Consulting Assignment Title: Development of the Tonga Ocean Finance Profile

Consulting Assignment Title: Development of the Tonga Ocean Finance Profile

Closing on: Wednesday, August 19, 2020 - 17:00 South Pacific Posted on: Tue, 08/04/2020 - 17:43

Tender Details

 

Pacific islands regional oceanscape program

Grant Number: D023-4P

Forum Fisheries Agency

 

August 3, 2020

REQUEST FOR EXPRESSION OF INTEREST(REOI)

Consulting Assignment Title: Development of the Tonga Ocean Finance Profile

Ref. No. FFA/PROP/C27

Location: Home-based 

Start Date: September 2020

  1. 1. Introduction

 

The Pacific Regional Oceanscape Program (PROP) component three is implemented through the Pacific Islands Forum Fisheries Agency (FFA) and the Office of the Pacific Ocean Commissioner (OPOC; affiliated with the Pacific Islands Forum Secretariat, PIFS). The program is funded by the World Bank and the Global Environment Facility.  The aim of PROP component three is to increase the amount and efficacy of financial investments into Pacific Ocean governance, focusing on eleven countries: Solomon Islands, Vanuatu, Fiji, Tonga, Samoa, Kiribati, Nauru, Palau, Marshall Islands (RMI), Federated States of Micronesia (FSM) and Tuvalu. This aim falls and contributes to the project’s development objective of delivering activities aimed at the sustainable financing of the conservation of critical fishery habitats.

The program defines the goal of ocean finance as generating, investing, aligning, and accounting for financial capital to achieve sustained ocean health and governance: 1) Generate public and private financial capital through traditional and innovative finance mechanisms to create a diversified portfolio of revenue that supports ocean health,  2) Invest financial capital effectively, efficiently, and strategically to achieve measurable ocean outcomes and sustained ocean governance, 3) Align public and private economic incentives with long-term ocean health, and 4) Account for how financial capital is deployed against performance benchmarks, and account for values of marine ecosystem services through time (Walsh 2018).

The program has three key objectives: 1) develop novel finance mechanisms for Pacific Ocean finance, 2) develop ocean finance profiles for Pacific Island countries, and 3) enhance Pacific regional capacity for ocean finance and governance. Under the first objective, PROP has supported work to analyse and develop a Pacific Ocean Bond, Pacific Ocean Insurance, replicable community managed marine area finance mechanisms, large-scale marine protected area finance mechanisms, and taxes and subsidies relevant to Pacific Ocean health. Under the third objective, several capacity building projects have been completed, including the Pacific Ocean Finance fellowship and knowledge exchange events and products. This terms of reference relates to the second objective - to develop ocean finance profiles for select, Pacific Island countries. Tonga was selected as the pilot country for the development of the ocean profiles work.

An ocean finance profile is an analysis of the status and opportunities to improve ocean finance for each country, involving engagement of public, private, and civil society sectors. The profiles will provide data, analysis, and recommendations to inform governments, non-profit organisations, communities and the private sector about how to improve ocean finance. The profiles are not designed to be formally endorsed by national governments, but instead will inform broader national reviews and strategies including the National Voluntary Reviews of the Sustainable Development Goals. The ocean finance profiles build upon, but do not repeat, the experiences of the Climate Change Finance Assessments conducted over the last several years for many Pacific Island countries. 

The ocean finance profile is guided by the “ocean finance framework” developed under PROP Component 3 work (Walsh, July 2018; see Figure 1). The framework has been used to assess the status of ocean finance at the Pacific regional level (Walsh, October 2018) and to create the assessment guideline/template for the ocean finance profiles. The ocean finance profiles together with the regional status paper will be used to develop a regional opportunities paper in the near future.

2. Background 

2.1 Ocean Finance Framework

The ocean finance profiles use the new ocean finance framework, to investigate the status and opportunities in ocean finance against four key actions: generating, investing, aligning, and accounting for financial capital to achieve sustained ocean health and governance (Walsh 2018; see Figure 2). 

Figure 1. Actions of Ocean Finance (Walsh 2018)

ACTION 1: Generate public and private financial capital through traditional and innovative finance mechanisms to create a diversified portfolio.

Funding sources for ocean finance - which can also be considered as investors in ocean health - include but are not limited to governments, private sector, philanthropic individuals and foundations, development partners, and multilateral institutions. There are numerous funding mechanisms (tools through which funds flow from an investor to an investee) including but not limited to grants, blend, bonds, loans, payments for ecosystem services, taxes, fines and fees. 

Philanthropic donations, development aid, and fishing access fees are the most common finance mechanisms for ocean governance and conservation. Over-reliance on a few mechanisms creates risks that there will be insufficient and/or unsustained funds for critical programs, and therefore a diversified portfolio of revenue streams is needed to support ocean governance (Bos et al 2015). 

For the Pacific region, generating new funds that target ocean governance is a priority. National governments are the primary investors in ocean governance, with the largest source of funding from the collection of foreign fishing license fees. The second largest source is official development assistance by bilateral development partners (USD $20 million annually) and multilateral partners ($10 million annually). Charitable foundations donate USD500k annually, yet this is projected to significantly decrease. Foreign Direct Investment (FDI) provides significant capital to the region, but the proportion of FDI that impacts ocean finance (positively or negatively) is not yet known. Institutional investors are a source of untapped capital, but challenges remain in identifying investment-ready deals. Innovative finance mechanisms worth evaluating for the region include a Pacific Ocean Bond, Pacific Ocean Risk Insurance, and a replicable locally-managed marine area finance mechanism (Walsh 2018).

ACTION 2. Invest financial capital effectively, efficiently, and strategically to achieve measurable ocean outcomes and sustained ocean governance.

Effective and strategic investment is equally important to generating new monies for ocean governance. Monies should be invested strategically towards priority actions that are identified in government strategic plans, sector plans, and/or private sector strategies. Cross-sector partnerships and public private partnerships are often effective pathways towards effective investments. 

Ocean finance should take a holistic view of how monies can be invested for ocean health; investments could be made in any sector or geography as long as there are measurable performance indicators in the ocean environment including cleaner water, more fish, healthier habitats, improved cultural connections to the ocean, and economic opportunities tied to ocean health (see “Account”). There is a nexus between investments in climate change mitigation and adaptation, and investments in ocean governance, that requires further exploration.

For the Pacific region, regardless of the investor or the finance mechanism, monies should be invested against regional and national frameworks for ocean governance in order to achieve strategic and effective change, notably the Pacific Islands Regional Ocean Policy, Framework for a Pacific Oceanscape, and the Sustainable Development Goal (SDG) 14: Life Below Water. For-profit investments have the added challenge of identifying investments that produce financial returns. While the theoretical business case for private investment in SDG 14 is strong, SDG 14 receives the smallest amount of impact investment of all SDGs. Private investment in Pacific Ocean governance is essential yet limited by the number of demonstrated business cases (Walsh 2018). 

ACTION 3. Align public and private economic incentives with long-term ocean health. 

There are two sides to the sustainable development and conservation funding gap. One side is the inadequate financial resources, which are addressed in the actions “generate” and “invest.” The other side of the gap is about the ongoing cost of environmental degradation. Generating and investing monies alone will never close the gap because the gap is continually widening. This action - align - targets the other side of the gap and aims to create long-term enabling conditions to close the gap. 

Economic incentives motivate individual and collective behavior. Examples of economic incentives include but are not limited to government taxes, fees, market incentives, subsidies, and other fiscal policies and private sector economic drivers.

Economic incentives can have a positive impact on ocean health (e.g., taxes for access to protected areas), a negative impact on ocean health (e.g., tax credits for the oil and gas sector), or a mixed impact (e.g., fisheries subsidies).  Sometimes finance mechanisms that generate revenue for ocean governance can have unintended long-term economic incentives that undermine ocean health, for example offshore fisheries license fees that generate more than half of several Pacific Island countries national budgets. Aligning economic incentives with ocean health includes:

* Assessing public fiscal policies to understand what economic drivers exist;

* Reforming public fiscal policies if necessary; and

* Diversifying and balancing revenue portfolios to ensure that long-term ocean health is economically viable.

Enabling the development of industries and sectors that have a net positive impact on ocean health.

For the Pacific region, generating and investing new monies will always be necessary, but unless incentives are aligned with ocean health, ocean finance will never be sufficient. Many finance mechanisms both generate monies and also act as economic incentives (e.g., rights-based fishery access fees). Certification schemes (e.g., Marine Stewardship Council) and the appropriate application of the mitigation hierarchy - including biodiversity offsets - can act as economic incentives to align Pacific economies with ocean governance. Government taxes, non-taxes and subsidies act as economic incentives that can have a beneficial, harmful, or mixed impact on ocean finance and governance. Environmental tax reform is needed but complicated in the region due to economic dependence on extractive industries (Walsh 2018). 

ACTION 4. Account for how financial capital is deployed against performance benchmarks, and account for values of marine ecosystem services through time.

To ensure that the generation, investment, and alignment of financial capital does in fact lead to improvements in ocean health and governance, accounting is a crucial component of ocean finance. There are two key areas of accounting.

Performance indicators should be developed and measured for every ocean investment. While there is not one globally-accepted system of performance indicators for ocean health, there are several systems that could be adapted to the context. Numerous governments and multinational companies are moving towards measuring the Means of Implementation (MOI). The MOI describes the interdependent mix of financial resources technology development and transfer, capacity building, inclusive and equitable globalization and trade against the Sustainable Development Goals, including Sustainable Development Goal 14: Life Under Water. Monitoring performance of investments improves accountability and traceability, reduces corruption and inefficiencies, and enables learning about which investments are most efficient and effective at improving ocean health and governance. 

Economic values of marine natural assets and marine ecosystem services must also be accounted. As above, there is not one globally-accepted methodology for valuing marine systems, but there are numerous methods and examples of valuations that can be adapted. Some marine systems have existing baseline data about the economic values of marine ecosystem services, but most marine systems require better resolution of data and monitoring of economic values through time.

For the Pacific region, a results framework has been developed for the Framework for a Pacific Oceanscape and several initiatives exist to assist countries and corporations with reporting against SDG 14. The Pacific has not yet made enough progress towards SDG 14. In addition, estimating and monitoring changes to the economic valuation of marine ecosystem services can serve as a check on ocean investments. Recent valuations have been done in Fiji, Kiribati, Solomon Islands, Tonga, and Vanuatu; the remaining countries require baseline economic valuations, and all countries require ongoing accounting for changes of values through time (Walsh 2018). 

3. Scope of Services

The aim of the consultancy is to work with the Pacific Islands Forum Secretariat (PIFS) and staff of the Office of the Pacific Ocean Commissioner (OPOC) Team to deliver on the following key tasks:

  1. 1. Lead in the validation and completion of the pilot ocean finance profile for Tonga - national-scale assessments of the status and opportunities for improving the amount and efficacy of ocean finance. The Tonga ocean profile will help to improve and strengthen the understanding of access to finance and help transform the analysis into a strategic source of advice by developing a clear method, assess current donor and country policies, practices, procedures and propose ways for the government to undertake and further the discussion on the principles underlying access and management of ocean finance. It is envisaged that the Tonga pilot ocean finance profile will serve as the reference document to develop other Pacific Island Countries (PICs) ocean finance profiles.
  2. 2. The team is also expected to share and socialise the Ocean Finance Framework with relevant stakeholders in Tonga during the validation mission/consultations. This also includes, determining whether there is a need to provide capacity building and awareness of the related regional policy documents for future work in other PICs.

3.1 Tonga Ocean Finance Profile Validation and Completion

The draft Tonga Ocean Finance Profile has been developed by the PIFS/OPOC staff and has undergone and passed a peer review panel assessment. The draft is now ready to be validated and finalised. The PIFS/OPOC team and the consultant are required to perform the following key tasks to finalise the work:

  1. I. Revise the current draft of the Tonga ocean profile based on the peer review panel’s feedback. The PIFS/OPOC team will provide all the information needed to progress this to the consultant.
  2. II. Progress a validation exercise with the Tongan relevant stakeholders and finalise the document. The consultant along with the PIFS/OPOC team will conduct the validation exercise with stakeholders in Nuku’alofa and Ha’apai. The consultant will gather all the feedback and finalise the profile based on feedback received. The second draft ocean finance profiles will need be circulated to all relevant participants and key stakeholders for feedback at least two weeks prior to a validation consultation. The validation work will need to be done with close engagements with PIFS/OPOC and FFA.
  3. III. After the validation work, the consultant will revise the draft profile based on the feedback and data collected during the validation exercise and submit the revised document to PIFS/OPOC and FFA for feedback. Once feedback is received and the consultant has incorporated it into the revised draft, FFA will submit the final draft of the Tonga profile for an independent review. 
  4. IV. The independent review process will be undertaken by FFA on the draft final ocean profile. The consultant is required to revise the draft following independent review and finalise for PIFS/FFA approval. The independent review process will be arranged by FFA.

5. Institutional Arrangements

FFA will manage the contract for the individual consultant to work with the PIFS/OPOC team on this consultancy. The consultant will sign a lump-sum contract for the services under this consultancy. The payments under this consultancy will be made against the following deliverables:

  1. 1. Delivery of the revised draft of the Tonga Ocean Finance Profile, approved and accepted by FFA and PIFS/OPOC – 50% of contract fees
  2. 2. Delivery of the final version of the Tonga Ocean Finance Profile, approved and accepted by FFA – 50% of contract fees.

 

 The consultant will report to the PROP Project Coordinator for all the contract administration matters. All the technical guidance and inputs will be provided by the PIFS/OPOC team. 

6. Duration of work

The contract shall begin in September and shall be completed within two months (with the possibility of an extension) from the start date. Details of a work schedule to deliver on the outlined tasks will be agreed on with the selected consultant upon signing of the contract.

7. Qualifications and Experience

The consultant should possess the following qualification and experience: 

  • • Has a PHD, Master’s degree, or MBA in conservation finance, sustainable development finance, or related field
  • • Has at least five years’ experience in assessing, developing, and implementing marine/ocean conservation finance mechanisms
  • • At least ten years’ experience with multi-sector stakeholder engagement
  • • At least five years’ experience in the Pacific Islands region is required
  • • At least five years’ experience in ocean / marine policy and /or resource management
  • • Experience in training, teaching, and/or capacity building events on the topic of conservation finance, natural resource economics, or related subject(s)
  • • Experience with report writing, including presenting challenging technical subjects with accessible language

8. Requirements for the Expression of Interest

FFA now invites individual consultants to submit an expression of interest (EOI) in undertaking the assignment. Interested consultants should provide information demonstrating that they have the above required qualification and experience to perform the assignment.

A Consultant will be selected in accordance with the Selection of Individual Consultants as set out in the Guidelines for the Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by the World Bank Borrowers dated January 2011 as Revised July 2014.

Further information can be obtained at the address below during office hours from 9:00 a.m. to 4:30 p.m. local (Solomon Islands) time.

Expression of interests should contain a Curriculum Vitae (CV) and supporting documents evidencing the qualification and experience to perform the assignment must be delivered to the address below (in person, or by mail, or by fax or by e-mail) on or before 5pm (Solomon Time) August 19, 2020.

 

Forum Fisheries Agency

Attention: Project Coordinator

Pacific Islands Regional Oceanscape Program

Honiara, Solomon Islands

Tel: (677)21124; Fax: (677) 23995/20092

E-mail: judy.arumae@ffa.int

Application Instructions

"See above"