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5. Building institutional capacity for law compliance

Establishing the right balance between legal requirements and the ability of governmental institutions to enforce the law is a key consideration, especially with the shrinking governmental powers and weak forest administrations observed in many countries (Christy, 2004). Capacity building may need to precede the legislative reforms described in the previous chapter, as amending laws is time- and resource-consuming and requires a wide range of stakeholders to agree.

The World Bank, in cooperation with the World Wide Fund for Nature (WWF), has developed a list of priorities for increasing the capacity to detect and suppress forest crime in producer countries (see Box 35). However, increasing the efficiency of the public forest administration requires a great deal more resources than are presently available in most countries. The following relatively low-cost options are therefore explored in this chapter:

Giving local people the tools to observe, report on and judge whether local forest operations are within the law or not, through policies on transparency and participation (as described in Chapter 4) is another low-cost and irreversible way of requiring forest administrations to be more effective.


Limited government resources, as well as the magnitude and complexity of the issue of law compliance in the forest sector, make it imperative for the government to strategize, prioritize and focus its actions (Scherr, White and Kaimowitz, 2004). Although the priority actions will depend on the national context, the following points give indications on how to make the most out of existing resources.

Increased focus on certain key actions

The following are specific examples of governments giving priority to one or more actions to improve forest law compliance:

Increased focus on certain regions or localities

Governments can concentrate actions on a few regions of the country, for example where local governments have a greater capacity to detect illegalities and enforce the law and/or where illegalities are strongly suspected. Focusing on areas threatened with the construction of new roads in currently inaccessible forest lands may be more cost effective than focusing on areas presently under intense population and economic pressure, where solutions may be extremely expensive and the chances of success are slim.

Increased focus on a few agents

Focusing on key forest criminals and companies with a bad track record will bring longer-lasting results than punishing communities that may be administering their forests in sustainable ways but technically operating illegally because they are unable to submit and secure government approval of local forest management plans. A few highly publicized success stories of forest law enforcement can serve as effective deterrents to illegal acts. They will also show others that the government is serious about prosecuting illegal acts in forestry (Box 18).

However, in order to remain credible in the public eye, control agents need to be transparent in the decisions they make about where to go and who to check. For example, in Cameroon, the control agents have shifted the focus away from targeted investigations, as industry might become suspicious of activities singling out particular companies for no good reasons, and towards more systematic inspections of all concessions and other titles over time. An alternative approach might be to clearly lay out criteria for deciding which suspicious cases/actors to follow up on (Global Witness, 2005a and 2005b).


Enforcement bodies often lack the staff, infrastructure, equipment and money to effectively regulate forest resource use. Poor management skills and weak monitoring procedures and accountability structures are also hindering progress towards better law enforcement in the forest sector. Field staff may have to rely on logging operators themselves for assistance with inspection processes. An inadequate number of often underpaid government officers with insufficient resources are expected to monitor and impose the law in immense areas.

Establishing effective monitoring and law enforcement bodies

Some of the measures which can be adopted to tackle forest crime are related to how government institutions process information and make decisions about the implementation of specific legislation. Sometimes, the restructuring or creation of new institutional bodies might help fill gaps in the forest governance system (Box 21 in Chapter 4 and Box 36).

Increasing staff number and improving staff performance

Wherever possible, the number of staff assigned to forest crime detection should be increased. Where this is not feasible due to resource limitations, improving the terms and conditions of the existing forestry officials may reduce corruption. Better-paid staff would have less incentive to accept bribes and more to lose from suspension or dismissal. However, it may be more cost effective to increase the supervision of staff and raise the probability of finding and dismissing staff colluding in illegal activities. Incentives such as rewards for contributing to the apprehension of those involved in illegal activities are likely to improve staff performance more than general improvements in terms and conditions of employment (Whiteman, 2003). Such incentives should be combined with other measures to foster the commitment of forestry officials to forest law enforcement, such as promoting team spirit and enhancing loyalty.

Training of forestry officials and staff is also needed to provide them with a better understanding of the regulatory framework and increased knowledge of the techniques and mechanisms for effective monitoring and reporting of illegal activities (Box 37). For example, in Costa Rica forestry administration officials are currently being trained to use GIS and GPS to help detect the illegal conversion of forests to pasture lands, as part of a comprehensive strategy to combat illegal logging (see also Box 9 in Chapter 3).

Altering staff incentive structures

As long as the probability of being caught and disciplined for accepting bribes is negligible, forestry officials have little to lose from corruption. Thus, increasing the monitoring and supervision of field staff is crucial. If the probability of being caught and disciplined increases, the minimum amount acceptable as a bribe will also increase. If this minimum amount rises above a certain level,   corruption will disappear because the producers' maximum willingness to pay will be less than the forestry official's minimum willingness to accept a bribe (Box 37).

However, very high levels of staff supervision may be costly and affect staff morale. Another way to change the attitude of forestry officials is to allow them to retain a proportion of the fines or penalties from offences (Boxes 38 and 39).

Establishing a Regencia forestal system

The Regencia forestal system was first established in Costa Rica in the mid-1990s, and later adopted by Ecuador, Mexico and other countries (Box 40). The system is based on the devolution of the state's forest-monitoring functions at the forest management unit level to private foresters ( regentes ) under a contract. These professional foresters accomplish a series of administrative and control tasks on behalf of the state to relieve the public forest administration from tasks it does not have the capacity to carry out. The forest regentes are legally responsible for managing the forests they are in charge of. If there is proof of illegal acts on this land, they lose their licence and can be legally prosecuted. The functions carried out by the regente can include:


As mentioned in Chapter 4, interagency cooperation is essential to the success of the chain of enforcement. When such cooperation has been achieved, with key agencies operating as a system along the chain of enforcement, overall performance has been greatly enhanced. In Ecuador, for example, the government has made a substantial effort to contract out the implementation of an integrated computerized control system (SNTCF) to improve cooperation, operational linkages and cross-checks between actors involved in controlling illegal logging (Vigilancia Verde road checkpoints; Regentes forestales , SGS and Ministry of Environment forest administration, licensing and verification services). As a result the volume of illegal timber seized grew exponentially (Thiel, 2004).

Experience shows that training of staff is also important in improving interagency cooperation. To establish proper communications with law enforcement agencies, forestry officers need training in functions that facilitate the prompt prosecution of law offenders. For example, they need to be trained on the procedures to be followed for the collection of solid and legally admissible evidence. Judges are seldom knowledgeable of the issues involved in law enforcement in the forestry sector and their training in this subject is also likely to facilitate more intensive collaboration with the public forest administration.


Establishing partnerships between the public forest administration and civil society or the private sector to monitor law compliance in the forest sector will directly or indirectly limit the capricious or arbitrary use of discretionary power and tend to increase transparency.

Delegate enforcement and/or monitoring authority to appropriate actors

The case studies considered here show that government agencies often have critical limitations on their abilities to impose the rule of law. Responsibilities assigned to government institutions often bear little relationship to their ability to fulfill them. Law enforcement requires technical and financial capacity. When capacity is lacking, it may be possible for governments to delegate or subcontract some of the law enforcement tasks and responsibilities to other, specialized non-governmental institutions. Collaborative arrangements that take advantage of relative strengths have proved useful in various countries (Ecuador, Brazil, the Philippines, Cameroon, Cambodia) and in various functions such as monitoring, ensuring transparency of operations and accountability (Box 41).

There are various partnership modalities. The first type (Ecuador, Cameroon) simply consists of contracting out some particular function - such as organizing inventories or bidding procedures, awarding concession contracts or licences, or controlling forest product transport and verifying compliance with sustainable
forest management indicators in the forest - to an independent and reliable specialized entity of the private sector or the civil society. In Peru, the implementation of the law is expected to rely on Forest Management Committees ( Comités de Gestión Forestal ). These are basically partnerships between the local branch of the public forest administration, concessionaires, indigenous and peasant communities, local environmental and other institutions, which have the responsibility of controlling harvesting operations, coordinating maintenance of common infrastructure and providing surveillance and conflict resolution services.

Independent forest monitors/observers

Another form of collaboration is the use of independent monitors and observers, whose mandate is to assist governments with an informed and independent assessment of the efforts and achievements of the forest administration and related agencies in investigating and suppressing forest crime, and to make recommendations for improvements to the current system. The independent monitor is not expected to implement government policy. Box 42 describes the main advantages of this type of arrangement.

Independent monitors/observers have been used by the governments of Cameroon, Cambodia, Indonesia, the Philippines, Ecuador, and Canada. In Cameroon and Cambodia, the international NGO Global Witness was contracted as the independent monitor in 1999. It issued a wide range of policy, legal and technical recommendations based on field missions. In both cases, the independent monitors were proposed and supported by international donors as conditions for the granting of structural adjustment loans. Eventually, however, independent monitoring might become more common practice and not be tied to loan conditions, as a result of market pressure through schemes such as the EU Forest Law Enforcement, Governance and Trade (FLEGT) licensing system, which are expected to drive demand for independent monitoring from exporting countries (see Chapter 5 and Annex 3 for more details). Although frictions between governments and independent forest monitors have occurred, such as in Cambodia (revocation of the independent monitor's contract by the Royal Government of Cambodia in 2003), independent monitoring often creates political space in which debates about illegality can take place. Independent monitoring has the potential to strengthen calls for reforms and anti-corruption measures, which are welcomed by those officials with a genuine interest in their public duty. The willingness of the government and forest administration to tackle the issues of illegality and corruption in the forest sector and their commitment to transparency are prerequisites for an enabling environment for independent forest monitors. Likewise, agencies undertaking independent forest monitoring need to be impartial to all partisan interests in order to retain their legitimacy and credibility in the eyes of their stakeholders. Independent monitors also need to be protected in carrying out their tasks (Brown and Luttrell, 2004). Institutional rules and structures need to be put in place to enhance both of these elements (Box 43).

By and large, independent monitors have been found to be very effective in increasing the levels of information about the sector and the extent of law compliance within it. They have also helped to reveal the political interests and relationships which underpin these practices. In some cases, this increase in available information has been matched by increased discipline within the state enforcement agency and the timber industry (Brown and Luttrell, 2004). A guide has been prepared which describes the general criteria that need to be in place for independent forest monitoring to operate effectively, while recognizing that each country has its own history, characteristics and needs and therefore requires tailor-made independent monitoring (Global Witness, 2005b).

Timber Compliance Assessment Partnerships (TCAP)

TCAP are a type of multistakeholder partnership which go beyond monitoring. They produce evidence of actual forest practices on the ground, document their compliance with agreed indicators of acceptable performance and communicate this to the market and the public. TCAP were established by the Global Forest Watch (GFW) initiative of the World Resources Institute (WRI). TCAPs are a concept under development that could unite diverse forest stakeholders in a given region to assess compliance between certain norms, such as the law or a set of criteria for good forest management, and actual practices in the forest.

In Central Africa, this partnership is promoting the establishment of the Forest Concession Monitoring System for Central Africa (FORCOMS). FORCOMS endeavours to provide public access to verified concession-level information on measurable actions and voluntary commitments by timber producers in Central Africa to support legal and sustainable forest management as defined through previously agreed indicators. The core principles resulting from many multistakeholder discussions on the organization and functioning of FORCOMS as initially put forward can be summarized as follows (World Resources Institute, 2001).

WRI-GFW and partners are developing a framework that would guide such partnerships in multiple regions. A trial TCAP funded by ITTO is being implemented in the Congo.

Forest certification

While forest certification is a tool designed to assess the sustainability of forest operations, the implementation of certification initiatives and the development of certification standards also provide opportunities to address legal compliance. Forest inspections carried out by an independent, third party accredited organization assess the forest owners'/operators' compliance with a set of criteria and indicators; this almost always includes the operators' adherence to the legal framework for sustainable forest management (Box 44 and Annex 2). Establishing forest certification partnerships is therefore a practice that can ensure that timber from certified forests is not only legal but also sustainably produced according to the criteria of the certifier. If information on certification follows the wood through the chain of custody, informed consumers can have a positive influence on forest management by choosing products   which originate from well-managed forests. Although forest certification by itself is not really a partnership, forest operations certified to programmes that meet stated criteria could be given incentives, such as avoidance of official inspections.

Voluntary corporate codes of conduct

Corporate codes of conduct are voluntary initiatives by which corporations, either independently or as members of industry associations, commit themselves to follow self-defined principles of social and environmental responsibility, including compliance with the law of the countries where they operate (see Box 45 and Annex 1 for more details).

Although these are private initiatives, public forest administrations have in some cases contributed to the design of the codes, persuaded interested enterprises to adopt them and established incentives for companies that follow codes of conduct.

Access to international support

Improving law compliance in the forestry sector is primarily the responsibility of governments in the affected countries. In recent years, however, producer and consumer countries alike have paid increasing attention to forest law compliance, with many of their activities being triggered by the G8 Action Programme on Forests of 1998-2002 (Brack, 2005). The main initiatives, which are briefly described below and in more detail in Annex 3, include:

Bilateral and multilateral initiatives

A great deal of international attention has been dedicated to international schemes, which seek to restrict imports of timber for which legality cannot be verified while simultaneously helping exporting countries to filter out exports of dubious origin. These schemes are of particular interest to countries with significant exports of forest products. They can be either bilateral agreements between a country and its trading partners (Box 46) or multilateral agreements involving a large number of exporting and importing countries. The current state of these initiatives is described in Annex 3. They are summarized here.

Convention on International Trade in Endangered Species of Wild Flora and Fauna (CITES). With 166 signatory countries at the time of writing, CITES is the only truly global scheme imposing restrictions on trade in wood products. This legally binding convention has three lists, or appendixes, each including species endangered to different degrees. CITES provides for different rules governing international trade in species listed in each appendix. By controlling international trade, CITES contributes to closing an economic window for trade in endangered timber species. Currently, relatively few timber species are included in the CITES appendixes, but the recent inclusions of mahogany ( Swietenia macrophylla ) and ramin ( Gonystylus spp.) in Appendix II have led to stricter controls on the harvest and international trade of these species.

Forest Law Enforcement and Governance (FLEG). FLEG processes are regional World Bank-coordinated initiatives to foster political commitment and facilitate cooperation to fight illegal logging and trade. The first regional FLEG was launched in Southeast Asia in 2001 and a similar process followed in Africa in 2003. In 2005, the World Bank started collaboration with the EU to ensure continuation of the African and Asian FLEG processes and initiated a similar initiative in Latin America. The Russian Government intends to hold the first Ministerial Conference on Europe and North Asia Forest Law Enforcement and Governance (ENA-FLEG) during 2005. All FLEG processes define priority issues of forest law enforcement and governance and a list of actions to address both illegal logging and illegal timber trade throughout the respective regions.

European Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan. In 2004 the European Commission approved the creation of a Forest Law Enforcement, Governance and Trade Action Plan. The Plan promotes bilateral agreements between importing and exporting countries to create, with the help of the EU, a voluntary licensing scheme to verify the legal origin of wood imported into Europe. The plan does not impose binding trade restrictions (the scheme is voluntary) but it rather attempts to support country efforts to suppress illegal logging and trade by discouraging markets for products that cannot be validated as legally sourced.

Asia Forest Partnership and the Congo Basin Forest Partnership. Both of these regional initiatives were launched at the World Summit on Sustainable Development in Johannesburg in 2002. Their objective is to facilitate country cooperation in various areas, many of which are exposed to illegal activities. Both partnerships include country governments as well as a wide range of relevant stakeholders including international organizations and civil society groups.

The United States President's Initiative against Illegal Logging. The United States launched the President's Initiative against Illegal Logging in 2003. The goal of the Initiative is to assist developing countries to combat illegal logging, trade of illegally sourced timber products and corruption. It focuses on the countries of the Congo Basin, the Amazon Basin, Central and South America, and Southeast Asia.

The United Kingdom's Illegal Logging Programme. This three-year programme, launched in October 2002, aims at facilitating reforms by national, regional and international institutions to address the problem of illegal logging and international trade in illegally harvested timber. It focuses on improved governance of the forests in West and Central Africa.

International organizations

Virtually all international organizations dealing with natural resource use have programmes aimed at improving forest law compliance. The World Bank Forestry Strategy prominently includes actions aimed at promoting forest law compliance. The Bank also hosts the Programme on Forests (PROFOR), a multidonor initiative established in 1997. Its objectives include enhancing accountability in the forest sector, improving understanding of forest law enforcement, supporting empirical research to fill information gaps and assessing possible tools to facilitate enforcement. ITTO supports several countries in designing and implementing programmes for forest law enforcement and has undertaken an analysis of trade data discrepancies that can be related to illegal trade (see Chapter 6). FAO hosts the National Forest Programme Facility, a multidonor support mechanism that helps countries strengthen their knowledge basis and provides assistance to facilitate broader stakeholder participation as well as legal and policy reform. These international organizations offer multiple possibilities to countries committed to fighting illegal activities in the forest sector. They can assist governments in rationalizing their policy and legislative framework, in training staff responsible for planning, monitoring and enforcement or by providing technical assistance programmes to support forest operators with the design and implementation of forest management plans.

Non-governmental organizations

Local, national and international NGOs can be strategic allies to improve law compliance in the forest sector, if governments are open to cooperating with such organizations. There are many NGOs active in the forest sector and they have played a key role in raising the issue of forest law enforcement on the international agenda. The role of Global Witness as an independent forest monitor/observer has already been discussed above. Global Forest Watch, established under the World Resources Institute, has carried out concession monitoring work in several countries that has led to improved government supervising of forestry operations. The Environmental Investigation Agency, working with local NGOs in countries such as Indonesia and Cambodia, has compiled evidence of illegal activities and assisted governments in bringing perpetrators to justice. The Nature Conservancy and WWF have begun an alliance to promote sustainable forest management and curb illegal logging and international illegal timber trade in Indonesia (Box 47). Partnerships with such NGOs promote transparency and can often catalyze forest law enforcement activities by governments.


Increasing the efficiency of the public forest administration often requires many more resources than are available in most countries. Relatively low-cost options do however exist, including to:

Box 35
World Bank and World Wide Fund for Nature's priorities for tackling forest crime in Indonesia

The WB/WWF multiple stakeholder process identifies the following priorities for increasing the capacity to detect and suppress forest crime:

  • training of civil society and law enforcers in detection and reporting, and of law enforcers in putting together a comprehensive case for prosecution;
  • further development of the forest crime reporting and monitoring system;
  • focusing on key forest criminals rather than those visible in the field (while recognizing that it can be difficult and dangerous to bring ringleaders to justice);
  • focusing on enforcing financial and administrative regulations, such as submitting annual reports and paying taxes, again targeting key offenders. It is often legally simpler and less dangerous to investigate and prosecute such infractions than illegal logging;
  • removal of geographical restrictions on law enforcement bodies.

Source: World Bank/WWF Alliance, 2005

Box 36
Restructuring the forestry administration in Cambodia

In September 2003, the former Department of Forestry and Wildlife (DFW) was renamed and restructured as the Forestry Administration (FA). While responding broadly to the overall restructuring needs of the Ministry for Agriculture, Forestry and Fisheries (MAFF), the reasons for restructuring the administration of the forestry sector included specific aspects that related to legal compliance, such as the anecdotal evidence of widespread illegal payments to supplement salaries and operational budgets, and the evidence of the adverse influence of various interest groups, including the military, in the workings of the Administration. Additional institutional-level changes to improve governance and legal compliance include the founding of a Community Forestry Unit within the MAFF, followed by its evolution into a separate office during the restructuring that led to the founding of the new FA.

An additional step which was intended to improve the governance of the forestry sector and, indirectly, legal compliance, was the creation of the Ministry of Environment (MoE) to protect Cambodia's resources and advise other relevant ministries on the conservation, development and management of natural resources. However, ongoing conflicts with MAFF over jurisdictional control of protected areas (a problem with roots in the incomplete legal framework for environmental protection) and a limited operational capability have led some to question how effectively MoE will be able to deliver on its mandate.

Source: Amariei, 2004

Box 37
Staff performance and integrity in the forest sector

Increased monitoring and control of forest operations can reduce illegal activities considerably, as long as the problem of corruption is also tackled. Increasing the fines and penalties for illegal activities in some circumstances (for example, in cases where there is little or no risk of being caught) may just increase the producer's willingness to pay bribes, leading to greater corruption. Improving the terms and conditions of forestry officials may reduce corruption by increasing the expected costs of any disciplinary action (better-paid staff would expect to lose more from suspension or dismissal). However, it may be more cost effective to increase the supervision of staff and introduce incentives for reporting illegal activities.

The above conclusions suggest that paying closer attention to and rewarding the honesty of forestry staff may yield higher returns than increased monitoring and punishment of illegal producers. Many countries have a poor record in this respect and the self-regulation of forestry institutions may not be very successful. Civil society has a very important role to play in this process and mechanisms should be developed to encourage effective monitoring and reporting of illegal activities without fear of reprisal or coercion.

Source: Whiteman, 2003

Box 38
Improving agency performance through staff training in Brazil

The Fundação Estadual do Meio Ambiente (FEMA), the state environmental protection agency in the Mato Grosso State, Brazil, initiated a new system in 1999 to detect illegal clearings and prosecute offenders that involved restructuring and hiring new staff. FEMA trains its field inspectors to identify and report environmental crimes. Their training includes topics such as the use of GPS and satellite imagery analysis. They are also trained to adopt a positive and respectful attitude with landowners in order to avoid unnecessary conflicts. FEMA accredits and trains service providers in the area of environmental licensing. Professionals who fail to comply with the FEMA criteria (for example by providing false information or failing to provide monitoring reports) are penalized: they automatically lose accreditation and may even be held jointly accountable for environmental damages from the activities carried out. The registry of service providers is available for
public access.

Source: State Government of Mato Grosso and State Foundation of the Environment (FEMA), 2001

Box 39
Distribution of revenue obtained from fines in Niger

Decree 88-385/BOM/MF of 15 September 1988 sets out the distribution of revenue obtained from fines, transactions, damages and sales of confiscated wood in Niger. This distribution is defined as follows:

  • Public Treasury: 75 percent;
  • Water and Forest Service personnel: 25 percent.

The 25 percent of revenue allocated to Water and Forest Service personnel is intended to encourage them to take care of the ecosystem and to avoid any misappropriation of funds. This is divided between the different staff members in the forest administration, with the largest shares going to workers that report an offence (40 percent of the revenue) and to the local forestry service personnel (16 percent of the revenue). As of 2005, this money is still being collected and distributed to staff involved in apprehending offenders.

Source: FAO, 2001a; A. Whiteman, personal communication, 2005

Box 40
Establishment of Regencia forestal in Ecuador

The Regencia forestal system was established in Ecuador in 2000 through the enactment of the forest normative, which was modified in 2004. In order to become a forest regente for the Ministry of Environment, the professional forester needs to meet the following requirements:

  • hold a university degree in forestry and be a member of a professional association of foresters;
  • take and pass a course on Regencia forestal ;
  • sign a legal declaration committing him/her to accomplishing his/her duty and watch over the compliance of legal and regulatory frameworks governing the forestry sector.

If a regente is suspected of having committed any irregularity a sanctioning committee is summoned by the National Forestry Director in which a representative of the environmental NGOs, one from the timber industry and one from the National Association of Professional Foresters have one vote each.

Regentes provide official certificates in forestry matters and can be contracted by those who need their services, thus their salary is decided directly with the user. They are not civil servants and do not receive any compensation from the state. The regentes are responsible for supervising reports (preliminary inspection, implementation, and final inspection) or to report any violation on behalf of the Ministry of Environment, which can then proceed to enact its authority in the forest domain. By the beginning of 2003 the Ministry of Environment had taught 25 training courses to 433 professional foresters who were interested in becoming regentes or who wanted to have a deeper insight about the normative reform and the new forest management tools. Of these, 59 successfully passed the regente test and received delegated authority from the Ministry of Environment.

Source: Thiel, 2004


Box 41
Examples of successful partnerships to promote forest law enforcement

Vigilancia Verde (Green Surveillance) was created in Ecuador in 2000 by a coalition involving the National Police, the National Defence Ministry, the Ministry of Environment and five NGOs. Vigilancia Verde is a supervising body responsible for controlling the transport of timber between the forest and processing and marketing locations. Thirteen fixed road checkpoints and seven mobile control points are being established, each one of them formed by a representative from the forest authority, one from civil society and two from the police. These teams operate on a 24-hour basis and their members are periodically reassigned to other control points. The system is funded by a trust that receives 50 percent of the sale value of the timber that is detected, confiscated and auctioned. The funds are administered by a bank and managed by three directors from civil society and two from government agencies. All of these features have been designed to avoid unaccountable practices, and to reduce the temptation of corrupt deals. This scheme has already demonstrated its effectiveness: in its first year the volume of timber seized was nearly 600 percent more than that seized by the government during the previous year (Contreras-Hermosilla and Vargas Rios, 2002; The Economist , 2003) and when a computerized link was created for the whole chain, the possibility to track licence compliance online resulted in twice the volume of illegal timber being retained.

In 1994, the Philippines Department of Natural Resources (DENR) created 16 Multisectoral Forest Protection Committees (MFPC) in areas where illegal logging was most acute. These committees included representatives from the DENR, the local government, the media, the church, the police, the military and various NGOs. The committee served as an information centre and discussion group for DENR monitoring and enforcement duties and as a mechanism to obtain information from members' informal networks. In 1999, the number of committees had expanded to 400 with a national federation and regional, provincial and municipal level MFPCs. The committees have been effective in raising awareness and mobilizing public support. They provide a trusted and secure vehicle for "whistleblowers" and have encouraged the organization of other popular groups with similar duties and responsibilities. The groups have contributed to the confiscation of large volumes of illegal wood, the dismantling of small illegal sawmills, the closure of large sawmills and the arrest and prosecution of large-scale illegal loggers. Of 360 cases filed, 285 have resulted in convictions, some of them involving important operators (Embido, 2001). MFPCs are still operational, though with much reduced coverage. The end of the World Bank funding cut off much of the financial support, which had been channelled through the DENR. The continued functioning of MFPCs now depends on the presence of motivated individuals and NGOs working on a voluntary basis. This makes them rather vulnerable to capture by sectional interests (Brown and Luttrell, 2004).

In 1999, an independent observer was appointed (as a structural adjustment conditionality) to work with the Cameroon interministerial committee for the allocation of forest concessions. Two local legal and accountancy firms were employed to increase the rigour and objectivity in the scrutiny of tenders. In 2002, a forest management plan oversight initiative was developed in Cameroon, and official contracts were awarded respectively to Global Witness (for enforcement monitoring) and Global Forest Watch (for monitoring of forest operations). Both contracts aimed to make authoritative information available to national and international users regarding the industry's respect for forest management plans (Brown and Luttrell, 2004).

In Brazil, the Brazilian environment and natural resources institute IBAMA joined forces with Greenpeace in 2000 to control illegal logging of mahogany in the Amazon. Greenpeace's investigative work exposed large-scale illegalities in Indian lands. Based on this information, IBAMA and Greenpeace conducted several inspections that in five days netted the largest volume of mahogany logs in Brazilian history: 7 165 m 3 , valued at US$7 million. Shortly afterwards, IBAMA's President announced that the government had stopped all mahogany logging plans in the states of Para, Mato Grosso and Acre, except those certified as under sustainable forest management (Greenpeace, 2001a, 2001b).

Box 42
Relative strengths of independent forest monitors or observers

An independent forest monitor or observer is a third party organization that, with the agreement of government authorities, provides observation of and support for an official forest law enforcement system. Arrangements between government and a third independent party provide the following advantages.

  • Independence. The independent monitor has a high degree of credibility due to its lack of affiliation with national political or economic interest groups, and the consequent ability to investigate politically sensitive situations.
  • Non-governmental, non-profit making status. Related to its independence, the monitor does not operate to obtain profits and therefore it eliminates or at least reduces the possibilities of conflicts of interest and dominance by powerful economic interests.
  • International, multisource funding. It is frequent for the international monitor to be funded by a number of donors, often international agencies. This is a desirable feature because independent funding contributes to shielding the monitor from the manipulations of domestic interest groups.
  • Official role . It is essential that the state acknowledges the need for and supports the objectives of the independent forest monitor; otherwise it is not possible to verify the activities of the government officials or the implementation of logging concessions. However, forest monitoring without an official role can of course also occur, by local communities and NGOs, and (as in the case of EIA-Telepak in Indonesia) supported by an international NGO and donor finance. This form of monitoring has been termed "external monitoring".
  • No enforcement role. The monitor gathers, analyses and provides relevant information and data to the government but the delicate task of actual enforcement of regulations remains with the government.
  • Confidentiality. Independent forest monitoring provides a confidential independent channel to collate and verify information on infractions and collusion.
  • Analysis. The detailed mechanisms of illegal activities are analysed, as testimonies from field foresters, ministry officials, law agents, the judiciary, NGOs and communities can be used while protecting individual identities.

Sources: Global Witness, 2005b; Brown and Luttrell, 2004

Box 43
Design of monitoring systems

In planning programmes of verification, consideration needs to be given to the various elements that can, in combination, create positive momentum for change. These include the following.

  • The regulatory function needs to be monitored at all relevant stages (concession allocation and the whole production and marketing chain) if the overall effectiveness of the system is to be secured.
  • The simultaneous presence of one or more external monitors, in addition to the official independent monitor(s), may facilitate the circulation of information, and keep up the pressure for systematic reform.
  • Attention needs to be given to the reporting framework within which the monitor works, and the validation of its findings through appropriate fora which widen ownership and accountability.

As regards the reporting framework, two key functions are institutional buffers and information filters. These are usually combined in some kind of reporting body which receives, assesses and validates monitoring reports before their publication by the monitor, and acts as an intermediary between it and the government. In some cases, representatives of different government ministries and donors are involved; in others it is an institution insulated from political influence.

Source: Brown and Luttrell, 2004

Box 44
Certification and legality in Bolivia

The Government of Bolivia, in its major restructuring of the policy and legislative framework of the forestry sector, began accepting independent certification of sustainable forest management as evidence of law compliance in its concession system. This was due to the close correlation between the legal requirements for the management of forests in concessions and the requirements of independent certification.

Certification is easier and less costly for law-abiding firms implementing sustainable forest management plans. Certification is also desirable for entrepreneurs because certified forests are exempt from the government forest audit. Some concessionaires and entrepreneurs have indicated that they prefer to deal with an independent certifying firm rather than with government bureaucracy (Jack, 1999).

At the same time, independent certification is beneficial to the Superintendence (the national forest service) as it frees up scarce resources that would otherwise be dedicated to monitoring and enforcing the application of sustainable forest management plans in forest concessions.

Source: Contreras-Hermosilla and Vargas Rios, 2002

Box 45
Examples of key forest industry declarations

Statement by the Confederation of European Paper Industries (CEPI) on illegal logging and forest law enforcement, governance and trade

In their willingness to contribute to the indispensable action to combat illegal logging, while considering that prime solutions should be found where such practices take place, CEPI and its members:

  • Commit themselves to support and cooperate with governments in their actions to halt illegal logging and secure good governance and law enforcement within the existing legal and institutional framework.
  • Strongly commit themselves to the purchase and use of wood only coming from legal logging.
  • Firmly condemn corruption and criminal activities related to illegal logging that tarnish forestry and forest-based activities.
  • Encourage sustainable forest management according to internationally agreed principles. In this context, voluntary and market-driven certification systems may constitute as one, but not the only instrument towards greater sustainability.
  • Request a clarification of responsibilities, notably by securing land tenure.
  • Are supporting cost-efficient measures aiming at verifying the origin of wood, and demand trade not to be made more difficult through unjustified administrative burdens or constraining measures.
  • Recommend not taking any action or measure that would penalize wood-based products, compared to competing non-renewable materials.

The Confederation of European Paper Industries represents trade associations from 18 countries and includes 1 000 companies and 1 300 mills employing directly some 260 000 people. Its members produce some 28 percent of the global production of paper.

Statement on illegal logging by the International Council of Forest and Paper Associations (ICFPA)

The ICFPA is unified behind the following principles:

  • ICFPA encourages sustainable forest management according to internationally agreed principles. ICFPA acknowledges that voluntary and market-driven certification systems can partially address the problems associated with illegal logging. The private sector must be vigilant in situations where illegal logging is suspected and all levels of government must work to enforce laws established to prevent it.
  • ICFPA strongly supports the conservation of forest areas, which have been designated for protection by law. ICFPA encourages governments and the private sector to work together to end all illegal logging from areas where timber harvesting is expressly prohibited.
  • ICFPA members commit to abide by domestic and sovereign laws pertaining to logging and harvesting in any country where logging and tree removals take place.
  • In countries where such laws are not in place, ICFPA supports the establishment of laws and regulations that promote and advance sustainable forest management and their subsequent enforcement.
  • ICFPA supports government monitoring and assessment of forests as essential to devising appropriate and effective measures to counteract illegal logging and trade of illegally harvested wood. Accurate and reliable information will greatly improve the ability of governments and private landowners to curtail illegal activity.

ICFPA's membership is comprised of trade associations in 43 countries, representing industries accounting for more than 90 percent of the world's paper and more than 50 percent of the world's wood production.

Responsible Purchasing Policy of the United Kingdom's Timber Trade Federation (TTF)

TTF is an industry federation which has developed a code of conduct to attempt to eliminate illegal timber from its supplies. TTF members can develop Responsible Purchasing Policy company commitments and send a questionnaire to all their suppliers in order to assess and grade their environmental performance as low, medium or high risk. Members also compile annual management reports summarizing supplier assessments and setting improvement targets for the following 12 months, which are audited by a TTF-appointed independent auditor.

Sources: CEPI, 2002; ICFPA, 2002; TTF, 2005

Box 46
Bilateral agreements between Indonesia and trading partners

Bilateral agreements have been signed with the United Kingdom, Norway, China (all in 2002), Japan (2003) and Korea. These involve a Memorandum of Understanding committing the parties to work together to reduce, and eventually eliminate, illegal logging and international trade in illegally logged timber and wood products.

The action plan of the Indonesia-United Kingdom agreement, the most advanced to date, includes a series of activities to be undertaken in both countries covering the following areas: identification of relevant legislative reforms and related actions; development, testing and implementation of systems to verify legal compliance; technical and financial capacity-building assistance from the United Kingdom; support for civil society's involvement in efforts to curb illegal logging; development of systems for timely collection and exchange of data; collaboration between the countries' enforcement agencies; and encouragement for industry action, including sourcing only timber and wood products identified as legal. In 2004, a series of actions focusing on the province of West Kalimatan were initiated, including NGO involvement in monitoring, assessment of training and equipment needs, closer cooperation between provincial enforcement agencies, improved data collection and analysis. The first phase of field testing the legality definition and the tracking system has been completed, and plans are in preparation for their wider application.

Source: Richards, 2004; H. Speechly, DFID, personal communication, 2005

Box 47
The role of NGOs and the market in fostering better governance in the forest sector

In North America and Europe, markets that favour environmentally friendly forest products are having a major impact on suppliers in other countries. Thanks to NGO campaigns and fear of criticism, large retailers, including IKEA, The Home Depot, Lowe's and Carrefour, have announced policies to exclude illegally harvested timber from their supplies. As a result, some forest product companies in Indonesia are starting to make voluntary investments to improve forest management in order to increase competitiveness and gain preferential access to high-value markets in North America and Europe.

An alliance was initiated in December 2002 by two NGOs (The Nature Conservancy and WWF) to bring together business, governments, and environmental organizations to promote responsible forest management, combat illegal logging and create market links to promote use of wood from well-managed forests with a focus on Indonesia. The alliance provides input to national and regional activities led by governments, such as the FLEG process and the Asia Forests Partnership and provides technical assistance to companies and communities. It also works to improve communication between "green" foreign buyers and Indonesian suppliers. The Nature Conservancy has also worked with the governments of Indonesia and the United Kingdom to develop a set of principles, criteria and indicators of legality for forestry operations and timber processing in Indonesia.

Source: The Nature Conservancy and WWF, 2005

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