Forestry and Poverty Newsletter: Issue 41, November 2012

World Bank delivers scathing review of REDD program

The World Bank’s evaluation group has published a scathing review of the Bank’s Forest Carbon Partnership Facility (FCPF), giving the impression of a program that has spiralled out of control. The group also pointed out that high expectations and over-optimism surrounding REDD and carbon markets are largely responsible.

The Independent Evaluation Group’s (IEG) review is a sobering wake-up call for the FCPF, through which donor governments have pledged more than USD450 million.  The review points out four key points that will be obvious to anyone that has followed REDD since its inception in 2005. First, carbon compliance markets – i.e. a regulated demand for REDD carbon credits – have not emerged.  Second, that REDD is “a more expensive, complex, and protracted undertaking than was anticipated at the time of the FCPF’s launch“. Third, that tying the FCPF fund to progress in REDD policies under the UNFCCC has severely constrained the fund’s objectives.  And, finally, that private sector interest in the fund has been close to non-existent.

But more important are the criticisms of the Bank’s own approach to the program and to REDD more broadly.

The review points out that monitoring, evaluation and regular reporting are close to non-existent. Disbursements of funds have also been a problem. Donors have pledged USD457 million. Yet just 30 per cent of this has been committed, with only 16 per cent disbursed. More worryingly for the FCPF, the review points out that it has cost the Bank around USD22 million to disburse just USD4.9 million in grants.

The overall impression is of a program that has spiralled out of control, underlined by the key recommendations in the review.  The review calls for the FCPF to clarify its mission and to effectively overhaul its management structure.  It also calls on the Bank as a whole to re-examine its approach to REDD, and possibly divert money into programs such as tenure reform.


New study urges conservationists to face economic realities

A new study by respected conservationist Eric Meijaard has called on conservation practitioners to work more constructively with the private sector as a way of gaining better access to forest data. It also states that unreasonable demands can act as a disincentive for companies to undertake any conservation work at all.

The study argues that timber, mining, and plantation companies play an important role in the management of tropical forests and wildlife, and are often willing to invest in improved forest management if the conservation efforts are reasonable. “Once an area has been set aside for productive use it is no longer reasonable to expect it to remain pristine and to maintain all the values that pristine forest can provide”, the study points outs. Excessive and unaffordable demands can act as a distraction and disincentive for companies that might otherwise be willing to improve.

Meanwhile, a new report by the Nature Conservancy states that goals of programs such as REDD+ must be aligned with national development goals, so that REDD+ programs emissions reduction targets complies with the countries’ overall development agenda. The study, funded by the Norwegian government, drew on lessons learnt from ten natural resource management programs, including Indonesia’s Kecamatan Development Project.


More than 120,000 encroachers living in Indonesian national park

New data from researchers in Indonesia indicates that around 127,000 people are living within the boundaries of a national park in Sumatra. According to the study, published in Conservation and Society, a total of 32,000 households have been established inside the Bukit Barisan Selatan National Park.

The data is the first comprehensive survey of populations living inside the national park. Deforestation and encroachment within the national park has been ongoing since the park’s establishment in 1982. A 2006 study found that the establishment of park boundaries made absolutely no difference to the rate of deforestation.

In 2005, the World Bank and other donors financed approximately USD2 million of new conservation initiatives inside the park through the Critical Ecosystem Partnership Fund. These appear to have made little difference.

The report notes that illegal farmers inside the park are mostly immigrants originating from the neighbouring island of Java that moved to Sumatra to establish coffee plantations. These squatters cite extreme poverty and the lack of alternative livelihood opportunities are as the main reasons for encroaching into the park boundaries.

A recent study by World Growth revealed similar failures within an NGO-backed protected area- the Tesso Nilo National Park in Sumatra. The goals of forest dependent communities living in high densities around these parks, made up of  poor landless migrants and small farmers looking to feed their families – are  unlikely to harmonise with NGO conservation efforts to save tigers, rhinos, and elephants.


Indonesian forest plan tempers conservation ambitions

The Indonesian Ministry of Forestry has released its Investment Plan for the World Bank’s Forest Investment Programme (FIP).  The total funds disbursed to Indonesia for the plan will be around USD 70 million, but the Plan emphasises that conservation ambitions must remain in line with national development goals.

According to Ministry documents, the plan is designed to reduce barriers to subnational REDD+ implementation and to increase provincial and local capacity for REDD+ and sustainable forest management. The plan aims to focus its activities on three key areas: developing institutional capacity for sustainable forest and natural resource management; investments in forest enterprises and community based forest management; and community capacity-building and livelihood development.

The plan aptly points out that the forestry sectors conservation objectives to deliver ecosystem services will need to be balanced with Indonesia’s economic growth ambitions of 6 per cent per annum. The plan also states that investments in alternative livelihoods and business models, as envisioned under REDD+ and other climate policy, must produce real and sustainable improvements in local incomes and employment in addition to protecting forests.

The document also cautions on the risk of generating high expectations for REDD+ which might not materialize, especially in the absence of carbon markets and adequate international commitments.

The FIP may increase levels of community forestry permits, which have failed to meet uptake targets since their introduction.


FLEGT-VPA on trial

The European Union and Indonesia have trialled the first shipment of timber products from Indonesia, verified in accordance with the country’s new timber legality scheme (SVLK) under the EU’s Voluntary Partnership Agreements (VPA).

The October/November trial will be followed by an independent assessment to verify that the agreed scheme is operational. The VPA between Indonesia and EU was concluded in 2011, but the signing has now been delayed to February 2013. This delay means that Indonesian exports will likely be subject to the EU’s new Timber Regulation (EUTR), due to come into effect from March next year.

According to a new report by World Growth, delays to the implementation of the VPA will put Indonesian timber-based exports into a ‘policy limbo’. The VPAs were designed to ‘fast-track’ Indonesian products that had been licenced under the SVLK system, avoiding the need to comply with the EUTR.

A number of European campaign groups have widely criticised the EUTR, claiming that it does not take measures far enough. WWF has stated that the measure will still allow timber listed under CITES Appendix III to be exported and imported, ignoring the fact that an Appendix III listing can be requested by one country, and may therefore only be considered illegally harvested in that country – and not elsewhere. Global Witness has also called for greater availability of forest company information.


Disney sourcing policy creates fuss in Jakarta

A new sourcing policy by US-based entertainment company Disney has created a fuss in Indonesia, prompting protests from radical local student groups.

The Disney sourcing policy makes a number of commitments that may be considered controversial by a number of businesses in developing countries, including Indonesia. The first is a commitment to eliminate use of paper fibre from natural forests that have been converted to plantations since 1994.

This will significantly hamper the company’s ability to source from Chile and Indonesia. It will, however, mean that it is much more likely to source from both North American and Western European paper manufacturers, where plantations are long established.

Indonesia’s two largest paper manufacturers, APRIL and APP, expressed disappointment at the policy. According to APRIL, Disney did not approach the company for information, and instead relied on the information of radical campaign group Rainforest Action Network.

The Disney decision prompted a protest from a local Indonesian group called Bergerak (Platoons of Citizens, Labors and College Students Fighting Foreign Imperialism). The group’s calls attempted to tap into local Islamic and anti-Semitic sentiments.