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1. 1 Works 2 87 0 01 0 00 2 44 0 00 0 00 2 44 2 02 0 10 0 00 2 22 2 02 0 09 0 00 2 11 3 Services 0 15 6 30 11 75 0 00 5 37 4 incr Operating Costs 2 10 2 79 0 00 0 49 5 Training and Education 0 05 0 66 Material 0 00 0 59 6 0 00 0 00 0 00 0 00 Total 8 80 f 20 55 0 00 11 00 Figures in parenthesis are the amounts to be financed by the Bank Loan All costs include contingencies 2 Includes civil works and goods to be procured through national shopping consulting services services of contracted staff of the project management office training technical assistance services and incremental operating costs related to i managing the project and ii re lending project funds to local government units Project Financing by Sub component in US million equivalent Percentage of Appraisal Sub component Appraisal Estimate Actual Latest Estimate Bank Bank Govt CoF Bank Gost CoF 1 Project Coordination 0 85 0 25 1 02 13 0 24 120 0 96 0 2 1 MEM SSM 0 30 0 05 1 02 0 06 340 0 120 0 2 2 DINAMI 1 00 0 10 0 82 0 09 82 0 90 0 2 3 DINAPA 0 40 0 05 0 20 0 33 0 02 0 10 82 5 40 0 50 0 2 4 5 CODIGEM 0 70 0 10 0 39 0 05 55 7 50 0 3 1 Env Monitoring 1 50 0 20 0 60 0 76 0 03 1 63 50 7 15 0 271 7 3 2 Hazardous Waste 1 40 0 20 0 70 0 69 0 01 0 35 49 3 5 0 50 0 3 3 Geological Mapping 1 75 0 25 2 50 0 74
2. HS Highly Satisfactory S Satisfactory U Unsatisfactory HU Highly Unsatisfactory 6 1 Bank performance Lending Supervision Overall 6 2 Borrower performance U Preparation Government implementation performance Implementation agency performance Overall 29 Rating OuHs S OHS Os OHS S Rating OHS S OSO s OHS S OHS S 000 coe 0000 SES O HU O HU O HU O HU O HU O HU O HU Annex 7 List of Supporting Documents l a e Ua PED Memorandum of the President for the Ecuador Mining Development and Environmental Control TA Project dated September 22 1993 Report No P 5988 EC Environmental Assessment Loan Agreement for the Ecuador Mining Development and Environmental Control TA Project signed October 20 1993 Loan 3655 EC Aide Memoires Back to Office Reports and PSRs Project Quarterly Progress Reports Project Annual Audit Reports Consultant Study Reports financed under the Project ca 200 including particularly titles in italic have been published most of the others are available as open files at SSM 1 Sector Legal and Institutional Reform overall 0 0 o o 0 Reformas al Reglamento de la Ley de Mineria 126 SSM June 1996 Fortalecimiento de las Instituciones P blicas del Sector Minero Luis Bilbao December 1996 Estadistica Minera 1991 1996 Gregorio Romun DINAMI June 1998 Diagn stico Institucional del Sec
3. 00 and 3 00 South T M Williams A Gaibor and P N Dunkley CODIGEM BGS November 1997 Geochemical Reconnaissance Survey of the Cordillera Occidental of Ecuador between 3 00 and 4 00 South Williams Gaibor and Dunkley CODIGEM BGS June 1998 Geochemical Reconnaissance Survey of the Cordillera Occidental of Ecuador between 1 00 and 2 00 South T M Williams W Castillo E Cruz and V Acitimbay CODIGEM BGS June 1999 Descripci n Bioecol gica y Socioecon mica de los Distritos Mineros Estudiados por el Subcomponente 3 5 de PRODEMINCA Ruth Elena Ruiz et al Fundacion Natura April 2000 Posiciones en torno a la difusi n de la Informaci n Geoqu mica generada por PRODEMINCA Informe Final CEPLAES April 2000 Levantamiento Geofisico A reo Cordillera Occidental de los Andes Ecuatorianos Informe Final versiones en ingl s y espa ol SIAL Geophysics May 2000 Geoscience in Integrated Resource Management Volume 1 The Western Cordillera Volume 2 Molleturo Protected Forest y Volume 3 Ecological Resreve Cotacachi Cayapas PRODEMINCA BGS May 2000 Geology of the Cordillera Occidental of Ecuador between 0 00 and 1 00 N Martin Boland et al DINAGE BGS June 2000 Evaluaci n de Distritos Mineros del Ecuador Volumen 1 Potencial Minero Met lico y Guias de Exploraci n Volumen 2 Dep sitos Epitermales en la Cordillera Andina Volumen 3 Sulfuros Masivos Alojados en Volcanitas Volumen 4 Dep sitos Por
4. 10 20 tons of gold per year in the medium term 6 8 years to meet increasing world demand for gold b the diversification of mining activities including base metals from sulfide deposits for producing copper zinc silver and molybdenum and c the possibility of moving the sector from a production of US 115 million in 1991 to more than US 600 million by 2000 the project objectives were fully justified as demonstrated by the results from project studies on the mineral endowment of Ecuador The second objective was also relevant considering the mostly informal and illegal artisanal and small scale mining ASM boom which had taken place during the 80s and early 90s in Southern Ecuador and while representing a significant generation of income had negative impacts on the communities and the environment within the area In addition the contamination related to ASM activities represented a potential threat to other downstream activities of prime importance for the national economy such as shrimp farming and banana plantations along the southern coastal zone or even to agriculture in some areas of northernmost Peru However to arrest degradation can be considered to have been a rather optimistic outcome considering the complexity of socio economic factors controling the development of ASM activities as well as the time frame required to change cultural more than technical attitudes from miners The project was consistent with the Bank s coun
5. Evaluaci n de los recursos minerales mediante muestreo geoqu mico en la zona de frontera suroriental de Ecuador con Per a fin de cooperar a un adecuado ordenamiento territorial incluyendo la definici n de nuevas reas protegidas d Mejoramiento integral de la gesti n de peque a miner a met lica en la zona sur de Ecuador considerando que sta es una alternativa principal entre las actividades econ micas de la zona e Apoyo y seguimiento en la formulaci n y aplicaci n de la Gu a de Relaciones Comunitarias la que podr a ser probada en varias zonas con operaciones mineras en exploraci n 5 Actuaci n y desempe o del BIRF en el proyecto 5 1 Evaluaci n de la actuaci n del BIRF en la identificaci n preparaci n evaluaci n y supervisi n del proyecto El Banco ha demostrado una amplia experiencia en este tipo de proyectos con un significativo despliegue de recursos t cnicos y econ micos durante todas las fases de Prodeminca La actuaci n del Banco fue oportuna y flexible para aceptar cambios de estrategia y ajustes durante toda la vida del proyecto Durante las diferentes fases del proyecto se tuvo suficiente apoyo y colaboraci n de los oficiales del BIRF 42 asignados al mismo Debemos destacar la presencia y constancia del Sr Gotthard Walser especialista minero del Banco durante estos seis afios 5 2 Diligencia y eficiencia demostrados y t cnicas administrativas financieras y ambientales empleadas El
6. Portovelo Zaruma and Nambija in Ecuador A preliminary report Staffan Skerfving SES April 1995 Caracterizaci n de las zonas de Pijil Ponce Enriquez Santa Rosa y Portovelo Anibal Vaca et al INAHMI July 1996 Diagn sticos Ambientales de las ciudades de Portovelo y Zaruma Santiago Espinoza August 1996 Viabilidad del Confinamiento Neutralizaci n y o Destoxificaci n de los Desechos Mineros Distrito Minero Bella Rica Provincia de Azuay Ecuador Tom Lundgren SES October 1996 Indicadores Biol gicos de Contaminaci n de la Miner a del Oro en Ecuador Olof Sangsfors and Lennart Lindestr m SES DINAPA February 1997 Memoria T cnica de los trabajos ejecutados por Fundaci n CENDA en la Regi n de Ponce 30 Enr quez y Pijili Fundacion CENDA April 1997 Estudio de prefactibilidad referente al confinamiento de los desechos mineros en el Distrito de Ponce Enr quez Bo Lundberg and Reidar Hoffner SES June 1997 Estudio de Factibilidad y Dise o de las Obras para el Confinamiento de los Desechos de Miner a Informe de Fase I Leoncio Galarza et al September 1998 La Mineria y La Comunidad Resultados y conclusiones de la conferencia de mayo 1997 en Quito Gary MacMahon editor PRODEMINCA BM December 1998 Homogeneizaci n de la Influencia de El Ni o sobre las Precipitaciones de las Cuencas Hidrogr ficas del Sector Minero comprendido entre Ponce Enr quez y Portovelo Edison Heredia et al INAHMI December
7. imposition and collection of mining royalties and fees and c development application and enforcement of mine safety and health standards and procedures ili Technical assistance and in service training with Swedish assistance to National Directorate of the Environment DINAMA on the development application and enforcement of environmental standards for the mining sector and on the carrying out of its other activities with regard to such sector focussing inter alia on a the establishment of appropriate organizational and staffing schedules and field inspection procedures in support of such application and enforcement b the design and establishment of effective mechanisms to facilitate the participation of nongovernmental organizations in environmental monitoring and rehabilitation related to mining activities and c the preparation of an institutional reform plan for DINAMA iv Technical assistance to Corporation for Geological Mining and Metallurgical Research and Development CODIGEM on strategies and mechanisms for a the privatization of publicly held mining properties or operations and for its divestiture of mining rights in Ecuador b attracting new private sector 3 investment to the mining sector in Ecuador and upgrading the technical and managerial capacity of artisanal and small scale miners or enterprises and c aiding mining enterprises or miners with respect to mining safety and health standards and pro
8. lo que resulta nocivo para proyectos de desarrollo 6 Actuaci n de la Rep blica del Ecuador como Prestatario 6 1 Evaluaci n general del prestatario El gobierno de Ecuador cumpli con los t rminos del convenio de pr stamo cuya participaci n se refleja en el xito del proyecto y cumplimiento de sus objetivos 6 2 Evaluaci n del MEM como agencia responsable de implementar el proyecto El MEM cumpli plenamente su rol de agencia responsable de la implementaci n del proyecto La estabilidad de la Unidad de Coordinaci n fue importante en esta gesti n lo que se refleja en el cumplimiento en cada componente del proyecto El proyecto deja adicionalmente un grupo de profesionales que han perfeccionado sus destrezas en manejo y administraci n de proyectos que podr a apoyar a otras actividades del Banco Mundial en el pa s 6 3 Evaluaci n de la actuaci n de las entidades ejecutoras La participaci n de las entidades ejecutoras ha sido variada La reforma institucional que se realiz en el ltimo a o del proyecto y que incluy disminuci n de personal afect el involucramiento de funcionarios y determin diferentes actitudes ante el proyecto Sin embargo de manera general se considera que las entidades bajo la Subsecretaria de Minas DINAMI DINAGE UAM USSIM est n adecuadamente preparadas para atender al sector de inversionistas mineros con agilidad transparencia y seguridad La presencia de consultores de largo ali
9. 0 04 2 79 42 3 16 0 111 6 3 4 Thematic Mapping 1 90 0 20 1 10 2 34 0 07 1 33 123 2 35 0 120 9 3 5 Ore Districts Assmt 1 70 0 20 1 12 0 00 65 9 0 0 3 6 M LS 1 20 0 10 0 60 0 48 0 03 0 85 40 0 30 0 141 7 3 7 Mining Cadastre 0 50 0 05 0 40 0 73 0 05 0 60 146 0 100 0 150 0 3 8 Small scale Mining 1 00 0 15 1 00 0 56 0 06 1 16 56 0 40 0 116 0 Total 14 00 1 90 8 10 11 00 0 75 8 80 78 6 39 5 108 6 E 24 Annex 3 Economic Costs and Benefits Not applicable 25 Annex 4 Bank Inputs a Missions Stage of Project Cycle No of Persons and Specialty Performance Rating e g 2 Economists 1 FMS etc Implementation Development Month Year Specialty Progress Objective Identification Preparation 02 28 03 0 1989 Mining Specialist 08 26 09 06 1989 Mining Specialist Mining Legal Specialist 09 24 30 1989 Mining Economist 10 10 15 1989 Mining Economist 04 30 07 07 1990 Mining Specialist Mining Economist 07 29 08 04 1990 Mining Specialist 11 26 12 03 1990 Mining Specialist 04 27 05 26 1992 Operations Officer Mining Specialist 09 09 14 1992 Operations Officer Appraisal Negotiation 11 30 12 17 WB Operations Officer 1992 Mining Economist Environmental Specialist Disbursement Specialist ODA Economist Environmental Specialist SIDA Mining Specialist 05 25 26 1993 Division Chief Supervision 06 27 07 02 Operations Officer S S 1994 11 15 17 1994 2 Operatio
10. 1998 Plan Conceptual de Manejo de Desechos Mineros Ricky Collins SES February 1999 Monitoreo Ambiental de las Areas Mineras en el Sur de Ecuador 1996 1998 SES UAM April 1999 Oro Limpio Resumen y conclusiones del monitoreo ambiental en la zona Sur del Ecuador formato popular PRODEMINCA SES April 1999 Resultados de los Muestreos Bioacu ticos Complementarios en las Areas Mineras del Sur del Ecuador Olof Sangfords and Adriana Flachier SES May 1999 Evaluaci n T cnica realizada en Areas Agricolas de Ponce Enr quez Afectadas por las Actividades Mineras Milton Carrasco and Adriana Flachier June 1999 Dise o de Obras Hidr ulicas Luis Cornejo et al June 1999 Trabajo en la Miner a del Oro Exposici n a Polvo Siliceo Ruido y Metales Pesados y Salud Ocupacional en Cuatro Areas del Ecuador Raul Harari et al June 1999 Esquema de Gesti n Ambiental Participativa para la Ejecuci n y Mantenimiento de las Obras de Mitigaci n Ambiental en las Sociedades Mineras de Bella Rica y San Gerardo Cecilia Mantilla et al September 1999 Esquema de Manejo de Aguas EMA Luis Cornejo September 1999 Manual de Operaci n y Manejo del Agua en las Instalaciones Mineras Luis Cornejo October 1999 Plan de Obras a ejecutarse como Segunda Etapa del PMA Luis Cornejo October 1999 Exposure to and Toxic Effects of Mercury in the Ecuador ian Gold Mining Industry Lars Gerhardsson et al Lund University October 1999 Sistematizaci n del
11. Banco actu con la debida diligencia y eficiencia y de conformidad con las mejores t cnicas administrativas financieras y ambientales acordadas en el convenio de pr stamo No 3655 EC suscrito con la Rep blica de Ecuador El departamento de Desembolsos fue un apoyo a la Unidad de Coordinaci n de proyecto 5 3 Calificaci n del grado de apoyo y compromiso del BIRF en el proyecto El Banco apoy permanentemente las solicitudes del proyecto y las misiones de evaluaci n aportaron oportunamente con sugerencias que ayudaron al cumplimiento de los objetivos propuestos Se percibi que el Banco tuvo con Prodeminca especial deferencia e inter s 5 4 Panel de Inspecci n La aceptaci n de una denuncia de una ong poco representativa y una larga investigaci n de la misma por parte de un panel de inspecci n pudo afectar innecesariamente el normal desarrollo del sector minero en el pais y las relaciones entre la Rep blica del Ecuador y el Banco en especial para futuros proyectos Si bien el gobierno de Ecuador considera objetiva y adecuada la actuaci n del IP y coincide con sus sugerencias y observaciones tambi n cree que estas instancias deben ser muy rigurosas al calificar la representatividad y validez de denuncias que como la presente consideramos desproporcionada En nuestro pais cada vez con mas frecuencia se tiende a acudir a tribunales internacionales con denuncias que buscan notoriedad sin mayores pruebas ni posibilidades de xito
12. Geological Mapping 4 10 3 57 87 1 3 4 Policy Implementation Thematic Mapping 2 80 3 74 133 6 3 5 Policy Implementation Assessment of Ore Districts 1 70 1 12 65 1 3 6 Policy Implementation Mining Information Systems 1 70 1 36 80 3 7 Policy Implementation New Mining Cadastre 0 90 1 38 153 3 3 8 Policy Implementation Small scale Mining 2 00 1 79 89 5 Total Baseline Cost 21 70 20 55 Physical Contingencies 2 30 Total Project Costs 24 00 20 55 Total Financing Required 24 00 20 55 Project Costs by Procurement Arrangements Appraisal Estimate US million equivalent 1 Expenditure Category ICB Procurement Mahad N B F Total Cost NCB Other pa 1 Works 2 50 1 30 0 20 4 00 es 0 1 00 0 00 3 50 2 Goods 2 30 0 50 0 00 0 00 2 80 20 0 50 0 00 0 00 2 70 3 Services 6 00 1 20 0 00 7 60 14 80 6 00 0 60 0 00 0 00 6 60 4 Incr Operating Costs 0 00 0 00 1 60 0 00 1 60 0 00 0 00 0 70 0 00 070 5 Training and Education 0 00 0 00 0 50 0 30 0 80 Material 0 00 0 00 050 0 00 0 50 6 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 Total 10 380 1 70 3 40 8 10 24 00 10 70 L 1 10 2 20 0 00 14 00 23 Project Costs by Procurement Arrangements Actual Latest Estimate US million equivalent Procurement Method NAE NCB Other eo Expenditure Category ICB Total Cost
13. Implementation Completion Report Ministry of Environment Ministry of Energy and Mines Mining Sector Policy and Strategy Paper Nongovernmental Organization Public Mining Institutions Quality Assurance Group Overseas Development Administration Project Status Report Mining Environment Unit Swedish Environmental Systems Undersecretariat of Mines MEM Undersecretariat of Environmental Protection MEM Swedish International Development Agency Vice President David De Ferranti Country Director Isabel Guerrero Sector Manager Peter van der Veen Task Team Leader Gotthard Walser FOR OFFICIAL USE ONLY ECUADOR MINING DEVELOPMENT AND ENVIRONMENTAL CONTROL TECHNICAL ASSISTANCE CONTENTS Page No 1 Project Data 1 2 Principal Performance Ratings 1 3 Assessment of Development Objective and Design and of Quality at Entry J 4 Achievement of Objective and Outputs 6 5 Major Factors Affecting Implementation and Outcome 11 6 Sustainability 12 7 Bank and Borrower Performance 13 8 Lessons Learned 15 9 Partner Comments 18 10 Additional Information 20 Annex 1 Key Performance Indicators Log Frame Matrix 22 Annex 2 Project Costs and Financing 23 Annex 3 Economic Costs and Benefits 25 Annex 4 Bank Inputs 26 Annex 5 Ratings for Achievement of Objectrves Outputs of Components 28 Annex 6 Ratings of Bank and Borrower Performance 29 Annex 7 List of Supporting Documents 30 Annex 8 Borrower s Evaluation Report 35 Map IBRD 24
14. Mining Specialist Social S S Specialist 10 29 11 14 1999 7 WB Mining Specialist 2 Social S Specialists DFID Mining Specialist SIDA 2 Project Officers and Environmental Specialist 06 06 17 2000 6 Sector Manager Mining S Specialist Environmental Specialist 3 Social Specialists ICR 08 29 09 06 1 Mining Specialist 2000 10 29 11 02 2000 3 Mining Specialist 2 Social Specialists 11 19 12 01 2000 3 WB Mining Specialist 2 Social Specialists DFID Environmental and Mining Specialists b Staff Stage of Project Cycle Actual Latest Estimate i No Staff weeks US 000 Identification Preparation 48 7 243 7 Appraisal Negotiation 20 9 104 4 Supervision 98 9 494 6 ICR 9 6 48 Total 178 2 890 7 27 Annex 5 Ratings for Achievement of Objectives Outputs of Components H High SU Substantial M Modest N Negligible NA Not Applicable Rating C Macro policies OH OSUOM ON NA Sector Policies OH SUOM ON OMNA Physical OH SUOM ON ONA C Financial OH OSUOM ON O na _ Institutional Development OH SUOM ON ONA C Environmental OH SUOM ON ONA Social Poverty Reduction OH OSUOM ON O na O Gender OH OsUOM ON 0 na C Other Please specify OH OSUOM ON ONA L Private sector development OH OSUOM ON ONA U Public sector management OH SUOM ON OMA _ Other Please specify OH OSUOM ON OMA 28 Annex 6 Ratings of Bank and Borrower Performance
15. benefits and they were highlighted in the project documentation However considering the project was a A environmental category the project would have benefited of a more robust and expanded EA process 7 2 Supervision The Bank s performance during the implementation of the project was satisfactory Over the six years of project implementation there were 28 supervision missions about 4 5 missions per year As stated in the Inspection Panel report summarizing the findings of its investigation on the mapping component of the project see section 10 the Panel found that frequent missions were undertaken and that there was 13 considerable follow up by the Bank on outstanding issues Moreover it appears that the composition and scope of the missions evolved with Project requirements The Bank s supervision teams included mining engineers and specialists in mining sector energy economics environment operations anthropology sociology and law They worked closely with the Government cofinanciers stakeholders and the implementing agencies and their working relationship was cordial and productive Outside consultants were used for specific aspects of certain project components especially in environmental aspects of the project Aide memoires were regularly prepared and transmitted The Bank provided comments to the studies conducted under the project The Form 590s and Project Status Reports PSRs realistically rated the performance
16. de comunidades y gobiernos locales Todo esto ha permitido racionalizar el debate entre conservaci n de biota versus desarrollo minero que ha marcado la evoluci n del Proyecto en su ltima etapa Uno de los aportes importantes ha sido la publicaci n y amplia difusi n de resultados del proyecto los que presentando de manera objetiva el balance entre ventajas y desventajas de la actividad minera y sus relaciones con aspectos ambientales han contribuido a orientar un permanente debate sobre explotaci n de recursos naturales en un pa s megadiverso Esto ha sido posible porque anteriormente se cumplieron algunas fases previas a Difusi n de informaci n La publicaci n de los diagn sticos iniciales incluyendo la relaci n de la miner a con pueblos indios al inicio del proyecto asi como de los resultados del monitoreo ambiental de las reformas legales promovidas bajo el proyecto y de las perspectivas de nuevos yacimientos han superado un vacio existente en el pa s incrementando la confianza e informaci n indispensables para procesos de consulta Las publicaciones consideraron diversas audiencias unas con nfasis t cnico y otras con inter s comunitario o ambiental b Impacto de la difusi n de informaci n En Ecuador no existe tradici n de difusi n masiva de resultados sobre manejo de recursos naturales por lo que hemos tenido diversas reacciones amplia aceptaci n en universidades y en las principales ong s por el valor
17. de obtenci n manejo y difusi n de informaci n cartogr fica y geol gica para disponer de un catastro minero y sistemas de informaci n computarizados y para dar asistencia integral a los mineros de peque a escala 1 3 Cumplimiento de los objetivos de PRODEMINCA Un enfoque integral y multidisciplinario Si bien los objetivos del proyecto se han mantenido desde su inicio el enfoque a cada uno de los aspectos evolucion durante la implementaci n privilegiando intervenciones metodolog as y procesos multidisciplinarios que integraron aspectos ambientales y sociales y permitieron una mayor participaci n de la sociedad civil y ong s En una primera etapa esto se reflej en la preparaci n de diagn sticos socioecon micos y ambientales en varios subcomponentes y posteriormente en el nfasis para impulsar soluciones integrales y participativas en temas como salud ocupacional minera remediaci n ambiental y difusi n de resultados Una descripci n detallada de los principales logros del proyecto consta en varias publicaciones realizadas En las siguientes l neas los comentaremos solamente en forma breve Modernizaci n del marco legal del sector Al t rmino del proyecto el gobierno del Ecuador en adelante el gobierno o el MEM considera que cuenta con un marco legal adecuado y competitivo respecto a otros pa ses que buscan recibir inversi n minera en Am rica Latina Se logr mejorar el marco legal del sector 35 genera
18. fueron modificados durante el proyecto siempre en el contexto del objetivo general Inicialmente el proyecto supon a fortalecer la Direcci n Nacional de Medio Ambiente DINAMA y la Corporaci n de Desarrollo e Investigaci n Geol gico Minero Metal rgica CODIGEM las que por efecto del proyecto han sido transformadas a Unidad Ambiental Minera UAM bajo la Direcci n Nacional de Miner a DINAMI y Direcci n Nacional de Geolog a DINAGE desde marzo de 1999 Esta variaci n en la reforma institucional propuesta signific un mejor cumplimiento de los objetivos del proyecto aunque tambi n mayores estudios y esfuerzos para lograrlo Los componentes relativos a aspectos ambientales supon an inicialmente un r pido monitoreo ambiental con aporte de entidades nacionales con capacidad de medici n y an lisis lo que a la postre no fue posible obtener Los estudios sobre salud humana y su afectaci n por actividades mineras de peque a escala requirieron mas tiempo del previsto ya que cubrieron problemas derivados de la pobreza y condiciones socioculturales imperantes en los distritos de peque a miner a lo que ampli los objetivos planteados inicialmente y as como sus resultados hasta poner en funcionamiento una unidad de salud en coordinaci n con otro proyecto del Banco Mundial en la zona Proyecto Fasbase del Ministerio de Salud y con aportes de la comunidad local Al inicio no estuvo suficientemente valorada la necesidad de estab
19. identify sources of financing to support the continuous improvement of a the environmental performance of small scale mining e g the implementation of the environmental mitigation works in the border area with Peru and b relationships between the communities and mining development b Cofinanciers Comments received from DFID The ICR identifies there seems to have been a significant delay following project implementation before environmental and institutional development issues were tackled by either WB or DFID Little seems to have been done on these issues in the first 3 years of the project Whilst this is in some measure due to institutional issues in Ecuador at that time with several changes of government occurring and the Ministry of Environment being temporarily disbanded neither WB or DFID appeared to be pro active in tacking these issues during the early stages of the project A more pro active approach was taken during the final 2 years of the project Whilst it is true to say that the project now has had successful outcomes the impacts could have been further improved particularly on the institutional development aspects had more concerted action been taken at the outset of the project rather than in the latter half of the project DFID supported the project by providing technical assistance for the implementation of the Geological Information and Mapping GIMP component of the project Although geological thematic mapping
20. improve the existing Law was passed in August 2000 as part of the so called Ley Trolle H package complementing the essential legal components to provide a sustainable and competitive framework for the development of the mining sector Significant progress regarding the development of more comprehensive consultation mechanisms for the mining sector an objective identified by SSM and the project in 1996 to respond to the growing awareness that local communities need to be closely involved and later as a consequence of the adoption of a new Ecuadorian Constitution 1998 has also been made This will be completed beyond project closure e The institutional framework was restructured and capacities were strengthened according to best practice to deal with the functions of a modern State as a regulator of the sector activities mining and environmental permits and provider of basic information infrastructure The role of the State as the owner and operator of mines has been discontinued The restructuring also meant a rationalization of personnel from about 240 to 120 persons e The technical components achieved the initial objectives in a very satisfactory way including the development of environmental monitoring capacity the provision of geo scientific information and multi sector data bases sector management systems for mining concessions and Environmental Impact Assessments EIAs and improvement of artisanal and small scale mining con
21. inter institutional cooperation and multi disciplinary approach partly because of weaknesses of institutions primarily responsible for these tasks b selection and monitoring of consultants partly because of pressures exerted by government agencies to hire specific individuals who were not fully committed to the project objectives and c project accounting However based on the recommendations made under the mid term review these deficiencies were subsequently addressed in a very satisfactory manner and the PCU in close coordination with the SSM and MEM and functioning as an interface between all project stakeholders played a proactive and critical role to achieve the projects objectives and their sustainability 7 7 Overall Borrower performance The overall performance of the Borrower was satisfactory 8 Lessons Learned e Sector development should be part of an overall political and economic reform Beyond 15 commitment of sector authorities an important risk to assess during project preparation and implementation is the consistent integration of sector development within an overall economic reform and the continued political support to implement the needed legal and institutional changes In Ecuador sector reform has been successful but has not yet fully achieved its foreseen outcome in term of sector foreign investment and related growth indicators This is due partly to the perception investors have regarding political sta
22. management of the data In addition considering the increasing political decentralization taking place in Ecuador an adequate cooperation needes be established between the ME SSM and local governements municipios and provincial councils to maintain consistent environmental norms at all levels 6 2 Transition arrangement to regular operations The successful transition to regular operations is facilitated by the fact that the reformed PMIs and the management systems were operational at project closure and the legal framework through the 2000 amendment to the Mining Law includes the allocation of funding from the annual land fees to surface and mining rights for the operation of the PMIs core functions However political stability and overall improvement of civil service rules are crucial factors to ensure the sustainability of the project outcomes 7 Bank and Borrower Performance Bank 7 1 Lending The Bank s performance in the identification of the project was in general satisfactory It was consistent with the Government s development strategy and the Bank s assistance strategy for Ecuador The Bank was proactive in initiating the dialogue with the Government cofinanciers and the MEM for the sector reform The Bank had a good skill mix and had a good working relationship with the Borrower The project preparation was also well organized systematic and satisfactory During the project appraisal the Bank assessed the project s risks and
23. of the project both in terms of achievement of development objectives and project implementation Throughout the implementation of the project consultation meetings seminars presentations and other activities were organized for Nongovernmental Organizations NGOs local communities and the public at large These events in general were useful to convey project objectives activities and results In addition if project activities concerned a particular community the local authorities were fully apprised as for instance was the case in the Intag region where meetings were held with the mayor of Cotacachi in March 1998 and with the population of the Intag area at a popular assembly in April 1998 7 3 Overall Bank performance Overall the Bank performance was satisfactory during project preparation appraisal and implementation Borrower 7 4 Preparation The project preparation which started in 1989 was finalized only in 1993 During these four years the Government commitment fluctuated with the frequent changes in sector Minister and Undersecretaries as well as with the change in Government Administration in 1992 While the project received strong commitment during 1989 91 as demonstrated by the preparation and passing of a new Mining Law Ley 126 and again in 1993 the commitment was lacking during 1992 and most of 1993 However the government officials and staff of implementing agencies worked closely with the Bank s project team on
24. que implica para el desarrollo de investigaci n y tesis de grado y para planificaci n y desarrollo clima de confianza en los distritos mineros ya que al conocer los resultados de su situaci n de salud y de la contaminaci n causada en su entorno logramos condiciones para establecer comit s locales de gesti n ambiental que superan los niveles de denuncia y realizan actividades de remediaci n con aportes importantes de cada comunidad La difusi n de los datos geoqu micos tambi n ha generado expectativas en algunas organizaciones del norte de Ecuador por su supuesta influencia en la presencia de mineros en reas protegidas Ante ello se realiz un estudio sobre las percepciones que la poblaci n del valle de Intag zona relativamente aislada al Occidente de Cotacachi cuyos resultados fueron devueltos en una publicaci n a la comunidad y se encarg a dos ong s representantes de la sociedad civil el monitoreo del uso de la informaci n generada por Prodeminca en reas naturales protegidas por un per odo de dos a os a partir de enero de 2001 Tambi n se incrementaron las publicaciones sobre uso de las geociencias y su relaci n con eventuales yacimientos mineros c Miner a de peque a escala La informaci n y consultas a actores sociales claves grupos de comunidades afectadas trabajadores due os de los negocios informales y autoridades locales permiti establecer procedimientos para monitorear y remediar impactos en la salud
25. 579R This document has a restricted distribution and may be used by recipients only in the performance of their official duties Its contents may not otherwise be disclosed without World Bank authorization Project ID P007129 Project Name MINING TECHNICAL ASSISTANCE Team Leader Gotthard Walser TL Unit CMNPO ICR Type Core ICR Report Date December 26 2001 1 Project Data Name MINING TECHNICAL ASSISTANCE Country Department ECUADOR Sector subsector NN Mining amp Other Extractive KEY DATES PCD 04 09 1990 Effective Appraisal 11 30 1992 MTR Approval 10 21 1993 Closing L C TF Number CPL 36550 Original 01 01 1994 06 01 1996 06 30 1999 Region SCL 3655A SCPD 3655S Latin America and Caribbean Region Revised Actual 07 18 1994 11 10 1997 12 31 2000 Borrower Implementing Agency Government of Ecuador GOE Ministry of Energy and Mines MEM Other Partners Department for International Development DFID U K Swedish International Development Agency SIDA Sweden STAFF Current Vice President David De Ferranti Country Manager Isabel M Guerrero Sector Manager Peter A Van Der Veen Team Leader at ICR Gotthard Walser ICR Primary Author Sati Achath Gotthard Walser 2 Principal Performance Ratings At Appraisal Shahid Javed Burki Ping Cheung Loh Paul Meo Aura Garcia de Truslow HS Highly Satisfactory S Satisfactory U Unsatisfactory H
26. Document of The World Bank FOR OFFICIAL USE ONLY Report No 22365 IMPLEMENTATION COMPLETION REPORT CPL 36550 SCL 3655A SCPD 3655S ON A LOAN IN THE AMOUNT OF US 11 0 MILLION TO ECUADOR FOR A MINING DEVELOPMENT AND ENVIRONMENTAL CONTROL TECHNICAL ASSISTANCE PROJECT December 26 2001 Sector Management Unit Mining Department CMNDR Country Management Unit for Bolivia Ecuador and Peru LCC6C Latin American and the Caribbean Region LCR This document has a restricted distribution and may be used by recipients only in the performance of their official duties Its contents may not otherwise be disclosed without World Bank authorization ASM BGS CODIGEM DFID DINAMA DINAMI DINAPA DINAGE EIA GIMP GIS GOE ICR MA MEM MSPSP NGO PMI QAG ODA PSR UAM SES SSM SSPA SIDA CURRENCY EQUIVALENTS Exchange Rate Effective December 31 2000 Currency Unit US Dollars FISCAL YEAR January 1 December 31 ABBREVIATIONS AND ACRONYMS Artisanal and Small scale Mining British Geological Survey Corporation for Geological Mining and Metallurgical Research and Development Department for International Development DFID U K National Directorate of the Environment National Directorate of Mining National Directorate of Environmental Protection National Directorate of Geology Environmental Impact Assessment Geological Information and Mapping Program Geological Information System Government of Ecuador
27. INCE BOUNDARIES INTERNATIONAL BOUNDARIES Y62S77 CGI
28. L Highly Likely L Likely UN Unlikely HUN Highly Unlikely HU Highly Unsatisfactory H High SU Substantial M Modest N Negligible Outcome S Seres L Institutional Development Impact SU Bank Performance S Borrower Performance S QAG if available Quality at Entry Project at Risk at Any Time Yes ICR 3 Assessment of Development Objective and Design and of Quality at Entry 3 1 Original Objective The two overall objectives of the project were to a attract new private mining investment and support the systematic development of increased yet environmentally sound mineral production and b arrest mining related environmental degradation and mitigate the damage that results from the use of primitive and inadequate technology by informal miners The specific objectives included a assisting the Government in implementing its new Mining Law passed in 1991 by strengthening sectoral institutions both at the policy and core functions levels b upgrading small scale miners technology c instituting applicable environmental standards and a monitoring system d helping contain and possibly detoxify mining related hazardous wastes and e monitoring mining related health issues among the mining communities The first objective of the project was relevant for the country and realistic from a technical point of view In particular considering the a potential for developing an industrial scale mining sector producing
29. PARA EL DESARROLLO MINERO Y SU CONTROL AMBIENTAL EN ECUADOR PR STAMO BIRF 3655 EC Comentarios del Prestatario 1 Objetivos del Proyecto 1 1 Objetivos generales del proyecto El prop sito del Proyecto de Asistencia T cnica para el Desarrollo Minero y su Control Ambiental PRODEMINCA fue a atraer nueva inversi n privada y apoyar un desarrollo sistem tico para incrementar la producci n minera en el Ecuador cuidando el medio ambiente y las relaciones con las comunidades circundantes a prospectos mineros y b detener y mitigar la degradaci n del medioambiente que resulta del uso de tecnolog a inadecuada por parte de los mineros artesanales algunas operaciones mineras de peque a escala en el Ecuador 1 2 Objetivos espec ficos del proyecto Para lograr nuevas inversiones privadas en la miner a ecuatoriana y apoyar la producci n de minerales en condiciones amigables con la naturaleza y social y ambientalmente sostenibles se plante Un mejoramiento del marco legal e institucional modernizando y fortaleciendo las entidades del sector p blico minero a fin de mejorar e incrementar su capacidad de manejo del catastro minero seguimiento y monitoreo de las operaciones en sus aspectos t cnicos fiscales y ambientales Desarrollo de varios objetivos t cnicos para establecer o incrementar la capacidad de monitoreo y mitigaci n de da os ambientales por acci n de cierta miner a de peque a escala para fortalecer la capacidad
30. Plan de Capacitaci n para los Comit s de Gesti n Ambiental de Shumiral y Ponce Enr quez Taller de Gesti n Ambiental y G nero Cecilia Mantilla et al March 2000 Medidas Ambientales Emergentes y el Establecimiento de un Plan Maestro Ambiental en el Distrito Minero Portovelo Zaruma y la Cuenca del Rio Puyango Plan Maestro Ambiental Swedish Geological AB April 2000 El Proceso de Configuraci n de la Gesti n Ambiental Participativa en las Zonas Mineras de Ponce Enr quez y Shumiral Cecilia Mantilla et al June 2000 Curso de prevenci n de las enfermedades ocupacionales en la miner a aurifera Fernando Carpio August 2000 La Salud de Nuestros Rios Manual y Metodo Simple de Evaluacion de la Calidad de los Rios Adriana Flaschier Ocotber 2000 4 Geological Information Infrastructure o Geology of the Cordillera Occidental of Ecuador between 1 00 and 2 00 S McCourt Duque and Pilatasig CODIGEM BGS June 1997 Geology of the Cordillera Occidental of Ecuador between 2 00 and 3 00 S Peter Dunkley and Alina Gaibor CODIGEM BGS June 1997 Geology of the Cordillera Occidental of Ecuador between 3 00 and 4 00 S Warren T Pratt Juan Figueroa and Bolivar Flores June 1997 31 o o Geology of the Cordillera Occidental of Ecuador between 0 00 and 1 00 S R Hughes and R Berm dez CODIGEM BGS June 1997 Geochemical Reconnaissance Survey of the Cordillera Occidental of Ecuador between 2
31. a continual basis throughout preparation period 7 5 Government implementation performance The Government changed five times during project implementation and this situation affected both commitment and performance From 1994 to 1996 the authorities were fully committed to the project and its mining development strategy was consistent with the project objectives The modified Mining Law the Health and Safety and the Environmental regulations for mining activities were ready by the end of this period August 1996 During the period 8 1996 to 2 1997 the government was only partly supportive of the project objectives For example while not opposed to private sector involvement in mining sector it reversed the process of release of areas controlled by CODIGEM initiated under the previous period With respect to implementation objectives it was less interested in long term development measures such as institutional capacity building Instead it was more keen on meeting immediate and short term objectives for example the building of tailings dams From February 1997 and until August 1998 the Government commitment to the project objectives was restated and progress in reforming the legal framework were made In August 1998 a strongly committed team was appointed to manage the sector and more decisive actions to achieve the project objectives were initiated This team with minor changes and overall commitment were maintained until project closur
32. a Artesanal de Oro en el Ecuador Reidar Hoffner Jorge Barrag n Solange Izurieta and Alcides S nchez October 1996 Investigaciones de Beneficio de Menas Auriferas de Ponce Enriquez para la eliminaci n del proceso de amalgamaci n y mejoramiento en la recuperaci n de oro Bengt Fagerberg and Jos Valencia SES April 1997 Relaci n entre pueblos indigenas y miner a aurifera Miguel Carvajal et al May 1997 Perspectiva socioecon mica de la Peque a Miner a y la Miner a Artesanal estudio de caso 33 de Nambija y Ponce Enr quez Anders Rudgvist and Miguel Carvajal May 1997 o Inspecci n t cnica y asesor a para la formulaci n de recomendaciones preventivas ante el fen meno de El Ni o en reas mineras L Galarza et al November 1997 o Documento de Apoyo para el Seminario Taller sobre formulaci n de Proyectos Sociales realizado entre el 8 y el 12 de diciembre de 1997 J C Cuellar December 1997 o Censo Minero de Zaruma y Portovelo SSM PRODEMINCA May 1998 o Estudio de canteras 6 vol menes correspondientes a las provincias de Azuay Ca ar Chimborazo Tungurahua Bol var y Loja CODIGEM July 1998 o Investigaciones de beneficio de menas auriferas de Los Ingleses y Muluncay B Fagerberg and J Valencia SES July 1998 o Curso de Seguridad Minera W Bonilla August 1998 o Estudio Ambiental de las zonas de canteras Diagn stico Ambiental de explotaci n de canteras de materiales de construcci n en la provinci
33. a del Guayas Informe Ejecutivo CODIGEM October 1998 o Procesamiento de Menas Auriferas en el Sur del Ecuador B Fagerberg and J Valencia SES November 1998 o Informe Final Trabajo de Asistencia T cnica a la Sociedad Jes s del Gran Poder Escuela Politecnica Nacional June 1999 o Deslizamiento Area Minera Fortuna DINAGE December 1999 o Estudio del Deslizamiento en la Parroquia San Francisco del Vergel Cant n Palanda Provincia de Zamora Chinchipe DINAGE December 1999 o Procesamiento de Menas Auriferas en el Sur del Ecuador La Cianuracion Industrial una Alternativa a la Amalgamacion Ximena Diaz Ernesto de la Torre Pedro Mantilla y Antonio Bermeo PRODEMINCA November 2000 Management Response to Request for Inspestion Panel Review of Ecuador Mining Development and Environmental Control Technical Assistance Project Loan 3655 EC WB Management January 2000 Request for Inspection Ecuador Mining Development and Environmental Control Technical Assistance Project Loan 3655 EC Inspection Panel May 2000 Investigation Report on Ecuador Mining Development and Environmental Control Technical Assistance Project Loan 3655 EC Report INSP R2001 1 February 2001 Management Report and Recommendation in Response to the Inspection Panel Investigation Report WB Management April 2001 Borrower s Evaluation Report MEM SSM July 2001 Additional Annex 8 Borrower s Evaluation Report PROYECTO DE ASISTENCIA TECNICA
34. a miner a para superar la informalidad mejorar su rendimiento reducir sus impactos ambientales y sociales negativos e incorporarla al sector de peque a industria Durante el proyecto se ha logrado a la legalizaci n de la mayor a de asentamientos mineros de hecho que exist an en 1995 en miner a aur fera de 169 hoy solo quedan 3 b apoyar la creaci n de asociaciones de peque os mineros c iniciar procesos de remediaci n ambiental d introducir tecnolog as alternativas al uso de mercurio y e mejorar la relaci n con las comunidades locales Informaci n Geocientifica Entre las actividades previstas en el proyecto se inclu a la recolecci n de informaci n producci n y distribuci n de mapas geol gicos y bases de datos geoqu micos de un rea de 36 000 km2 en la Cordillera Occidental de Los Andes Este trabajo se realiz con apoyo del Servicio Geol gico Brit nico BGS y t cnicos ecuatorianos tanto de DINAGE como independientes El trabajo supuso esfuerzos log sticos y t cnicos superiores a lo programado sin embargo de lo cual se concluy en el tiempo previsto y con una calidad superior ya que los mapas fueron publicados en escala 1 200 000 inicialmente se previ hacerlo en 1 250 000 y se dispone de informaci n digitalizada sobre geolog a geoqu mica con un muestreo de sedimentos con densidad de 1 m 2 44 km2 mientras inicialmente se esperaba 1 5 km2 y geof sica as como bases de datos multisectori
35. al awareness among stakeholders and miners and increased environmental management capacity of small scale miners and the government see section 4 2 and text box 3 4 2 Outputs by components A Policy Management Legal framework The project paid significant attention to the modernization and improvement of the sector legal framework The existing Mining Law Law 126 was prepared with the support of the Bank during project preparation and passed in 1991 During implementation three regulations of the existing Mining Law namely a General Regulations b Health and Safety Regulations and c Environmental Regulations were prepared and approved by the Executive A draft new Mining Law focusing particularly on fiscal environmental and social aspects as well as on improved mining rights security of tenure was prepared and was subjected to an open and broad consultation process It was presented to Congress in the midst of general political difficulties and was not debated Finally most of the elements of the draft Law were incorporated in an amendment to the Mining Law and included in the so called Trolle II package passed by Congress in August 2000 Institutional Strengthening The institutional reform went through a process of varying political support during project implementation depending on the commitment of the successive governments but regained a positive and decisive momentum from late 1998 until the end of the project It resul
36. ales que contribuir n a la planificaci n de uso de territorios en esta cordillera La difusi n de esta informaci n que incluye zonas del patrimonio nacional de reas naturales se complementa con un sistema de monitoreo de la informaci n que realizar n los Ministerios de Ambiente y de Energ a y Minas con la colaboraci n de dos de las mas prestigiosas ong s ambientalistas Fundaci n Natura y CEDA as como con una publicaci n sobre Geoqu mica y Ambiente que resume los usos multidisciplinarios principalmente relacionados a gesti n de uso territorial y de aguas prevenciones ambientales salud infraestructura de caminos y obras civiles riesgos naturales de la informaci n tem tica Se produjeron tambi n estudios de alta calidad sobre varios tipos de dep sitos minerales existentes en el pa s en los que se sistematizan los principales modelos de yacimientos reconocidos Este trabajo se resume en un Manual de Exploraci n que incluye las principales condiciones legales institucionales t cnicas y ambientales esto ltimo con la cooperaci n de Fundaci n Natura necesarias para realizar exploraci n en el pa s Sistema de Informaci n Minera Al t rmino del proyecto debemos se alar que el sector geol gico minero p blico cuenta con una red de computaci n que enlaza los sistemas ambientales geol gicos y de administraci n minera desarrollados en DINAMI y DINAGE permitiendo la consulta tanto a funcionarios e interesados ta
37. amorro and Klas Lundquist DINAMI SES December 1997 SIGM Informe Final Krister Lindquist SES June 1999 Manual de Administraci n y T cnico del Sistema de Administraci n de Estudios Ambientales 32 Mineros Washington Romero UAM SSM November 1999 Manual de Usuario del Sistema de Administracion de Estudios Ambientales Mineros Washington Romero UAM SSM November 1999 Formularios de Evaluacion de Impactos Ambientales Mineros y de Denuncias Ambientales Mineras Washington Romero UAM SSM November 1999 Sistema de Registro y Notificaci n de Enfermedades Mineras Manual T cnico y de Administraci n y Manual del Usuario Juan Chamorro SSM November 1999 GeoCampo Base de Datos para Geolog a de Campo P Duque February 2000 SIP Sistema de Informaci n de Proyectos Est ndares y Control de Calidad P Duque February 2000 Manual de Normas y Diccionarios para Mapeo Digital versi n 2 P Duque et al February 2000 Manual de Administraci n Sistema de Administraci n Minera SIM Washington Rosero May 2000 Manuales del Sistema de Informaci n Geogr fica Geol gica Minera Manuales del SIGEM Tecservin Cia Ltda May 2000 Manual de Usuario Interface SIP SIGEM Washington Rosero June 2000 Sistema de Administraci n de los Derechos Mineros SADMIN Manual de Administraci n del Sistema y Manual de usuario Luis O a and Juan Chamorro DINAMI June2000 Artisanal and Small scale Mining O Prelim
38. as principales propuestas han sido recogidas en las reformas vigentes desde diciembre de 2000 Con ello puede considerarse que este objetivo ha sido cumplido muy satisfactoriamente y salvo ligeras modificaciones al reglamento ambiental no se requerir n reformas legales en un futuro cercano Instituciones P blicas Mineras Se logr la transformaci n y fortalecimiento de las instituciones p blicas mineras acorde a principios modernos sobre el rol del estado como regulador y responsable del monitoreo de la actividad minera El sector estatal solamente realizar la investigaci n geocient fica regional a trav s de la recientemente creada Direcci n Nacional de Geolog a DINAGE que sustituy a la Corporaci n de Desarrollo e Investigaci n Geol gico Minero Metal rgica CODIGEM tambi n se logr la reestructuraci n y fortalecimiento de la Direcci n Nacional de Miner a DINAMI y sus oficinas regionales asi como la creaci n de la Unidad Ambiental Minera UAM Los funcionarios recibieron capacitaci n y preparaci n para sus nuevas funciones dentro de este nuevo marco institucional Gesti n Ambiental Minera La gesti n ambiental deber ser multidisciplinaria incluyendo aspectos como condiciones ocupacionales y sociales descentralizada y ejecutada con participaci n de los gobiernos y comunidades locales bajo la pol tica y directrices del MEM Para ello se ha preparado a la Unidad Ambiental Minera responsable de la evaluaci n y s
39. ate or DINAGE under SSM were redefined to fulfill the functions of a Geological Survey as provider of the basic geological information infrastructure see Text Box 1 Its corporative functions as representant of the State in the development of mining operations were eliminated and the promotion functions restricted to the national mineral potential and to multi sectoral information including environmental base line geological hazards and land use information e Environmental management greater involvement of local communities e Geological information infrastructure increased focus on multi sectoral information and diffusion of information in relation of the use of it e Information and management systems increased synergies based on a linked cross sector entities network e Assistance to artisanal and small scale mining shifting from a techo economic towards a more comprehensive approach including legal management and socio economic factors Geo information and Development An important result from the PRODEMINCA project was to provide a clearer understanding of the links between geo information and the physical and institutional pre requisites to establish a comprehensive development framework as well as of the actions to be implemented to improve them through TA projects The provision of geo data is fundamental for good governance and to manage for example the multifunctional use of space water resources health and foo
40. bility and government overall commitment to economic opening Indeed the evolution of this situation through time may have been difficult to assess at project preparation and has also varied strongly during implementation Improved coordination between Bank s projects might help to facilitate dialogue with and leverage on the Government This applies as well to cross sectoral issues for instance regarding civil service reform infrastructure and in particular regarding the set up of umbrella and sector environmental management agencies Integral approach to sector development The Ecuador Mining TA provides another good example of the importance to approach sector reform in an integrated instead of a piecemeal way For instance the demonstration of the country mineral endowment through the publication of mineral information would be of little use for sector growth without the development of an enabling legal and institutional environment for sector investment and of institutions in capacity to properly administer mining rights and monitor environmental performance This approach applies as well at the sub component level as illustrated in text boxes 1 and 2 in the case of the development of the mining cadastre and assistance to small scale mining respectively The coordination with the Government and with co financing agencies SIDA and DFID has been particularly useful in that sense to ensure the success of the project Communication consultati
41. cedures v Support for the proper execution of the general managerial and technical functions of MEM DINAMI DINAMA and CODIGEM through the provision of incremental operating cost funding office furniture and equipment and vehicles B Policy Implementation These included Environmental Management with Swedish assistance i Systematic monitoring and establishment of a data baseline of the environmental pollution and occupational health hazards caused by mining ii Implementation of methods to rehabilitate in a technical and environmentally feasible manner areas environmentally degraded by mining activity and prevent further environmental degradation Geological Information Infrastructure with British assistance iii Systematic data gathering production and publication of regional geological maps at 1 250 000 scale and description reports of an approximately 36 000 km area of Ecuador s Western Cordillera iv Systematic data gathering production and publication of regional thematic geo scientific maps at 1 250 000 scale and reports of an approximately 36 000 km area of Ecuador s Western Cordillera v Analysis of known ore districts in Ecuador and use of the results of such analyses to identify and study currently unrecognized ore districts and propose appropriate prospection methodologies Information and Management Systems with Swedish assistance v Computerization of CODIGEM s budgetary planning accounting a
42. d environmental baseline data j An Inter ministerial Decree between MEM and ME defines an Information Policy regulating the distribution and use of information Assistance to Artisanal and Small scale Mining k Achievements include complete formalization of the sector improved managerial technical and environmental performance of small scal miners and reduced contamination See Text Box 3 4 3 Net Present Value Economic rate of return Formal net present value or economic rate of return are not appropriate measurements for this technical assistance project since it was never directly linked to an investment project 4 4 Financial rate of return Not applicable An Integrated Approach to Improve Artisanal and Small Scale Mining The Ecuador Case Artisanal or Small Scale Mining is an activity largely driven by poverty in combination with other socio economic factors e g climatic events affecting agriculture commodity prices and others It is typically practiced in marginalized and remote rural areas by poorly educated people with little other employment alternatives Today an estimated 13 million people in about 30 countries across the world are small scale artisanal miners with about 80 million to 100 million people depending on such mining for their livelihood Miners and their families expose themselves to harsh working conditions for minimal income in a high risk context endangering their health as well as often the sur
43. d Bank Investigation Panel review initiated through representations to the World Bank by an environmental group The project was cleared by the Inspection Panel at the end of a full inspection However more pro active engagement with non geoscience stakeholders during the project could have helped in avoiding the circumstances arising which led to the investigation The formal subsequently determined to be unfoundded complaint that lead to the inspection panel review of the PRODEMINCA project highlights the need for projects and programmes involving minerals to be 19 very carefully and pro actively mananged Whilst there is always vocal opposition to any intervention in the minerals sector principally due to misinformed and unrepresentative interantional campaigning NGOs there are potentially very significnat developemnt benefits from minerals projects To avoid becoming enmeshed in activist protests projects must communicate effectively Also it is critically important that environmental and social aspects are considered at the project design stage and conditionallities are enforced promptly which did not appear to happen in this project There are a number of generic lessons from this project that should be considered in future geoscience projects These lessons are well established learning and apply to development projects in general However this project serves as a good case study of the importance of these general principles in ens
44. d security the environment natural disasters and other areas Key principles include e The mandate organization and work programs of government agencies have to be defined or adjusted in order to establish the capacity of public mining institutions to provide the information required by the society development needs Civil society organizations and the private sector have to be specifically targeted and actively involved in order to optimize the potential benefits resulting from a proper use of the information The public good nature broad access and regulations regarding the use of the information should be defined in a clear and transparent information policy statement agreed upon with all stakeholders Text Box 1 3 5 Quality at Entry The Quality Assurance Group QAG did not do an official assessment of the project s quality at entry Nevertheless the ICR finds the quality at entry on balance to be satisfactory As mentioned in the earlier section the project objectives were consistent with the country assistance strategy and the Government priorities and met the critical needs of the mining sector In particular the selected comprehensive approach to sector reform reflected lessons learned in similar recent Bank projects in Latin America as the most effective way to achieve consistent and sustainable outcomes Since MEM had the technical capacity especially with the help of external consultants the quality of technical design
45. ditions see text box 3 Though all specific project objectives could be achieved the overall outcomes more ambitious and less subject to government or project control would need continued efforts beyond project closure to be fulfilled The anticipated increase of mining production and diversification were not achieved by year 2000 However until project mid term 1997 exploration activities had been growing significantly and an increase in formal ASM gold production from about 1 to 7 t yr could be observed But exploration efforts for larger projects did not mature into the development of industrial operations before the onset of the downward worldwide mining trend which unfortunately coincided with particularly severe national Bo economic and political difficulties without mentioning the occurrence of natural disasters such as the El Ni o phenomenon in 1998 The situation seems now to be improving again with the return of major mining companies and a more favorable economic situation Still a few years will be necessary to see whether the mining sector develops according to expectations and contribute to improved socio economic conditions of local communities as well as to the national economy Regarding environment conditions have been set to provide an adequate monitoring of the sector performance and enforcement of regulations both for large and small scale mining The project reduced ASM related contamination increased environment
46. e albeit with a somewhat lesser commitment towards environment which did 14 not however translate in reversing legal and institutional progress within this field In general except during the 8 1996 to 2 1997 period despite the difficult economic political and social conditions the Government has shown resolution and commitment in putting through the institutional and legislative reforms contemplated under the project The Government also placed a high priority on strengthening mechanisms and guidelines for consultation processes with local communities Building on the consultation requirements of the environmental regulations for mining activities September 1997 the Government designed a program to broaden the scope of the process including socioeconomic and cultural aspects design mechanisms and guidelines and support the systematic implementation of consultation and information processes This is expected to contribute to further strengthen the sustainability and the integration with local communities of mining in Ecuador and provide useful lessons and experience for other sectors Compliance with some of the loan covenants were affected for sometime by delays in privatizing Portovelo mine and releasing CODIGEM held mineral areas to private investors There were also initial problems regarding persistent shortfalls of government counterpart funds logistical support and physical resources required for project implementation 7 6 I
47. e new Mining Law restricted Government operations to special mining zones and reserve areas considered of strategic interest In addition the revised Policy and Strategy Document and covenants in the Loan Agreement also addressed this issue Second risk pertained to the difficulty in changing environmentally ce unsound practices being employed by artisanal and small scale miners However some changes were already taking place as better organized small scale miners were voluntarily upgrading their technology Third there was the risk of Government finding it difficult to sustain activities initiated under the project The project attempted to mitigate the risk by incorporating into the project design activities such as institutional restructuring and development of core functions which would permit specific and important major activities related to technological upgrading environmental monitoring and the establishment of the mining cadastre 3 2 Revised Objective There was no formal revision of the original project objectives as they are stated in the MOP and the Loan Agreement However there was during implementation an important and progressive shift towards the development of processes and activities to increase consultation and participation of the community civil society and nongovernment organizations in relation to the project and more broadly to the mining sector development This trend followed the growing worldwide awareness durin
48. e important to allocate at an early stage sufficient resources and time to convey to the institutions staff the relevance of the project objectives to their sustainability through workshops consultations staff training and exposing them to best practice and experience in countries in the Region where reforms are further advanced However a vital pre requisite is a full and sustained commitment by government authorities Institutional strengthening and capacity building Activities related to institutional reform and those aiming at developing the institutions technical capacity need to be linked into common components instead of separate ones as under the PRODEMINCA case in order to optimize synergies between the two sets of modernization tasks For example a closer integration of the mapping components into CODIGEM later DINAGE work program would probably have facilitated the reform of the 247 institution as well as the smooth transfer of working methodology e Intensive monitoring and supervision are essential for sectoral reform TA project especially when the design is complex counterpart institutions are weak and political uncertainties or turmoil frequent Supervision should therefore be given the appropriate priority from inception and be maintained during the project life Beyond the follow up of procurement disbursement legal and other administrative matters related to project implementation the Bank supervision must emphasiz
49. e peque a escala Debe aprovecharse las condiciones de confianza y aceptaci n que deja el proyecto para consolidar la institucionalizaci n de los procesos alcanzados y extenderlos a reas nuevas Se requiere de recursos de la cooperaci n internacional con enfoque al continuo mejoramiento social y 41 ambiental del entorno de las actividades mineras de peque a escala incluyendo temas como salud general y ocupacional igualdad de derechos a la mujer y la erradicaci n del trabajo infantil disminuci n de la contaminaci n por desechos mineros y malas pr cticas ambientales fortalecimiento de esquemas empresariales y asociativos que permitan un mejor aprovechamiento de los recursos y aplicaci n de nuevas t cnicas e implementos que permitan disminuir la contaminaci n incrementar los ndices de recuperaci n de minerales y dar mejores condiciones de vida y trabajo a los peque os mineros con alta participaci n de actores y gobiernos locales Gesti n ambiental descentralizada Diversos actores tanto mineros como no mineros coinciden en que es imprescindible fortalecer y desarrollar la gesti n ambiental con participaci n de actores y gobiernos locales en un proceso descentralizado que permita el di logo y el control durante todas las etapas de actividad minera desde la consulta previa a exploraci n hasta las condiciones de cierre de minas con suficiente coordinaci n con el MEM Esto supone acompa ar un proceso de fortalecimiento i
50. e the appropriate provision of advisory support in sectoral policies legal institutional framework and technologies and maintain a constant effort to dialogue with changing involved parties In addition to enhance effectiveness co financiers should be closely involved in these efforts e Trust could be established at an early stage and maintained during implementation between the Project Coordinating Unit most of the succesive governments sector authorities many stakeholders e g small scale miners and the Bank s project team This permitted to engage a constructive dialogue which contributed to the reform success despite frequent political and economic turmoil It also allowed to implement procurement disbursement and other procedures in a relatively smooth way under sometimes challenging circumstances e The project coordinating unit has played a key role in the success of the Project Staff constituing a relatively small team of 5 persons had been selected by the Governemnt through open competitive procedures and on the basis of management and or technical competence and experience instead of political allegiance or of partisans agenda More important maybe the PCU demonstrated the capacity to command professional respect from the succesive governments sector authorities and to maintain an acceptable stability in project implementation and development objectives 9 Partner Comments a Borrower implementing agency As described in m
51. eguimiento de los Informes de Impacto Ambiental y se han logrado los siguientes resultados a desarrollo y puesta en operaci n de una red de monitoreo ambiental en el sur del pa s y amplia difusi n p blica de sus resultados b puesta en funcionamiento de un centro de salud ocupacional minera en el distrito minero de Ponce Enr quez c construcci n de obras demostrativas de contenci n y remediaci n de la contaminaci n en el distrito minero de Ponce Enr quez d apoyo al establecimiento de comit s de gesti n ambiental en el municipio de Pucar distrito minero de Ponce Enr quez e preparaci n de un plan maestro de gesti n ambiental de la cuenca del rio Puyango afectada por el 36 distrito minero de Zaruma Portovelo Miner a de peque a escala Durante el desarrollo del proyecto y luego de un amplio debate y de diversas experiencias a lo largo de seis a os con las organizaciones de peque os mineros se ha demostrado que solamente un enfoque integrado que incluya aspectos organizativos legales t cnicos sociales y ambientales y procure incrementar la confianza de este sector con los organismos estatales permite ordenar y modernizar de manera sostenible la miner a de peque a escala Los resultados positivos logrados durante el desarrollo del proyecto representan experiencias y lecciones valiosas que podr n ser utilizadas tanto en el Ecuador como en otros pa ses para mejorar las condiciones de este sector de l
52. ell as by legalizing about 98 of the small scale miners and artisans and bringing them under the formal system If there would be sufficient mining activities going on in Ecuador DINAGE DINAMI and the Mining Environment Unit UAM will derive necessary resources from mining concessions service fees and state financing which would ensure their sustainability The sustainability will also remain highly dependent on the prices for mineral commodities on international markets Increased participation of local communities especially for environmental monitoring is also an important factor for ensuring sustainability However sustainability could be affected if the current economic and fiscal crisis gets worse In addition to fully achieve sustainability of the mining sector in the long range there is a need to complete the design and implement mechanisms ensuring participation of local communities in mining development Activities related to this objective have been initiated under the project but would likely need further support Also to take full advantage of geo scientific mining and environmental information and promote a responsible use of it there is a need to continue i linking of information and management systems between sectors principally between the MEM and the Ministry of Environment ii monitoring the use of geological and mining data and iii informing users at a national level and promote awareness regarding the responsible
53. ement The geo scientific information as generated under the project represents a very valuable tool not only for sector development but also for land use and related potential conflicts management In that sense it is important at the project preparation stage to define and identify a the type and characteristics of information which should reflect the public good nature of the information to be generated and managed as corresponds to the mandate of public geological institutions e g environmental geological geochemical and geophysical databases b a series of concrete and useful products to be generated for identified audiences instead of general studies c channels to make these products openly and easily available to potential clients and to the public in general under appropriate formats open files publications including popular editions CDs internet web sites at a nominal cost d activities to inform and train at different levels all potential users on how to use the information and e activities to monitor the use of data which could be misused and cause negative social or environmental impacts e g exploration in protected areas 16 Another important lesson from PRODEMINCA is that issues related to the generation and use of geo scientific data must be part of the project social strategy and consultation process Assistance to artisanal and small scale mining The project has been rich in lessons on how to addres
54. ento financiados por cr ditos no reembolsables que acompa aron al pr stamo fue muy importante en la relaci n con las agencias ejecutoras 6 4 T cnicas administrativas financieras y ambientales empleadas y provisi n de fondos servicios y recursos seg n requerimientos del proyecto 43 Se cumplieron satisfactoriamente las t cnicas y normas administrativas financieras y ambientales que rigen la administraci n p blica en Ecuador En aspectos ambientales para miner a incluso realizamos actividades pioneras en el pa s tanto en legislaci n participaci n de actores sociales claves como en monitoreo y remediaci n 7 Evaluaci n de resultados A criterio del gobierno de Ecuador y de las principales empresas mineras y c maras de producci n minera los resultados pueden calificarse como altamente satisfactorios Los objetivos se han logrado A la conclusi n del proyecto se tiene un marco institucional m s adecuado para el control y seguimiento de la inversi n informaci n p blica sobre sitios prospectivos mejores herramientas para la relaci n con la comunidad y para el control ambiental En el a o 2001 hemos iniciado una nueva etapa de inter s e inversi n de empresas mineras en el pa s sin duda relacionada con las mejores condiciones logradas por el proyecto y a pesar de que las condiciones generales reci n comienzan a mejorar y estabilizarse Igualmente el prestatario ha logrado mejores condiciones de monitoreo
55. er the priority given to the incorporation of a much larger number of national consultants both firms and individuals than originally envisaged has certainly helped to insert the project into the Ecuadorian reality a fact clearly demonstrated in the case of the small scale mining activities and will contribute to the sustainibility of the project results Particularly positive synergies between national and foreign expertise have been developed within the fields of institutional reform environmental management assistance to small scale mining and set up of information systems In that sense the performance of the team financed under the SIDA grant and promoting a real participatory attitude has to be commended In addition the cooperation with and involvement of technical departments of Ecuadorian universities in several project activities for example assistance to small scale miners and the organization of courses sponsored by the project i a the Mining Environmental Management one year post graduate course organized at the EPN in Quito While the sustainibility of these activities as such cannot be garanteed in the long term they had the benefit to expose the next generation of mining specialists in Ecuador to modern concepts Commitment to institutional reform Sectoral institutions and their staff need to develop a strong commitment to reform and acquire a full sense of ownership and responsibility for the project It is therefor
56. f dicos y Epi Mesotermales Relacionados con Intrusiones de las Cordilleras Occidental y Real Volumen 5 Dep sitos Porf dicos y Epi Mesotermales Relacionados con Intrusiones de la Cordillera el Condor Peter Pittfield et al BGS June 2000 Manual de Exploracion de Depositos metaliferos en el Ecuador peter Pittfield BGS June 2000 Manual T cnico Sistema GIMP incluye CD con datos de GIS para aplicaci n Edgar Cruz DINAGE BGS June 2000 Percepciones sobre la Informaci n Geoqu mica Generada por PRODEMINCA en la Zona de Intag CEPLAES August 2000 Breve Lexico Estratigrafico del Ecuador Pablo Duque October 2000 Geochemical Reconnaissance Survey of the Cordillera Occidental of Ecuador between 0 00 and 1 00 N T M Williams et al DINAGE BGS May 2001 Geoquimica y Ambiente T M Williams et al Prodeminca May 2001 Mineria realidades y perspectivas PRODEMINCA July 2001 Management and Information Systems o o o Proyecto de Catastro Minero en Ecuador Enrique Ortega November 1995 Documento de Planeamiento del Catastro Minero F Sarria January 1996 An Information Systems Strategy Scoping Study for Component Three of the Project to Develop Mining And Control the Environment Jeremy R A Giles BGS July 1996 Cat logo de Informaci n T cnica Martha Correa et al CODIGEM SES May 1997 Sistema de Administraci n de los Derechos Mineros Manual de Administraci n del Sistema Luis O a Marco Cazco Juan Ch
57. funding for the GSO does not appear to be a priority during the final monitoring mission mechanisms for extra budgetary funding and using exploration revenue licence fees for funding the GSO as a type of QANGO which would enable more competitive salaries to be paid to staff were discussed An evaluation of the impact of this in the event that these discussions move forward to reality should be considered as it may provide a useful model for sustainability where central funding is difficult to obtain The small scale mining component appears to have been a particularly successful intervention in this difficult area This component provide a valuable case study for successful techniques in the small scale mining sector in a Latin American context c Other partners NGOs private sector Not applicable 10 Additional Information On December 17 1999 the World Bank Inspection Panel IP received a request for inspection from two NGO s established in the Intag valley in the northern part of the Western Cordillera The complaint was directed to the geological and thematic mapping component carried out by DINAGE and the British Geological Survey over the whole Western Cordillera area of Ecuador and which included the survey of the Cotacachi Cayapas Ecological Reserve located close to the valley the survey of all protected areas of 20 this region were specifically included in the mapping program during appraisal Among other claims re
58. g the last decade by communities and companies alike regarding the need of deeper community involvement to optimize the potential contribution of mining to local and reginal socio economic development see for example the proceedings of the Mining and the Community conference Quito 1997 There was also increased focus on a multiple and broader use of environmental and geo information for development and land use management instead of being mainly focused on mineral sector development 3 3 Original Components The project consisted of the following components A Policy Management This component consisted of 1 Technical assistance to Ministry of Energy and Mines MEM on a application and revision of the Mining Law Mining Regulation and associated decrees norms and other related statutory or regulatory texts b organization and operation of mining sector public agencies c relations between mining sector public agencies and nongovernmental organizations and private mining companies operating in Ecuador d minerals marketing trading and export issues and e taxation and economic matters pertinent to the mining sector ii Technical assistance and in service training to National Directorate of Mining DINAMI on a legal and procedural issues with respect to the issuance registration and termination of mining concessions and processing licenses b accounting financial and administrative issues with respect to the assessment
59. gated this problem including a pro active support from the team under the Swedish grant which helped to bridge gaps in critical periods particularly at the early stages of the project And considering the importance of the social components of the project as well as the particularly severe national economic crisis at this moment an amendment was processed in September 1999 to reduce the percentage of the government contribution as reflected in Annex 2 and allowed a smoother implementation during the final stage of the project Consequently fund flows problems did not significantly alter project implementation 6 Sustainability 6 1 Rationale for sustainability rating By virtue of reforms in the Mining Law the sector institutions had the access to dedicated funding which will enable to achieve in the long term the project objectives including sector management capacity as well as maintain and renovate the necessary infrastructure established under the project Restructured institutions with specific roles and without corporate functions have improved the systems and procedures It is estimated that while the income generated through the payment of land fees has gone up by more than 12 one million dollar per year expenses have been reduced by more than 2 million dollars in 1999 and by more than 800 000 in 2000 The sustainability is also strengthened as a result of the training imparted to the institutional staff under the project as w
60. has a myriad of uses not least for baseline environmental conditions determination and water resources development thematic mapping has been perceived by a number of stakeholders as being wholly focused on mineral resources mapping for mineral exploitation purposes Whilst thematic mapping is not mineral resource exploration it does provide indicators which can be used to develop an exploration campaign Internally until the last two years of the project little consideration seems to have been given to communication of non minerals exploitation uses for thematic mapping data with a focus being purely on data collection and building the thematic maps and feeding information into the other technical components such the mining cadastre and geological website Although this approach was in line with fulfilling the terms of reference in hindsight such a narrow approach which did not appear to address the concerns of non geoscience stakeholders seems to have been misguided This lack of proactive communication with stakeholders has to some extent lead to the problems which resulted in the World Bank Inspection Panel investigation Although measures taken by WB to remedy this problem have been reactive the work carried out as a result of this reaction seems to have had very positive impacts This lack of stakeholder engagement has been a significant issue during the project and appears to be the reason why the PRODEMINCA project was subject to the Worl
61. ia del proyecto en el desarrollo del sector la confianza lograda por el catastro minero o por las acciones con mineros de peque a escala y las necesidades crecientes de gesti n ambiental multidisciplinaria llevan a considerar varias acciones posteriores al cierre de Prodeminca para las cuales actualmente se han formulado nuevos proyectos y se busca recursos principalmente no reembolsables Entre estas se puede mencionar Monitoreo de uso de la informaci n en reas protegidas Esta actividad iniciada bajo el proyecto con participaci n de dos ong s de alta credibilidad ha mostrado que en el campo se requiere muchas mas acciones de protecci n ambiental no respecto a la informaci n generada por el proyecto o a miner a en general sino a todo lo referente a protecci n y mejor conocimiento de las reas naturales protegidas Por tanto esta etapa de monitoreo deber a complementarse con otras acciones de car cter mas general asi como con nuevas investigaciones geocient ficas en estas zonas Relaciones cumunitarias y consulta previa a actividades mineras El Ministerio de Energ a y Minas ha conformado una unidad de coordinaci n para continuar con esta actividad procurando una formulaci n concertada de una gu a de relaciones comunitarias que pueda conducir estos procesos en proyectos mineros en marcha en Ecuador El Banco Mundial que apoya un proceso similar para hidrocarburos est colaborando con el MEM en este esfuerzo Miner a d
62. in disbursements and a build up in disbursement lag due to resurgence of frequent political interference and uncertainties From mid 1996 to end 1998 recurrent changes of governmental and sector authorities with 11 the corresponding variations in identification with project objectives resulted in a lack of commitment to institutional restructuring which adversely affected the implementation 5 3 Factors generally subject to implementing agency control Lack of cooperation from National Directorate of Environmental Protection DINAPA to the project was a factor which delayed start up of environmental component activities While DINAPA was allocating more resources to hydrocarbon and electricity subsectors mining sector was almost neglected and deprived of human and financial resources However halfway through the project 1997 with the arrival of a new team at DINAPA the Bank could start dialogue with them to finalize environmental regulation and start work of the institutional reform CODIGEM on the other hand did not want to give up its corporate functions It was more interested to focus on mining activities and exploration rather than in geological activities and consequently it was reluctant to release mining properties right CODIGEM did not also participate actively with BGS in the mapping activities Until its transformation as DINAGE in 1999 CODIGEM s lack of identification with project objectives affected project implemen
63. inary proposal for a conceivable J V agreement for a mining project in Ecuador A Swartling CODIGEM SES January 1995 Registro de plantas gravim tricas y de cianuraci n en el rea de Ponce Enr quez B Fagerberg CODIGEM SES June 1995 Aspectos Sociol gicos en la Miner a A Rundqvist SES June 1995 Factibilidad de instalaci n de un Centro de Beneficio Mineral en el rea de Ponce Enr quez Informe de Evaluaci n B Fagerberg SES June 1995 Investigaci n Relaci n entre Pueblos Ind genas y Miner a Aurifera Informe Final Miguel Carvajal Natalia Wray and Rafael Mashinguiash January 1996 Investigaciones de laboratorio en muestras de mineral del rea de Ponce Enr quez y evaluaci n de m todos para la eliminaci n del proceso de amalgamaci n B Fagerberg SES February 1996 Catastro de sociedades mineras del Distrito Aurifero de Zaruma y Portovelo seg n coordenadas de localizaci n territorial N Romero May 1996 Informe Final del Estudio Diagn stico Socioecon mico de Nambija L Pereira V and Jaime Espin D May 1996 Censo Minero de Zaruma y Portovelo Memoria T cnica Universidad Central del Ecuador May 1996 Estudio Socioecon mico del Centro Minero Ponce Enr quez Miguel Carvajal and Jos Rivadeneira May 1996 Programa de capacitaci n empresarial Sector minero de San Gerardo Provincia del Azuay Organizaci n y administraci n empresarial F Chango October 1996 Diagn stico de la Miner
64. kewise the project did not take into account the adverse impact of the worldwide trend in mining activities resulting i a from the Bre X scandal in Indonesia and fallout of the East Asian crisis Many junior exploration companies were affected by the dearth of financing available from the stock market consequent to these developments In addition as it appeared gradually the design and implementation of a consistent communication and participation strategy would have facilitated project activities and involvement of stakeholders and civil society concerned with the project outcome In particular this need became evident in 1995 in the cases of ASM and environmental issues as well as later on of generation of geological information and could be progressively incorporated into project components 4 Achievement of Objective and Outputs 4 1 Outcome achievement of objective The project achieved significant results Both the legal and institutional frameworks were fully reformed according to best practice and to Ecuadorian specificities cf A Mining Strategy for Latin America WB Technical Paper No 345 1996 and they compare positively with other countries on a world wide basis in terms of sector management capacity and investment environment e Legal framework A modern mining Law was prepared and passed 1991 under project preparation and under implementation complemented by regulations to enforce it Furthermore an amendment to
65. lacionadas al fortalecimiento institucional capacitaci n y difusi n del proyecto que solo se iniciaron con determinaci n a fines de 1998 Sin embargo estas situaciones pudieron controlarse gracias a la relativa estabilidad de autoridades sectoriales comprometidas con los objetivos del Proyecto durante per odos comparativamente largos por ejemplo 95 96 98 2000 a la fuerte estabilidad de la unidad de coordinaci n 1995 2000 y del personal contratado y a la presencia comprometida de las misiones de asistencia t cnica sueca y brit nica 40 Relaci n entre componentes t cnicos e institucionales Durante la planeaci n del proyecto se previ dos partes claramente diferenciadas una componentes 2 relativa al fortalecimiento institucional que en varios periodos tuvo afectaciones por la inestabilidad pol tica y otra componentes 3 referida a ejemplos de aplicaci n t cnica en aspectos ambientales de obtenci n y difusi n de informaci n geocientifica y de gesti n de sistemas inform ticos asi como de asistencia a peque a miner a cuyo avance marc el ritmo del proyecto Quiz un sistema de codirecci n en las entidades participantes en el proyecto DINAMI y DINAGE a fin de que sus funcionarios asuman las nuevas visiones que guiaron la implementaci n de los componentes t cnicos la gesti n de consultores nacionales y extranjeros con mayor criterio multidisciplinario incremento sus capacidades de manejo de proyec
66. lated to compliance with WB safeguard policies the most important issue of the request was related to the public release of the information and the negative impacts it would generate on the environment and the community as an unavoidable consequence of such release WB Management agreed with the findings of the IP as stated in their final report of February 2001 namely that it was substantially in compliance with OPN 11 02 on Wildlands and OD 13 05 on Project Supervision With respect to Environmental Assessment Management accepted the position stated in the Panel report that a more expanded and robust EA concerning processing geographical scope and baseline data and consultation OD 4 00 Annex A and OD 4 01 should have been undertaken during preparation With regard to the release of information it was found that the geological and thematic mapping carried out under the Project is ecologically neutral and thematic mapping is generally beneficial for the country as it increases its database of knowledge on its natural resources It will also help identify areas that are sensitive and that could be excluded from mining development The information must be carefully managed so as not to generate adverse social and environmental consequences for measures taken by the GOE and the Bank in this regard see section 4 2 For details related to the IP investigation please refer to the Investigation Report on Ecuador Mining Development and En
67. lecer una relaci n de confianza con los peque os mineros la que debi ser construida durante los primeros a os del proyecto para lograr condiciones de aceptaci n de las propuestas t cnicas y ambientales generadas por los consultores Sin embargo el clima de confianza logrado signific el xito de este proceso no solo permiti cumplir los objetivos trazados sino incrementarlos con lecciones que podr n ser aplicadas en otros pa ses y con nuevas propuestas para el sector Los aspectos de protecci n ambiental fueron ligeramente modificados ampliando la gesti n y participaci n local de las comunidades que rodean las explotaciones mineras aur feras estableciendo un centro de diagn stico y prevenci n de enfermedades ocupacionales relacionadas con miner a en la zona de Ponce Enr quez y construyendo una de las obras de remediaci n dise adas durante el proyecto como caso demostrativo 38 2 Temas relevantes en la evoluci n de PRODEMINCA Procesos de informaci n y consulta Este proyecto ha sido pionero en impulsar procesos de consulta reconocidos en la Constituci n de Ecuador desde 1998 a partir de 1996 en que utiliz este procedimiento para preparar el reglamento ambiental para actividades mineras Tambi n permiti cambiar los criterios de difusi n de informaci n sobre contaminaci n considerada confidencial antes del proyecto y los de descentralizaci n y desarrollo de capacidades de gesti n a nivel
68. mplementing Agency The project was identified as risky in view of the lack of consistency in commitment at the MEM to sector reforms during the 1996 to 1998 period During this time many project related issues were caused by the MEM s Mining Subsecretariat s inadequate policy coordination and not fully open attitude toward public discussion and consultation with stakeholders Two of the implementing agencies also demonstrated weak commitment to the project objectives which contributed to implementation delays and uncertainties DINAGE was reluctant to concentrate on its geological survey role and to give up any corporate functions DINAPA which had continued to be the weakest project entity played a more active role in project implementation after the mid term review and supported the creation of the sector Environmental Unit see Section 4 5 The Government had a good project coordination unit and the day to day implementation of the project was relatively smooth The PCU dealt with procurement disbursement progress reports and in maintaining proper records of the project During the entire implementation period there were only two project coordinators 1994 1995 and 1995 2000 and this ensured stability at PCU In the initial stages of the project PCU s performance was satisfactory in administrative matters but was not fully satisfactory in matters related to a the implementation of the more complex institutional reform requiring
69. n strengthening of regional offices for administration of mining rights and environmental monitoring Though the institutional reform process started late in the project life the objectives could be achieved through an extension to the loan closing date which was specifically designed to this effect The institutional developments which impacted the entire mining sector were the modernization of the Subsecretariat of Mines SSM as head of sector and responsible for sector policy and performance monitoring Under SSM the Environmental Mining Unit UAM was created responsible for the evaluation of EIAs administration of environmental permits and monitoring of environmental performance as an interface between the mining operators DINAPA and the Ministry of Environment The National and Regional Directorates of Mines DINAMI responsible for the administration of mining rights was modernized CODIGEM was restructured as i the National Directorate of Geology DINAGE responsible for the development and diffusion of the national geo scientific information data base and ii Mining Information System Unit USSIM which serves all PMIs and is responsible for the maintenance and updating of the information and management systems including the intranet as well as the internet interfaces On the negative side civil service conditions which apply to the overall State administration could not be improved and this might affect the continuity of ser
70. nation unit as well as the continuous support of foreign consultants funded under Swedish and British grants have contributed to the achievements of the objectives An important lesson from the project is the need to design and implement a social and communication strategy aimed at a a more comprehensive participation of the community in relation to sector development and b the inclusion of better defined socio economic components to improve the conditions in the artisanal and small scale mining sub sector Other lessons include permanent staff such as in components related to information systems environmental management and small scale mining rather than short term contract staff e g under the 18 geological mapping components should act as counterparts to technical experts to ensure that capacity building remains within the agencies and national consultants should be hired as technical experts whenever possible in order to enhance the sustainability of project activities at large within the country Sustainability of the sector institutions and their core functions could be strengthened under the reformed framework including the provision of adequate financial resources However this sustainability as well as a full development of the sector according to Ecuador mineral potential will also depend in the future on the continued national political and economic stability The challenge now will be to sustain activities and to
71. nd control activities as well as development and operation of mining information system that would provide the general public access to mining documentation and databases regarding mines mining and metallurgical information and sector statistics mineral occurrences showings and prospects and related environmental matters vi Improvement and implementation of a mining cadastre which will effectively record monitor and provide public access to up to date information such as status of applications for mining concessions and exact geographical area of concessions Assistance to Artisanal and Small scale Mining with Swedish assistance vil Provision of technical assistance to artisanal and small scale mining operations in Ecuador with regard to a mining methodology environmental safeguards and simple mining economics and reducing environmental contamination and b identification of suitable potential private joint venture mining partners C Project Coordination Unit PCU to manage and coordinate project activities 3 4 Revised Components None of the components was formally revised However some of them were refocused aligning them with the Bank s and country s agenda for stronger focus on mining and environment e Institutional strengthening increased linkage between the institutional component and the development of the technical components e CODIGEM the objectives of the agency renamed as a National Geological Director
72. nd published until June 2000 These state of the art maps and data bases are utilized for land use planning and management as explained in Text Boxes land 2 e A series of books and brochures have been published see annex 7 and workshops organized to inform civil society organizations universities and schools and the public at large on the potential uses of the geo information in relation to development and land use management f In response to the concern of stakeholders on the use of geodata see below a formal system to monitor the use of such data has been put in place which would function beyond project closure In December 1999 a complaint was filed with the World Bank Inspection Panel by two Ecuadorian environmental NGOs against the geological thematic mapping activities in and around a protected area in Northern Ecuador see section 10 The complaint asserted that the local communities were likely to suffer harm as a consequence of this work and of the related Bank failures and omissions in the design and supervision of the project Specifically they claimed that the development of mining activities in the area would prevent local communities from continuing to work in their traditional agricultural and cattle breeding activities and that the project would have a destructive impact on critical natural habitats threatening protected natural reserves and endangered species An investigation was subsequently initiated in May 2000 by
73. ndicators Institutional Strengthening Not Applicable a Designing new functions for management Completed of mining rights and environmental permits b Passing necessary regulations decrees to Completed establish required framework c Elimination of corporate functions of Completed CODIGEM d Rationalization of personnel Completed It Technical Component a Conducting environmental baseline Completed studies in mining areas of Southern Ecuador b Building of dams to contain tailings Completed c Completing environmental management Completed master plan d Publication of geological and geochemical Compieted maps e Developing sector GIS Completed f Developing a computerized Mining Completed Cadastre Administration System End of project 22 Annex 2 Project Costs and Financing Project Cost by Component in US million equivalent Appraisal Actual Latest Percentage of Estimate Estimate Appraisal Project Cost By Component US million US million 1 Project Coordination 0 80 1 26 157 5 2 1 Policy Management MEM SSM 0 30 1 08 360 2 2 Policy Management DINAMI 1 00 0 90 90 2 3 Policy Management DINAPA UAM 0 60 0 45 75 2 4 and 5 Policy Management CODIGEM DINAGE 0 70 0 43 61 4 3 1 Policy Implementation Environmental Pollution and 3 00 2 42 80 7 Health Monitoring 3 2 Policy Implementation Hazardous Mining Wastes 2 10 1 05 50 3 3 Pclicy Implementation
74. ndo mayor seguridad juridica a la inversion mayores cuidados ambientales y comunitarios por parte de los concesionarios mineros y la eliminaci n de reas para uso exclusivo del Estado Se redactaron y aprobaron a Reformas a la Ley de Miner a que entraron en vigencia entre agosto y diciembre de 2000 acogiendo planteamientos como el titulo nico que da seguridad a la concesi n la patente progresiva que disminuir la especulaci n improductiva de reas la eliminaci n de las regal as que permite mayor competitividad y evita riesgos de corrupci n y la supresi n de la inversi n corporativa por parte del estado dejando la inversi n de riesgo al sector privado Estos fueron los principales postulados del proyecto b El nuevo Reglamento a la Ley de Miner a se dict en abril de 2001 Reformas al Reglamento de la Ley de Miner a se emitieron en dos ocasiones anteriores estableciendo finalmente un adecuado complemento a las nuevas disposiciones legales y agregando transparencia al proceso de otorgamiento de reas mineras c Reglamento de Salud y Seguridad Minera y d Reglamento Ambiental para la Actividad Minera cuya formulaci n concertada fue la primera experiencia participativa en propuestas legales en el Ecuador Durante el proyecto se prepararon varias versiones de una nueva Ley de Miner a cuyos textos fueron debatidos largamente con el parlamento y con actores sociales claves sin lograr su aprobaci n Sin embargo l
75. ns Officer Economist S S 05 05 10 1995 1 Mining Specialist S S 06 12 22 1995 2 Economist Mining Specialist U S 08 07 10 1995 1 Economist U S 09 11 26 1995 2 Economist Mining Specialist U S 10 30 11 02 1995 1 Mining Specialist U S 02 20 03 01 1996 4 Economist Mining Specialist U S Energy Economist Operations Officer 04 29 05 03 1996 1 Mining Specialist S S 07 29 08 02 1996 2 Energy Economist Mining S S Specialist 09 23 26 1996 1 Mining Specialist S S 10 18 26 1996 6 WB Energy Economist Mining S S Specialist ODA Environmental and Mining Specialists SIDA Project Officer and Environmental Specialist 03 31 04 05 1997 1 Energy Economist S S 26 05 09 16 1997 3 Energy Economist Mining S Specialist Legal Specialist 06 16 20 1997 2 Energy Economist Mining S Specialist 10 03 10 1997 2 Energy Economist Mining S Specialist 11 10 14 1997 6 Energy Economist Mining S Specialist ODA 2 Mining Specialist SIDA 2 Environmental Specialists 03 10 13 1998 2 Energy Economist Mining S Specialist 09 07 11 1998 I Energy Specialist S 11 16 23 1998 5 WB Energy Economist Mining S Specialist DFID Mining Specialist SIDA Environmental and Mining Specialists 04 16 20 1999 1 Mining Specialist S S 04 23 25 1999 1 Mining Economist S S 06 21 29 1999 1 Mining Specialist S S 10 14 17 1999 2
76. nstitucional a nivel de los cantones y parroquias con mayor actividad y o perspectivas mineras aprovechando la situaci n favorable desarrollada en torno al proyecto Promoci n Minera La amplia aceptaci n a las ltimas reformas legales establecidas en Ecuador refrendada por la presencia de tres de las principales empresas mineras en el pais a partir de 2001 obligan a realizar esfuerzos para difundir las condiciones que deja Prodeminca al final del proyecto a fin de atraer nuevas inversiones para una miner a sostenible El MEM ha establecido un programa a cumplirse durante 2001 para difundir las ventajas e informaci n que hoy ofrece el Ecuador Nuevos proyectos a partir de estudios realizados bajo el Proyecto Se han identificado al menos cuatro proyectos nuevos a partir de estudios realizados por Prodeminca a La ejecuci n del plan maestro ambiental del r o Puyango que establece propuestas de remediaci n ambiental por montos superiores a los 15 millones de d lares como nica opci n para controlar la contaminaci n en los afluentes de este r o que drena el distrito minero de Zaruma Portovelo b Obtenci n de informaci n y condiciones socioecon micas para el aprovechamiento de recursos naturales no renovables en la zona de frontera entre Ecuador y Per en las provincias de El Oro Loja y Zamora Fue entregado al Banco Mundial y a DFID durante esta revisi n a fin de que sean considerados para futuros financiamientos c
77. nto del sector minero como ambiental o de otras entidades mediante una red intranet y el acceso de usuarios externos a trav s de internet Nuestro parque inform tico es uno de los mejores del sector p blico ecuatoriano y es usado intensamente por funcionarios debidamente capacitados La p gina web mineriaecuador com incrementa el n mero de visitas y nos permite promocionar el sector especialmente 37 en otros paises Gesti n de las concesiones mineras Para garantizar la inversi n minera y un adecuado monitoreo y control del sector es imprescindible el funcionamiento transparente y eficiente de un Catastro Minero computarizado En el marco del Proyecto se estableci el Sistema de Administraci n de Derechos Mineros SADMIN para automatizar los tr mites de otorgamiento conservaci n y extinci n de derechos mineros aplicando las normas legales la informaci n de ubicaci n geogr fica de las concesiones y sus restricciones en reas protegidas El SADMIN permite un control riguroso del proceso reduciendo asi la discrecionalidad e incrementando con ello la seguridad de los t tulos El sistema es accesible por internet www mineriaecuador com 1 4 Modificaci n de objetivos durante el transcurso del proyecto y fundamento de estos cambios La formulaci n inicial del proyecto tuvo suficiente claridad de objetivos respecto al prop sito general del proyecto y esto se mantuvo durante la ejecuci n Sin embargo algunos mecanismos
78. on and stakeholders participation The preparation and implementation of mining TA programs require today the development of a consistent social strategy Sector reform technical assistance projects and outcomes may be perceived by government authorities and by Bank staff and other donor organizations as of neutral character in terms of social and environmental impacts direct or indirect The PRODEMINCA experience demonstrates that in the case of mining TAs and most likely of other extractive industries as well such a perception may not be shared by the civil society at large particularly by indigenous or local communities NGOs and other stakeholders who might feel their values or resources are potentially threatened by a development process induced by such projects It is therefore critical to design and implement during project preparation and implementation a more systematic social strategy including improved information and consultation participatory processes which should be continued by the governmental sector authorities in the longer term The social strategy should include the definition of actions to be carried out jointly by government authorities and civil society organizations The ultimate goal would be to optimize stakeholder participation and consensus with respect to sector development objectives and outcomes and consequently ensure a more sustainable and improved contribution of mining to society Geo scientific information manag
79. onal que permitan que la actividad minera se realice en armon a con las comunidades Desarrollo de capacidades locales e institucionales Se han enfatizado esfuerzos para construir capacidades locales para la gesti n sostenible de la miner a de peque a escala logrando la participaci n de las comunidades locales y sus gobiernos seccionales Al inicio de 1999 el Proyecto colabor en la conformaci n de dos Comit s de Gesti n Ambiental en Ponce Enr quez y San Gerardo con la participaci n de miembros de cada comunidad como profesores habitantes locales centros de salud y lideres formales e informales La formalizaci n y adecuado registro de organizaciones mineras reconocidas por el MEM facilita su participaci n en mejoras t cnicas sociales y ambientales en su mbito de influencia Los municipios de Pucar Ponce Enriquez Portovelo y Santa Rosa destacan a la fecha por su inter s en gesti n ambiental relacionada con miner a de peque a escala 3 Principales observaciones y lecciones Protecci n Ambiental y desarrollo minero sostenible Durante estos seis a os el proyecto ha incrementado el debate sobre protecci n ambiental desarrollo minero y condiciones de sostenibilidad en explotaci n de recursos no renovables a prop sito de la amplia difusi n de sus resultados El criterio de las principales ong s se ala que la miner a es parte importante del proceso de desarrollo del Ecuador ya que el pa s necesita de est
80. once Enriquez village instead of discharging them in the river improvement of metallurgical processes about 40 of plants are now using the more effective cyanidation process introduction of gravimetric devices in most operations reduction of mercury use for example there is an estimated use of 1 to 2 kg of Hg per recovered kg of Au instead of an estimate of 8kgHg per kgAu in Peru development of local equipment e g retort re forestation and other works training in safety and occupational health building of a health center specialized in mining originated diseases e Facilitating the organization including the establishment of an ASM Chamber of Mines management and technological training of small scale miners supporting the establishment of sector associations and small enterprises with the view to up grading the efficiency and performance of the sector e Involving local communities in the monitoring of environmental and socio economic impacts from mining e g creation of community and miners environmental committees e Facilitating the development of alternative economic activities The project was also instrumental in setting up a network among NGOs other agencies working on small scale mining and government authorities with a view to taking a systematic and collaborative approach in addressing the issues Adapted from R Hoffner 2000 SES final report Text Box 3 4 5 Institutional development impact The project
81. ore details in Annex 8 the Project has been successful in establishing sector conditions conducive to private mining investments as well as an institutional and information framework permitting an adequate development monitoring and enforcement of regulations regarding mining activities from the legal and environmental point of views While the overall political and economic situation is slowly recovering after years of turmoil during project implementation mining investments are picking up again as a result of the project achievements The social environmental legal and technical conditions in the artisanal and small scale mining sub sector have also strongly improved compared with those which prevailed a decade ago For example 166 of 169 small scale mining groups are now legalized and invasions of mining properties by illegal miners did not occur during the last years local community driven environmental committees have been established in two important mining districts the use of mercury is progressively replaced by better controlled cyanide operations and the build up of improved containment facilities for tailings is spreading Constraints encountered were mainly related to the country instability during project implementation and the varying grade of political support towards the legal and institutional reform which could only be completed during the final two years of project activities In that sense the stability of the project coordi
82. os recursos especialmente en reas remotas con oportunidades econ micas muy limitadas cuyos gobiernos y comunidades locales requieren infraestructura y optimizaci n de sus finanzas Varias instituciones centran sus esfuerzos en establecer v as innovadoras para asegurar una miner a ambiental y socialmente responsable con participaci n de la comunidad y la sociedad civil en el manejo y monitoreo de los impactos sociales y ambientales Prodeminca ha demostrado a trav s de su trabajo en sectores de miner a de peque a escala que esto es posible si se involucra a la comunidad local en estas tareas La consulta previa y p blica acompa ada de suficiente informaci n llevada a cabo por el proyecto en sus principales acciones ha permitido identificar mecanismos nuevos de participaci n de la sociedad civil en el manejo y toma de decisiones que pueden afectar a las comunidades en el contexto del desarrollo minero lo que resulta ejemplar incluso para otras industrias Inestabilidad pol tica y estabilidad del proyecto La inestabilidad pol tica del Ecuador afect el plan de implementaci n y multiplic los esfuerzos para explicar a sucesivas autoridades los alcances y l mites del mismo En una oportunidad agosto 96 febrero 97 se lleg a una discrepancia con respecto a los objetivos del proyecto y la imposibilidad de apoyar una pol tica minera distinta de la definida originalmente Estos factores afectaron principalmente las actividades re
83. rounding environment Conflicts with surrounding communities are frequent Much of the actual economic potential is Jost due to the absence of a legal or fiscal framework for small scale mining and due to rudimentary production processing and marketing techniques An artisanal mining boom in hard rock gold involved more than 50 000 miners in the southern regions of Ecuador during the 1980s which by the early 90 s had caused considerable damages affecting the environmental and social situation of the miners and the communities living around Building on the lessons of a workshop held at the World Bank in May 1995 the PRODEMINCA project decided to shift from an originally mainly technical approach towards a fully integrated program with the active participation of the miners themselves and of local communities addressing the environmental and social problem including migration and gender issues The project made a significant contribution to e Largely formalizing the activity 166 associations of the 169 groups existing before 1995 have now been granted a legal title and land invasions by small scale miners did not occur during the last years e Developing sustainable remedial measures to limit the environmental degradation caused by small scale mining controlling the occupational and toxicological problems related to mining including for example building of a pound collecting the tailings of 22 of the existing 50 ASM plants upstream the P
84. s artisanal and small scale mining issues demonstrating particularly the importance 1 to use an integrated approach and ii to emphasize the socio economic aspects related to the sub sector situation The key lessons are summerized in Text Box 2 below Though the actual impact still need to be more systematically documented the contribution of similar integrated ASM activities to poverty alleviation and socio economic improvement on populations in peripheric mineral rich areas with few alternative economic options is important With this purpose in mind the Bank together with DFID has recently taken the initiative to establish a Consultative Group for Artisanal and Small Scale Mining CASM aiming at gathering and disseminating experiences within this field and promote and coordinate amongst donors the development of integrated approach projects Many countries in the LAC Africa South Asia and other regions would certainly benefit of such projects see also http casmsite org Capacity building and foreign vs national consultant services The involvement and balance of foreign versus national expertise in project activities is an issue much debated with respect to TA capacity building impact and sustainibility Under the project the involvement of long term foreign specialists most of them funded by DFID and SIDA has without any doubt contributed to implementation stability and to introduce cutting edge methodologies and technologies Howev
85. s institutional development impact was substantial The mandates responsibilities and functions of the different public mining institutions PMIs in charge of sector management have been modernized and clearly defined including within the Mining Law its amendment and regulations They now correspond to the role of a modern State as a regulator of the activity The operating functions which remained in the 1991 Law have been eliminated amendment to the Law 2000 Mining areas which were under the control of the State were being released at project closure The process of institutional reform lost momentum during the period August 1996 to August 1998 due to 10 weaker political support However commitment under the subsequent administrations regained strength and consistent efforts were made to achieve the reform modernization and sustainability of the PMIs see section 4 2 paragraph on Institutional Strengthening above These developments embraced international best practice and were designed to fit the specificities of the Ecuadorian mining sector in terms of functions size capacities including a personnel rationalization from 240 to 120 through a both formal and on the job training b infrastructure remodeling and rehabilitation of offices c acquisition of modern equipment e g installation of GPS base stations over the country and establishment of computerized information and management systems and d decentralizatio
86. tation 5 4 Costs and financing The total cost of the project executed at closure amounted to US 20 55 million This is about US 3 45 14 4 million less than the US 24 0 million estimated in the MOP The Bank s Loan amount was reduced by 3 million from 14 million to 11 million through a partial cancelation in November 1998 in view of the expected closure of the project on June 30 1999 and delays in the institutional reform process and in the implementation of important works such as an airborne geophysical survey and building of tailings dams However all project objectives could be achieved through subsequent extension to the loan closing date and reduced implementation costs including i lower cost than originally estimated for the aerial survey ii selection of a different approach to finance the construction of tailings dams and other environmental remediation works and iii more extensive contracting of national consultants instead of international ones as originally planned particularly regarding the legal and institutional reform process as well as the environmental and assistance to small scale miners activities and others The availability and delays in obtaining counterpart funds has been a problem during most the project life particularly during the Bucaram and Alarcon administrations While this resulted in implementations delays this difficulty did not endangered project activities In addition a few initiatives miti
87. ted and or under implementation with the participation of producers in a pilot mining area near the Wes southwestern coast of Ecuador where risks and risk perception to impact other important economic activities shrimps bananas are significant c An environmental management master plan was completed in the Portovelo Zaruma area to define measures to contain contamination affecting downstream economic activities including across the Peruvian border Land Use Planning and Management The sustainable use of mineral resource requires that areas of mineral potential are evaluated and managed in the context of existing and alternative land use options integrating social environmental cultural and economic factors One of the important achievements of PRODEMINCA was therefore to provide tools for efficient and transparent land use planning and management Such tools include e Mining cadastre and management of property rights The establishment under the project of an efficient mining cadastre including the regulatory institutional and technological aspects with clear rules is a key factor to attract and sustain mining investments to monitor sector activities and optimize the sector contribution to regional development The granting of mining titles founded on transparent procedures and on unequivocal location and limits of mineral properties guarantees the security of tenure for investors Also through its display on internet ht
88. ted in a designing modernized mandates new set up and functions regarding the management of mining rights and environmental permits as well as the development of the geological information infrastructure b passing of necessary regulations or decrees to establish the reformed framework c elimination of corporate functions of the CODIGEM d rationalization of personnel e establishment of procedures f preparation of operation manuals and training and g provision of modern infrastructure The new set of sector entities including the National Mining Directorate DINAMI and its regional decentralized representations the Environmental Mining Unit UAM and the National Geological Directorate DINAGE all under SSM was operative by the end of 1999 Through the Ley Trolle II amendment a mechanism providing reliable funding a percentage of land fees to sustain in the long term core functions of the public mining institutions was passed B Policy Implementation The main outputs include Environmental Management a Environmental base lines studies in mining areas of Southern Ecuador were completed and results were published and presented at workshops and seminars an environmental monitoring network and environmental information system were developed which would permit to monitor properly the sector environmental performance b Building of dams to contain tailings and other works to improve environmental conditions were comple
89. the Bank s Inspection Panel which while identifying shortcomings in the project EA preparation concluded that thematic mapping was environmentally neutral This process led also to indirect positive outcomes such as the statement of a clearer definition of information policy by the Governement mainly MEM and ME and an increased awareness by public authorities on the need to improve consultation and participatory processes involving local communities in relation to the development of mining operations Activities in that sense have been initiated and will continue beyond project closure with the support of the Bank including the development of guidelines related to relationships with communities as well as monitoring by environmental NGOs of the use of geological data in relation to activities in protected areas Information and management Systems g A sector Geological Information System GIS and related data bases were developed and are operational h A computerized Mining Cadastre Administration System SADMIN was developed and is operational in all DINAMI s central and regional offices The information updated daily is available on internet at http www mineriaecuador com One output of particular interest is a map showing the distribution of mining concessions and of protected areas SADMIN is linked to the environmental data bases see below i A computerized information and management system related to environmental permits an
90. tor Minero de Ecuador y Recomendaciones para el Contenido Institucional de la Nueva Ley de Mineria 12C December 1998 Manual de Procedimientos y Cat logo de Funciones para la Subsecretar a de Minas con Base en el Nuevo Modelo Institucional Versi n Final de la Fase Conceptual Maritza Rojas and Yurina Zalumbide October 1999 Implementaci n del Nuevo Modelo Institucional Direcciones Regionales y Unidad de Soporte al Sistema de Informaci n Minera USSIM 12C November 1999 Evaluaci n y Reforzamiento del Sector Minero I2C May 2000 Reformas a la Ley de Mineria 126 Ley para la Promocion de la Inversion y Participacion Ciudadana GOE August 2000 Ley de Mineria y Reglamentos Version en ingles y espanol SSM July 2001 2 Sector Legal and Institutional Reform Environmental Management 0 10 Resumen de las Disposiciones Legales e Institucionales Relacionadas a la Miner a y el Medio Ambiente Faith Halter SES August 1995 Reglamento de Salud y Seguridad Minera SSM Reglamento Ambiental para las Actividades Mineras SSM September 1997 Evaluaci n de la capacidad analitica de laboratorios nacionales Consuelo Hernandez Dinapa March 1998 Propuesta de Desarrollo Institucional de la Direcci n Ambiental Minera Direcci n Nacional de Protecci n Ambiental Mark Kenber Fundacion Natura May 1998 3 Environmental Management and Monitoring o Exposure to mercury lead and cadmium in miners in Ponce Enr quez
91. tos habr a permitido una mejor proyecci n para el futuro de estas entidades De igual manera los objetivos en aspectos como salud debieron dimensionarse al contexto social de las zonas de intervenci n incrementando la acci n en aspectos generales desnutrici n pobreza alcoholismo que afectan al sector rural para que no aparezca la actuaci n como excluyente solo para el sector minero Situaci n general y riesgo pa s Si bien hemos desarrollado todos los elementos necesarios en el sector minero esto es marco legal mas seguro mejores instituciones y un sistema de catastro transparente mayor informaci n geocient fica mejor contexto social y ambiental el principal objetivo del proyecto lograr mayor inversi n en miner a solo podr ser medido en los pr ximos a os Factores como la ca da de precios de los m todos y de las inversiones a nivel mundial a partir de 1997 la inestabilidad pol tica en este per odo en el pa s la crisis econ mica que a n preocupa a los inversionistas extranjeros y la falta de confianza en los rganos judiciales completan este marco general negativo para la inversi n extranjera en Ecuador Sin embargo en las primeras semanas posteriores a la emisi n de las reformas a la Ley de Miner a importantes empresas mineras del mundo como RTZ BHP y Noranda han visitado el pa s o han solicitado nuevas reas mineras 4 Seguimiento de PRODEMINCA Actividades de seguimiento del Proyecto La influenc
92. tp www mineriaecuador com it allows the government administration as well as communities to foresee and mitigate potential conflicts between mineral resources exploitation and other land uses including conservation of protected areas Geo scientific information infrastructure The availability of strategic information with respect to mineral resources constitutes an important mandate of a modern State through a national Geological Survey Organization The Government of Ecuador and the World Bank has long recognized the importance of a Geological Survey as an enabler to provide the required data to make well informed decisions regarding sustainable land and resource use PRODEMINCA allocated funds to strengthen the Ecuadorian Directorate of Geology DINAGE to develop the national multi disciplinary geoscientific data base to set up a related information system and publish and disseminate the information through maps books workshops and conferences The availability to all stakeholders of modern and reliable geo scientific data enhance the capacity not only to assess and manage mineral resources but is also applicable to agriculture forestry natural hazards environmental and health risk analysis conservation and land use planning Text Box 2 Geological Information Infrastructure d 100 of the planned regional geological geochemical geophysical and known ore districts maps descriptions and data bases were generated a
93. try assistance strategy to support private sector development The project directly supported the Government s 1990 Mining Sector Policy and Strategy paper MSPSP developed with the Bank assistance which stressed the need to facilitate and attract private investment by making Ecuador internationally competitive The project was also significant for strengthening the enforcement of the new Mining Law approved in 1991 which was the essential building block for the sector development particularly in terms of providing concessionary rights restricting discretionary powers tightening environmental requirement for mining and creating equality for national and international investors The Bank s involvement in the project was expected to enhance the Government s ability to administer and enforce the Law help restructure sector institutions and bring international experience to bear on its new mining program especially in matters of environmental concern The Bank assistance was also expected to help the Government mobilize financing and coordinate and focus activities of bilateral agencies such as Swedish International Development Agency SIDA and the Department for International Development DFID interested in the mining sector in Ecuador The project also took into account three main risk factors First was the risk of the existing and later Governments seeking an expanded role for the public sector in mining production To mitigate this risk th
94. uring projects contribute to achieving DFID s strategic objectives e Early and full consideration of environmental issues is needed in all mining and geoscience related projects to avoid adverse impacts and negative stakeholder views ToRs must reflect environmental issues and environmental conditionalities must be implemented early in projects e Wide and proactive communication with stakeholders including those who may hold a negative view to ensure an objective view of the project is maintained e Proactive communication between all parties to the project is needed to ensure conditionalities and needs are being met and to resolve issues early on e Visible results are required to engender a positive view of the project with stakeholders e Capacity building must be integral to projects with a technical focus to ensure that technology and skills transfer can be used appropriately e Mechanisms for retaining staff trained by projects in the sector and public service must be considered at design stage and implemented from the beginning of the project to mvoe towards sustainability Although the project received criticism on environmental issues no adverse environmental impact from the project is apparent on project completion Overall the PRODEMINCA project of which the GIMP is a component has had significant positive impacts and the GIMP component has achieved its purpose The sustainability question is one that needs examining Whilst direct
95. vices of staff who have been trained under the project and quality of staff to be recruited in the future Efforts were made to include the PMIs as a pilot into the Modernization of the State T A Project MOSTA However such initiatives did not yet result in a change at the Government level 5 Major Factors Affecting Implementation and Outcome 5 1 Factors outside the control of government or implementing agency Steep decline of commodity prices in 1998 which made investment in mining activities in Ecuador no more attractive to major exploration companies was a major factor affecting project implementation Likewise lack of financing resulting from the Bre X scandal in Indonesia and fallout of the East Asian crisis during 1997 98 made it difficult for many junior exploration companies to conduct mining activities in emerging countries such as Ecuador 5 2 Factors generally subject to government control Because of initial delays including the setting up of a proper project implemention unit the loan became effective only in July 1994 with a delay of about nine months The project had a slow start also because of the need to finalize cofinancing arrangements with the DFID and SIDA for the environmental monitoring and control components During the period August 1996 to February 1997 disagreements over project implementation strategy and political interference in project management also put the project on hold There was a slow down
96. vironmental Control Technical Assistance Project Loan No 3655 EC INSP R2001 1 February 23 2001 and to the Management Report and Recommendation in Response to the Inspection Panel Investigation Report April 10 2001 21 Annex 1 Key Performance Indicators Log Frame Matrix Outcome Impact Indicators Indicator Matrix Projected in last PSR Actual Latest Estimate i Increased private investment in mining Not applicable i Partially achieved Investments increased until start of economic and meta prices recession 1997 Picking up in 2000 ii More appropriate legal and regulatory ii Achieved Mining Law 126 and framework amendment enacted General Mining Regulations and amendment Environmental Regulations for Mining Activities and Health and Safety Regulations for Mining Activities approved iii Effective application and administration of iii Achieved DINAMI and UAM are legal regulatory framework by public mining operational institutions iv Enactment of environmental legal and iv Enacted see ii In addition guidelines regulatory framework in mining for relationships between mining projects and communities under development v Improved environmental permitting and v Achieved staff of DINAMI and UAM control incl monitoring by Government including regional offices trained authorities management systems and procedures L established and operational Output I
97. was generally adequate to meet the projects overriding objective During preparation of the project major risk factors were considered and discussed Stakeholders and cofinanciers were also involved However there were a few design shortcomings Considering the internal political climate and lack of political stability the project was ambitious Multitude of project components 13 and institutional weaknesses on the part of the Government especially the MEM made the project risky from its inception There was also a lack of strong enough links between the technical and institutional components While technical components including environment geoscientific information and information systems were implemented by highly competent technical experts with new vision and creative ideas institutional components had to encounter several barriers including periodical lack of political commitment and in a few cases difficulties to involve professionally qualified people to take care of the implementation The project preparation did not identify the risk of fluctuation in commodity prices or the extent of coming national political and economic turmoil Because of the downturn of commodity prices as well as periodical political turmoils investment in mining activities in Ecuador was not attractive to major exploration companies and they left the country seeking better opportunities elsewhere this situation apparently started to revert in late 2000 Li
98. y el ambiente Publicar sus resultados dio seriedad y asegur la toma de conciencia definici n de competencias y apoyo a las acciones de remediaci n Las iniciativas de mejor relaci n con la comunidad de incorporaci n de mejor tecnolog a apropiada y de apertura a criterios de calidad ambiental han sido posibles gracias a un amplio trabajo social que ha permitido transferir conceptos t cnicos y fortalecer la actuaci n de gobiernos locales en el control ambiental d Consultas para reformas legales Todas las reformas legales y reglamentarias estudiadas en el sector durante la vigencia del proyecto se han discutido ampliamente convocando a los principales actores sociales 39 En el proceso debe destacarse el Reglamento Ambiental para actividad minera en cuya discusi n con ong s ambientalistas comunidades y entidades mineras se ratific el consenso de no realizar actividades mineras en reas protegidas hoy incorporado en el nuevo Reglamento e Consulta Previa a la actividad minera Bajo el proyecto se realiz una primera etapa de informaci n del marco legal que regular a los procesos de consulta previa a actividades mineras Al finalizar Prodeminca el MEM con apoyo del Banco Mundial desarrolla una Gu a de Relaciones Comunitarias para proporcionar lineamientos concertados entre los actores sociales claves empresarios mineros peque os mineros comunidades ong s ambientales y de desarrollo gobiernos locales y naci
99. y remediaci n ambiental especialmente en las zonas con peque a miner a Existen ahora profesionales que laboran en las agencias ejecutoras con mejor capacitaci n en gesti n ambiental y se ha logrado comit s de gesti n locales en dos de los distritos en que labora la miner a de peque a escala Queremos expresar un especial agradecimiento al Sr Gotthard Walser especialista en Miner a del Banco Mundial quien con su constancia entusiasmo y capacidad contribuy para el xito de este proyecto Para las autoridades del Ministerio de Energ a y Minas resulta altamente satisfactorio emitir comentarios positivos respecto a este proyecto que estamos seguros contribuir a la inversi n minera y con ello a mejores condiciones de vida de la poblaci n ecuatoriana C sar Anibal Espinosa Garc s Subsecretario de Minas Ministerio de Energ a y Minas Julio 2001 MAP SECTION 100 ANNE 1 Bahia de C araq seze ye helma A a 0 Guayaquil This map was produced by the Map Design Unit of The World Bank Tha boundaries colors dencminations and anyother information shownon this map do not imply on the part of The World Bank Group any judgment on the legal status of any territory or any endarsement or acceptance of such buundaries ECUADOR MINING DEVELOPMENT AND ENVIRONMENTAL CONTROL TECHNICAL ASSISTANCE PROJECT GALAPAGOS ISLANDS ARCHIPIELA SCG DE CELON AA UTE EN A mi Zi i PORTS RIVERS mem eamm PROV

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