Forests Sourcebook - HCV Resource Network

CHAPTER 8
Introduction to the World Bank
Forests Policy
The World Bank has 10 key policies that are critical
to ensuring that potentially adverse environmental
and social consequences are identified, minimized,
and mitigated, as well as a policy on disclosure. In the context
of forests, the Operational Policy on Forests (OP 4.36)
is proactive in both identifying and protecting critical forest
conservation areas and in supporting improved forest management
in production forests outside these areas.
The reader should note that this section covers only the
policies relevant to World Bank investment projects. The
World Bank also has an Operational Policy on Development
Policy Lending (OP 8.60) that is relevant to the forest sector
and Forests Strategy. Section 11 of OP 8.60 states:
The World Bank determines whether specific country
policies supported by the operation are likely to cause
significant effects on the country’s environment,
forests, and other natural resources. For country policies
with likely significant effects, the World Bank
assesses in the Program Document the borrower’s systems
for reducing such adverse effects and enhancing
positive effects, drawing on relevant country-level or
sectoral environmental analysis. If there are significant
gaps in the analysis or shortcomings in the borrower’s
systems, the World Bank describes in the Program
Document how such gaps or shortcomings
would be addressed before or during program implementation,
as appropriate.
Guidance on handling the due diligence requirement in
OP 8.60 with regard to forests is discussed in chapter 6 of
the Forests Sourcebook, and its associated notes.
HISTORY OF THE WORLD BANK’S
FORESTS POLICIES
The World Bank’s original Operational Directive on
Forestry (OD 4.36) was issued in 1993. It grew out of a concern
(voiced by environmental nongovernmental organizations
[NGOs] and other outside stakeholders, as well as
within the World Bank) that World Bank–supported
forestry operations need to be environmentally sustainable.
As such, the policy was focused primarily on forestry activities.
This Forestry Policy was controversial, both within and
outside the World Bank, because it prohibited World Bank
financing of commercial logging in primary tropical moist
forests. This provision did not prohibit technical assistance
and numerous indirect forms of support for such logging.
Nonetheless, it had a chilling effect upon World Bank management
and project staff, who were reluctant to support
activities that were in any way linked to any kind of tropical
forest harvesting, even when the expected outcomes would
be highly positive from a conservation standpoint. Meanwhile,
deforestation (driven more by agricultural expansion
than by logging) was continuing and even increasing in
many World Bank member countries, resulting in the concern
that the World Bank’s relative disengagement from
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