THE WORLD BANK AND FORESTS: 
Back to Destruction?

From Friends of the Earth International's excellent publication "LINK". LINK is available online from http://www.foei.org/LINK/indexlinkissues.html in Spanish and French as well as English.

This article by Simone Lovera from FoE Paraguay (coordina@sobrevivencia.org.py)  came from the most recent issue of LINK, (#94, 9/00), "DEBT AND INTERNATIONAL FINANCIAL INSTITUTIONS"

Imagine that you run an institution that must spend a substantial amount of money every year, and that you are constantly criticized about the social and environmental destruction caused by these funds. After many years of being bashed, you decide to develop an ambitious new policy to address the destruction of at least one important set of ecosystems, forests. Yet ten years later, you discover that this policy is being massively ignored by your very own staff. What do you do?

A) You make sure that your staff implements the policy; or 
B) You weaken the policy and turn back to the destruction of the old days.

This is the main choice at stake regarding the ambitious "World Bank Forest Sector Policy Implementation Review and Strategy" currently being implemented. Amazing as it may seem, the main conclusion of the recently published report by the Bank’s Operations Evaluation Department (OED) about the implementation of its 1991 Forest Policy is that the institution’s own employees have largely failed to comply with the policy. Bank staff have not incorporated the policy into the so-called Country Assistance Strategies and Economic Sector Work. They have largely ignored the Forest Policy in structural and sectoral adjustment lending. Governance and gender considerations, as called for by the Forest Policy, were insufficiently addressed in the large majority of projects, as was the need for equitable land reform. Only marginal results were booked as far as civil society participation in project design and implementation was concerned, and that was only in forest-related cases like natural resource management projects. And most of all, forest-related lending largely failed to promote poverty alleviation, the Bank’s number one objective.

Of course, the OED should be congratulated for publishing such a frank report. Another positive element of the report is that it finally recognizes that deforestation is not primarily caused by the poor, population increase or slash and burn cultivators, but by corruption, globalization, liberalization, adjustment programs, pervasive market failures and illegal logging. If there were a new commitment to address these real causes of forest loss, the Bank´s role in forest protection and sustainable development in general could actually be quite positive. Imagine structural adjustment lending not promoting liberalization!

Bye, Bye, Brundtland
However, the OED report is also very flawed in other parts of its analysis. The most pathetic flaw is its "back-to-the seventies" assumption that ecosystem conservation and development are incompatible. Forget the Brundtland report. Forget the Earth Summit. Forget the Commission on Sustainable Development. They are all wrong: Environmentalists are the enemy of development. After all, forests exist to be financially exploited, so please let's promote logging! In fact, whether or not timber profits actually contribute to poverty alleviation has never been proven. However, the World Bank would be the last institution on earth to properly analyze whether its economic policies contribute to its so-called number one objective. Abundant proof of the opposite -- that forest destruction forms a major cause of poverty, especially amongst women, indigenous peoples and other marginalized peoples -- is simply ignored. 

Another fascinating flaw in the OED report is its presumption that any tree is a good tree. No distinction whatsoever was made between large-scale commercial monoculture tree plantations and small-scale sustainable community forests, agroforestry schemes and other useful community-driven tree planting. Whereas the latter projects -- even when they do not deliver all the ecological services of a forest -- can contribute to poverty alleviation and sustainable land management, the former tend to increase poverty and rural unemployment, exclude local people, destroy biodiversity and freshwater resources and cause other environmental problems. Comparing community tree planting to large-scale plantations is like comparing a pleasant breeze to a hurricane. 

Furthermore, it is illuminating to read how large-scale plantations are defended as being capable of relieving pressure from natural forests, while no words are spent on the question of how to address the unsustainable levels of timber product consumption. Logically, overproduction leads to lower prices and thus higher demand, which makes tree plantations part of a perpetual cycle of ever-increasing production and consumption.

Bye, Bye, Precautionary Approach 
The most important flaw in the OED report, however, remains the fact that the Bank seems to be more concerned about whether it is spending enough money on forests rather than how to address the continued devastating levels of deforestation and forest degradation. Typically, the OED report fails to properly evaluate the impacts of financial support to those sectors
most responsible for deforestation: large-scale agriculture, infrastructure and transportation. Some of the greatest successes of the Forest Policy may be the millions that have not been spent by the Bank on large agricultural schemes, roads, and dams. From this point of view, the policy has undoubtedly failed to boost the forestry department of the Bank, and it is logical that forest staff members regard their work as constituting two percent of the Bank´s portfolio but responsible for 80 percent of its headaches. Or, as someone from the Environment Department once put it, one must be an idealist to remain in a position where one must continually prevent one’s colleagues from implementing "their" projects. 

The World Bank: a Never-do-Good?
So will the World Bank be able to save the world´s forests? For many NGOs and Indigenous People’s Organizations, this is the same as asking whether Shell Inc. can save the atmosphere. The world´s forests and forest peoples will not be saved by rigorously pouring money into them; and most certainly not if these financial flows are concessional loans to the forestry departments of governments. A major problem with such loans is that they have to be repaid. Due to the fact that sustainable forest management still must compete with unsustainable forestry, which externalizes all environmental and social costs, few sustainable forestry projects will succeed in delivering the commercial returns to pay back a loan. Conservation-oriented activities tend to be even less profitable in monetary terms, as the most important benefits of forests tend to be enjoyed by people who do not have the money to pay for them, such as indigenous and other forest-dependent peoples. This is why the few conservation projects which seem to be economically successful, such as eco-tourism, tend to benefit only northern consumers and others with financial resources. 

The abundance of recent analysis on the effectiveness of financial support to forest management has also proven that the most successful projects tend to be projects that the Bank is simply unable to manage: small-scale, and driven by local communities, NGOs and indigenous peoples. The Bank can only direct its money to governments and politely request some participation by civil society. The OED concludes that this participation can often be summarized as "too little, too late", although it should be noted that some Bank procedures have facilitated NGO and indigenous participation in government projects (such as natural resources management) which would otherwise have been entirely closed  to them. Still, the World Bank is obviously not the most appropriate institution to provide grants to those small and micro-scale community projects that have delivered the most promising results during the last decade.

So maybe it is true that less Bank means more forest. This certainly does not mean that the World Bank should ignore the global forest crisis, but it does mean that a "risk averse" attitude when it comes to forests is crucial. Extinct is forever, and 60 percent of the world´s biodiversity can be found in tropical forests alone. We can not risk losing this natural wealth by re-opening primary tropical moist forests for Bank-financed timber extraction, as some Bank officials have proposed.

Instead, let us expand the precautionary approach to other forests, and ensure that this "risk averse" approach is also applied to sectoral policies in agriculture, infrastructure and transportation.

To Comply with Sustainability
And now for the good news: all of this does not require a new Forest Policy. Although the 1991 Forest Policy may not be perfect, it does address poverty, indigenous peoples´ rights, gender issues, governance, the need for civil participation, promotion of protected areas, and, very importantly, the need to prevent negative impacts on forests from adjustment lending, agricultural projects and other sectoral projects. If the current Forest Policy was properly implemented, it could have very positive results.

In this respect, it is revealing that two important processes in the field of global forest policy have taken place over the past two years. One was organized by the Canadian government, the EU and other allies and involved a time and money-consuming process to try to start negotiations for a new Forest Convention. The other process was organized by the World Bank and involved a similarly time and money-consuming process to make the case for a new, weaker, Forest Policy. In both cases, the main motivation seems to have been the fact that these governments and institutions had failed to comply with their own commitments. Yet neither the 1991 World Bank Forest Policy nor existing conventions and agreements like the Convention on Biological Diversity and the Intergovernmental Panel on Forest’s "Proposals for Action" are wild, conservationist dreams which are impossible to comply with. They were developed after sincere debates in which it was recognized that the world´s forests are an essential resource, not only for future generations, but also for the indigenous peoples and other communities that are directly dependent upon these important ecosystems for their livelihoods. This recognition makes forest conservation one of the most important social quests of the coming century. 

Simone Lovera, FoE Paraguay