Over-Exploitation of Natural Forests?
Forest Certification
Natural Forest Management Today
Outlook
Summary
The last ten years have witnessed an unprecedented concern over the fate of the world's forests. The recognition that forests provide more than just timber has particularly affected the discussion on natural forest management. While the environmental services provided by forests have shaped forest policies and management, and with it the use of the forest resources, in the densely populated countries of Europe for centuries, forest management in the less populated regions of the northern hemisphere and the tropics has developed more slowly. Today there is a general agreement that a transition from timber exploitation to sustainable multiple use forest management is crucial. The following discussion draws on examples from the Asia-Pacific Region, at the same time recognizing that some problems encountered and some of the changes that have taken place are similar in other regions. Furthermore, it should be emphasized that while changes in forest management will take place they will not be sufficient to guarantee a reversal of current deforestation trends. Though logging has been identified as one cause of deforestation it should be emphasized that the major cause is planned and spontaneous conversion to other uses, particularly agriculture. On the other hand, degraded forests criss-crossed by logging roads are frequently entry point for migrants in search on agricultural land.
The world's attention has only recently been drawn to deforestation of tropical forests because of the heightened awareness of its global externalities. This development and the reactions of governments, non-governmental organizations (NGOs), forest managers and the general public, do not mean that up to about ten years ago nothing has happened. Quite on the contrary, international aid as well as national projects and programmes for protecting tropical forests have steadily increased over recent decades. The Food and Agriculture Organization of the United Nations (FAO), the European Union (EU), the International Tropical Timber Organization (ITTO), the International Union for the Conservation of Nature (IUCN), the Asian Development Bank (ADB) and the World Bank have all assisted governments of tropical countries to introduce necessary changes. However, the billions of dollars spent on forestry activities still do not enable us to answer some of the most basic questions concerning global forest resources and their functions (Nilsson, 1996). This is echoed by Bach and Gram (1996, p. 168) who note "there are still no visible signs of significant positive effects in tropical forestry". The main reason for the failure to reduce deforestation and forest degradation is the narrow traditional forestry sector focus. It has in the past neglected other economic sectors that affect forests. In general terms, this criticism is justified but ignores that developments have varied among countries and that some changes occurred.
The international discussion on natural forest management has received its most recent impetus by the 1992 United Nations Conference on Environment and Development (UNCED) which emphasized the need for sustainable management guidelines, criteria and indicators for temperate, boreal and tropical forests alike. A review on timber certification is used in the following discussion as an entry point for assessing the current state of the art in tropical forest management and the changes that can be expected.
Over the last couple of decades a numerous official reports have been produced in which the management of the Region's forests is described as sustainable. It is ironic, that at the same time the forestry sector has undergone many changes and adjustments. For example, the export of unprocessed logs has been banned in Indonesia, the Philippines and India. In the Philippines, logging has been banned in old-growth forests and shifted to residual forests. The most dramatic developments could be observed in Thailand with the declaration of a "logging ban" in 1989. The ban, together with the growing economy and raw material needs for the furniture and secondary processing industries make today Thailand the top importer of tropical sawnwood. Similarly, the Philippines, once a major exporter, imported tropical sawnwood with a value of USD 100 million in 1993 (Johnson, 1996). The general growth in consumption explains the increases in imports partially. Deforestation and unsustainable timber harvesting are the other two reasons for increasing timber imports in countries such as Thailand and the Philippines. In Peninsular Malaysia and Indonesia, the move to develop and support domestic wood processing has led to export restrictions, first for logs but later also for sawnwood.
While the shift from net export to net import indicates that timber production has not been as sustainable as claimed, other trends in the forestry sector cannot be used for interpretative purposes in the same way. For example, the increase in domestic processing does not correlate with shrinking supplies but with the desire to produce higher value products for export. Rather it is the conventional cutting practices and damage to advanced regeneration typical of most logging activities in the Region, that explain the much slower than expected regrowth. In other words, damage to residual trees, seedlings, soils and streams is often so extensive (see below) that it "hampers the attainment of the silvicultural objectives associated with harvesting operations" (Dykstra and Heinrich, 1996, p 11).
The international debate on the environmental and social impacts of logging operations led some environmental pressures groups (esp. in Europe and North America) to demand a ban on the import and use of tropical timber. Timber producing countries contended that this proposed measure was a trade restriction, but that did not stop some municipalities in European countries (e.g., Germany and the Netherlands) from banning the use of tropical timber. Economists were fast in pointing out that if timber production would cease, tropical forest would be viewed by many governments as a resource of only little value, available for conversion to more productive uses. As a result, today many governments, trade groups and NGOs look for alternatives to tropical timber boycotts. The option that has received substantial attention is forest or timber certification (Upton and Bass, 1995).
The debate of what actually constitutes certification is ongoing and in some countries considerable confusion still surrounds the issue (Wadsworth and Boateng, 1995). Generally, certification involves the assessment of forest management practices and systems against performance indicators of ecological, social and economic standards. While there are numerous unresolved issues regarding acceptable standards for ecological and economic aspects, the incorporation of social criteria and indicators has received strong criticism by forest certifiers "as being the least well developed, the most difficult to assess in the field and the most ambiguous to interpret" (Wollenberg and Colfer, 1996, p. 9). The lack of generally accepted international principles and criteria to assess forest management, the lack of a widely accepted accreditation process for forest certifiers, and the emergence of many parallel systems, are noted by Baharuddin (1995, p. 23) as additional problems. Certification continues to be, both from its conceptual and operational perspectives, a learning process for many stakeholder groups involved (Upton and Bass, 1995). Despite the remaining problems, the reluctance by many governments to consider certification as a useful tool is waning. For example, the Sarawak Timber Association urged the federal authorities to speed up the formation of the proposed National Timber Certification Centre (Anon, 1997).
The twin objectives of certification are (Upton and Bass, 1995):
· to provide a market incentive for improving forest management; and· to improve market access and share for the products from sustainably managed forests.
From a technological perspective the first objective is of major interest because it addresses practical issues of forest management and timber harvesting operations. This issue has received only little attention in the literature, whereas the objective of improving market access and share has been dealt with in more detail.
It is perhaps not surprising that of the various stakeholders potentially affected by certification, forest industry, forest product trade and retailers are more in favour of the initiative than others. The views are particularly positive from such organizations close to the "green" consumer, and new entrants into the market who want to create a niche for specialized products (Upton and Bass, 1995). The number of comprehensive studies concerning the implications of certification is rather limited. Thus, it is difficult to assess the market potential for certified forest products. Moreover, it is not only the environmental concerns which is changing consumer behaviour in some countries. As Upton and Bass (1995, p. 41) notes, "the current fashion for lighter coloured furniture has contributed to an increased demand for temperate hardwoods, compared to their generally darker tropical counterparts". Earthy colours and materials from American hardwood are forecast to have a great appeal to the Asian consumers, particularly to the rapidly growing middle class of the ASEAN countries. Rubberwood benefits from this trend too. This has led some observers to question whether the consumer is, in fact, willing to pay a premium for "green" forest products. As Telfer (1996, p. 182) notes, "consumers appear to want sustainably sourced products at competitive prices".
In his critique of timber certification Kiekens (1995) points out that as a percentage of timber production, the global demand for certified timber is negligible. Supply and demand patterns, Kiekens continues (p. 27), "indicate that trade in certified timber would be likely to have only a marginal role in world timber trade". From a slightly different angle, this perception is echoed by Wadsworth and Boateng (1995) in their "Study on Markets and Market Segments for Certified Timber and Timber Products". They conclude that, for example, according to timber agents, by the year 2000 there will be no market for certified products in Germany. Also, there is only little interest in some major importing countries such as Japan and Korea (Varangis et al., 1995). In the latter, most companies view tropical timber as unreliable in the long-term and redirect their attention towards raw material sources that are less affected by the intense environmental lobby. Similarly, France, Spain, Portugal, Ireland and Italy show little interest in timber certification. China, a major importer with a fast growing market, has not indicated any interest. The same holds for other major importers or consumption areas such as India, Thailand, the Middle East and Latin America. In line with other analysts Bourke (1996) concludes therefore that only a minor share of products traded world-wide will be affected by certification.
Other problems yet unsolved are potential trade distorting effects, the costs of certification and the increased use of substitute materials such as metal frames, PVC or concrete in the US and Europe. In China, wooden structures are replaced on a large-scale by cement structures and metal ware. Perhaps most importantly, developments in the production of reconstituted wood panels reduce the need to rely on larger diameter logs from natural forests or plantations.
As discussed earlier, the objective of certification is to provide a market incentive for improving forest management. This, as Upton and Bass (1995) continued is a "sticky issue". The question is whether such an objective can be reached or whether certification can only reward those forest operations that are already sustainable. This raises the issue of the quality of current natural forest management.
Harvesting Operations and Intensities
Constraints to Improving Forest Management
Eco-tourism
As Poore et al. (1989) points out, most of the world's tropical rain forest is managed in an unsustainable way. Reeve (1994, cited in Upton and Bass, 1995, p. 160) claims that at least 99 percent of trade is unsustainable, though a detailed study of specific areas suggests a lower figure. According to Leslie (1994) the proportion of tropical forests under "sustainable" management may be in the order of around 5 percent. In addition, in some countries re-logging, i.e. the premature re-entry into stands that were previously logged, occurs within five to ten years after the first harvest (Gillis, 1988, cited in Ascher, 1993). It is impossible to say how accurate such claims and assessments are because of the lack of reliable information. Most claims are countered by contradictive statements. For example, a 1990 ITTO-report on forest management in Sarawak cites over-cutting of the hill dipterocarp forest as a major impediment to sustainability. Mok (1992, p. 32) calls ITTO's conclusion "illogical, irrational and unfair as it presumes that Sarawak will continue to harvest timber at the present rate without any regard for sustainable forest management or the people's welfare". Whitmore (1994) praises the highly developed system of tropical forest management in Malaysia, while Appanah and Weinland (1993) complain that sustainable forest management has neither been achieved nor given a chance. What these examples highlight is the absence of a common definition of sustainability. Basically, two issues need to be considered. The first is the quality of harvesting operations itself. The second deals with the volume of timber harvested, i.e. the harvesting intensity.
One of the hindrances to sustainable forest management practices has been the destructive form of logging. Logging operations in most, though not all, countries in the Region are performed by concessionaires. They are responsible for the silvicultural treatments, whereas forestry departments supervise operations and enforce regulations set out under the various forest policies. However, the reality of logging operations is often a long way from the tight frameworks for forest management (Upton and Bass, 1995). As Arentz (1992, p. 7) notes, "policing harvesting operations is difficult or impossible due to both an inadequate number of trained personnel to enforce harvesting regulations, and of trainers with the necessary expertise and experience to conduct the training courses required". The most common problem is that the majority of the people working in the forest are not aware of the requirements of good forest practice. This explains why "far too many harvesting operations are carried out without the benefit of any kind of formal, written plan" (Dykstra and Heinrich, 1996, p. 11).
For a number of reasons, many timber harvesting operators do not treat natural forests as a renewable resource. Johnson and Cabarle (1993) summarized fourteen studies on damage to residual trees following selective harvesting in Malaysia, Indonesia and the Philippines. Conducted over more than twenty years, the studies shows that not very much changed during the relevant time span and that between 40 to 60 percent of the residual stand was damaged. In a recent study in Sabah, damage recorded in conventional logging areas was approximately 66 percent (Pinard and Putz, 1996). Therefore, operations have not changed to any significant extent. If anything, damage during log extraction has increased due to the use of larger and more powerful machines and cutting in environmentally more sensitive areas (e.g., steeper terrain).
Most logging is still performed with ground skidding equipment though the need to develop more appropriate harvesting systems for logging hill forests is gaining recognition. The switch to less damaging practices is obviously desirable considering that skid trails usually cover up to 40 percent of the area. Dykstra and Heinrich (1996) refer to studies that found up to 80 percent of a selectively logged area covered by skid trails, though it is both unnecessary and uneconomical to drive skidders to every log to be extracted. While the continued use of crawler tractors has been criticized repeatedly, they have certain advantages over tracked and wheeled skidders, and are likely to remain the most common type of skidding machine, particularly in steep terrain with large trees and high precipitation (Dykstra and Heinrich, 1996)1. Damaged caused during felling and skidding operations is compounded by poorly designed and maintained transport infrastructure.
1 It is recognized that the discussion in this review is biased towards the large-scale timber harvesting operations in Malaysia and Indonesia. Small-scale harvesting systems in several other countries are far less mechanized. For example, in India, Sri Lanka and Myanmar elephant logging with its much lower damage to soils is still common. Similarly, mobile sawmills have inherent advantages regarding environmental impacts. On the other hand, since they are more mobile, small-scale timber operators are far more difficult to control and the impacts of their operations on the residual stand may be just as high as in mechanized operations.
The commercialization of lesser known species has led to a general increase in harvesting intensities. In Malaysia, for example, the volume of timber harvested has increased from an average of 24m3/ha over the period of 1971-78 to 45m3/ha in the years 1979-90 (Ahluwalia, 1995). Frequently it is much higher. In Sabah, Pinard and Putz (1996) recorded an average of 154 m3/ha and 104 m3/ha in conventional and reduced-impact logging areas, respectively. Another striking feature, which is criticized, is the amount of waste material left in the forest. It is not uncommon, to find more than 50 percent of the wood of the main stems of tropical trees felled for harvest to remain unutilized (Schmincke, 1995). This is not only wasteful in itself but increases the fire danger in logged forests. The large-scale fires in Kalimantan in 1982-83 indicate that this is not merely a hypothetical issue. Only little progress has been made in reducing the amount of waste produced or in utilizing it. The industry has until today expressed no interest in using wood waste because of high transportation.
The discussion above has focused exclusively on timber harvesting; but this is not to say that harvesting is identical with silvicultural treatment. The reasons for neglecting silvicultural treatments, such as enrichment planting, poison girdling and liberation thinning, in the discussion are threefold. First, research results from Malaysia cast doubt on the need for enrichment planting (Ng, 1996). Second, while most forest departments advocate silvicultural treatments, the costs of such measures are prohibitively high after poorly performed harvesting operations (Adhar, 1996) and due to unfavourable climatic conditions (Ng, 1996). Third, the most promising silvicultural treatments are selective logging operations which focus on the retention of a viable stand and regeneration for future harvesting instead of maximizing log output. As Stocker (1991, cited by Arentz, 1992) suggests the only silvicultural action necessary for sustainable management may be adequate harvesting control. Compared to the expensive post-harvest silvicultural treatments it is a more viable option (Taumas, 1996). It may be insufficient but as long as the impact on residual stands and soils is not reduced, any silvicultural treatment that follows logging operations can be considered as window dressing since it cannot sustain forest productivity.
In their publication on natural forest management, Johnson and Cabarle (1993) cite eleven studies whose authors with few exceptions note that tropical forests can be managed sustainably. Most of them are convinced that it is technically feasible but also highlight that it may be unprofitable and will never be brought about if major improvements are not implemented.
In recent years, researchers have made considerable progress in testing and refining environmentally sound harvesting practices in many parts of the world. While it is still too early to assess whether such practices can ultimately make natural forest management sustainable, the prerequisite for better management exists. The crucial issue is the lack of the political will to make the required changes, to enforce the already existing regulations and to provide incentives for forest operators to adopt better forest management. Certification may be one vehicle that will speed up the adoption of reduced-impact logging practices but it is not a "miracle cure".
The recently published FAO Model Code of Forest Harvesting Practice (Dykstra and Heinrich, 1996) sets out guiding principles and recommended practices for better forest management. It addresses seven critical elements of harvesting: harvest planning, forest road engineering, cutting, extraction, landing operations, transport operations, and harvesting assessment. There is no need to recapitulate the recommendations of each element. The main point raised is that better management means, in many cases, paying more attention to planning. In Pinard's (1994, p. 11) words, the "harvesting plan is pivotal to reducing logging damage". Currently, most practices are inefficient because planning is poor. As a result damage is unacceptably high and resources are wasted. For example, a 1991 report on tractor logging in the hill forests of Sarawak showed that tractor drivers spent at least 70 percent of an operating day building skid roads and wandering through the forests in search of felled logs (Aulerich, 1995). This is unnecessary and costly, which explains why adaptations to the current harvesting practices do not automatically have to incur higher costs.
One major impediment to better forest management is the lack, in most cases, of any form of vocational training for forest workers (Strehlke, 1993). Training for forest workers is usually provided on the job (Tiki, 1994), with the result that people only repeat what they see and that skill development is lacking. Personnel at the management and supervisory level are also affected by weak training programmes, and Salleh and Ng (1994) lament that a whole generation of foresters has emerged with no experience in natural forest management. Particularly, practical aspects receive far too little attention. To improve forest management and to reduce the cost of adopting ecologically sound operations thus requires adequate training, particularly on such subjects as harvest planning, technology and practical silviculture. Initial staff training incurs substantial costs. Positive research results on reduced-impact logging in the 1970s in Sarawak were not adopted because no one company was prepared to cover the training costs (Palmer, 1996). In Sabah, tree fellers and skidder operators have been trained by foreign specialist which incurs extremely high costs.
Increased costs are still viewed as the main constraint to adopting better forest management. As Johnson and Sarre (1995, p. 3) correctly point out "low impact logging needs to be paid for, and needs to pay its way". Where timber extraction causes massive externalities, economic benefits of reduced impacts will cover costs. But as Putz (1994) reports, reduced impact logging may also be attractive in strictly financial terms. Short-term financial benefits derive from more efficient planning and reduced transport costs, and long term financial benefits accrue because forests recover more quickly (Pinard and Putz, 1996). Jonsson and Lindgren (1990, cited in Baharuddin, 1995) also suggest that better planning may reduce rather than increase operating costs. Preliminary estimates for Sarawak reveal that the introduction of reduced-impact logging would result in net savings to the contractor of about USD 17 (ITTO, 1996a). Operations utilizing comprehensive harvest planning can cost 20 to 45 percent less than operations for which only minimal plans were done (Dykstra and Heinrich, 1992). However, there is also a concern of significant income forgone with a reduction in yields. On the other hand, Cedergren et al. (1994) show that reducing impacts in harvesting operations does not automatically result in lower yields. This only applies where the annual allowable cut is inconsistent with sustainable forest management. As Waggener and Lane (1996) note, serious questions are raised in the Region regarding the appropriateness of current and/or recent harvesting levels. Where such levels are still based on the exploitation of natural forest stocks they will have to be reduced in order to reach sustainable yields in intensively managed forests. But this applies regardless of whether harvesting operations are conventional or designed to reduce impacts.
While most results currently under discussion come from research projects, and may not be easily replicated under standard situation, it should be remembered that better harvesting practices can mean lower costs. Experiences from the Philippines (Ludwig, 1994) and Malaysia (Rashid and Ibrahim, 1994) indicate that skyline cable yarding systems compare favourably, ecologically as well as economically, with conventional yarding systems. However, high investment costs render the environmentally sound extraction systems such as skylines and helicopters financially unattractive for areas that can be logged using conventional systems. For example, helicopter logging in Sarawak has shown that costs are between 85 to 110 percent higher than the use of tractors (Downing, 1995). The comparison is, however, unfair because helicopters are cost-effective in areas that cannot be logged by more conventional means (Blakeney, 1994). In Sarawak, for example, helicopters logging is executed only in areas inaccessible to more conventional extraction methods (Chua, 1996). Nonetheless, in Indonesia, shortage of capital has already resulted in a slowdown of investment in new equipment, lowering productivity (Kuswanda, 1995) and the shift to reduced-impact logging.
Eco-tourism is being portrayed as a vehicle for providing environmental, socio-economic and cultural benefits at both local and national levels (Brandon, 1996). It presents a means by which forests can be used to provide income while conserving the natural resource that the eco-tourism industry ultimately relies on. The demand for eco-tourism is steadily increasing and Ong (1996, pers. comm.) predicted that the increasing importance of eco-tourism as a revenue generator in Sabah will also affect natural forest management in the future. Brandon's (1996) review of the key issues provides an excellent overview of the opportunities and limitations of eco-tourism. It does not address natural forest management per se. Yet, it provides valuable insights for assessing the likely impacts of eco-tourism on forest management.
There are only few well documented cases were eco-tourism has provided substantial social and economic benefits (Brandon, 1996) without causing ecological damage. In fact, it appears that those natural sites described for their outstanding tourism potentials such as the Himalayas, the marine environments of many Southeast Asian countries and the highlands of Thailand are more degraded today than ten to twenty years ago. Mass tourism frequently took over and transformed a formerly natural landscape into an environment more suited to the average holiday maker.
In theory, eco-tourism provides an economic incentive to protect natural resources (Laarman and Durst, 1993). In practice, conflicting interests and short-term benefits result in the environmental impacts incompatible with eco-tourism. Because of these problems, various countries within the Region including Thailand, Brunei, the Philippines, Australia and New Zealand have passed national eco-tourism policies and guidelines.
Natural forest, particularly lowland rainforests, have numerous inherent characteristics that leave them at a disadvantage in comparison with other sites. First, as Theophile (1995, p. 25) describes, "most eco-tourists still want a vacation. Balancing luxury with adventure is the trick for tour operators, wildlife park managers, and inn keepers". Most forested areas that are of interest offer only very few amenities that, at least, the "soft" eco-tourist is looking forward too. Second, most forest sites, of great interest because of their high biodiversity, have a limited appeal because of their remoteness and difficulties of access. Third, the likelihood of viewing wildlife is rather low. Fourth, the climatic conditions are far less attractive in lowland rainforests than in more mountainous or marine environments. And fifth, eco-tourism should not be mixed up with ethno-tourism. Though parts of the Northern Thai highlands are very scenic and offers diverse natural ecosystems, the most interesting component of any trekking trip is a visit to a hill tribe village (Chudintra, 1993). Thus, it is not per se the natural environment that tourists are interested in. Their first priority may be experiencing cultural diversity.
Hence, it is obvious that many forests of the Region don't make for very attractive tourist locations. The picture is not necessarily bleak everywhere; but "the overall effect of small-scale success is inconsequential in the face of current environmental degradation and economic development needs. Eco-tourism is not a panacea for forest managers struggling to balance economic and environmental concerns in the United States or overseas" (Theophile, 1995, p. 27).
The recent developments in natural forest management and developments that can be expected over the next fifteen years cannot be viewed in isolation from what is happening in other forestry sectors. Forest plantations are increasingly supplying raw materials for the industry. The wood processing industry has seen dramatic changes over the last two decades. Solid wood products are being replaced by plywood and reconstituted wood panels such as medium density fibre boards (MDF) and oriented strand boards (OSB) (Adams, 1995). This shows that the processing industry has already reacted to perceived and actual changes in wood supply. For instance, the Malaysian timber industry is faced by a shortage of about 8 million m3 in the coming decade (Shaharuddin, 1996). The reliance on large diameter wood will decrease even further in the future. Log production will shift considerably out of the natural forest with more raw material being supplied by forest plantations and the estate sector. As an example, in 1992 in Indonesia, 68.7 percent of the total log production (41.9 million m3) was from natural forests. Two years later, this figure was reduced to barely 62 percent (total production was 35.23 million m3). Current projections are that by 1998 it will be reduced to less than 55 percent out of a total production of 39.23 million m3 (Adhar, 1996).
Since UNCED the service functions of forests have received more attention in deliberations on the use of the Region's forest resources. There has been a shift, albeit slow, from focusing on the developmental, where forest production and industrialization were viewed as an engine to general economic development, to the environmental roles of forests. Recently passed legislation in a number of countries underscore this shift. As described by Durst (1995), the under-valuation in the traditional economic analysis and the low financial profitability of forestry investments relative to investment alternatives encourage over-exploitation and forest conversion to more profitable land uses with higher short-term benefits2. Accordingly, the key challenge is how to make sustainable forest management more profitable than unsustainable practices and competing land use (Sizer, 1994).
2 The development of methodologies for the valuation of forest resources is still ongoing. Valuing various forest benefits poses a number of problems, particularly in areas for which there are virtually no reliable data available such as remote tropical forest areas. Also, our knowledge of complex human-environment interactions is still inadequate to forecast and quantify likely impacts (see e.g., Enters, 1996). Finally, and perhaps most important, ethical concerns have been raised regarding the appropriateness of calculating monetary benefits for many of the values that forests provide.
Despite these developments and mounting environmental pressure in the main producer countries, only a few forest managers have decided to improve performance (Upton and Bass, 1995). The explanation for this poor response lies in the business nature of current forest management. As discussed above, natural forest management consists mainly of timber harvesting, which is in most cases conducted by private companies. As profit maximizers these firms would be following the recent debate on sustainable forest management closely before deciding how to adapt. Being diverse, they will thus make different decisions. Their reactions will depend on:
· their dependence on marketing their products in countries interested in certified products;· pressures applied by their respective national governments as well as restrictions imposed by government departments on their overseas concessions;
· the capacities and interest to invest in new timber harvesting equipment, training and wood processing technologies;
· their perceptions about resource supply;
· alternative - outside the forestry sector - investment opportunities; and
· opportunities to move their operations overseas.
As a result, three possible scenarios emerge, which have quite different impacts on what happens to the forests of the Region.
First, those companies not interested or unable to upgrade existing technologies and practices will phase out timber harvesting operations and downstream processing. This will be companies that operate with outdated and inefficient equipment. Their departure from the scene has positive effects where inefficient processing factories are closed down and their concessions are taken over by companies with better management records or state operators. In Indonesia, the government has reduced the number of timber licenses from 500 to 350 over the last three years. It can be assumed that these companies knew beforehand that the licenses would not be extended. They were not interested in upgrading their practices and equipment. While this is not the place to speculate how many additional companies will be phased out it can be assumed that the number will rise.
The second group of companies is seriously pursuing a path towards better forest management. Some companies are interested in increasing the market share for their products overseas or have recently invested in downstream processing facilities. Some are actively searching for ways to reduce the impact of timber harvesting operations such as Innoprise Corporation in Sabah. Innoprise is a particularly interesting case because it receives funds from New England Electric Systems (Massachusetts, USA) to implement reduced-impact logging guidelines. The harvesting guidelines include the following specifications (Pinard, 1994): buffer zones for streams and roads, a formal harvesting plan, pre-felling climber cutting, skid trail planning, tree marking for directional felling, tree felling, skidding, log landings and post-harvest operations. The guidelines are similar to the codes of harvesting practices that have been developed by FAO (Dykstra and Heinrich, 1996) as well as locally in some countries such as Fiji (Ministry of Forests, 1990).
Currently, the area treated by better forest management is still very small. In Indonesia, for example, only six of the 350 forest concessions have been identified as sustainably managed (Ngu, 1996). What is encouraging is that some companies are seriously considering to adapt. For example, Ong (1996, pers. comm.) predicts the present enthusiasm for skyline systems to translate into an increasing use of such systems in Sabah in the near future. However, the available information regarding the application of better management technologies currently comes predominantly from pilot projects. For example, Innoprise Corporation Sendirian Berhad is implementing reduced-impact logging guidelines on only 1,400 ha of its 1 million ha concession (Pinard et al., 1995).
Better management in many cases means better planning and not necessarily huge investments in new systems and machinery. As discussed, some studies even note the cost effectiveness of reduced-impact logging though it is not always clear which actors involved in timber harvesting operations benefit and who has to bear any additional costs. It can be safely assumed that better forest management, i.e. less destructive harvesting, will become more widespread as long as operators have the incentives to follow commonly accepted guidelines. Furthermore, land use conflicts need to be solved and the degree of control and enforcement increased. In Sabah, one professional forester is employed per 93,000 ha of commercial forest reserve (Sabah Forestry Department, 1989, cited in Pinard et al., 1995). In other countries, foresters are responsible for even larger forest areas. This persistent lack of enforcement capacity will substantially affect the current move towards better forest management.
Malaysia and Indonesia have worked towards what can be regarded as creating necessary conditions for sustainable forest management for quite some time. The main risk, with a potential for backlash, is that independent certifiers may assess operations or systems as being "unsustainable" even though concerned operators can prove that they have followed the various guidelines and regulations imposed on them.
The last group of companies - as examples indicate it overlaps partially with the previous group - will follow a very different strategy (for details see EIA, 1996). Convinced that they will face a supply shortage and declining profits in the near future, they are looking for alternative investments in the forestry sector. This is not a new development and for many years companies, have heavily invested in operations in countries such as Myanmar, Papua New Guinea, Vanuatu and the Solomon Islands. But as recent evidence from Cambodia (World Bank et al., 1996, Global Witness, 1996), Surinam (Sizer and Rice, 1995) and Guyana (Colchester, 1994) indicates the interest in logging concessions as far away as Latin America and Africa (e.g., Gabon and even Zimbabwe) is rapidly growing. While some operators are expanding in the region to tap formerly "under-utilized" resources (e.g., Cambodia, Vietnam and Laos) the majority is looking for opportunities in other regions where the cost of acquiring timber concessions is comparatively low, and where forestry departments are not only inadequately staffed and under-funded but also politically marginalized (Colchester, 1994). Some of the approved and/or proposed new concession areas cover vast areas. For example, the area that three Asian companies applied for in Suriname covers almost 3.5 million ha (Sizer and Rice, 1995). This is almost one third of the total Production Forests in Malaysia (10.67 million ha). The concession area under consideration or recently being granted in Cambodia is more than 4.2 million ha (World Bank et al., 1996, Global Witness, 1996). The move to Latin America is not confined to investments in the forestry sector. Investments in other sectors of the economy are expanding too with large companies in the Region looking for opportunities to boost trade links and raw material exports.
While the information on overseas investment in logging concessions is scanty at best and not always reliable, it is obvious that they will affect natural forest management and the wood processing industries especially in Malaysia and Indonesia. In particular, it will reduce the pressure on the natural forests in some countries while increasing it in those countries selected for further investment. As experience in Myanmar (Enters, 1992) and Cambodia (Global Witness, 1996) showed, logging activities are very destructive when concessionaires view their business as risky. The tendency in those cases is to maximize short-term profits. It can therefore be assumed that wherever the capacity to enforce regulations is low, natural forests will suffer further. An example of highly destructive operations by foreign concessionaires is Papua New Guinea, where monitoring is ineffective, approval of plans is nothing more than a formality (1994), and the requirements of the laws are blatantly neglected (DEC, 1995, cited in McCallum and Sekhran, 1996).
The pressures to introduce better forest management practices are increasing in the Region. The international debate on sustainable development and resource use have contributed significantly to raising the awareness in many countries of the Region that not all is well in the forests. Countries such as Malaysia and Indonesia, the two main timber producers, have reacted by amending existing policies not only in response to international pressures but also because it has become apparent that supply will decrease in the medium-term. Some actions have been rather drastic such as the revocation of logging licenses in Indonesia. While partially critical of the international initiative of certification, Malaysia as well as Indonesia have foreseen its significance and put in place the necessary agencies to undertake certification themselves. Indonesia is the main producer developing a national system for timber certification (Varangis et al., 1995). These developments are paralleled by research on reduced-impact logging practices and efforts to transfer the new knowledge to the forest. How soon that will be, is difficult if not impossible to answer. Recently Malaysia and Indonesia opted to jointly establish a set of criteria and indicators for sustainable forest management at the regional level. The technologies for managing natural forests in an environmentally sound manner are available. Most of the proposed changes do not necessarily entail high capital investments. As many authors have pointed out, the focus should be on better planning. This requires a commitment to training, a long-term investment. It is unreasonable to expect practices to change in the near future even if pressure on timber harvesting operators is increased.
As a result, three parallel developments, as discussed above, can be expected. The first two will have a positive effect on natural forest management in the Region while the third will have mixed blessings.
· The number of concessionaires in the main producer countries has already been reduced and will decrease further (see e.g., Anon, 1996a) though new players will enter the scene. Those who do not view natural forest management as a profitable venture will find alternative investment opportunities.· Those concessionaires who continue to operate will slowly adapt their practices and follow national codes of forest harvesting practice or similar guidelines. The impact of certification and the willingness to pay higher prices by consumers concerned about the future of the tropical forests will determine adoption rates, and whether changes will be voluntary, or mandatory.
· As private companies in the forestry sector are profit maximizers they are looking for alternative opportunities where they can use their experience. This explains the interest in obtaining concessions in other countries.
If one accepts that timber certification is not expected to provide significant commercial benefits to producer countries in the Region in the near future, then the conclusion is that not much will change over the next decade and the available technologies will be adopted only slowly. Certification might provide significant rents to individual firms that develop market niche strategies (Varangis et al., 1995). Since no more than 20 percent of the tropical timber market in Europe and the US will be affected by certification, the number of players who can benefit from financial incentives is rather small and will remain small over the next decade.
As a result the chances for sustainable or, at least better management, are not too good. While technologies for change exist and research as well as development projects have provided relevant results and insights, the tropical forest area affected by destructive practices is at the moment growing, though not necessarily in the Region. Incentives for plantation management and for further increasing wood processing facilities outweigh incentives for sustainable forest management. Coupled with the general decrease in available supplies this means that,
· The percentage of timber supply from the natural forests will decrease while the supply from plantations (forestry and estate crops such as rubber) will increase. Any forecasts should be treated carefully but the successful implementation of plantation programmes may reduce the dependence on natural forests as a raw material resource to about 50 percent by the year 2010 in countries such as Indonesia, whereas in other countries the shift to plantations as a raw material source will be considerably slower.· Better forest management practices will be adopted slowly in the forests of the Region. However, limited enforcement capacity, inadequate training and the lack of political will to provide incentive means that the area affected will remain small. It would be unrealistic to expect any major changes by the year 2000. Even in 2010 it can be assumed that no more than 20 percent of tropical forest management will be sustainable.
A more rapid change is not happening because large corporations involved in timber harvesting and processing do not feel pressured enough to change. The result is, that today the top logging nations in the Amazon basin are from Malaysia, Indonesia, Taiwan, China and South Korea, that environmental groups warn of a "forest chainsaw massacre" (Anon, 1996b), and that foreign companies are warned of "a very rough time" by the Environment Minister of Brazil (Anon, 1996c, p. 12). In fact, the criticism of relocating logging operations to other continents has reached such an extent that the term "transnational predators" has been coined (ITTO, 1996b).
