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Appendix A: Summary of Selected Forest Fund Legislation

 

Albania

Albanian law earmarks income from state forests and pastures that is generated from wood material sale, grazing fees, medicinal plants, hunting and other activities. Seventy percent of this income is managed by the Directory General of Forest and Pasture (DGFP) (the remaining 30 percent goes to Government). These managed funds are dedicated to forest work (forest improvement, forestation, seedling production); the protection of fauna and forest and pasture biodiversity; building, repairing and managing forest roads; prevention of forest diseases, pests, and fires; management of forest and pasture; forest scientific research; providing facilities for tourism and recreation activities.

Legal authority: Law No. 8302 for the Management of Revenues Generated from the State Forest and Pastures. 12 March 1998.

 

Bolivia

Bolivia has a National Fund for Forest Development, also called FONDOBOSQUE, dedicated to promoting sustainable use and conservation of forests and forest lands. The fund may receive money from five listed sources:

(1) a percentage from forest patents, as well as an amount from fines and sales;

(2) funds from the general treasury;

(3) donations and bequests;

(4) resources held in trust from multilateral bank loans, official development aid, or international organisations; and

(5) financial transfers under the Convention on Biological Diversity and the Framework Convention on Climate Change.

The fund may be used only for management projects by institutions approved by the Forest Superintendency.

Legal authority: Ley Forestal (Ley No. 1700, 12 July 1996), Articles 19 and 23.

 

Brazil

A number of forest-related funds exist in Brazil, including a reforestation fund replenished by the levying of a reforestation tax (Landell-Mills and Ford, 1999; legislation creating this fund was not available for review by the authors during the preparation of this study).

One particularly interesting fund in Brazil is noteworthy for being entirely private in terms of its management, its source of income and the activities it supports. This fund is the Carajás Forest Fund, recently created by the Associação das Siderúrgicas de Carajás or "ASICA", an association of pig iron mills that use iron ore from Carajás. According to ASICA, the Fund is designed to provide financial support for an afforestation program with both native and exotic species "in order to ensure the needed biomass for their permanent sustained production." ASICA members will contribute as much as US$ 3.00 per exported ton of pig iron. The predicted annual sales of 1.7 million tons of pig iron will generate approximately 5 million dollars per year. Over 10 years, the Fund is expected to collect some 50 million dollars to finance its afforestation program.

ASICA stresses that the Fund will also have important environmental benefits for the Amazon region. Through the establishment of fast growing forests within a radius of 150 kilometres from the mills, the Fund will ensure the sustainability of pig iron production. Charcoal production from forest plantations will preserve threatened native species. ASICA also adds that the establishment of forest plantations with resources from the Fund will generate approximately US$ 200 million dollars in proceeds to the country; create 50,000 direct and indirect jobs, most of them suitable for unskilled workers, thus dramatically reducing migration to urban centres; and bring to the region about US$ 170 millions annually in wages, social obligations, taxes and through the purchase of local raw materials and service. The Fund will promote the development of new afforestation techniques, including refinement of management and forest planting and good use of wood. These objectives will be reached through the integration of existing education and research institutions with the private sector.

The Banco da Amazônia — BASA has been designated as the Fund’s financial manager, which ASICA claims reinforces its role as "a Financial Agent of Regional Development in Amazonia and creates a relation of additional partnership to attract international resources destined to the preservation of Amazonia in a productive and environmentally correct manner."

Source: http://www.asica.com.br/

 

Bulgaria

A Concessions Cost Recovery Fund, set up with the Ministry of Finance, is to receive 15 percent of the cash revenues from the granting and execution of concessions, along with interest and unspecified other revenue. Fund resources are to be used to cover the costs of awarding concessions and other costs related to the implementation and control over concessions. The surplus of revenues over expenses at year's end represents a floating balance to be used during the following year. The Minister of Finance must prepare a draft statement of the revenues and expenses of the Concessions Cost Recovery Fund on an annual basis. The Council of Ministers must adopt annually the revenues and expenses of the Concessions Cost Recovery Fund in compliance with a full budget classification.

Legal authority: 1995 Concessions Act, Articles 25-28.

 

Burkina Faso

The Fonds forestier is created to finance activities related to maintenance, regeneration and conservation of forest, wildlife and fish resources. It consists of money donated by the state, grants from bilateral and multilateral institutions, the gifts of legal or physical people, and other money defined by the law on finance. Details are to be spelled out in decree.

Legal authority: Loi nº 006/97/ADP portant Code forestier au Burkina Faso — Art. 8 et. seq.

 

Cameroon

Cameroon established its Fonds Spécial de Développement Forestier in 1994. It is intended to finance forest management activities carried out on behalf of the Minister responsible for forests by a public body. According to the law, the fund’s income is largely derived from various taxes, fees and receipts of sales which are to be shared between the fund and the public treasury as specified by decree. This decree, issued in 1996, was not available to the authors. It apparently also contains further specifics concerning the functioning of the Fund. According to Gabus (2000), a further decree in 1999 has substantially altered the method by which the Fund receives its income, stipulating that the Fund is now to be replenished according to an annual budgetary allotment rather than through the automatic receipt of the aforementioned taxes, fees and receipts.

Legal authority: Loi N°94/01 du 20 janvier 1994 portant régime des forêts, de la faune et de la pêche; Décret n° 96/237 du 10 avril 1996 fixant les modalités de fonctionnement des fonds spéciaux; Décret n° 99/711 PM du 11 août 1999 (the latter two as described in Gabus, 2000).

 

Canada

In Canada, forest management is federalised. The provinces own the majority of the public forests and have regulatory authority over most aspects of forest management. Some provinces have dedicated forest funds.

For example, the province of Alberta has the Forest Resource Improvement Association of Alberta. This is quasi-public entity, privately incorporated but endowed by regulation with governmental powers and duties. It has authority to collect dues on timber harvested, reforestation levies, and fees for services. It can also accept donations and earn interest on its assets. It may spend its money on reforestation and projects promoting forest management. The Association and its key personnel are subject to record-keeping and reporting requirements designed to assure transparency.

The province of British Columbia’s Forest Renewal Act 1994 created a quasi-public corporation called Forest Renewal BC. In 1993 the province increased the stumpage royalty on Crown timber by 30 percent, and that increase goes to fund the corporation. It spends the money on environmental, economic, and social projects related to forests. About 70 percent of its money goes towards reforestation of degraded lands and stream and habitat restoration. About 30 percent goes towards economic and social projects intended to make the forest sector more sustainable, profitable, and stable. Some of its activities, such as making loans and grants, require specific approval from the Lieutenant Governor in Council. Forest Renewal BC is governed by a board of directors appointed by the Lieutenant Governor and has several additional advisory committees, which provide opportunities for stakeholders to participate in the management of the corporation. The Act puts in place several planning and record-keeping requirements to promote transparency.

Legal authorities: Alberta Regulation 152/97, Environmental Protection and Enhancement Act and Forests Act, Forest Resources Improvement Regulation. British Columbia, The Forest Renewal Act 1994.

 

Congo (Brazzaville)

Legislation provides for "Fonds d’aménagement et des ressoures naturelles." (1975: Note that there is a new law just passed, which the authors did not have an opportunity to review.)

In the Decret, Article 1 says the Fonds is designed to assure the financing of work and studies directed at protecting, managing and developing forest, wildlife and aquaculture. In forestry, Article 2 says that the Fonds may be used in particular for inventory of resources, management and silviculture in dense forests, and the constitution of a permanent forest domain.

The Fonds is to be managed by the Ministry of Rural Economy, who can delegate authority to the Director of Forestry. A budget is prepared by the Director and submitted annually to the Ministry of Rural Economy and the Ministry of Finance.

Receipts include:

management taxes created by the 1974 law.

any contributions from the state budget.

loans, subsidies, advances, interest.

products of the activities of the forest service.

carrying over of funds associated with a closed activity.

 

Disbursements include:

expenses relating to the execution of the annual programme of work.

the reimbursement of advances.

miscellaneous and unforeseen expenses.

interest on loans.

financial charges.

Fund administration must be conducted according to the rules of public accountancy. An accountant is appointed to keep the books and make and annual report to the chamber of accounts in the Supreme Court. An accounting for the preceding year is done at the beginning of each year.

It appears that funds are made available on a trimesterly basis on instruction from the Ministry of Rural Economy in conformity with the annual work programme.

Legal authority: Loi No. 004/74 du 4 Janvier 1974 Portant Code Forestier, Art. 30; Décret nº 76/398 fixant les modalités de gestion du Fonds d'Aménagement des Ressources naturelles.

 

Costa Rica

Costa Rica is noteworthy for having more than one fund and particularly for its innovative approach to capturing the value of non-commodity environmental services that forests provide.

Article 38 of the current Forest Law creates a Forest Fund. This fund appears to focus on industrial forestry and support of governmental forest administration. Its purposes include promoting products from forest plantations; reforestation; agroforestry; fire and disease prevention; industry and market modernisation; research; soil, air, and water conservation; and other activities of the nation’s forest administration that advance the purposes of the Forest Law. The fund may receive income from a number of sources. These include a tax on wood, donations of various sorts, proceeds from the issuance of forest bonds, fines and seizures related to the forests, income from publicly owned forests and forest nurseries, sale of seeds, income from legal publications and documents, fees for the use of protected areas, and other forest income.

For income from the tax on wood, the law specifies by percentages how to divide the income among nine programs. Forty percent is earmarked for administration of a second fund, the National Forest Financing Fund.

The National Forest Financing Fund (FONAFIFO) focuses on financing small and medium-sized operations, through credit and other mechanisms. Besides the wood tax, it also may get income from several sources, including donations and the general national budget. The fund is governed by five directors — one representing small and medium-sized producers, one representing the forest industrial sector, one named by the Minister of Environment and Energy, one by the Minister of Agriculture and Ranching, and one by the National Banking System.

One of the most innovative functions of FONAFIFO is to pay forest owners for environmental services that their forests provide. Under art. 22 of the law, FONAFIFO may issue certificates for forest conservation, representing payment for environmental services from forests. Forest owners can use these to pay taxes and other fees owed to the government.

A separate provision of the Ley Forestal, art. 69, reserves a third of a national tax on hydrocarbons to be spent for the benefit of forest conservation and management. Enabling regulations give charge of this money to FONAFIFO. Most of this money has reportedly gone to support reforestation rather than ongoing forest conservation. (de Camino et al, 2000).

Legal authority: Ley No. 7575, Ley Forestal, arts. 22, 38-50, 69.; Decreto No. 25.721-MINAE que aprueba el Regalamento a la Ley Forestal, arts. 37-71.

 

Croatia

Croatian law sets up a special "simple biological reproduction account" of the Forestry Enterprise, into which a minimum percentage of the sales of timber and timber for own use is paid (20% for single-season forest; 15% for multi-season forest; 15% for karst forest). This account shall be used for biological reproduction purposes as envisaged in the forest management area plan. Other enterprises and legal entities operating in the Republic of Croatia are to pay into the account a 0.07% income tax in quarterly instalments for the "generally beneficial functions of forests."

Legal authority: Law on Forests, 1991, Articles 67-70.

 

Cuba

Cuban law creates a National Fund for Forest Development (FONADEF), to promote sustainable development of forest resources. The main objective of the Fund is the promotion and financing of projects and activities to conserve and develop forest resources, particularly inventories, management, protection, and research.

Rules for the Fund’s establishment and operation come from the Ministry of Finance and Prices acting with the Ministry of Economy and Planning, and with advice from the Ministry of Agriculture and other interested bodies.

Legal authority: Ley Forestal (Ley No. 85, 21 July 1998), Articles 12 & 13; Resolution Conjunta No. 1/2000, Minesterio de Economía y Planificación y Minesterio de Finanzas y Precios, 28 abril 2000.

 

Cyprus

Regulations under the Forest Law, 1967 as amended through 1991, require the establishment in respect of every Communal Forest of a Communal Forest Fund under the control of the Village Commission or Commissions who are responsible for that forest. The fund will receive the fees for the taking of forest produce and any other revenue derived from the forest. The Commission(s) may, with the approval of the Director, use the fund to defray expenses of management, development and protection of the Communal Forest. The Commission(s) are required to keep accounts, which may be audited by the Director.

Legal authority: regulations under the Forest Law 1967, as amended, Section 13.

 

Dominican Republic

The Dominican Republic’s Forest Fund has two parts: a Special Fund and a Forest Trust Fund. The Special Fund receives income from the general treasury, the profits from administration of the state forests, fines, damages, taxes on wood, seizures, and donations. It also receives income from the sale of special postage stamps. The Forest Trust Fund receives income from donations and compensation for environmental services. In addition, the Forest Fund may accept money given for particular projects as part of international co-operation.

The National Institute of Forest Resources (INAREF) is to use the Forest Fund for conservation and management of forest resources, reforestation and agroforestry, prevention of fire and diseases, and extension work. Also, the law requires INAREF to spend at least 15 percent of fund income on research to promote sustainable forest use. The Forest Trust Fund, managed by INAREF’s Directing Council, is for financing sustainable forest activities, particularly in the country’s mountains, high basins, and other priority areas.

A provision in the law requires the country’s executive to give INAREF the annual budget resources it needs to address basic forest infrastructure needs of priority areas. It is not clear to the authors how this provision of law is enforced if the executive fails to comply. However, this provision seems to be intended to avoid the problem of the forest fund serving as an excuse not to fund basic agency functions through the national budget.

Legal authority: Codigo Forestal, Ley 118-99 (23 dec. 1999) Cap.. VI, Arts. 35-40.

 

France

The France’s Fonds Forestier National was created in 1946 in reaction to the severe crisis facing the French forestry sector in the aftermath of World War II. Its purposes are to support forestry production in order to meet national wood product demand, to increase the value of forests, to conserve wooded lands, and to promote better utilisation of forest products. The Fonds is, in structure, an independent account of the treasury. It is managed by the Minister of Agriculture. Its oversight consists of two different committees. The first is the comité de contrôle, which is given various duties and powers with respect to examining the accounts of the fund. This committee consists of two members of the legislative assembly; one member of the senate; the director of the treasury; the director of local government; the director general of industrial strategies; and various other representatives from a variety of sectors. The comité d’orientation, is made up of people nominated by the Minister from a range of different public and private sector disciplines, and is tasked with advising the Minister on matters that he or she might submit to it.

The Fonds’ replenishment previously depended on a tax on wood products. This was changed to a tax on French forest industry products consumed in France in 1991 due to European Union regulations. The Fonds focuses primarily on financing (i) research and development work in forest sector, (ii) public investments on tree nurseries, promotion, information, (iii) grants for public sector afforestation and forest protection, and (iv) subsidised credit and in-kind subsidies for private sector afforestation.

Over the past 50 years, the Fonds has financed a large expansion of French forests. The average annual financing has been some 600 million FFR enabling the afforestation or reforestation of more than 2.2 million ha of forests, and the financing of many other activities in private and public forestry. The Fonds has been highly successful in promoting and financing the forest sector development in France. However, it has been criticised for causing price distortions reducing the competitiveness of French forest industry in French markets.

Legal authority: Code Forestier, L. 531-1 – L. 532-4; R. 531-1 – R. 532-25. The above summary also draws upon Liagre (1997) and especially Salmi et. al. (1999).

 

Gambia

Gambia’s National Forestry Fund is dedicated to the protection, development, and sustainable use of forests and to the promotion of community forestry. It receives income from sale of forest products from forest parks, from community forestry, from forest fees and royalties, from fund-financed projects, from general revenues, and from donations. The Director of Forestry in the Forest Department controls the use of the fund, with the advice of a National Forestry Fund committee and the consent of the cabinet ministers responsible for forestry and finance. The forestry minister may also make rules concerning fund income and expenditures.

Eighty five percent of income from community forests, joined by other community-related forest income, goes into a local fund. The local forest committee appoints administrators for the fund and may approve spending for forest use or general community development. The committee must place the body of the fund in a local bank until the money is spent.

Gambia has provisions for auditing both the National Forest Fund and local funds.

Legal authority: Forest Act 1998, Part V (sections 30-38).

 

Guatemala

Guatemala has a Special Forest Fund. Its income comes from multiple sources, including payments under the Forest Law, donations, loans and contributions from international organisations, and interest on the fund itself. The National Institute of Forests (INAB) administers the fund. The law directs INAB to use the fund for forest development, advancement of industrial forestry, management of natural forests, agroforestry, watershed restoration, reforestation, research, agroforestry education, and other purposes. INAB must prepare an annual plan, approved by its board of directors. The law directs INAB to spend 70 percent of the fund on its own programs and 30 percent on three programs strengthening agroforestry education. The regulations provide for INAB´s internal auditors to review fund spending.

Legal Authority: Ley Forestal, Decreto No. 101-96, title VI, ch. III, arts. 84-86; Regalomento del Fondo Forestal Privativo, Acuerdo Guebernativo No. 561-99 (6 junio 1999).

 

Guinea

There is a new law as of 1999, which simply states that the Fonds Forestier is to be under the Ministry of Forests and fed with money according to the law of finance.

The old law, 1989, was more detailed. It says the Fonds is to be a special account, endowed with accounting and budgetary autonomy. Its annual budget is to be annexed to the annual budget of the State. The fund is not to function as a separate entity. Employees necessary to run it are supplied by the civil service, and remuneration is the same. The fund is made up of the following receipts:

products of the exploitation of state forests

taxes and fees from application of the forest laws

fines and penalties

sale of confiscated items

net profits of public wood processing enterprises

the fees paid to the forest service for services rendered

loans or donations from the State or international organisations

The resources of the fund are intended for the development of the forest domain and to put into effect the national forest policy.

The Decret of 1993 is still in effect, pending the issuance of new decrees under the 1999 Law. The Decret establishes a management committee for the fund, consisting of representatives from many ministries. The committee is supposed to approve internal rules, the annual budget of the Fund, authorise the entering into of contracts, etc. There are rules about how often it meets, powers of the officers, voting, etc. The issuing of rules governing the Fund is the joint responsibility of the Minister of Forests and the Minister of Finance. A special committee supervises the expenditure of funds from international sources, with representatives of the donor and the management committee on this special committee.

Legal authority: Décret nº 227/PRG/SGG/89 portant application du Code forestier.

 

Indonesia

The Indonesian Reforestation Fund gets income from a tax on logs, chips, and other raw materials collected through timber processors, including saw mills and chip mills. The Minister of Forestry may spend the fund on reforestation outside of concession areas (where reforestation is the responsibility of the concession holder), plantation development in non-productive forests, and rehabilitation of other lands.

Legal authority: Presidential Decree re: Reforestation Fund (No. 29 of 1990), Warta Cafi, 32nd year, No. 100 (Aug. 23, 1990).

 

Laos

The Forestry Law of 1996 provides for a Forest and Forest Resource Development Fund. The statute sets out only the broadest outline of the Fund, declaring that it may get income from the state budget and contributions from other entities, and that it can be used only for forest activities. The statute gives examples of forest activities that stress conservation and protection of forests rather than commodity extraction, but leaves open the possibility of all forest-related uses of the Fund. The statute also specifically says the Fund may be used for education related to forests, forest laws, and conservation. Regulations may exist that specify more details about Fund use, but the authors of this report did not have access to them.

Legal authority: Forestry Law (Effective Nov. 2, 1996), Art. 48.

 

Lesotho

The Forest Fund, under the control of the Principal Secretary of the Ministry of Agriculture, receives voluntary contributions plus all fees, monies, and fines collected under the Forest Act. The Government may use the Fund for forest management and research. Among other uses, the Fund may make payments to the holders of a community forest, may assist private, co-operative, or community forest owners, may pay for reforestation not otherwise required by law, and may provide materials or assistance to afforestation efforts.

The Forest Act requires proper accounting of the Fund and annual audits by the Ministry of Finance.

Legal authority: Forestry Act 1998 (Act 17 of 1998), sec. 7.

 

Lithuania

The Lithuanian Forest Fund receives income generated off the state forests plus fines, forfeits, and other payments related to the administration of the forest laws. The Forestry Law allows the government to spend the Fund on a broad variety of forest management activities, but the Fund in practice apparently focuses on support of state enterprises rather than subsidising private forestry.

Details of the Fund appear in Rules on Forming and Using the Forest Fund (1995), which was not available to the authors of this report.

Legal authority: Forestry Law (No. I-671 of 1994), (amended by 23 December 1999 No. VIII-1498), art. 8.

 

Madagascar

The Fonds Forestier National is a special account, under private management, directed by a management council with representatives of the State, local government, NGOs and operators. Nothing else is said in the law itself; the details of the fund are set out in decrees not available to the authors. According to an IMF report, in September 1999 following a March 1999 audit, the nation revised the decree governing the Fund to help decentralise its regional operations while keeping its financing an integral part of the budget.

Legal authority: Loi nº 97-017 portant révision de la législation forestière — Titre VI.

 

Malawi

The Forest Development and Management Fund draws income from various categories of payments, including levies on wood felled or extracted by the Forestry Department; sale proceeds of seized forest produce; voluntary contributions; and sums appropriated by Parliament or donated by foreign governments or international agencies. In addition, if in any year the income of the Fund, along with any surplus income brought forward from previous years is insufficient to meet the "actual or estimated liabilities" of the Fund, the Minister responsible for finance may make advances to cover the shortfall. The Fund is administered by the Minister responsible for forestry, and is to be used for "the conservation, augmentation and management of forest resources and forest lands in Malawi." More specifically, the Fund may be applied to:

(a) the inculcation of the twin concepts of multiple purpose management and sustainability in forestry into local communities;

(b) the provision of an enabling environment for the participation of the local communities in forest management;

(c) maintenance of equipment and records;

(d) the cost of any scheme that the Minister considers to be in the interest of the management of forest reserves;

(e) meeting any expenses arising from the establishment and maintenance of the fund; and

(f) any purpose which the Minister considers to be in the interest of the objects of the Fund.

The Minister is required to cause proper books to be kept and to prepare an annual report. Auditing is the responsibility of the Auditor General. All sums are to be deposited into the Fund’s bank account. Any Fund not immediately required for the purposes of the Fund may be invested in such manner as the Minister may determine, after consulting with Minister responsible for finance and upon recommendation of a multi-sectoral Forestry Management Board also established by the Act.

Legal authority: Forestry Act 1997, sections 55-62.

 

Malaysia

The National Forestry Act 1984 stipulates that a Forest Development Fund shall be created in each of the States to which the Act applies. It is to be administered by a committee consisting of the State Secretary, the State Financial Officer and the Director of Forestry. Money paid into the fund includes (a) annual appropriations; (b) forest development cess (see below); (c) loans or grants from Government; and (d) fees paid to the Forestry Authority to compensate it for the cost of undertaking reforestation that a licensee had failed to carry out. The Fund is to be used for (a) preparation of State forest management plans; (b) preparation and implementation of reforestation plans; (c) reviewing of State forest management plans and reforestation plans; (d) preparation and implementation of programmes relating to amenity forests; (e) expenses incurred in carrying out reforestation where licensee has failed to do so. There are provisions concerning keeping of accounts by the Committee and an annual audit by the Auditor General, and a laying of the Audit before the State Legislature.

The forest development cess is charged for timber, poles, fire wood and some other specified forest produce removed from any permanent reserved forest, State Land, reserved land, mining land or alienated land.

Legal authority: National Forestry Act 1984, sections 56-60.

 

Mauritania

Mauritania has a fonds national de développement forestier, consisting primarily of taxes and fees, as well as adjudications and transactions carried out by the State. The mission of the fonds is reforestation and regeneration of forests, and to provide incentives to safeguard the forest. Details are to be set forth in regulations.

Legal authority: Loi nº 97-007 (1997) abrogeant et remplaçant l'ordonnance nº 82-171 portant Code forestier du 15 décembre 1982 — Art. 85.

 

Mozambique

The Forest and Wildlife Act creates a forest and wildlife development fund, but gives no specifics on its sources of income or its use. Regulations have not yet been finalised.

Legal authority: Forest and Wildlife Act, 1999, art. 36(e).

 

Nepal

The 1993 Forest Act is notable for its provisions on community forestry, which provide for the "turning over" of portions of national forest land to user groups. These user groups are, among other things, each required to keep separate funds. They shall comprise (a) government grants; (b) grants or donations from others; (c) amounts received from the sale and distribution of forest products; (d) amounts collected through fines; (e) amounts from any other sources. The funds are to be used for meeting the expenses of the group in connection with the development of community forests. Thereafter, the balance is to be used for "other public welfare activities." (Sec. 45).

Legal authority: Forest Act 1993, sec. 45.

 

Norway

Norway’s Forest Trust Fund receives income from assessments on sales and transfers of forest products. The money collected must be used to benefit the forest from which forest products originated or to benefit another forest owned by the same owner. Each forest property in effect has its own claim upon the Fund, and this claim runs with ownership of the land. The Ministry of Agriculture may exempt forest owners from the obligation to pay into the Fund or may allow a forest owner to carry out reforestation and forest improvement work in lieu of contributing to the Fund.

Legal authority: Act of 21 May 1965 Relating to Forestry and Forest Protection (The Forestry Act) as amended, Chapter VIII, secs. 41-49.

 

Philippines

Sections 65-66 of the Revised Forestry Code authorise the Department Head, upon recommendation of the Director and in consultation with representatives of the industries affected, to impose fees for forest protection, management, reforestation, and development. The collection of the charges and fees is the responsibility of the Director or his authorised representative. The Director remits his monthly collection to the Treasurer of the Philippines, who puts the proceeds, along with special deposits required of forest licensees, into a special account in the Philippine National Bank. The Budget Commissioner and the National Treasurer can make quarterly releases of the collected fees and charges upon request of the Director. Expenditures must be outlined in an annual budget and work program approved by the Department Head and the President. In the case of the special deposits, the Department Head may release them for expenditures outlined in an annual budget prepared by the Director and restricted to specific purposes listed in the law.

Legal authority: Revised Forestry Code, secs. 65-66.

 

Senegal

The Fonds consists of fees and auction money, receipts from sales of coupes or other forestry products realised by the State, a tenth of sales and auctions realised by local governments, loans, gifts, and other income. The Fonds executes or encourages actions for the protection and conservation of forestry, wildlife and fish resources, reforestation, and restoration of denuded earth in danger of erosion. Under the Decret, spending may go towards: (i) actions for protection and conservation of forests, including fire fighting, management of hunting, fishing and exploitation, delimitation and surveillance of the forest domain, education, information, "sensibilisation" of the population; (ii) actions for management, restoration of forest resources, conservation of soils; (iii) infrastructure and equipment for the Service; (iv) remuneration of temporary personnel, costs of displacement, uniforms, etc.

The Fonds can provide subsidies for collectivities and local organisations, public and private establishments, as well as for physical persons to help them undertake conservation actions, reforestation, etc. These are given by decision of the Minister, on the advice of the Director, upon submission of a document justifying the granting.

Legal authority: Loi nº 98-03 portant le code forestier (1998) — Art. 5-6; Décret nº 98-164 portant Code forestier - partie réglementair — Section 4.

 

Solomon Islands

The Forests Act establishes a Forest Trust. Besides government appropriations and outside donations, the Trust receives half the proceeds from fines and license fees under the Act and revenue from forest development levies and sale of forfeited property. The Trust supports tree planting and tending, reforestation, and other purposes set out in regulations.

Legal authority: Forests Act 1999 (No. 3 of 1999), sec. 9.

 

South Africa

To promote access to and the use of forests for recreation, education, culture or spiritual fulfilment, the National Forests Act creates a National Forest Recreation and Access Trust. The Trust may receive donations or government funding. It may also enter into contracts and charge fees for any services or goods it provides. The National Forests Act outlines clear procedures for keeping and auditing the Trusts accounts.

Legal authority: National Forests Act (No. 84 of 1998), Chapter 5, part II, secs. 41-44.

 

Sri Lanka

Regulations under the Forest Ordinance established a Forest Department Fund in 1979. The Conservator of Forests is to be responsible for its administration. Sources of money paid into the fund include: an amount not exceeding half of any money received by the CF through the compounding of an offence. It also appears that the Fund will be a conduit for money available through court order to reward informers. Otherwise, no sources of Fund money are specified. The Fund is to be used to reward informers; reward forest officers and others; to reimburse the expenses of witnesses; to compensate forest officers and others for bodily injury incurred in the performance of duties; to pay death benefits.

Legal aut hority: Forest Regulations No. 5 of 1979, relating to the Forest Department Fund.

Tanzania

A draft law currently being considered would create the Tanzania Forest Fund. The Fund would draw on a small percentage of forest fees and royalties, plus contributions, government appropriations, income from sale of confiscated forest produce, and income from Fund-financed projects.

A board of trustees would manage the Fund. The President would appoint the board chairman and the minister whose portfolio includes forests would appoint the remaining members.

The trustees could spend the Fund on education; community forestry projects; research; participation in international conservation initiatives in Tanzania; public participation in forest management or implementation of the Forest Act; and similar activities that will advance the purposes of the Forest Act.

The draft Act directs the trustees to keep the Fund’s assets in a reputable bank and to run the Fund in a business-like fashion. The draft would require annual, independent audits of the Fund.

Legal authority: A Bill for a Forest Act, 2000 (third draft, Jan. 12, 2000), secs. 86-89.

 

Tanzania (Zanzibar)

In Zanzibar, the Forest Conservation and Management Act 1996 provides for the future creation of a Forestry Development Fund by the Minister responsible for forests upon the agreement of the Minister responsible for finance. It is to be used for: (a) expenses related to reforestation; (b) extension and research; (c) loans and grants to persons or groups desiring to plant trees or manage forests; (d) administration and operations of the Forest Authority; and (e) any other activities directly related to the fulfilment of the purposes of the Act. The Forestry Development Fund would receive: (a) any sums contributed by private individuals, foundations, corporations and international organisations; (b) any sums appropriated to the Fund by the Government; (c) all or some of the amounts collected as penalties, fees or royalties under the Act (including sums obtained through the sale of confiscated materials, but excluding sums collected by managing communities under a community forest management agreement), as may be specified in regulations; and (d) other funds designated in regulations. The Fund is to be administered by the Minister, and the Act provides for an annual report and audit.

During the drafting of this Law, there was strong support within the forestry sector for the establishment of a Fund within the Law itself, rather than in regulations. However, the idea of a fund was vigorously opposed by the Ministry of Finance, so the compromise position was to include language in the Act that would enable creation of a fund in the event the agreement of the Ministry of Finance could be secured at some point in the future (Lindsay, 1996).

Legal authority: Forest Resources Management and Conservation Act 1997, sections 81-83.

 

Tunisia

Tunisia has a fonds for sylvo-pastoral development, designed to encourage the participation of people, collectivities and entities in the production of wood and forage, and the amelioration of economic and social conditions of forest populations. Farmers outside the forest domain of the State may benefit from the help of this fonds for their support of the national effort to improve forestry and forage. The Decree setting forth the details of the fonds was not available to the authors.

Legal authority: Loi nº 20 portant Code Forestier (1988).

 

United States

By one count, the United States Forest Service has 23 trust funds and special accounts (Gorte & Corn 1997). In addition, at least 47 special accounts lie under the jurisdiction of other federal land management agencies (the Bureau of Land Management, the National Park Service, and the Fish and Wildlife Service), and some of these may go to forested land management (Gorte et al. 1999). Typical funding sources include agency receipts, excise taxes and licensing fees, import duties, and donations. A few funds receive money from the general treasury. Most of these funds are for agency activities, such as reforestation or other land management.

A major Forest Service fund is the Knutson-Vandenberg or K-V Fund (created in 1930 and named after two legislators with a history of interest in forest management). It allows the Forest Service to reserve up to 100 percent of the receipts from a sale of timber for use in reforestation or timber stand improvement. In 1976 Congress amended the law to allow the Forest Service to also spend the K-V Fund on management of non-timber resources. The money must be spent on the management unit (national forest) that generated the income. This has two notable effects: it creates an incentive for local forest officers to make timber sales, and it decentralises forest management by giving local forest officers a source of funding independent of agency headquarters.

Another example, the Reforestation Trust Fund, is of interest because of its funding structure. It channels income from tariffs on imported solid wood products to fund reforestation and stand improvement on public forests.

Some federal funds make direct payments to sub-national governments. A few compensate sub-national governments for the lack of property tax revenue from federal lands. Some make grants to sub-national governments for forestry projects. (For example, the relatively small Rural Fire Disaster Fund supplies emergency funds for forest fire fighting. The relatively large Land and Water Conservation Fund supplies money for public land acquisition for both federal and state governments. Its income comes largely form royalties from offshore oil and gas leases.) The law may require the grants to be distributed among sub-national governments according to a pre-set formula, or it may allow the agencies to award money on a competitive basis, based on the merits of individual project proposals.

One relatively minor federal funding effort was mentioned in the main text of this paper because of its unusual reliance on a private organisation to distribute funds. This was the America the Beautiful Act, which allowed the president to designate a private foundation to receive a one-time grant of up to $25 million for use on community and urban tree planting and related projects.

The United States has some sub-national funds that are of interest as well. The state of Maryland taxes property transfers of agricultural and forest lands. The resulting Woodland Incentive Program fund will pay half the costs of reforestation and stand improvement for private landowners holding 10 to 500 acres (approximately 4 to 202 hectares).

Also in Maryland, a state-created Chesapeake Bay Trust makes small grants for tree planting and educational projects that help enhance water quality in the Chesapeake Bay watershed. Income for the trust comes from donations, which citizens can make voluntarily as an addition to their annual income tax. Citizens can also contribute by buying special decorative automobile license plates instead of the normal state plates.

The state of Oregon created a Forest Resource Trust that pays for up to 100 percent of the costs of reforestation on qualifying private lands. In return, the landowner must have a management plan and must agree to either pay back the costs with interest or share future net revenues from the forest with the Trust. The owner must also give the Trust any carbon (greenhouse gas) offsets created through the reforestation. Once it is created, the revenue-sharing obligation applies to whoever owns the land for the next 200 years.

Legal authority: K-V Fund, Act of June 6, 1930, ch. 416, codified as 16 United States Code sec. 576. Reforestation Trust Fund, Public Law 96-451, sec. 303, codified as 16 United States Code sec. 1606a. Rural Fire Disaster Fund, Public Law 95-313, sec. 7(f), codified as 16 United States Code sec. 2106(f). Land and Water Conservation Fund, Public Law 88-578 as amended, codified at 16 United States Code secs. 4601-4 to 4601-11. American the Beautiful Act, Public Law 101-624, secs. 1261-1266, codified as note following 16 United States Code sec. 2101. Maryland Woodland Incentive Program, Maryland Code Annotated, Natural Resources, secs. 5-301 to –307. Chesapeake Bay Trust, Maryland Code Annotated, Natural Resources, secs. 8-1901 to –1909. Oregon Forest Resource Trust, Oregon Revised Statutes secs. 526.700 to .775 and Oregon Administrative Rules, secs. 629-0220-0400 to –0700.

 

Uruguay

The Forest Fund of Uruguay collects income from government payments, income from government forests, fines, indemnities assessed for failure to meet forest norms, returns of interest and principal from loans made by the fund, donations, and the proceeds of loans or other financial arrangements made to the Fund. The Fund is kept in a special account in the Bank of the Republic. It can be used for loans to forest land owners and light industry, forest land purchase, and public forest management. The resources of the Fund must be put to use under a plan for long-term forest development.

Legal authority: Ley N° 13.723, title VI, arts. 54-56.

 

Vanuatu

The Forest Act 1982 establishes a Forestry Fund, to be kept by the Treasury. Each year there is to be paid into the fund (a) a sum equivalent to what the Minister receives in repayments under plantation agreements, reforestation charges and penalties; (b) such other moneys Parliament may appropriate to the Fund; and (c) such moneys granted to the Government of Vanuatu for such purpose. The Fund is to be used for (a) establishment and maintenance of forest plantations under the plantation agreements; and (b) other afforestation and reforestation works. The "reforestation" charge referred to in (a) is on all timber cut during the course of utilisation operations, and shall be a percentage of the market value at stump of timber cut, sold or utilised, to be assessed by the Minister.

Legal Authority: Forest Act 1982, sections 27-28.

 

Vietnam

Vietnam has a Forest Regeneration Fund, created by the Council of Ministers and modelled generally on France’s Fonds Forestier National. The government collects a forest regeneration fee on the harvests of all forest products, both from natural and planted forests. The Ministry of Forestry uses the Forest Regeneration Fund to plant new forests, restore damaged forests, and manage and protect existing forests.

Legal authority: Council of Ministers, Decision 88-HDBT (1981), Decision 116-HDBT (1988), as summarised in Salmi, et. al, 1999.

 

Zambia

The Forests Act 1999 contemplates the establishment of several different funds by the Forestry Commission: (a) a Forest Revenue Fund comprising of moneys obtained from licences and permits issued, concessions granted and services rendered in connection with forest produce; (b) a forest development fund for the promotion and support of wood processing industry, afforestation and reforestation programmes within the forest sector; (c) fund for Joint Forest Management at local levels.

Legal authority: Forests Act 1999.

 

 

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