Forest  Policy and Forest Policy Implementation Review: our view

Paper produced in occasion of the FPIRS Western Europe Consultation,
Zurich, Switzerland, 10-11 April, 2000
by
Francesco Martone

Introduction:

The Reform the World Bank Campaign (a coalition of 41 Italian development, human rights and environment NGOs) , has been following the debate around the FPIRS from its inception, although not directly, and shares many of the concerns expressed by the World Rainforest Movement and Forest Peoples' Programme.

We have considered the review as a crucial exercise to seek ways to strengthen the Bank's role in promoting socially just and environmentally sound forest conservation and use, by identifying shortcomings of past Bank activities and lacking compliance to the existing Policy, with a view to support fundamental changes in the patterns of forest use and conservation.

However, from the initial outcome of the consultations and discussions within the Bank, we have reason for concern. This short briefing outlines some of the areas that in our view reveal that this important exercise might fall short of our initial expectations.

Flawed process

In terms of process, we support WRM concerns that Forest Policy and Forest Policy Implementation Reviews, have not included sufficient field evaluations of ongoing projects, while the selection of NGOs to involve in regional consultations was not very transparent.

As a matter of fact, we have to regret that OED did not follow the request of NGOs to select a series of case studies to check whether the documentation available to OED is sufficient to describe and understand the impacts and effects of Bank projects. Nor did the OED guarantee that such studies be carried out in close consultation with affected communities and NGOs.

Misleading rationale

In terms of contents, the underlying rationale behind the Review seems to be that of justifying a change, or worse a watering down, of the 1991 Policy, by putting the blame of past failures to the Policy itself rather than on the poor implementation of the same. Or simply "scapegoating the innocent". After a careful reading of the la test OED study's findings, it is clear that the issue is first and foremost the issue of compliance and existence of internal incentives for staff to apply the existing policies. As a matter of fact, the OED study points out that "staff lack the expertise, time, resources and incentives and reporting tools to observe the policy". We share the position of other partner NGOs according to which the main reason for failure was not the policy itself, but rather the lack of staff compliance.

Therefore we do not share the line expressed by OED according to which the policy failed to promote an ambitious approach of the Bank to the sustainable management of forests. Rather it was its poor implementation! Subsequently we urge the Bank to develop and introduce incentives and measures to secure compliance of Bank's staff to relevant policies and to develop capacity to address the various cross-sectoral aspects of forest management and conservation.

A policy or a strategy?

Throughout the materials we could review it is unclear whether the Bank still considers the exercise as relevant to review the Policy and subsequently to make it more effective, or whether the final goal is that of simply transforming the Policy into a Strategy. This is not only a semantic nuance: as a matter of fact, a strategy is not a binding tool as a policy might be, and this change would in fact avoid to address the issue of poor compliance, and the need to introduce staff incentives and accountability mechanisms for Bank staff. A clarification on this issue is fundamental to understand the final purpose and goal of the Forest Policy Implementation Review.

Macroeconomic policies and forests

As to the relationship between macroeconomic policies and forests, we acknowledge that the Bank's operations have had a negligible effect on meeting the goal of curbing deforestation, as there has been no incorporation of the policy in the Country Assistance Strategy and Economic Sector Work. We share OED's view that the policy was ignored in structural and sectoral adjustment lending. As a matter of fact, the Bank has made little progress in addressing the impacts of adjustment lending on the forest sector, and environmental assessments guidelines
are not systematically applied to structural adjustment loans. This is unfortunately common practice, as also reconfirmed in an internal ESSD memo of May 1999 on the social and environmental aspects of Structural and Sectoral Adjustment Lending.

Trade liberalization and infrastructure development are considered as OED as a major cause of illegal and usustainable logging, but the Bank has not carried out any assessments of the impact of those sectors on forests. The OED report in fact acknowledges that liberalization of trade and market deregulation are among the key causes of accelerated pressure on the forest resource base, but omits to point out that liberalization is one of the key purposes of the Bank's macroeconomic policies.

The Bank is now undergoing a review of its Operational Policy on Structural Adjustment lending and also working to integrate environmental components in the Country Assistance Strategies (CASE). We very much look forward to learn how the Bank plans to link up these exercises with the Forest policy discussion in order to guarantee effective synergy and cross-fertilization.

The macroeconomic aspect is also relevant when discussing the issue of land reform. A case in point is Brazil, a country that suffered the severe consequences of the financial crisis and where the market-based land reform sponsored by the Bank the so-called Cedula da Terra and Banco da Terra, will not address the key needs of the landless. Other than relying on market-based solutions, how does the Bank envisage to support governments in carrying out participatory agrarian reforms to relieve the land needs of the rural poor?

A new role for the Bank?

In terms of purposes, we would like to point to the fact that the Bank is trying to review and change its role as regards forests conservation and use. By extending the mandate of poverty alleviation to this sector too, the Bank implicitly admits that forest management and conservation need to be subject to this overarching principle. This is no news somehow, as it is indeed true that the living standards of forest peoples and any other community depend on the integrity of forests and also on the promotion of their rights. There is, therefore, a link between poverty and impoverishment of the forest resource base.

However, it is also true that World Bank forest related lending failed to promote poverty alleviation and also that the Bank has paid poor consideration of the importance of reform of the land tenure in favor of the poor and customary owners. This is even more worrying, considering that in fact forest destruction and degradation are per se a major cause of impoverishment for local communities and the ruthless exploitation of the forest resource base, with no concern for long-term sustainability, hampers the possibilities for a country to develop and bring benefits to the poor.

Hence, if the Bank is genuine in its effort to reduce poverty, it should be more effective in supporting socially just and environmentally sound forest management and conservation, as well as promote the respect of the rights of forest peoples, including land reform and indigenous peoples' rights. Therefore the question is: "How does the Bank intend to integrate the promotion of Indiegenous Peoples' rights in its operations?". More technically, how does the Bank intend to link up the Forest Policy debate with the ongoing review of its Indigenous Peoples' Policy?

To go back to the key argument, the Bank is trying, in our view, to use its renewed focus on poverty alleviation as a means to review its policy and create a conceptual split between conservation of forests and poverty reduction. It sees conservation and development as opposites, thereby forgetting the real meaning of sustainable development. This is a major step backwards. Also it points to the fact that conservation is not an issue for Southern countries, but for Northern countries, in order to justify recourse to "win-win" market-based solutions and mechanisms such as joint implementation and carbon sequestration by means of plantations.

Is the Bank going to support the expansion of "green deserts"?

The existing bias towards plantations that we detect in Bank's documents is in our opinion very worrying, especially because the Bank tends to put both monocultures and local small scale plantations to meet local needs at the same level. So it is unclear what the Bank means by plantations and expansion of forest cover.

Therefore, we urge the Bank to better clarify the importance and sense of the concept "expansion of resource base", and how in their view the promotion of plantations is a way to meet people's basic needs and alleviate poverty. Large-scale tree monocultures, in particular those with exotic species have had and still have an adverse social and environmental impact on local communities and affect local subsistence economies. Nevertheless, we have to notice the scarce analysis made by OED in that regard, in that it overlooks the effects of plantations on the poor, indigenous peoples and on biodiversity and land tenure.

To put it simply, is the Bank convinced that by supporting the expansion of large-scale tree plantations, and therefore of some resource intensive industries, such as agribusiness, timber and pulp and paper, the benefits would then trickle down to the poor? And what are the arguments in support of this approach, considering that evidence on the ground suggests the opposite?

Forest loss: who is to be blamed?

In terms of analysis of the root causes of deforestation, the OED acknowledges that the poor have not been a substantial cause of deforestation. This is a major welcome change from the traditional approach that sees the poor as the key cause for forest degradation and destruction. In fact logging activities have been and still are among the key direct and indirect catalysts of deforestation.

The logical consequence of this assumption in our view is that the Bank should tackle the issue of unsustainable activities of logging practices as a first step.

Secondly, with respect to its renewed emphasis on good governance and the rule of law, the Bank should take steps to support governments' capacity to implement stringent forest management and conservation efforts, as well as punish corruption and illegality. As a matter of fact there is a strong relationship between good governance, notably corruption and human rights issues and the illegal activities of logging companies, so the two aspects should be tackled in parallel.

Again, more research is needed in our view on the relationship between logging and poverty, especially in terms of better understanding the distribution of benefits ensuing from large scale logging operations to indigenous communities and the poor.

Logging and the precautionary approach

The other issue that is of concern is the OED argument that the existing ban on logging in primary tropical moist forests has had a "chilling" effect on Bank lending in the sector. This interpretation is contradicted by the figures: in fact Bank forest-related lending has increased by 78% since 1991. However, this interpretation seems to be instrumental to the wish to remove the current ban, and seems to be still inspired by the traditional culture of "lending targets", rather than on the quality of operations.

In our view the Bank should retain the precautionary approach that characterized the adoption of the ban in 1991 and should extend it to other forest types, such as temperate and boreal.

Demand and consumption of forest products

The poor have been less a source of deforestation than the policy had assumed, as in many countries demand for timber is the major cause of deforestation. Illegal logging supplied at least half the total timber supply in many forest-rich countries.

The OED suggests that ways need to be found to manage demand for tropical timber in international markets. We believe that truly sustainable production of timber needs to be supported by policies aimed at reducing consumption, improve recycling and reutilization of timber, in particular in Northern countries. So, if Northern countries are to be considered as among the key actors to support the conservation of forests, they should act accordingly and decrease their excessive and wasteful consumption of forest products. We believe that the Bank should take this factor into consideration as well in devising an overarching policy to tackle forest issues.

The author wishes to thank Marcus Colchester of the Forest Peoples' Programme, UK, Korinna Horta, Environmental Defense and Lisa Jordan of the Bank Information Center, USA, Ricardo Carrere of the World Rainforest Movement, Uruguay for the very valuable materials and analyses they have produced on the issue