DOMINICAN REPUBLIC: USAID DR-CAFTA ENVIRONMENT

UNCLAS SANTO DOMINGO 000772

SIPDIS

SIPDIS

DEPT FOR OES/ENV FOR CAROLE JACKSON, OES/PCI FOR LARRY
SPERLING, USAID/LAC/RSD FOR JOHN GARRISON, WHA/EPSC FOR
FAITH CORNEILLE, DEPT PASS USTR FOR MBURR

E.O. 12958: N/A
TAGS: EAID ETRD LAB SENV DR
SUBJECT: DOMINICAN REPUBLIC: USAID DR-CAFTA ENVIRONMENT
PROGRAM PROJECTS

REF: SECSTATE 26123


1. Summary: This is the 2006 USAID/Dominican Republic
Environment Program Request which will support the
environmental obligations of the Free Trade Agreement between
the Dominican Republic, the Central American countries, and
the United States (DR-CAFTA) and the regional environmental
cooperative agreement. This program request builds on the
Embassy's highly successful environmental program. Without
funding of these proposed activities, the Embassy will not be
able to do them, putting in serious risk full compliance of
the Dominican government with the environmental provisions of
DR-CAFTA, other relevant MEAs, its National Environmental
Law. It would also require a revision of the economic
prosperity performance goal paper in Embassy Santo Domingo's
MPP. This cable is in response to reftel and is also being
sent via email.

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A. Characteristics of the Environmental and Natural Resource
Situation
Description and Justification for Proposed Activities

The protection of the environment and the natural resource
base is critical to the future growth and sustainable
development of the country. The natural resource base lies
at the core of the Dominican Republic,s delicate biological
balance and provides the undergirding for the country's
economy. Tourism, which accounts for around 22 percent of
the Gross Domestic Product, is linked to a vibrant and
diverse environment and a network of unique national parks
and protected areas. Dominican agriculture and industry, as
well as human health, are highly dependent on clean water,
which is rapidly dwindling on this island. The sustainable
growth of these sectors in the country is important to the
sustainable growth of the Dominican economy.

The Embassy worked intensively in 2000 with the Dominican
government to formulate the progressive General Environmental
Law (Law 64-00),which marked the beginning of a broad-based
effort to deal with the threats to the country's natural
resource base. After the promulgation of this law, the
Embassy continued to provide technical assistance through
USAID's primary environment and natural resource contractor,
International Resources Group, Ltd. (IRG),to formulate the
necessary regulations and norms, as well as to strengthen the
public and private institutions, required to enforce this
law.

With the initiation of the Improved Policies for
Environmental Protection (IPEP) Program in 2003, USAID made a
four-year financial commitment to the government to provide
assistance to the Secretariat of the Environment and Natural
Resources (SEMARENA) to develop and implement an
Environmental Policy Framework and to increase civil society
participation in policy formulation and enforcement. Over
the past two years, the IPEP program has helped to formulate
laws for Bio-diversity and Coastal-Marine Resource Use, as
well as norms for the rational use of ground water, forestry
resources, marina operations, surface water management, and
toxic waste treatment. IPEP has also developed a draft
regulation for Environmental Enforcement and, while working
at the municipal level, has strengthened fourteen Municipal
Environmental Units (UGAMs) by helping them to develop and
implement local environmental ordinances to complement the
national norms. IPEP has worked with grass-roots NGOs,
private enterprise, and community based organizations to
promote economically viable, environmentally-friendly
investments. IPEP,s Environmental Protection Investment
Fund (FIPA) has co-financed 26 successful 1:1 (at least)
matching grants with grass-roots NGOs and private enterprises
and leveraged around USD600,000 in private resources to
develop and implement clean and environmentally sustainable
production technologies. These investments, focused in areas
such as eco-tourism, organic agriculture, clean energy uses,
and
watershed protection, are showing small firms how to make a
profit while protecting the environment at the same time. A
good example of this work is IPEP,s assistance given to a
local group of swine producers who invested in an efficient
bio-digester to convert the swine excrement into usable
methane gas.

IPEP has also developed a number of analytical instruments to
facilitate the government's policy making and enforcement

(e.g., a ground water data base, an analysis of the impact of
free trade on the environment, a strategic plan for the
Dominican Biosphere Reserve, a market-demand study for a
clean production center, an analysis of economic instruments
to promote clean technology, a strategy for the Dominican
national park system's financial sustainability). Also, IPEP
has provided training on a wide range of topics to enhance
Dominican institutional capability to design and implement
sustainable natural resource use policy and programs. This
training has included public sector management skills,
economic valuation of environmental goods and services,
national park management, forest ranger and park ranger
skills, clean production services, and strategic planning to
protect the environment and natural resource base.

With the ratification of DR-CAFTA in 2005, the Dominican
Republic faces new challenges in implementing the
environmental provisions of this treaty. In addition, while
much work has been done to develop an effective public and
private system to protect the Dominican environment and
natural resource base, there is still much work to be done as
delineated in the following "expected results and activities"
proposed by the government under the DR-CAFTA Environmental
Project.

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B. Results and Activities Expected under the DR-CAFTA
Environmental Project


1. Strengthened Environmental and Natural Resource Law
Compliance and Enforcement Systems operating in the Dominican
Republic (USD600,000).

Develop training materials to work with the public and
private sectors to encourage compliance with and enforce
environmental regulations and norms, which will include
modules on key DR-CAFTA regulations, distinction between
environmental crimes and administration infractions,
inspections, management of evidence, and compliance
(USD50,000).

Facilitate five workshops to coordinate interministerial and
private sector coordination to promote compliance with and
enforcement of environmental regulations and norms
(USD50,000).

Organize four workshops and four participant observation
visits to public sector organization representatives to train
personnel in SEMARENA, Secretariat of Industry and Commerce,
Secretariat of Agriculture, Tourism, Foreign Affairs, the

SIPDIS
Congress, the Environmental Attorney General,s Office, and
environmental police on measures needed to implement
environmental enforcement procedures (USD100,000).

Complete the Regulation on Environmental Enforcement
(USD50,000).

Draft a revised Forestry Law and a Law for the National
Protected Areas System (USD75,000).

Develop improved norms and regulations for Coastal/Marine
resource use, Bio-diversity, and organic agricultural
production (USD75,000).

Work with 14 municipalities to assist them with the
implementation of local ordinances (USD100,000).

Develop 10 new Municipal Environmental Units (UGAMs) and
bring them into the national network to enforce environmental
standards (USD100,000).


2. Successful operation of the Dominican National
Environmental Council, which includes Opportunities for
Public Participation (USD500,000).

Strengthen the National Environmental Council (NEC),as
stated in the National Environmental Law, comprised of
cabinet-level representatives, members of Congress, and
representatives of the judicial system, to develop an
appropriate plan of work to enforce environmental regulations
(USD150,000).

Establish a system within SEMARENA to receive and publicly
communicate all matters related to Chapter 17 of the CAFTA-DR
and the Economic Cooperation Agreement (USD150,000).

Establish and put into operation the National Environmental

Information Network, which will serve to monitor the CAFTA-DR
environmental compliance (USD200,000).


3. Implementation and improved compliance with the other
Multilateral Environmental Agreements (MEAs),such as CITES,
RAMSAR, the Montreal Protocol, and other relevant
MEAs (USD200,000).

Design and develop informational materials to support
SEMARENA,s public awareness, environmental enforcement
campaign of relevant MEA,s (USD100,000).

Organize four workshops with public and private sector
representatives to develop programs to enforce compliance
with other MEA,s (USD100,000).


4. Promotion of the use of environmental tools and self
regulation techniques through dissemination and exchange,
with the purpose of improving environmental exchange
(USD500,000).

Organize and give four workshops among civil society
organizations, and provide participant training observation
to 4 civil society representatives to disseminate information
on environmental management programs and self regulation
techniques (USD150,000).

Update the existing ground water data base, giving particular
attention to the tourism growth centers of Bayahibe and
Bavaro (USD50,000).

Develop a strategy for micro-watershed protection
(USD150,000).

Develop a Mass Media Campaign promoting the environmental and
economic provisions and dimensions of DR-CAFTA (USD150,000).


5. Promotion of private market initiatives and information
exchange with the purpose of improving environmental
performance (USD300,000).

Strengthen the Environmental Protection Investment Fund
projects (FIPAs),especially those that are located in
transition zones in the vicinity of national parks, by
developing three new FIPA public-private partnership projects
(USD300,000).


6. Development of effective private market environmental
management mechanisms (USD300,000).

Develop strategies for the creation and use of financial,
fiscal, and market incentives to enforce environmental
regulations and norms (USD100,000).

Promote and implement market schemes for environmental
services (USD50,000).

Identify specific market opportunities for certified
agricultural and wood products
(USD50,000).

Organize and give three workshops to provide training in
financially sustainable forestry and watershed management
(USD100,000).


7. Development and implementation of cleaner production
methodologies and technologies (USD400,000).

Design and promote cleaner production schemes in productive
processes, applying best practices to improve efficiency in
the use of resource materials and inputs (USD50,000).

Design and implement a Development Credit Authority (DCA)
loan guarantee program with at least one local financial
institution to support commercial lending to clean production
investments (USD100,000).

Develop four new FIPA public-private partnership "Green
Investment" programs, which will promote organic coffee,
cacao, and banana production, as well as alternative
renewable energy systems (e.g. wind, bio-diesel, hydro)
(USD200,000).

Organize and give two workshops to provide training in
certification of organic production and the use of cleaner
production techniques and technologies (USD50,000).


C. Link with U.S. Policy Objectives and Current Development
Assistance Program


1. The U.S. Government, with the signing of the USAID/DR-IPEP
program in 2003, made a contractual commitment to the
government to provide assistance to implement effectively the
Dominican National Environment Law. With the ratification of
DR-CAFTA in 2005, particularly
with respect to its environmental requirements on enforcement
(Chapter 17),Sanitary and Phytosanitary Measures (Chapter
6),Technical Barriers to Trade (Chapter 7),and Market
Access (Chapter 3),the U.S. Government expects trade to be
increased among the parties without causing any damage to the
environment in the respective countries. The enforcement and
implementation of the environmental provisions in DR-CAFTA
(including the Environmental Cooperation Agreement) and other
relevant Multilateral Environmental Agreements are priority
U.S. policy objectives.


2. This project proposal builds on the highly successful
Embassy Santo Domingo IPEP program, which suffered a 30
percent cut in FY 2006. With the current level of funding,
Embassy Santo Domingo will not be able to undertake the
activities and achieve the results proposed above, putting in
serious risk full compliance of the Dominican government with
the environmental provisions of DR-CAFTA, other relevant
MEAs, and its National Environmental Law. It would also
require a revision of the economic prosperity performance
goal paper in Embassy Santo Domingo's MPP.


D. Estimated Cost to achieve results in (B) above is USD2.5
million per year:
If granted these funds, USAID-DR will provide assistance to
the key Dominican public sector institutions (primarily
SEMARENA, the Environmental Attorney General,s Office, and
the municipal environmental units),small businesses, and
grass-roots civil society groups, primarily through its
existing contract with IRG. These institutions are already
in the field and are ideally positioned to start the proposed
activities immediately. Consequently, they can be expected to
achieve the expected results well within a two year period.


E. Degree of Local Buy-In: This proposal has been developed
in conjunction with representatives from SEMARENA, which
considers the specified results and activities to be among
their highest priorities to comply with the environmental
provisions in DR-CAFTA, other MEAs, and their National
Environmental Law. In addition, this proposal has been vetted
with the private sector and the NGOs that are expected to
play a key role in the implementation of this project. These
funds are expected, as in the past, to leverage at least a
one to one match from the private organizations and other
international donors participating in this project.

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KUBISKE