U.S.-BELIZE TROPICAL FOREST CONSERVATION ACT OVERSIGHT

UNCLAS SAN JOSE 000011

SIPDIS

STATE PLEASE PASS TO AID
AID FOR SLAMPMAN, JHESTER, AND JGARRISON
TREASURY FOR KBERG

SIPDIS

E.O. 12958: N/A
TAGS: SENV EAID ENRG BH
SUBJECT: U.S.-BELIZE TROPICAL FOREST CONSERVATION ACT OVERSIGHT
COMMITTEE CONSIDERS SMALL GRANTS FUND, OIL EXPLORATION

REF: A) 07 STATE 2071 B) 07 STATE 30914



1. SUMMARY: REO attended the U.S.-Belize Tropical Forest
Conservation Fund Oversight Committee meeting held on November 9 in
the Rio Bravo Conservation Areas. The meeting considered recipient
NGO expenditures and plans for the coming year, PACT Foundation
grants, and PACT Foundation Board Composition. Board members
expressed concern about the issue of oil exploration in Belize's
National Parks and an expressed an interest in an opportunity to
meet with the Guatemala TFCA Oversight Committee. Embassy Belmopan
may wish to consider a number of activities that can complement the
U.S. investment in conserving Belize's forests. END SUMMARY.



2. The U.S.-Belize Tropical Forest Conservation Fund Oversight
Committee (OC) met on November 9 for its first meeting since the
Protected Areas Conservation Trust (PACT) Foundation (the
Foundation) initiated distribution of grants. The meeting was
hosted by Programme for Belize at La Milpa Field Station in Rio
Bravo Conservation Area, a protected area that benefits from TFCA
monies. Rio Bravo's jungles, mountains and pine forests constitute
approximately four percent of Belizean territory.


3. After reviewing minutes from prior meetings, the Board
considered reports, expenditures, and proposed budgets for Belize
Audubon (BAS),Foundation, Programme for Belize (PfB),and Toledo
Institute for Development and the Environment (TIDE). REO noted
that seventy percent of the TFCA budget is used to directly support
park management: to pay rangers, park administrators and other
staff; to purchase equipment; to upgrade park infrastructure; and to
conduct aerial overflights to locate illegal logging sites and
similar activities. TIDE, BAS, and PfB receive the remaining thirty
percent of the funds to cover administrative costs linked to fund
management -- an amount established by a survey conducted on the
establishment of the debt for nature swap. The debt swap monies
covered basic expenses that NGOs find are the most difficult to
cover. In their reports, the NGOs noted that nearly all activities
(improvements, research and outreach) in these parks funded by third
parties leveraged U.S. funds. Thirty percent of the PACT Foundation
monies disbursed cover administrative costs linked to managing PACT
Foundation monies; PACT noted that this amount does not cover the
full administrative cost to PACT of managing a comparatively small
grants fund, but nevertheless views it as worthwhile since it
complements existing PACT programs.


4. The OC emphasized its interest in an exchange of views,
priorities and lessons learned with the Guatemala Tropical Forest
Conservation Act Fund. The OC will be particularly interested in
the Guatemalan perspective on xate harvesting in the Peten, a
seasonal cross-border problem in TFCA-funded Tapir Mountain and
other parks. Belizean and Guatemalan TFCA representatives
approached REO on the margins of the November REDLAC meeting (REF A)
about facilitating a meeting or teleconference between
representatives of the two boards.



5. Belize Audubon's Anna Hoare succeeded TIDE's Celia Mahung as
chair of the Oversight Committee.

PACT Foundation Update
--------------


6. The PACT Foundation conducted its first grants project call and
disbursements plans to six recipients in 2007. Board members were
appreciative of the participation of U.S. Ambassador Robert J.
Dieter in the recognition ceremony. The Foundation leveraged
additional funds from PACT, which topped off available Foundation
monies to permit full funding of the six winning proposals.


7. The U.S. representative acknowledged the Fourth Amendment to the
PACT Foundation Agreement, which limited expenditures to a given
percentage of its endowment. Although the PACT Foundation decision
to amend the Agreement did not require U.S. concurrence, the GOB and
the NGOs agreed that the existing precedent where Amendments to the
Foundation Agreement are acknowledged by the USG promoted
transparency and confidence in PACT Foundation operations.


8. Neither the U.S. nor The Nature Conservancy has a seat on the
PACT Foundation Board, whose membership is defined by GOB statute.
The NGOs inquired about proposed legislation that would drop the

statutory definition of Board composition from legislation defining
the Board, permitting the appointment of new representatives to the
Foundation Board without additional legislative approval. Andrade
explained that current legislation needed in order to align current
legislation with a Foundation Board decision to add
non-environmental, non-government representatives to the Foundation
Board. He also explained that the GOB had a ripening opportunity to
channel a new donation through the Foundation, but that the donor
required that the Foundation have a stronger government presence
than at present. Andrade emphasized that the Foundation Board,
which was still considering the proposal, would need to endorse any
decision to add new representatives. Andrade took issue with REO's
understanding that TFCA funds were to be managed by an entity where
NGOs were in the majority; in his view, the Agreement merely
stipulated required participants on the Board without prejudice to
additional members, NGOs or GOB. Should the legislation not be
amended or additional government members not be appointed, a new
entity would need to be created to receive the new donation to which
PACT would prefer to transfer the name "PACT Foundation." The
difference between U.S. and GOB expectations over the role of the
PACT Foundation is highlighted in the 2007 evaluation report
commissioned by the USG.


9. In discussions with Treasury, State and AID officials on the
margins of the REDLAC meeting the following week (REF A) on
Foundation Board membership, U.S. officials raised the possibility
that the existing Foundation Board might retain its existing balance
and responsibilities as the sole decision making body relative to
the TFCA sub-account while becoming a sub-committee of a new Board
that reflects broader GOB ambitions for the PACT Foundation. The
proposal will be raised in a communication from REO to the Board now
under consideration by Treasury.

Oil Exploration in Belize's National Parks
--------------


10. Programme for Belize Director Edilberto Romero flagged the
question of oil exploration in national parks. A U.S.
Colorado-based company intends to conduct oil exploration on Rio
Bravo lands. While initial tests themselves need not greatly affect
environmental integrity of the protected area (although concern has
been expressed about the impact of test explosions on ground birds),
subsequent exploration and exploitation should oil be struck could
have a significant impact on Rio Bravo. For the present, PFB is
primarily concerned about the opening of six transects through the
park which will need to be guarded for three years until
reforestation occurs to ensure that they are not used by poachers,
loggers, or squatters. PfB is also concerned whether its success in
attracting students, researchers, grants and sustainable tourism
will be compromised by oil exploration. In discussions on the
margins of the meeting, Romero explained that the U.S. investor,
after initially offering a risory amount to conduct the tests
(itself perhaps a reaction to an over-the-moon estimate of expenses
from PfB),short-circuited negotiations by prevailing on the
Minister of the Environment to dictate the standard fee paid to
landowners despite the special circumstances affecting Rio Bravo.
PfB is seeking reconsideration of this decision as it would leave
PfB subsidizing security, environmental monitoring and other costs
linked to oil exploration.


11. While no one wants to stand in the way of Belize's development,
REO noted to the OC that the U.S. will follow decision-making
closely as it makes little sense to invest in forest protection if
the same land is earmarked by the GOB for energy development. The
U.S. has multiple interests in the Rio Bravo Area. Romero recalls
that the United States Government contributed USD 2 million to its
founding in 1988. Rio Bravo receives a quarter of the debt swap
monies available under the TFCA. Rio Bravo is the site for an
ongoing Joint Implementation project on climate change organized
under USG auspices and involving 16 U.S. public utilities. Rio
Bravo hosts migratory birds that summer in the United States. More
broadly, Rio Bravo was established through the efforts of the
Massachusetts Audubon Society and benefited from a donation of lands
from the Coca Cola Company.


12. Andrade emphasized that the issue of oil exploration is
affecting a number of parks, and that PACT intends to channel the
broader discussion on oil exploration through the National Parks
Commission to standardize government treatment of the issue. The
independent umbrella organization for NGOs, APROMAR, is another
vehicle for NGOs to make their opinions known.


Embassy Belmopan and the U.S.-Belize TFCA
--------------


13. Embassy might consider a number of opportunities in which the
TFCA might complement Embassy Belmopan activities or which the
Embassy might consider to bolster TFCA management:

-- With REO departing in June 2008, Embassy Belmopan might consider
whether it is in a position to assume representation on the TFCA OC.
The Embassy might gain from closer contacts with NGO partners and
grassroots organizations based in rural areas. The Embassy might be
in a better position to tap the public affairs opportunities
nationally and regionally as small grants projects are implemented.
OC Board members would welcome close engagement with Embassy but
plans to submit separately its recommendation for continued Hub
representation on the Board.

-- In response to the request outlined in 4, Embassies Guatemala
and Belmopan might consider whether they might be able to make their
facilities available to host a DVC between their countries' TFCA
boards. The TFCA Boards might also benefit from briefings by the
Regional AID program and the Mesoamerican Barrier Reef System (MBRS)
on their programs directed at the Gulf of Honduras watershed.

-- OC Board members have no experience in dealing with oil issues.
Embassy Belmopan might consider whether it can tap U.S. expertise
through DVCs, speakers programs, or similar tools to educate
government officials, PACT and NGOs with regard to issues that need
to be addressed in negotiating terms and compensation for oil
exploration and extraction.

-- If appropriate, Embassy Belmopan might consider meeting with the
firm seeking to prospect in Rio Bravo to brief them on past and
on-going U.S.-supported activities in the park and encourage that
exploration activities must not put the US activities in jeopardy.
Setting aside problems should oil be discovered, it might be
possible to link oil prospecting with science. For instance, the
company could provide information on the geography of the area,
participate in the joint monitoring of the behavior of ground birds
and other species in light of prospecting techniques, and conduct
bird and plants counts as transects are cut. Should the Embassy
wish to meet with the U.S. company, REO recommends briefings from
PACT (Valdemar Andrade) and PfB (Edilberto Romero).

-- Embassy Belmopan might consider bolstering TFCA activities
through the American Fellow Program (www.partners.net) and the
Embassy Science Fellows Program (REF B). The first is available for
mid-level government officials from a Western Hemisphere government
to work in a U.S. government agency (or vice versa) for up to 6
months. The second is to request a federal agency scientist to
conduct a project of interest to the Embassy for an extended period
of time. For the first, PACT is interested in receiving a U.S.
official that can work with the GOB on environmental valuation
techniques. For the second, PfB expressed an interest in hosting a
scientist to help them develop a formula for calculating carbon
sequestration in non-trees forest species. NGOs might be in a
position to help out on issues like in-country travel or housing
that may prove to be hurdles for the Embassy.

-- The Embassy CLO might consider working with TFCA partners to
organize day visits or weekend trips to TFCA-funded protected areas
for Embassy staff, which include some of Belize's most sensitive or
sites. These visits might also double as inspections for meeting
with staff, inspecting infrastructure or interviewing recipients.

LANGDALE