Best Practices - Effective Governance Systems

GFCR supports interventions that contribute to effective governance (political, regulatory, institutional, corporate, and customary) of coral reefs and the zone of influence including governance by and for associated communities. 

The sustainable and efficient use of natural resources including ecosystem services depends on the existence of effective governance systems. This is largely due to the market failures associated with nature – public goods, externalities, etc. and the resulting poor integration of nature’s services into the market economy. Effective governance is an absolutely essential underlying condition of economic and ecological systems if the Global Fund for Coral Reefs’ goals are to be met. In a way, we can define effective governance systems for coral reefs to include elements of fairness and equity, ecological health and productivity, balancing short-term and long-term needs, and effective identification and censure of rule breakers.

There are different interacting forms of governance, and some valuable categories are described below:

1. Political – Political systems interact with regulatory and institutional systems but have certain unique characteristics. Political economy analyses (see above) can be very useful to understanding where political power lies in a community, government unit, or country and this information is essential to plan long-term effective interventions. One of the challenges of political systems other than their complexity, is the short-term nature of political cycles – this is not conducive to long-term thinking. Some approaches to managing political governance issues include finding a well-connected “champion” to support coral reef issues, using clear economic analyses to assess policy options (such as port placement, subsidies, etc.), and continuous communication via multiple channels including through the popular press.
   
   
2. Regulatory - Formal governance systems are established through laws and other regulatory structures. For a regulatory system to effectively support sustainability through governance, the entire chain of actors and actions must be effective. For example, many countries have regulations on sustainable use of natural resources such as fishing, forestry, waste management and others. However, most countries do not effectively enforce the existing regulations. Any break in the regulatory chain from identifying an illegal action, capturing or fining the perpetrator, enforcing the fine or penalty through judicial action, collection or other penalties, etc. – and the entire process will not have the desired impact of reducing or changing the behavior. Supporting the full implementation chain of the regulatory policies levels the playing field such that responsible enterprises, do not pay a cost penalty – relative to other enterprises – for simply following regulations or being coral reef-positive.
   
   
3. Institutional – institutions are the key to governance and essential to the management of coral reefs and associated ecosystems. Regulatory, political, and commercial structures are embedded in institutions at all levels – from local institutions such as community groups, governance committees, etc. through national agencies, ministries, and deliberating bodies. Institutions can be governed in a wide range of approaches, and these approaches vary from highly efficient and transparent to totally corrupt or dysfunctional. One of the first steps in building the enabling environment for scaling and replicating reef-positive enterprises and market mechanisms is to understand the governance needs and opportunities of the existing institutions involved in the specific drivers of degradation or opportunities for positive impact.
   
   
4. Corporate – corporate governance issues deserve special attention due to the potential large impact of companies higher up in the supply chain. Good governance at the corporate level will have positive impacts on the interaction of the company with its supply chains – one of the main ways in which large companies can either harm coral reefs or contribute to their health. Strong corporate governance principles include independent boards, strong diversity, and transparent reporting.
   
   
5. Customary – most local communities and indigenous people have customary governance structures in place for the management of lands, coasts, and natural resources. Although these governance structures may have challenges as in any governance system, respecting, supporting and ultimately strengthening customary systems have a better chance of achieving lasting sustainability objectives than the creation of new institutions or regulations. It is more efficient to work with existing structures and customary governance can be extremely efficient and effective.

Governance systems are often scale-specific and each element of a governance system may only function at one or a few scales. For example, local customary governance systems may function well within communities at very local scales but must also interact with systems operating at a larger scale – such as landscape level or national level. It is important to understand the scale at which the principal impacts and opportunities for GFCR objectives are working and target interventions to address the drivers of degradation at the scale where there is opportunity for significant change. This area-based analysis determines the “zone of influence” of the GFCR interventions and governance issues should be evaluated and addressed with this scale consideration.

Spatial planning tools can play a large role in understanding the zone of influence and in determining a participatory strategy for management of the area. Some spatial planning, scenario building, and related guidance is presented below.
The GFCR can use principles from or directly incorporate multi-objective Marine Spatial Planning (MSP) and Integrated Coastal Zone Management (ICZM) as two methods for spatial assessment that can be used for outlining comprehensive systems approaches. MSP is, “a public process of analyzing and allocating the spatial and temporal distribution of human activities in marine areas to achieve ecological, economic, and social objectives that are usually specified through a political process.” It can align with several of the GFCR’s outcomes and best practices and, “can include and address issues such as equity, social inclusion, local economies, biodiversity goals, and implementation financing.” Guidance for MSP developed by The Nature Conservancy highlights the following practices:

1. Facilitate local, bottom-up involvement of diverse stakeholders
2. Develop alternative future management scenarios
3. Explicitly analyze tradeoffs among objectives and highlight common ground
4. Conduct formal, rigorous cost-benefit analyses
5. Ensure that the burden of proof is distributed appropriately among groups with differing objectives

Several tools are also available for MSP and ICZM, including:

• InVEST: an open-source software for valuing and mapping ecosystem services that can help identify key resources and potential investment opportunities. Developed by the Natural Capital Project at Stanford University.
  
  
• Ocean Wealth: a mapping platform and information repository for ecosystem services including tourism, coastal protection, coral reef fisheries, and blue carbon.
  
  
• Marxan: a decision support software for designing new reserve systems.

Integrated Coastal Zone Management (ICZM) is defined as, “a dynamic, multidisciplinary and iterative process to promote sustainable management of coastal zones…ICZM seeks, over the long-term, to balance environmental, economic, social, cultural and recreational objectives all within the limits set by natural dynamics.” Whereas MSP is important for planning, ICZM also “formalizes” coastal cooperation and sustainable management for the long-term. Principles of ICZM are for it to be:

1. Transparent
2. Based on risk assessment
3. Inclusive of a social aspect
4. Appropriate to the scale of the issues being addressed
5. Underpinned by sound ecological understanding
6. Able to provide clear structures among agencies to streamline the entire process

Case Studies: 
The World Ocean Council has published several case studies that can help guide MSP including for the Coral Triangle, the Great Barrier Reef Marine Park, and other regions.

Integrated coastal zone management in the Mediterranean.

You can access more GFCR Investment Principles' best practices here
The full document covering all the best practice series can be downloaded from here: GFCR Best Practice General Principles 2022.pdf