1 2010 ANNUAL REPORT The Great Work of our generation is to carry out the transition from a period of human devastation of the Earth to a period when humans would be present to the planet in a mutually beneficial manner... to ensure each species of their proper habitat and to conserve the basic functioning of the biosystems of the planet. Thomas Berry, The Great Work
2 Dear Friends, Nature and Culture International dedicates itself to conserving Latin America s most extraordinary yet highly threatened ecosystems and cultures. We do so by saving endangered habitats, developing and strengthening local institutions and assisting communities to preserve their way of life and traditions. We believe we have been extremely effective, due in part to our ethic of operating with a very small US staff, and devoting over ninety percent of our resources to in-country programs and to building local capacity. We achieved major successes in 2010: Formal declarations of important regional and community reserves in Piura and Amazonas, Peru, some as large as 50,000 acres; Significant advancement in municipal watershed protection in southern Ecuador, resulting in a request that we consider expanding this effort nationally; Protection of 8.8 million additional acres of headwaters in Peru from large development projects; and Major land acquisition to expand our Alamos reserve in Mexico. In all projects, Nature and Culture International builds local capacity and works with residents to establish long-term conservation efforts that integrate local communities and are sustainable in biological, social and political terms. Toward this end, NCI will continue its important work to: Protect the tropical forests of Ecuador, Peru, Mexico and Colombia that possess some of the highest biodiversity levels in the world; Build in-country capacity by hiring talented local people and relying on their knowledge of tropical ecosystems, which allows NCI to consistently protect more land for less; and Instill a conservation ethic in every generation. We ask you to join us in helping to save the miraculous diversity of life and cultures on our planet, that are now at risk. As a Shuar leader told us during an ages-old ceremony, the tropical forests are the lungs of the Earth: without them, we can t survive. The destiny of creation, and of our own well-being, lies in the hands of our generation. Sincerely, Ivan Gayler Chairman of the Board Byron Swift Executive Director Cover photo courtesy of Charles Smith 2
3 Ivan Gayler and Byron Swift talk with a Shaur curandero in the upper Amazon of Ecuador. In 2010, Ivan Gayler was awarded the Zoological Society of San Diego s prestigious Conservation Medal. The Medal has, in 44 years, been awarded to to conservation luminaries such as Jane Goodall, Edward O. Wilson, and Prince Philip.
5 2010 Highlights Conservation Measures Protect Fifteen Million acres of Peruvian Amazon Forest Photo courtesy of John P. O Neill - VIREO With NCI s assistance, the government of Loreto, Peru took action to restrict development in 15 million acres of forests 8.8 million of which are outside existing reserves that protect the headwaters of the Region s rivers. This action will help maintain a full and healthy water supply to sustain the people of these Amazon lowland rainforests, while protecting forests with some of the greatest species diversity on Earth. Southern Ecuador Fund Advances Protection of Watershed Forests 2010 was a year of success for FORAGUA, the regional fund NCI helped to establish with municipal governments in southern Ecuador with the dual goals of improving water supplies for thousands of people and conserving highly threatened and biodiverse watershed forests. FORAGUA now is a self-maintaining structure through which municipalities manage, protect and pay for watershed conservation. Innovative Bio-Knowledge Program in Ecuador Working with the Ecuadorian government and local universities, NCI is helping to create an innovative national program for the conservation of ecosystems and generation of bioknowledge through scientific research coupled with the development of productive industries based on environmental goods and services. The program s multifaceted development approach should make Ecuador a benchmark country for biodiversity conservation and the sustainable use of natural resources. Purchase and Protection of Unique Dry Forests NCI expanded the Cazaderos Private Reserve in southwestern Ecuador by financing the purchase of an additional 10,000 acres of exceptionaltropical dry forest. This acquisition protects an unspoiled section of tropical deciduous forest in one of the world s most endangered ecosystems, which is a major stronghold for many threatened species of birds, reptiles and plants. Tragically, only 5% remains of this forest type, which has one of the highest numbers of endemic and endangered species in all the tropics, making this habitat purchase especially important. Photo courtesy of Fabián Robas Photo courtesy of Noam Shany 5
6 Creation of Regional Conservation Areas to Protect Endangered Species and Habitats in Northwest Peru Nature and Culture International is working to protect the most important sites for biodiversity in the highly threatened dry forests of northwestern Peru, a renowned center of endemism. In collaboartion with the Regional government of Piura, and with German assistance, NCI staff leaders have prepared the technical documents to support the declaration of seven new species-rich Regional Conservation Areas to preserve over 325,000 acres of land as well as several threatened marine ecosystems. Creating Economic Incentives for Community Forest Conservation NCI is helping to implement the new Socio Bosque or Forest Partners program under which the Ecuadorian government provides payments to rural communities and farmers to preserve their forested lands. In 2010, NCI helped four communities and another eight landowners inscribe 16,800 acres of rich cloud forests and paramo into Socio Bosque, with a special focus on protecting lands within the exceptional Podocarpus-El Condor Biosphere Reserve. We have helped these communities and property owners obtain economic incentive payments of $62,000 annually for 20 years to conserve these forests. Advancing Sustainable Development Initiatives NCI promotes an ethic of productive conservation that combines conservation goals with sustainable development objectives to improve livelihoods in local communities. In the endangered dry forest of southern Ecuador we are working with communities surrounding our La Ceiba reserve to promote the sustainable use of the palo santo tree for the extraction of essential oils that are later used for cosmetic products by the Brazilian company, Natura. As a result, community members earn significantly more revenue, while 7,500 acres of endangered tropical dry forests are conserved. Photo courtesy of Fabián Robas In the Peruvian Region of Loreto, NCI is helping fishermen s associations near several new conservation areas such as the Alto Nanay and Pintuyacu basins improve the management of local fisheries, which will protect and enhance this major source of protein for local populations. This program has led to the adoption of more responsible fishing practices such as the use of larger mesh nets that allow fry and smaller fish to escape, as well as the elimination of such extreme practices such as using explosives and poison. 6
7 Conservation of Tropical Dry Forests Our Goals Nature & Culture International arranged the financing to purchase an additional 9,100 acres of highly endangered Tumbesian dry forests in southwestern Ecuador to expand the Cazaderos Forest Reserve. The tropical deciduous forests of southwestern Ecuador and northern Peru form a unique dry forest ecosystem that has one of the highest numbers of endemic and endangered species in all the tropics, and is home to sixty endangered bird species and many endemic plant and animal species. What little remains barely five percent is one of the top conservation priorities for Ecuador and the world. Working with local communities, NCI is attempting to create the largest continuous protected block of tropical deciduous forest in the region. The area of focus adjoins our 25,000 acre La Ceiba Reserve and 4,000 acre Laipuna Reserve, and helps link the Ecuadorian forests with the Biosphere Reserve in northwestern Peru. In and near all these reserves, NCI is developing the capacity of local communities to manage and conserve these areas while improving the livelihoods of their citizens. This purchase was only partially funded through private donations. In order to take advantage of favorable land prices, we helped our partner, Nature and Culture-Ecuador, secure a $725,000 loan to complete purchase of the remaining 12,000 acres. That loan must be repaid by In another initiative, NCI bought 900 acres to preserve the Catacocha watershed that protects a site with ancient canals and lagoons that provided year-round water to the local population in pre-incan times. In the Peruvian State of Piura, Nature & Culture International is working to conserve multiple sites with substantial species diversity. That list includes the coastal deserts of 7
8 Talara, the dry forests of the Limon Watershed home to the endangered White-winged Guan and the Cota de Caza El Angolo. In 2010, we submitted extensive technical documentation for the creation of five regional conservation areas that will protect over 325,000 acres including endangered dry forests. That work continued with the development of proposals to protect an additional 70,000 acres in the region, including threatened marine environments that are important habitats for endangered species such as the Humboldt Penguin and green sea turtles. At Alamos, Mexico, we are creating a 20,000 acre reserve within the Sierra de Alamos national protected area (pictured above). This area protects the northernmost extension of tropical deciduous forest in the Americas, and also the headwaters of the Rio Cuchujaqui. To date, Nature & Culture International has purchased 12,000 acres, and has improved several cabins in order to promote visitation and scientific research in this remarkable landscape. 8
9 Our Goals Conservation of Andean Cloud Forestss Andean cloud forests arguably have the highest species diversity of any terrestrial habitat. Due to their geography and climate, southern Ecuador and northern Peru are among the most diverse areas within this ecosystem which, because of its exceptional endemism and multiple impending threats, is deemed by many as the top global conservation priority on the planet. In 2010, NCI continued to assist in the management of the 3 million acre Podocarpus-El Condor Biosphere Reserve, working with governments, communities, and the private sector to conserve the pristine tropical forests and local cultures of this region. An important NCI program provides the technical assistance needed by communities to inscribe their natural land holdings into the government s Socio Bosque program, which exchanges ecosystem service payments to communities that agree to protect their forests for 20 years. In 2010, NCI helped the Saraguro indigenous community create two new reserves called Paquishapa and Guambusari, and to inscribe these and an additional three called Cochecoral, Tundurama and Cofradía into SocioBosque protecting 15,000 acres in all. NCI also helped private land owners inscribe an additional 2500 acres in this program during the year. In 2010, NCI also emphasized conservation in the Nangaritza Valley, one of the key watersheds in this region that includes significant stands of foothill forests. Those forests are especially endangered due to timber harvest and the growing of specialty crops. Initiating work with farming communities and with the indigenous Shuar people who live here, NCI focused on the creation of community reserves and Shuar hunting reserves. In prior years, we successfully helped three indigenous Shuar communities establish ancestral homelands and protect 40,000 acres of cloud forests as the Yacuambi Shuar Community Reserve. In Peru, Nature & Culture International is working with the Regional government of Piura to promote the protection of endangered cloud forests and paramos at sites such as Ayabaca and Pacaipampa in Piura. NCI leaders in Peru are also assisting the national government by providing information to support declaration of a new conservation area of 275,000 acres that would protect a corridor of cloud forest connecting the Tabaconas-Namballe National Park all the way to the border with Ecuador, where it would join the Colambo-Yacuri national sanctuary. The protection of threatened paramos (high-altitude grasslands) that protect the most important local water source for the Chira and Huancabamba rivers is another priority of the leadership of NCI-Peru. In addition to directly promoting sustainable management practices, NCI supports policies emphasizing conservation and sustainable development. 9
10 Conservation of Amazon Rainforests Home to an amazing diversity of species, Amazon lowland rainforests are the most extensive tropical forests in the Americas. In such areas, NCI primarily works with Regional governments and other partners to implement region-wide conservation programs. The leading example of this is the Program for Conservation, Management and Use of Biodiversity of Loreto, Peru (PROCREL) implemented by the Regional Government of Loreto, with technical assistance provided by NCI together with the Institute for Investigation of the Peruvian Amazon (IIAP) and local organizations. Our Goals PROCREL promotes a regional conservation vision combined with sustainable development initiatives for local communities within the Amazon forests of this vast 90 million acre region. Nearly 4.5 million acres of largely untouched Amazon forests have already been protected through the program to date. Successful sustainable development initiatives have also been launched to help local communities. Efforts have included the creation and marketing of hand-made crafts using the fiber of the Chambira Palm, and the enhancement of community forest management. In 2010, with NCI s assistance, the government of Loreto, Peru took action to improve fishery regulations and to designate 15 million acres of headwaters forests 8.8 million of which were outside existing reserves in order to protect the sources of the Regions rivers. These results can be seen at Photo courtesy of Noam Shany In 2010, NCI initiated work to extend this program with the government of Ucayali, another large Region to the south of Loreto that includes over 60 million acres of Peruvian Amazon. We aim, in future years, to initiate productive conservation programs that will protect several million additional acres of Amazon rainforests while improving the livelihoods of local people. 10
11 Land Conservation National and Regional Protected Areas Our Methods A central priority of Nature & Culture International s mission is land conservation. We work to protect land through direct land purchase, the creation of reserves through community efforts, and declarations of reserves by municipal, regional and national governments. In 2010 we purchased over 10,000 acres in Ecuador and Mexico, and are working with communities to protect over 120,000 acres as community reserves. We are also working with regional governments in Ecuador and Peru to declare more than 2 million acres as state protected areas. NCI has found that working with local, regional and national governments to support the declaration of large protected areas is one of the most productive and cost effective methods of land conservation. By assisting the Regional Government of Loreto, we have already helped support the creation of three major Regional Conservation Areas that together protect close to 4.5 million acres of extraordinarily-diverse tropical forest. At present, NCI is providing information required by the Regional Government of Piura to extend protection to 400,000 acres through a Regional System of Conservation Areas that will protect paramos, cloud forests and endangered dry forests. NCI also extended such efforts to Ucayali in Assisting local governments with land conservation is another focus, and NCI has been particularly successful in helping to protect community watersheds. Loja has offered NCI management rights over its 17,000 acre Romerillos Reserve, which will protect cloud forests bordering the Podocarpus Park. We are also working with smaller municipalities to protect cloud forests around this park. 11
12 Community Reserves Several current projects are aimed at helping indigenous and farming communities declare community reserves. This includes continued work with Shuar communities to designate lands as community reserves in the Yacuambi Mountains and the Nangaritza River Valley, as well as a continuing commitment to the Saraguro indigenous community that protected 16,000 acres in Work also continues with farming communities in endangered Tumbesian tropical dry forest along the Catamayo River Valley in southern Ecuador. In the Amazonas Region of Peru, NCI helped local communities and the municipality Rodriguez de Mendoza establish the Huamanpanta municipal reserve of 57,000 acres that protects remarkable cloud forests. Technical support was provided, enabling protection of the Tilacancha Reserve of 16,800 acres, extending watershed protection to Chachapoyas, a city of 36,000 inhabitants. Land Purchase The purchase of land is an important tool when rare ecosystems are privately owned. In 2010, NCI purchased more than 10,000 acres of tropical dry forest to expand the Cazaderos Reserve in the endangered Tumbesian ecosystem of southern Ecuador, and initiated the purchase of over 2,000 acres at Alamos, Mexico site of the northernmost tropical dry forest in the Americas. NCI also continued its innovative land-for-rights program to protect the spectacular cloud forests in and around the Podocarpus National Park in southern Ecuador. After buying land outside the park that was less valuable for conservation purposes, yet more accessible, NCI traded ownership of those properties to people who ceded to the government their rights to utilize lands within the park.
13 Scientific Investigation Our Methods On the northern edge of Podocarpus National Park in Ecuador is Nature & Culture International s 2,000 acre San Francisco Scientific Station. Here, the German Research Foundation (DfG) and 17 German and Ecuadorian universities conduct one of the largest ecosystem studies worldwide, investing $3 million a year in interdisciplinary study of tropical mountain forests. The DfG s research plan going forward gives greater emphasis to maintaining the region s ecosystems with the practical application of research to aid in conservation efforts. Results to date include 109 Doctoral and MS theses (33 of which are Ecuadorian), training of research interns from local universities, and 140 papers published in peer-reviewed journals. To learn more, see and In Piura, NCI assists the government park service with information on the biodiversity priorities in its national reserves such as the Cota de Caza Angolo. We also work with the Regional Government of Piura, providing information on the biodiversity of its dry forests and paramos to improve its planned regional system of conservation areas. 13
14 Environmental Management NCI is also helping Ecuador become a leader in the development and promotion of environmental goods and services. This innovative bio-knowledge program integrates the conservation, research and production sectors to increase sustainable development and also the conservation of natural ecosystems. Encouraging programs that enhance human prosperity and nature is a founding principle of Nature and Culture International. Elements of the program will include ecotourism ventures, carbon sequestration programs, the valuation of ecosystem services for protection of watersheds, adding nutritional value by tapping the vast plant diversity, and the training of high-level professionals in the area of biodiversity conservation and sustainable use. Our Methods Through this multifaceted, integrated approach, Ecuadorian leaders hope to make their country the recognized benchmark for biodiversity conservation and the sustainable use of natural resources in order to guarantee a high quality of life for human and other inhabitants, now and in the future. Photo courtesy of Shea Johnson, I.C.R. 14
15 Valuing Ecosystem Services Our Methods A pressing conservation task is that of valuing the ecosystem services that provide us with so many of life s essentials most notably air, water and climate stability. Nature and Culture International is actively advancing projects that value water and other resources that result from watershed protection. NCI has succeeded in helping municipal governments in southern Ecuador, including the provincial capitals of Loja and Zamora, to purchase, reforest and protect cloud forest lands in the watersheds that provide them with drinking water. The conservation of these forests has especially high value as this effort is simultaneously: protecting the very high species diversity of these tropical cloud forests; providing clean water and related health benefits to the citizens downstream; and creating climate benefits by saving virgin forests and reforesting degraded lands. It was a year of success for FORAGUA, the regional watershed protection fund that NCI helped municipal governments in southern Ecuador establish. With dual goals of improving water supplies for the Region s residents while conserving highly-threatened, species-diverse watershed forests through ecosystem service payments collected by municipalities from waters users, FORAGUA is now a self-executing mechanism by which municipalities manage, project and pay for watershed conservation. In 2010: Two additional municipalities joined FORAGUA Zamora (protecting 2,500 acres at Limon and Jambue watersheds) and Chinchipe (protecting 37,500 acres). The technical secretariat was established, and the founding municipalities began buying land through the FORAGUA trust 2,000 acres in the case of Loja; NCI attracted a counterpart contribution of $500,000 from the national government to support reforestation on municipal watershed lands owned and protected by the member communities of FORAGUA. 15
16 Our Methods Sustainable Community Development As is evident throughout this report, a core element of the NCI ethic is to link the well being of local people with environmental conservation activities. The transformative power of working with communities to enhance economic benefit through sustainable use of natural resources is visible in the reduction of local activities that degrade forest ecosystems, and in the protection by residents of their forests. Amazon Community Initiatives At the Tamshiyacu-Tahuayo reserve in Peru, we work with local artisans to create a sustainable development model using beautiful value-added products such as multicolored baskets from the local chambira palm. We helped the artisans create the cooperative Mi Esperanza, and worked to place products in gift shops at the San Diego Zoo and the Natural History Museum in Balboa Park. Average incomes in communities around the reserve have doubled due to these efforts. In 2010, working with the government of Loreto, we successfully expanded this program to other reserves and communities. NCI also strengthened four community forestry associations in the buffer zone of the Alto Nanay Pintuyacu Chambira Regional Conservation Area by helping them adopt sustainable forestry practices and market their products directly at fair prices to local enterprises in Iquitos. Association members participated 16
17 Our Methods in training courses aimed at helping them implement sustainable practices, learning about low-impact production, value-added products, business management, sales, safety and legal protection. As a consequence, illegal logging and large-scale forest degradation has been virtually eradicated in these areas. In the Amazonas region of northeastern Peru, NCI is promoting the construction of small scale fish farms, using native species to improve the health of community members while also reducing pressures on the surrounding forests. Once heavily reliant on extractive activities with destructive long-term impacts, the impoverished populations in these rural areas are siting these small fish farming operations on degraded land and producing high-quality protein for nearby families. Other rural populations in the region have taken notice of the project and are beginning fish farms of their own, which could eventually influence the conservation of over 24,000 acres. Palo Santo Project Adds Value while Conserving Dry Forests in Southern Ecuador The conservation of 7,500 acres of endangered tropical dry forests is supported through the sustainable use of the Palo Santo tree, with land-owning communities deriving benefit from the sale of essential oils to the Brazilian cosmetics group, Natura. The local people are protecting the forest effectively, and have been granted certification of sustainability by guaranteeing that the environment will not be contaminated, the functionality of the ecosystem will not be affected, and the people who live in these natural ecosystems will benefit economically from the activity. This project is recognized as a model of sustainable use and conservation, which we will duplicate and hope that others will emulate. We thank the entities collaborating with NCI on this initiative, which are the Environmental Ministry, the Technical University of Loja, and Natura. 17
18 Environmental Education Our Methods Nature & Culture International seeks to develop an environmental ethic within society through programs for children, youth and adults. By stressing the management of natural resources for sustained use, active participation in community decisions, and the importance of living in healthy ecosystems free of contamination, NCI encourages local people to take control of their environments. In southern Ecuador, our public outreach effort includes publication of a full weekly page of local conservation news in the leading regional newspaper, and workshops that reach rural populations across the region. NCI offers environmental education programs for children from the first through twelfth grades, and organizes annual Science and Technology fairs and Encounters for Creativity, which have reached 200,000 students in southern Ecuador and northern Peru. NCI is also active locally in the regional capitol, with training programs and a campaign for the recycling of batteries offered with the EcoClubs of Loja, and programs on fire prevention offered in conjunction with Podocarpus National Park and the Zoological Gardens of Loja. NCI also works with the Piura Department of Education (DREP) to deliver specialized training courses to elementary and high school teachers. Several ecoclubs are successfully utilizing our environmental education platform, Darwin Net, to coordinate events and as an information resource (http://www.darwinnet.org/) 18
19 Finances & Administration Overall, our 2010 revenues were $2,334,323 and costs were $2,076,638 (expenses plus land and building purchases). We are proud that over 93% of all costs were spent within our project countries, building capacity where it is needed most. ASSETS NATURE AND CULTURE INTERNATIONAL Statement of Financial Position For the year ended December 31, 2010 CURRENT ASSETS Cash and cash equivalents $ 897,318 Pledged 59,989 Prepaid expenses & deposits 140,542 Total current assets 1,097,849 PROPERTY & EQUIPMENT (at cost) Land $ 2,260,266 Building & improvements 226,242 Furniture and equipment 43,613 Vehicles 182,902 Less accumulated depreciation (190,703) Total property & equipment 2,522,320 OTHER ASSETS Deposit - Land Purchase 100,613 Total other assets 100,613 Total assets $ 3,720,782 LIABILITIES AND NET ASSETS CURRENT LIABILITIES Accounts payable $ 28,686 Accrued payroll & vacation 97,766 Deferred revenue grants 379,441 Total current liabilities 505,893 NET ASSETS Unrestricted $ 2,091,203 Temporarily restricted 273,686 Permanently restricted 850,000 Total net assets 3,214,889 Total liabilities & net asse $ 3,720,782 REVENUES NATURE AND CULTURE INTERNATIONAL Statement of Activities For the year ended December 31, 2010 Grants & Contributions Foundations $ 337,652 Community Funds 880,000 Governments 104,807 Individuals 618,741 Organizations 197,392 Fees 160,291 Other 35,217 Interest 223 Total revenues $ 2,334,323 EXPENSES Auto $ 62,522 Consultants 128,094 Insurance 44,632 Office expense 64,260 Other direct costs 20,021 Outside services 116,365 Project grants 458,772 Publications 51,917 Repairs & maintenance 11,073 Salaries & related benefits 910,230 Supplies 30,597 Telephone 20,548 Training 9,227 Travel 127,652 Utilities 9,968 Depreciation 45,278 Total expenses $ 2,111,156 CHANGE IN NET ASSETS Land and buildings 21,000 Other 202,167 Total change in net assets $ 223,167 NET ASSETS AT Jan. 1, ,991,722 NET ASSETS AT Dec. 31, 2010 $ 3,214,889 19
20 2010 Income Sources 5% 8% 14% Foundations Advised Fund Donors Organizations 27% Individuals Government Fees & Other 38% 8% 2010 Cost Categories 16% 19% Land Conservation, Mgmt & Reserve Creation 44% Land Purchase Administration Science Community Development 9% 7% 5% Education & Policy 20
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