Forests Sourcebook - HCV Resource Network

support socially and environmentally responsible
companies.
Continue further collaboration between the Bank
and the IFC. IFC investments in an environmentally
sustainable private company can demonstrate profitability
within the framework of a Bank-supported regulatory
structure (supply response), and it is at this intersection that
the benefits of collaboration are strongest. Areas where the
Bank and the IFC should increase collaboration include the
following:
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■
■
■
promotion of investment in forest-based, small-scale
enterprises;
increased exchange of information at the country,
regional, global, and research levels;
further cooperation in areas where engagement has
already been demonstrated to be beneficial (for example,
the IFC could enhance the use of the GFTN of the World
Bank–WWF Alliance in linking its investments with
responsible buyers); and
additional Bank economic and sector work and analytical
and advisory activities, especially those related to governance
reform, that can help create enabling conditions
for IFC investment projects. 7
NOTES
1. In 2002 the World Bank estimated that total forest sector
private investment in developing countries and countries in
transition was about US$8 billion to US$10 billion per year.
This may underestimate actual private sector investment.
According to the FAO (2005), the plantation area in developing
countries is increasing at about 1.8 million hectares per
year. This represents investments of US$3 billion to US$4 billion
per year. Improvements in existing forest management
should be added to this, but reliable estimates do not exist. In
plantation-based projects, industrial investments represent
80–90 percent of the total. Applying this coefficient—with
plantation investments being 20 percent of the total—total
forest investment in developing countries should be at least
US$15 billion.
2. The World Bank operates according to a fiscal year that
begins July 1 and ends June 30.
3. As an example, there is ongoing work to prepare a
strategic plan for the pulp and paper industry in Ukraine.
4. This appears to be due to the scarcity of companies that
can meet IFC criteria for support.
5. The regional analysis is based on the projects with a total
value of US$800 million. In two countries without the
Bank’s forest lending, there are practically no production
forests.
6. The upstream forestry activities have significant potential
for rural poverty reduction. As an example, IFC projects
in India have engaged 135,000 farmers or families in cooperative
arrangements with pulp and paper companies, covering
a total area of 128,000 hectares. Each family typically
allocates 1 to 2 hectares to forest plantation to increase their
income, demonstrating that primarily poor households are
involved in these schemes. Similar arrangements are also
being supported by IFC-financed projects in Brazil. IFC has
also provided technical assistance to small-scale, forestbased
operations in Central America through the LAC Project
Development Facility in collaboration with the GFTN.
The future impact of these investments can be significant
for employment and local income, if such efforts move
beyond technical assistance.
7. Several economic and sector work and analytical and
advisory activity products developed under the World
Bank’s forest partnerships are directly related to this issue
(see annex 2A to this chapter for a list of some products).
SELECTED READINGS
FAO (Food and Agriculture Organization of the United
Nations). 2005. “Global Forest Resources Assessment
2005: Progress Towards Sustainable Forest Management.”
FAO Forestry Paper 147, FAO, Rome.
Mayers, James. 2006. “Poverty Reduction Through Commercial
Forestry. What Evidence? What Prospects?” TFD
Publication No. 2, School of Forestry and Environmental
Studies, Yale University, New Haven, CT.
Mayers, J., and A. Vermeulen. 2002. Company-Community
Partnerships in Forestry: From Raw Deals to Mutual
Gains? Instruments for Sustainable Private Sector
Forestry series. London: International Institute for Environment
and Development.
Pagiola, S., and G. Platais. 2007. Payments for Environmental
Services: From Theory to Practice. Washington, DC: World
Bank.
REFERENCES CITED
ITTO (International Tropical Timber Organization). 2006.
Tropical Forest Update 16 (2).
Howard, M., P. Matikinca, D. Mitchell, F. Brown, F. Lewis, I.
Mahlangu, A. Msimang, P. Nixon, and T. Radebe. 2005.
Small-Scale Timber Production in South Africa: What Role
in Reducing Poverty? Small and Medium Forest Enterprise
Series 9. London: International Institute for Environment
and Development.
68 CHAPTER 2: ENGAGING THE PRIVATE SECTOR IN FOREST SECTOR DEVELOPMENT