Plantations, poverty and power - Critical Information Collective

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Nepal
In Nepal, the target area for tree planting under the Bank’s Sagarnath Forestry Development Project was
reduced from 10,000 hectares to 4,140 hectares. Among the problems were “Shortage of staff, inadequate
delegation of authority and responsibility, lack of flexibility in administration and overcentralization of
decision-making”, according to the Bank’s 1994 overview of its lending to the forestry sector. 494
Another ADB project in Nepal, titled “The hill forest development project,” initially aimed to plant
30,000 hectares. This was subsequently reduced to 10,000 hectares, but at project completion,
“plantations and/or improved management practices” had been established on about 7,000 hectares. A
third project aimed to establish fuelwood plantations on two project sites. On one project site, at
Nepalganj, 1,737 hectares was planted (compared to a target of 5,000 hectares) “primarily because of
encroachment by squatters”. 495 Rather than describing local people as “squatters”, it would be more
appropriate to describe the Bank’s plantations as squatting on the land of local people.
Indonesia
A series of ADB loans have supported the expansion of the pulp and paper industry in Indonesia, the
result of which has been massive deforestation and destruction of local livelihoods. In 1988, the ADB
awarded a contract to Jaakko Pöyry, to identify sites for the development of the pulp industry in
Indonesia. Pöyry went on to win further contracts with Asia Pulp and Paper (APP) and Asia Pacific
Resources International (APRIL) to design some of the biggest pulp mills in the world. The resulting
demand for timber has led to the destruction of hundreds of thousands of hectares of forest. (See section
on Pöyry, above.)
In 1990, the ADB agreed a US$33.3 million loan to Indonesia for a Timber Plantation Project. The
project ran into several problems. In the end, only US$17.33 million was disbursed. Of the target area of
51,000 hectares to be planted with fast-growing tree plantations, 26,920 hectares was established under
the project. It turned out that the “unproductive shrubs and grasslands” that the ADB’s experts planned to
plant with trees were already in use; some areas by local communities, others were allocated for
hydropower and irrigation dams. In West Kalimantan, the company carrying out the planting, Inhutani III,
clashed with Indigenous People. An Indonesian NGO, the Institute of Dayakology Research and
Development, accused Inhutani III of using force in taking over lands from indigenous communities. The
Bank hired a consultant for a few weeks and rejected the allegations, although the project area was
reduced to exclude “areas where potential land tenure claims could rise”. 496
The ADB’s Project Completion Report describes the damage to the plantations by fires and failing
species as “staggering”. The tree species selected for the project “were not based on proven field trials,
and were not sufficiently reassessed during site planning and preparation of plantation site designs.” 497
494 “Sector synthesis of post-evaluation findings in the forestry sector”, Asian Development Bank, Post-Evaluation
Office, August 1994.
495 “Sector synthesis of post-evaluation findings in the forestry sector”, Asian Development Bank, Post-Evaluation
Office, August 1994.
496 “Project Completion Report Timber Plantation Project (Indonesia) (Loan No. 1000-INO)”, Asian Development
Bank, 11 December 1998.
497 “Project Completion Report Timber Plantation Project (Indonesia) (Loan No. 1000-INO)”, Asian Development