(TCP PROJECT EXAMPLE)

I. PROJECT SUMMARY

In the transition to a market economy, the main challenge in institutional development is to decide on the allocation of different State responsibilities in the forestry sector. And a further challenge is how to re-organise existing institutions according to their new functions or to create new institutions to take on these responsibilities. This project objective is elaborate a legal framework in forestry to facilitate the implementation of sectoral policy, and to provide training to the forestry staff for carrying the new institutional, policy and legal responsibilities.

II. BACKGROUND AND JUSTIFICATION

The Forest Resources
Forests in the X cover an area of ___million ha, almost ___% of the country. The total growing stock has increased from ___ millions m³ in ___ to ___ million m³ in __. At present conifers cover approximately ___, fairly divided between ____ and ________, and deciduous trees ____%, of forest area. Current annual increment and allowable cut are estimated to be ____ million m³ and _____ respectively. The____% of this volume falling onto the state forests.

According legal reforms the land that was in private ownership up to_______ is going to be returned to previous owners. It is forecasted, that ____ million ha of the forest will be distributed among many small private owners with a forecasted ____ to ____ thousand estates. The historical dynamics relative to the total forest area and ownership is shown in Annex I.

The Forest Economics
The country development programmes has resulted in the privatization of forest industry and wood processing enterprises. By 1996 all state owned wood processing companies were privatised with very few still in last stages of privatization and a large number of new private companies have been created. About 300 private companies are working in state forests on the basis of long term agreements. The majority of the forestry companies are small and only small number can be considered as middle size, harvesting volumes greater than __ thousand m³/ year.

Manufacturing of sawn wood and timber from construction has developed rapidly.

In 199- the export of forest industry's products in FOB values by percentages was as follows: sawnwood (___%), boards (plywood, particleboards, fiberboards) (___%), roundwood (mostly pulpwood) ___%), furniture (__%), others (__%).

The contribution of forest products to total export sales was estimated to be ___% in the first nine months of ___. The share of forestry and forest industries to GDP in ____ was estimated to ____%.

Formulation of Forestry Policy
During the ____discussions were initiated on the formulation of a Forestry Policy as the existing regulatory framework does not meet the current stage of development of society, ownership structure and relations with interest groups in particular private forest owners and private forestry companies.

The national forest policy defines the basic principles of the long-term development strategies and tactics for the country's forest sector with the following goals:

· management of the forest and wooded lands on a sustained-yield basis,
· ensure efficiency of forest management.

The Forestry Policy covers the following issues: ownership, forestry and environment, social and economic issues, forest management, the role and responsibilities of the State, education, research and forest information system.

Forest Legislation
The law on "Forest " provides the basic principles for carrying out the forest management and utilization regulating the norms and standards for forest reforestation, intermediate and final felling, management planning, forests' health monitoring and sanitary conditions. (see Annex III).

The law on "Incomes from Forest Resources Utilization" and the law "On Utilization of State Forests" regulate the selling of State owned forest resources in auctions, utilised on the basis of long term contracts, and provide the regulations for the Forestry Development Fund, the main source for funding the State's interventions in the forestry sector.

The law "On hunting" governs the conditions for hunting activities in Latvia and regulates the status of State Hunting Enterprise.

All the above-mentioned laws need to be modified (see Annex III).

The Structure of Forest Stewardship
The role of the State in the forestry sector is to use its resources to create an environment within which Forestry Policy goals can be achieved, taking into account ecological, social and economic constraints and guidelines. In the forestry sector, the State has four basic functions: policy formulation, regulation (control), ownership and support.

The policy function includes contributing to forest policy formulation and establishing a basis for improving the legal framework for its implementation. The regulatory (control) function provides an institutional framework that ensures that forest law is observed and applied irrespective of ownership. The ownership function means that the State forests should be managed according to guidelines which fulfil the State forests' ecological and social responsibilities and which guarantee an income to the State, while at the same time encouraging private commercial development and sustainable management in the state owned forests. The support function includes the activities undertaken by the State through its institutions and/or financial support in order to create the conditions for the successful development of the private sector.

In the recent reorganization of the State forestry administration, the policy and normative functions were separated from the regulation, ownership and support functions. The body responsible for policy and normative functions is the Forestry department within the Ministry of _______. The State Forestry Service with controls the country forests. The main duties of the State Forest Service are forest protection, regulation of forest management, representing the State as a forest owner and the provision of the support function.

Issues and Need for International Cooperation
As illustrated above, a number of changes have already taken place in X since ____, and further changes are in progress, mostly in the institutional field. In the transition to a market economy, the main challenge in institutional development is to decide on the allocation of different State responsibilities in the forestry sector. And a further challenge is how to re-organise existing institutions according to their new functions or to create new institutions to take on these responsibilities. Unfortunately, some of the functions of the State are in direct conflict or competition with the private sector.

These functions should be divided with the State assuming a neutral position to the various interest groups, acting solely on the basis of legislation, especially in providing a mechanism for conflict resolution and in achieving maximum possible social consensus on national or local issues confronting forestry. The position of the State as a forest owner is particularly difficult as it competes with the private forest owner in the open timber market.

The rapid pace of transition to a market economy further aggravates these problems. The Government has therefore decided to seek technical assistance from FAO to help designing strategic actions oriented to strengthening its institutional capacity to deal with these emerging problems.

III. OBJECTIVES OF THE ASSISTANCE

The principal objectives of the project are to:

· conduct an analysis of the macroeconomics of the forestry sector and a survey of the role of the sector in the country economy and analyse the existing division of responsibilities between the public and private sector in forestry;
· develop a model for financial flows within the forestry sector;
· elaborate a legal framework in forestry to facilitate the implementation of sectoral policy and develop the legal means for the optimization of the institutional structure of the Forestry administration;
· restructure or plan institutions so as to optimise the functional distribution between the State and private sectors and identify potential areas of further institutional development; and
· training forestry staff for the introduction and management of institutional change, policy and legal aspects, economic and financial analysis and in the monitoring and evaluation of the forestry sector.

IV. PROJECT OUTPUTS

The outputs of the project will be:

· the role of forestry sector in the country economy evaluated;
· financial flows within the forestry sector and revenue-expenditure ratios for public performed functions identified;
· the functional division between the public and the private entities within the forestry sector analysed, with proposals made for their optimisation and a programme for further technical assistance in forestry institutional development drawn up;
· legal framework supporting the implementation of the new Forest Policy and the legal instruments for the optimisation of the institutional structure of the public forestry administration proposed; and
· forestry officials trained in introducing and managing institutional change, policy and legal aspects, economic and financial analysis and the monitoring and evaluation of the forestry sector.

V. WORK PLAN

The assistance proposed is for a period of 12 months. The work plan includes the following activities (see Annex ...):

1. Project Inception Period
1.1. Preparation of the TORs and establishment of a Task Force on institutional reform and development to work closely with the project team and to continue the reform and development process after the termination of the project. This multidisciplinary Task Force will be integrated by senior staff from the public forestry administration and representatives of other public institutions and the private sector involved in the implementation of the project.
1.2. Elaboration of methodologies for economic, functional, institutional and legislation analyses.
1.3. Establishment of a cross-sectoral relationship between the Forestry Department and other Ministries involved in the management of renewable natural resources with the determination of their sharing of responsibilities.
1.4. Assisting the forest administration in setting up a mechanism, principles and time schedule for public debate on issues concerning the optimization of the public forest authority
1.5. Carrying out the economic survey of the forestry, forest industry and timber trade sectors and determining the contribution of the sectors to the economy.
1.6. Analysis of the distribution of tasks between the public and private sector in forestry.
1.7. Training of forestry officials (including Task Force) in the introduction and management of institutional change, policy and legal aspects, economic and financial analysis and in the monitoring and evaluation of the forestry sector.

2. Proposals for Optimization
2.1. Identification of the structure of the financial flows and the revenue-expenditure ratio for public activities within the forestry sector.
2.2. Modelling of the optimized pattern of financial flow to improve the efficiency of performance of the public institutions.
2.3. Elaboration of proposals for the optimized distribution of functions and responsibilities among the public and private sector in forestry.
2.4. Elaboration of proposals for the legal framework to implement the new Forest Policy.
2.5. Elaboration of proposals for structural change in forestry related institutions, if necessary.
2.6. Drafting of legal means to provide a legal basis for the proposed institutional change.
2.7. Arrangement of two study tours of the duration of one week each, for one senior forestry official.

3. Implementation Programme and Terminal Statement
3.1. Design and drafting of a programme to implement change in institutional structures, organization and procedures which are required to implement the new Forest Policy.
3.2. Identifying and preparing a programme considering needs for further technical assistance in forestry institutional development.
3.3. Preparation of a Terminal Statement.

VI. CAPACITY BUILDING

The Government will appoint a National Project Director (Terms of Reference in Annex ....) to be responsible for the implementation of the project and will provide an appropriate number of project counterparts to work in close co-operation with the international consultants to be recruited by FAO.

As mentioned above in Section V, a Task Force, which may be multi-disciplinary in composition representing diverse forestry interest groups, will work closely with the consultancy team and gain experience in institutional problem analysis, identification of reform measures and the introduction and management of institutional change.

Forestry staff will be trained for the introduction and management of institutional change, in policy and legal aspects, economic and financial analysis and in the monitoring and evaluation of the sector.

Two senior forestry staff will go on study tours, one to ............. and the other to ........to review, compare and analyse institutional matters and to observe forestry practices.

VII. INPUTS TO BE PROVIDED BY FAO

Personnel
· One International/TCDC/TCCT/Retired Consultant in Forestry Policy and Institutions, .....months in .....missions, (Terms of Reference in Annex ...)
· One National Consultant in Institutional Organisation, .... months, (Terms of Reference in Annex ...)
· One National Consultant in Forestry Macroeconomics, .... months (Terms of Reference in Annex ......)
· One National Consultant in Forestry Legislation, .... months, (Terms of Reference in Annex ....)
· Technical Backstopping by Hqs staff from FO... (number) visits for a total of (member) weeks, (Terms of Reference in Annex ...)
· Technical Backstopping by Hqs staff from TCI, (number) mission for (number) week, (Terms of Reference in Annex ...)
· Advisory Technical Services by Hqs staff from LEGN, (number) visits for a total of (number) weeks, (Terms of Reference in Annex ....).

Official Travel
· A budgetary provision is made for in-country travel by the consultants and FAO staff, up to US$ ......

Contracts
· Contracts will be issued for the translation of technical reports by international consultants and FAO staff and also for preparation/ development of training material mainly for the two workshops and for background material for the study tour participants, up to US$ .........

General Operating Expenses
· General Operating Expenses for miscellaneous expenditures in-country required for operating the project will be up to US$ ........, including US$ ..... for project report.

Materials and Supplies
· The cost of materials and supplies will be up to US$ ........

Equipment
· The cost of equipment will be up to US$ ......, (Include Annex detailing each equipment and its cost).

Direct Operating Costs

· Direct expenses at FAO Headquarters connected with the implementation of the project, up to US$ .......

Training
The total cost for training is up to US$ ....... (Include an Annex indicating each training activity: study tours (maximum two for one person each), seminars; meetings, courses, detailing clearly its objective, number of persons that will participate, from where, duration of the activities and all costs involved: transportation, DSA, travel costs, material needed, etc.)

VIII. REPORTING

Each international and national consultant will produce a technical report which will form the basis of the Terminal Statement which the Policy and Institutions Consultant will prepare before the end of his second mission incorporating also an account of any institutional changes that may have taken place to date and of the institutional tools prepared and approved by the Government. The Terminal Statement will be drafted in accordance with TCP procedures, for finalisation at FAO Headquarters and formal submission to the Government of XXX.

VIII. GOVERNMENT CONTRIBUTION AND SUPPORTING ARRANGEMENTS

The Government will provide the following for the implementation of the project:

· a National Project Director (Terms of Reference in Annex ....) for all the duration of the project;
· counterparts and administrative support;
· physical facilities such as adequate office space;
· local transport.

In addition, the government will make arrangements for the clearance of experts, customs clearance of equipment, and tax-free local purchase of project equipment and supplies.

The Government has committed itself to making the necessary budgetary allocations until the desired reform measures are in place.

PROJECT BUDGET COVERING FAO INPUTS
(in US dollars)

Country: XXX

Project Title: Strengthening the Institutional Capacity of the Forest Authority

Project Number: TCP/XXX/......

ANNEX

TERMS OF REFERENCE

International Consultant in Forestry Policy and Institutions

(... person/months in .... missions)

Under the supervision of ............, the technical guidance of ................. and in close collaboration with the National Project Director and National Consultant in ...................., the Forest Service , the Consultant will:

First Mission
· prepare a detailed work plan and methodology at the beginning of the consultancy;

· assist the Forest Authority in setting up a multidisciplinary Task Force;

· review the structure, organisation and procedures of the Forest Authority in the light of the forestry policy and environmental policies;

· assist the National Consultant in Forestry Legislation in reviewing the Forestry Act/Law and identifying the legal issues to be addressed;

· describe and analyse the functions of the various bodies responsible for forestry, including forest industries.

· make proposals for the optimal distribution of such functions among the bodies concerned;

· prepare a report on the activities carried out during this phase indicating the main findings and identified issues and specifying the tasks/activities to be developed by national consultants and project counterparts until his/her second mission.

Second Mission
· describe and where necessary revise the duties and responsibilities of the various categories of forestry staff in the light of the changed mandate and structure of the forestry administration;

· develop a strategy for the implementation of the Forestry Policy and identify areas of further technical assistance for national institutional development;

· design and organise two workshops on forestry policy formulation, analysis and development;

· prepare a report on his/her activities and the draft Terminal Statement of the project in co-operation with the National Project Director.

Qualifications and Experience
A graduate in Forestry, Environmental Sciences or a related discipline with at least ten years of relevant experience in a developed or developing country and international organisations.

Timing
The first mission will take place during project months ... and ... and the second mission will take place during project months .... and ....

Language: English

ANNEX

TERMS OF REFERENCE

International Consultant in Forestry Macroeconomics

(... person/months in .... missions)

Under the supervision of ............, the technical guidance of ....................... and in close collaboration with the National Project Director, the National Consultant in ...................and the Forest Department, Ministry of ..........., the Consultant will:

First Mission (..... month)
· prepare a detailed work plan and methodology at the beginning of the consultancy;

· carry out a macroeconomic survey of the forestry and forest industries sectors, identifying the main issues and constraints to investment and suggesting measures to remove them in close co-operation with national forestry economists;

· devise a nationally accepted methodology for the calculation of the real contribution of the forestry sector to the national economy;

· prepare a technical report on his activities.

Second Mission (.... month)
· design and organise, in collaboration with national forestry economists, a one-week workshop for ten participants on financial and economic analyses of investment projects in forestry and forest industries and on the evaluation of such projects;

· identify and prepare together with the .......................Consultant a framework plan for further technical assistance for the institutional development of the national forestry sector;

· prepare a technical report on his activities.

Qualifications and Experience
A graduate in Economics, specialised in Macroeconomics or Forestry Economics, with ten years of experience in forestry involving the preparation and analysis of investment projects. Experience of teaching or training at professional level would be an advantage.

Timing
The first mission will take place during project months ... and .... and the second mission will take place during project month ......

Language: English

Duty Station:

ANNEX

TERMS OF REFERENCE

National Consultant in Institutional Organization

(.... person/months)

Under the coordination of the International ...............Consultant and in close collaboration with the National Project Director and counterpart staff of the Forest Service, the Consultant will:

· prepare a detailed work plan and methodology at the beginning of the consultancy;

· identify, analyse and evaluate the institutional factors within the Forest Authority which have a bearing on the implementation of the new Forestry Policy and technical forestry programmes, with particular reference to their impact on employment creation, food security and rural development;

· examine how to achieve and harmonise relationships between the Forest Authority, rural institutions, NGOs, industrial enterprises and other relevant institutions;

· propose mechanisms and procedures which, in the light of the current and possible new needs of society, institutional experience, administrative science and organisational theory, make it possible to enhance the role of the Forest Authority as an agent of rural development;

· assist the International Forestry Policy and Institutions Consultant to include in the proposed workshops training components on introducing and managing organisational change in the forestry sector.

· participate in a public discussion on the proposed draft forest legislation.

· prepare a technical report on his/her activities.

Qualifications and Experience
A graduate in organisational or behavioural science or in business management with reference to forestry or environmental management with ten years of relevant experience in a senior position in a developed country or an international organisation.

Timing
............. month/s

Language: English

Duty Station:

ANNEX

TERMS OF REFERENCE

National Consultant in Forestry Macroeconomics

(.... person/months)

Under the coordination of the Consultant in ........and in close collaboration with the National Project Director and the counterpart staff of the Forest Service, the Consultant will:

· prepare a detailed work plan and methodology at the beginning of the consultancy;

· carry out economic analyses of the forestry and forest industries sectors, identifying, in collaboration with the Consultant in ......................., the issues and main constraints to investment and suggesting measures to remove them in close co-operation with national forestry economist;

· design and organise, in collaboration with the Consultant in ...................... and national forestry economists, a one-week workshop for ten participants on financial and economic analyses of investment projects in forestry and forest industries and on the evaluation of such projects;

· prepare a technical report on his/her activities.

Qualifications and Experience
A graduate in Economics or Forestry Economics with ten years of forestry experience involving the preparation and analysis of investment projects in the sector. Experience of teaching or training at professional level would be an advantage.

Timing
............month/s

Language: English

Duty Station:

ANNEX

TERMS OF REFERENCE

National Consultant in Forestry Legislation

(.... person/months)

Under the coordination of FAO .......... and in close collaboration with the National Project Director and the counterpart staff of the Forest Service, the Consultant will:

· make a thorough review of the existing Forestry Act, rules and regulations, and other related legislation specifically by collecting and summarising legislation related to forestry and identifying legal provisions which may be relevant to the implementation of the country's new forestry policy and institutional framework and analysing the linkages between the Forestry Act and other related legislation in terms of their effects on the development of the forestry sector;

· draft a proposal for a new or revised Forestry Act in harmony with the new national forestry policy, the requirements of a market economy, other related laws and forestry legislation;

· organise a public discussion on the proposed draft forest legislation;

· support the design of a strategy for the appropriate implementation of the national forestry legislation;

· carry out any other duties, as required, which are within his/her field.

Qualifications and Experience
A graduate in Law with at least five years' professional experience including some experience in natural resources law.

Timing
................months

Language: English

Duty station:

ANNEX
TERMS OF REFERENCE

Technical Backstopping

(.... person/weeks in .... missions)

Under the supervision of the Chief of ................................., the Technical Backstopping Officer from FAO Hqs will:

First Mission: ........ week/s at the beginning of the project

· assist the National Project Director in the identification of the national organisations and persons who will participate in the activities of the project, define their responsibilities and harmonise them with those of the national and international consultants, and prepare a detailed workplan;

· assist in the identification and selection of the project`s national consultants to be submitted to FAO;

· advise the National Project Director in the organisation of the project`s activities and in the identification of the main policy and institutional issues to be analysed and discussed within the framework of the project;
· assist the National Project Director in the selection of members of the multidisciplinary Team.

Second Mission: ...... week/s during the last two months of the project

· analyse and review the institutional and policy findings and conclusions of the .........Consultant/s and assist them in their finalization;

· support the National Project Director in the presentation of the final results of the project to the national authorities and participate in the public discussion;

· guide the National Project Director and the .................................Consultant/s in the preparation of the draft Terminal Statement; and

· discuss with the national authorities the follow-up of the project results and proposals as well as any future possible involvement of FAO;

· present a technical paper on ......................aspects related to the project findings and conclusions.

ANNEX
TERMS OF REFERENCE

National Project Director

(........ person/months)

Under the general supervision of the Chief of the National Forest Authority, the Ministry of ...............and in close collaboration with the ...............................Consultants, the National Project Director will coordinate all activities of the Project. In particular, he/she will:

· direct the preparation of the Programme/Plan Work of the project;

· ensure the collection of all the essential documents relevant to project implementation;

· if needed, arrange the translation of key documents into English;

· assist in the identification and recruitment of National Consultants;

· identify members of the project multidisciplinary Task Force;

· act as Secretary of the Task Force, call its meetings and establish its agendas in consultation with the Consultants, Task Force members and the National Forest Authority;

· maintain records of Task Force meetings in English;

· provide support to the consultants and counterpart for the carrying out of project activities;

· arrange meetings, visits and interviews for the consultants with relevant government officials, non governmental organisations, other institutions, key private individuals and industries;

· identify candidates for study tours and set clear objectives for such tours in consultation with the Chief of the National Forest Authority and the candidates and determine the countries to be visited;

· assist in the design, organisation and conduct of meetings/seminars/courses/workshops on ..................;

· prepare a report on his/her activities to be presented to the national authorities;

· assist the Consultant in the preparation of the draft Terminal Statement.