of the 24 indigenous peoples’ territories in the country, 21 have participated in the program and the demand to include indigenous peoples’ lands under a PSA contract increases by the year. D. MONITORING, EVALUATION, AND ADAPTIVE MANAGEMENT PSA payments occur yearly, after verification that no land use change has occurred and that conservation activities have been performed as specified in the relevant Program of Best Management Practices. The program requires that participants work directly with a private technical specialist (a regente forestal) to prepare certain program documentation. The specialist is also responsible for preparing status reports on the project as part of the monitoring strategy. FONAFIFO staff also conduct site visits, review (and regular- ly audit) the reports of the specialist, and carry out geographic information system monitoring. RESULTS REPORTED: To date a total of 1.26 million hectares of land have been registered in the program (1.1 million hectares of which are was forest protection). This represents nearly 18,000 PSA contracts signed. Of the contracts, 2,600 have been with women and 284 are with indige- nous peoples’ community groups. In addition, 7.5 million trees have been planted under agrofor- estry systems. Around 300,000 hectares are maintained under active contract each year. REFERENCES Arriagada, R. A., E. O. Sills, P. F. Ferraro, and S. K. Pattanayak. 2015. “Do Payments Pay Off? Evidence from Participation in Costa Rica’s PES Program.” PLoS ONE 10 (7): e0131544. Chaves, O. S., and G. N. Chacón. 2017. “La experiencia de Costa Rica en el pago por servicios ambientales: 20 años de lecciones aprendidas.” Revista de Ciencias Ambientales 51 (2): 195–214. FONAFIFO. (2018). Fondo Nacional de Financiamiento Forestal. https://www.fonafifo.go.cr/es/. FONAFIFO, CONAFOR, and Ministry of Environment. (2012). Lessons Learned for REDD+ from PES and Conservation Incentive Pro- grams. Examples from Costa Rica, Mexico, and Ecuador. Washington, DC: World Bank. Fonseca, C. A., and J. A. Drummond. 2015. “The Payments for Environmental Services Program in Costa Rica: An Assessment of the Program’s Early Years.” Desenvolvimento e Meio Ambiente 33: 63–80. Madeira, E. M., L. Kelley, J. Blockhus, D. Ganz, R. Cortez, and G. Fishbein. 2012. Sharing the Benefits of REDD+: Lessons from the Field. Arlington, VA: The Nature Conservancy. Navarro, G. 2010. “REDD-plus Benefit Sharing in Costa Rica.” Working paper, World Bank, Washington, DC. Pagiola, S. 2008. “Payments for Environmental Services in Costa Rica.” Ecological Economics 65 (4): 712–24.   93 OVERVIEWS OF CASES OF BENEFIT-SHARING CONTINUED Socio Bosque Program (SBP) LOCATION: Ecuador (national scale) COLOMBIA AREA: 1.6 million hectares are protected ATLANTIC OCEAN through the program. QUITO YEARS OF OPERATION: The program began in 2008. When an agreement is signed, E C UAD O R annual payments are made for 20 years. SCALE OF FUNDS & BENEFICIARIES: Since 2008, the government of Ecuador has invested around US$55 million in the pro- PERU gram. Nearly 2,800 individual and collective agreements have been signed, representing roughly 190,000 people. IBRD 44456 | JUNE 2019 GOALS: The three objectives of the program are (1) to conserve native forests and other native ecosystems to protect their ecological, economic, cultural, and spiritual values; (2) to signifi- cantly reduce deforestation and associated greenhouse gas emissions; and (3) to improve the well-being of farmers, indigenous peoples, and other groups living in the country’s rural areas with the aim of benefiting between 500,000 and 1 million people. A. BENEFITS AND BENEFICIARIES Beneficiaries are communities and households that voluntarily agree to protect important ecosystems in Ecuador. There are some requirements related to verification of land title for individuals and communities and an “ancestry certificate” for indigenous peoples. Land title requirements are challenging for poorer peo- ple in Ecuador, but this decision was made with the intent of preventing land grabbing. The benefits within the SBP consist of direct cash payments made twice a year, based on complying with several conservation commitments. Importantly, payments are not related to the opportunity cost of choosing conservation over unsustainable use. Payments are based on a graduated scale according to the number of hectares conserved and the type of ecosystem and beneficiary (individual or community). Smaller landholders and communities receive a higher per hectare payment in order to promote equity. For communities participating in the program, the use of funds from payments received should align with com- munal development plans, intended to promote sustainable economic development and access to services. B. INSTITUTIONAL, FINANCIAL, AND GOVERNANCE ARRANGEMENTS The program is led by a dedicated team within the Ministry of Environment. The program also employs regional staff and extension agents to socialize it and to receive and verify applications. All costs of the program are covered by public funds, which are designated annually by the National Secretary for Plan- 94 ning and Development, along with additional finance from REM (KfW and the government of Norway), the Global Climate Fund (GCF), the Global Environment Facility (GEF), and private sector investment (minimal investment through carbon offsets). The program is based on conservation agreements, wherein individuals or communities make clear conservation commitments (for the SBP the commitments are standardized to the number of hectares conserved), and in return they receive cash incentives to reward those efforts. C. STAKEHOLDER PARTICIPATION The program was developed over a matter of months in 2008, a fast process that was successful in cap- italizing on already-proven conservation agreement models as well as existing political will, but that may have limited participation by some stakeholder groups in the program’s initial design. Although participa- tion in the program is voluntary, in the case of indigenous peoples and Afro-Ecuadorian communities and rural organizations, participatory processes are a fundamental requirement. In these cases, even though the president of the community or rural organization signs the conservation agreement, the decision-mak- ing process involves the approval of the community general assembly. The assembly also approves the communal Annual Investment Plan and the twice yearly financial and activity accountability report that is developed throughout the duration of the conservation agreement. D. MONITORING, EVALUATION, AND ADAPTIVE MANAGEMENT Monitoring appears to focus on compliance with the conservation obligations included in the conservation agreements and includes remote sensing and site checks. Evaluations of the use of funds from the commu- nal payments are also undertaken. Monitoring of finer-scale environmental and socioeconomic factors (eco- system health, human well-being indicators) is not central to the adaptive management of the program. RESULTS REPORTED: As of 2018, the program reports the protection of 1.6 million hectares of their 4-million-hectare goal. REFERENCES Conservation Stewards Program. 2019. Conservation Agreements: Empowering People to Choose Nature. Arlington, VA: Conservation International. https://www.conservation.org/docs/default-source/publication-pdfs/csp-overview.pdf?sfvrsn=ba50d9c5_3. Cuenca P., J. Robalino, R. Arriagada, and C. Echeverrí. 2018. “Are Government Incentives Effective for Avoided Deforestation in the Tropical Andean Forest?” PLoS ONE 13 (9): e0203545. de Koning, F., M. Aguiñaga, M. Bravo, M. Chiu, M. Lascano, M. Lozado, and L. Suarez. 2011. “Bridging the Gap Between Forest Con- servation and Poverty Alleviation: The Ecuadorian Socio Bosque Program.” Environmental Science and Policy 14 (5): 531–42. Fehse, J. 2012. Private Conservation Agreements Support Climate Action: Ecuador’s Socio Bosque Programme. Climate and Develop- ment Knowledge Network. Hayes, T., and F. Murtinho. 2018. “Communal Governance, Equity and Payment for Ecosystem Services.” Land Use Policy 79: 123–36. Initiative 20x20. 2019. Ecuador’s Socio Bosque Program. Washington, DC: Initiative 20x20. Murtinho, F., and T. Hayes. 2017. “Communal Participation in Payment for Environmental Services (PES): Unpacking the Collective Decision to Enroll.” Environmental Management 59 (6): 939–55. Perafán, C., and M. Pabón. 2019. “Comunidades sostenibles: Evaluación sociocultural del Programa Socio Bosque.” Technical note IDB-TN-01587, Inter-American Development Bank, Washington, DC.   95 OVERVIEWS OF CASES OF BENEFIT-SHARING CONTINUED National Forestry Incentive Programs (PINFOR and PINPEP) LOCATION: Guatemala (national scale) AREA: 383,000 hectares of land were covered BELIZE under PINFOR (plantations and natural MEXICO forest management). As of the end of 2017, Gulf 115,000 hectares of land are included in of PINPEP (plantations, agroforestry and natural Honduras forest management). G U AT E M A L A YEARS OF OPERATION: PINFOR was operation- al from 1998 to 2016. PINPEP began in 2007 and GUATEMALA HONDURAS has no mandated end date. SCALE OF FUNDS & BENEFICIARIES: 880,000 people directly benefited from the PINFOR EL SALVADOR PACIFIC OCEAN program, and 250,000 have directly benefited IBRD 44457 | JUNE 2019 from PINPEP (up to the end of 2017). The govern- ment of Guatemala has invested around US$364 million in both programs to date. GOALS: PINFOR objectives were to increase forest stocks available for exploitation by the forestry sector, improve sustainable forestry production, and incentivize the protection of natural forests. PINPEP also aims to increase forest cover but has the additional objectives of generating employment in rural areas and promoting gender equity. An additional program, PROBOSQUE began in 2015 and has a lifetime of 30 years; this program expands the forestry incentives for projects with both production and protection objectives, including for the provi- sion of ecosystem services (e.g., natural forest management in areas of water recharge). It also has objectives linked to improving livelihoods and food security, promoting rural development, and mitigating and adapting to climate change. A. BENEFITS AND BENEFICIARIES The majority of PINFOR beneficiaries were larger private landowners because of the 2-hectare minimum land eligibility requirement and the need to have formal land tenure. PINPEP was developed in response to demand to allow access to incentives for small landowners without formal tenure but who can prove that they have a possession right to the land (granted via the municipality). The minimum land size requirement for PINPEP is only 0.1 hectares, which also allows poorer families with little land to participate. Municipalities are also able to participate by entering municipal forest lands into the programs, and often these munici- palities own important extensions of forest lands. Benefits are provided as cash payments once a year. Payments are based on the amount of land enrolled in the program, the type of project being implemented (forestry plantations, agroforestry, natural forest management), and the year of implementation (e.g., plantation projects receive a higher payment in year one than in years two–five). 96 In order to receive the payment, beneficiaries must adhere to forestry management plans developed by a qualified technician as part of the enrollment process. These plans outline the criteria and activities that each project must complete, such as the establishment of fire breaks for protection projects and achieving 65 percent survival rates for plantation projects. Annual site verifications are conducted by National Forest- ry Institute (INAB) staff and the beneficiary needs to implement corrective actions in cases of noncompli- ance before being able to receive payment. Incentive payments only last up to a maximum of five to ten years (depending on the type of project) and the same parcel of land cannot be re-registered. B. INSTITUTIONAL, FINANCIAL, AND GOVERNANCE ARRANGEMENTS The incentive programs are managed by the National Forestry Institute (INAB), which is responsible for veri- fying performance of the projects. The payments are transferred directly to the bank accounts of beneficia- ries by the Ministry of Finance (MINFIN) following receipt of the certificate that confirms adherence with the forest management plan. Though attached to the Ministry of Livestock and Agriculture (MAGA), the INAB is an autonomous, decentralized agency with its own governing body (Junta Directiva) made up of central government, municipalities, academia, environmental NGOs, and the private sector, including the forestry industry. C. STAKEHOLDER PARTICIPATION It does not seem that PINFOR was developed with much participation from a broad range of stakehold- er groups. Indeed, the majority of smallholders were excluded from participating in the program by the requirement to have a legal title and an extension of over 2 hectares of land. This led community forestry organizations to successfully pressure for the creation of a new scheme. During the process of establishing PINPEP, owners of small tracts of land with forest or agroforestry vocation participated, as well as various indigenous peoples and farmer associations, NGOs, environmentalists, municipalities, and representatives of the forestry sector. Given that Guatemala intends to use its forestry incentive schemes as an incentive and benefit-sharing mechanism under REDD+ then free, prior, and informed consent will be required for at least those elements of the programs that may affect indigenous peoples’ rights, for example, provisions of PINPEP regulations and PROBOSQUE that relate to communal tenure (including over land titled in another’s name), or in re- spect of activities in which there are claimed or disputed rights. D. MONITORING, EVALUATION, AND ADAPTIVE MANAGEMENT Projects are monitored and verified once a year by the INAB to check that they are in compliance with the activities and criteria outlined in the Forest Management Plan. The INAB has the authority to reject, approve, or request changes to the reports/plans from projects prior to the incentive payment being made. Monitoring finer-scale environmental and socioeconomic factors and outcomes (ecosystem health, human well-being indicators) is not currently central to the monitoring framework, partially because of the inclu- sion of many small land parcels, which increases transactional costs for on-site checks. However, given that PINPEP and PROBOSQUE are now part of Guatemala’s REDD+ mechanism, other measurement, report- ing, and verification components such as the estimation of removals from the increase of carbon stocks through forest management, reforestation, and natural regeneration will also be included going forward. 97 OVERVIEWS OF CASES OF BENEFIT-SHARING CONTINUED RESULTS REPORTED: As of the end of 2017, nearly 500,000 hectares of land have been includ- ed in both the PINFOR and PINPEP programs combined. For PINFOR, a total of 10,418 projects were incorporated into the program, of which 57 percent were for reforestation/plantations and 43 percent for natural forest management (production and protection). Of these projects, 12 percent corresponded to women, 48 percent to men, and 40 percent to collective projects (municipalities, communities, companies). In addition to the 880,000 direct beneficiaries, 4 million people have benefited indirectly. For PINPEP, during the period 2007–2017, 32,000 projects have been adopted into the pro- gram, of which 31 percent are led by women, 61 percent by men, and 8 percent are collective projects. There are 250,000 direct beneficiaries and 750,000 indirect beneficiaries. REFERENCES Comisión de Finanzas Publicas y Moneda. 2014. Dictamen PROBOSQUE. Congreso de la Republica de Guatemala. 2010. Decreto Número 51-2010. Cruz Valenzuela, J. 2015. “Cooperación internacional para Guatemala: Ley de programa de incentivos forestales para pequeños poseedores de tierras forestales o agroforestales PINPEP.” Graduate thesis, Universidad Rafael Landívar, Guatemala City. INAB. 2014. Resolución JD 03.31.2014. INAB. 2017. Boletín Estadístico 1998-2017. Departamento de Incentivos Forestales. INDUFOR. 2017. Guatemala: Diseño e implementación del proceso nacional de consulta con las partes interesadas de la Estrategia Nacio- nal REDD+, con pertinencia cultural y enfoque de género (Proyecto No GU-T1194). Inter-American Development Bank. Kuper, J. 2014. Guatemala Resource Tenure and Sustainable Landscapes Assessment. Washington, DC: USAID Tenure and Global Climate Change Program. von Hedemann, N., and T. Osborne. 2016. “Incentivos forestales del estado y la administración comunal: Una ecología política de pagos y compensación por servicios ambientales en el altiplano de Guatemala.” Journal of Latin American Geography 15 (1): 83–110.   98 Katingan Peatland Restoration And Conservation Project (Katingan Mentaya Project) LOCATION: Indonesia (Mendawai, Kamipang, INDONESIA Seranau, and Pulau Hanaut subdistricts BRUNEI DARUSSALAM of Katingan and Kotawaringin Timur districts, Central Kalimantan) MALAYSIA AREA: Project zone covers 305,669 hectares KALIMANTAN TIMUR YEARS OF OPERATION: 2010–2070 KALIMANTAN BARAT INDONESIA SCALE OF FUNDS & BENEFICIARIES: KALIMANTAN TENGAH 34 village communities and a population Kamipang Seranau estimated in 2010 to be 43,000 people living Pulau Hanaut Mendawai KALIMANTAN in 11,475 households Katingan SELATAN Kotawaringin Timur IBRD 44458 | JUNE 2019 GOALS: The project aims (1) to protect and restore 149,800 hectares of peatland ecosystems, and to generate an average 7,451,846 tons of greenhouse gas emission reductions annually; (2) to improve quality of life and reduce poverty of the project-zone communities; and (3) to stabilize healthy populations of faunal and floral species in the project zone and enhance natural habitats and ecological integrity through ecosystem restoration. A. BENEFITS AND BENEFICIARIES Beneficiaries are the communities residing in the project zone. Participatory mapping and planning have been conducted in each of the 34 villages to determine short- to medium-term development goals and to plan specific activities that can be implemented between the communities and the Katingan Mentaya Project. Nonmonetary benefits are provided through grant funding for long-term education and health programs (e.g., awareness raising, infrastructure development, sanitation projects) and grant funding for institutional strengthening and various training opportunities (e.g., skills, techniques). In addition, monetary benefits are provided through developing revolving funds for microfinance to support small-scale economic activities and funding small and medium enterprises with business objectives that are consistent with the project’s overall objectives. An emphasis has been placed on technical, material, and financial support for community-based busi- ness development such as the fabrication of composite flooring from rattan and bamboo, coconut palm sugar production, rubber and vanilla agroforestry, improved production of rice and other organic produce, fishponds, livestock management, and salvaged wood production. Training and support have also been pro- vided to establish microfinance institutions in several villages. In more remote villages with less easy access to markets, benefits have focused on grants for improved services such as construction of latrines, solar energy, and access to clean water. In all cases, finance is provided as co-funding with villagers contributing, often from a Village Fund provided to them by the government. B. INSTITUTIONAL, FINANCIAL, AND GOVERNANCE ARRANGEMENTS The Katingan Project is managed by an Indonesian company, PT Rimba Makmur Utama (RMU), through two Ecosystem Restoration Concession licenses (the first issued by Minister of Forestry Decree SK 734/ 99 OVERVIEWS OF CASES OF BENEFIT-SHARING CONTINUED Menhut-II/2013 covering 108,225 hectares and the second issued by Capital Investment Coordinating Board Agency Decree 23/1/IUPHHK-RE/PMDN/2016 covering 49,620 hectares). No official regulations have yet been established for benefit sharing for such projects in Indonesia. Currently RMU maintains the sole responsibility for managing and disbursing funds used to support community development efforts. Deci- sions are made by RMU based on inputs from the participatory planning processes. In future, the possibility of funds being managed by an independent or semi-independent entity are being evaluated. In addition, the project is helping to develop the capacity for local institutions, such as cooperatives and NGOs, to help deliver results. Benefits provided are consistent with government regulations stipulating that all village business develop- ment should be channeled through village-owned enterprises. C. STAKEHOLDER PARTICIPATION Benefits packages are designed by the villages in collaboration with Katingan Mentaya Project staff through participatory mapping and planning and respecting principles of free, prior, and informed consent. This approach is conducted iteratively to enable local people to critically consider potential impacts of ac- tivities and to negotiate their participation. In additional to regular meetings, community message boards, flyers, and local radio programs are used to provide information to the villages. D. MONITORING, EVALUATION, AND ADAPTIVE MANAGEMENT RMU conducts regular monitoring of the forest cover using remote sensing and of the implementation and results of project activities. While the project started in 2010, the first significant carbon revenues were received only from 2018. Benefit-sharing activities have been implemented using investment funding on a pilot scale. In addition, the government of Indonesia has not yet issued regulations on benefit sharing for this type of project. Benefit sharing will be adapted based on the results of the pilot activities and will be formalized once the regula- tions are clarified. RESULTS REPORTED: From 2010 to 2017, the project generated avoided emissions equivalent to 21,918,156 tons of carbon dioxide equivalent (CO2e); generated 33,805 hectares reduced forest loss and 496 hectares restored forest; employed 127 full-time equivalent employees (9 percent women); and improved livelihoods for 2,740 people, health services for 200 people (56 percent women), access or quality of education for 51 people (67 percent women and girls), access to drinking water for 256 people (50 percent women), well-being of 11,929 community members, and skills of 945 community members (34 percent women). REFERENCES PT RMU. 2016a. Katingan Peatland Restoration and Conservation Project: Monitoring & Implementation Report, 2010-2015. Jakrata: PT Rimba Makmur Utama. PT RMU. 2016b. Katingan Peatland Restoration and Conservation Project: Project Description Document. Jakarta: PT Rimba Makmur Utama. PT RMU. 2017. Katingan Peatland Restoration and Conservation Project: Monitoring & Implementation Report, 2015-2016. Jakarta: PT Rimba Makmur Utama. PT RMU. 2018. Katingan Peatland Restoration and Conservation Project: Monitoring & Implementation Report, 2017. Jakarta: PT Rimba Makmur Utama.   100 Kasigau Corridor REDD+ Project SOUTH SUDAN ETHIOPIA LOCATION: Kenya (Taita-Taveta County) Lake Turkana AREA: 203,784 hectares (30,168 hectares in Phase 1 plus 173,616 hectares in Phase 2) UGANDA SOMALIA YEARS OF OPERATION: 2005–present (with KENYA Phase 2 added in 2010) Lake SCALE OF FUNDS & BENEFICIARIES: Victoria NAIROBI 14 ranches (total 4,185 shareholder) and 6 community groups (with 92,500 people TANZANIA in 21,500 households) INDIAN TAITA/TAVETA OCEAN IBRD 44459 | JUNE 2019 GOALS: The four goals of the project are (1) to protect the dryland forests that form a wildlife corridor between the Tsavo West & Tsavo East National Parks, reducing human-wildlife con- flict; (2) to conserve important biodiversity in these dryland forests; (3) to provide alternative sustainable livelihood and development opportunities; and (4) to prevent greenhouse gas emis- sions from slash-and-burn agriculture. A. BENEFITS AND BENEFICIARIES The primary behavior changes needed to meet these objectives vary: for communities, the strategies in- volve reducing slash-and-burn agricultural practices and the production of charcoal for communities; while for ranch owners, the strategies involve commitments not to poach wildlife, produce charcoal, log, clear land for agriculture, harvest firewood for sale, and/or conduct any other activity damaging to forests and biodiversity. There are three categories of beneficiaries: (1) ranch owners, who are individuals or groups—private compa- nies or directed agricultural companies—with membership based on share ownership; (2) the project imple- menter—Wildlife Works (WW)—which covers patrolling, monitoring, and employment; and (3) communities living in the project area. Theoretically, the revenue is equally distributed among the three beneficiary categories mentioned above, with one-third of revenues going to each; however, low project revenue combined with high project cost has led to a different distribution. In practice, the ranch owners receive their third as contractually obligated (US$18,000–US$73,000/ranch/year, distributed differently on each ranch); half of the revenues go to proj- ect costs (including 320 staff salaries); and the remaining funding (roughly one-sixth) goes to communities (which averages to US$5–US$8 per person per year). B. INSTITUTIONAL, FINANCIAL, AND GOVERNANCE ARRANGEMENTS Wildlife Works Sanctuary handles project implementation and the sale of associated carbon credits. Communities are not contractually bound; however, ranch owners are required to sign 30-year contractu- 101 OVERVIEWS OF CASES OF BENEFIT-SHARING CONTINUED al agreements, given that their permission (as landowners) is required to conduct the project. In terms of distributing the funds, one-third of the revenue is automatically distributed to ranch owners, then project costs are deducted, and the remainder—the profits—is split between the WW and the communities. For communities, Wildlife Works Carbon Trust (WWCT) distributes benefits through Location Carbon Committees and community-based organizations; this structure was chosen instead of payments per household to maximize effectiveness. To implement these collective community projects, local institutions needed to be created and/or strengthened. Community-based organizations oversee implementation of the projects and submit proposals to the Location Carbon Committees, while in turn the Location Carbon Committees review the proposals and submit their selections for funding to the WWCT. C. STAKEHOLDER PARTICIPATION The WW organizes ongoing stakeholder education and input processes, with many modes of engagement and multiple options for providing feedback and submitting grievances. Additionally, the WW reports actual benefit distribution against the benefit-sharing plan to all stakeholders on a periodic basis. Legally, consent is required only from the ranch owners given they are the legal rights holders for the carbon. However, both the WW and the ranch owners recognized the importance of including the communities as key stakeholders. D. MONITORING, EVALUATION, AND ADAPTIVE MANAGEMENT The project is monitored and evaluated through processes required by compliance with the Verified Carbon Standard (for carbon accounting) and the Climate, Community & Biodiversity Standards (for social and en- vironmental aspects). The WW employs guards to patrol the project area and check for any illegal activities. One project adaptation has been to document the agreements with the communities even though con- tracts are not required with them. This documentation for the community agreements has reduced confu- sion and increased trust among stakeholders in the project. RESULTS REPORTED: Net estimated emission reductions of 2.75 million tons of carbon dioxide equivalent (CO2e) from 2005 to 2017 for Phase 1 area plus an additional 41.60 million tons carbon dioxide equivalent (CO2e) from 2010 to 2017. REFERENCES Chomba, S., J. Kariuki, J. Friis Lund, and F. Sinclair. 2016. “Roots of Inequity: How the implementation of REDD+ Reinforces Past Injustices.” Land Use Policy 50: 202–213. Githiru, M. 2016. “Correcting Inequity: How the implementation of the Kasigau Corridor REDD+ Project in Fact Redresses Past Injustices—Response to Chomba et al.” Land Use Policy 57: 619–24. Wildlife Works. 2017. Kasigau Corridor REDD+ Project: Benefit Sharing Plan. Rukinga, Kenya: Wildlife Works. WWC. 2018a. 5TH MONITORING REPORT (M5): The Kasigau Corridor REDD+ Project Phase I - Rukinga Sanctuary. Mill Valley, CA: Wildlife Works Carbon. WWC. 2018b. 5TH MONITORING REPORT (M5): The Kaksigau Corridor REDD+ Project Phase II - The Community Ranches. Mill Valley, CA: Wildlife Works Carbon. WWC. n.d. Kasigau Corridor REDD+ Project: Lessons Learned from Project-Based REDD+. Mill Valley, CA: Wildlife Works Carbon.   102 Makira Project Mayotte LOCATION: Madagascar (Analanjirofo, SAVA, (France) el nn and Sofia Regions) eC ha SAVA iqu mb oza SOFIA M AREA: Makira Natural Park 372,470 hectares ANALANJIROFO and community-managed green belt 351,037 hectares ANTANANARIVO YEARS OF OPERATION: 2005–2018 MADAGASCAR SCALE OF FUNDS & BENEFICIARIES: 49,000 INDIAN people estimated in the project zone in 2009, OCEAN US$412,813 provided for community projects 2015–2017, unclear how many people have ben- efited directly IBRD 44460 | JUNE 2019 GOALS: The Makira Project aims (1) to avoid emissions of 38 million tons of CO2e over the 30-year project period; (2) to maintain ecological integrity of the Makira landscape and its connectivity with other protected areas of Northeastern Madagascar; (3) to ensure mainte- nance of ecological services; (4) to ensure the protection of its exceptional biodiversity with a high level of species endemism, which is certainly among the highest in the country, with large numbers of plants and animals found nowhere else in the world; and (5) to empower the surrounding local communities to manage their natural resources sustainably and address their food security and subsistence needs. A. BENEFITS AND BENEFICIARIES Fifty percent of the revenues from the sale of carbon credits generated by the Makira Project are allocated to support local communities in and around the Makira Forest in their natural resource management, forest conservation, and community-development initiatives. These funds for communities provide nonmonetary benefits for community projects identified by the communities or by the manager of Makira Natural Park, which have been identified in management plans linked to management transfer contracts (simplified management plans, as part of the contractual community forest management) or in the project design document of the Makira Project, or for conservation and natural resource management projects in the buffer zone around the natural park of Makira including funding for operational structures for community management including for community management associations (VOIs), platforms of VOIs, and federations of VOIs. Seventy-five communities surrounding Makira Natural Park have established VOIs that have contracts with the government for the management of forest areas in the buffer zone and that are eligible to receive benefits. They have agreed to implement and enforce land use zoning and management plans that aim to reduce deforestation by limiting slash-and-burn agriculture, clearance of pastures, and small-scale illegal logging and illegal mining. Community projects include providing materials and training for beekeeping, 103 OVERVIEWS OF CASES OF BENEFIT-SHARING CONTINUED vanilla cultivation, improved rice cultivation, and health care and construction or rehabilitation of schools, health centers, and irrigated agriculture. The remaining revenues from the sale of carbon credits are allocated to the government (20 percent), to the Wildlife Conservation Society (WCS) for the management of the protected area (20 percent), to the Makira Carbon Company for promotion and marketing of the credits (5 percent) and for third-party validation and verification of the credits (2.5 percent); and to the Tany Meva Foundation for the management and dis- bursement of funds for communities and management of the protected area (2.5 percent). By the end of 2017, at least US$3.8 million had been generated from the sale of carbon credits. B. INSTITUTIONAL, FINANCIAL, AND GOVERNANCE ARRANGEMENTS The Makira Project is implemented on government-owned land including Makira Natural Park and the buffer zone where local communities have VOIs and signed forest management contracts with the govern- ment. The VOIs are represented on six VOI platforms for each sector of the project area, and the platforms, in turn, constitute a VOI federation. Decree No. 2008-704 dated July 11, 2008, approved in a Council of the Government of Madagascar and further amended on July 16, 2012, specifies the roles and responsibilities as well as the carbon revenue shar- ing and management mechanism for the Makira Project. The WCS is the designated manager of Makira Natural Park and the Makira Carbon Company, a wholly owned subsidiary of the WCS, is responsible for the marketing and sale of verified emission reduction credits generated by the project. The Tany Meva Founda- tion was appointed in 2015 to manage and disburse funds allocated to communities and to park manage- ment from the sale of credits. Tany Meva requests proposals from all the VOI for the use of community funds, which are collected by the VOI platforms; screened for feasibility by a Local Technical Committee composed of the presidents of the six VOI platforms, the WCS, and Tany Meva; and then prioritized by the VOI federation. For more complex projects like school construction or irrigation canals, Tany Meva commis- sions a detailed work plan and budget. A steering committee composed of representatives of the Ministry of Environment responsible for Forest, the National REDD+ Coordination and Climate Change Coordination offices, the WCS, and the VOI federation reviews and approves annual work plans and budgets for the use of carbon funds for the communities proposed by Tany Meva. C. STAKEHOLDER PARTICIPATION Local communities are mostly engaged in the project and consulted through the VOI structures, including the representatives VOI platforms and the VOI federation. In addition, 34 park agents have been recruited from and live in the local communities; they who help greatly to facilitate the flow of information to and feedback from the communities. Communication is a significant challenge given the isolated nature of many villages, many of which are one to three days’ walk from the nearest transport, and given also the low education and widespread illiteracy among the population. D. MONITORING, EVALUATION, AND ADAPTIVE MANAGEMENT The WCS conducts a comprehensive monitoring program including periodic socioeconomic surveys includ- ing issues of health, education, production, revenues, security, and empowerment through detailed house- hold interviews and focus group discussions with VOIs. Monitoring of forest cover and compliance with forest management contracts and zoning is ongoing through remote sensing and site visits. Lemur and fosa (endemic primates and carnivore) populations are monitored along with the incidence of poaching for bush meat. 104 The delivery of benefits from the carbon revenues to communities underway since 2015 has faced adminis- trative and logistical challenges leading to limited and delayed disbursement. The Ministry of Environment decided in October 2018 to terminate the memorandum of understanding with the Makira Carbon Compa- ny and subsequently suspend the role of Tany Meva in the management of the community carbon fund. To ensure continuation of delivery of benefits to communities, responsibility was given to the WCS to manage the remaining community funds. Some improvements have been made to facilitate the disbursement pro- cess and others are planned. RESULTS REPORTED: From January 1, 2005, to December 31, 2013, the Makira Project generated 2,148,104 tons of carbon dioxide equivalent (CO2e) of avoided greenhouse gas emissions. Positive impacts on local communities at least partially attributed to the project are most significant in the fields of access to microfinance, school attendance (increase from 76 percent to 96 percent) and capacity building, access to health care, new income-generating improved agriculture techniques (increase in average annual household income from US$159 to US$394), and increased participation of community members, including women, in decision making. Positive impacts on biodiversity are most clearly shown by the increase of frequency of seven out of eight-day active lemur species encountered in the project zone and the reduction of illegal activities leading to forest degradation. REFERENCES Rainforest Alliance. 2013. CCB Verification Statement for Wildlife Conservation Society. New York, NY: Rainforest Alliance. WCS-Madagascar. 2015. Makira Forest Protected Area Project: 2005-2013 Project Implementation Report. Antananarivo: Wildlife Conservation Society-Madagascar.   105 OVERVIEWS OF CASES OF BENEFIT-SHARING CONTINUED Community Forestry LOCATION: Nepal (national scale) AREA: 2,237,670 hectares as of May 2019, CHINA covering nearly 37 percent of the total forest area in Nepal YEARS OF OPERATION: 1989–present SCALE OF FUNDS & BENEFICIARIES: 2,907,871 NEPAL million households (more than a third of the KATHMANDU national population) in 22,266 Community Forestry User Groups, of which there are 1,072 women-only committees as of May 2019. INDIA US$13.7 million total annual profit was estimated for all CFUGs across the country in 2011. BANGLADESH IBRD 44715 | OCTOBER 2019 GOALS: To achieve sustainable management of forest resources by converting accessible national forests into Community Forests in a phased and wise manner. Additionally, to improve the social and economic condition of the poor, Dalits (a socially marginalized group), indigenous peoples, and ethnic groups, and women. A. BENEFITS AND BENEFICIARIES The government of Nepal instituted community forestry in the Forest Act of 1993. Community forestry transfers the use rights of forest resources from government to local communities through Community Forest User Groups upon approval of bylaws and forest management plans by Divisional Forest Offices. A Community Forest User Group has the full right to manage the forest and use its resources according to the forest management plan, and may involve conservation, timber extraction, cash crops, the rearing of livestock, and the collection of non-timber forest products. The Community Forest User Groups may use these products for their domestic needs and they have the right to sell forest products. The government taxes such sales at 15 percent for some commercially valuable species. The 1993 Forest Act mandates that 25 percent of the income from management of the forest should be used for the protection and management of the Community Forest and the remaining amount for other development work. Guidelines for implementing community forestry require that 35 percent of the income be used to improve the social and economic condition of the poor, women, Dalits, indigenous peoples, and ethnic groups through livelihood improvement programs. In addition, Community Forest User Groups must pay 10 percent of their income to the local government and 15 percent of their income to the cen- tral government. The Federation of Community Forestry Users Nepal (FECOFUN) continues to advocate against this tax system, which they perceive as unfair, and is proposing a one window tax system to reduce conflicts and complexity as well as what they describe as an unrealistic tax system. A 2013 survey found that forest management generates on average 640 paid person-days of work an- 106 nually per Community Forest User Group. At an average wage of US$2 per day, this represents the direct transfer of US$8.5 to US$12.8 per household per year. Community Forest User Groups generate substan- tial funds—an average of US$3,660 per year for those managing more than 100 hectares of forest. A significant proportion of this money is spent on community development, which can have a positive impact on the livelihoods of group members. The largest use of community forestry funds was for schools (mainly buildings) (30 percent), followed by poverty-reduction activities (17 percent), roads (16 percent), and other infrastructure such as electricity, temple buildings, drinking water, and sanitation. B. INSTITUTIONAL, FINANCIAL, AND GOVERNANCE ARRANGEMENTS Community Forest User Groups are legal, autonomous corporate bodies, governed by a general assembly consisting of all households in the boundaries of the applicant community, and an executive committee chosen by the Community Forest User Group through consensus or election. User groups who want to manage a Community Forest must submit a written application to the government, which then sends a technical expert to help the communities prepare bylaws and a management plan, respecting the guidelines set out in the Forest Regulations 1995. Decisions must be made on a consensual basis, and boundaries with neighboring communities must be respected. The Community Forest User Groups must then prepare a management plan to govern the Community Forest, also assisted by government staff. The management plan describes the community forest area and outlines the activities that will take place within it over its 10-year lifetime (though this period can be extended). Activities are implemented according to the manage- ment plan, bylaws, and decisions of the full Community Forest User Groups assembly. From 2014 the guidelines on community forestry require that a Community Forest User Groups manage- ment committee must contain at least 50 percent women representatives, with the remaining 50 percent including proportionate representation from the poor, socially marginalized groups, minority ethnic groups, and indigenous peoples. Either the chairperson or the secretary of the committee must be a woman. C. STAKEHOLDER PARTICIPATION The government worked with NGOs and the private sector to organize national workshops to develop the central policies and regulations now governing community forestry from 1987. The Federation of Commu- nity Forestry Users Nepal has played an important role in beneficiary participation in design of community forestry. The Federation of Community Forestry Users Nepal is a formal network of Community Forest User Groups that strives to promote their rights and strengthen their role in policy-making processes. Since its inception in July 1995, the Federation of Community Forestry Users Nepal has grown to include nearly 80 percent of the country’s Community Forest User Groups comprising around 10 million people. The Fed- eration of Community Forestry Users Nepal is run as a democratic network representing the Community Forest User Groups at each level, with an inclusive approach to decision making. D. MONITORING, EVALUATION, AND ADAPTIVE MANAGEMENT The Government of Nepal Ministry of Forests and Environment monitors overall forest conditions across Nepal. In 2011, the government conducted a survey involving 137 Community Forest User Groups and 2,068 households across 47 districts, supplemented by seven detailed case studies, which collected detailed information on activities, income, and use of funds by Community Forest User Groups. Guidelines for com- munity forestry have been revised on several occasions with significant input from Community Forest User Groups and other stakeholders. 107 OVERVIEWS OF CASES OF BENEFIT-SHARING CONTINUED RESULTS REPORTED: The Government of Nepal Ministry of Forests and Environment commu- nity forestry webpage (May 2019) states that impacts of Community Forests include restored degraded forest land; resumed greenery; increased biodiversity; increased supply of forest products; empowered women, poor, and the disadvantaged groups; promoted income-genera- tion and community development activities; and improved livelihoods. REFERENCES ClientEarth. 2019. Communities at the Heart of Forest Management: How Can the Law Make a Difference? Sharing Lessons from Nepal, the Philippines and Tanzania. London: ClientEarth. Gilmour, D. 2016. Forty Years of Community-Based Forestry: A Review of Its Extent and Effectiveness. Rome: Food and Agriculture Organization of the United Nations. SHA Pandey, G. S., and B. R. Paudyall. 2015. Protecting Forests, Improving Livelihoods: Community Forestry in Nepal. Moreton in Marsh, UK: Fern. 2019. CF Data Update 2075_02_04 (2018 Sep 20).   108 Alto Mayo Protected Forest (AMPF) LOCATION: Peru (Alto Mayo Protected Forest) ECUADOR COLOMBIA AREA: 430,000 hectares SAN MARTIN YEARS OF OPERATION: REDD+ project started BRAZIL in 2008, running through 2028. Some activities, including conservation agreements, started in 2007 PERU SCALE OF FUNDS & BENEFICIARIES: As of LIMA 2016, 848 settlers (60 percent of the population) PACIFIC OCEAN had signed conservation agreements. To date, US$24 million in carbon credit revenue BOLIVIA and US$14.7 million in investments has been provided by donors. It is projected that an CHILE additional US$9.1 million will be provided through 2022. IBRD 44461 | JUNE 2019 GOALS: The overall goal is to promote the sustainable management of the AMPF and its ecosystem services for the benefit of the local populations and the global climate. A. BENEFITS AND BENEFICIARIES Beneficiaries are settlers and communities who live inside and around the AMPF and its buffer zone. Benefi- ciaries sign conservation agreements that include (1) clear commitments to conserve the environment in accordance with the law and (2) incentives/benefits to enable compliance with these commitments. Each settler who signs a conservation agreement in the AMPF agrees to participate in conservation activities, such as training sessions, reforestation campaigns, and surveillance activities, as well as to report to the AMPF Head Office any illegal activities and the establishment of new settlements in the state Natural Protected Area. Additionally, they agree to implement only environmentally sustainable activities that are compatible with the conservation objectives of the AMPF and to limit these activities to authorized areas. The agree- ments provide a contract for the transfer of benefits in the absence of clear land tenure (in the AMPF the beneficiaries are illegal settlers). A key benefit is land security, as opposed to land tenure. For agreements with indigenous peoples’ communities adjacent to the AMPF, benefits are aligned with their Life Plans. Agreements have a standardized form but are flexible in terms of conservation commitments and benefits/ incentives. Settlers can negotiate and help design the agreement. Most benefits relate to technical assis- tance to improve coffee cultivation and sale and other livelihood activities. Additional benefits relate to creating government service hubs and improving access to health and education services. It is unclear how the amount of benefits is related to the amount of reduced deforestation produced by a beneficiary. There does not appear to be a direct link. 109 OVERVIEWS OF CASES OF BENEFIT-SHARING CONTINUED B. INSTITUTIONAL, FINANCIAL, AND GOVERNANCE ARRANGEMENTS Management of the AMPF is coordinated through an Administration Contract held by Conservation Inter- national – Peru and signed with the protected areas authority, SERNANP. Conservation International (CI) has the authority to sell carbon credits created through the project. From the amount generated, 20 percent is kept by CI headquarters for the generation of carbon assets (docu- mentation, verification, carbon accounting, etc.), and for marketing and brokering sales. Of the remaining 80 percent, 35 percent goes to the local beneficiaries through the conservation agreements, 25 percent goes to technical assistance, 25 percent goes to AMPF payroll and administration, and 15 percent goes to CI Peru payroll and administration. A management committee makes decisions about the management of the protected area. C. STAKEHOLDER PARTICIPATION Each beneficiary can negotiate and voluntarily sign a conservation agreement, selecting certain benefit packages. Little consultation took place for the design of the program at the community level because set- tlement in the AMPF is illegal and therefore key parts of the operational framework were already enshrined in Peruvian law. D. MONITORING, EVALUATION, AND ADAPTIVE MANAGEMENT Rigorous monitoring ensures compliance with conservation commitments and tracks environmental and social impacts. The project monitors deforestation, greenhouse gas emission reductions, and many social and environmental aspects for compliance with the Verified Carbon Standard and the Climate, Community & Biodiversity Standards. Conservation agreements, through their monitoring and renegotiation, are a form of beneficiary-by-beneficiary adaptive management. RESULTS REPORTED: As of 2015, deforestation rates were reduced by 75 percent of baseline. By 2019, over 800 conservation agreements had been signed, 6.2 million Verified Carbon Units generated, and there were 240,000 indirect beneficiaries. REFERENCES Conservation International-Peru. 2016. Alto Mayo Conservation Initiative Monitoring & Implementation Report No3. Lima: CI-Peru. Cordero, D. S.-P. 2014. Country Report Considerations for REDD+ Benefit Sharing in Peru. New Haven, CT: The Forests Dialogue. The Forests Dialogue. 2014. Country Options for REDD+ Benefit-Sharing Insights from a TFD Initiative. New Haven, CT: The Forests Dialogue. Podvin, K. S. 2017. Final Project Report: Facilitating REDD+ Benefit Sharing in Peru. Quito, Ecuador: Regional Office for South America of the International Union for Conservation of Nature, Quito, Ecuador in collaboration with Conservation International Peru (CI-Pe- ru) and the Association for Research and Integral Development.   110 Payment For Forest Environmental Services (PFES) CHINA LOCATION: Vietnam (national) MYANMAR HANOI LAO AREA: 5.3 million hectares of watershed forest PEOPLE'S Gulf DEM. REP. of protected/managed up to 2015 Tonkin YEARS OF OPERATION: 2011–present THAILAND VIETNAM SCALE OF FUNDS & BENEFICIARIES: From 2011 to 2017, US$400.9 million raised in revenue SOUTH CHINA CAMBODIA and US$298.8 million (6,574 billion Vietnamese SEA dong) disbursed to 506,298 households receiv- Gulf of ing PFES payments. Thailand IBRD 44462 | JUNE 2019 GOALS: The goals of this project are (1) to improve forest quality and quantity, (2) to increase the national economic contribution of the forestry sector, (3) to reduce the state’s financial burden for forest protection/management, and (4) to improve social well-being. A. BENEFITS AND BENEFICIARIES Providers or suppliers of forest environmental services implement forest protection contracts, while users or buyers of forest environmental services (hydroelectric plants, water companies, tourism operators) pay set fees for services. Beneficiaries are the suppliers of forest environmental services and include village funds, groups of up to 20 households, cooperatives, and individual households. Beneficiaries must have forested land and a land title or a land-use-right certificate to participate. The area of forest is verified when a new supplier joins the program, after which they are subject only to potential spot-checking unless a formal complaint is lodged regarding unpermitted practices on the land. The per hectare direct cash payments are calculated based primarily on the amount of revenue collected by the PFES in the province and the total forest area in the province included in the program. Some prov- inces also apply a K factor (or K coefficient) relating to different quality of forest (forest function, status/ stock, origin, and workload level), but this is not uniform and requires more data to expand its application. The average household participating in the scheme receives US$82 per year. While roughly two-thirds of the hectares receive less than 200,000 Vietnamese dong per year (US$8.61), significant variation exists in payments per hectare in different provinces, with some receiving as little as $0.07 per hectare per year in years with low PFES revenue, while others receive as much as US$56.52 per hectare per year in years with high PFES revenue. B. INSTITUTIONAL, FINANCIAL, AND GOVERNANCE ARRANGEMENTS The institutional arrangements predominantly rely upon the provincial Forest Protection and Development Funds (FPDFs), backed by the national-level Forest Protection and Development Fund (VNFF). The FPDFs manage the service buyers (signing contracts and collecting payments) and the service providers (preparing payment plans, monitoring, issuing payments), along with reporting up to the VNFF. The FPDF takes a 10 percent management fee and sets aside a 5 percent contribution to a reserve fund. 111 OVERVIEWS OF CASES OF BENEFIT-SHARING CONTINUED C. STAKEHOLDER PARTICIPATION The communities where the system was first piloted were consulted and provided input on the design of the program; however, now that it is operational, the FPDFs make decisions relating to the design of the pro- gram and distribution of benefits while beneficiaries receive cash payments so they have decision-making authority for how the money is spent. Relatively little detailed documentation exists, and beneficiaries are generally informed of and involved in the decision-making process only once the payment has reached the communities. D. MONITORING, EVALUATION, AND ADAPTIVE MANAGEMENT Spot-checks are conducted to verify whether areas are still forested and observe what activities are taking place, but these are more quantitative than qualitative. There is no monitoring of the results of the PFES program in terms of improvements in the provision of ecosystem services or improvements in livelihoods and well-being. RESULTS REPORTED: As of 2017, 5.3 million hectares of forest—around 42 percent of the area nation- wide—have been protected through the PFES Program. REFERENCES Catacutan, D., T. Pham, V. Dam, E. Simelton, T. To, A. Enright, E. Egashira et al. 2016. Major Challenges & Lessons Learnt from Pay- ment for Forest Environmental Services (PFES) Schemes in Vietnam. Hanoi: ICRAF, CIFOR and GIZ. Nguyen, C., and V. Vuong. 2016. Assessment Report: 8 Years of Organizing and Operating the Forest Protection & Development Fund (2008-2015) & 5 Years of Implementing the Policy on PFES (2011-2015). Hanoi: VNFF, MARD, iPFES, and ADB. Pham, T. T., K. Bennet, T. P. Vu, J. Brunner, N. D. Le, and D. T. Nguyen. 2013. PFES in Vietnam: From Policy to Practice. Bogor, Indone- sia: CIFOR. Pham, T. T., G. Wong, N. D. Le, and M. Brockhaus. 2016. The Distribution of PFES in Vietnam: Research Evidence to Inform Payment Guidelines. Bogor, Indonesia: CIFOR and CGIAR. Tran, V. 2017. PFES: Experiences & Lessons Learned, Vietnam. Forestry Economic Research Center, Hanoi: Vietnam Academy of Forest Science.   112 Kariba REDD+ Project MOZAMBIQUE LOCATION: Zimbabwe (Matabeleland North, ZAMBIA Midlands, Mashonaland West, and Mashonaland MASHONALAND MASHONALAND CENTRAL Central) WEST ND ALA HARARE HON AST S E ZIMBABWE MA AREA: 784,897 hectares M AN MATABELELAND MIDLANDS ICAL NORTH YEARS OF OPERATION: 2011–2041 AND SCALE OF FUNDS & BENEFICIARIES: MATABELELAND MASVINGO SOUTH 334,518 people BOTSWANA MOZAMBIQUE SOUTH AFRICA IBRD 44463 | JUNE 2019 GOALS: The Kariba REDD+ Project aims (1) to reduce emissions from deforestation and forest degradation; (2) to maintain wood supply for domestic use; (3) to contribute to community development and poverty alleviation; (4) to improve access to social, educational, and health services; (5) to build community capacity to improve natural resource management and cope with climate change; and (6) to sustain and enhance biodiversity. A. BENEFITS AND BENEFICIARIES Beneficiaries are the communities living in the project area and the four Rural District Councils of Binga, Nyaminyami, Hurungwe, and Mbire. The project activities and benefits seek to reduce the conversion of forests to agricultural land and to grassland, resulting from creating pastures or over‐harvesting wood products for fuelwood collection for domestic purposes, brick production, or tobacco drying. Nonmone- tary benefits are provided to communities—for example, in the form of rehabilitation of health clinics and schools, subsidies for health care practitioners and teacher salaries, health care supplies and education materials, subsidies for school fees, or rehabilitation of bore holes for clean water. In addition, the project implements environmental management activities that also benefit the communities, including training and inputs for conservation agriculture, beekeeping, fuelwood plantations, early burning fire management, road maintenance and anti-poaching, most of which are implemented through local employment. Monetary benefits are provided to the Rural District Councils and leaseholders. Benefits are linked to an obligation to protect the forest but are not performance based. Of the carbon revenues generated by the sale of emission reductions from the Kariba REDD+ Project, 30 percent go to the private sector project proponent Carbon Green Investment, and 70 percent go to the Kariba REDD+ Trust. The Kariba REDD+ Trust then disburses 30 percent of these funds to Rural District Councils, 20 percent to a Community and Project Sustainability Fund, 20 percent for environmental man- agement, 20 percent to a leaseholder safari operator (for the two districts where there is one, or shared equally as an additional 10 percent each for the Rural District Councils and Community Fund otherwise), and 10 percent to a longevity fund. The longevity fund is set aside for future delivery of benefits after the REDD+ project terminates. 113 OVERVIEWS OF CASES OF BENEFIT-SHARING CONTINUED B. INSTITUTIONAL, FINANCIAL, AND GOVERNANCE ARRANGEMENTS The land in the project area is communally owned and administered by Rural District Councils composed of democratically elected councils for each ward and chiefs (traditional leaders) based on the 1988 Rural Dis- trict Councils Act, which established the communities represented by the districts as the legal beneficiaries of natural resources in their area. The project proponent, Carbon Green Investment, established legal agreements with the Rural District Councils. Carbon Green Africa, a private company established in Zimbabwe and majority owned by Carbon Green Investment, is responsible for project management, development, implementation, and operation both from a technical and from a financial perspective. The 70 percent revenues from carbon credit sales destined for communities are managed by the Kariba REDD+ Trust overseen by a board composed of representatives of Rural District Councils and Carbon Green Africa. Due to lower than expected revenues from carbon credits sales, all of the 30 percent Carbon Green Investment share of revenues to date has been used in Zimbabwe to support the operation of Carbon Green Africa to implement project activities. Requests for community development projects are compiled by councilors in each ward and prioritized by Rural District Councils prior to submission to Kariba REDD+ Trust for final selection and implementation. C. STAKEHOLDER PARTICIPATION Formal consultations were conducted with Rural District Councils for the design of the project in 2011 and continue Rural District Council participation in the Kariba REDD+ Trust board and through numerous com- munity meetings in each ward as part of project management. The Kariba REDD+ Trust is managed trans- parently, providing regular technical and financial reports to the Rural District Councils and the government. A newsletter is published for each district every month in English, Tonga, and Shona languages, providing information about general project progress, environmental awareness, grievances (if any), vacancies (if any), and general relevant topics. D. MONITORING, EVALUATION, AND ADAPTIVE MANAGEMENT Carbon Green Africa conducts regular monitoring of forest cover and of the implementation of project activities. RESULTS REPORTED: From 2011 to 2016, the project generated 13,423,705 tons of carbon di- oxide equivalent (CO2e), trained 2,800 in conservation agriculture with at least 1,363 farmers benefiting from 20–181 percent increases in yields, provided beekeeping training and supplies to 287 beneficiaries, repaired and maintained 1,200 kilometers of roads with early burning along 800 kilometers 20–150 meters from road to create a fire break and a 20–25 percent reduction in fires, provided supplies and materials to 26 schools and eight health clinics, and repaired and maintained 198 boreholes. REFERENCES CGI. 2012. Kariba REDD+ Project CCBS Project Design Document (PDD). Carbon Green Investments. CGI. 2014. Kariba REDD+ Project, Zimbabwe: Project Implementation Report (PIR). Carbon Green Investments. CGI. 2017. Kariba REDD+ Project Monitoring & Implementation Report 2014–2016. Carbon Green Investments. 114 Appendix 2: Summary Table of Good Practices, Illustrative Examples, and Reference to the FCPF and ISFL Requirements for Benefit-Sharing Plans The table below summarizes the good practices identified in this analysis with corresponding examples from the case studies. References are provided in brackets to sections of the analysis where these examples are provided in more detail. To complement this, references to the FCPF and ISFL require- ments for benefit sharing are provided for the four themes. These requirements for benefit sharing should be considered in whole, but are listed where they directly refer to the themes identified. Given that the FCPF and ISFL requirements for benefit sharing are not structured according to this report, there are instances where these requirements are relevant to multiple good practices and vice versa. For information on the FCPF and ISFL requirements and guidance on compliance with these require- ments, refer to the FCPF’s Methodological Framework, the ISFL ER Program Requirements, and the Note on Benefit Sharing for Emission Reductions Programs Under the FCPF and ISFL. FCPF & ISFL GOOD PRACTICE ILLUSTRATIVE EXAMPLES REQUIREMENTS REFERENCE A. Benefits & beneficiaries A1. Identifying benefi- • Kasigau Project, Kenya: Some of the benefits go to the ranch owners FCPF: Criterion 30; ciaries: Careful analysis based on their landownership rights and some of the benefits go to Criterion 31 should be conducted to communities living in the project area who need to change their land identify which actors use to reduce deforestation. [Section 4.2.2.5] ISFL: 3.6.1; 3.6.2 should receive incentives • SISA, Acre, Brazil: Beneficiaries in the State of Acre are defined by for behavior change to the SISA legislation based on the provision of ecosystem services achieve the objectives using the stock-and-flow approach; by rewarding stakeholder groups of benefit sharing and that contribute to protecting forests (stock) as well as to reducing which should be re- deforestation (flow). The benefit sharing explicitly recognizes the role warded because of their that indigenous peoples have played historically and continue to play rights and their contri- in maintaining forests on their land and includes them as beneficiaries butions to generating for reasons of equity as well as effectiveness. [Section 4.2.2.4, Box the goods and services linked to results-based 4.2c] finance. 115 SUMMARY TABLE OF GOOD PRACTICES CONTINUED GOOD PRACTICE ILLUSTRATIVE EXAMPLES FCPF & ISFL REQUIREMENTS REFERENCE A2. Eligibility criteria: • •AMPF, Peru: Conservation agreements provide a model for addressing the Although land and absence of land tenure through the security of a contract. They provide a resource tenure can mechanism for the participation of illegal settlers in the AMPF through the provide a clear and establishment of legally binding conservation commitments by which land legitimate basis for security was achievable if settlers complied with the regulations of the determining eligibility protected area. [Section 4.2.2.2, Box 4.2a] of beneficiaries, care • •Makira Project, Madagascar: Where communities have customary should be taken to collective rights on government land, a legally established association and include key actors with a forest management contract can help establish collective rights and overlapping rights and responsibilities as a basis for benefit sharing. [Section 4.2.2.2, Box 4.2a] to recognize customary rights. • •PINFOR & /PINPEP, Guatemala: PINFOR required proof of title to at least 2 hectares, while PINPEP—the next phase of the program—requires legal right of possession, a form of recognition of customary tenure, to at least 0.1 hectare to enable inclusion of landowners with smaller holdings. [Section 4.2.2.2, Box 4.2a] • •PSA, Costa Rica: Formal title is a requirement for participation in the PSA, which excluded many people who have customary rights to land through long-standing use, often for generations, but do not have full land title, so the program was amended to accept proof of right of possession in lieu of title in some circumstances. [Section 4.2.2.3] A3. Barriers to par- • ERF, Australia: The high transaction costs for participation in the Carbon ticipation: Eligibility Farming Initiative proved challenging for smaller-scale projects to requirements should not participate, so changes were made during the design of the subsequent exclude target groups ERF to facilitate aggregation such that the project proponent no longer and benefit packages needs to hold the carbon sequestration rights (i.e., own or have a property should be sufficiently interest in the project area) but can be another entity that has a contract attractive to encourage with the landowner. [Section 4.2.2.3] participation; special • PSA, Costa Rica: The PSA sets quotas for women and indigenous attention should be community groups to ensure that they receive a set share of the overall paid to vulnerable and PSA benefits in addition to a more generous size allowance of 800 marginalized groups and hectares per indigenous community contract (as opposed to a maximum existing inequities. 300 hectares for individual landowners). [Section 4.2.2.4] A4. Targeting benefits: • PSA, Costa Rica: The PSA targets beneficiaries that help meet Allocations, weight- development and biodiversity objectives by prioritizing areas of low ing, or quotas can be development indices and high conservation importance using a point- effective for targeting system for weighting and prioritizing applications. The PSA also sets specific beneficiary quotas for women and indigenous community groups to ensure that they groups and for meeting receive a set share of the overall PSA benefits. [Section 4.2.2.4, Box 4.2d] specific objectives. • •Nepal: Community Forest User Groups are required to allocate at least 35% of their income to improve the livelihoods of poor people, Dalits (members of a socially marginalized group), indigenous peoples and ethnic groups, and women. Guidelines for implementing community forestry specify how poor and marginalized individuals and groups should be identified using participatory well-being ranking to identify those with limited access and control over resources. [Section 4.2.2.4, Box 4.2d] 116 GOOD PRACTICE ILLUSTRATIVE EXAMPLES FCPF & ISFL REQUIREMENTS REFERENCE A5. Differentiated bene- • SISA, Acre, Brazil: The benefit sharing explicitly recognizes the role that fits: A differentiated ap- indigenous peoples have played historically and continue to play in proach can be effective, maintaining forests on their land and includes them as beneficiaries for providing different types reasons of equity as well as effectiveness. The indigenous peoples get and/or amounts of ben- support for indigenous agroforestry agents and for cultural heritage efits to different groups activities, while other beneficiaries get technical training and economic tax of beneficiaries to reflect and credit incentives. [Section 4.2.2.4] their different rights • AMPF, Peru: Illegal settlers needed to be engaged because their and contributions with agriculture was directly causing deforestation in the AMPF, and the respect to the objectives nearby indigenous peoples also needed to be engaged because they were of benefit sharing. This indirectly contributing to deforestation by renting their land to outsiders approach should con- who deforested the land. The illegal settlers receive rights to remain in the sider monetary and/or protected area and technical support for improved coffee farming, while nonmonetary and indi- the indigenous communities have prioritized support for retaining and vidual and/or communi- recovering traditional practices. [Section 4.2.2.4] ty benefits as appropri- ate, bearing in mind that • Bolsa Floresta, Amazonas, Brazil: Different types of individual or collective greater complexity could action are incentivized by providing some benefits to individual households increase operational and for sustainable production activities and some to communities to improve transaction costs for social conditions such as education and health. [Section 4.2.2.4] delivery of benefits. • Bolsa Floresta, Amazonas, Brazil: Women (mothers of families) receive a monthly payment as part of the Bolsa Floresta package and special social and environmental training and inputs—for example, on types of agriculture for which women are typically are responsible. [Section 4.2.2.4] • SBP, Ecuador: Smaller landholders and communities receive a higher per hectare payment. [Section 4.2.2.4] A6. Conitionalities for • AMPF, Peru: Conservation agreements adjust incentives (reduce, increase) benefits: Specific out- based on compliance with commitments in the actual contract. The size comes can be facilitated of the benefit packages depends on the direct and opportunity costs of by making benefits changes in resource use, as well as conservation performance. Rigorous performance-based, by monitoring verifies both conservation and socioeconomic results. [Section linking them to clear 4.2.2.2, Box 4.2b] commitments in a con- • SBP, Ecuador: Beneficiaries of the SBP are required to submit an servation agreement, investment plan to explain how the cash they receive will contribute to and/or by requiring an poverty alleviation and local development. [Section 4.2.2.9] investment plan for the use of monetary bene- • ERF, Australia: Project owners receive Australian carbon credit units fits received. Conditions based on the number of emission reductions generated verified by an should be clear, with independent auditor. Project owners may then compete through an monitoring to assess auction process to sell the carbon credits to the government. Credits compliance and con- may also be sold on the secondary market or used for voluntary emission sequences or penalties reductions. [Box 4.2h] consistently applied when the conditions are not met. 117 SUMMARY TABLE OF GOOD PRACTICES CONTINUED GOOD PRACTICE ILLUSTRATIVE EXAMPLES FCPF & ISFL REQUIREMENTS REFERENCE A7. Participatory identi- • Bolsa Floresta, Amazonas, Brazil; Makira Project, Madagascar; and Kariba fication of benefits: Ben- REDD+ Project, Zimbabwe: Listening to beneficiaries and being able to efits should outweigh adapt the benefits based on their inputs were among their most important opportunity costs and lessons learned. [Section 4.2.2.9] the efforts and inputs • AMPF, Peru: It was hard to apply the standard conservation agreement needed to participate approach that aims to benchmark incentives against the opportunity in the program, so a costs of changing behavior for the indigenous communities around the cost-benefit analysis AMPF. These communities requested benefits related to the recovery for different stakeholder of traditional knowledge (which is difficult to quantify in dollar terms) in groups can be helpful. addition to technical support related to agriculture (which can more easily However, this may not be defined monetarily). [Section 4.2.2.8] be easy, so participa- tory identification of • SBP, Ecuador: Each beneficiary must outline how they will use the benefits—enabling the monetary incentive in a family or community investment plan, which beneficiaries to decide is a tool for more transparent decision making within communities on the benefits they re- (for indigenous peoples’ collective benefits) and to reduce the risk of ceive—is often the most misinformation about or exclusion from program benefits. [Section 4.2.2.9, effective approach. Box 4.2i A8. Monetary benefits: • Bolsa Floresta, Amazonas, Brazil: FAS has partnered with Bradesco Bank Monetary benefits can to enable easy registration for a bank account by beneficiaries who meet provide strong incen- the Bolsa Floresta eligibility requirements, such that cash transfers are tives by giving benefi- made even in remote areas with a lack of bank accounts and limited ciaries decision-making individual land tenure. Beneficiaries receive a debit card and can access control about how they their monthly payments when they go to the local municipal center. spend the cash they re- [Section 4.2.2.6] ceive. Monetary benefits • Makira Project, Madagascar: The community forest management can be efficiently deliv- associations receive cash payments that are paid to the individuals who ered where beneficiaries conduct patrols for surveillance and monitoring of Makira Natural Park. have bank accounts, This is an example of cash being paid to individuals within an overall and they are generally package of primarily nonmonetary community benefits, often for daily more appropriate where wages. [Section 4.2.2.6] there is clear land tenure and landowners have • ERF, Australia: The Clean Energy Regulator invites bids from registered the capacity to imple- projects that have already shown they meet methodology and ownership ment activities on their requirements. Participants submit a bid specifying a price per ton of own land. emission reduction and the lowest-cost projects are selected. Successful participants are paid the price that they bid once they submit audited reports demonstrating the number of emission reductions achieved after project implementation. [Box 4.2h] 118 GOOD PRACTICE ILLUSTRATIVE EXAMPLES FCPF & ISFL REQUIREMENTS REFERENCE A9. Nonmonetary Examples of nonmonetary benefits [Section 4.2.2.6]: benefits: Nonmonetary • Infrastructure: Rehabilitation of schools and health clinics (Makira benefits can be target- Project, Madagascar; Kariba REDD+ Project, Zimbabwe); infrastructure ed to achieve social or for irrigated rice cultivation (Makira Project, Madagascar); rehabilitation environmental objec- of bore holes (Kariba REDD+ Project, Zimbabwe); access to clean water tives but, to be effective, (Katingan Mentaya Project, Indonesia); road maintenance (Kariba beneficiaries should REDD+ Project, Zimbabwe); construction of latrines (Katingan Mentaya identify which benefits Project, Indonesia); solar energy (Katingan Mentaya Project, Indonesia); are implemented and rehabilitation and construction of crop storage facilities, cocoa and have the capacity to fish-drying structures, markets, buildings for community meetings benefit from them. (Bolsa Floresta, Amazonas, Brazil); offices for community management Capacity is also needed associations (Makira Project, Madagascar); coffee-related storage and to deliver nonmonetary processing facilities, and eco-bathrooms (AMPF, Peru) benefits, which can be • Services: Subsidies for health care practitioners and teachers’ salaries more challenging than (Kariba REDD+ Project, Zimbabwe); subsides for health care practitioners, monetary benefits, both health care supplies, and educational materials (Katingan Mentaya administratively and Project, Indonesia); subsidies for school fees (Kariba REDD+ Project, logistically. Zimbabwe); health care supplies and educational materials (Kariba REDD+ Project, Zimbabwe); government service hubs to improve access to health and education (AMPF, Peru); ambulance boats and radio equipment for emergencies (Bolsa Floresta, Amazonas, Brazil) • Inputs: Materials for beekeeping (Makira Project, Madagascar; Kariba REDD+ Project, Zimbabwe); vanilla cultivation (Makira Project, Madagascar; Katingan Mentaya Project, Indonesia); firewood plantations (Kariba REDD+ Project, Zimbabwe); organic gardening inputs (AMPF, Peru; Katingan Mentaya Project, Indonesia); bamboo and cashew cultivation (Katingan Mentaya Project, Indonesia) • Capacity building: For fuelwood plantations, early burning fire management, and anti-poaching (Kariba REDD+ Project, Zimbabwe); rice and vanilla production (Katingan Mentaya Project, Indonesia; Makira Project, Madagascar); rubber agroforestry (Katingan Mentaya Project, Indonesia); microfinance (Katingan Mentaya Project, Indonesia); fish ponds (Katingan Mentaya Project, Indonesia); coffee cultivation and cooperative development, and organic gardening (AMPF, Peru); participatory planning, financial management, and leadership of community associations, artisanal products, tourism, fisheries management, guarana, acai and banana cultivation, Brazil nut commercialization, community forest management, and timber production including support for certification (Bolsa Floresta, Amazonas, Brazil) • Enterprise support: Poultry production company (SISA, Acre, Brazil); native fish aquaculture company (SISA, Acre, Brazil); village enterprises for fabrication of composite flooring from rattan and bamboo, and for coconut palm sugar production (Katingan Mentaya Project, Indonesia); coffee cooperative development (AMPF, Peru) • Market access: Access to local markets for vegetables (Katingan Mentaya Project, Indonesia); access to international markets for coffee (AMPF, Peru), composite flooring, rubber and vanilla (Katingan Mentaya Project, Indonesia) • Securing land tenure: Supporting villages to get formal recognition and tenure over forest land (Katingan Mentaya Project, Indonesia); supporting illegal settlers to avoid eviction from a protected area by remaining in compliance with the laws of that area (AMPF, Peru) 119 SUMMARY TABLE OF GOOD PRACTICES CONTINUED GOOD PRACTICE ILLUSTRATIVE EXAMPLES FCPF & ISFL REQUIREMENTS REFERENCE A9. Continured • Revolving funds*: Village funds for microfinance (Katingan Mentaya Project, Indonesia) • Employment*: Daily wages for patrols and monitoring (Makira Project, Madagascar; Kariba REDD+ Project, Zimbabwe); for community fire patrol for four months of dry season (Katingan Mentaya Project, Indonesia); for road maintenance (Kariba REDD+ Project, Zimbabwe); for early burning fire management (Kariba REDD+ Project, Zimbabwe) * Although revolving funds and employment involve cash transfers, they are typically included as part of a package of nonmonetary benefits A10. Individual versus • Bolsa Floresta, Amazonas, Brazil: The beneficiaries are living in protected community benefits: areas where land is owned by the state, so there is no individual land Although benefits to in- ownership and an atypical mix of individual and community benefits are dividual households can provided. [Section 4.2.2.5] be appropriate and ef- • AMPF, Peru: Illegal settlers in the AMPF do not have individual land fective in some contexts, ownership but receive benefits as individual households through community benefits can conservation agreements negotiated on a household basis. The program reinforce and reward began at the individual level to introduce, test, and build support for the collective responsibilities approach with people most open to collaboration with park authorities and can ensure that all and is moving toward a model of signing communal agreements in order community members— to engage all the residents in the area. [Section 4.2.2.5] including the vulnerable and marginalized—share • Katingan Mentaya Project, Indonesia: People in villages around the project in the benefits. do not have private land ownership so all benefits target the whole community, although some activities are piloted by individual “anchor farmers.” If these farmers are successful, then others will be supported to adopt the new practices. [Section 4.2.2.5] • Kasigau Project, Kenya: Some of the benefits go to the ranch owners (landowners) who are individuals or groups acting as companies with membership based on share ownership, and some of the benefits go to communities living in the project area. The communities around the project have all opted to implement projects at the community level to be most efficient in their receipt of benefits, given that the alternative of individual household monetary benefits would have been low and the communities perceived a greater reward for communal projects. [Section 4.2.2.5] • Nepal: The Community Forestry program demonstrates another advantage of sharing benefits with communities rather than individuals, as poor and marginalized households were found to be more likely to share in benefits delivered to the community as a whole as a result of the elite capture that can occur when benefits are shared with individuals. [Section 4.2.2.5] 120 GOOD PRACTICE ILLUSTRATIVE EXAMPLES FCPF & ISFL REQUIREMENTS REFERENCE A11. Revenue-generating • Bolsa Floresta, Amazonas, Brazil: The representatives of the community benefits: Benefits in the associations decided to allocate more funds to revenue-generating activities form of revenue-gen- and reduce the funds for social projects from in 2014. [Section 4.2.2.7] erating activities are • Makira Project, Madagascar: Intensive Rice Cultivation System (SRI) and often popular and can other cultivation and revenue-generating activities have seemed to be the help ensure long-term nonmonetary benefits that have worked best, in part because the community sustainability if there members have the capacity to implement them. In contrast, infrastructure is good market access, projects have been among the most challenging. [Section 4.2.2.7] but care should be taken in their design to link • Katingan Mentaya Project, Indonesia: The project has emphasized revenue-generating suc- community-based business development through the establishment cess to the maintenance of revolving funds for microfinance to support small-scale economic of the forest or other en- activities, as well as funding small and medium enterprises with business vironmental objectives objectives that are consistent with peat conservation and restoration. The to avoid perverse or aim is for carbon finance to provide a bridge to a low-carbon economy unintended outcomes. that does not rely on continued deforestation. However, market access is key. [Section 4.2.2.7, Box 4.2f] • AMPF, Peru: The shade-grown coffee in the AMPF relies on maintaining the forest cover, and, in addition, the coffee growers retain their right to stay in the protected area only if they help protect the remaining forest. There are also market incentives to protect the forest, as the certified coffee commands a significant premium that would be lost if deforestation leads to a loss of certification. [Section 4.2.2.7] A12. Timing of benefits: • AMPF, Peru: If all benefits are delivered up front, there is no longer an The timing, duration, incentive to comply. If monitoring and penalties for noncompliance are and consistency of ben- clear by decreasing or eliminating the benefits through a conservation efits over time can have agreement, the coupling between incentive and behavior can be maintained. an important impact on It should be noted, however, that independent of timing, some benefits— their effectiveness, bear- such as a subsidy for a teacher’s salary or delivery of a basic service— ing in mind that some cannot easily (ethically or logistically) be adjusted. [Section 4.2.2.10] activities may require • Makira Project, Madagascar: Delays in the delivery of expected benefits up-front investment were demotivating for the beneficiaries. [Section 4.3.2.3, Box 4.3b] (such as tree planting), whereas later delivery • SBP, Ecuador: In mid-2015, the payments were temporarily delayed and provides an opportunity were not reinstated until 2017 as a result of fluctuations in the price of oil to link benefits with that affected state revenues. These budgetary uncertainties and payment performance. delays affected the level of trust that people had in participating in the programs, as it led them to question the long-term value of taking part and the commitment of government to maintain the stated level of benefits. Furthermore, the SBP has agreements with a term of 20 years, and the agreement is automatically renewed if the landholder does not opt out. Twenty years was seen as a period that was long enough to require changes in practices and outlook and would have a greater chance that conservation would continue after the initial term. [Section 4.2.2.10, Box 4.2j] • PINFOR/PINPEP, Guatemala: The National Forestry Institute (INAB)’s position is that the incentives provided should be short term since they are meant to promote the adoption of sustainable forestry practices that lead to long-term income-generation opportunities, so all forestry incentive programs provide payments for between 3 and 10 years. However, for plantations, short-term incentives leave a potential gap between the end of the incentives and the plantation reaching a mature age, and for natural forest protection, this creates a risk that a landowner ends up deforesting (even if it is illegal), because they do not want, or cannot afford, the unproductive asset. [Section 4.2.2.10, Box 4.2j] 121 SUMMARY TABLE OF GOOD PRACTICES CONTINUED GOOD PRACTICE ILLUSTRATIVE EXAMPLES FCPF & ISFL REQUIREMENTS REFERENCE B. Institutional, financial, and governance arrangements B1. Legal framework: • SISA, Acre, Brazil; PSA, Costa Rica; and SBP, Ecuador: The legal provisions, FCPF: Criterion Benefit sharing should strong political support, and positive experiences of beneficiaries have 30; Criterion 31; be grounded in a clear helped ensure longevity of these programs despite changes in political Criterion 32; legal framework to contexts over time. [Section 4.3.2.2] Criterion 33 support and enable the • SISA, Acre, Brazil and AMPF, Peru: Legal frameworks have different necessary agreements ISFL: 3.6.1; 3.6.2; forms, ranging from laws and regulations–like the SISA law—to individual and collaboration 3.6.3; 3.6.4 contracts and agreements—like the conservation agreements used in the AMPF. [Section 4.3.2.2] B2. Flexibility to enable • ERF, Australia: Even though the ERF is established by law, some of the adaptation: Despite details are clarified in regulations, which allows some flexibility given that being based on a clear regulations can be more easily changed. [Section 4.3.2.2] legal framework, some • SISA, Acre, Brazil: SISA is a platform or framework with programs flexibility in the legal and implemented and funds distributed through a variety of individual institutional arrange- mechanisms, and is able to flexibly direct funds to a variety of different ments is needed—for strategies and activities through these implementing agencies in a way example, defining them that is flexible and more easily modified. [Section 4.3.2.2, Box 4.3a] through regulations rather than laws—to be able to make adjust- ments in beneficiaries, benefits, institution- al composition, and activities over time such that the program can respond to lessons learned and changes in context. 122 GOOD PRACTICE ILLUSTRATIVE EXAMPLES FCPF & ISFL REQUIREMENTS REFERENCE B3. Service providers: • Katingan Mentaya Project, Madagascar; Makira Project, Madagascar; Substantial technical AMPF, Peru; and Kariba REDD+ Project, Zimbabwe: In these projects it has and administrative ca- been efficient and effective for NGOs or private sector actors with local pacity is needed to ad- presence to play a service provider role. [Section 4.3.2.3] minister benefit sharing • SBP, Ecuador: The program has established cooperative alliances with civil in a way that effectively society organizations to increase its effectiveness. In collaboration with and equitably distrib- the Ministry of Environment, these organizations support local families utes resources. Partner- and communities interested in participating in the SBP. [Section 4.3.2.3, ships with nongovern- Box 4.3c] mental organizations (NGOs), private sector • ERF, Australia: A new type of private sector has emerged to provide actors, and others to administrative services as a “carbon service provider” to support the provide services and development of projects and enable landowners to access finance from build capacity can be the ERF, as landowners do not generally have the time and skills to helpful to improve effi- prepare the documentation needed. [Section 4.3.2.3, Box 4.3c] ciency and effectiveness • PSA, Costa Rica: FONAFIFO has established collaborative agreements while also benefiting with numerous NGOs as part of the PSA program. NGOs give support from local knowledge to the PSA beneficiaries during the application process and can provide and presence. technical expertise on the development of the management plans, implementation of project activities, and the monitoring of compliance with the agreed-upon land use. [Section 4.3.2.3, Box 4.3c] • Kariba REDD+ Project, Zimbabwe & Makira Project, Madagascar: In each case, 20% of the revenues from carbon credit sales is shared with oversight bodies to enable them to play a critical support role—in Zimbabwe, the Rural District Councils, and in Madagascar, the local Waters and Forests agents; however, in practice, lack of capacity, involvement, and oversight from government staff (despite receiving funds) hampers project success. [Section 4.3.2.3] B4. Existing or new insti- • Kariba Project, Zimbabwe: The Kariba REDD+ Project is based on the tutions: It is often most laws and by-laws that were established under the Communal Areas efficient and effective to Management Program for Indigenous Resources (CAMPFIRE) program, capitalize upon existing which in the 1990s established that local communities represented by institutions if they have Rural District Councils are the legal beneficiaries of natural resources. the legitimacy, capacity, [Section 4.3.2.1] and thematic relevance • SISA, Acre, Brazil: The structure and framework for SISA were formalized to the programs— by law in 2010 and included the creation of several SISA-specific strengthening these institutions such as the Institute of Climate Change and Environmental where necessary—giv- Services Regulation (IMC). [Section 4.3.2.2] en that new laws and institutions require sig- • Makira Project, Madagascar: The roles and responsibilities as well as the nificant time, resourc- carbon revenue–sharing allocations and management mechanism for es, and political will; benefit sharing for the Makira Project were formalized through a national otherwise, establishing government decree. [Section 4.3.2.2] new institutions may be • Kasigau Corridor REDD+ Project, Kenya: Implementation of community more appropriate. development activities supported by the project required the establishment of new institutions like the Location Carbon Committee and community-based organizations to ensure the fair and transparent implementation of those resources. [Section 4.3.2.2] 123 SUMMARY TABLE OF GOOD PRACTICES CONTINUED GOOD PRACTICE ILLUSTRATIVE EXAMPLES FCPF & ISFL REQUIREMENTS REFERENCE B5. Up-front finance: • PFES, Vietnam: International donors funded pilots to demonstrate Significant financial success and raise awareness about payments for environmental services. resources are often re- With this, the Ministry of Agriculture and Rural Development was able quired up front to cover to secure buy-in from various ministries at an early stage that were the many costs associ- able to collectively allocate resources to set up the PFES and begin ated with designing and implementation before finance from private water supply companies, initiating a program— hydropower plants, and tourism companies began coming into the conducting adequate system. [Section 4.3.2.5] stakeholder input, • Kasigau Corridor REDD+ Project, Kenya: Significant financial resources documenting base- were needed at the beginning of the project to conduct community lines, establishing new consultations, design the implementation strategies and benefit sharing, institutions, implement- establish new multistakeholder governance structures, and complete the ing activities—before required processes to be able to raise finance from the sale of emission results-based payments reductions. [Section 4.3.2.5] can be made. • SISA, Acre, Brazil: One of the biggest factors contributing to the success of the SISA program is the up-front funding from the REM program through the German government, which was critical to support enabling conditions and initial cash flow. [Section 4.3.2.5] B6. Transparency around • PFES, Vietnam: The program was originally designed with electronic financial management: payments used only for groups; however, with an increasing number of Regular audits can build people with access to electronic banking, an electronic payments system trust and participation to individual households is being piloted to improve transparency of in the program, but they financial management between provincial funds and beneficiaries. [Section can also increase overall 4.3.2.4, Box 4.3d] operating costs. Adopt- • Bolsa Floresta, Amazonas, Brazil: Information regarding types and ing a simple approach to amounts of benefits and numbers of beneficiaries in each participating calculating, monitoring, conservation unit is publicly available on the FAS website along with a and delivering benefit complete list of beneficiaries for the Bolsa Floresta Familiar subprogram. transfers helps enable Furthermore, all financial activities involving public funding are audited wider public under- by an external firm. This audit is then subject to approval by the FAS standing. Supervisory Board and Board of Directors, before being reviewed by the Amazonas State Prosecutor and accounting court (tribunal du contas). [Section 4.3.2.4] 124 GOOD PRACTICE ILLUSTRATIVE EXAMPLES FCPF & ISFL REQUIREMENTS REFERENCE B7. Transaction costs: • AMPF, Peru: Implementing a tailored benefit-sharing approach that Transaction costs responds to complex conditions at the local scale through conservation should be assessed, agreements necessitates relatively higher transaction costs because both to reduce them of the large number of geographically disbursed individual or grouped where possible and to beneficiaries with unique context-specific opportunity costs of behavior adequately budget for change addressed via many different agreements. [Section 4.3.2.6] them so as to not un- • Makira Project, Madagascar: The relatively low capacity of participants dermine project efficien- to engage in the program, in addition to their extreme geographic cy and effectiveness. remoteness, makes delivery of in-kind benefits logistically difficult, causing transaction costs to exceed the overhead percentages for administration. [Section 4.3.2.6] • PINPEP, Guatemala: PINPEP necessitates many low-value transactions, with an overhead based on the percentage of funds administered as opposed to the number of contracts issued, so the overhead percentages for administration have not been sufficient to comfortably cover transaction costs associated with such a large number of small contracts. [Section 4.3.2.6] • PSA, Costa Rica: The program initially imposed very high transaction costs on participants, requiring applicants to fulfill several separate requirements, many of which had nothing to do with their ability to provide environmental services. These requirements are now much more streamlined by linking FONAFIFO’s databases to those of other government agencies. [Section 4.3.2.6] • Bolsa Floresta, Amazonas, Brazil: FAS services extremely remote communities and incorporates nonmonetary training and social infrastructure programs, yet has managed to keep their overhead at 17%, including covering costs of fundraising, given: (1) a standard formula is applied for determining benefits for different beneficiaries and (2) FAS has collaborated with Bradesco Bank on new banking technologies to improve efficiency in the direct delivery of monetary benefits. [Section 4.3.2.6] • SISA, Acre, Brazil: A key factor in SISA’s relatively low transaction costs—10–30%, depending on the donor, including administration and monitoring—was the incorporation of existing activities and projects into the SISA model. Efficiency was optimized in SISA not only by aligning with existing deep experience in community development projects, but also by capitalizing on the specific technical expertise of these already-established projects. [Section 4.3.2.6] • PFES, Vietnam: Sometimes households are organized into groups such that one transaction is divided among beneficiary households by a representative of the group, instead of having individual transactions for each household. Such aggregation of beneficiaries may reduce transaction costs. [Section 4.3.2.6] • ERF, Australia: High transaction costs for participation proved challenging for smaller-scale projects to participate in the Carbon Farming Initiative, so changes were made during the design of the subsequent ERF to facilitate aggregation and reduce transaction burden for smaller-scale project participants. [Section 4.3.2.6] • Kariba Project, Zimbabwe: The project has been able to deliver significant nonmonetary benefits to cover the costs of materials and labor; however, the carbon revenues allocated to the communities were insufficient to cover the true costs of implementation, so the projects were made feasible with additional support and oversight from the Carbon Green Africa team. [Section 4.3.2.6] 125 SUMMARY TABLE OF GOOD PRACTICES CONTINUED GOOD PRACTICE ILLUSTRATIVE EXAMPLES FCPF & ISFL REQUIREMENTS REFERENCE B8. Grievance and • Kasigau Corridor REDD+ Project, Kenya: The project manager, Wildlife redress mechanisms: Works, implements an ongoing process of stakeholder engagement Benefit-sharing mecha- with multiple venues for providing input, including a formal system for nisms should have clear, submitting grievances. This formal set of procedures is well documented accessible, impartial, and consistently communicated, with specific measures taken to design culturally appropriate, the grievance mechanism to be accessible, easy to understand, and easy-to-understand culturally appropriate. [Section 4.3.2.7] grievance and redress • SISA, Acre, Brazil: An independent ombudsman receives complaints from mechanisms that oper- beneficiaries and ensures that they are addressed. [Section 4.3.2.7] ate in a timely manner C. Stakeholder participation C1. Stakeholder analysis: • Kasigau Corridor REDD+ Project, Kenya: Existing tribal conflicts and FCPF: Criterion Prior to designing ben- tensions between local communities, more recent migrants, and 30; Criterion 31; efit sharing, all groups ranch owners no longer living locally generated a complicated web of Criterion 32 that may be affected by stakeholders. Designing the project required a delicate balance of ensuring benefit sharing or can everyone’s voice was heard while not appearing to give preferential ISFL: 3.6.1; 3.6.2; influence its outcomes treatment to any particular group. [Section 4.4.2.2] 3.6.4 should be identified and • AMPF, Peru: Negotiating conservation agreements with individual families, mapped to understand as opposed to with entire communities, involved significant consultation their needs and inter- and dialogue with each individual family, providing a depth of material ests, their capacities from which to generalize more replicable approaches later. [Section and their rights, and 4.4.2.2] variations within the groups and relations be- tween groups, including any historical conflicts or alliances. This stake- holder analysis helps to improve the design of the consultation processes, to identi- fy beneficiaries and appropriate benefits, and to develop gover- nance and institutional arrangements. Stake- holder analyses should be updated periodically while benefit sharing is implemented and the context changes. 126 GOOD PRACTICE ILLUSTRATIVE EXAMPLES FCPF & ISFL REQUIREMENTS REFERENCE C2. Stakeholder consul- • SISA, Acre, Brazil: Deep stakeholder engagement is needed not only to tation: Consultation of design an appropriate benefit-sharing mechanism, but also to generate beneficiaries is critical buy-in to support longevity and success of implementation. The SISA to determine the type framework and legislation benefited from a comprehensive, transparent, of benefits that are and long-term participatory consultation process, which included making appropriate and how the proposal available for public comment through the state government they should be delivered. portal in addition to soliciting specific input from hundreds of people Consultation of a full through technical seminars, workshops, and one-on-one meetings with a range of stakehold- variety of stakeholders. [Section 4.4.2.3, Box 4.4a] ers—including benefi- • ERF, Australia: The ERF was designed over several years based on ciaries—is also helpful experiences from the Carbon Farming Initiative through a series of formal with institutional and consultations requesting written comments on terms of reference and governance arrange- then a green paper, before producing a white paper outlining the design ments, processes for of the program and responding to comments received. To learn from stakeholder participa- landowners, the government team responsible for the ERF visits areas tion, and monitoring with a lot of projects or where there are conflicts to meet with landowners and evaluation. Consul- informally to explain the rules and process and respond to questions. tations are meaningful [Section 4.4.2.3, Box 4.4a] when stakeholder input influences the design of benefit-sharing arrange- ments, and requires sufficient time, resourc- es, and willingness to share power and influ- ence with stakeholders. Consultations should be conducted as part of an iterative process for design, enabling partic- ipating stakeholders to consider proposals and confer with others in their group before pro- viding further input. This process is valuable not only during initial design but also periodically during implementation to support adaptations and improvements to benefit sharing. Consul- tation is not the same as obtaining free, prior, and informed consent, which is essential for the participation of indigenous peoples and other groups with collec- tive rights to lands and resources in programs that affect them, whereby consent must be given through their own decision-making processes after consul- tation. 127 SUMMARY TABLE OF GOOD PRACTICES CONTINUED GOOD PRACTICE ILLUSTRATIVE EXAMPLES FCPF & ISFL REQUIREMENTS REFERENCE C3. Planning, time, and • SISA, Acre, Brazil: The legislation was designed with inputs from targeted resources: Effective consultations with different stakeholder groups through workshops, stakeholder participa- seminars, and meetings, as well as online comment submissions. [Section tion requires significant 4.4.2.3] time and resources and • ERF, Australia: The program was designed with inputs from a series is often underbudgeted. of public online consultations through an iterative design process, A stakeholder engage- complemented by additional informal consultations with landowners, ment plan should in- a critical stakeholder group that did not engage as much in the online clude the steps involved process. [Section 4.4.2.3] and the resources, time, and other inputs needed. C4. Participation in • Makira Project, Madagascar: Beneficiaries participate in decision making governance: Including about the nonmonetary benefits their community receives, and in beneficiaries in gover- prioritization of benefits across different communities. A formal tiered nance structures with structure for community representation from local to national level helps decision-making and to ensure effective participation. [Section 4.4.2.3, Box 4.4b] oversight roles deepens • Bolsa Floresta, Amazonas, Brazil: The over 40,000 beneficiaries of Bolsa the opportunities for Floresta are organized and represented through a tiered structure with effective participation elected officials at each level: the community level, the reserve level, in design and imple- and for the entire program across all 16 reserves. The governance of mentation of benefit Bolsa Floresta includes a leadership meeting of 40 to 70 presidents, vice sharing—ensuring that presidents, and treasurers of the grassroots organizations established for beneficiaries influence each of the 16 reserves. [Section 4.4.2.3, Box 4.4b] benefit sharing to re- spond to their needs and interests—and helps to share information with beneficiaries. Legitimate representatives should be identified by the group they represent. 128 GOOD PRACTICE ILLUSTRATIVE EXAMPLES FCPF & ISFL REQUIREMENTS REFERENCE C5. Measures to ensure • Nepal: The Community-Based Forestry Program includes proportionate social inclusion: Specific representation of women and indigenous peoples; implements an approach measures should be ad- that prioritizes those with limited access to and control over resources; and opted to facilitate and mandates an allocation of benefits specifically focused on marginalized ensure the participation groups, indigenous peoples, and women. [Section 4.4.2.4, Box 4.4c] of women, indigenous • Katingan Mentaya Project, Indonesia: The project actively implements peoples, and margin- activities designed to reduce barriers that limit the participation of alized and/or vulner- indigenous peoples and vulnerable and marginalized groups. Also, the able groups that may microfinance component of the project is implemented almost entirely otherwise be excluded— through women’s groups. [Section 4.4.2.4, Boxes 4.4c and 4.4d] for example, through separate meetings or • SISA, Acre, Brazil: The program’s Commission of Validation and Monitoring other approaches that (CEVA) requires approval from two working groups before making address barriers for decisions—one comprised entirely of indigenous peoples and another participation, through comprised entirely of women. There are also specific programs within SISA quotas for participation that target participation of indigenous peoples, including the Indigenous in activities and gover- Land Management Program and the Indigenous Agroforestry Agents nance bodies, through program. [Section 4.4.2.4, Box 4.4c] allocations of benefits, • PSA, Costa Rica: Contracts are awarded based on a point-system and by designing sub- prioritizing areas of low development indices and high conservation programs specifically importance, with minimum quotas set for both indigenous community targeting activities and groups and women. The program has also made special contractual benefits for certain arrangements to enable indigenous peoples to participate. [Section groups. 4.4.2.4, Box 4.4c] • Bolsa Floresta, Amazonas, Brazil: One of the four subprograms—Bolsa Floresta Familiar—is designed specifically for women beneficiaries. Through this program, the female head of household receives a monthly cash transfer in exchange for good forest management practices, including zero net deforestation. [Section 4.4.2.4, Box 4.4d] C6. Disclosure: Public • SBP, Ecuador: The program requires that communities develop a financial and disclosure of informa- activity accountability report each semester which tracks progress against tion about the overall the community investment plan and that must be shared with community financial envelope for members and approved by the community assembly. [Section 4.4.2.5] benefit sharing, the • Nepal: Community Forest User Groups are required to hold a public hearing amounts distributed to as well as public auditing at least once a year to inform users about group each stakeholder group programs, income, expenditure, sale and distribution of forest products, in different geographic group decisions, and implementation status. In addition, income, expenditure, areas, the per hectare programs, and decisions of the group are shared on a regular basis through or other rate used for posting of information in public places. [Section 4.4.2.5, Box 4.4e] monetary benefits, and all the nonmonetary • Kasigau Project, Kenya: The actual benefits distributed against the benefits delivered pro- benefit-sharing plan are regularly reported to all primary stakeholders motes transparency and of the project, including information about the sales of the emission builds trust. reduction units generated from the project. [Section 4.3.2.4] 129 SUMMARY TABLE OF GOOD PRACTICES CONTINUED GOOD PRACTICE ILLUSTRATIVE EXAMPLES FCPF & ISFL REQUIREMENTS REFERENCE C7. Transparency and • Kasigau Project, Kenya: Documenting a common, shared understanding providing informa- of benefit sharing with the landowners with statutory rights but also with tion: Beneficiaries and communities living on the land with customary rights was important to potential beneficiaries build trust and encourage stakeholder engagement. [Section 4.4.2.5] need to understand • Bolsa Floresta, Amazonas, Brazil: Decisions of the leadership council the purpose of benefit usually take at least a year, allowing time for discussion and feedback sharing, the opportuni- from the grass roots between the twice annual meetings. [Section 4.4.2.5] ties to participate, the eligibility criteria, and • Makira Project, Madagascar: The elected representatives of the the conditionalities for community management associations participate in meetings to review receiving benefits, the and approve benefits and share this information with the people they results achieved, and represent. [Section 4.4.2.5] how to provide feedback • Kariba Project, Zimbabwe: Information is shared in quarterly newsletters or submit a complaint. published in English, Tonga, and Shona, the local languages. [Section This requires active 4.4.2.5] dissemination of infor- mation tailored to each stakeholder group in a format that they un- derstand—for example, using local languages, providing information through public meet- ings and stakeholder representatives, and paying special attention to provide information to women and vulnera- ble and/or marginalized people. Adequate, prior information is essen- tial to enable potential beneficiaries to decide whether to participate in programs that affect them, and it is critical for obtaining the free, prior, and informed con- sent of indigenous peo- ples and other groups with collective rights to lands and resources. 130 GOOD PRACTICE ILLUSTRATIVE EXAMPLES FCPF & ISFL REQUIREMENTS REFERENCE D. Monitoring, evaluation, and adaptive management D1. Socioeconomic • Bolsa Floresta, Amazonas, Brazil: The monitoring of social impacts in FCPF: Criterion monitoring: The inclu- the Bolsa Floresta program has been critical for the donors to be able to 30; Criterion 32 sion of socioeconomic justify continued funding of the program. [Section 4.5.2.2] impacts in monitoring • AMPF, Peru: It was not until social surveys were done that the and evaluation systems, implementers understood that even though incomes were improving, as opposed to solely en- ISFL: 3.6.2; 3.6.4 beneficiaries were still dissatisfied given there were much more vironmental outcomes, fundamental barriers to human well-being that needed to be addressed. is useful for improving The program had to branch out to helping the local population to get tacit effectiveness and can approval from the government to live in the protected area, but it was only foster support from through social survey work that these benefit packages were adjusted. politicians, donors, and [Section 4.5.2.2, Box 4.5a] other stakeholders. D2. Simple approaches • Bolsa Floresta, Amazonas, Brazil: One method for increasing stakeholder employing local people: participation and ownership is to involve beneficiaries themselves Monitoring is best kept in monitoring and evaluation efforts. In Amazonas, Brazil, including as simple and practical leaders and individuals from beneficiary communities in the planning as possible while still and implementation of monitoring activities has not only strengthened being adequate. Bene- participation in the program, but has also helped embed more of ficiary participation in the communities’ actual priorities and inputs in the process. In some monitoring activities in cases, this has the added bonus in that paying jobs may be created for exchange for paid wages monitoring, which are an in-kind benefit funded, generally, through the can also constitute an implementing agency. [Section 4.5.2.2] important local benefit. • SISA, Acre, Brazil: The original SISA safeguard monitoring system included 52 indicators; however, after the first monitoring cycle, it was clear to stakeholders that the number of indicators and the focus on program processes needed to be adjusted. The number of indicators was reduced to adapt to local capacity, and indicators were reoriented toward impacts in beneficiary communities. [Section 4.5.2.2] D3. Adaptive manage- • AMPF, Peru: The options provided for local people to select as ment: Adaptive man- nonmonetary benefits around the AMPF changed a lot over time as agement of the design implementers gained a deeper understanding of the social roots of the and implementation of environmental problems in the area. The program had to branch out from benefit sharing arrange- addressing only deforestation to helping the local population to get tacit ments based on the approval from the government to live in the protected area, which enabled results of monitoring the settlers to gain compliance with government stipulations. [Section and evaluation is critical 4.5.2.2, Box 4.5a, Section 4.5.2.3, Figure 4.5a] for improving effective- • PSA, Costa Rica: Initially, the PSA was an untargeted program, but ness, efficiency, and biodiversity and socioeconomic priorities have been incorporated into the equity over time. Piloting application process to enable increasing targeting of the program over of benefit sharing can time. To most effectively improve biodiversity conservation as well as help facilitate adaptive equity, FONAFIFO currently prioritizes areas where conservation hotspots management during the have been identified, as well as counties where there is a relatively low design phase. Social Development Index. These priorities are adjusted every five years or so as other needs or gaps are identified. [Section 4.5.2.3] • PFES, Vietnam & PINFOR/PINPEP, Guatemala: Pilots were conducted not only to better understand how to design the program but also to build political will and buy-in among government and other stakeholders. [Section 4.5.2.3] 131 Appendix 3: Guiding Questions for Interviews Interviews were conducted with individuals involved in each of the cases. The aim was to interview at least one person involved in program design and management and, if possible, to conduct interviews with additional people who have a beneficiary perspective or a donor perspective. In several cases, government and/or project owner permission was necessary for participation in interviews for the analysis. Lessons learned were identified and documented for each of the cases based on the liter- ature review and interviews, which provided a wealth of information about each case. Interviewees provided insights into challenges they have encountered, changes that have been made, and what they think has contributed to successes or problems. Below are the guiding questions for the interviews. While the interview questions related to the four key themes, the format of the interview allowed the authors to follow up on interesting details; focus questions that most pertained to the interviewee’s role, knowledge, and experience; and gave more flexibility for additional insights that arose. Because of the format of these interviews, in some cases not all guiding interview questions were asked or were relevant to all interviewed persons. GUIDING QUESTIONS FOR INTERVIEWS Name, title and organization: Role in the initiative: Number of years involved: What do you think are the main lessons learned from benefit sharing/incentive allocation in your program that could be helpful for governments and others who are designing benefit sharing for jurisdictional-level results-based land use programs? What have been the main challenges? How have they been or could they be addressed? What have been the main factors contributing to success? What was done to build on them to strengthen the program? Equity To what extent was the benefit sharing/incentive allocation designed to address trade-offs between effectiveness (getting good results) and equity (ensuring that benefits are shared in a way that is perceived to be fair)? Were any changes made to get better social outcomes or to build greater support and legitimacy? Or what changes could be made? Are there any groups who have not been able to participate well? What was done or could be done to increase participation? What have been strengths and weaknesses on stakeholder involvement in design and evaluation? 132 Effectiveness What factors have helped or prevented the benefit sharing/incentive allocation to get good results? E.g., in terms of: • Who is targeted? Eligibility criteria? • Scale of benefits to individuals or allocation to different groups? • Types of benefits provided—monetary and nonmonetary? • Conditionality? (e.g., clear linkage to results, inputs for activities) • Timing of benefits? • Other Were any changes made to get better results? Or what changes could be made? What are the strengths and weaknesses of monitoring and evaluation? How could it be improved? Efficiency What legal and institutional factors have affected the efficiency and effectiveness of program? Why and how? What was done or could be done to address problems and build on opportunities? Have there been challenges in how the funds were managed, and how benefits were delivered? 133 134 Initiative for Sustainable Forest Landscapes October 2019