Forests Sourcebook - HCV Resource Network

Box 6.12
The Use of DPLs to Support Natural Resources Management in Gabon and Cameroon
In November 2005, the World Bank approved a US$15
million IBRD Natural Resources development policy
loan to help Gabon design and implement reforms in
the forest, fisheries, biodiversity and environment,
mining, and oil sectors. In February 2006, it approved
a US$35 million Forest and Environment development
policy grant to help Cameroon consolidate and scale
up recent sector reforms. Both operations represent
World Bank contributions to national sector programs
supported by multiple donors—the Cameroon grant is
a joint IDA-Global Environment Fund (GEF) operation,
while the Gabon development policy loan is an
IBRD loan to be complemented by a parallel GEF
grant.
Forests, biodiversity, and other natural resources are
critical to rural livelihoods in both countries, where the
majority of people live in extreme poverty. They are
also central to economic development and stability,
and are the focus of a number of international partnerships.
While adapted to fit their specific country
contexts, both operations focus on reforming sector
incentive frameworks, improving governance, enhancing
participation, and enforcing laws and regulations
in the field. Their design is based on several principles:
that natural resources are public goods to be managed
in the interests of local people, the country, and the
global environment; that sustainable forest management
and fiscal and environmental responsibility must
be integrated into the business model of the forest
industry; and that government must assume full
responsibility for the quality of management of the
assets under its stewardship.
Well-designed, comprehensive forest operations
tend to involve difficult choices and reforms ranging
from reshaping and enforcing taxation regimes, curbing
illegal logging, restoring the traditional rights of
local populations, closing down parastatals, overcoming
inertia, and reforming institutions. Two decades of
Bank experience in providing assistance to the forest
sector in Cameroon and Gabon revealed clearly the
limits of traditional projects (called Sector Investment
Loans, or SILs by the World Bank) in reforming forest
sectors traditionally dominated by political patronage
and vested interests. It also indicated that more successful
reform programs can be pursued through sector-wide
structural adjustments, if the programs are
sufficiently broad, and endowed with flexible time
frames and adequate resources for supervision.
A number of considerations led the World Bank to
select DPL as the instrument for the new Cameroon
and Gabon operations:
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DPLs directly involve central economic ministries,
engaging high-level authorities to support fundamental
changes in policy and its implementation.
SILs, however, are often limited to sector ministries
in which narrower interests tend to guard the status
quo, leaving necessary policy changes in the hands
of those most resistant to change.
DPL disbursements are triggered by the delivery of
tangible and measurable results, whereas SIL proceeds
are used to reimburse eligible expenditures
incurred by the client. SILs are based on the
assumption that a strong direct link exists between
expenditures and results, while DPLs focus more
directly and uncompromisingly on results. DPL disbursements
are far fewer in number and involve
much larger amounts than SIL disbursements, making
them significant to heads of state and central
economic authorities who would otherwise likely
overlook forest-related issues.
DPL places a strong emphasis on defining results
clearly and measuring achievements objectively,
because these are at the core of legal agreements and
key to World Bank loan and grant disbursements.
This focus on results facilitates donor alignment
and harmonization, joint donor supervision, public
scrutiny, and independent monitoring.
For example, the joint adoption of the results matrix
negotiated in the course of the preparation of the
Cameroon Forest and Environment development policy
loan, encouraged Canada, Germany, France, the
Netherlands, the United Kingdom, the European
Union, the African Development Bank, the World
Bank, the FAO, the United Nations Development Programme
(UNDP), the World Wildlife Fund (WWF),
and the Netherlands Development Organization
(SNV), to sign a partnership agreement that provides a
clear framework for aligning their support to the forest
sector.
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DPLs sharpen the focus of Bank-government dialogue
on the achievement of larger results and the
quality of processes. Dialogue surrounding SILs
tends to revolve around individual procurement
224 CHAPTER 6: MAINSTREAMING FORESTS INTO DEVELOPMENT POLICY AND PLANNING