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4mission conducted a midterm review from 14–28 October 2005.11 The mission overlaid theregular review process but also reviewed holistically the institutional, administrative,organizational, technical, environmental, social, economic, and financial aspects of the Project.ADB's sixth loan review mission, which visited Cambodia from 24 April to 3 May 2006, placedan even stronger accent on the sum of the Project's component parts and evaluated in detail theperformance of FAO's team.129.ADB's seventh loan review mission was conducted from 13–15 September 2006.13 Itkicked off by meeting project personnel at the PMCO on 13 September 2006. This aidemémoire records its findings and recommendations, which are subject to review and approvalby higher authorities of the Government and ADB.14 The format of the aide-mémoire departsfrom that of previous loan review exercises because of the need to concentrate on reallocationof loan proceeds. For details of the parameters commonly examined by loan review missions,reference is invited to the previous aide-mémoire and to the second quarterly report for 2006prepared by the PMCO. Its assessments remain valid, unless indicated otherwise below. Theprincipal function of the Mission was to work out, in consultation with CNMC, DOF, MEF, andMOE what reallocation of loan proceeds would best serve the Project's objective and whatfurther supportive adjustments were called for.III.A.STATUS OF PROJECT IMPLEMENTATIONProject Performance Report10.ADB operates a project performance rating system to establish the implementation (oroperational status) of each project and to identify projects that are encountering or couldencounter problems. This ulterior intention is to make out what remedial measures can be takenpromptly by the borrower, executing agency, implementing agencies, ADB, and as the casemay be, associated partners. Specifically, ADB's project performance rating system usesperformance indicators that assess both the implementation progress and the achievement ofthe (development) objective (or outcome). The rating on implementation progress applies tophysical and financial factors. The rating on achievement of the objective relates to thelikelihood that a project has of contributing to its goal (or impact). Given the cause-and-effectrelationship inherent to a project's design, satisfactory implementation is normally essential toachieving the objective. ADB's project performance rating system introduces a rating scale of:"highly satisfactory",15 "satisfactory",16 "partly satisfactory",17 "unsatisfactory",18 and "at risk".Projects are initially rated as satisfactory after approval by the Board of Directors of ADB andthe ratings are then updated periodically.11.A project's objective is a statement of the outcome expected from implementing itscomponents and accomplishing its outputs. Any significant success or deficiency encountered inproject implementation is likely to be reflected in the degree of achievement of a project's11Reference is invited to its aide-mémoire, dated 26 October 2005.Reference is invited to its aide-mémoire, dated 5 May 2006.13The Mission comprised O. Serrat (Mission Leader) and C. Garcia, Project Administration Officer. R. Fenn, DeputyTonle Sap Initiative Coordinator, helped the Mission to foster synergies with other operating outputs of the TonleSap Initiative and facilitated logistics.14The drafting of this aide-mémoire was facilitated by the progress report for the period April–June 2006 prepared bythe PMCO.15The project is expected to exceed most of its objectives (where there are several).16The project is expected to achieve most of its objectives (where there are several).17The project is expected to achieve some of its objectives (where there are several).18The project is unlikely to achieve its objectives (where there are several).12

5objective.19 The criteria referred to when assessing the rating on achievement of the objectiveare project-specific but commonly hark to: key policy assumptions (policy-based covenants suchas cost recovery and tariffs, financial performance of the executing agency, etc.); assumptionson environmental sustainability; assumptions on beneficiary participation and stakeholderownership; assumptions on economic and financial viability and cost recovery (e.g., costs andprices remain within the viable range identified during the appraisal sensitivity analysis);assumptions on institutional capacity, budget availability, and operation and maintenance;socioeconomic impact; political stability (peace and security); and baseline data availability andmonitoring mechanisms to measure development impacts. At present, the rating for the Projectwith regard to its objective is deemed to be "satisfactory".12.The criteria referred to when assessing the rating on implementation progress hark to:timely project implementation; changes in project scope; changes in implementationarrangements; project cost overrun; provision of counterpart funds and cofinancing; compliancewith major covenants; and submission of audited project accounts and agency financialstatements. At present, the project performance rating with regard to implementation progress isdeemed to be "satisfactory" (Appendix 3).20Project Performance Report Abstract(as of 31 July 2006)19Notwithstanding, satisfactory implementation progress does not automatically lead to satisfactory achievement of aproject's objective because of the critical effect of external factors, e.g., the economic policy environment, globalmarkets, and the prevalent political situation.20The project performance report will be updated based on the findings of the Mission.

6B.Actions Taken on Issues Identified by the Last Loan Review Mission13.To improve project performance, the loan review mission of May 2006 recommended 29follow-up actions. The responses to these are itemized below:Follow-up Action RequestedThe executing and implementing agencies shoulddeliver where little or no follow-up action has been takenin response to the midterm review mission's requests.CNMC, DOF, MEF, and MOE should debate eachanalysis of output accomplishment, refine it aswarranted, and take with all speed the actions deemednecessary to improve activities. CNMC, DOF, MEF, andMOE should ensure that discussion of outputaccomplishment and decisions on improvement ofactivities is routine. The project management advisor,the fisheries management advisor, the team leader ofFAO's team, and the team leader of component 3 shouldelaborate how the activities are being implemented, howthey can be improved, and what action plans arenecessary to improve the activities.The PMCO, PIOs, and PIUs should prepare an estimateof their required expenditures for the remaining projectperiod to enable ADB to prepare a revised allocation ofloan proceeds in time for the next loan review mission,tentatively scheduled in October 2006.MEF should make sure that counterpart funds arereleased on a timely basis.The project coordinator and the PIO head in DOFshould, jointly, remind project personnel that it behoovesprofessionals to pay respect to the efforts that thePMCO makes for monitoring and coordination, readquarterly progress reports, and comply speedily with therecommendations for improvement that the PMCOprepares.The PMCO should consider whether to reducefrequency of periodic reporting to semi-annual (sixmonthly), rather than the current quarterly, frequency.The PMCO, PIOs, and PIUs should estimate essentialrequirements of consulting services for the remainingproject period to enable ADB to prepare a revisedallocation of loan proceeds in time for the next loanreview mission.DOF should formulate a coherent plan to engage ethnicminorities in community fisheries management.Follow-up Action TakenThe PMCO provided details of responses to outstandingactions to ADB in 28 June 2006. In general, theresponses meet the recommendations made. A requeststemming from the midterm review mission involvesorganizing toward the end of 2006 for re-survey ofcommunity fisheries using the PMCO's questionnairecommunity fisheries organizations. Current thinking onthis matter is that the work required by the re-survey isbest conducted by an NGO as part of one of the NGOcontracts being prepared and executed by the PIO inDOF under component 2.The PMCO discusses output accomplishment withproject personnel during project review and preparationof quarterly reports.A preliminary proposal for reallocation was sent to ADBin July 2006.The PMCO and the PIOs interact and follow up withMEF on withdrawal and direct payment applications on aregular basis.The PMCO is engaged in substantive discussions withproject personnel, and generally has its position knownin regard to the issues. It strives to incorporate theperspectives of all project personnel and considers themclosely in its strategy. The Project advances sufficientlyat present given the constraints it faces.The PMCO requests to elect semi-annual reporting tobegin either with the next report (third quarter), or thesemi-annual report following (fourth quarter), dependingon the need for a third quarter report, based onevaluation in September 2006.The evaluation of additional consulting services is inprogress as part of the reallocation of the budget inregard to staffing. A preliminary proposal was submittedin July 2006.While Cham minorities are Cambodian citizens and faceno barriers to membership in community fisheries, theethnic Vietnamese do not hold citizenship and areexcluded from membership under the Subdecree onCommunity Fisheries Management. Further, the ethnicVietnamese typically do not show interest in community

7Follow-up Action RequestedThe PMCO should respond to ADB's request forfeedback on actions taken to integrate suggestions toimprove the financial and administrative procedures forthe Project.DOF should conduct a thorough review of the adequacyof the Subdecree on Community Fisheries Managementand its prakas with the help of a small and mixed teamfrom FAO and NGOs, for which provision would need tobe made.FAO's team and the GIS consultant should reconciletheir different approaches to boundary demarcation withan eye to efficiency and effectiveness.The PIUs in DOF and the PIUs in MOE, working inconsultation with the GIS Office in DOF and the GISconsultant, should finalize demarcation of 2–3community fisheries areas in each of the five projectprovinces by end-June 2006.Follow-up Action Takenfisheries. However, the situation is not unique toCambodia where foreigners are not granted fishingrights except under special permission, as could beprovided to the ethnic Vietnamese by DOF. An ethnicminorities plan might include registration andlegitimization of the ethnic Vietnamese on the lake;exclusion of illegal migrants; and obligation of the ethnicVietnamese on the Tonle Sap to be members ofcommunity fisheries, in line with the "obligatory" rights ofcommunity fisheries implied in the Subdecree onCommunity Fisheries Management and Fisheries Law.Financial and administrative systems are up-to-par inthe PMCO and there are no particular problems atpresent. The PMCO will request additional support tofinance and administration toward the end of the Projectto assist in liquidating project accounts.The issues in contention include (i) the limitedparticipation of the ethnic Vietnamese, (ii) the shortduration of tenure rights; (iii) the restrictions on types ofgear permitted under the Fisheries Law; (iv) lack ofexclusivity to fishing grounds; and (v) the terminationclauses in the Subdecree on Community FisheriesManagement. The Subdecree on Community FisheriesManagement can and will be amended to accommodatethe new Fishery Law (some common terms need to beadjusted, and other matters). Changes could beintroduced at that time to alleviate these concerns.Apparently, the Fishery Law does not limit or contravenethe potential changes. A team of FAO providedcomments on the Subdecree on Community FisheriesManagement as part of TA 3993–CAM: Improving theRegulatory and Management Framework for InlandFisheries and later, in response to the request of anearlier loan review mission. A meeting is planned to beheld by the PIO in DOF, CFDO, FAO's team, and thePMCO in September 2006 to consolidate views andprepare a recommendation for revising the Subdecreeon Community Fisheries Management. The prakas(proclamations) for community fisheries managementare currently being signed by Director, DOF after whichthey will be assessed by the legal committee in MAFFbefore signing by Minister, MAFF. Another three monthsmay be required. However, this should not be seen asinhibitory to the community fisheries developmentprocess and the work of FAO's team.Revised demarcation guidelines are being prepared andare already being used to delineate community fisheriesareas.A demonstration of the refined technique was made inSiem Reap to three community fisheries. All five PIUswere represented. Their representatives returned homeand will be applying the lessons learned. Whiledemarcation has been emphasized extensively undercomponent 2, it was remarked that it is a self-limitingconcept. To demarcate, community fisheries membersmust know whether (i) they are excluded from fishingoutside, and (ii) whether land (under water) inside isthen "theirs". What is being granted by demarcationshould more properly be seen as resource exploitationand protection areas. Such entities are akin to eco-

8Follow-up Action RequestedThe PMCO, in consultation with MOE, should examinewhether the PIUs in MOE are sufficiently resourced toimplement their work plans.The PIO in DOF should prepare a proposal for anyadditional budgetary support needed to expeditemapping and boundary demarcation. It should alsoinvestigate and confirm, subject to ADB's endorsement,the acceptability of charging the cost of providing eacharea with signboards and charging physical demarcationof the area polygon, in amounts not exceeding 400 foreach demarcated area, to the operating budgets of thePIUs.DOF and FAO's team, in consultation with the PMCOand MOE, should debate the usefulness of theCommunity Fisheries Site Assessment tool and theextent to which it can be used in support of prioritizingthe coverage, extent, and nature of project activitiestoward organizing communities for natural resourcemanagement. With a view to its general application insupport of work planning and implementation, as well asmonitoring and evaluation, they should also expeditepilot testing in 2–3 community fisheries areas in each ofthe five project provinces by end-June 2006 on a parwith progress in demarcation.FAO's team should hold a national workshop onsustainable livelihoods as soon as practicably possibleto review the findings and recommendations of the finalreport.The PIO in DOF should ensure that: (i) NGO servicesare incremental and complementary to the very largecapacity that is already available for implementation ofcomponent 2; (ii) special attention is given to identifyingand formulating NGO contracts that provide horizontalsupport to a selected number of community fisheries inareas where there are no specific provisions under theProject; and (iii) NGO contracts are performance-basedand therefore monitored closely in all areas.Follow-up Action Takenzones that change with the seasons, defined alongnatural boundaries and only peripherally reliant on "strictboundaries". The distinction between resource andadministrative boundaries has been often beenemphasized by the PMCO and discussed with loanreview missions, corresponding to technical and"political" (e.g., resource use) delineation procedures. Itwas also remarked by the PMCO that the Land Lawprovides a means of legitimating claims to communityfisheries areas over and above that offered by theSubdecree on Community Fisheries Management, viaits social, communal, and economic concession clauses.The PMCO has coordinated work planning among thePIUs in MOE, the national environmental educationcampaign, and component 3. A series of meetings and aworkshop have been held in Siem Reap and KompongThom to help to integrate the work plans of the PIUswith other project-related activities, providing the basisfor increasing the operations budgets of the PIUs.Two alternatives are available for financing boundarymarkers, via the existing contract with DARUMA, or viathe operating budgets of the PIUs. While the latter ispreferable, inadequacies in the accounting systems ofthe PIUs have led to failure to liquidate previousadvances and the freezing of funds. Extension of thecontract with DARUMA to include money fordemarcation via aerial maps and for funding groundmarkers is being considered.DOF and FAO's team agreed in June 2006 to proceedwith the use of the Community Fisheries SiteAssessment Tool.The national workshop has been held but FAO's teamand the PIO in DOF are yet to notify ADB of its findingsand recommendations.Recruiting NGO services is in process, with approval ofthe procedure and the long list by ADB, and preparationof TORs for livelihoods, gender, and field performanceauditing. The process has not progressed beyond thisstage because of the preoccupation of the PIO in DOFwith other pressing issues. Notes from a meeting of theProcurement Review Committee held in May 2006document extensively the Government's procedures. Atthat meeting, the PMCO urged the committee toaccelerate recruitment and provide a broad base ofcoverage of NGOs currently working with communityfisheries on the Tonle Sap. FAO's team voiced concernthat, while the project design called for NGO servicesfrom early in the project schedule, only now was therean active attempt to engage NGOs somewhat externallyto the efforts of FAO's team. DOF maintains that at no

9Follow-up Action RequestedFAO's team leader should apply himself in the areas of:(i) planning and organizing work; (ii) analytical, technical,and conceptual skills; (iii) quality, accuracy, andtimeliness of work; (iv) oral and written communicationskills; (v) productivity and initiative; (vi) innovativeness;(vii) client orientation; (viii) teamwork; and (ix) leadershipand managerial skills.FAO's team should, in close collaboration with the PIOin DOF and the PMCO, decisively address shortcomingsin its approach to implementation, coordination, andmanagement of component 2.Follow-up Action Takenpoint in its implementation of component 2 has FAO'steam asked DOF to make NGOs available to supportproject implementation. However, the PMCO recollectsan effort by FAO's team i

The goal of the Project is sustainable management and conservation of natural resources and biodiversity in the Tonle Sap basin.5 Its objective is to enhance systems and develop the capacity for natural resource management coordination and planning, community-based natural resource management, and biodiversity conservation in the TSBR (Appendix 1).