World Bank management rejects criticisms of industrial logging

Note: No surprise here…

–The GJEP Team

By Chris Lang, February 5 2013. Source: REDD-Monitor

Photo: REDD-Monitor

Photo: REDD-Monitor

The debate about the World Bank’s lending on forests is heating up after the Independent Evaluation Group’s review was leaked last week. The IEG report is very critical of the World Bank’s record in the forestry sector, particularly the fact that the Bank’s involvement in forests has failed to address poverty and has not benefited local communities.

REDD-Monitor posted a copy of the IEG report and predicted that Bank management would attempt to water down the criticism. And the response from the World Bank’s management, “Draft Management Response” (pdf file, 294.9 kB) attempts to do precisely that. The response from Bank management questions the approach taken by the IEG and rejects some of its findings and recommendations.

Bank management rejects the IEG’s finding that “evidence is lacking that the World Bank‘s support for industrial timber concession reform has led to sustainable and inclusive economic development”. Management argues that the Bank’s attempts to reform concessions were never intended only as “targeted poverty interventions”:

[F]orest concession reforms were never supported by the Bank with this narrow stand-alone objective in mind. Concession reforms were introduced as one part of a suite of reforms, and it is the impact of these overall economy-wide measures which would be expected to demonstrate ‘sustainable and inclusive economic development.’

Bank management describes forest concessions as “a widely accepted approach to forest management”. But as Greenpeace, Bank Information Center and Global Witness point out in a letter to the World Bank’s Board of Executive Directors, the impact of the concession approach has often been disastrous:

Over the past several decades, the World Bank has been instrumental in promoting legal and policy reforms that support the establishment of large logging concessions in tropical forests in countries such as Cambodia, Cameroon, Democratic Republic of Congo (DRC), Gabon, Indonesia, Laos, Liberia, and Republic of Congo. In many cases, the Bank was critically involved in the establishment of policies that earmarked much of its client countries’ intact forests as logging concessions…. The consequence is that tens of millions of hectares of tropical rainforest that millions of local people depend on for their livelihoods have been and continue to be allocated as industrial timber concessions under Bank-supported forest sector programs.

The letter is available below and can be downloaded here (pdf file, 512.9 kB). A press release from Global Witness is also posted below.

The IEG recommends that the Bank should carry out a comprehensive review of the economic, environmental and social impacts of World Bank support for industrial timber concession reforms. Whether and how the Bank can support sustainable forest management should be based on the evidence in this review.

Management’s response is revealing. “There is a fairly extensive body of literature,” they write. “Management is of the view that an additional review would create little added-value and would do little to inform the development of new operations.” Management argues, in other words, that the evidence supports their argument in favour of continued Bank support of industrial timber concession reform. And therefore there’s no point carrying out a review of the evidence.

In November 1999, the Bank’s Operations Evaluation Department published a review of how the Bank had implemented its 1991 Forest Policy. Korinna Horta wrote about the review’s findings in Multinational Monitor in 2000. The similarities with the IEG report are interesting:

After reviewing hundreds of project documents, the OED study concludes that the Forest Policy has largely been ignored at all levels and that forest-related World Bank lending had done little to alleviate poverty.

Then, as now, there were no incentives for Bank staff to implement its own policies. As Larry Lohmann noted in 1994, “it is often left to local uprisings or NGO publicity to force the Bank to implement its own policies”. Plus ça change…

The World Bank’s Committee on Development Effectiveness was scheduled to meet yesterday to discuss the IEG report. Of course, this being the World Bank, no details of the meeting are available. REDD-Monitor believes looks forward to posting a leaked copy of the meeting notes. Transparency is, after all, a crucial part of addressing corruption.

A few days ago, the World Bank’s President, Jim Yong Kim, gave a speech on “Anti-corruption Efforts in a Global Environment”. He explained that the World Bank needs “to be fighting poverty in areas where the legal framework for combating corrupt and illicit behavior is imperfect and institutions of public accountability may not function well, or even exist at all”. He talked about how the Bank attempts to stop corruption. In other countries, that is. He did not talk about the institutional, structural corruption within the World Bank.

 31 January 2012

To: World Bank Board of Executive Directors

Re: Independent Evaluation Group (IEG) evaluation of World Bank Forest Strategy implementation

In light of the upcoming CODE discussion of the IEG evaluation of the implementation of the World Bank’s 2002 Forest Strategy, our organizations are writing to share our views regarding the Bank’s continued support for industrial-scale logging as a principal approach to forest management in tropical rainforests. We understand that the evaluation concludes that this approach has not been successful in achieving the objectives of the Forest Strategy, particularly around poverty alleviation and environmental sustainability. We agree with these findings and urge you to ensure that the Bank commits to halting its support for industrial-scale logging in tropical rainforests in favor of alternative approaches that prioritize land rights, rural livelihoods, and the protection of vital ecological functions.

The importance of tropical forests for mitigating climate change, preserving biodiversity and supporting the hundreds of millions of vulnerable people who depend on these forests for survival demands that the World Bank develop and promote alternatives to industrial-scale timber extraction in tropical rainforests. Industrial-scale logging is widely acknowledged as a major driver of tropical forest destruction and is often the first step in the process of deforestation.[1]The Bank has positioned itself as a leader in international efforts to halt deforestation and forest degradation,[2] and yet it continues to support the unsustainable expansion of industrial logging operations into the world’s last intact tropical forests.

In the ten years since the Bank adopted its current forest strategy, the destruction of tropical forests has continued nearly unabated, even as recognition of the importance of these forests for rural livelihoods, biodiversity conservation, and climate change mitigation and adaptation has grown. A growing body of information based on the Bank’s own operational experiences and a wealth of independent sources, some of which are cited in this letter, demonstrates the need for increased attention to governance and land tenure issues, improving rural livelihoods, scaling up community forest management, and developing holistic approaches to valuing forest resources, while calling into question the potential of industrial-scale timber extraction to drive sustainable development. We are concerned that the Bank is not taking into account critical lessons and recent data in a comprehensive and systematic manner, but rather is continuing to support an outdated industrial forestry model that is not meeting the objectives of its Forest Strategy.

Over the past several decades, the World Bank has been instrumental in promoting legal and policy reforms that support the establishment of large logging concessions in tropical forests in countries such as Cambodia, Cameroon, Democratic Republic of Congo (DRC), Gabon, Indonesia, Laos, Liberia, and Republic of Congo. In many cases, the Bank was critically involved in the establishment of policies that earmarked much of its client countries’ intact forests as logging concessions.[3] Since the adoption of its 2002 Forest Strategy, the Bank has largely continued to support this approach using a range of instruments including development policy loans, technical assistance, and investment projects.[4] Recently, IFC investments in industrial logging and processing operations in tropical rainforests in Indonesia and Central Africa have been proposed.[5]

The consequence is that tens of millions of hectares of tropical rainforest that millions of local people depend on for their livelihoods have been and continue to be allocated as industrial timber concessions under Bank-supported forest sector programs. At the same time, the Bank gives relatively little attention and resources to addressing land tenure issues and building the capacity of local communities to directly manage and benefit from their forest resources beforeforests lands are allocated for industrial logging.

Recent studies have found that industrial-scale logging operations in tropical rainforests cannot be both ecologically sustainable and economically viable,[6]have failed to contribute significantly to poverty alleviation and rural development in Africa,[7] and in many cases violate the rights and harm the livelihoods of forest-dependent indigenous peoples and local communities.[8] In Cameroon, where the Bank has been deeply involved since the 1990s in the legal and policy reforms that put much of Cameroon’s tropical rainforests under logging concessions, a growing body of independent evidence shows that sustainability and local development outcomes associated with these logging concessions are extremely poor.[9] The concession system has also had severe detrimental impacts on the rights and livelihoods of Cameroon’s vulnerable, forest-dependent indigenous peoples.[10]

However, the Bank’s own retrospective self-assessment on Cameroon, published in 2009, contains little up to date field data with which to evaluate the actual impacts of its interventions.[11] The study concludes that “The most serious threats against forest lands have virtually ended in permanent production forests” (p. 126), ignoring findings by independent researchers that weak regulations and poor law enforcement are allowing companies to carry out widespread unsustainable logging in the country’s production forests.[12] In
2011, the Bank was forced to close its forest sector development policy operation in Cameroon with two tranches undisbursed after the government failed to meet its commitment to sign concession agreements more than ten years after the concessions were allocated to logging companies. The Government, according to the Bank’s ICR, recently stated that it does not view industrial logging concessions as having sufficient economic benefit to justify the permanent allocation of forest land for this purpose.[13] Despite these failures, the concession system that the Bank was instrumental in establishing in Cameroon formed the basis for forest sector reforms in DRC also supported by the Bank.[14]

Since the Bank adopted the 2002 Forest Strategy, its forest projects in Cambodia, DRC and Liberia supporting the establishment of industrial timber concessions were the subject of complaints to the Bank’s Inspection Panel by impacted communities and/or indigenous peoples.[15] In Cambodia and DRC, the Inspection Panel investigated the claims and found that the Bank had violated multiple operational policies, particularly in relation to identifying potential negative social and environmental impacts on indigenous populations and the forest. We are concerned that the lessons from these cases are not being learned. The Bank is currently financing a zoning process in DRC that may lead to the designation of large tracts of tropical rainforest for industrial timber concessions, despite evidence of widespread illegality and social harms in existing concessions that already cover roughly 15 million ha of forest (more than twice the area under concession in Cameroon).[16]

In 2011, Global Witness visited 67 communities in and around logging concessions in three large forested provinces in northern DRC and found that communities were receiving little benefit from logging in their area, were negotiating “social contracts” with logging companies under highly unfair and disadvantageous circumstances, and were experiencing increased and sometimes violent social conflicts as a result of frustrations with logging operations.[17] A Government decree that would give communities the legal right to manage forest resources has gone unsigned for years, and, due to a lack of funding, the Bank-financed zoning process will not be carried with the full participation of communities and indigenous peoples living in the areas being zoned. In addition, recent reports from an independent, third-party monitor of forest law enforcement hired by the Government of DRC with support from international donors found that nearly all of the international companies holding logging concessions are involved in illegal activities, indicating that the Government still lacks the capacity and will to perform adequate oversight of existing concessions.[18] All of these issues raise serious concerns that the Bank has not learned from the Inspection Panel case and is at risk of facilitating the expansion of poorly-governed industrial timber concessions that could result in irreversible negative impacts on globally significant tropical rainforests and the communities and indigenous peoples who depend on them.

In conclusion, we would like to reiterate our call for members of the Board to ensure that the Bank commits to halting its support for industrial-scale logging in tropical rainforests in favor of alternative approaches that will better contribute to the poverty alleviation and environmental objectives of the Bank’s Forest Strategy.

Contact:

Susanne Breitkopf
Senior Policy Analyst
Greenpeace
susanne.breitkopf@greenpeace.org

Josh Lichtenstein
Manager, Forest Campaign
Bank Information Center
jlichtenstein@bicusa.org

Rick Jacobsen
Team Leader, International Forest Policy
Global Witness
rjacobsen@globalwitness.org

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