Forestry and Poverty Project Newsletter – Issue 44, March 2013

Indonesia considers terminating its partnership with WWF

The Indonesian Forest Ministry has said it is considering terminating its existing partnership with the World Wildlife Fund (WWF), following claims that the NGO has been unsuccessful in slowing the rate of deforestation in one of Indonesia’s worst-hit provinces.

New analysis of satellite images by the Forest Ministry indicate that approximately 46,960 hectares of protected forest has been cleared from Riau Province’s Tesso Nilo National Park, over the past ten years. The 83,068-hectare park, which has been jointly managed by the Forest Ministry and WWF since 2006, has therefore experienced one of the highest rates of deforestation across the entire country over this period.

As a result, Indonesian lawmakers have called on the Government to end its partnership with the NGO. In particular, the head of the Indonesian House of Representative’s Commission on Forests, Firman Subagyo, has said that: “It is time for Indonesia to stop compromising with the WWF because it has failed to do anything.”

Mr Subagyo also highlighted that despite the nation’s best efforts to improve sustainable forestry management practices across Indonesia WWF has continued to wage a negative public relations campaign against its forestry sector from abroad.

He further argued that similar Environmental NGO efforts have not only undermined sustainability concerns, but have also hampered Indonesia’s economic growth and development: “Foreign NGOs like the WWF are like thieves visiting our homes to steal our treasures without us realizing it. The NGO’s arrogance has impacted our weakened industrial competitiveness overseas, which will even worsen Indonesia’s economy.”

In response, the Director General of the Forest Ministry has rightly decided to undertake an evaluation of WWF’s work in the Tesso Nilo National Park and has vowed to terminate the partnership if investigations prove it to have been of no benefit to the Indonesian people.


Indonesian producers in the firing line

Indonesian pulp and paper producer APRIL has come under renewed fire from a large number of international NGOs. Campaigners have made a number of allegations against APRIL and its parent company Royal Golden Eagle International (RGEI), including ‘greenwashing’, bulldozing of community forests and destruction of biodiversity. There is, however, a significant allegation concerning FSC certification missing from the list.

The question concerns RGEI’s FSC-certified products going through its Chinese subsidiary, Asia Pacific Paper Converters, based in Suzhou.  The company produces a range of stationery products that are exported to key markets in Australia and elsewhere.

APRIL’s previous engagements with FSC had been subject to controversy.

In 2010 APRIL had its FSC certification suspended following accusations by WWF and its affiliate Indonesian NGOs of conversion of rainforests for acacia plantations and the destruction of High Conservation Value Forest (HCVF).

The destruction of HCVF would require FSC to dissociate from APRIL and any of its subsidiaries, according to its 2011 “Policy for Association“.

The Policy for Association was first introduced in 2009 to effectively bar Asia Pulp and Paper (APP) from using the FSC logo for a number of its compliant products.

The question for FSC and the NGOs campaigning against APRIL is whether the double standards that keep APP outside and APRIL inside FSC will remain in place.

Meanwhile, APP has been hit with renewed criticism from WWF that its suppliers are clearing natural forest areas.

APP and its suppliers have responded, stating that the accusations have arisen from confusion over concession boundaries, which are an ongoing problem in Indonesia that affects all sectors.

Many of the accusations previously made against many Indonesian forestry and plantation companies have stemmed from a lack of clear tenure boundaries and consistent spatial plans between government departments. This is likely to continue.


Greenpeace retracts claims against Canadian forester

Greenpeace has acknowledged that a series of allegations it made in 2012 against the Canadian forestry company, Resolute Forest Products, were false and misleading.

In December last year, Greenpeace withdrew from the Canadian Boreal Forest Agreement (CBFA) after alleging that Resolute Forest Products was building roads in the threatened Montagnes Blanches forest and secretly engaging in prohibited logging activities.

The CBFA is an agreement between 29 forestry companies and various environmental groups, which formalized a commitment to protect ecosystems and wildlife within 72 million hectares of forest in the Canadian Boreal region.

At the time, Resolute Forest Products fervently denied the Greenpeace allegations, asserting that the roads in question were in fact authorized under the CBFA, or had previously been built by the Quebec government. In addition, Resolute said that the pictures of supposedly “ravaged” forest, which Greenpeace used as evidence of secret logging, had been taken at a completely different site, one which was harvested in the early 2000s. The company further highlighted that Greenpeace’s behaviour was not only irresponsible, but also a violation of its legal commitments under the CBFA.

Last week Greenpeace posted a news release retracting all of the allegations made against Resolute, acknowledging that its claims had been based on inaccurate information, yet still decided that it will not return to the CBFA. Greenpeace has said that it ‘sincerely regrets the error’.


Developing countries highlight a number of concerns with the EUTR

The long awaited European Union Timber Regulation (EUTR) came into effect on March 3. This law makes it a criminal offence for timber traders and operators to place illegally harvested timber and timber products on the EU market. However, there is growing discontent amongst developing countries.

The Democratic Republic of Congo (DRC) is one such nation, which is currently engaged in VPA negotiations with the EU. Despite such efforts, the current state of the DRC forestry sector and the lack of independent monitoring systems, indicate that is extremely unlikely, if not impossible, for EU timber operators to feel comfortable that timber imported from the DRC will be EUTR compliant. Such uncertainty effectively precludes many DRC timber producers from the EU market, since the risk of prosecution under EUTR penalty provisions is likely to be too high for many EU operators.

CEO of the Ghana Forestry Commission, Mr Afari Dartey, has also recently underscored a 50% decline in the volume of timber and timber products that his nation has exported to the EU.

Although Ghana was the first country to conclude a VPA with the EU, Mr Dartey has described the decline in exports as a big blow for the local timber industry. He specifically attributed the fall to the European Forest Law, Governance and Trade (FLEGT) Action Plan, as well as growing demand for certified wood products. He further emphasised that the EUTR presents a number of additional challenges for Ghanaian timber producers.

Broader problems posed by the EUTR were also raised at a recent EU-backed meeting on illegal logging. The meeting provided updates on a number of VPAs and considered implementation issues associated with the EUTR.

Conference delegates noted that the European Commission has been slow to publish guidance on the EUTR ‘due diligence system’ and that few designated authorities currently have the capacity to enforce the EUTR provisions.

Concerns were also raised that the regulations would lead to a shift towards lower risk timber products, such as those harvested or manufactured within the EU, as opposed to lower-cost and higher quality products imported from non-EU countries. The presenters further noted that the implementation of VPAs in some cases has taken much longer and been more resource-intensive than anticipated.

A representative from the Ghana Forestry Commission noted that delays in implementing the VPA licensing systems arises from the lack of simple commercial tracking systems, whilst the representative from the Indonesian Ministry of Forestry stated that the VPA’s multi-stakeholder approach will also slow the legality verification process.


The EU’s domestic illegal logging problem

The number of illegal logging cases in Greece has skyrocketed according to The Wall Street Journal.  The Ministry of Environment has reportedly lodged more than 3,000 lawsuits and seized over 13,000 tons of illegally harvested timber in 2012. This dramatic rise is a direct consequence of Greece’s deepening economic woes.

According to the Greek authorities, tens of thousands of trees have disappeared from parks and woodlands this winter. Many Greeks are reportedly unable to pay for electricity or fuel and have thus turned to fireplaces and wood stoves as a source of heat. The issue has also been exacerbated by a new tax on heating oil, which caused an 80 percent plunge in sales. The last time Greece saw such rates of illegal logging was during German occupation in the 1940s.

Nonetheless, the new EUTR is unlikely to stem this rise in illegal logging, since it fails to address its underlying cause poverty. Accordingly, the EUTR will not only fail to alleviate the rate of illegal logging, but it is also more likely to exacerbate the issue by placing a further burden on the Greek economy.


New FAO guidelines highlight the development benefits of agroforestry

The UN Food and Agriculture Organization (FAO) has recently published a set of agroforestry guidelines for key decision makers and policy advisers. The purpose of these guidelines is to support greater recognition of agroforestry and its developmental benefits, as well as to educate those that may facilitate more favourable agroforestry policies at the national level.

Agroforestry systems include both traditional and modern means of managing forestry plantations together with crops and animals, within an agricultural setting. It is practised in both tropical and temperate regions to produce food and fiber, and contributes to sustainable livelihoods for farmers.

Eduardo Mansur, the Director of the Forest Assessment, Management and Conservation Division of the FAO, has said that agroforestry is an effective means of promoting productive and sustainable land management in both cropping and grassland environments. The benefits of agroforestry have also been recognized by multilateral instruments, such as the United Nations Framework Convention on Climate Change (UNFCCC) and the Convention on Biological Diversity (CBD).

However, despite such favourable treatment at the international level, agroforestry continues to face a number of headwinds in developing nations. In particular, its development is hampered by a lack of recognition and understanding amongst decision makers, inadequate property rights, and deficient coordination between multiple governing sectors.

As outlined by the FAO guidelines, developing countries must therefore seek to promote agroforestry systems by improving the security of land tenure, heightening inter-sectoral coordination, and driving ‘good governance’ of natural resources. Such efforts will not only encourage sustainable land management practices but also improve food security and alleviate poverty.


UNEP study demonstrates that forest carbon credits are financially unfeasible

The United Nations Environment Programme’s (UNEP) Riso Centre has released a new report that investigates the economics of implementing Reduced Emissions from Deforestation and Forest Degradation (REDD+) projects. The results indicate that such projects do not represent attractive investment opportunities for the private sector.  A further investigation demonstrates that the costs of implementing REDD+ are highly uncertain for developing countries.

The REDD+ financial mechanism seeks to create an incentive for forest conservation, by promising payment for carbon sequestration services in tropical forests. However, the recent UNEP study demonstrates that revenues from carbon credits are a secondary source of income for REDD+, due to the inherent volatility and immature state of existing carbon markets. The study ultimately highlights that, such projects are generally financially unfeasible due to the large upfront investments required, as well as the long period to achieve fairly modest returns.

Furthermore, a separate investigation into REDD+ has indicated that implementation costs for such projects are highly uncertain for developing countries due to inadequate project designs and issues over how the actual environmental benefits are determined. In particular, the study assesses the set-up, transaction, and monitoring costs of project designs from the Peruvian Amazon and compares them with established projects in Brazil and Bolivia.

Overall, these case studies suggest that REDD+ project developers require external support in order for them to remain financially feasible. Therefore, forest carbon projects should seek to derive revenues from other activities, such as agro-forestry, which also have much broader social and economic benefits.

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