C H A P T E R 5 IMPROVING FOREST GOVERNANCE F orest sector governance refers to the ways in which evasion of legal taxes and royalties, indicate weaknesses in officials and institutions (both formal and informal) forest sector governance that need to be addressed. In devel- acquire and exercise authority in the management of oping countries, illegal logging in public lands alone causes the resources of the sector to sustain and improve the wel- estimated losses in assets and revenue in excess of US$10 fare and quality of life for those whose livelihoods depend billion annually, more than six times the total official devel- on the sector. 1 Good governance is fundamental to achiev- opment assistance dedicated to the sustainable management ing positive and sustained development outcomes in the of forests. In addition, about US$5 billion per year is esti- sector, including efficiency of resource management, mated to be lost to uncollected taxes and royalties on legally increased contribution to economic growth and to environ- sanctioned timber harvests, as a result of corruption (World mental services, and equitable distribution of benefits. Bank 2004). The global magnitude of the problem as esti- Good forest governance is characterized by predictable, mated by its direct monetary impacts is staggering. 2 open, and informed policy making based on transparent The associated physical, environmental, and social processes, a bureaucracy imbued with a professional ethos, an impacts resulting from poor governance are even more exten- executive arm of government accountable for its actions, and sive and serious. They are characterized by the following: a strong civil society participating in decisions related to sec- tor management and in other public affairs—and all behav- ■ Violation of protected area boundaries threatens the ing under the rule of law. Thus, key features of good gover- conservation of forest resources and biodiversity. nance include adherence to the rule of law, transparency and ■ More than 350 million rural poor rely heavily on forests low levels of corruption, inputs of all stakeholders in decision for their livelihoods, while more than 60 million depend making, accountability of all officials, low regulatory burden, almost exclusively on them for subsistence. Strong forest and political stability (see also World Bank 2000). governance (including vesting tenurial rights with such The rationale for the World Bank to engage in improving communities) is essential for protecting their livelihoods forest governance in client countries is twofold. On one and improving their well-being, and for protecting them hand, broader governance reform processes, such as decen- from the consequences of illegal logging and unautho- tralization and devolution, and public sector reforms pres- rized removals from the forest (World Bank 2006). ent direct opportunities to which the forest sector needs to ■ Legitimate forest enterprises are subjected to unfair com- respond. On the other hand, illegal logging, corruption, and petition through price undercutting and discouraged other forest sector crimes, such as arson, poaching, land from making socially and environmentally responsible encroachment, trade in endangered fauna and flora, and investments in the sector. Delivered by The World Bank e-library to: unknown IP : 192.86.100.36 Thu, 23 Apr 2009 18:27:53 151 (c) The International Bank for Reconstruction and Development / The World Bank
■ Forests are a global public good, and their degradation Some of the complexities of these relationships and the imposes global costs, such as climate change, environ- magnitude of the task to improve forest governance are cap- mental degradation, and species loss. Improving gover- tured in figure 5.1. nance will help contain the negative environmental, eco- The box in the center of the figure lists “entry points,” or nomic, and social consequences at the global level. opportunities within the forest sector itself, directed toward ■ There are less visible—though highly insidious—costs reducing the means, motives, and opportunities for crimes resulting from the erosion of institutions, the spread of and misdemeanors in the forest sector (see note 5.5, Address- corruption across the economy, and lower growth. These ing Illegal Logging and Forest Crime). The surrounding boxes spillover effects are the most far-reaching and significant indicate the “embedded” nature of the problem in the econ- aspects of the problem of poor sectoral governance. The omy and of the need for other sectors, institutions, and actors problem originates in the forest sector but the impacts to support and complement the within-sector efforts at are transmitted through the economy, weakening gover- improving governance and law enforcement. They elaborate nance and the rule of law, impeding investments in legit- on the roles of the overall political structure; of national and imate commerce, and undermining the overall gover- international checks and balances; and the contributions of nance structure. civil society, media, the private sector, and local communities. Figure 5.1 Identifying “Entry Points” and a Sustainable Reform Process to Improve Forest Governance Political accountability • Political competition, broad-based political parties • Transparency and regulation of party financing • Asset declaration by legislators and parliamentarians • Disclosure of parliamentary votes Building blocks for effective Civil society and media forest sector management • Freedom of press and information Checks and balances • Civil society watchdogs • Adequate legislative frameworks and • Independent, • Participatory country law enforcement capacity effective judiciary • Robust institutions with a service- diagnostic surveys • Independent • Report cards, client surveys delivery orientation oversight institutions • Competent leadership based on • Global initiatives: meritocracy and technical skills UN, OECD Private sector interface • Institutional oversight including an Convention, anti-money • Streamlined regulation independent forests monitor laundering and asset • Public-private partnerships • Transparent forest fiscal systems forfeiture • Corporate social responsibility based on easy-to-track revenue flows • Sound sector policy conducive to competitive domestic markets and international trade Ownership and decentralization • Property and access rights • Decentralization with accountability • Community driven development • Oversight by user groups and citizens organizations • Beneficiary participation in projects Delivered by The World Bank e-library to: unknown IP : 192.86.100.36 Thu, 23 Apr 2009 18:27:53 152 CHAPTER 5: IMPROVING FOREST GOVERNANCE (c) The International Bank for Reconstruction and Development / The World Bank
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