Forests Sourcebook - HCV Resource Network

pronged approach to legal compliance is the only way to
ensure that the full range of motivations, opportunities, and
means for illegal behavior are addressed.
Strengthen supply-side measures with measures to
control imports of illegal timber and wood products.
This is especially important in countries where export
demand is a significant driver of illegal activities in the forest
sector. It should be noted that—at least in principle—
these measures could also be extended to other products
(for example, wildlife or products derived from illegal conversion
of forest lands).
Integrate anti-money-laundering and asset forfeiture
laws into the fight against forest crime and
related corruption. These tools, along with the UN Conventions
Against Corruption and Transnational Organized
Crime, provide strong and effective regimes that governments
can use to fight forest crime and related corruption.
Risks
Focusing more directly on illegal logging and other forest
crimes will not always be a natural or comfortable role for
development agencies, including the World Bank.
Inevitably, development agencies will become involved in
complex and controversial issues regarding the quality of
laws, and at times these institutions will be put at odds with
powerful interest groups, including high-level government
officials, defending the status quo for personal gain. Consequently,
there are two potential areas of risk for the development
community:
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As with any complex and controversial issue involving
different interests and actors, there are reputational risks
related to work with FLEG. The World Bank and its partners
need to be especially sensitive to issues related to
human rights and equity in their work. Transparency and
advocacy and support for participatory approaches are
important means to avoid these types of risks.
A more vigorous engagement with FLEG will also
inevitably involve difficult issues related to national sovereignty
in the management of natural resources. This
political risk needs to be carefully managed.
Opportunities
Specific opportunities for action by the international community
include the following:
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Address critical gaps in the understanding of the nature
of the governance challenge. An illustrative list of important
areas for focus follows:
– Development of diagnostics to benchmark forest crime
and the state of forest governance in high-priority
countries, and identification of indicators to monitor
the progress of proposed interventions
– Advancements in the role of independent monitors in
making forest operations more transparent and in
providing legal operators with positive incentives
– Institutional (and incentive-compatible) reforms of
forestry agencies in Bank client countries that include
gaining a better understanding of the role of incentives
(including salary structure and so on) for civil
servants
– Development approaches to forest industry restructuring
and retrenchment that will efficiently and
effectively help address imbalances in wood supply
and demand
– Establishment of information management systems
and use of geographic information systems for overall
monitoring of the forest resource
Deepen the technical content of FLEG processes at the
international and national levels, mobilize opportunities
for multilateral enforcement action, and integrate the
regional FLEG processes into existing structures for
regional cooperation
Promote collaboration between the progressive elements
of the industry, international financing institutions, and
international NGOs involved in the FLEG process to
develop, improve, and harmonize safeguards and due
diligence on forest investments (see note 5.4, Strengthening
Fiscal Systems in the Forest Sector). The aim should
be both to ensure the legality of the timber used and to
mitigate the risk for other forest crimes, such as poaching,
arson, and encroachment of forest areas, resulting
from forest industry investments.
Ensure effective coordination between the implementation
of the FLEGT Regulation and Action Plan and other
FLEG efforts. The aim should be to strengthen the links
between the voluntary partnership agreements envisioned
in the FLEGT action plan and the lending and
advisory operations of the international financing institutions,
especially the World Bank.
Explore the potential for initiatives similar to the Extractive
Industries Transparency Initiative (EITI) 2 to increase
transparency of forest sector financial flows in some key
forest countries, especially where a relatively small number
of companies operate large forest concessions.
196 CHAPTER 5: IMPROVING FOREST GOVERNANCE