Forests Sourcebook - HCV Resource Network

Forest law enforcement and governance. Loss and
degradation resulting from weak forest law enforcement and
governance have occurred at the expense not only of
national economies, but also of the rural people who depend
on forest resources for their livelihoods. This
mismanagement translates into enormous national costs.
For example, failure to collect appropriate royalties and taxes
from legal forest operations has a global cost to governments
of about US$5 billion annually. Illegal logging results in
additional losses of forest resources from public lands of at
least US$10 billion to US$15 billion a year. Improvements in
forest law enforcement and governance are critical to
capturing the full economic potential of forests in a
sustainable manner. In response, a stronger global focus has
been placed on forest sector governance, accountability, and
transparency (see chapter 5, Improving Forest Governance).
Private sector engagement. Because of forests’ significant
commercial value, the private sector is the principal source of
finance in forest production in most countries. Indeed, the
level of activity and influence of the private sector in forests
dwarfs that of the international community—and
sometimes of the national government. Private investment
in the forestry sector in developing countries and countries
in transition is close to US$15 billion per year, or up to nine
times more than the current official development assistance
flows. 1 Official development assistance accounted for only a
fraction of the funds available for forestry in the mid-1990s,
and has declined sharply since then.
Private sector investment—from both domestic and foreign
sources—has been on the upswing. Given this trend of
increased private engagement in forest production and processing,
legal and regulatory frameworks that support sustainable
forest practices must be developed to promote
responsible private sector investment and corporate social
responsibility as well as to eliminate corruption. To enhance
the role of private sector investment in poverty alleviation,
effective and efficient community-company partnerships
and greater support to small and medium forest enterprises
will be critical.
Increased community engagement in forest
management. Local communities, including indigenous
and traditional groups, play an increasingly important role
in forest management. Studies of the ownership and
administration of forests anticipate that forest areas under
recognized community ownership and reserved for
community administration will nearly double between 2001
and 2015 (figure 2). Community participation in decision
Figure 2
Million hectares
600
500
400
300
200
100
Community Ownership and Administration
of Forests
0
1985 2001 2015 1985 2001 2015
Community owned Community administered
Source: White and Martin 2002.
making and implementation is considered essential for
good governance, equitable distribution of benefits, and
sustainable resource management. Additionally, it is
important for creating accountability and transparency.
Using forests for poverty reduction requires a strong
institutional framework and an effective legal and regulatory
environment, in which the rights of specific groups
among the poor are recognized and protected (see note 1.3,
Indigenous Peoples and Forests, and note 1.4, Property and
Access Rights). Additionally, opportunities to develop sustainable
forest businesses must be provided to the forestdependent
poor and other groups (see note 2.2, Small and
Medium Enterprises). Therefore, development organizations,
in collaboration with government and other relevant
stakeholders, need an approach that focuses on participation
and conflict resolution, and not just on the technical
and economic aspects of forestry.
Coexistence of conservation and production.
Conservation and production must coexist for the full
potential of forests for poverty reduction to be realized.
Although large areas of the world’s forests must be preserved
intact for their ecological and cultural values, much of what
remains will inevitably be used for productive purposes.
Consequently, a dual approach covering both protection and
productive use is needed.
Greater investment in the development of plantations
contributes to economic growth and poverty reduction
while reducing pressure on natural forests and protecting
some ecosystem services. Integration of forest conservation
into productive landscapes can help achieve conservation
objectives, enhance the benefits of conservation, and
broaden the ownership of conservation initiatives (see note
INTRODUCTION: OPPORTUNITIES AND CHALLENGES IN THE FOREST SECTOR 3