Davids and Goliaths

The UK Guardian newspaper reports today that the World Bank’s own internal investigation has shown serious shortcomings in its forest policy advice and lending in the Congo, which has endangered the lives of Pygmy forest communities. The bank apparently overestimated the value of timber export revenues, and pushed commercial logging at the expense of paying sufficient to alternative forest use strategies when introducing forest policy reforms.

First, I should say that I have been working as a consultant for the World Bank in Liberia since 2005, and initially my task was to help redesign the forest taxation system. So I know how difficult it can be ‘getting the numbers right’. Also, both the Congo (better known to some of us as Zaire) and Liberia are barely recovering from simply horrifying civil wars, so even basic institutions (in both senses of the word) are at best weak. Second, the good news is that the bank responded to NGOs’ concerns and the bank’s own watchdogs have admitted that there are shortcomings, which can now presumably be corrected.

In Liberia the bank is working within a coalition known as the Liberia Forest Initiative. The overall forest strategy and reform programme is continually discussed within the LFI. During 2005 I worked on forest taxation proposals. Under the Taylor regime revenues from logging were diverted to funding arms which fuelled both regional wars and the civil war, and prompted a UN log export ban. In 2006 the new government established a Forest Reform Monitoring Committee (I represented the bank) to assess all the proposed reforms for commercial, community and conservation forestry (the so-called 3Cs), and to get a new national forest reform law passed. This was completed in that year, and the accompanying regulations have been through a period of public consultation in early 2007.

Under the new law forest communities have to agree before commercial logging rights are granted. Logging companies have to negotiate a social responsibility agreement before logging can start, and must become certified within 5 years. Forest taxation fees are shared between the central government, directly affected communities and districts. A percentage of forest taxes is also ring-fenced for the protected area network. The forestry law requires that annual audits of logging companies are carried out in public, and companies cannot resume logging unless this process is completed; every 5 years an independent assessment of forest management practices must be carried out.

Here forest taxation is deeply embedded within the rule of law, and criss-crossed with checks and balances. The government is keen that commercial logging contribute to economic development (remember this is a small shattered poor country of 3m souls, with an annual budget of a little more than US$100m), but both the President and Minister of Finance have accepted that getting the reforms in place is the immediate task if “sustainable forests, sustainable revenues and sustainable jobs” are to be achieved.

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