Phase 3: Agreement Design

1. MCA Field Guide
2. MCA Field Guide Checklist
3. Phase 3: Agreement Design Checklist
4. 3.1 Conservation commitments are established
5. 3.2 Recipient benefits are determined
6. 3.3 Compliance mechanisms are developed
7. 3.4 Sanctions are agreed upon
8. 3.5 Regulatory permits issued or applied for
9. 3.6 Final actions are completed

After successful completion of Phase 2: Engagement (during which the engagement team, right-holders and other direct stakeholders have agreed to work together), activities for designing the actual Marine Conservation Agreement (MCA) begin. The agreement design phase guides conservation organizations through the process of designing a formal MCA, including key components, terms, conditions and additional assessments that may be useful. All parties are free to withdraw from the agreement design process at any time if they feel that a satisfactory agreement cannot be negotiated.

MCA projects can be applied using several different Models and agreement Types depending on the nature and needs of each project. As such, agreement design can vary greatly from one project to the next. Official MCA documents can take the form of contracts, concessions, consents, easements, leases, management agreements, permits, and purchase and sale agreements, among others (for examples, see Sample Documents).

Elements of Agreements

While MCA models and types can vary from project to project, there are several elements that all projects should consider including in the MCA document. Some elements may be boilerplate contract language while other elements may be new language developed for each project. In general, conservation commitments, recipient benefits, monitoring and sanctions are the defining elements of an MCA. Additional standard provisions for any agreement will include clear documentation of the parties to the agreement, the duration of the agreement and procedures for dispute resolution. When designing and drafting the agreement, legal advice should be sought to ensure that the agreement conforms to local laws as well as donor expectations.

Any of the elements below identified as important for an MCA project should be carefully and jointly articulated and agreed upon by all parties to the MCA through a participatory process.

Possible elements of formal MCA documents include:

• Identification of signatory parties
• Authorities (under which the MCA entered into and implemented)
• Description of location/area/resources/ecosystem services
• Duration/term
• Purpose/authorized and restricted activities (to include Conservation Commitments)
• Benefits/payments (to include Recipient Benefits)
• Default and remedies/dispute resolution (to include Compliance and Sanctions)
• Assignment and subletting
• Cancellation terms
• Renewal and extension terms
• Expiration terms and final disposition of assets
• Environmental liability/risk allocation
• Financial security and insurance
• Appendices such as management or restoration plans

On its own, the information presented in Phase 3 may not provide enough detail for some organizations. Lead conservation organizations should assume that there may be many additional sub-steps and issues involved in the MCA design process based on site-specific circumstances or agency-specific requirements. Specific issues to consider include:

Time Requirements: The time it takes to design an MCA can vary significantly. Under ideal circumstances in which all possible activities occur concurrently and the project sets no new precedent, agreement design may take between six and 12 months. Under other, less-than-ideal circumstances, agreement design may take one to three years to reach signing. When dealing with public agencies, conservation organizations can often be frustrated by the appearance of bureaucratic delays—patience and perseverance will be required.

Lease Issues: Each entity with proprietary leasing authority will likely have different lease applications and procedures. Some states within the U.S. have highly developed leasing programs and templates (such as Washington and Texas) while other states have little to no leasing programs at all (such as South Carolina and North Carolina). Many private landowners may have little to no experience with leasing or easements. Entities with developed leasing programs will invariably want to use their programmatic criteria and formats for documenting the MCA.

Fee-simple Issues:

• Option/Sales & Purchase Agreement: Each conservation organization will likely have specific procedures and requirements for developing and executing (by seller and buyer) option and purchase agreements for MCAs that involve fee-simple acquisitions. Often times, the Purchase Agreement or Option Agreement can only be executed by staff that have received delegated written real estate approval authority.
• Escrow: The Purchase Agreement or Option Agreement may require that an escrow be opened and the deposit or option consideration be deposited. Third-party escrow is often a worthwhile expense, should misunderstandings or disagreements arise at the time of closing.
• Title Exceptions: An objection notice, related to title exceptions discovered during the title search, may be sent to the seller (i.e., the right-holder). The objection notice informs the seller of actions the seller needs to take in order to deliver the title in the appropriate condition at closing.

Conventional Land Acquisition Processes: Many conservation organizations have well-established processes in-place that are used for terrestrial land acquisitions. For example, The Nature Conservancy's California Chapter has long form (download .pdf, 21k) and short form (download .pdf, 25k) land acquisition processes which have traditionally been applied to terrestrial areas. In addition, there may be acquisition processes specific to different levels of government, such as the Checklist for Land Acquisition using Federal Funds (download .pdf, 20k), and specific to foundations, such as the instructions for using funds (download .pdf, 33k) from the National Fish and Wildlife Foundation.

Conventional terrestrial acquisition processes can frequently be adapted for MCAs that involve fee-simple and less-than fee-simple acquisitions of assets lying within ocean and coastal waters. However, there will likely be acquisition issues and needed actions that relate specifically to ocean and coastal lands and resources.

Short-term Trial Agreements versus Long-term Agreements

During engagement, the lead conservation organization, right-holders and other direct stakeholders should have agreed on the initial use of a short-term MCA versus a long-term MCA. Short-term agreements (those that last one to five years) may not include all of the details that long-term agreements (those that last over five years) include. Short-term agreements are opportunities for each party to get to know one another and the details of the project better. Long-term agreements will require greater detail to ensure commitments are met on behalf of right-holders regarding the legal status of the area to be protected and on behalf of the lead conservation organization regarding long-term benefits.

In general, long-term agreements need to be more explicit in terms of:

• A long-term vision for local development that guides the benefit package design and investment.
• A clear management plan to guide resource and habitat use over time as well as responses to threats to biodiversity. This plan should consider the right-holders’ continuing rights, culture and skills, and should be developed with the participation of right-holders as well as other relevant actors (e.g., government, law enforcement, surrounding communities, technical experts).
• A cost-effective long-term monitoring framework based on the monitoring protocols defined for the trial period.
• A long-term financing strategy to cover ongoing activities as well as protect the agreement from potential increases in opportunity cost.

Draft a Plan

After engaging right-holders and other direct stakeholders, and after verifying conceptual agreement on the proposed MCA project, the lead conservation organization should draft a brief plan that identifies the salient project terms and conditions that will become part of the MCA. This plan will in large part describe how the agreement reached in sub-step 2.4 Verify Agreement will be actualized in the MCA and subsequently implemented.

Organizations may have standardized proposal forms, formats, and checklists that project plans must adhere to. Elements of project plans may include restoration activities, long-term management and budgetary needs. Budgetary needs should include acquisition and post-acquisition (see Phase 4: Implementation) costs. Specific information needed in each plan will be dependent on the conservation targets, regulatory agency needs, and requirements of right-holders. The plan should be circulated internally and externally for review and input as necessary and appropriate (i.e., to land acquisition, protection, and/or legal staff, partners, agencies, land/resource owners).

Lease Issues: Legal and protection staff should pay particular attention to leasing requirements and standardized/template lease terms and conditions during their review. Government agencies often have onerous leasing conditions and terms which are difficult to negotiate.

First Sub-step

Proceed to 3.1 Conservation Commitments

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