Forests Sourcebook - HCV Resource Network
Forests Sourcebook - HCV Resource Network Forests Sourcebook - HCV Resource Network
■ ■ tional Bank for Reconstruction and Development (IBRD) and International Development Association (IDA) loans with grants. Building a solid analytical foundation to support and facilitate engagement in the forest sector. Coordinating across the World Bank Group, with a particular emphasis on the International Finance Corporation (IFC), whose operations in the sector are significant in many forest-important countries. Operational policies for World Bank–supported investment projects The World Bank’s suite of operational policies ensures that Bank operations with potential impact on forests take forest outcomes into consideration. In line with the current Forests Strategy, OP 4.36 is proactive both in identifying and protecting critical forest conservation areas and in supporting improved forest management in production forests outside these areas. OP 4.36 applies to all World Bank investment operations that potentially affect forests, regardless of whether they are specific forest sector investments. It also encourages the incorporation of forest issues in Country Assistance Strategies (CAS) and addresses cross-sectoral impacts on forests. OP 4.36 provides for conservation of critical natural habitats and prohibits World Bank financing of any commercial harvesting or plantation development in critical natural habitats. It also allows for proactive investment support to improve forest management outside critical forest areas, with explicit safeguards to ensure that such World Bank–financed operations comply with independent certification standards acceptable to the World Bank, or operations with an agreed upon, time-bound action plan to establish compliance with these standards. Beyond OP 4.36, relevant operational policies comprise the provisions for environmental assessment embodied in OP 4.01, which require that impacts of any proposed activity on the natural environment, human health and safety, and social aspects be taken into account under OPs 4.10 (Indigenous Peoples), 4.11 (Physical Cultural Resources), 4.12 (Involuntary Resettlement), and 4.04 (Natural Habitats). OP 4.04 in particular requires that the World Bank not support projects that, in its opinion, involve the significant conversion or degradation of critical natural habitats, and OP 4.10 requires that the World Bank only support projects in which affected Indigenous Peoples provide broad community support to the project based on prior, free, and informed consultations. Broadly based development policy lending, by its nature, is not dealt with under safeguard policies of the type the World Bank applies to its investment lending. Development policy loans (DPLs) were originally designed to provide support for macroeconomic policy reforms, such as in trade policy and agriculture. Over time, DPLs have evolved to focus more on structural, financial sector, and social policy reforms, and on improving public sector resource management. Development policy operations now generally aim to promote competitive market structures, correct distortions in incentive regimes, establish appropriate financial monitoring and safeguards, create an environment conducive to private sector investment, encourage private sector activity, promote good governance, and mitigate short-term adverse effects of development policy. While the sorts of activities, institutional changes, and policy developments that result can certainly have impacts on forests, it is no simple task to assess what these effects will be in any given situation, as the connections with outcomes at the field level are diffuse and indirect—and thus quite inaccessible to the precise and specific requirements of the safeguard policies that apply to investment lending. The World Bank recognized this difficulty, and until recently did not subject its structural adjustment lending to compliance with the safeguard policies. An operational directive (OD 8.60) provided some guidance on environmental issues for this form of lending until it was replaced by a more detailed operational policy on DPLs (OP 8.60). 3 This policy makes explicit mention of forests and is highly relevant to the forest sector because it guides the due diligence needed to ensure that the potential for this form of lending to cause damage to natural resources, forests, and the environment is minimized in the design and approach used. Such operations are of special concern where large numbers of poor people rely on forests to some extent for their livelihoods. Where rapid economic change is occurring, perverse incentives and misallocation of resources leading to forest removal or changes in the status of use and ownership of forests will be risk factors to poverty alleviation. THE WORLD BANK’S LENDING TO THE SECTOR The portfolio of the World Bank’s investments in forests indicates an upward trend, after having fallen in the early 2000s to historically low levels. 4 The total commitment in 2001 was US$141 million, reflecting lending from the World Bank, the Global Environment Facility (GEF), and the IFC (figure 3). Lending has remained relatively steady in fiscal 2007 (July 1, 2006 to June 30, 2007). 5 Between October 2002 and June 2007, the World Bank approved 12 stand-alone forestry projects, as well as 39 others that include forestry components. There are 13 more forestry-related projects in 6 INTRODUCTION: OPPORTUNITIES AND CHALLENGES IN THE FOREST SECTOR
Figure 3 Commitment from the World Bank, GEF, and the IFC for Forests, FY01 to FY07 600 500 World Bank Global Environment Facility International Finance Corporation Total 443 518 436 400 US$ million 300 200 100 0 11 25 45 82 128 35 111 274 2001 2002 2003 2004 Fiscal year 166 6 45 217 29 17 162 208 63 12 2005 302 300 143 131 134 28 2 2006 2007 the pipeline, four of which are stand-alone forestry projects. A more proactive approach to World Bank engagement in forests, which is embodied in the Forests Strategy, and strong support for this approach from the Board of Executive Directors and senior management have been significant factors in creating the increase in activities. Overall lending profile The volume of lending for the five years preceding the Forests Strategy is nearly equivalent to the five years after introduction of the Forests Strategy: US$568 million between fiscal 1997 and fiscal 2001, compared with US$517 million from fiscal 2002 through fiscal 2006. After adoption of the Forests Strategy, lending slowed and has only recently regained the levels preceding the adoption. When forestry investments in projects associated with other sectors are included (that is, World Bank projects that do not have a forest sector coding), aggregate IBRD and IDA investment in the forest sector is much larger (figure 4). By this measure, total investment in forests by the World Bank was US$770 million after adoption (fiscal 2002 to fiscal 2006). Though lending in the forestry sector has not expanded since approval of the Forests Strategy in 2002, forest lending has been integrated into natural resource management, agriculture, environment, and rural development projects. Furthermore, World Bank lending has expanded to include all types of forests, not just tropical forests: Nearly 40 percent of lending between fiscal 02 and fiscal 06 (US$204 million) has been in nontropical countries, predominantly in Eastern Europe and the Mediterranean. Regional lending profile The regional profile of lending has changed since 2001 (figure 5). The inclusion of temperate forests in the Forests Strategy has increased lending in the Europe and Central Asia region. In the region, the World Bank has been concentrating on an increasing demand for policy dialogue and advisory technical assistance. Projects in Armenia, Bosnia and Herzegovina, Georgia, Kazakhstan, Romania, and the Russian Federation are working to strengthen fire management, reforestation, and development of protected areas. Focus within the projects has been on training, institutional reforms, forest information, the role of the private sector, and devolution of management to local and subnational levels. In the Sub-Saharan Africa region (AFR) since the new strategy there have been three active projects with a focus on governance in the Congo Basin (Cameroon, Democratic Republic of Congo, and Gabon). It is anticipated that over the next few years, forest activities will focus on governancerelated issues, sector reform, and institution strengthening. In general, the World Bank has had limited forestry engagement in the Middle East and North Africa region INTRODUCTION: OPPORTUNITIES AND CHALLENGES IN THE FOREST SECTOR 7
- Page 1 and 2: INTRODUCTION OPPORTUNITIES AND CHAL
- Page 3 and 4: Forest law enforcement and governan
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- Page 11 and 12: management and biodiversity conserv
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- Page 38 and 39: World Bank, 1978. Forestry. Sector
- Page 40 and 41: [Indigenous Peoples’] rights of o
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Figure 3<br />
Commitment from the World Bank, GEF, and the IFC for <strong>Forests</strong>, FY01 to FY07<br />
600<br />
500<br />
World Bank<br />
Global Environment Facility<br />
International Finance Corporation<br />
Total<br />
443<br />
518<br />
436<br />
400<br />
US$ million<br />
300<br />
200<br />
100<br />
0<br />
11 25 45 82<br />
128<br />
35<br />
111<br />
274<br />
2001 2002 2003 2004<br />
Fiscal year<br />
166<br />
6<br />
45<br />
217<br />
29<br />
17<br />
162<br />
208<br />
63<br />
12<br />
2005<br />
302<br />
300<br />
143<br />
131<br />
134<br />
28<br />
2<br />
2006 2007<br />
the pipeline, four of which are stand-alone forestry projects.<br />
A more proactive approach to World Bank engagement in<br />
forests, which is embodied in the <strong>Forests</strong> Strategy, and<br />
strong support for this approach from the Board of Executive<br />
Directors and senior management have been significant<br />
factors in creating the increase in activities.<br />
Overall lending profile<br />
The volume of lending for the five years preceding the<br />
<strong>Forests</strong> Strategy is nearly equivalent to the five years after<br />
introduction of the <strong>Forests</strong> Strategy: US$568 million<br />
between fiscal 1997 and fiscal 2001, compared with US$517<br />
million from fiscal 2002 through fiscal 2006. After adoption<br />
of the <strong>Forests</strong> Strategy, lending slowed and has only recently<br />
regained the levels preceding the adoption. When forestry<br />
investments in projects associated with other sectors are<br />
included (that is, World Bank projects that do not have a<br />
forest sector coding), aggregate IBRD and IDA investment<br />
in the forest sector is much larger (figure 4). By this measure,<br />
total investment in forests by the World Bank was<br />
US$770 million after adoption (fiscal 2002 to fiscal 2006).<br />
Though lending in the forestry sector has not expanded<br />
since approval of the <strong>Forests</strong> Strategy in 2002, forest lending<br />
has been integrated into natural resource management,<br />
agriculture, environment, and rural development projects.<br />
Furthermore, World Bank lending has expanded to include<br />
all types of forests, not just tropical forests: Nearly 40 percent<br />
of lending between fiscal 02 and fiscal 06 (US$204 million)<br />
has been in nontropical countries, predominantly in<br />
Eastern Europe and the Mediterranean.<br />
Regional lending profile<br />
The regional profile of lending has changed since 2001 (figure<br />
5). The inclusion of temperate forests in the <strong>Forests</strong> Strategy<br />
has increased lending in the Europe and Central Asia region.<br />
In the region, the World Bank has been concentrating on an<br />
increasing demand for policy dialogue and advisory technical<br />
assistance. Projects in Armenia, Bosnia and Herzegovina,<br />
Georgia, Kazakhstan, Romania, and the Russian Federation<br />
are working to strengthen fire management, reforestation,<br />
and development of protected areas. Focus within the projects<br />
has been on training, institutional reforms, forest information,<br />
the role of the private sector, and devolution of management<br />
to local and subnational levels.<br />
In the Sub-Saharan Africa region (AFR) since the new<br />
strategy there have been three active projects with a focus on<br />
governance in the Congo Basin (Cameroon, Democratic<br />
Republic of Congo, and Gabon). It is anticipated that over<br />
the next few years, forest activities will focus on governancerelated<br />
issues, sector reform, and institution strengthening.<br />
In general, the World Bank has had limited forestry<br />
engagement in the Middle East and North Africa region<br />
INTRODUCTION: OPPORTUNITIES AND CHALLENGES IN THE FOREST SECTOR 7
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