Item 7 of the Provisional Agenda




Rome, Italy, 1-5 March 1999




Secretariat Note


1. The recent evolution of national forest policies has been determined by efforts to internalise UNCED agreements as well as by results achieved in the pursuit of an operational definition of sustainable forestry management (SFM). The reconciliation of these policies with powerful economic and political forces outside the forest sector has proven to be a complicated task. The purpose of this document is to inform delegates, to facilitate discussion of important aspects of current forest policy-related efforts, and to give all COFO members the opportunity to advise member governments, the international community and FAO on the orientation of future undertakings. The document first reviews relevant national challenges to policy formulation, implementation, and monitoring and evaluation. It then examines a selected number of significant international challenges to policy formulation and proposes a list of critical issues that require further analysis and could benefit from guidance by COFO.



2. National challenges relating to national forest programmes (NFPs) - endorsed by the Intergovernmental Panel on Forests as the preferred policy framework for forest sector planning - include the expansion of key stakeholder participation and the integration of non-forest sectors. Although decentralised planning has facilitated the involvement of local stakeholders, their active participation in decision-making has yet to go beyond mere consultation. Disadvantaged groups, including rural women and indigenous populations, are often still excluded from policy formulation processes. The private sector, though recognised as a key partner in forest development, has also often been inadequately involved. Co-ordination with public and private non-forest actors has been facilitated where forestry administrations are located in multi-sectoral ministries or where forest issues are addressed in the context of broader strategic frameworks (such as National Environmental Action Plans), but sectoral integration remains inadequate.

3. Building on its experience, FAO has actively participated in the work of the IPF (and that of its successor, the Intergovernmental Forum on Forests) in formulating the current international consensus on forest-related issues and measures. FAO also continues to facilitate technical and financial support, decentralised through Regional Forestry Groups in Bangkok, Accra and Santiago. FAO's contributions to NFPs, in addition to more general policy monitoring and evaluation, have been augmented by regional forest policy studies for Africa (finalised in 1996), Central America (second phase launched in 1997), Northern Hemisphere boreal countries (finalised in 1997) and Latin America and the Caribbean (initiated in 1997).


4. There is a general consensus, expressed at the XI World Forestry Congress and elsewhere, that progress in forest policy in developing countries has not been translated into more effective implementation. Although numerous explanations for so-called policy failure have been advanced -- frequently summarised as "lack of political commitment" or blamed on the shortage of financial resources -- no in-depth analysis confirms such claims.


5. Government forest policy institutions around the world are currently struggling to cope with the effects of a changing forestry policy landscape, as well as the repercussions of macro political and economic forces that continue to reshape the traditional roles of governments. Awareness of the growing list of goods and services provided by forests and trees at local, national and global levels has greatly expanded the range of activities expected of forestry institutions. With the emergence of the concept of sustainable forest management ecological, cultural and recreational functions and values have assumed near-equal importance to timber production. As a consequence, forestry institutions must respond to new demands for research, extension, information gathering and analysis, accompanied by the need for a more varied professional work force.

6. A second effect of the emergence of a more comprehensive concept of forest management and the accompanying expansion of forestry institutions' mandates is the increase in number and type of stakeholders with which forestry institutions must interact. Recognition of the positive impact of increased stakeholder participation in decision-making processes, as well as increasing disillusion over the inability to arrest deforestation and forest degradation, has led forestry institutions to reconsider their roles and devise responsive strategies. While considerable progress has been achieved in industrialised countries, the shift in Public Forestry Administrations' (FPAs) roles (subject to a wide array of socio-economic, political and biophysical factors) is only gradually materialising in developing countries. FAO is currently undertaking a review of PFAs in developing countries, which is expected to yield beneficial insights into these shifts.

7. Another issue relating to the role of PFAs in policy implementation is the erosion of their traditional role as forest guardians. The increasing number of stakeholders, as well as their legitimisation through national legislation and international obligations, the reduction in availability of financial resources for public forest sector investment, and general government streamlining has compelled forestry institutions to abandon their forest management monopoly. The sharing or transfer of responsibilities has taken different forms, ranging from decentralisation to partnerships with non-governmental organizations or private sector organizations. The new governmental institutions created to deal with environmental matters have in many cases taken up responsibilities and functions previously held by the PFAs. This has often led to further downsizing of PFAs and such changes have not always resulted in an improvement of forestry development.

8. In some countries, the most far-reaching and possibly the most controversial form of transferring responsibilities has been privatisation. Despite concerns about the loss of public control over vital national resources and the concomitant risk of forest degradation, nothing prevents governments from retaining sufficient influence to ensure sustainable management. The design and enforcement of appropriate regulatory and incentive systems, however, is a demanding task. Prominent examples of countries with experience in privatisation include New Zealand, Poland, Romania, Ghana, South Africa and Honduras; numerous other countries are currently facing similar challenges.

9. The complete or partial transfer of forest management responsibilities to regional or local administrative levels has been used in some cases as a remedy to lack of stakeholder participation, efficiency, accountability and transparency in forest management. At present, experiences with decentralisation vary. Positive effects have been recorded where decentralization involved the complete transfer of long-term user or ownership rights, as well as control over benefits accruing from forests, as in some countries in South Asia. Nonetheless, where decision-making power is transferred to lower government levels without adequate systems of accountability, short term gains may have negative effects in the long run. In order to improve understanding and promote the sharing of lessons on decentralisation processes, FAO's Asia-Pacific Regional Office organised a conference on these topics in the Philippines in 1998.

Policy tools

10. At the XI World Forestry Congress (1997), it was noted that the substantial lack of attention to, or ignorance of, the nature, combination and effects of policy tools is a consistent feature of forest policy analysis. Similarly, an earlier review of NFAPs by FAO underlined that one of their biggest shortcomings was their adherence to the assistance-driven project concept, instead of looking into local constraints, incentive systems and least-cost response strategies. The current changes in forestry institutions and policies are having a decisive impact on the choice of tools used to support the maturing concept of SFM, as well as government disengagement from commercial activities and market interference. A better understanding of policy tools is therefore a crucial prerequisite to successful policy implementation and reform, particularly with regards to the balance between regulatory, economic/incentive and persuasive instruments.

11. Among the different tools of forest policy implementation, legally binding regulatory instruments, embodied in constitutions, forest laws and property rights frameworks have traditionally been the most extensively used. As a result of the growing diversity of forest goods and services, regulatory tools have in many places evolved into exceedingly complex bodies of law. The obligation to comply with international agreements has further complicated the situation. Of late, however, worldwide political and economic liberalisation, coupled in many places with the inability of governments to enforce forest laws, have provoked a gradual shift away from regulatory tools. This tendency has been more pronounced where forest ownership is decentralised, as in much of Western Europe and the United States. Where the State remains the primary forest owner contractual arrangements, such as concessions, play a more important role, even though they are increasingly designed to qualify as market tools. In either case, the challenge is to evaluate which regulatory tools to phase out and how desired behaviour on the part of forest users can otherwise be achieved.

12. A second category of policy instruments is made up of economic-financial and market instruments that are generally aimed at inducing specific behaviours in exchange for economic advantages. They include compensation, incentives and grants, taxation, tariffs and duties, performance bonds, debt-for-nature swaps, and joint implementation. Yet, the entire range of their consequences is often inadequately understood leading to unwanted results. Moreover, as governments are forced to reduce expenditures, interest is shifting to market-led tools, such as carbon offsets and tradable development rights.

13. Complementary regulatory, economic-financial or market-led tools are often persuasive policy instruments (or informational tools). They include extension, research, education and public relations, which aim to foster communication among the various stakeholders in forest management (such as policy-makers, NGOs, rural populations and the private sector). These tools must be re-designed to change the uni-directional flow of information that has characterized traditional extension and education. Although significant progress has already been achieved -- particularly in the field of community forestry -- the challenge remains to design appropriate mechanisms for two-way information exchange. FAO continues to make substantial contributions to this field, through the development of participatory and conflict resolution tools within the Community Forestry Programme, the regional Forest Sector Outlook Studies and other initiatives.


14. Successful forest policy implementation also depends on the development and maintenance of sound monitoring and evaluation systems. In spite of substantial efforts and resources devoted to their improvement, policy monitoring and evaluation, similar to policy implementation, continue to be vulnerable to criticism. There are substantial opportunities for improvement including improving national capacities for information gathering and analysis, and increasing involvement in the monitoring and valuation processes of key stakeholders.

15. The efforts by more than 120 countries to develop criteria and indicators (C&I) for SFM continue at an impressive pace. Under many of these initiatives, forest management unit or operational level C&I have been developed to complement national ones. FAO continues to facilitate the development and harmonisation of these processes. The challenges ahead, as noted by the IPF, include full involvement of all interested parties in ongoing processes, building country capacity to implement C&I, setting national and international research priorities, and enhancing comparability in data outputs and reporting among countries.

16. In order for C&I to be effective in measuring progress towards SFM, countries must have the technical, human and financial resources to make use of the process. The essential need to improve national forest resources assessment, forest statistics and the capacity to analyse forest resources information was noted as a proposal for action by the IPF, as was the need to formulate an internationally acceptable set of definitions of key terms used in all types of forest resource assessment. FAO has worked to enhance countries' abilities to collect and analyse forestry statistics. In the context of FAO's Forest Resources Assessment 2000, for instance, a global strategic plan has been prepared and numerous national and sub-regional needs assessment and capacity building workshops have been conducted. FAO continues work to harmonise definitions for forestry.

17. A number of additional policy tools have the potential to contribute to the monitoring and evaluation of progress in achieving SFM. Although controversial, voluntary codes of conduct, certification and labelling have been identified by the G8 and participants at the XI World Forestry Congress as valuable tools that do not require government intervention.


18. The dividing line between national and international challenges in forest policies continues to blur as organizations and mechanisms that extend beyond the borders of single countries take interest in traditional areas of national sovereignty, and as financial and capital markets sustain their pace of global integration. Although many international instruments of relevance to national forest policy are legally non-binding, they are increasingly regarded as political commitments subject to sanctions in the form of negative international exposure, with potentially serious economic and political repercussions. The implementation of forestry policies mandated by international obligations often exceeds the domestic financial and human resources of developing countries, and available resources for forest sector investment have been declining since 1993.

19. The international endorsement of national forest programmes as the preferred policy framework for forest sector development and the elaboration of the guiding principles outlined in the IPF proposals for action creates an opportunity as well as a responsibility to improve the exchange of best practices and key lessons between governments and other stakeholders. FAO has organised three regional workshops on "International cooperation and resource mobilisation for the implementation of the IPF proposals for action related to national forest programmes", at which participants noted the need for more concerted action by the donor community to revitalise initiatives in countries which have developed strategic frameworks for the forestry sector. The key challenge that presents itself is not solely to augment the flow of information and technical and financial resources, but also to enhance its usefulness, particularly across country contexts, and thereby its applicability.

20. Sustainable forest management requires substantial financing, the generation of which constitutes a second national policy challenge with international ramifications. Funding from both domestic and international public sources, essential for human resources development, institutional capacity building and technology assessment and transfer, has decreased. Although private capital flows to forestry activities are increasing, they are unevenly targeted and do not always contribute to SFM. The private sector is also said to face problems accessing start-up capital, particularly in developing countries, as well as risks and uncertainties involved in SFM activities. The IPF has called for the creation of an attractive investment environment, preferably through economic-financial or market-led policy tools. Furthermore, the IFF at its second session considered national forest programmes "to be a viable framework for addressing forest sector issues, including implementation of the IPF's proposals for action in a holistic, comprehensive and multi-sectoral manner".

21. Among the international financial mechanisms with the potential to generate additional funds, the development of an international emission offset trading regime and the Clean Development Mechanism under the Kyoto Protocol to the Framework Convention on Climate Change has attracted the most recent attention. Several international and national initiatives are under way, although many technical and legal issues have yet to be explored and clarified. The establishment of an international forestry fund is another international instrument which has been discussed. It, too, requires further examination and more widespread political and economic support. Finally, the use of dept-for-nature swaps, one of the oldest innovative financing mechanisms, has declined during recent years. FAO's recent activities related to international resource mobilisation have included a regional study on the constraints and prospects for improved flow of assistance in the Asia-Pacific region in 1997, a publication on carbon dioxide offset investment in the Asia-Pacific forestry sector and a similar document in preparation for Latin America and the Caribbean.

22. A third international challenge facing national forest policies for sustainable development relates to the agreed upon priority areas of forest resource assessment (remote sensing, computer-based GIS techniques, etc.), intensive wood production (biotechnology and breeding), forest harvesting and transport, wood processing and use (saw mill technologies, pulp and paper manufacturing, energy production) and the value of non-wood forest products. In view of the anticipated increase in private sector involvement in these areas, one of the main challenges concerns the design of policies that promote the integration of training and capacity building into technology transfers through innovative financing packages and incentives. FAO continues to serve as an intergovernmental policy forum on forestry development issues, as a focal point for technical information collection and dissemination, and as a facilitator in assisting countries through technical capacity building and technology transfer.

23. International trade in forest products has the potential to contribute to SFM. The IPF noted that all countries ought to further reduce tariff and non-tariff barriers and that the World Trade Organisation should focus its attention on the proliferation of "new" trade barriers, such as export restrictions on developing countries to encourage domestic processing of tropical timber for export, environmental and trade restrictions on production and exports in developed countries and quantitative restrictions on imports of `unsustainably produced' timber products. One of the more controversial trade-related issues of the past few years involves the development of certification and labelling schemes, which has divided consumer countries, producer groups, intergovernmental and civil society organisations. In this context, the main challenge is to achieve a certain level of international comparability of schemes and at the same time avoid their use as `hidden' protectionism. FAO has remained neutral in the debate and continues to promote dialogue through its various forestry-related international fora.

24. A final issue of relevance to the international aspects of national forest policies for sustainable development is the growing number and importance of regional and sub-regional agreements and treaties. Similar to arguments in the realm of trade, the regionalisation of forest policy poses the question of whether it constitutes a vehicle for or an obstacle to the development of an international legally binding instrument.


25. The issues outlined above provide an overview of recent developments in national and international challenges to national forest policies for sustainable development, as well as the nature and extent of FAO's involvement in meeting those challenges. This last section summarises key issues, in the form of queries, to facilitate discussion among COFO participants and to promote further analysis and encourage guidance to member governments, the international community and FAO:

a) Despite considerable progress in policy formulation, shortcomings are said to persist in stakeholder participation, integration of cross-sectoral issues and international obligations, and quantitative analysis of policy options. Do these shortcomings merit a reconsideration of policy and planning approaches?

b) The significance of institutional arrangements for successful policy implementation has been widely acknowledged and FAO has contributed to institutional strengthening in numerous countries. Have these efforts been effective in addressing recognised problem areas, have new problems arisen or has the level of achievements fallen short of expectations? If so, are there ways in which institutional analysis and technical assistance packages could be improved?

c) Advancements in the theory and practice of policy formulation have generally not been followed by improvements in policy implementation, evaluation and monitoring. Would a shift of resources from policy formulation to developing assistance strategies and tools for implementation, evaluation and monitoring produce a more integrated and more successful approach to policy assistance, or would it jeopardise achievements made in policy formulation?

d) In spite of recognised progress in the development of criteria and indicators for sustainable forest management, challenges persist in fully involving all interested parties in ongoing processes, building country capacity to implement C&I, refining the indicators and testing their applicability, setting national and international research priorities and enhancing data comparability and reporting among countries. In what ways could these areas be addressed in order to contribute to the consolidation of achievements made through the various C&I processes?

e) The reduced availability of international public financing for forest sector investments represents a growing obstacle to the consolidation of previous successes and the achievement of new ones. What are the options for promoting the forest sector as an attractive area of investment?

f) In spite of widespread interest in certification, FAO has remained neutral in the debate. Is a closer involvement warranted, and if yes, in what way?

g) Vested interest in maintaining present structures of forest institutions are often cited as the main reason for lack of reforms. Is this an area that deserves more attention?