1. Introduction 2. Background 3. Importance 6. Implications |
This is a summary of the main report of the Independent Forest Sector Review Team commissioned by the Joint Coordinating Committee of Government and donors. The review was undertaken by an independent multi-disciplinary team between October 2003 and March 2004.
The report is presented in 2 parts. Part I presents the overall conclusions and recommendations of the review team, together with the argument and reasoning for the conclusions. Part II presents the current context for the forest sector in a series of multi-authored chapters.
2. BACKGROUND AND DEFINING POLICY ISSUES This report is presented at a critical junction for the forest sector in Cambodia, where there are a series of debates surrounding different issues. Many of these are captured under the title of “forest sector reform”, to which the Royal Government of Cambodia (RGC) remains committed. These include issues of: a) forest management, including the concession system, illegal logging and forest crime monitoring, community forestry, plantations, land conversion; b) rights and claims, including indigenous peoples’ titles, and the uncertainty and inconsistency between laws; c) institutional roles, including administrative structures, roles for interest groups and international environmental NGOs (IENGOs); d) national context, where over-riding poverty-related objectives have been articulated and procedures for decentralisation and de-concentration are being developed; and e) donor funding.
Some of these issues have been the subject of conflict and recrimination. However, the review did not start by addressing these issues directly, but, instead, started by describing the forest resource, identifying pressures and opportunities under different management regimes and, then, assessing the agencies and operators in the sector (i.e. the players) and the factors which govern and control how they work together (i.e. the institutional rules, both formal and informal). In so doing, the review has attempted to determine the importance of these issues within an overall framework, rather than as ad-hoc and separate issues.
This approach has resulted in the identification of three key policy questions to which the review contributes, but which we believe need to be answered through an explicit public debate managed by government in Cambodia:
Over the last decade of support to the forestry sector these questions have been answered through a de facto and often non-transparent process. The review has stepped back from the de facto answers to these questions and posed them afresh in the light of current national policy goals.
The first key policy question raises the more specific questions of what are the forests for and for whom? Forests are clearly important in terms of (a) livelihoods, (b) economy and (c) ecology.
a) Livelihoods. Most people in Cambodia are dependant on the forest in many different ways. These range from meeting domestic requirements for fuel, food, bushmeat, medicine and construction materials, to earning an income from enterprises associated with the forest, such as resin-tapping and charcoal manufacture and even illegal logging. The most directly forest-dependent are indigenous people, whose livelihoods and cultures are intimately associated with the forest and whose way of life is threatened by the spread of settled agriculture.
The extent to which people can use forest assets to build a livelihood depends on the institutional arrangements which define rights and access to the forest and the way those rights are curtailed by others in more powerful positions. In practice, for rural people, there is a nexus of business, politicians, the military and officials who are able to claim a share of forest products. This results in producers receiving low returns for their labour and consumers paying relatively high prices.
b) Economy. Forestry has contributed surprisingly little to the national revenue, not exceeding 4% at its peak in 1994, and now less than 0.5%. In terms of the contribution to GDP, it is estimated to have only reached about 8% at its peak. However, the forest has contributed to the economy in other ways including provision of wood and non-wood products for construction and furniture making. At its height, it is estimated that nearly 37,000 people were employed in the sector. Furthermore, the whole rural economy of Cambodia depends on fish and rice, both of which are dependent on maintaining water flows, which is regulated in part by forest cover.
c) Ecology. Cambodia has the largest relative area under forest in the region and some of the greatest extents of forest, and, therefore, it provides important habitats for many species of animals, birds and plants.
The key policy question of determining the balance between these issues depends on how the forest could and should be managed. This issue was addressed by the second policy question.
The second policy question relates to how the forests should be managed. Approaching this question required an analysis of existing and emerging forest management systems. The policy framework for this analysis, according to the Land and Forestry Laws, consists of a hierarchical series of policy steps relating to allocation of land to different purposes:
Step 1 Indigenous title Step 2 Protection Step 3 Production Step 4 Conversion
Step 1: Indigenous title Indigenous peoples in Cambodia are mainly confined to the more remote and forested regions of the country. Their cultures and livelihoods are closely interconnected to forests in which they practise extensive forms of agriculture through swidden cultivation. This form of agriculture is an intrinsic part of the livelihoods of indigenous groups in Cambodia. It does not just represent a productive system but is also an inherent element of the socio-cultural systems of these groups. Under the Land Law, indigenous collective title is legally recognised and enshrines the legal rights of indigenous communities to practise swidden agriculture. The indigenous title constitutes a prior claim to land resources that are both forest-based and agricultural and must, therefore, be established prior to any other claims being imposed on the land.
Under the Land Law there is legal provision for collective titling of indigenous lands. The process of identification of indigenous peoples and their lands is currently being piloted in order to support the drafting of a sub-decree and the completion of the collective titling process. Our recommendation is that no new land claims should be put in place until the collective titling process is complete, and that zonation should also wait until this process is completed; in particular, there should be no demarcation of the permanent forest estate until indigenous peoples’ rights are secured.
Step 2: Protection Cambodia has a relatively extensive Protected Area system. However, it excludes some areas of high significance and includes other areas of degraded forest or of limited ecological significance. This situation should be rationalised and the total area reduced in overall area in order to focus resources and effort on a smaller more valuable area.
Of particular concern is the Strung Chinit – Prey Long area. This is an area of great ecological significance, which is currently a production area. It is liable to be recommended for approval as a concession. A clear policy decision is required here: to permit logging, open up the area and generate revenue or to protect the area for future generations and for biodiversity. If this area was taken out of production, then the potentially viable concession areas would, in practice, have virtually disappeared.
Protection activities are implemented by International Environmental NGOS (IENGOs) through Memoranda of Understanding (MOUs) with the Ministry of Environment (MOE) and the Forestry Administration (FA). This system parallels the commercial concession system. There is a need to develop a national overview, strategic plans for each area and monitorable contracts for implementation. Governance arrangements are also necessary which separates the approval of plans within a strategic framework from the preparation and implementation of those plans. The development of a strategic framework is especially important to set national policy priorities since the implementing agencies bring their own funds and have their own, often very distinct focus and priorities. Some of the good practice and lessons of concession management, developed under the Learning and Innovation Loan (LIL) Project for commercial concessionaires could be applied to the management of environmental concessions.
Step 3: Production The current management system is focused on the (1) commercial concession system and on (2) community forestry. As well as these legal systems, (3) illegal logging takes place in and around the concession areas and system and (4) unorganised forest management takes place throughout most of the forest area.
(1) The concession system was introduced to bring order and systems to the anarchic logging practice which went on previously. The system is now at an impasse: there is a moratorium on logging in place since 2001; it is anticipated that only a few of the Strategic Forest Management Plans (SFMPs) will be recommended to go forward to the next stage; the concessionaires, who may have made good profits initially, are now making losses and many are in debt; the main area where SFMPs are likely to be proved viable is in the Strung Chinit-Prey Long area, which is also of significance in terms of biodiversity (as discussed above). There is still a deep sense of injustice over the initial allocation of concession areas, which did not take local or traditional use rights into consideration. Our view is that the system is no longer viable and should be stopped, although we recognise that there are important steps still to be completed.
(2) The community forestry system has demonstrated that communities can manage forest assets and that, where community title is established, this is usually respected by other people and groups. However, the scale of the community forestry activities is still small in terms of area and is largely focused in degraded forest areas. More worryingly, to make community forestry self-financing and sustainable, communities have to be sure of an adequate level of benefit flows. This provides the incentive for management and protection. It is not clear that either of these conditions (secure and adequate returns) have yet been put in place on a widespread basis throughout the country.
(3) Associated with the concession system has been the illegal logging of commercial quality timber, much of it for export. The illegal logging has been driven by “hungry” mills operating at low throughputs and the nature of sub-contracting which did not give concessionaires any incentive to check the source of supplies arriving at their mills. This lack of incentive to ensure good practice was followed was reinforced by high royalty rates and by the opportunity to enter into private deals with officials and others who could exercise control along the market chain.
The position of many of the current operators, concessionaires, subcontractors and military, is that, either by choice or by force, they have compromised their position and so, in general, are not able to exercise effective prior claim. They are forced either to keep going or to drop out. The concession system has not been able to ensure self-regulation. Additional state and, even, external resources may highlight the problem, but cannot of themselves prevent its continuation.
The debate around illegal logging has focused on detection, monitoring and prosecution. The view of the team is that the high value of the product, the remote areas and long boundaries make it virtually impossible to prevent illegal logging, without also having clear and effective prior claims. The concessionaires have hired military groups to provide forest protection in areas they are about to enter for harvesting, but once an area is deemed to be post-concession, that protection ceases.
(4) “Unorganised” forest management applies, de-facto, to virtually all the forest areas, if we include post-concession evergreen areas, the deciduous areas and some of the protected areas. Since there is no legal recognition of activities in these areas, there is no recognition in policy and no forest management instruments. The commercial logging and the debate around concessions and illegal logging have meant that these areas are often dismissed as being of no (commercial) value. There are formal permit and licensing processes and royalty requirements, but these are so cumbersome that they are rarely used. Instead, control is exercised through a nexus of local politicians, business men, military and officials Since there is effectively no clear legal basis, producers have to negotiate their share of the forest rent with those who exercise power over them, the resource and the market chain. Since harvesting and sale of forest products, small timber, charcoal, resin, etc. result in a livelihood for the producer it is tolerated by officials. However, with this tolerance goes rent-capture which leaves the producer with the minimum required for survival. The captured rent is then in private hands, where it is more likely to be spent on consumption than on investment and development, and to be spent outside the area where it was collected.
This system is inherently short-term in outlook. It also creates incentives for everyone to grab what they can and provides no incentive to anyone to manage the resource in a sustainable manner.
However, it does provide a livelihood for many people and, following the logging moratorium, has encouraged the development of small forest-based entrepreneurs in local towns near the forest. Consumers have also benefited: although some may have had increased difficulty in accessing the most valuable timber, the market prices in most places have been stable since the start of the logging moratorium.
Following the restructuring of the Forestry Administration in September 2003, a new, alternative system of management has emerged, which retains the roles and functions of the old Department of Forestry and Wildlife (DFW) and could potentially include the concession system. We have labelled this as “Forest Estate Management”.
Forest Estate Management refers to both the reorganised and restructured Forestry Administration and to the associated new management systems.
(a) New structure and approach. The reorganised structure is a logical response to some of the criticisms of the previous structure. In the past, DFW were held accountable, but were not responsible for staff in the province and field. The new structure ensures that FA has a direct field presence and the reorganisation allocates staff to forest areas. However, the new system has no downward or horizontal accountability to local people, other rights holders or to the civil administration. This is counter to overall government policy, where the trend has been to increase public involvement and participation. The FA will become the estate holder or landlord of the forest area by acquiring rights in law which, by tradition, belong to communities and others. FA activities such as boundary demarcation or plantation programmes, useful as they may be, can be interpreted as being consistent with this approach. Further, the new structure centralises control, while decentralising some decision making. Policy formulation, policy implementation and regulatory functions are all part of a single line of command. We would strongly recommend the separation of these functions and the development of mechanisms for increased public accountability.
(b) New processes. The FA have started to prepare strategic cantonment plans (similar in function to SFMPs under the concession system) within which harvesting will be managed through a process of annual bidding coupes. This system could replace the concession system, but is unlikely to solve all of the problems encountered under the concession system. Effectively, this internalises forest management whereas under the concession system there was a public-private partnership. Our concerns are that: the focus is still on commercial forestry; the same problems of conflicts over rights remain; the problem of dealing with sub-contractors remains, although smaller coupe sizes may be easier to manage. Finally, the resources needed for such a heavy undertaking are significant.
We recommend that both the structural and process issues should be addressed. Taken together with our earlier concerns about the focus on commercial forestry and the difficulty of preventing illegal logging without effective prior claims, we propose consideration of a radical alternative, which we have labelled “Partnership Forestry”.
Partnership Forestry would be based on a partnership between the State and commune in the form of a Commune Forest Plan. It would be approved by the regulatory authority, but all royalty and fees would be assigned to the commune. The commune would hold the revenue in a bank account which would require democratic control to spend. The FA, without its non-regulatory activities, would regulate on behalf of the State. The commune would be responsible to prepare the Plan within guidelines set down in advance by the regulatory authority.
The Commune Forest Plan would relate to the whole area, excluding areas under protection, and would be professionally prepared. The Plan would relate to all forest products and would take a long-term planning horizon. Plans would be self-financing, although an arrangement for advance funding of Plan preparation activities could be provided on a repayment basis.
Support to preparing Plans could not be provided by the regulatory authority. However, the regulatory functions could be funded from an annual levy raised on, for example, commune turnover. The regulatory authority would apply sanctions to communes who did not follow the approved Plan, and third party arbitration would be available where there were disputes. As part of the review, we have developed a very simple economic model, based on existing forest productivity and current levels of formal and informal fees, which suggests that for a commune with 5,000 ha of reasonably good forest, the annual flow would be about US$150,000 per year.
The effect of the proposed change in entitlement is that the new stakeholders (i.e. the communes) would have an incentive to protect against illegal logging and, in turn, would put demands on the State to prevent organised crime from removing their assets.
Partnership Forestry is different to community forestry, which assigns rights to community groups, but it is not an alternative to community forestry. With the Commune Forest Plan, there would be a range of implementation approaches including community forestry, private sector contracting or self-working.
Our recommendation is that the proposal for Partnership Forestry should be given serious consideration as it addresses many of the problems identified in the analysis of current systems. We also recognise many constraints: e.g. communes do not have autonomy as yet, there is high risk of elite and party capture, and there are no financial mechanisms in place such as bank accounts.
Step 4: Conversion areas Finally, we considered the residual category of lands for conversion to other, non-forest purposes. Conversion includes both legal processes such as economic and social concessions, infrastructure development, mining and quarrying, as well as illegal activities such as speculative land grabbing and encroachment for agriculture and plantations.
Our basic economic analysis suggested that, at current agricultural productivity levels, the economic returns to forestry may be greater than to agriculture. However, given the speculative value of the land, the private incentive to an individual farmer or planter will always be positive. Therefore, in general we would support the forest sector authorities in resisting both legal and illegal land conversion, while recognising that land conversion is both appropriate and necessary in certain circumstances.
Illegal land grabbing has been aided by commercial logging, which has opened up access, brought in labour and allowed mobile millers to follow. The same general principle as was proposed for illegal logging, of ensuring effective prior claims, is probably the only way to prevent this process.
The analysis of forest management has led us on to our third policy choice question: how should the sector be organised.
In this section, the review addressed the issue of overall management of the sector and the relationships between different agencies. Much of the policy debate in Cambodia has been issue-based (e.g. illegal logging) or has taken place around contested situations (e.g. Tumring). This is because there are few managed opportunities for interaction at a strategic policy level. This type of interaction also characterises the debates between Ministries and Departments, which are often resource rather than policy competitive. Furthermore, these events have framed the wider debate amongst Government, CSOs and donors. Hence there is an urgent need to create mechanisms and structures to allow a higher level of policy debate.
Currently, policy is being developed separately for protection areas, under the National Environmental Action Plan (NEAP) process, and for production areas, under the National Forest Programme (NFP) process. However, it is unlikely that on its own either process will deliver a clear statement of forestry’s contribution to the national goals of poverty reduction, as stated in national policy documents. Therefore, we recommend that there should be a single over-riding policy and policy process for the forest sector, ideally managed by a single Ministry/agency. This policy should be closely aligned to national goals of poverty reduction and embedded in national planning processes, such as the Socio-economic Development Plan (SEDP), Governance Action Plan (GAP), National Poverty Reduction strategy (NPRS) and the associated Medium-term expenditure framework (MTEF).
Furthermore, we recommend that the Forestry Administration (FA) and the Department of Nature Conservation and Protection (DNCP) are brought together through the establishment of a single Ministry or agency mandated with responsibility for an integrated forest sector policy. We also recommend that the new Ministry/agency develops capacity for (a) public consultation, (b) evidence-based analysis and c) sector-wide monitoring and intelligence.
We also recommend that permanent public accountability mechanisms are established at appropriate levels e.g. structures for civil society oversight, policy dialogue and implementation guidance. The landscape planning approach is a useful way to bring together natural and socio-political interests and to develop an integrated strategy for a geographic area.
Participation in public policy processes requires trust between organisations and individuals. Many of the existing relationships have broken down because of lack of transparency in the roles, and, therefore, of the motivation of individuals. Mechanisms are required to bring more transparency to these interactions. We have proposed a “register of private interests” for senior public servants to record their business connections, but the same principle applies to dealings between other stakeholders, such as, for example, international NGOs and donors.
Finally, an essential condition for any regulatory authority is that staff are paid adequate salaries. We recommend that pay scales are reviewed for the forest sector, as for other high value resource sectors, and that this should be undertaken as a priority. Pay scales should be attached to development of performance systems through support to human resource development programmes.
6. IMPLICATIONS FOR PROGRAMMES
Finally, we recommend a period of facilitated active reflection on the analysis, recommendations and proposals set out in this report.
Future governance and management of the sector needs to be widely agreed and owned within Cambodia. One lesson of this review is that, although expediency was important at earlier stages, the time is now ripe for Cambodia to adopt a more considered approach and not to respond to new ideas without a deeper understanding of the implications of particular courses of action.
The proposed period of reflection should precede any investment programmes and will need to be funded. After this and arising from this process, there are several areas in which external financing could be required.
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