USAID CBJ FY 2002: Peru

PROGRAM: Peru
TITLE AND NUMBER: Improved Environmental Management in Targeted Sectors, 527-004
PLANNED FY 2001 OBLIGATION AND ACCOUNT: $4,188,000 (DA)
PROPOSED FY 2002 OBLIGATION AND ACCOUNT: $4,300,000 (DA)
STATUS: Continuing
INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: FY 2004

Summary: Peru has an abundance of natural resources and its biodiversity is one of the richest in the world. However, Peru's environment is threatened by uncontrolled urban growth, industrial pollution, and widespread poverty that frequently lead the poor to use environmentally destructive practices to survive. Consistent with the agency's goal of protecting the environment and the Mission Performance Plan (MPP) goal of promoting sound environmental policies and sustainable use of natural resources, the purposes of USAID's environmental activities are to improve protection of the natural resource base, fragile ecosystems, and biodiversity, and to prevent or reduce urban and industrial pollution. These improvements will be achieved by: strengthening the institutional capacity of the Government of Peru (GOP) and the private sector; mobilizing public support for environmental improvements; testing and replicating innovative and sustainable technologies/practices through pilot projects; and promoting sound policies and effective legislation. All Peruvians, including the most vulnerable groups such as indigenous peoples, women and children, and those living in fragile ecosystems or peri-urban environments, are beneficiaries. The activities support the Summit of the Americas initiative to "Guarantee Sustainable Development and Conservation of the Natural Environment" through biodiversity and pollution prevention initiatives. Activities contribute to the sub-initiative of Free Trade and Cooperation in Science and Technology through a cleaner production initiative and promotion of the International Standards Organization (ISO) 14000 (environmental management) certification. The Americas Fund Agreement between the GOP and U.S. Government under the Enterprise of the Americas Initiative supports USAID objectives by financing activities designed to preserve, protect, or manage the natural and biological resources of Peru in an environmentally sound and sustainable manner, while improving child survival and development.

Key Results: The cumulative number of industrial plants in targeted sectors that have adopted new cleaner production practices reached 24 in 2000. In 2000, 22 of the 80 fishmeal, cement, paper, brewery, tannery and other plants in Peru that had been exposed to USAID-sponsored pollution prevention activities, reduced their pollution levels by more than 10% by adopting more efficient production systems. For example, as a result of a small USAID grant, a plant that recycles used auto and restaurant oil greatly increased its efficiency and reduced pollution by at least 10% through the reuse of waste products such as boric acid and different gases in the refining process. At least four other businesses have eliminated or greatly reduced pollution from waste oils through the recycling activities of USAID-supported pilot projects.

Preliminary data from the matrix on biodiversity and fragile ecosystem conservation and management indicates that a cumulative total of 10 biologically important natural protected areas have achieved management improvements in administration, legal status, budget, strategic planning, community participation, use of natural resources, and management of conflicts and threats. These improvements are attributable mainly to USAID-supported activities and the stable leadership at the National Institute for Natural Resources (INRENA) over the past two years.

Environmental and natural resources policy or legislative reforms enacted in FY 2000 with USAID support included a forest law and draft regulations, a solid waste law, and draft regulations and laws to raise the National Environment Council (CONAM) to ministerial level and strengthen its arbitration authority. The forest law requires management plans for all forest concessions. The solid waste law establishes the universe of steps, principles, obligations, and responsibilities for the management of solid wastes in a clean and environmentally friendly way to protect the health and general wellbeing of the Peruvian populace.

USAID's most recent national environmental survey shows that the percentage of Peruvians with an adequate understanding and concern for environmental and natural resource matters increased dramatically from 15% in 1998 to 30% at the beginning of FY 2000.

Performance and Prospects: Activities continue to meet overall expectations, showing good prospects for achieving all expected results if requested funding is made available. USAID's Sustainable Environmental and Natural Resource Management activity (SENREM) has continued assisting CONAM to assume its role as the main GOP environmental policy-making and inter-sectoral coordination agency in Peru. SENREM is also strengthening the environmental policy and regulatory framework, promoting private sector participation, and implementing pilot interventions in biodiversity, pollution prevention, and solid waste management. Through this activity, USAID has played a key role in the development of the environmental framework legislation for the manufacturing and fisheries sectors, as well as the guidelines for the development and application of environmental review and monitoring procedures in the manufacturing sector. For a second consecutive year, the National Environmental Society, established under USAID auspices, pursued an active role in promoting private sector participation in affecting policies aimed at protecting environmental and natural resources.

SENREM financed the first ever "Peru State of the Environment Report" in 2000. To date, demand for this quality document has been outstanding, further validating USAID's decision to increase and strengthen a focus on environmental education. Furthermore, the Peruvian Environmental Law Society (SPDA) has initiated a competition for six environmental and natural resource policy studies to be completed in FY 2001. SENREM also supports GOP efforts to decentralize environmental and natural resource management through the creation of 10 multi-sectoral Regional Environmental Committees. With USAID technical support, CONAM has formed inter-sectoral technical committees for developing quality standards for air, water, and noise. In addition, CONAM has established maximum permissible limits for emissions in the manufacturing, fisheries, oil, electricity, and transportation sectors. A total of 14 Peruvian firms have now received ISO 14000 certification through a SENREM activity adopted by the private sector. In FY 2001, a private sector consortium will start operating the Clean Production Center to support pollution reductions in targeted industrial areas. Testing of innovative environmental and natural resource technologies and practices through pilot projects is progressing very well. Eleven of the 35 USAID-supported pilot activities managed by SPDA are finished or are approaching completion; six of those 11 activities have validated new technologies or practices in sustained environmental management.

The Biodiversity and Fragile Ecosystem Conservation and Management activity (BIOFOR) completed the ecological economic zoning analysis for the Department of Madre de Dios, one of the richest biodiversity zones in Peru. BIOFOR provided critical leadership and technical assistance for a master plan for the extremely large and biologically diverse Pacaya-Samiria National Reserve; awarded 13 grants for natural resource activities in buffer zones of six protected areas in Peru; and completed scheduled modules of a training program in institutional development for locally-based non-governmental organizations (NGOs) at each of these sites. In FY 2001 and FY 2002, BIOFOR will support INRENA, the GOP partner institution, as well as local organizations in improving the management of national parks, creating communal reserves for isolated indigenous people, developing master plans for various natural protected areas, and awarding scholarships for economic valuation of natural resources.

USAID's new environmental health activity will reduce health risks associated with exposure to urban contaminants and pathogens. Implementation of the activity began with a behavior change effort in areas of Callao where a storage depot for loose ore is contributing to high blood lead levels in children. This activity also determined that much of the exposure to lead in Lima is due to dust from ore storage depots rather than lead in gasoline. The environmental health activity will implement a local grants activity and associated training in FY 2001 and FY 2002 to improve environmental health services in targeted communities and provide feedback for policies that facilitate improved urban environmental health conditions.

In FY 2001, approximately $2,038,000 will be used to support pollution reduction activities, which include private sector advocacy, pilot demonstration projects, and Clean Production Center (CPC) operations. Approximately $2,000,000 will be used to support management improvements in national parks and develop a forestry management strategy for protected areas. $150,000 will finance a new Policy Deficiencies Analysis and the annual environment and resources survey.

In FY 2002, approximately $2,000,000 will be assigned to support CPC operations and provide services to the GOP and private industry on pollution prevention and energy efficiency. Approximately $500,000 will be used to implement the management strategy in Pacaya Samiria National Reserve and support institutional strengthening of INRENA. Approximately $900,000 will be used to further strengthen the GOP environmental health policy-making capability and continue implementation of local grants to improve environmental health conditions. Planning is underway for the allocation of the remaining funds among new activities in environmental education, policy development, and institution building, which are still in the planning stages.

Possible Adjustments to Plans: A major evaluation of all environmental management activities completed in June 2000 served as the basis for developing a new five-year strategic plan that will begin in FY 2002. Contingent upon availability of funds, USAID plans to extend the ongoing SENREM and BIOFOR activities through 2003 and develop two new activities: an environmental education and awareness activity for implementation in 2002; and an environmental policy development and national and local institution building activity for implementation in 2003.

Other Donor Programs: The World Bank and Japan's International Cooperation Agency provide support to rehabilitate Lima's water and sewage systems, while the Inter-American Development Bank supports basic sanitation services in 36 cities. The Swiss provide environmental monitoring support to the Ministry of Industry, which augments USAID's institutional strengthening activity, and is assisting USAID in developing a clean production center. A small United Nations Development Program activity is assisting CONAM to organize Regional Environmental Committees. USAID collaborates closely in biodiversity conservation with bilateral donors including the Netherlands, Germany, Canada, Finland, and Switzerland. The World Bank supports the protected areas fiduciary fund. The Food and Agricultural Organization is helping to develop a National Forestry Development Strategy and support forest management and re-forestation in the highlands. A donor coordination mechanism created by BIOFOR has assumed a broad role across most environmental issues and is currently the only broad-based donor environmental coordination mechanism functioning in Peru.

Principal Contractors, Grantees or Agencies: Principal contractors are the U.S. firms Abt Associates; International Resources Group; and Camp, Dresser and McKee. Local partners include the Environmental Law Society and GOP counterpart agencies CONAM, INRENA, and the General Directorate for Environmental Health within the Ministry of Health.

FY 2002 Performance Table

Peru: 527-004

U.S. Financing

(In thousands of dollars)

	Obligations		Expenditures		Unliquidated
Through September 30, 1999	13,464	DA	7,228	DA	6,236	DA
	1,106	CSD	233	CSD	873	CSD
	0	ESF	0	ESF	0	ESF
	0	SEED	0	SEED	0	SEED
	0	FSA	0	FSA	0	FSA
	0	DFA	0	DFA	0	DFA
Fiscal Year 2000	4,104	DA	3,259	DA
	0	CSD	273	CSD
	0	ESF	0	ESF
	0	SEED	0	SEED
	0	FSA	0	FSA
	0	DFA	0	DFA
Through September 30, 2000	17,568	DA	10,487	DA	7,081	DA
	1,106	CSD	506	CSD	600	CSD
	0	ESF	0	ESF	0	ESF
	0	SEED	0	SEED	0	SEED
	0	FSA	0	FSA	0	FSA
	0	DFA	0	DFA	0	DFA
Prior Year Unobligated Funds	0	DA
	0	CSD
	0	ESF
	0	SEED
	0	FSA
	0	DFA
Planned Fiscal Year 2001 NOA	4,188	DA
	0	CSD
	0	ESF
	0	SEED
	0	FSA
	0	DFA
Total Planned Fiscal Year 2001	4,188	DA
	0	CSD
	0	ESF
	0	SEED
	0	FSA
	0	DFA
			Future Obligations		Est. Total Cost
Proposed Fiscal Year 2002 NOA	4,300	DA	3,656	DA	29,712	DA
	0	CSD	0	CSD	1,106	CSD
	0	ESF	0	ESF	0	ESF
	0	SEED	0	SEED	0	SEED
	0	FSA	0	FSA	0	FSA
	0	DFA	0	DFA	0	DFA

Peru

Activity Data Sheet

FY 2002 Performance Table

Peru: 527-004

U.S. Financing