The Role of Community-based Enterprises and Monitoring: Experiences from Biodiversity Conservation Network Funded Projects in the Asia-Pacific Region

Carlos S. Encarnacion
Biodiversity Conservation Network (BCN)
Washington, U.S.A.

Introduction

One of the main questions concerning the decentralization and devolution of forest management is whether local institutions and communities have the capability and political will to manage and protect their natural resources. Given the above concerns, community-based enterprises and monitoring play an important role in the processes of decentralization and devolution. Community-based enterprises can provide appropriate incentives to protect the biodiversity, strengthen local systems and create opportunities for community participation. Formal community monitoring on the other hand is critical in assessing the ecological, economic and social sustainability of the enterprises. It also improves local conservation knowledge and awareness that are necessary in aiding a community's resource management capability.

This paper looks at the role community-based enterprises and monitoring through the work of the Biodiversity Conservation Network (BCN). To illustrate these points, this paper is divided into three parts: (1) a brief outline of BCN's overall program goals, hypothesis, and methodology; (2) a case study of the Kalahan Forest Farm Development Project illustrating the relationships between decentralization and devolution, enterprise development, monitoring and conservation; and (3) a discussion of the key principles linking these processes from the experiences of other BCN-funded studies in the Asia-Pacific region.

BCN Analytical Framework and Communication Strategy

BCN's two main program goals are to:

• support enterprise-oriented approaches to biodiversity conservation at a number of sites across the Asia-Pacific region (specifically in Nepal, India, Indonesia, Philippines, Papua New Guinea, Solomon Islands and Fiji); and
• evaluate the effectiveness of these enterprise-oriented approaches to community-based conservation of biodiversity and provide lessons and results to BCN's clients and audiences.

Its core hypothesis is that "If enterprise-oriented approaches to community-based conservation are going to be effective, then the enterprises must:

• have a direct link to biodiversity, i.e. the enterprises must directly depend on the in situ biological resources of the region. BCN thus seeks to develop enterprises that would fail if the biological resource base upon which they depend was significantly degraded;
• generate short- and long-term economic, social and/or environmental benefits in order to encourage local people to protect biodiversity; and
• involve a community of stakeholders at the site, i.e. the enterprises must involve members of the local community, and often others, who are stakeholders in the enterprise and biodiversity conservation in a particular area.

BCN considers numerous variables when measuring and analyzing the efficacy and conservation impact of the community-based enterprise approach at a given site. BCN together with its grantees, attempt to annually measure these variables in the course of the project (Figure 1).

Figure 1: Measuring and analyzing efficacy and impact

The Interrelation of Enterprise, Monitoring, Decentralization-Devolution and Conservation: The Kalahan Forest Farms Development Project

Background

The Kalahan Reserve is part of the larger Cordillera and Caraballo mountain ranges that supply water to the agricultural areas of Northern Luzon. The reserve is spread over 13,894 ha and composed mostly of pine and dipterocarp forests. It is home to several endemic and endangered flora and fauna such as the Tarictic Hornbill. The Ikalahans (meaning people of the broad leaf forest) have lived here for centuries relying mainly on hunting, gathering and traditional swidden agriculture to survive. The natural resources in these areas remained relatively intact until the 1950s, when the Philippine government started to actively enforce the doctrine that all forests/uplands are government lands, and proclaimed all uplanders/indigenous people as "squatters". Realizing the futility of challenging the Philippine government (and military) over control of their land, their local attitudes changed from that of protection to full utilization. As a result, several traditional and indigenous technologies were ignored, and new destructive practices such as rearing cattle were introduced.

As early as the late 1960s, negotiations began for the control of the Kalahan Reserve in order to counter numerous external and internal threats such as land grabbing and harmful agricultural practices. In 1970, the Ikalahans tried to organize a Producers Cooperative to address the rampant economic exploitation of the resources at that time. Unable to negotiate with the government for the formation of a cooperative, they decided to form instead the Kalahan Educational Foundation (KEF) Inc. in 1973 to give the community legal representation. The purpose of KEF is to "promote the education and development of the Ikalahan people". KEF since then has been the main stakeholder organization in the reserve and has taken the lead in implementing many activities such as land tenure, resource management, policy formation, sustainable agriculture and education.

By 1974, KEF was finally able to negotiate an agreement with the now defunct Ministry of Agriculture and Natural Resources. This agreement, simply referred to as Memorandum of Agreement No. 1 (MOA1), gave the Ikalahans full and legal stewardship, management and utilization rights for 25 years in exchange for the protection and rehabilitation of the Kalahan Reserve. As the agreement neared its end, KEF secured three Certificate of Ancestral Domain Claims (CADCs) in the adjacent provinces of Nueva Ecija, Nueva Vizcaya and Pangasinan that expanded their rights and management activities to 45,000 ha.

The people of the Kalahan Reserve are highly homogenous. Of the 550 households, 547 are Ikalahan and three are Ifugao. The largest barangays (towns) are Imugan, Malico, Baracbac, Bacneng and Unib. The Ikalahans are indigenous swiddeners with kamote (sweet potato) being their staple crop. Other sources of income include small businesses and employment in the KEF and a nearby town. Historically, the Ikalahans were scattered around the reserve. The 1990 earthquake, however, forced the Ikalahans to settle in the flat areas, a trend that continues today.

Forest Farms Development Project Framework

The main vision of the Forest Farms Development Project is "to establish an effective resource management framework to ensure a stable and diverse forest ecosystem within the Kalahan Reserve". It is envisioned that the 550 Ikalahan families will be able to source most of their food, cash, domestic and knowledge needs from the 13,894 ha reserve. The main objective of the Forest Farms Development Project is to identify and develop income generating opportunities based on forest products, which would satisfy the needs of the community and in turn encourage the Ikalahans to conserve the biodiversity of the reserve. The underlying assumptions of the Forest Farm Development concept are that:

• understanding the ecological principles will contribute to environmental protection;
• the Modified Timber Stock Improvement (MTSI) will improve secondary growth;
• forest-based industries in the community will generate employment opportunities as well as add value which will reduce environmental degradation; and
• maintaining a "forest-based community" will provide opportunities to educate the younger generation who will in turn provide appropriate leadership for future community development activities.

Goals of the BCN intervention

BCN supported the Kalahan Forest Farms Development Project from 1994 to 1998. Its three major objectives were to:

• strengthen the existing KEF Mountain Fresh jams and jelly production;
• explore other livelihood niches, most notable the ongoing MTSI research aimed at determining sustainable yields for cutting; and
• assist in the various research activities of the KEF in support of the conservation efforts within the Kalahan Reserve including the documentation of existing flora and fauna and mapping based on a geographic information system (GIS).

Bio-monitoring, enterprise and conservation activities at the Kalahan Reserve

Determining the sustainability and conservation significance of the Ikalahan fruit harvesting activities.

The key question was whether there were sufficient fruits and regeneration of species to supply the Mountain Fresh venture. Research revealed that the quantity of fruits that are sold by harvesters to the food processing plant does not limit production nor threaten the regeneration of fruit trees within the Kalahan Reserve. Research showed that one ha of dagwey trees can produce up to 891 kg of fruits per year. This considers the population structure and fruit-bearing capacity of each age class. There are an estimated 509 ha of dagwey trees within the reserve, which annually produce an estimated total of 45,387 kg. At present, the KEF food processing plant processes not more than 5,000 kg a year, or just 11 percent of total annual fruit production. Home consumption by the Ikalahans is estimated to be about 50 percent of total production. The research is important as the regeneration of fruit trees and the production of fruits also serve as indicators of biodiversity quality within the Kalahan Reserve.

Economic and conservation benefits derived from fruit harvesting

The Ikalahans sell on average 15,000 kg of fruits, worth about 60,000 pesos¹, to the KEF each year. Almost two-thirds of this is guava, their best-selling product. Around 90-110 gatherers sell fruits in any given year to the food-processing unit. In 1996, the average revenue generated by each gatherer were roughly 687 pesos, which is about 2 percent of the Ikalahans' individual annual cash income of about 33,000 pesos. In 1997, the average revenue generated by each gatherer amounted to only about 1 percent of their annual income of about 38,000 pesos. Though this may seem like an insignificant amount, the KEF states that this is an important contribution to the Ikalahans cash accessibility. Since the KEF's policy has been to accept everyone offering fruits for sale, selling to the food-processing unit has become a source of "instant cash". This policy also encourages the gatherers to participate in the production of the jams and jellies, and to assist the KEF with the monitoring of fruit supply and production².

Sustainability of the Mountain Fresh Jams and Jellies Enterprise

The main product of KEF is the Mountain Fresh line of jams and jellies. This enterprise has been supplying jams and jellies to major supermarkets in Manila since the late 1980s. BCN's objective was to strengthen the current operations and examine their links and contribution to conservation in the area. Analysis of sales and production show that gross revenue has declined to around 2,000 bottles or 650,000 pesos of sales annually between 1994 and 1997 (Figure 2).³ At this level, the enterprise is able to cover its variable cost but has not yet been able to cover fully its fixed cost. "The biggest challenge then at the present time is to bring the Food Processing Center to the point where its net profits can support the other activities of the KEF" according to Pastor Delbert Rice, the KEF Executive Director. To do this, KEF is strategizing with the Upland NGO Assistance Committee (UNAC) and the Philippine Business for Social Progress (PBSP) on ways to increase Mountain Fresh sales. Aside from promotions and increased marketing efforts, KEF will soon be introducing a line of low-sugar jams and jellies, which they expect will significantly add to their gross sales.

Figure 2: Mountain fresh jams and jellies from the Kalahan Reserve, Nueva Vizcaya, Philippines

Exploring the potential of MTSI for income generation

KEF is now in the process of examining timber growth and harvest information from around 86 different MTSI sample plots throughout the Kalahan Reserve. KEF has placed the sustainable cutting rates per forest type as 10 percent of the annual volume of timber production. At present, the forestry team estimates that less than 10 percent of the growth increments is extracted by the local population.

MTSI research also serves to determine the cash generating capability of the activity. As of now, extraction is only permitted for local use; commercial sale of lumber is prohibited. If studies show logging as a sustainable and profitable enterprise, then the TSI can be replicated in other areas both within and outside the reserve. Such monitoring and regulation can reduce "illegal timber cutting" for local use, as the scheme allows the community to cut provided regulations are followed.

Strength of the KEF as a stakeholder organization

Local organizations play a major role in the success or failure of enterprise and conservation efforts at the site. It is for this reason that BCN contracted a consultant to do a special case study of several stakeholder organizations across the Asia-Pacific region. Given the conservation milestones that the Ikalahans were able to achieve, the KEF was chosen as one of the stakeholder groups for study.

The KEF is governed by a Board of Trustees (BOT) that consists of eleven members elected by the different communities within the reserve. The BOT has two basic functions, to manage the KEF and to manage the Kalahan Reserve itself. BOT members are required to regularly consult with their respective town members and personally make their `monitoring rounds' to formulate and re-enforce necessary resource management policies. Designated staff members organized into project teams implement project activities. An administrative team headed by an Executive Director oversees the implementation of project activities.

Table 1: Modified Timber Stock Improvement production and extraction analysis

Forest Class	Volume Produced 94-97(Vol. Increments)(A)	Volume of Extraction 94-97(B)	Recovered Volume*(C)	of Extraction(A/B)	Rate(C/B)
All types in the Kalahan Reserve	8,716 cum	863.00 cum	616.43 cum	9.9%	71.4%
*This is less the wastage from cutting

There are three basic leadership requirements in an undertaking such as the Forest Farms Development Project. The first is leadership to spearhead the community development-organizing process. KEF certainly ranks high in this regard, not only because of its achievements, but also because of its ability to integrate traditional leadership with new democratic processes such as elections and policy enforcement. Its organizational structure also allows for appropriate representativeness that has resulted in establishing the KEF as the main stakeholder organization in the area.⁴

The second requirement is project administration and enterprise management. KEF's performance in this area has received mixed reviews. The main issue here is the question of the development of "second liners". Pastor Rice, currently the KEF Executive Director who has lived in the reserve for nearly forty years, has been recognized as an important asset and has considerable influence in the organization of the Ikalahans. However, there have been some critics pointing out the dependence of the Ikalahans on the Pastor and the questions of his eventual replacement upon his retirement. KEF has recognized this problem and taken the first steps to address this issue.

The third important aspect is the relationship between stakeholder organizations and the local government. In the Philippines, several barangays make up a municipality and each barangay has a set of elected local government leaders. The KEF therefore is not the only stakeholder organization in the Kalahan Reserve influencing its development. There is a strong relationship between the KEF and the local government. The barangays, municipal government and the KEF took a united stance against the national government on a proposed new highway. Also, because the Local Government Code devolves a considerable amount of authority to the municipal government for the protection and rehabilitation of natural resources, the KEF closely coordinates its management activities with local government officials. In fact, several elected town officials are also KEF members. This arrangement has greatly strengthened the existing conservation efforts, not just at the Kalahan Reserve, but in the adjacent areas as well.

Examining the implementation and efficacy of resource management policies

Table 2 illustrates the different resource policies and guidelines that are implemented by KEF. These rules are enforced by KEF staff, including forest guards and agroforestry staff, barangay officials, and BOT members themselves. A system has been developed between KEF and barangays whereby 75 percent of the fines collected are transferred to the apprehending body. For example if a barangay official catches an offender, the barangay receives 75 percent of the fine and 25 percent goes to the KEF. The BOT gets an overview of the implementation of resource rules during annual monitoring visits to all the barangays in the reserve. Rewards may be presented to barangays where policies have been well implemented, for example where there have been no illegal fires during the year. This provides a further incentive for strong enforcement of resource policies by barangays.

Table 2: Rules and their enforcement

Resource use/ issue	Nature of restriction	Fine/penalty
Use rights	- Kalahan residents only access to resources in secondary forest areas subject to resource guidelines below. - New residents need permits for resource use	- Non-residents reported to DENR for prosecution
Firewood and lumber	- For use on the reserve only, not for external sale - Harvesting restrictions marked trees only to be cut - Cutting permit required - Registration of chainsaws with AF office	- 400 pesos per tree cut - Confiscation of all produce - 500 pesos for unregistered chainsaws and reported to DENR for prosecution
Swidden farming	- New clearings must have permit from AF office - Cultivated lands to be interspersed with forest and not on land susceptible to slides	- 500 pesos in dedicated watershed or sanctuary (primary forest) areas and required to cover cost of reforesting area - 100 pesos anywhere else
Forest fires	- No burning except for `proper agricultural development' Guidelines for firelines and burning times	- 500 pesos, plus payment for damages and reforesting area plus remuneration of people involved in putting out fire
Orchid collection	- Strict guidelines on methods for orchid collection complete ban on collection of endangered orchids	see below
Wildlife and flora	- In sanctuary areas: no harvesting of trees, orchids, rattan, bamboo, birds or other animals - Outside sanctuaries: hunting of animals permitted from July-August; birds from September-October	- 1st offence: pesos 1000 + confiscation - 2nd offence: pesos 2000 + confiscation - 3rd offence: pesos 3000 + confiscation of resources (this fine also applies for hunting wild pig and other big animals in sanctuary areas on the 1st offence)

Source: KEF, 1995, Development Plan: Ancestral Domain Kalahan Reserve Phase 2

Examining the changes in land use and vegetation cover in the Kalahan Reserve

Between 1994 and 1997, there has been a slight decrease in mossy, pine and dipterocarp forests in the Kalahan Reserve ( Table 3). Lowland agriculture has remained stable - neither increasing nor decreasing in area. There has been a slight increase in the area of grasslands. The increases in upland agriculture (resulting in the loss of upland forests) are due to the needs of a growing population. However, the 67 ha additional upland agricultural accounts for less than 0.5 percent of the reserve.

The KEF estimates that when the Ikalahans assumed responsibility for the management of the reserve in the 1960s, around 35 percent of the upper half were grasslands and thinly scattered pine, while several areas around Imugan, Malico and Baracbac were grasslands. More than 30 years later these areas are mostly covered with secondary pine and dipterocarp forest.

After attaining land-use rights, the Ikalahans established rules and regulations for protecting the forest. One of the activities was the development of a land-use classification system (Table 4).

Since the Ikalahans recognized the importance of watershed protection and biodiversity preservation early on, they decided to classify 3,159 ha of the reserve as a "Sanctuary Area" where extraction, hunting and agriculture are not permitted. The vegetative cover in this area was composed mostly of mossy forest, some primary dipterocarp forest and a small portion of grasslands with scattered dipterocarp forest. In 1997, the Sanctuary Area was expanded to 4,224 ha to include some primary pine forest and secondary mossy forest. The Ikalahans and the KEF also decided to designate parts of the reserve as Protection Forest (which are steep areas that cannot be exploited anyway) and Production Forest that are open to regulated exploitation.

Table 3: Changes in land use and vegetation in the Kalahan Reserve between 1994 and 1997

Table 4: Land use classification of the Kalahan Reserve

Lessons learned

The Kalahan Reserve is a good example of how enterprise development, monitoring, decentralization and devolution work together. The main concept of the Forest Farms Development Project is that, not only are people part of the ecology, but they are actually important partners in the protection and rehabilitation of biodiversity. However, the communities and local institutions must be able to reach a certain level of capacity to be able to manage their affairs and the reserve. As demonstrated by the Ikalahans and the KEF, this involves the following basic processes:

• Community development and organization;
• Sustainable enterprises and alternative livelihoods development;
• Implementation of progressive government policies and programs that promote decentralization and devolution; and
• Continuous monitoring and evaluation for effective adaptive management.

By no means have the Ikalahans and KEF "perfected" the four processes. However, they have made significant progress in the last 30 years.

Key Contributions of Community-Based Enterprise and Monitoring to the Processes of Decentralization and Devolution

In "Rethinking the Decentralization and Devolution of Biodiversity Conservation", Enters and Anderson (see in this volume) have emphasized that both processes are not just concerned with the transfer of management authority from the state to local institutions or communities. Equally important are the development and transfer of business opportunities. Communities are not motivated to manage their land and resources if they are unable to reap the benefits of their labor. Conversely, they will not be able to implement enterprise strategies unless they attain legal and management control.

Indeed BCN has observed the necessity of securing tenure early on as one of the common themes throughout its projects, illustrated by the oak leaves and silkworm project in Garwhal, India (BCN 1997):

"The major problem remains one of tenure. The ultimate control of the forests and forest resources still largely rests in the hands of the government and not in the hands of the people who are directly involved and affected. This means that the funds generated by sale of wood, grazing rights to outsiders, fines and other fees are not at the disposal of the Van Panchayat [local forest user group] but rather under the control of the Revenue Department, which takes most of the funds for its own purposes. This arrangement is a serious disincentive for the villagers who feel that they don't have control over their resources."

Another point worth mentioning here is that community-based enterprises, decentralization and devolution are complementary processes that empower and encourage communities and local institutions to become what Mark Poffenberger terms "Keepers of the Forest". Then again we have the "Catch-22" situation where communities cannot be motivated to strengthen themselves and participate in the management of their resources unless they receive legal and management control. Vice versa, they cannot obtain such legal and management controls until they can demonstrate that their activities are sustainable. However, this should not be viewed as a "chicken or egg" situation, but rather that the interdependence of enterprises, monitoring, decentralization and devolution requires processes that support each component.

There is no need to expound on the economic significance of community-based enterprises, decentralization and devolution. The development of a community-based enterprise can produce a variety of non-cash benefits that strengthen a community's resolve for decentralization and devolution, and not to mention conservation. A good example of this is the BCN funded project with the Lumad in Bendum, Mindanao, Philippines. One of the main goals of the project was to revive Lumad backyard abaca (Manila hemp) growing. This practice helps to reduce the threats of over-extraction of forest resources and clearing of additional land for agriculture, since abaca fibers can provide people with additional income. The project also assisted in the creation of bufferzones that have enabled the Lumads to assert their land-use rights in the area, thereby protecting their land and forest resources from further lowland encroachment. From six active Lumad groups in 1995, the number has grown to 38 in 1998. As of 1997, each Lumad grossed an estimated 700 pesos from abaca harvesting, which constitutes around 30 percent of their cash income.

The production of handicrafts by Lumad women is another interesting example. Although the Lumad women produce and sell only a few items each year, the non-cash benefits are integral to the process of community empowerment. First of all, the enterprise project promotes cultural integrity. The handicraft enterprise makes use of traditional skills that the women transfer to their children. In addition, the women are reviving their leadership roles in the community. The enterprise has allowed for a better understanding of the relationships between men and women (i.e. men needed for production and women needed for financial management). This has made communal labor and participation more effective. As a result, more families are now staying in Bendum, which indicates the community's increased self-esteem.

Both the activities have strengthened the Lumad's resolve to fight for their ancestral rights. In June 1998, the Department of Environment and Natural Resources (DENR) awarded the Bendum community its Certificate of Ancestral Domain Claim (CADC). This is a significant step towards community-based conservation since the CADC serves as a legal stewardship instrument that allows indigenous people to utilize and manage the resources within their ancestral domain.

The development of local associations and community participation is crucial for effective and decentralized forest management. The BCN-funded ecotourism project in the Khangchendzonga National Park, West Sikkim, in India is a good example of this. In 1997, the project organized a Naturalist Guide Training, the success of which led the community to form the Khangchendzonga Conservation Committee (KCC). With 10-15 "formal" members, this NGO, assisted by the project staff, has been able to solicit the commitment more than 200 lodge operators, guides, cooks, porters and vegetable growers from four communities to participate in training in alternative fuelwood use, trash management and enterprise skills. Lodge operators have reported increased revenue because of the training activities. The local government in the area has also deputized the KCC to apprehend illegal gatherers and poachers. The result has been the formation and implementation of local tourism and conservation plans for Khangchendzonga National Park and the surrounding forest. As Chewang Bhutia, an engineer involved in the project, has stated: "The project has empowered the local people to a great extent to take part in community initiatives and has set a trend to take actions instead of only talking".

Below are some examples of the influences of enterprise and monitoring activities on policies from across the BCN sites:

• In Gunung Halimun National Park, West Java, Indonesia, the Ecotourism Society (IES), the Ministry of Tourism and the Ministry of Forestry have decided to simplify the procedures for developing community-based ecotourism.
• In Nepal, the King Mahendra Trust for Nature (KMTNC) has led an effort to draft and pass legislation to share 30-50 percent of revenues earned on tourism taxes from the Royal Chitwan National Park with local communities.
• In Lore Lindu National Park, Sulawesi, Indonesia, the Indonesian office of The Nature Conservancy is drafting a 25-year resource management plan with the Directorate General of Forest Protection and Nature Conservation. Also, with testimonies from scientists and butterfly collectors, the TNC and WWF/Indonesia lobbied for lifting the ban by the Indonesian government on the exportation of live pupae. Butterfly farming is a major source of income in the area and so the ban "is unnecessary from a technical and policy standpoint and detrimental to the local households who derive income from such sales" (BCN 1999).
• In Crater Mountain, Papua New Guinea (PNG), the Research and Conservation Foundation of PNG (RCF) and the Wildlife Conservation Society (WCS) collaborate with numerous national and international NGOs, the government of PNG and the Gimi and Pawaian landholders in drafting legislation for the Crater Mountain Wildlife Management Area (WMA). Under the arrangement "land-owning clans" in the WMA identify clan representatives to form Management Committees that create laws regarding the management of natural resources (within the parameters of the national law) and act in an official capacity to enforce them." (BCN 1999).

References

BCN. 1997. Annual Report. Biodiversity Conservation Network. Washington, DC.

BCN. 1999. Annual Report. Biodiversity Conservation Network. Washington, DC.

1 38 pesos = USD 1.00 (December 1998)

2 Ten to twenty percent of the gatherers are students, while less than 10 are classified as consolidators, or people who buy from other gatherers and then sell them to the KEF.

3 The large amount of sales generated in 1994 was due to a one-time export order from Germany.

4 KEF reports that in the 1960s, there were only two high school graduates out of the entire population of 2,000. Now there are three Ikalahans with graduate degrees, and 95 percent of the present population is able to attain at least seven years of formal schooling.