Galapagos National Park

Designed a Contracting System for Commercial Visitor Services

Nearly all visitors to the Galapagos Archipelago access the island’s fragile terrestrial and marine sites from live-aboard boats whose owners have been granted exclusive rights and in perpetuity.  Those rights have effectively yielded the private boat owners a proprietary interest in the islands natural resources, for which those owners had been paying very modest annual fees.

Although some boat owners have provided responsible services, including caring for the natural resources, the system has provided the opposite incentive, namely offering a financial incentive for operators to maximize visitation and profits at the expense of putting greater pressure on the Park’s resources. As a result, tourism activity has been degrading the Galapagos Islands natural marine and terrestrial resources.  The system also concentrated the financial benefits from Galapagos tourism in the hands of a select few owner/operators, many of whom take their profits out of Ecuador.

The Galapagos National Park is able to limit and manage visitation pressure on the islands’ resources by regulating annual boat schedules and requiring visitors to be accompanied by trained and certified guides, who are generally conscientious about enforcing Park rules. However, these two measures had not been entirely effective in limiting overall tourism growth, or therefore visitation pressure, or even limiting purposeful and inadvertent abuses. Visitation has grown significantly and hadbeen running close to the boats’ carrying capacities.

Dornbusch Associates was engaged by the Nature Conservancy to design a new contracting structure and procurement system for the boat operators.  The objective was to make the boat owners more responsible to the Galapagos National Park.  The project was also guided by the Ministers of the Environment, Tourism, Finance and Defense, Conservation International, the Charles Darwin Foundation, World Wildlife Fund, and the Galapagos Governor.

The new system was being implemented precisely as Dornbusch recommended for up to 72 new contracts at marine locations within the limits of their specified carrying capacities. The procurement and contracting system seeks to:

  • Obtain payment at fair market fees in exchange for the tourism contracts’ rights and privileges, while seeking to
  • Maintain appropriate tourism levels to the islands’ sites’, considering those sites’ capacities to sustain such tourism while preserving and protecting the terrestrial and marine resources.
  • Maintain and improve the quality of visitor services and visitor-serving facilities.
    Enable the Galapagos National Park to effectively manage visitor service operations through contractor selection, and monitoring and enforcement of contract terms and contractor operations.
  • Promote local community economic benefits, and promoting access to contracts by local residents who have never previously held a visitor services contract, who emphasize hiring and training of local residents in management and operations, and who emphasize purchases of local goods and services.
  • Extinguish significant numbers of fishing rights to better protect the archipelago’s marine resources.

The new contracting system is achieving the objectives by:

  • Granting contracts through a competitive bidding process to yield the best contractor qualifications and performance, as well as reasonable fee payments to the National Park.
  • Granting operating rights for a specified term, based on an evaluation of the time necessary to enable operators to obtain reasonable profits commensurate with their financial and operating risks.
  • Monitoring and evaluating operator performance, with the power to penalize contractors, deny access to future contracts, and even terminate ongoing contracts for violations of contract terms, including Park rules and standards.
  • Requiring operators to facilitate such performance reviews by requiring submission of audited annual financial reports and other information reflecting operating and performance parameters.
  • Limiting the transfer of operating rights and requiring specific Park approval for any such transfers, based upon evaluations of a prospective operator’s qualifications.

The new procurement and contracting system also incorporated a number of measures designed to promote contracting success among local Galapagos contractors who might lack the resources, experience, and industry relationships of large non-Ecuadorian and mainland corporations.

The new system was adopted as recommended in June 2008. In March 2009, 77 proposals were evaluated, and 9 contracts were awarded in July 2009.