1.  Implement Key Actions to Achieve Performance-Based Sustainable Financing Standards

Currently many PAs are not well-funded and are not able to contribute effectively to the country’s sustainable development efforts. It is recommended that two key actions are put into effect to support the implementation of the project objective—namely, to establish a performance-based financing structure to support effective PA systems management.

Key Action 1: Ensure budget considerations for PAs are included under the Malaysia Plan, every 5 years.

This aims to translate the country’s aspirations towards green growth into strong financial commitments to PAs. The initiative would go beyond a traditional sectoral approach of budget requests and would be implemented through a collaboration between NRE and leadership from the EPU, Ministry of Finance, and key state governments. Such an initiative would help to ensure that the country’s commitments related to PAs under the Eleventh Malaysia Plan and Aichi Targets are effectively realised.

Key Action 2: Revisit the fundamental issues of performance based financing.

It is recommended that the project undertakes a thorough review of: (i) the rationale for adopting a performance-based approach to financing; (ii) its relevance, ownership, and viable funding sources; (iii) at which level performance-based approach can be implemented, and how it relates to the existing framework of outcome based financing, (iv) mechanisms to measure, verify, and certify performance; (v) how to build a system that can ensure effective implementation, evaluation and reporting; and (vi) how standards for performance based financing can be institutionalised12 The PMU would be the lead organisation to facilitate the review involving key partners including Federal and State EPU, MoF, Park Agencies and NGOs

Establish Action Plan on Protected Areas and Sustainable Finance

It is recommended that an appropriate form of policy intervention such as a draft “action plan” containing a consolidation of policies on PA management, be submitted to the MoF and EPU for
consideration. The NRE, as the focal point for CBD, IUCN, and NBSAP is to lead the formulation of the action plan in collaboration with the key stakeholders in government and beyond. Key elements of the action plan should include the rationale of a PA policy in Malaysia and the relevant programmes to support the policy.

3. Strengthen Budget Planning and Budget Platform

It is recommended that budget planning processes for PAs are strengthened at the Federal, State and site levels to ensure that:
• Budgets and identification of financing needs are tied to conservation goals and impacts.
• Budgets are effectively planned through collaborative budget planning with key partners to promote efficiency and cost savings.

At the national level, it is recommended that:
• the project should identify those ministries and agencies which are relevant for PA budgeting (e.g. Ministry of Tourism and Culture Malaysia in relation to the implementation of the National
Ecotourism Plan) to encourage collaborative budget planning;
• efforts are made to build capacity among PA agencies in Malaysia on outcome-based budgeting and the development of a “Creativity Index (CI)” to be in line with the national budget framework with the support of the Economic Planning Unit and the Ministry of Finance Malaysia;
• the project identifies relevant funding avenues for PA management supported by federal resources such as federal funding for forest management in Sabah and Sarawak under the 11th
Malaysia Plan (e.g. for Heart of Borneo initiative), 1MBeon patrolling through the Blue Ocean Strategy, etc.;
• funding avenues or systems are established to ensure the continuous implementation of the national level PA programs such as the PA Managers’ Conference and World Rangers’ Day.

At the state level,
• Funding needs for PA management are identified.  
• The need for sustainable finance initiatives in relation to PA budgeting and management are recognized and institutionalized;
• Sufficient capacity and personnel are committed to work on sustainable finance and PA budget initiatives.

At the site level (for the sites under the PA financing project):
• Management plans that have been developed are adopted;
• Business plans that have been developed are adopted and implemented;
• Support, primarily in the form of capacity building initiatives, is provided for the implementation of the management and business plans.

4. Develop and Pilot-Test Sustainable Financing Mechanisms

The MTR team recommends that, in cooperation with partners in government, the community, and private sector, one or more innovative mechanisms for sustainable financing be adopted to be put into action and tested. This should include such practical considerations as developing the processes and standard operating procedures for implementing the mechanisms, collection and channeling of funds, etc. Pilot-tested initiatives, if successful, could then be replicated at multiple sites. Decisions for selecting proposals for various pilot projects could be based upon the  following guiding criteria: financial returns, administrative needs, political acceptability, social acceptability and environmental impact. It should be noted that financing mechanisms may be
implemented at different levels.

5. Promote Institutional Strengthening at All Scales to Achieve Sustainable Finance Goals

it is recommended that the following measures at the institutional level are implemented to ensure that sustainable finance goals are met:
(i) Site level – NRE, MoF and State parks authorities are to put in place a practical mechanism whereby resources that are generated within or by a PA, can be retained and reinvested
back into the conservation and management requirements of the PA, building on from the proposed legal review of State enactments related to PA management;
(ii) PA network level – With endorsement from Federal and at State authorities, DWNP, JNPC, and PSPC are to establish business units, with competent personnel, to focus on enhancing
funding sources and investments (without compromising conservation objectives), as well as cost savings through partnerships, licenses, etc; and
(iii) National level – EPU, NRE, and relevant authorities at the national level are to prioritize institutional strengthening, particularly to support the national goals and objectives on PAs
(11th Malaysia Plan, National Biodiversity Policy, National Ecotourism Plan etc) and various commitments through regional and international agreements (e.g. Convention on Biological
Diversity Plan of Action for Protected Areas, Indonesia-Malaysia-Thailand-Growth Triangle [IMT-GT] Implementation Blueprint, etc.).

6. Confirm That Government Actions Intended to Support and Strengthen Biodiversity Conservation, Actually Do So

In both the cases described above, mechanisms need to be put in place to ensure that government actions intended to support and strengthen the protection of vulnerable biodiversity
resources, actually do so. There are a variety of methods that can be employed to achieve this.

Implementation of this recommendation will require considerable coordination and cooperation among several parties. Financial analysis will need the involvement of personnel from Ministry of Finance and EPU. Identification of certification schemes may require that dialogue be undertaken (e.g., in seminars or workshops) among a wide range of stakeholders. Decision-making and policy recommendations will need to be coursed through the NSC. And the PMU will have to provide an overall coordinative function to ensure that this recommendation is effectively implemented

7. Promote Greater Community Engagement and Empowerment

The project has had a strong impact in terms of community empowerment, especially in JNPC.For example, through the learning trips to Sabah, community members from Johor were motivated to develop their own cooperative. It is recommended that efforts be undertaken to continue, replicate, and scale-up project successes for community empowerment

One important component of promoting such engagement with the community, has to do with articulating and demonstrating benefit-sharing to community members. Once communities become more aware of the benefits that derive from improved management of the PAs, stronger grass-roots ownership, which in turn fosters more effective protection and enforcement within PAs, can be achieved under the leadership of each PA. It is also recommended that the project examine and encourage tourism packages that truly involve the participation of local and indigenous people as a basis to demonstrate the benefit-sharing model.

Another important element of strengthening community involvement relates to gender. Gender is not highlighted in the project design, and as a result, gender awareness as demonstrated by the project has been weak. Therefore, it is recommended that the project incorporate greater gender sensitivity, and build it into the implementation of project activities

However, gender sensitivity needs to also be introduced in a culturally sensitive manner, and methods for introducing it need to be developed on a case-by-case basis. Sex disaggregated data need to be gathered to factor in gender intervention that is cognizant of the local culture.

8. Extend the Project Timeframe

There are inherent opportunities to build on some of the successes already achieved by the project, through scaling up and replication. Also, some of the other recommendations being made as part of the project and this MTR that are critical for the success of the project would require additional funds and time to be committed (but still within remaining project budget), in order to implement them.

As determined through the financial analysis, a very significant portion of the project budget is still unutilized. A number of factors have contributed to this situation, among them, higher-thananticipated cofinancing contributions, and beneficial currency exchange fluctuations. Thus an extension of the project timeframe would be possible, at no additional cost.

9. Continue High-Level Engagement For Greater Buy-In and More Effective Implementation of the Project

To ensure that policies, plans, and proposals for more effective conservation efforts in PAs can be better implemented, it is essential to have the commitment and support of key decision-makers at the highest level of government. In order to achieve this, it is recommended that ongoing engagement with ministers and other top officials be maintained, and where possible, strengthened.

Key Actions proposed:

1. Increase awareness of policy-makers on the importance of PAs

2. Promote discussion of the urgent need for sustainable environmental financing in Malaysia, at the highest level