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The Protected Areas Conservation Trust in Belize
Barry Spergel and Mark Nolan, World Wildlife Fund - US
presented by Mark Nolan
Belize's Protected Areas Conservation Trust ("PACT") represents an innovative way of raising additional funds for the conservation and management of protected areas through a "conservation fee" charged to all foreign tourists when leaving the country. This can serve as a model for other countries at a time of severe budgetary constraints and declining international aid. Since tourism is now the world's largest industry, charging tourists even a modest conservation fee has the potential to generate large sums for management of protected areas.
In addition to being an innovative fund-raising mechanism, an equally noteworthy feature of the PACT is that the money generated by the "conservation fee" -- which is essentially a tax -- goes to an independent legal entity outside of government, which is managed by a Board of Directors having an equal number of members from government and from non-governmental organizations.
This represents a new kind of partnership between government and civil society. Yet it took five years from the time that a proposal was first discussed in 1991, until the PACT became fully operational on June 1, 1996. The following case study describes the sequence of events and the issues involved in establishing the PACT, and the legal, financial and organizational structure that have resulted.
Many species under pressure elsewhere in the Central American range, such as jaguar, manatee and Morelet's crocodile, occur here in healthy populations and as part of complete, fully-functioning natural communities characteristic of the region. A number of species are endemic, and the country is also important as an overwintering and passage area for migrant species. In addition, there are hundreds of Mayan sites. For all of these reasons, Belize is extremely important for conservation on a regional, and even global, scale. Its biodiversity resources are by and large, not under immediate threat and are in relatively robust condition. There is time, therefore, to develop appropriate actions before crisis conditions are reached.
The forward trends indicate, however, that this situation is about to change.
Most of the conservation values of Belize can be attributed to low population pressure, but the population is growing swiftly, especially in rural areas. Substantial investment is required both to raise current living standards and to service a growing population. This will require continued intensification of activity promoting economic development. The window of opportunity to conserve Belize's natural and cultural heritage is fast closing.
Officially, 36% of Belize is under some form of protected area status, including Forest Preserves, Marine Reserves, National Parks, Wildlife Sanctuaries, Nature Reserves, Natural Monuments, Archaeological Reserves, and a number of private nature reserves. However, the protected area system is seriously underfunded, and some protected areas exist on paper only. Three different government ministries have direct responsibility for protected areas -- the Ministry of Natural Resources, the Ministry of Agriculture and Fisheries, and the Ministry of Environment and Tourism.
The NGO community also plays a major role in protected area management. The Government has delegated to the Belize Audubon Society the responsibility for managing six protected areas, and another NGO, the Program for Belize, responsible for managing the country's second largest protected area. But all of the protected areas in Belize are under-resourced in terms of finance, equipment, infrastructure and qualified staff. Since 1986, WWF has been a major source of financial support for Belize's protected area system. Since 1993, USAID has provided several million dollars through the Natural Resources Management and Protection ("NARMAP") Project, but this support ended in mid-1996. Although international funding agencies have supported initial planning and protected area establishment costs, there is an acute shortfall of funds for the day to day costs of running the protected areas system.
A recent study estimated the cost of "basic services" for the protected area management system at U.S. $6 million in one-time capital expenses and $2.0 - $2.5 million in annual recurrent costs. These sums are well in excess of current expenditures. The same study concluded: "It is highly unlikely that, given current financial constraints and the many calls on government support, extra expenditure can be devoted to protected areas from the national budget." The PACT was developed, therefore, as an alternative way of providing long-term sustainable funding for conservation.
Since most of the 140,000 foreign tourists who visit Belize each year are "ecotourists" who come to experience jungle treks and wildlife viewing, or diving and fishing in the barrier reef, rather than the mass tourism based on high-rise beach hotels that is characteristic of many other areas in the Caribbean, there is a clear link between the financial well-being of Belize's tourism industry and the health of Belize's natural environment. Based on extensive interviews, the Colorado State University consultants found that "tourists themselves are willing and expect to pay a substantial part of the cost of protecting the resources as long as the money they pay goes directly toward managing and improving the protected area resources", and does not simply disappear into general government revenues.
The consultants therefore proposed that a US $20 conservation fee should be collected as part of the price of the airline and cruise ship tickets for all foreign tourists coming to Belize, and that the monies collected be put into an independent Protected Areas Conservation Trust ("PACT"). Based on 140,000 foreign tourists per year, a $20 fee would be enough to totally cover annual basic recurrent expenses for Belize's protected area system. In addition, the consultants recommended that new or higher license and concession fees be charged for recreational activities within protected areas, including diving fees, boating fees, sports fishing fees, hunting fees and entry fees for each protected area (since many protected areas currently charge no entry fees), and that 20% of all these different fees go into the PACT. Finally, they recommended that all private businesses providing services to visitors in protected areas should be charged concession fees which would also go into the PACT. These additional sums could be used to meet needed capital expenditures.
A Consultative Committee was convened to discuss the consultants' proposal. The Consultative Committee had more than 20 members, from all the relevant government ministries and departments, from the Belize Tourism Industry Association ("BTIA"), and from the four major national conservation NGOs -- Belize Audubon Society, Programme for Belize, Belize Center for Environmental Studies, and the Belize Zoo. WWF also participated in meetings of the Committee and submitted extensive written comments.
Everyone on the Consultative Committee was to some degree supportive of the PACT proposal, but everyone had concerns and questions, which resulted in the Committee making many changes in the consultants' original proposal. Tourism industry representatives were concerned that the "conservation fee" being proposed was too high and might cause tourists to go to other countries instead. As a result, the "conservation fee" was first reduced from US $20 to US $10, and then (over the next few years of discussions) reduced even further.
Belizean conservation NGOs were concerned that the PACT would be too government-dominated, and that the PACT funds could be diverted for other uses than conservation of protected areas. NGOs were also concerned with the approach of the Ministry of Natural Resources, which had recently de-gazetted several protected areas.
WWF's most important concern was that by allocating a fixed percentage of PACT revenues for specific government ministries year after year, the PACT might simply replace existing government funding, especially if the Ministry of Finance cut those Ministries' budgets by the amounts they receive from the PACT. WWF recommended that all grants awarded by the PACT should be based on objective conservation criteria as evaluated by an advisory council of technical experts which would then make recommendations to the full Board of Directors.
There were many other questions raised about the proposal. First of all, to what extent should the PACT be used for funding activities besides nature protection, such as cultural heritage preservation (i.e. maintaining Mayan archaeological sites, which is something that the Ministry of Environment and Tourism wanted); or clean-up of urban and industrial pollution (which some of the development NGOs and local governments wanted); or providing loans to develop ecotourism enterprises in and around protected areas (which the Ministry of Natural Resources favored); or paying for better police protection of foreign tourists against ordinary street crime (which is something the tourism industry wanted). Eventually, it was decided that, in addition to funding activities related to biodiversity conservation, the PACT could be used for cultural heritage preservation and for providing loans to community-based ecotourism ventures, but would not be used for broader environmental activities such as clean-up of urban and industrial pollution, or for paying salaries of additional policemen to protect tourists.
Many people thought the Board of Directors was too large (its size was eventually reduced from 11 voting members to 7 voting members and two non-voting members) and that the proposed Advisory Council of technical experts was too small (its size was eventually raised from 5 to 11 members). WWF suggested that there be a higher proportion of NGO representatives on the Board of Directors -- including development NGOs as well as conservation NGOs -- in order to make the PACT more attractive to potential foreign donors. USAID, in particular, has regulations that only allow it to give money to environmental trust funds that have at least 50% non-governmental representation on their boards. Belizean NGOs, of course, argued very strongly that they should have greater representation on the Board. This was eventually achieved by cutting down the number of government representatives. Development NGOs are not represented on the 7 member Board of Directors, but do have one representative on the 11 member Advisory Council.
The Advisory Council in its final form has five voting members from central government ministries (the same 3 ministries represented on the Board of Directors, plus the ministries of economic development, and education), and six from outside government (one each from conservation NGOs, rural development NGOs, the tourism industry, the Village Councils, the Town Boards, and University College of Belize). The Board is the highest level policy-setting and decision-making body, whereas the Advisory Council is a group of mid-level technical experts. There is also a small (3 to 5 member) Honorary Board, appointed by the Board of Directors and composed of leading Belizean public figures and representatives of international conservation organizations. Its function is to assist with publicizing and fund-raising for the PACT and to make suggestions to the Board of Directors.
In May 1992, WWF worked with Belize's Solicitor General to draft legislation to establish the PACT. At the same time, the Permanent Secretary for the Ministry of Natural Resources made the first public announcement of the government's intention to establish the PACT, at a meeting of the World Ecotourism Conference then being held in Belize. The several hundred participants at the Conference were surveyed for their reactions to the PACT proposal, and asked whether they thought the "conservation fee" would drive away foreign tourists. The results were quite positive, and were interpreted as a green light to go ahead over the next few months to refine the draft legislation.
Among the additional changes made were that Belize citizens and residents would now be exempted from payment of the conservation fee; that entry fees for private nature reserves would be exempted from the requirement that 20% of fees collected must go into the PACT; that provisions for using PACT funds to make loans were made more restrictive; and that monitoring and evaluation would be required for all PACT-funded projects.
In fact, a National Protected Areas System Plan was completed in 1996 as part of the WWF/USAID-funded NARMAP Project. But because of strong support from the Ministry of Natural Resources, the PACT legislation finally passed by Parliament retains the requirement that all spending of PACT funds must be in accordance with a 5-year PACT strategic plan written by outside consultants. The original proposal has been somewhat modified by giving primary responsibility for developing the 5-year plan to the Advisory Council "with the assistance of appropriate professional and technical planners who may be contracted by the Board," and then requiring that the plan be approved by the Advisory Council, the Board and finally by the Cabinet. However, it is still not clear how closely the funding priorities of the PACT will match the priorities of the National Protected Areas System Plan.
Another issue that was discussed in 1992 was which kinds of activities should qualify for funding from the PACT. The Consultants had drafted a schedule of activities that included:
1. training
2. environmental education and awareness activities
3. policy studies and consultations
4. research
5. protected area management planning
6. institutional support for public sector agencies and NGOs, and
recurrent
expenses for NGOs
7. evaluation of resource management activities
8. loans to conservation or ecotourism ventures, including starting a tour
guide operation and assistance to private reserves.
The following three activities were listed as not eligible for PACT funding:
1. salaries for government staff
2. salaries for core or permanent staff of NGOs
3. recurrent expenses of government agencies.
The reasons for the three exclusions were to prevent the PACT from being used simply to pay existing expenses for salaries and other recurrent costs of government agencies. However, some NGOs felt that too many of the activities listed focused on research, planning, education and ecotourism, while there was not enough focus on financing the expenses of actually managing protected areas (including increasing the levels of staffing, especially in those protected areas that currently have no permanent staff).
In retrospect, probably not enough attention was given to this issue, since most of the discussion of the PACT over the years was focused on more operational issues such as the board's structure and composition. Some way should have been devised to allow the PACT to fund the recurrent expenses for salaries of additional park guards, forest rangers and other field staff in the protected areas, but not the salaries of existing government officials. Unfortunately, the Schedule of activities was somewhat overlooked in the discussions, and the initial list was simply incorporated without any changes in the final version of the PACT legislation passed by Parliament.
This was extremely controversial and upset the tourism industry. The tourism industry withdrew its support for the PACT out of fear that the new hotel tax plus the PACT "conservation fee" would make Belize uncompetitive with neighboring countries as a tourist destination. Secondly, the ruling political party was voted out of power, and the new government distanced itself from the PACT as something too closely associated with its predecessor.
It was not until almost a year later, at the end of 1993, that a meeting was held to discuss whether or not to revive the PACT proposal, but no conclusions were reached, and eight months went by before another meeting to discuss the PACT was held. Gradually the new government took a renewed interest in the PACT as a way of financing conservation of Belize's natural and cultural resources. In June 1994, a broadly representative meeting was held to discuss the PACT, attended by representatives of most of the same organizations that formerly made up the Consultative Committee. A number of relatively minor changes were made to the 1992 PACT legislation, and in December 1994 this was resubmitted to Cabinet. It then took another year, until December 1995, before the PACT legislation was finally submitted to a vote in Parliament.
Because of opposition from the tourism industry to even a US $10 or $5 "conservation fee", the amount of the fee was reduced to US $3.75 (7.50 Belize dollars). Based on the current figure of 140,000 foreign tourists each year, the $3.75 fee should raise more than US $500,000 annually. The amount of $3.75 was chosen because it would round off the existing US $11.25 airport departure tax to US $15.00.
Originally, the consultants had recommended that the "conservation fee" be included in the price of foreign tourists' airline tickets so that the fee would be less noticed and easier to collect. At a later point, the idea of collecting the conservation fee from tourists when they enter the country was also considered. Not until 1995, however, was a consensus reached that it would be more practical to collect the "conservation fee" along with, but separate from, the airport departure tax.
Another issue that came up in meetings in 1995 was exactly how the Board members were to be selected. It was agreed that the Board should have three members from the national government (from each of the three ministries involved with protected areas) and three from outside the national government -- one from conservation NGOs, one from the tourism industry, and one from the Village Councils -- and that a seventh Board Member should be selected by the other six. However, it had not been specified how these members were to be selected.
It was finally decided that the representatives of the three ministries should be the Permanent Secretaries of those ministries, and the non-governmental representatives should be selected by their respective associations -- the Belize Association of Conservation NGOs (BACONGO), the Belize Tourism Industry Association (BTIA), and a somewhat more complicated procedure for the representative from the Village Councils.
After the details of the PACT legislation had finally been agreed upon, Parliament heard testimony on support of the PACT from many different people. However, just before the legislation was submitted to a vote in Belize's Parliament, several small but critical changes were inserted in the PACT legislation.
The changes require that the three non-governmental Members of the Board, although "selected" by their respective non-governmental association, are to be "appointed by the Minister" of Natural Resources, which seems to imply an approval role. The legislation was also changed to require that members of the Advisory Council, as well as the PACT Executive Director and staff, are to be appointed by the Minister of Natural Resources rather than by the PACT Board of Directors (although the Board retains the authority to fire the Executive Director and staff). The other two ministries and the NGO community were upset with these changes, and learned of them only after the legislation had been passed by Parliament on January 2, 1996.
Over the course of several weeks, the team met with more than fifty governmental officials, NGO and private sector representatives to discuss various options and viewpoints on the detailed steps and procedures necessary to make the PACT operational, including (1) procedures for the selection of the Board of Directors, Advisory Council, Honorary Board, and staff; (2) agendas for the first meeting of each of the Boards and Council, and an administrative workplan for the PACT's first year; (3) eligibility requirements, selection criteria and evaluation procedures for applicants for PACT funding from the PACT; (4) a revenue generation plan and procedures for revenue collection, disbursements; and (5) procedures for accounting for trust funds and other internal control mechanisms. The consultants produced an 85 page report which was widely discussed and then revised at an all-day meeting in April 1996 attended by 46 people representing all interested organizations and ministries.
One of the recommendations of the Operational Plan that was approved by an overwhelming majority at the April workshop, was that the PACT legislation should be amended in order to delete the last minute changes giving broad powers to the Minister of Natural Resources. Spokesmen for the Ministry countered with the suggestion that no amendments should be made for at least two years, since other provisions needing amendment might become apparent over the course of time, or it might be decided that after all no amendments are needed.
The authors of the Operational Plan also recommended that for the time being, the Minister's power to appoint all Board Members, Advisory Council Members and PACT staff should be treated as a "mere formality," in order to be consistent with other provisions in the legislation that specify that Board Members shall be selected either by Cabinet (in the case of government representatives) or by their respective associations or networks (in the case of NGO and private sector representatives). The Operational Plan however, is not binding, and must be adopted by the Board of Directors in order to take effect.
One of the key recommendations of the Operational Plan is that the seventh board member -- i.e., the at-large member selected by the 3 government and 3 non-governmental representatives on the Board -- should be chosen from the non-governmental sector in order to give the Board a non-governmental majority. At the PACT Board's very first meeting on June 3, 1996, a representative of the Belize Association of National Development NGOs ("ANDA") was chosen as the seventh Board Member. The PACT's interim executive director is the former head of the Belize Ecotourism Association. The Permanent Secretary of the Ministry of Natural Resources was chosen as the Chairman of the Board.
Other key recommendations of Operational Plan were endorsed by a majority of those present at the workshop, but still remain to be decided by the Board. These include a recommendation that the PACT should only make grants and not loans, and that grants should not be made to private individuals or profit-making entities, except community-based enterprises. Another recommendation is that the 5-year PACT Strategic Plan should not simply be prepared by outside consultants, but should be the result of an open and transparent process with maximum public participation. The 5-year plan is critically important because it will specify what kinds of project activities are to be the focus of PACT grants for a given 5-year period.
Additional matters which were discussed in detail at the workshop included the procedures for selection of the Board member representing the Village Councils; detailed procedures for collecting the "conservation fee" at the airport; a recommendation that the PACT's administrative expenses be limited to some specific percentage of PACT revenues; and a recommendation that the Board of the Protected Areas Foundation should not be the same as the Board of the PACT, but should be composed of three representatives from local NGOs, two representatives from international conservation NGOs, and two from local financial institutions, with no government representatives on the Foundation's Board. In practice, it will be up to the Board to decide whether or not to adopt these recommendations.
More funds are still needed -- possibly from international donor agencies, or from raising the amount of the "conservation fee," or from both sources--in order to finance the US $6 million in one-time capital expenses and $2.0 to $2.5 million in annual recurrent expenses needed for operating Belize's protected area system. Belize is unique in having 36% of its area under some form of conservation status, in having 70% of its area still forested and characterized by abundant wildlife populations, and in having the second largest barrier reef system in the world, still in relatively pristine condition. But all these resources will be threatened if there are not sufficient funds to protect and manage them.
The PACT represents a powerful new mechanism for providing sustainable financing for conservation and deserves to be carefully studied and perhaps initiated by other countries. Already, Namibia (in southern Africa) as well as a group of Mediterranean countries are looking to Belize's example to set up similar trust fund mechanisms that are independent of government, and use revenues generated by a tourist tax.
Belize's government is to be commended for pioneering this idea, and for working so closely with NGOs at all stages of the process. Depending on how things work out in practice, the PACT may become a new model for public-private partnerships in conservation, which may turn out to be an even more valuable legacy than the additional funds generated.
Mark Nolan lives in Miami and can be reached via email at MarkAhnenNolan@msn.com
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