Governance principles for
concessions and contracts
in public forests


The designations employed and the presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries.

ISBN 92-5-104612-3

All rights reserved. Reproduction and dissemination of material in this information product for educational or other non-commercial purposes are authorized without any prior written permission from the copyright holders provided the source is fully acknowledged. Reproduction of material in this information product for resale or other commercial purposes is prohibited without written permission of the copyright holders. Applications for such permission should be addressed to the Chief, Publishing and Multimedia Service, Information Division, FAO, Viale delle Terme di Caracalla, 00100 Rome, Italy or by e-mail to

FAO 2001

Table of Contents



The role of contract arrangements in the governance of public forests


1.1 Purpose

1.2 The challenges in managing public forests and public forest lands

1.3 Scope of the study

1.4 Organization and structure

1.5 Audience

2. Contractual arrangements in the management of public forest lands – an overview

2.1 Introduction

2.2 Definitions of contractual arrangements

2.3 The scope of contractual arrangements

2.4 The evolution of tenure arrangements and resource contracts

2.5 Contractual arrangements: key instruments of government policy

2.6 Historic problems with contractual arrangements

2.7 The changing roles of contractual arrangements

2.8 Chapter Summary

2.9 References

Conditionalities for concessions and contracts in public forests

3. Forestry policy framework for contract design and administration

3.1 Introduction

3.2 Forestry policy framework: national goals, resources management principles, priorities for action

3.3 Coordination and compatibility of forestry policy with other government policies

3.4 A policy process for forestry

3.5 Chapter Summary

3.6 References

4. The legal framework for contract design and administration

4.1 Introduction

4.2 Legal systems

4.3 Legal framework

4.4 The relationship between forestry policy and legal instruments

4.5 Chapter Summary

4.6 References

5.The institutional framework for contract design and administration

5.1 Overview

5.2 Issues in the strengthening of government forestry agencies

5.3 Institutional functions and capacities in the design and administration of contracts

5.4 Operational functions in management of public forests

5.5 Organizational structures and organizational design

5.6 Steps in institutional analysis, design and reform

5.7 Chapter Summary

5.8 References

Administration of concessions and forest contracts

6.Types of forest contract, property rights, tenure and use rights

6.1 Introduction

6.2 The meaning of property and use rights

6.3 Common forms of contractual arrangements

6.4 Choice of the form of resource utilization contract

6.5 Goods and services procurement contracts

6.6 Chapter Summary

6.7 References

7. The design of contracts and contract administration systems

7.1 Introduction

7.2 Land use planning and allocation

7.3 Key requirements of forest contracts

7.4 The process of designing forest contracts: major components and stages

7.5 Forest utilization contracts: terms and conditions

7.6 Contract conditions for short- and long-term contracts

7.7 Steps in the development and implementation of resource utilization contracts

7.8 Chapter Summary

7.9 References

Appendix A: Contract design checklist

8. Valuing and pricing forests, forest fees and revenue collection

8.1 Introduction

8.2 Basic concepts for appraisal of forest goods and services: appraisal steps

8.3 Appraisal methods

8.4 Setting forest levies

8.5 Developing a forest revenue system for forest utilization contracts

8.6 Chapter Summary

8.7 References

9. Contract award and competition

9.1 Overview

9.2 Contract award: the goal of economic efficiency in forest contracts

9.3 The principle of competition in contract award

9.4 Auctions and other methods of contract award

9.5 Principles and skills for improving negotiation capacity

9.6 Chapter Summary

9.7 References

10. Contract administration

10.1 Introduction

10.2 Monitoring and inspection of forest utilization contracts

10.3 Monitoring and inspection of procurement contracts

10.4 Contract enforcement

10.5 The design of enforcement systems

10.6 Institutional structures for contract monitoring and enforcement

10.7 Jurisprudence education and training

10.8 Chapter Summary

10.9 References