World Bank Document

Public Disclosure Authorized

Public Disclosure Authorized Progress Reports and Completion Notes for Activities supported by PROFOR during CY2011

Public Disclosure Authorized PROFOR Secretariat

January 2012 Public Disclosure Authorized

Acknowledgements

The activities reported here were funded by the Program on Forests (PROFOR), a multi-donor partnership managed by a Secretariat at the World Bank. PROFOR finances in-depth forest policy analysis and processes that support the following goals: improving people’s livelihoods through better management of forests and trees; enhancing forest governance and law enforcement; financing sustainable forest management; and coordinating forest policy with other sectors. Learn more at www.profor.info.

PROFOR is a multi-donor partnership supported by:

Progress Reports and Completion Notes for Activities Supported by PROFOR during CY2011

TABLE OF CONTENTS

I. Introduction ...... 1 II. PROFOR’s Portfolio of Currently Active Projects ...... 3 A. Livelihoods ...... 3 The Impact of Artisanal and Small-scale Mining in and around Protected Areas ...... 3 Community Forestry and REDD+ ...... 8 Impacts of China's Forest Tenure Reform: Implications for Policy Makers ...... 11 Mexico Community Forestry Enterprise Competitiveness and Access to Markets...... 14 Scaling up Renewable Charcoal Production in Brazil ...... 19 Benefit Sharing in the Forest Sector ...... 23 B. Financing Sustainable Forest Management ...... 28 Analysis of Alternative REDD+ Financing Instrument Mechanisms, Indonesia ...... 28 Innovative Financing for Sustainable Forest Management in the Southwest Balkans ...... 32 PES Lessons to inform South-South Cooperation on REDD+ in Latin America ...... 36 Redesigning the Mexican Forest Fund to Support Sustainable Forest Management ...... 40 C. Coordination Across Sectors ...... 43 Chile - Forests, Trees and Conservation in Degraded Lands ...... 43 Impacts of Climate Change on Rural Landscapes in Brazil ...... 46 The Role of Forests in Low Carbon Growth Strategies ...... 51 Nepal forest sector strategy ...... 54 Using Forests to Enhance Resilience to Climate Change ...... 57 D. Governance ...... 62 Establishing a Network of Controlled Delivery Units for Forest Law Enforcement ...... 62 Field-testing Governance Building Blocks (Burkina Faso); Field Manual on Forest Governance Diagnostics ..... 65 Reform of State Forest Management in Northeast China ...... 68 Certification and Verification as a tool for SFM in Southeast Asia ...... 72 Workshop on Evaluation of SFM Certification ...... 76 III. PROFOR Activities Completed in CY2011 ...... 79 A. Livelihoods ...... 79 Desert Cloud Forests in Yemen and Oman: Adapting a Unique Ecosystem to Climate Change ...... 79 Forest Connect II ...... 82 Forests and Fragile States ...... 90 Forests and Rural Livelihoods in the Kyrgyz Republic - Development Potentials ...... 95 Improving Rural Livelihoods and Sustainable Dry Woodland Management in Eastern and Southern Africa ..... 99 Lessons Learned from an Agro-Silvo-Pastoral Technology Transfer from Costa Rica to Cameroon ...... 102 Support for Forest Day 5 and for the Dry Forests Symposium...... 106 Targeting Watershed Rehabilitation Investments In Turkey ...... 110 Pro-Poor REDD - How will we know?: A Toolbox for Social Impact Assessment of Multiple-Benefit Forest Carbon Projects ...... 114 B. Financing Sustainable Forest Management ...... 119 Evaluating the Effectiveness of Public Spending in the Forestry Sector ...... 119 Landscape Restoration and Management Forum ...... 122 C. Coordination Across Sectors ...... 127 Assessment of Forest Landscape Restoration Potential in Ghana ...... 127 Biochar Systems for Smallholders in Developing Countries ...... 132 Economic Growth and Drivers of Deforestation in the Congo Basin ...... 136 Forest Indonesia Conference: Alternatives Futures to Meet Demands For Food, Fiber, Fuel and Redd+ ...... 141 Forestry in Sub-Saharan Africa: Challenges and Opportunities ...... 145 Implications of Changes in Agro-food and Fuel Prices on Rural Livelihoods and Forests in Syria ...... 148 Large-Scale Land Acquisition for Agricultural or Natural Resource-based Uses ...... 152 Landscapes of Opportunity...... 157 West Africa Forests Strategy ...... 162 D. Governance ...... 168 Development of National Timber Yield Tables for Mahogany ...... 168 Field-testing Governance Building Blocks (Uganda) ...... 174 Governance Indicators Symposium ...... 177 Information Technology and Management In Forest Governance ...... 180 Liberia Chain of Custody System Project ...... 183 Mekong Regional FLEG Plan Development Phase I ...... 190 Pilot Project on Timber-Supply Audits to Forest Industry in Guatemala INAB ...... 194

Introduction 1

I. INTRODUCTION

The following is a compendium of reports about individual activities supported by PROFOR during Calendar Year 2011. The compendium is meant to complement the full progress report, which is to be discussed with PROFOR’s Advisory Board in March 2012. Because of the length of individual reports, detailed timetables, milestones, and estimates have been deleted from this compendium, but are available from the PROFOR Secretariat on request.

The compendium describes 47 activities supported by PROFOR during CY2011, including 15 new activities, and 32 activities which carried over from the previous year. 27 activities closed during the calendar year.

2 2

PROFOR’s Portfolio of Currently Active Projects 3

II. PROFOR’S PORTFOLIO OF CURRENTLY ACTIVE PROJECTS

A. LIVELIHOODS

THE IMPACT OF ARTISANAL AND SMALL-SCALE MINING IN AND AROUND PROTECTED AREAS

http://www.profor.info/profor/knowledge/impact-artisanal-and-small-scale-mining-protected-areas

Project ID: TF096902 – P116024 Region: AFR PROFOR Thematic Area Percent Date prepared: November 3, 2011 Main: Cross-sectoral coordination 50% Prepared by: Carole Megevand Secondary: Livelihoods 50%

When was the grant originally approved?: 5/12/2010 When was the original planned grant completion date?: 11/30/2011 Have any extensions been approved?: Yes If yes, until when?: 6/30/2012

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note, and if any aspect of these has changed. The proposed activity seeks solutions to address the growing threat of artisanal and small-scale mining (ASM) on rainforests and particularly on National Parks, in a way that can ensure continued socio-economic development without undermining ecological resilience. It will investigate ways for minimizing forest degradation while finding viable economic alternatives for these already vulnerable mining communities. The Minkebe National Park (Minkebe) in Gabon and the Sapo National Park (Sapo) in Liberia are both important protected areas which have suffered gold rushes and population booms in the last decade. The ultimate goal of this activity is to develop strategies for sustainably tackling ASM in and around these protected areas with a view to gleaning valuable lessons on how we might manage this emerging development conundrum in Africa more generally.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. The activity will rely on site-specific diagnostic assessment of the scale and character of the economic activity of artisanal mining and its social, economic and environmental impacts in two National Parks (Minkebe NP in Gabon and Sapo NP in Liberia). A common methodology will be developed and applied in both sites, relying on strategic assessment, stakeholder engagement and development planning. Analytical work will then be conducted based on both the lessons drawn from the two case studies, and derived from existing literature on successful park management, to extrapolate some guidance and recommendations to the various stakeholders on how to reconcile economic activities based on artisanal mining and preservation of high-value ecological sites. The methodological tools will be elaborated and widely disseminated.

Activity I: Project Preparation 1. Desk-based review of situation in Liberia and Gabon. Key output: Desk-based report of ASM in Sapo and Minkebe National Parks, respectively. 2. Methodology Design. Key output: Methodological tool usable for research and analysis. 3. Monitoring and evaluation framework. Key output: Project M&E framework created to measure results. 4. Field Trip Planning ( including activity schedule). Key output: Field trip research plans.

Activity II: Field-based Studies in Minkebe NP and Sapo NP Phase I: Strategic Assessment of ASM and its Environmental and Social Impacts 5. Profiling of ASM Activities in the National Parks. Key output: Field study on each national park. 4 PROFOR’s Portfolio of Currently Active Projects

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. 6. Assess the ecological, social, and economic impacts of mining. Key output: Field study on each national park; refinement of methodological tool. 7. Report Write-up. Key output: Final report for Liberia and Gabon. Phase II: Local Assessment Review and Strategic Plan Development (Focus on Minkebe NP) 8. Refinement of Consultative Workshop Design 9. Participatory Workshops 10. Development of a Strategy Summary Paper 11. Three-day Strategic Planning Workshop. Key output: Successful workshop with results integrated into the country program plan and M&E framework. 12. Develop a Draft Three-Year Strategic Plan for Sustainable Management of ASM in Protected Areas

Activity III: Elaboration of Methodological Tools 13. Drafting of a Methodological Tool. Key output: Draft methodological tool for comment. 14. Review and Input from the Client 15. Finalization, Publication and Dissemination of the Methodological Tool. Key output: Methodological tool that has been peer reviewed and field-tested.

3. Progress to-date. Please describe progress in completing the activities outlined above, and indicate key outputs which have been completed. Activity I: Project Preparation/ Completed 1. Desk-based studies are complete and currently being edited: conducted prior to the field-research trips, the desk based studies for each country have been completed for both Liberia (July 2011) and Gabon (September 2011). Those reports will then be combined with the results from the field-study to produce a overall country report: The Liberia report will be finalized by end of December 2011 while the report on Gabon is planned to be finalized by end of March 2012. 2. A Methodological tool usable for field research and analysis was developed, peer reviewed, and has been field tested in both Liberia and Gabon. The tool was also a useful input for the field research plans as it made the field data collection process more consistent. The methodological tool will be refined based on the field results: a final version of the tool is planned for April 2012. 3. Monitoring and evaluation framework: draft framework to be finalized by end of December 2011. 4. Field research plans (for Phase I) for Gabon and Liberia were completed before field research commenced. Copies of those research plans are included as deliverables. Programme planning for Phase II for Gabon is ongoing.

Activity II: Field-based studies in Minkebe NP and Sapo NP / Phase I has been completed in both Liberia and Gabon. 5, 6 and 7: Two field studies were conducted; one in Liberia in July 2011 and in Gabon in September-October 2011. The Liberia field team carried out a three-week study trip to Sapo National Park in July 2011, where they were able to study the artisanal gold mining occurring around the park and also study the September 2010 miner eviction with a view toward whether it was a sustainable strategy with regard to ASM taking place in and around the park. The Liberia country report will be available by the end of December 2011.

As indicated below, the Gabon program had to be adjusted (see below section 4. Changes in planned outputs): the location of the site to be covered by the field study had to be changed. A first mission was conducted in September September/October 2011. A draft report will be submitted in December 2011 and a final report will be available by the end of March 2012.

Activity III: Elaboration of Methodological Tools 13. The first tool has been developed by the project team. With the initial draft completed in May 2011, it is now PROFOR’s Portfolio of Currently Active Projects 5

3. Progress to-date. Please describe progress in completing the activities outlined above, and indicate key outputs which have been completed. being ‘field tested’ and improved through the project’s studies in Liberia and Gabon. It provides guidance on ASM Baseline Assessments, Interventions-Impact Assessments, and Programme or Intervention Design. The tool will be officially launched at an international convening in early 2012.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. The Gabon program has experienced a few changes in the last several months. In June 2011, the Gabonese government evicted all miners from Minkebe National Park, our planned study site for this project. This situation, which initially was viewed as detrimental to the project, has now – after a few months of engagement meetings – turned into an opportunity. The project originally intended to perform an impact assessment of ASM in Minkebe National Park and to use the results thereof to gather stakeholders and work towards a sustainable solution balancing environmental considerations and livelihood realities. As a part of the negotiated compromise, a study site in Minkebe National Park was ruled out by the government due to its political sensitivity and Ndangui (within Ivindo National Park) was selected instead. The new site has a population of approximately 6,000 people and has experienced many state interventions. There is history of artisanal gold mining there since the 1960s.

For the Phase I trip that occurred in September-October 2011, the team was able to gather a great deal of information from site Ndangui. In the project’s Phase II, the team will develop a strategic plan for how to deal with the issue of ASM in protected areas in Gabon through a sustainable supply chains (SSC) approach. The report expected in March 2012 will describe the ASM occurring at the Ivindo site, assess whether SSC is a feasible response to ASM in protected areas in Gabon and what type of SSC response would be optimal, and determine next steps.

5. Findings, impacts, knowledge generation, and dissemination to-date. Describe any preliminary impacts and findings from the activities which have been completed so far and efforts made to disseminate the findings. A final report for Liberia will be available at the end of December 2011. A draft report for Gabon will be submitted at the same time. A leaflet produced by WWF and Estelle Levin Ltd (the joint venture contracted to conduct this activity) shared initial findings in October 2011. Some of the research findings include:

(i) ASM is motivated by a lack of economic alternatives Consistent with ASM in similar contexts, one of the main motivations to turn to ASM activities is a lack of economic alternatives. In Liberia, a significant number of diggers are ex-combatants and former child soldiers. Many expressed their desire to move ahead and to provide for their families. “We were all involved in the war; we are just doing this to survive. There are no jobs!” said one male digger amongst a group. “We are all here for just one thing; no trouble,” said another digger. “I work because I need to survive… when I spend the money, I feel the pain (that it took to earn it),” said another digger. Some of the diggers on the site were students, whose education was interrupted by successive civil wars, and who were mining to earn enough money for their university tuition.

(ii) Threats on Biodiversity and Environment Researchers believe mining activities will increase and begin to encroach upon Sapo National Park, Liberia’s only national park and part of the Upper Guinea Rainforest, which is one of the most biodiverse ecosystems in Africa and considered a “biodiversity hotspot” (Conservation International)—as well as “virgin” land teeming with gold. Although there is currently no ASM activity taking place inside SNP it faces a real and growing threat by artisanal gold miners. Legal artisanal gold mining activities are occurring directly upstream from the park and are currently operational on its borders with the high possibility of encroachment. The current ASM activity that is taking place around SNP undoubtedly has secondary impact on the integrity of SNP, whether this is through hunting, water siltation or encouraging in-migration and associated population pressures on natural resources. While researchers found that mercury is not in use in and around Sapo National Park, they believe it is a matter of time before it is introduced and adopted to increase efficiency, at the expense of miner, digger and community 6 PROFOR’s Portfolio of Currently Active Projects

5. Findings, impacts, knowledge generation, and dissemination to-date. Describe any preliminary impacts and findings from the activities which have been completed so far and efforts made to disseminate the findings. health in the area and downstream, and the ecological health of Sapo National Park. Now would be a prime time to introduce an educational campaign on mercury and create incentives for its non-use. Findings in Gabon are still being analyzed but researchers noted the clearance of primary forest, subsequent erosion, miners’ erection of dams, and deep pits stretching potentially 1-mile long with no backfilling system in place. Mercury was not in use at the Ivindo NP site.

(iii) Potential opportunities related to "sustainable ASM" Given the active interest by Gabonese authorities to develop a sustainable ASM program and the favorable field visit by researcher team, there seems to be potential for the development of ‘sustainable’ artisanal gold mining in Gabon, notably through the “Sustainable Supply Chain” (or Green Gold). A potential issue and something researchers will need to address is the overlap between large-scale gold mining concessions and ASM. Almost all artisanal mining camps find themselves now to be inside an exploration concession for a gold mining company. This is not an issue at this stage, but will be once the companies decide to go for extraction. This is something researchers will examine further in Gabon in phase II.

In Gabon, the project has earned positive government attention and fostered interest in creating a win-win solution to the ASM in protected areas phenomenon. As evidenced by the June 2011 eviction, followed by its “change of heart” and subsequent engagement with the project, the government is now interested in creating a managed- space that allow Gabonese miners to mine legally whilst also contributing tax revenues to the government and respecting Gabon’s pristine forests. In Liberia, where capacity is much lower, there does not seem to be interest on the part of the government to change their strategy on ASM in Sapo NP or to deal with the issues of ASM occurring around it, although the publication of the report and continued engagement (outside the scope of this project) could serve as a basis for change.

ASM-PACE project organizers are in discussions with organizers of complementary projects on how to achieve joint goals, such as collaborating on an effort to deal with mercury in the ASM-PACE Methodological Tool, and broadcasting study results. The activity has also attracted the interest of people working on ASM and conflict minerals supply chains in the Great Lakes region.

Thanks to PROFOR’s support and leadership, there is a reinvigorated discussion on how to address ASM’s environmental impacts in one of the world’s most important ecosystems.

PROFOR’s Portfolio of Currently Active Projects 7

7. Implementation Performance. How would you characterize implementation performance? What unexpected opportunities have arisen and how have you been able to take advantage of these? Have there been unanticipated obstacles in implementation? Do you expect any significant delays in completing this activity? What measures are being taken to address any shortcomings in implementation? The project was designed to take place in Gabon’s Minkebe National Park and Liberia’s Sapo National Park. In Gabon government-led evictions took place in the Minkebe site and the subsequent political tensions around the park have resulted in it being ruled out as a potential study site. However, as previously described, the government of Gabon now has a high interest in working on ASM and working with the research team to design a win-win solution to harness ASM’s economic potential while also contributing to conservation goals. Delivery of the Gabon report has thus been significantly delayed and is now planned for March 2012. Now that the Gabon government is looking at possibly re-opening the Minkebe gold mining camp, the findings from the Ndangui and Longo study sites will be used to assist in developing a strategy –such as the Sustainable Supply Chain SSC- for the new Minkebe Gold mining camp and beyond.

8. Next steps. What happens now? How will the project be brought to closure? Project is on-going. The key outputs for this project will be delivered in time. The project itself is expected to continue past the original PROFOR funding, thanks to new sources of funding and interest from other national stakeholders.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? Yes, the ASM-PACE team is in active discussions to build on the lessons learned in Gabon and Liberia and apply them to other sites of key ecological importance. Potential sites may include DRC and/ or Madagascar. This is still to be determined.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources which have been mobilized.

PROFOR funding $ 149,045.00 Other sources of funding (describe below) $ 300,000.00 Total $ 449,045.00

What other sources of co-financing have been mobilized? What amounts are involved under each source of co- financing? WWF-Netherlands: US$30,000. Grant made to allow for additional detailed research into the Global Desk-based Solutions Study. WWF CARPO, WWF DRC, and Africa Biodiversity Collaborative Group (via USAID funding): US$10,000.00 for a detailed ASM baseline and scoping studies for two national parks – Itombwe and Kahuzi-Biega (a World Heritage site) -- in DR Congo. At this point, the funding is purely to ensure a rich case study of DR Congo. There are active discussions with other donors to potentially conduct programmatic activities in the DRC. There are active discussions with other donors to potentially conduct programmatic activities in the DRC. Tiffany & Co. Foundation and WWF USA: US$240,000 over two years to support the entire ASM-PACE program.

8 PROFOR’s Portfolio of Currently Active Projects

COMMUNITY FORESTRY AND REDD+

http://www.profor.info/profor/knowledge/community-forestry-and-redd

Project ID: TF098987 Region: Global PROFOR Thematic Area Percent Date prepared: December 21, 2011 Main: Livelihoods 50% Prepared by: Gernot Brodnig Secondary: Financing SFM 50%

When was the grant originally approved?: 2/5/2011 When was the original planned grant completion date?: 12/31/2012 Have any extensions been approved?: No If yes, until when?: Click here to enter a date.

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note, and if any aspect of these has changed. The main purpose of this project is to contribute to the debate about the ability of community forestry approaches to strike a balance between forest management, livelihood enhancement and carbon sequestration in the context of emerging REDD+ architectures (national, regional or project level accounting/implementation). It will focus on the following policy questions: • What are the cost factors and non-economic barriers to the adoption of REDD+ schemes at community level? • How are synergies and trade-offs between carbon sequestration and livelihood goals identified and managed? • What role do different benefit- and power-sharing approaches play, and how are they differentiated in the respective REDD architectures? • How can communities effectively and efficiently engage with globalised carbon markets? • What responsibilities can communities assume in terms of MRV? Addressing and nuancing these questions will help to develop guidance for policy makers and project proponents to design and implement REDD+ interventions that involve and benefit communities.

a) Review community forestry experiences: This secondary data review will focus on a) examining the requirements at the community level for each of the potential REDD architectures; and identifying the gaps between these requirements and current good practice in CBNRM; b) reviewing how CBNRM practices would need to change in light of an added carbon objective. The output from this activity will be a synthesis report detailing good practices and lessons learned.

b) Validate findings through case studies: We will select up to three field sites in three countries (tentatively Nepal, Tanzania and Bolivia), and conduct both quantitative assessments on the economic feasibility and viability of different community REDD+ scenarios, and a qualitative analysis on a range of social and institutional dimensions such as inclusion, accountability and empowerment. The project will largely rely on the protocols available through the International Forestry Resources and Institutions (IFRI) initiative, which contain longitudinal data on biophysical, socio-economic and institutional variables. The expected output is a series of case study notes that will focus on specific criteria and barriers such as tenure, social capital, access to credit, etc.

c) Develop guidance for policy makers and project managers: The two previous activities will inform the PROFOR’s Portfolio of Currently Active Projects 9

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. development of guidelines for the REDD+ policy and operations community on mainstreaming community forestry in REDD+ strategies and projects. The output for this activity is a short Guidance Note.

3. Progress to-date. Please describe progress in completing the activities outlined above, and indicate key outputs which have been completed. a) Concept Note Review: We held a Bank-wide concept note review on September, 22, 2011 and received a host of useful comments which helped us to sharpen and narrow the main policy questions of the project. b) Revision of Concept Note: Based on the suggestions received from the peer reviewers and other staff, we amended the concept note, and sent it out for another virtual review. c) Draft TOR: We developed draft TOR for consultancy services to implement the ESW, which also include a revised work plan to reflect the delays. d) Re-categorization from KP to ESW, given the target audience beyond the Bank. e) We held consultations with Arun Agrawal (University of Michigan), who has expressed his interest in this project, and would be able to link it to a couple of related activities he is currently undertaking. f) Based on e), we have initiated the procurement process under a sole-source arrangement, justifiable in light of the centrality of the IFRI data for this project.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. no

8. Next steps. What happens now? How will the project be brought to closure? Our priority is finalization of procurement and project launch in January 2012.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? Too early to tell.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources which have been mobilized.

PROFOR funding $ 147,500 Other sources of funding (describe below) $ 48,000 Total $ 195,500

What other sources of co-financing have been mobilized? What amounts are involved under each source of co- financing? $48,000 from the Bank’s Administrative budget (SDV)

PROFOR’s Portfolio of Currently Active Projects 11

IMPACTS OF CHINA'S FOREST TENURE REFORM: IMPLICATIONS FOR POLICY MAKERS

http://www.profor.info/profor/knowledge/impacts-china%E2%80%99s-forest-tenure-reform-implications- policy-makers

Project ID: TF099436 Region: EAP PROFOR Thematic Area Percent Date prepared: January 17, 2012 Main: Livelihoods 50% Prepared by: Klaus Deininger, Jintao Xu Secondary: Governance 50%

When was the grant originally approved?: 3/22/2011 When was the original planned grant completion date?: 12/31/2012 Have any extensions been approved?: No If yes, until when?: Click here to enter a date.

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note, and if any aspect of these has changed. By analyzing the information collected in two questionnaire-based surveys administered to households, the proposed activity will provide up-to date and policy relevant analysis of key aspects of China’s forest tenure reform, in particular (i) the impact of reforms on households’ livelihood strategies and investments ; (ii) the extent to which reforms allowed emergence of transparent and well-functioning markets for forest land to attain efficiently sized operations rather than excessive fragmentation or concentration; (iii) the nature and impact of collective action at the village level to effectively manage forests and provide local public goods; and (iv) determinants of households’ labor allocation and the extent to which local labor and credit markets function and allow households in forest-dependent villages to make the best use of their endowments. The fact that questionnaires were specifically designed to provide answers to these questions and the ability to exploit spatial and temporal variation in initial conditions and nature or changes of local regulations will make results of immediate policy relevance. Results from the analysis will be disseminated via working papers, workshop and conference presentations, and a seminar with policy makers in Beijing at the end of the period that might result in a published proceedings volume.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. Clarification of hypotheses and policy questions: This phase will relate the questions that can be answered based on the household survey to the existing literature on China’s forest tenure reform. In addition, it will broaden the review to include international literature and highlight the extent to which the same issues are encountered in other contexts that could therefore be informed by the results from our analysis. Data cleaning and descriptive analysis: Once data for both rounds of survey are available in fall 2011, data will be cleaned and descriptive statistics generated. This will provide the basis for descriptive statistics to give an overview of how China’s forest tenure reforms may have affected the outcomes of interest in the aggregate. Econometric analysis: More sophisticated analysis will be needed to ensure that other factors are controlled for and, more importantly from a policy perspective, identify conditions that were particularly conducive or detrimental to reform impacts materializing. This will be done for each of the main variables of interest. Writing and presentation of working papers: The main focus of the analysis will be to explore impacts of forest tenure reform on investment, operation of land markets, collective action at the local level, credit markets, and overall economic activity and household welfare. All of the results from the analysis will be summarized in working papers. These will be presented at academic conferences and workshops for policy makers. Policy seminar: To disseminate results among Chinese policy makers and to allow discussion of their link to and implications for ongoing reform efforts, a seminar for policy makers will be conducted in Beijing in fall of 2012 once all of the analysis has been completed. It is envisaged that the papers presented at this event will be published 12 PROFOR’s Portfolio of Currently Active Projects

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. in book form.

3. Progress to-date. Please describe progress in completing the activities outlined above, and indicate key outputs which have been completed. Hypotheses and policy questions have been developed through internal and exterior discussion, a practical work plan has been written up which lays out expected research and policy questions, and papers to be produced in the project period. Dataset development is near completion. It includes three type of information: household data, village data and GIS data. Preliminary descriptive statistics were produced, mostly at village level.

A policy overview report was drafted which utilized descriptive statistical data to illustrate progress and performance achieved in China’s collective forest tenure reform in the last decade. The report covered useful information which sheds light on village choice of tenure structure, immediate results in forest management and farmer income, as well as important characteristics of tenure reform. The overview report also sheds light on directions of rigorous empirical analyses.

Empirical analysis of village tenure choice. A draft paper is 70% complete which includes the background of reform, analysis of political and economic settings in which the reform was performed, and the impact of these factors on tenure choice. A cross-sectional data analysis was carried out.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. Farmer association analysis: Our survey found very little development in voluntary farmer participation in associations, therefore we did not obtain sufficient information about such associations, making empirical analysis in this regard difficult, if not impossible. We plan to drop this analysis and increase the weight of analyses on the impact of the reform on farmer welfare and resource allocation (e.g. labor).

5. Findings, impacts, knowledge generation, and dissemination to-date. Describe any preliminary impacts and findings from the activities which have been completed so far and efforts made to disseminate the findings. The outcomes of forest tenure reform are diverse across villages, regions and provinces, which reflects the strong influence of local political, economic and natural factors. Understanding these factors and the magnitude of the impacts will help government to make more prudent policy reform.

Harvest, afforestation and forestry income seemed to be highly correlated with the level of individualization. Precise impacts of the reform have to be examined through rigorous econometrics.

Researchers o f the project maintain collaboration with domestic researchers. Works have been done in parallel at the World Bank headquarters and in Beijing. The team has also kept in touch with policy makers of the State Forestry Administration (SFA) and the Bank country office and communicated on policy issues to be addressed in the project.

8. Next steps. What happens now? How will the project be brought to closure? We will continue to carry out analyses on impacts of the reform in several dimensions, so that we will be able to inform the government with multiple inputs. The project will be brought to closure when the dissemination workshop is held and papers and reports are published.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? Tenure reform is a long-term and dynamic process. Findings of this project will serve near term goals. New policy issues will come up and warrant continued academic support from analyses like this one. The need for similar evaluation may arise from the state forest reform which is in pipeline. There is an ongoing PROFOR project led by the Bank country office (with Jintao Xu) to explore directions of state forest reform. Reform policy is expected in 2- 3 years.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources which have been mobilized. PROFOR funding $ 148,800 Other sources of funding (describe below) $ 83,600 Total $ 232,400 What other sources of co-financing have been mobilized? What amounts are involved under each source of co- financing? Beijing University, the Rights and Resources Initiative, the Environment for Development network at Gothenburg University, the University of Berkeley, RFF, and Indiana University.

14 PROFOR’s Portfolio of Currently Active Projects

MEXICO COMMUNITY FORESTRY ENTERPRISE COMPETITIVENESS AND ACCESS TO MARKETS

http://www.profor.info/profor/knowledge/community-forestry-enterprise-competitiveness-and-access-markets- mexico

Project ID: TF094818 Region: LAC PROFOR Thematic Area Percent Date prepared: January 5, 2012 Main: Financing SFM 50% Prepared by: Robert Davis Secondary: Livelihoods 50%

When was the grant originally approved?: 5/1/2009 When was the original planned grant completion date?: 12/31/2009 Have any extensions been approved?: Yes If yes, until when?: 12/31/2012

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note, and if any aspect of these has changed. To support the development of more effective and efficient forest policies, appropriate to Mexico’s unique Community Forestry Enterprise (CFE) sector, and to strengthen the competitiveness potential of the sector and expand opportunities for: (i) development of commercially viable and sustainable forest management and forest-based enterprises by forest ejidos and communities; (ii) enhanced contribution of the CFE sector to employment generation and poverty reduction in communities of the rural poor; (iii) assistance to the overall economic development and sustainability of Mexico’s forest sector.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. A two phase process is proposed: The first phase would (i) create the stakeholder participation framework and develop ownership among key stakeholders on the process, outputs and outcomes; (ii) provide training to professionals and technicians for data collection; ( iii) carry out the initial diagnostics and analysis required to identify and agree upon the priority products and value chains. More specifically it would provide for: (i) Stakeholder management , training and participation: • Research and analysis of recent efforts to determine economic and financial benefits of Mexican CFEs (as a background and context for training and capacity building on the themes); • Develop training materials for Mexican forestry professionals and technicians on approaches for determining economic and financial benefits for CFEs; • Develop and implement an effective stakeholder participation to ensure the proper orientation of the work to be carried out and final ownership of the results, conclusions and recommendations by the key actors in the community forestry sector; • Develop consensus around objectives and key questions, targets and desired outcomes; • Establish a working group with key stakeholders and design workshops for data collection and analysis • Data collection toolkits for use in study and dissemination

Deliverables: (i) Review of economic and financial approaches used in CF in Mexico; (ii) Conceptual and practical training package for forest economic/financial analyses of Mexican CFEs; (iii) economic/financial data collection plan and toolkits for CFEs; (iv) workshop report.

(ii) Research and analysis: PROFOR’s Portfolio of Currently Active Projects 15

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. • Field data collection in select CFEs according to stakeholder agreements; design workshops • Review and analyze data collected through the activity to determine (a) Internal Rates of Return, cost structure and profitability for CFMs of different scenarios and typologies, (b) cost drivers which increase or decrease CFMs competitiveness, including organization, technology, supply chain and policy factors, (c) written report summarizing findings including aspects such as competitiveness of CFMs, constraints to CFM in sample areas, market opportunities and value of certification.

Deliverables: (i) Economic and financial data collection report for CFEs; (ii) Economic and financial data analyses for CFEs and summary report; (iii) closure workshop report including review of findings and recommendations for a possible second Phase.

(iii) Phase I results and conclusions: Stakeholder processes and working group established, analytical reports, training materials and results and findings for financial and economic analyses for CFEs

Phase II − The second phase (to be financed at a later date) is proposed to provide the in-depth analysis required to support the development and justification of specific policy, incentive, and public expenditure recommendations to the Government of Mexico and the National Forestry Commission (CONAFOR) to enhance the competitiveness of community forestry. More specifically: (i) Stakeholder management and participation: • continued functioning of working group; • private sector and community forestry business development forum for policy development and vetting of recommendations; and • results dissemination (see Section 8, below)

(ii) Research and analysis: • Priority products and value chains − o analysis of the agreed products, their value chains for community forestry, and value chain governance; o determination of the competitiveness of CFEs in the selected products and markets; o identification of improvements needed to enhance CFE competitiveness in the short, medium and long terms; o development, with key stakeholders of potentially competitive value chains, of the strategy (-ies), organizational schemes (potential clusters) and set of products, investments and technologies to improve competitiveness in the short-term within selected markets; • Policy and incentive frameworks − o economic and financial analysis of cases of competitive CFEs (both market and community perspectives); o analysis of potential capital markets for community forestry investment; and o cost/benefit analysis of proposed alternatives for improving short-term competitiveness;

(iii) Results and conclusions: • Integration of results of components and others studies made by partners • Development of specific policy, incentive, and public expenditure recommendations for: o enhancing competitiveness of CFEs in prioritized products and value chains; and o promotion of possible clusters with potential to enhance CFE competitiveness.

3. Progress to-date. Please describe progress in completing the activities outlined above, and indicate key outputs which have been completed. While the program has taken longer than originally expected to complete tasks and activities, to date progress is very encouraging. Several high quality analyses, guidelines, tools, training templates and comprehensive reports 16 PROFOR’s Portfolio of Currently Active Projects

3. Progress to-date. Please describe progress in completing the activities outlined above, and indicate key outputs which have been completed. have been produced by the Bank team together with stakeholders, CONAFOR and North Carolina State University. Additionally, two training workshops have been completed with active participation of both public and private sector stakeholders. Activities enabled assistance to guide beneficiaries through a stepwise learning process from theoretical and practical exercises to designing their financial and economic analyses, especially structured for community forestry and other SMEs.

The following are the resulting outputs to date: • Guidelines for financial and economic evaluations for community forestry (Spanish and English versions); also a longer version in English has been completed; • Training materials for financial and economic evaluations for community forestry (English and Spanish Versions); • Non-market valuation of forest goods and services: Training presentation (Spanish); • Elements of a toolkit for data capture for community forestry for financial and economic evaluations including: (i) data capture guidelines (Spanish); (ii) data processing spreadsheet (Spanish), and (iii) data capture survey (short and longer version in Spanish); • Capacity building services to CONAFOR and private and public stakeholders provided to date are: (i) Stakeholder workshop (Nov. 2010); and (ii) Stakeholder workshop (July 2011). Reports from each of the events are included in PROFOR files.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. The initially proposed analysis of value chains was deferred for the prospective follow-up Phase II. This was decided in light of findings from the initial assessment and the limited contribution of this work in meeting the objectives of the overall activity.

As a result of this initial adjustment of the activity, new outputs were included, specifically those related to building stakeholder management capacity, training and participation: (i) review economic and financial approaches used by CFE in Mexico; (ii) develop conceptual and practical training package for forest economic/financial analyses of Mexican CFEs; (iii) economic/financial data collection plan and toolkits for CFEs; and (iv) workshop reports. (These additional activities are already reflected in the list above.)

5. Findings, impacts, knowledge generation, and dissemination to-date. Describe any preliminary impacts and findings from the activities which have been completed so far and efforts made to disseminate the findings. One important finding is the consistent stakeholder perception and demand for data and analytical information and assessment related to the business development of CFEs. This demand was clearly expressed during the two participative workshops.

As numerous ongoing ventures and projects could benefit greatly from the activity’s outputs, participant stakeholders have urged the completion and dissemination of expected outputs as soon as possible.

Considering that in one form or another, 80% of Mexico forests are under community property and the fact that about 8,400 communities nationwide own primary forest, there is an urgent need to develop tools that contribute effectively to helping Mexico’s CFEs increase their competitiveness and market place knowledge and information.

Given the consistent trade deficit of the forest sector (over US$10 billion annually) and the CFE sector’s modest contribution to Mexico’s GDP, solid and reliable financial and economic returns for Mexican CFEs could play an important role to reduce this deficit. Policy incentives and capacity building aiming at promoting business development strategies are urgently needed.

PROFOR’s Portfolio of Currently Active Projects 17

5. Findings, impacts, knowledge generation, and dissemination to-date. Describe any preliminary impacts and findings from the activities which have been completed so far and efforts made to disseminate the findings. Stakeholders and partners involved in the activity requested follow-up activities (a second phase of information exchange and dissemination).

Knowledge outputs resulting from this activity such as Guidelines for financial and economic evaluations of community forestry, a Toolkit for data capture for CFEs and valuation of forest goods and services and related training material have the potential for extensive dissemination, particularly among Spanish and English speaking countries.

Also, this activity has made a significant contribution in laying the foundations and assisting with programmatic justifications for CONAFOR/World Bank reengagement in preparation of an important lending operation of over US$340 million through the Specific Investment Loan Forest and Climate Change project.

CONAFOR has been the lead Mexican government agency to promote Mexico’s increased role in regional and global policy dialogue on forests and climate change; particularly, on moving forward in the global agenda the role of community forestry within the framework of forests and climate change. Mexico’s delegation during the UNCCC COP16 in December 2010 in Cancun played a central role in facilitating key outcomes related to the REDD+ regimen. CONAFOR’s active participation on behalf of the Mexican Government in the FCPF and FIP Sub- committees has highlighted within the REDD+ frameworks the importance of community forestry and its potential to contribute to REDD+ national strategies and FIP national investment programs.

18 PROFOR’s Portfolio of Currently Active Projects

8. Next steps. What happens now? How will the project be brought to closure? The final phase of this activity includes delivering: (i) spreadsheet and format for data collection and systematization; (ii) data collection through support from CONAFOR’s PROCYMAF technical assistance specialists; (iii) PROFOR sponsored tasks will also play a central role in training specialists; further assistance will be offered through specialized consultants to supervise the field team for troubleshooting and data collection (November – April); (iv) data processing systematization and analysis.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? Considering that extensive areas of forestlands are under control of communities, particularly in tropical forests, and given the increased global attention to community forestry, this project offers extensive potential for replication, particularly in Central America and Amazonian countries. Specifically, recent attention to forest ecosystems and their role in poverty alleviation and climate change mitigation demands increased capacity in community forestry, particularly in the areas of improving competitiveness and access to markets. This focus on community forestry further increases the likelihood of replication of this initiative globally.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources which have been mobilized.

PROFOR funding $ 150,000 Other sources of funding (describe below) $ 80,000 Total $ 230,000

What other sources of co-financing have been mobilized? What amounts are involved under each source of co- financing? US$80,000 from CONAFOR, representing 35% of the total costs of the activity.

PROFOR’s Portfolio of Currently Active Projects 19

SCALING UP RENEWABLE CHARCOAL PRODUCTION IN BRAZIL

http://www.profor.info/profor/knowledge/brazil-scaling-renewable-charcoal-production

Project ID: TF099987 - P120637 Region: LAC PROFOR Thematic Area Percent Date prepared: December 7, 2011 Main: Cross-sectoral coordination 60 % Prepared by: Garo Batmanian Secondary: Governance 40 %

When was the grant originally approved?: 3/8/2011 When was the original planned grant completion date?: 3/30/2012 Have any extensions been approved?: Yes If yes, until when?: 6/30/2012

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note, and if any aspect of these has changed. The objective of this activity is to carry out analytical studies to identify institutional and financial arrangements which could help mainstream various successful models to promote the development of Programmatic Clean Development Mechanism (CDM) projects aiming at GHG emissions reductions and net removals from the forestry and iron supply chains in the State of Minas Gerais.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. The project was comprised of 3 key activities: (i) Identify potential government and financial partners and organizations that can participate in an institutional arrangement suitable for a program aiming at scaling up forest plantation for charcoal production in the State of Minas Gerais: a. Collection, systematization, synthesis and analysis of existing studies and data (ii) Provide support for workshop and a participatory process to define integrated policy development and financial strategies: a. Workshop and survey b. Indicators and quantitative analysis (iii) Conceptualize achievable institutional and financial arrangement models, achievement indicators, and the design and implementation of monitoring and evaluation schemes for plantations to be financed by the program: a. Final report and preparation of recommendations

Expected Outputs: (i) Inception report and work plan (ii) Stakeholder workshop (iii) Survey and qualitative analysis (iv) Final report and recommendations

Expected Outcomes: (i) key government agents and financial institutions (private and public) engaged in ensuring the design of efficient institutional and financial arrangements; and (ii) proposal for institutional development strategies and secure financing mechanisms required to enhance the renewable charcoal production to be implemented in the State of Minas Gerais that would enable designing a Programmatic CDM initiative to promote 1.5 million hectares of plantations.

20 PROFOR’s Portfolio of Currently Active Projects

3. Progress to-date. Please describe progress in completing the activities outlined above, and indicate key outputs which have been completed. To date the following tasks and activities have been completed: (i) Inception report and work plan A document, “Identifying Financial and Institutional Arrangements for Scaling up Renewable Charcoal Production in the State of Minas Gerais” was delivered in October, 2011. The report includes a methodological approach, operational objectives, baseline information and a work plan.

(ii) Collection and analysis of existing studies and data Collection, synthesis and analysis of data and information including literature review, baseline data analysis (e.g. company reports, websites) made available by primary stakeholders as well as by the CDM Executive Board. As the objective of this initiative is having an extensive understanding of the Programmatic CDM for specific forestry and pig iron sectors in the State of Minas Gerais, analytical work included: (1) data and information review on the features of pig iron production for steel in the State of Minas Gerais; (2) data collection from major stakeholders involved in renewable charcoal production, sustainable forestry and carbon markets in the State; (3) assessment of barriers, risks, opportunities and measures to mitigate GHG emission in the forestry and pig iron sectors; (4) development of comparative tables of the CDM modalities; (5) identification of main methodologies approved by the Panel of Methodologies under the CDM Executive Board that can be applied to renewable charcoal production; (6) presentation of the potential of a CDM Program of Activities for renewable charcoal production in the State of Minas Gerais; (7) establishment of the main parameters for successful development of programmatic CDM project.

(iii) Stakeholder participative workshop A workshop with participation of 20 stakeholder representatives was conducted on December 5, 2011 in Belo Horizonte, Minas Gerais, which allowed harmonization of knowledge and information among local stakeholders involved in renewable charcoal production, sustainable forestry, carbon markets and charcoal consumers ( steel sector) in the state of Minas Gerais. Participants included governmental agencies (at the State level), private companies ( producers or consumers of charcoal) , non-governmental organizations (NGOs), trade unions, financial sector entities and State government officials. The event allowed exploring the potential of a Programmatic CDM for renewable charcoal production at the State level. Also the event facilitated a participatory analysis of the challenges of a potential Programmatic CDM for renewable charcoal production in the State of Minas Gerais; and also provided the opportunity to explore, on a preliminary basis, the main features of a coordinating entity to promote a successful implementation of a programmatic CDM project. A survey was applied to those present and the event. I report will be prepared which will include quality information to complement the survey, the qualitative analysis and final report and recommendations.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. N/A

5. Findings, impacts, knowledge generation, and dissemination to-date. Describe any preliminary impacts and findings from the activities which have been completed so far and efforts made to disseminate the findings. As a result of initial analytical studies and stakeholder inputs, some preliminary findings include: (i) The potential for scaling up the use and production of renewable charcoal in Brazil is very significant. Minas Gerais has 62 pig iron mills and is the largest national producer of steel and iron, responsible for 60% of the national production. Moreover, the fact that Minas Gerais has approved a mandate that by 2018 will result in implementing sustainable firewood and charcoal production practices virtually bans the use of charcoal resulting from deforestation by 2018; by that date 95% of charcoal consumed in the State must come from plantations. (ii) Successful business cases of forest plantation for charcoal production in Brazil, including one CDM project financed by the Prototype Carbon Fund in the State of Minas Gerais, are now in operation. Therefore, there is a general perception that CDM projects may be an important tool to offer incentives for large-scale adoption of forest plantations for charcoal. Programmatic CDM can be a reasonable alternative for establishing a new model for the PROFOR’s Portfolio of Currently Active Projects 21

5. Findings, impacts, knowledge generation, and dissemination to-date. Describe any preliminary impacts and findings from the activities which have been completed so far and efforts made to disseminate the findings. production of pig iron for steel. All of this makes this initiative critical for meeting the sub-national policy while contributing to global climate change mitigation.

More specifically this analytical and program design initiative is expected to contribute to decreasing the pressure to clear cut primary forest from Cerrado ecosystems for charcoal while reducing CO2 emissions in the State of Minas Gerais through successful mechanisms for promoting forest plantations, thus contributing to Brazil’s low carbon economy efforts. Charcoal is one of the main sources of energy used in the production of pig iron for steel in Brazil. The vast majority of the current charcoal production is from unsustainable and often illegally harvested native forest resources from the Cerrado area, leading to severe environmental deforestation and forest ecosystem degradation. The State is the largest national producer of steel and iron, with 62 pig iron mills and responsible for 60% of the national pig iron production. In 2009 the State of Minas Gerais approved the Law 18365/09 that virtually bans the use of charcoal from deforestation by 2018, as it mandates that 95% charcoal consumed in the State must come from plantations. In order to supply the industry with charcoal from plantations the State should have about 1.5 million hectares under plantations.

Pig iron in Brazil is a US$2 billion business primarily exports (60%). In addition to Minas Gerais, the State of Para accounts for the steady increase (40%) in total Brazilian pig iron production. As in Minas Gerais, energy for pig iron production comes from charcoal, and meeting these energy demands results in hundreds of thousands of deforested hectares. Thus this PROFOR sponsored activity is critically important to provide tools that will direct efforts to prevent deforestation and forest degradation. In October 2010 KfW, the World Bank and the Government of the State of Minas Gerais signed a MoU to assess the potential for developing a programmatic CDM to promote GHG emissions reduction and removals from the forest and iron industry supply chain by mainstreaming the Plantar Business Model supported by the Prototype Carbon Fund project.

7. Implementation Performance. How would you characterize implementation performance? What unexpected opportunities have arisen and how have you been able to take advantage of these? Have there been unanticipated obstacles in implementation? Do you expect any significant delays in completing this activity? What measures are being taken to address any shortcomings in implementation? A consulting firm hired in mid 2011 is leading the implementation of the overall activity through a four-member, expert team specializing in analytical studies on environmental issues, particularly on CDM methodologies, forestry, finance and on such topics as forestry and steel iron supply chains and environmental public policy and legislation at federal and state level. So far tasks and activities have been implemented according to the terms of reference, including the completed Inception report, work plan and agreed upon timetable.

8. Next steps. What happens now? How will the project be brought to closure? Three main tasks and activities need to be completed during 2012: (i) Survey and quantitative analysis; (ii) Elaboration of indicators; and (iii) Report and recommendations. 22 PROFOR’s Portfolio of Currently Active Projects

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? Although it is too early to draw conclusions about the replication potential of this initiative, its potential for replication adapted to other specific conditions is substantial. At the very least, replication of the core elements of the analytical work could be extremely useful for the iron industry in the State of Para, currently contributing 40% of total Brazil pig iron production.

As charcoal is an important source of reducing power to convert iron ore into primary iron and thermal energy beyond Brazil, an adapted version of the methodology used in this initiative could have a large replication potential globally. While the case of charcoal production and demands by the supply chain of pig iron for steel production in Brazil is somewhat unique, the methodology, scope, research framework and terms of reference for the analytical work adapted to specific country conditions could be extremely useful for those countries facing challenges similar to those of Brazil, including China, India, Indonesia, and Nigeria.

Also, these experiences could be useful for smaller countries where firewood and charcoal are the main source of thermal energy for rural households, brick industries, and mid-size agro-industrial processing plants, such as the case of Guatemala in Central America(where about 79% of households use firewood as the main source of energy) and Ghana in Africa (where 63% of total energy demands are met by forest resources).

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources which have been mobilized. PROFOR funding $ 50,000 Other sources of funding (describe below) $ 70,160 Total $ 120,160

What other sources of co-financing have been mobilized? What amounts are involved under each source of co- financing? Co-financing provided by the Carbon Fund. Out of the total amount, $48,170 has been spent from March 2011 up to date.

PROFOR’s Portfolio of Currently Active Projects 23

BENEFIT SHARING IN THE FOREST SECTOR

http://www.profor.info/profor/knowledge/making-benefit-sharing-arrangements-work-forest-dependent- communities

Project ID: P122024 Region: Global PROFOR Thematic Area Percent Date prepared: December 8, 2011 Main: Livelihoods 80% Prepared by: Diji Chandrasekharan Behr Secondary: Governance 20%

When was the grant originally approved?: 3/31/2010 When was the original planned grant completion date?: 3/28/2011 Have any extensions been approved?: Yes If yes, until when?: 6/5/2012

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note, and if any aspect of these has changed. The objective of this study is to inform the design of benefit sharing arrangements in initiatives to reduce emissions from deforestation and degradation and enhance carbon stocks (REDD+). The study will draw on experiences in the forest sector provide insights on how REDD+ initiatives can: (i) identify “legitimate beneficiaries” – by examining how beneficiaries are (a) defined by carbon rights, (b) have been identified in social agreements associated with forest, mining or agriculture concessions and (c) have been identified in government facilitated community based forest management schemes; (ii) identify appropriate mechanism for sharing benefits - by describing characteristics of national or subnational funds that are effectively distributing benefits to local communities, and (iii) learn from practical experiences in benefit sharing

The last part of this study extends the recently completed World Bank ESW on Rethinking Forest Partnerships and Benefit Sharing. The ESW focused on identifying process elements that are important in making and keeping partnerships.

This study will go beyond process elements and (i) develop practical guidance for how to facilitate benefit sharing in situations where rights to resources are unclear, and (ii) assess current legal, policy, institutional and capacity strengths and shortcomings to determine what is the most appropriate and feasible mechanisms for transferring benefits either from the national or subnational level to the local level.

The primary audience for this study includes development partners and World Bank staff involved in forest carbon initiatives.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. Activities include: 1. Reviewing experiences in CBNRM and other relevant natural resource arrangements where there were issues over clarity of rights and legitimacy of beneficiaries to see how the partnership handled the issue and provide insights from these experiences; 2. Reviewing mechanisms in the forest sector that distribute benefits from either the national or subnational level to communities to analyze how they are structured, their governance regime, the scale of benefit sharing, the strengths and weaknesses of the arrangement and the conditions needed for the mechanism to be effective in delivering benefits; 3. Conducting nine case studies of partnerships in areas of relevance for REDD, e.g., PES, Carbon, and CBNRM 24 PROFOR’s Portfolio of Currently Active Projects

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. between private entities, government and communities to draw insights on how issues of legitimate beneficiaries were handled and how the mechanism was structured and what process factors were influential in the development of the arrangement; 4. Developing an options assessment framework that is a tool that assists governments to determine their options for transferring benefits and selecting the optimal one; 5. Drafting three papers (the first on identifying beneficiaries, the second on mechanisms for transferring benefits and an options assessment framework, and a third paper on benefit sharing in practice); 6. Developing simple guidance for how to work on benefit sharing in situations of unclear rights; 7. Preparing briefs to make the findings accessible to a broader audience.

3. Progress to-date. Please describe progress in completing the activities outlined above, and indicate key outputs which have been completed. The case study work in three countries (three cases per country) has been completed (the countries were Uganda, Tanzania, and Nicaragua). A final report on benefit sharing in practice has been produced. Briefs on a subset of cases have been produced.

The final report of the work on legitimate beneficiaries has been completed, and a brief has been produced.

A two part report on mechanisms for transferring benefits has been completed. The report covers the basics of such mechanisms and details a tool for assessing options (rather than being prescriptive).

An overview paper has been completed.

Dissemination of brief at two international events (FCPF Participants Committee meeting and Forest Day 5).

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. The main change in the activity is the scale of the dissemination exercise. Original plan was to have a report and briefs. This has been scaled up to include: - developing materials for training efforts (including an FAQ on benefit sharing). - an interactive tool to inform stakeholders decisions regarding mechanisms for sharing benefits. - identifying a country for piloting the tools.

To implement this change PROFOR management and board approved an extension and increase in budget associated with this activity. There has been an increase in the budget for this activity by USD 130,000 and an extension till May 2012. The verbal approval was reflected in the letter sent to the donors from the PROFOR manager on 10/26/11.

5. Findings, impacts, knowledge generation, and dissemination to-date. Describe any preliminary impacts and findings from the activities which have been completed so far and efforts made to disseminate the findings. The paper on identifying legitimate beneficiaries found that in most situations there are multiple legal systems that bear on how resources are used, and only a few of them may be formally recognized. For REDD+ initiatives to be effective and sustainable, it will be necessary to work with these different systems of rights to identify who should be involved in REDD+ initiatives and their rights and reliance on the resource. The latter information should in turn influence what benefits are needed and how to most effectively deliver them. The paper explains that where transfer of ownership rights is not viewed by local partners as a necessary condition prior to their engaging in REDD+ initiatives, it is possible to use contracts and other legal instruments to work with a range of local stakeholders to ensure they benefit from the initiatives. There are several illustrations of how this has been done and the process and support needed to adopt such an approach. In summary, while clarity over who owns or has PROFOR’s Portfolio of Currently Active Projects 25

5. Findings, impacts, knowledge generation, and dissemination to-date. Describe any preliminary impacts and findings from the activities which have been completed so far and efforts made to disseminate the findings. the right to carbon is helpful, it is seldom needed prior to being able to engage in meaningful benefit sharing from REDD+. The paper on mechanisms for transferring benefits classifies all mechanisms by scale (national/subnational) and scope (input-based/performance-based). It works with four types of mechanisms – national input based, national performance based, subnational input based and subnational performance based. Upon reviewing examples of benefit sharing arrangements in a range of countries including Brazil, Cameroon, Canada, Ecuador, Mexico, Uganda, and elsewhere, the authors identified four building blocks to each benefit sharing mechanism: • government, civil society, community and private sector institutional capacity • national or subnational legal framework relevant to REDD+ • fund management capacity and experience • monitoring capacity and experience. The paper on mechanisms includes an options assessment framework that allows decision makers to assess where they are with regards to the four building blocks. The framework helps decision makers identify which mechanism type they would be most effective at delivering and what enabling actions need to be taken in order to deliver the mechanism of their choice. Both the mechanisms paper and the paper on benefit sharing in practice offer some key recommendations for designing and implementing a benefit sharing mechanism (many of these complement the recommendations from the paper on identifying beneficiaries). Key recommendations include: • Having a clear legal mandate/framework should underpin benefit sharing arrangements. Alignment of the benefit sharing mechanism with national strategy especially poverty alleviation can help galvanize political support. Fitting a benefit sharing arrangement with national economic development plans can assist in scaling up an effective pilot scheme. • Ensure government (local and national) have sufficient technical forest management, community development and planning capacity and resources to support beneficiaries effectively. • Use existing benefit transfer channels or institutional arrangements to keep transaction costs moderate and reduce the need to build a new arrangement. Where a preexisting institutional structure does not exist for benefit sharing, use a process that involves experts and representatives from key stakeholder groups (including well organized CSOs, NGOs and extension) to design and implement a suitable institutional arrangement. • Ensure benefits from REDD+ financial resources reach relevant entities involved with research, monitoring and enforcement in addition to the local communities. • Ensure eligibility criteria for benefits are not unduly exclusionary. • Provide both monetary and nonmonetary benefits (e.g., policy measure such as clear rights or technical assistance). The non monetary benefits should create future options for the beneficiary. In low governance and monitoring capacity environments, the most effective initial benefits may be in capacity building and land tenure assistance, building up to performance based benefits later. • Ensure that the basis for providing benefits is consistent for all parties involved (that is, the benefit may not be the same for the various participants, but it will be based on the same criteria for payment). Have transparent criteria for payments and considering a flow of benefits (not one time benefits). • Having an effective mechanism to safeguard against mismanagement of funds or misappropriation is important to prevent inequitable benefit allocation. • Use a third party monitoring and audit organization within a benefit sharing mechanism to encourage good governance, transparency and better financial controls. This should include conduct social audits to ensure that benefit sharing arrangements are not being captured by the more powerful members of the local partner group. • Balance the trade-off between costs (associated with monitoring sophisticated criteria that are the basis of payments) and incentives to engage (created by a simple criteria as the basis for payment). Having a distributional equation for benefit sharing enhances transparency and manages expectations.

In the area of dissemination, the briefs produced have been distributed at an issues marketplace on forest financing at Forest Day 5 in Durban in December 2011. The briefs were also distributed at the November 2011 26 PROFOR’s Portfolio of Currently Active Projects

5. Findings, impacts, knowledge generation, and dissemination to-date. Describe any preliminary impacts and findings from the activities which have been completed so far and efforts made to disseminate the findings. FCPF Participants Committee meeting. The latter has led to further collaboration with FCPF on developing a training course on benefit sharing.

There has been work done by UNREDD, IUCN, EU, a group of foundations and others examining the issue of benefit sharing. This work does not overlap with existing pieces that have looked at macro-level questions of benefit sharing as well as drawn on experiences from the field to understand how benefit sharing is occurring in REDD pilots or in CBNRM, but instead complements existing work by looking at the question in greater detail and analyzing data from current experiences.

One of the unexpected opportunities has been the extent to which this work can now link with FCPF proposed activities on benefit sharing. Initially while FCPF was informed of this work and interested in viewing the interim and final products, there had not been discussions regarding using this work to inform their clients. This is more of a reality now because of a new FCPF staff person who will be focusing on benefit sharing.

There have been two unanticipated challenges with this work. First, while benefit sharing is a real issue that will have to be dealt with there are widely varying understandings of what benefit sharing means – simply covering opportunity costs, to getting rights straight, to implementation of a project – this has made talking about some of the detailed aspects of benefit sharing difficult as it has required bringing people to a common understanding before looking at issues in depth. Secondly, the challenge of benefit sharing is viewed as one that needs to be met if there is a compliance market, so some stakeholders feel this discussion is premature. On the contrary, having this end objective clearly defined early in the process can minimize expensive ‘retrofitting’ (independent of whether there is a compliance market, as benefit sharing needs to happen for the REDD+ activities on the voluntary market as well).

8. Next steps. What happens now? How will the project be brought to closure? Finalization of the three papers (copy-editing, layout, production) and production of a CD that contains all the papers and associated briefs and interactive version of the options assessment framework

Finalization of the interactive version of the options assessment framework. PROFOR’s Portfolio of Currently Active Projects 27

8. Next steps. What happens now? How will the project be brought to closure?

Posting of the papers and interactive tools on PROFOR website. Posting of the paper on mechanisms for benefit sharing and interactive tool on the website of Pricewaterhouse Coopers UK.

Development of material for decision-makers and practitioners to be used for the training coordinated with FCPF and presenting the material produced at the trainings.

Identification of an opportunity to pilot the instruments in one country and launching this work.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? The replication potential is really in the use of the suggested approaches developed in the three studies – use of contracts, selection of a suitable financing mechanism, and adoption of process to determine benefits and delivery of benefits. In terms of approach, the paper on mechanisms for sharing benefits provides a framework that can be used for examining the same question at the individual country level activities being considered to examine funding mechanisms for informing REDD benefit sharing and financial transfers. This study provides information for efforts reviewing existing approaches to sharing benefits.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources which have been mobilized.

PROFOR funding $ 280,000 Other sources of funding (describe below) $ 195,996 Total $ 475,996

What other sources of co-financing have been mobilized? What amounts are involved under each source of co- financing? Cofinancing was provided by BB (US$15,740), TFESSD ($84,040) and BNPP ($96,216). It accounts for 41% of the total cost of the activity.

28 PROFOR’s Portfolio of Currently Active Projects

B. FINANCING SUSTAINABLE FOREST MANAGEMENT

ANALYSIS OF ALTERNATIVE REDD+ FINANCING INSTRUMENT MECHANISMS, INDONESIA

http://www.profor.info/profor/knowledge/analysis-alternative-redd-financing-mechanisms-indonesia

Project ID: TF099409 P124086 Region: EAP PROFOR Thematic Area Percent Date prepared: December 9, 2011 Main: Financing SFM 70% Prepared by: Emile Jurgens Secondary: Cross-sectoral coordination 30%

When was the grant originally approved?: 3/31/2011 When was the original planned grant completion date?: 3/31/2012 Have any extensions been approved?: No If yes, until when?: Click here to enter a date.

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note, and if any aspect of these has changed. This activity aims to directly assist the Government of Indonesia in preparing for REDD+ by providing analysis for the establishment of a REDD+ financing mechanism. This will be done in consultation with affected stakeholders, contributing to greater inclusion of local communities, indigenous peoples, and women in the national policy development process. The work will also provide valuable lessons for the establishment of similar frameworks in other REDD+ countries.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. 1. Develop a preliminary synthesis of issues and hold a consultation workshop involving REDD+ stakeholders, including local community, IP and women’s representatives, in Jakarta. This will result in knowledge sharing and multi-stakeholder inputs.

2. Hold a focus group discussion in Jakarta involving key REDD+ policy makers from relevant institutions. Preliminary policy options will be shared and discussed.

3. Hold one or two workshops at the regional level to gather local stakeholder inputs on sub-national distribution mechanisms. These will be held in regions prioritized by the government and they will also serve as case studies.

4. Develop two to five succinct policy briefs on issues related to financing mechanisms and share with key REDD+ stakeholders and policy makers.

5. Develop a final report on alternative financing mechanisms for REDD+. The report will provide an analysis of existing financing mechanisms in Indonesia, will draw on existing literature on REDD+ benefit distribution mechanisms, will pay particular attention to existing REDD+ pilot projects in Indonesia, and will distill general lessons for national and international REDD+ stakeholders.

3. Progress to-date. Please describe progress in completing the activities outlined above, and indicate key outputs which have been completed. The following three policy briefs were developed: 1. PES as a Mechanism for REDD+ Benefit Sharing in Indonesia; 2. Green PNPM Program (formerly the Kecamatan Development Program) as a REDD+ Benefit Sharing Mechanism in Indonesia; and 3. The Role of Small Grants Programs in REDD+ Readiness and Implementation. These are meant as inputs to the consolidated report. They have not undergone a thorough internal review nor been distributed. PROFOR’s Portfolio of Currently Active Projects 29

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. None so far.

5. Findings, impacts, knowledge generation, and dissemination to-date. Describe any preliminary impacts and findings from the activities which have been completed so far and efforts made to disseminate the findings. Some key findings are as follows: -Small Grants Programs are effective at providing benefits to local communities as they bypass central bureaucracies and have a short processing time from proposal submission to disbursement. Also, they are responsive to local needs and build local ownership. Small Grants Programs already play an important role in improving REDD ‘readiness’ in Indonesia and a number of key institutions have already launched REDD-specific programs. Grant management capacity at the regional level is still weak but there is potential for improving this capacity to allow REDD funds to be channeled directly to the sub-national level. While SGPs are largely a non-state mechanism, public funding (for example from a national REDD fund) could be used in the future.

-The PNPM Program (formerly the Kecamatan Development Program) is a successful key component of GOI’s poverty alleviation strategy, and provides important lessons for designing a REDD+ benefit sharing mechanism. There may also be scope for using the PNPM mechanism as a component in a benefit sharing mechanism. The Green PNPM program already addresses a number of forest-related issues. More REDD-specific indicators could be integrated into the project selection stage, a “REDD PNPM” could be designed with positive or negative project lists to target REDD activities more explicitly.

-PES has a role to play in informing the design of a sub-national benefit sharing scheme for REDD in Indonesia, but a pure PES scheme is unlikely to be workable. Instead, a PES-like scheme could play a role to ensure there was some relationship between benefits and performance, but practicality and equity issues would weaken conditionality in practice. Other approaches – such as small grants – would be required to complement this type of scheme. Judging from lessons learned from PES projects on the ground, an Indonesian REDD benefit sharing mechanism would need to heed the warnings of establishing priorities and eligibility at an early stage to help manage expectations. Tenure reform to strengthen conditionality would be a key requirement for successful implementation, as would the establishment or strengthening of a supportive institutional and governance framework.

These three distribution systems play an important role in REDD+ readiness and implementation, but are at a risk of being sidelined in the discussion on national REDD+ benefit distribution systems. In Indonesia REDD+ readiness to a large degree depends on increased capacity and empowerment of local stakeholders. One of the key lessons of PES in Indonesia has been that in a weak governance framework, direct and performance-based payments for environmental services, such as those commonly referred to in the REDD+ debate, are often not a feasible option. Instead, investment in local capacity building, livelihoods, and tenure security may be more viable. Small grants have been shown to be effective in this regard and provide important lessons for the design of REDD+ benefit sharing. The PNPM program brings together the concept of small grants with a national program and serves as an important model for national REDD+ benefit distribution in Indonesia.

The intention is that these findings will be disseminated through workshops associated with the FCPF SESA and to key GOI policy makers. The idea is to leverage the communication and outreach activities planned under the FCPF Readiness FCPF grant, which includes approximately US$1m for such work and involves a large number consultations, meetings, and workshops with stakeholders at multiple levels over the next two years. With increasing demands on the schedules of REDD+ stakeholders in Indonesia, the Task Team decided that it would be advisable to combine dissemination of the briefs with FCPF/SESA workshops. Integrating the PROFOR analytical work into the SESA would also promote increased visibility and greater impact, as one of the stated goals of the SESA process is to provide analytical inputs to national REDD+ policy development. However, the degree to which 30 PROFOR’s Portfolio of Currently Active Projects

5. Findings, impacts, knowledge generation, and dissemination to-date. Describe any preliminary impacts and findings from the activities which have been completed so far and efforts made to disseminate the findings. integration into the SESA process will be possible remains to be seen due to delays in FCPF implementation. The SESA process is expected to begin only in early 2012, at which time the findings will be disseminated to key stakeholders. Also, the termination and restructuring of the REDD Task Force, beginning in June 2011, has led to some delays in policy development and discussion concerning REDD benefit sharing mechanisms.

7. Implementation Performance. How would you characterize implementation performance? What unexpected opportunities arose during implementation and how have you been able to take advantage of these? Have there been unanticipated obstacles in implementation? Do you expect any significant delays in completing this activity? What measures are being taken to address any shortcomings in implementation? Implementation performance to date has been relatively good. The final report on REDD+ Financing Mechanisms in Indonesia is still under development and completion is pending the initiation of the FCPF SESA Outreach program. The termination and restructuring of the REDD Task Force, beginning in June 2011, has also led to some delays in policy development and discussion concerning REDD benefit sharing mechanisms

8. Next steps. What happens now? How will this project be brought to closure? Next steps will be to hold a workshop with UNREDD, the REDD Task Force, and other key stakeholders with a view to provide space for presenting the three draft briefs. We are currently waiting to hear back from UNREDD and expect the event to occur sometime in February or March 2012. This will be followed by further dissemination, pending the initiation of the FCPF SESA process. At the same time the individual policy briefs will be collated into a longer paper for discussion and dissemination.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? The final report will be disseminated to key national and international REDD+ stakeholders, thereby informing the overall debate on REDD+ and supporting other countries in developing appropriate financing mechanisms. Report findings could feed into the growing literature on lessons from PES for REDD+ for example.

PROFOR’s Portfolio of Currently Active Projects 31

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources were mobilized.

PROFOR funding $ 149,950 Other sources of funding (describe below) $ 57,000 Total $ 206,950

What other sources of co-financing were mobilized? What amounts are involved under each source of co-financing? As of December 20, 2011, $108,147 has been disbursed, mainly for consultant activities, travel and WB staff costs. It is expected that the remainder, along with co-financing (28%) will be disbursed by March 31, 2012.

32 PROFOR’s Portfolio of Currently Active Projects

INNOVATIVE FINANCING FOR SUSTAINABLE FOREST MANAGEMENT IN THE SOUTHWEST BALKANS

http://www.profor.info/profor/knowledge/innovative-financing-sustainable-forest-management-southwest- balkans

Project ID: TF097987 - P124095 Region: ECA PROFOR Thematic Area Percent Date prepared: December 15, 2011 Main: Financing SFM 100% Prepared by: Andrew Mitchell Secondary: Choose an item. %

When was the grant originally approved?: 6/1/2010 When was the original planned grant completion date?: 10/1/2012 Have any extensions been approved?: Yes If yes, until when?: 10/31/2013

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note, and if any aspect of these has changed. The objectives of this project are to: define scientifically sound methodologies; establish key baseline data in some case studies; provide quantitative estimates of the value of some specific targeted environmental services; and to propose mechanisms to start/increase payment for these services in two case studies in two countries in the Southwest Balkans; and then, to fully disseminate the results and experiences both regionally and more broadly.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. The activities will be implemented by an international consultancy company/NGO, SNV, in collaboration with local researchers and experts. The international company will prepare/devise the methodology, design the surveys in collaboration with local experts / institutions. It is expected that the actual research will be undertaken by local experts and students. Analysis and write up will be done jointly. The activities are split between Albania and Kosovo.

Albania: A case study will be undertaken of the Ulza hydro-power dam and watershed. Ulza has been chosen because: the reservoir and watershed are of a size suitable for a pilot research study; the bathymetry of the reservoir has been recently assessed under another project; and, there are data on past and existing land uses in the watershed including some areas which are now covered by forest and watershed management plans, denuded and refused lands and agricultural lands. The following activities are envisaged: • The exact boundary of the watershed/study area will be defined, and historical and current land use maps prepared; • The bathymetry from the original dam design (the dam was constructed 54 years ago) and present day will be compared and the remaining lifespan of the dam estimated assuming no change to the current land use in the watershed; • A sampling methodology will be devised and implemented to monitor soil erosion by land use type and could include: Soil sampling throughout the study area to ascertain the topsoil depth and characteristics of the different land uses, and experimental measurements to assess silt load in runoff and water courses leading to the reservoir through the different land uses over one complete calendar year; • Comparison will be made of ‘with’ and ‘without’ sustainable forest and or upland management land uses within the watershed to determine the impact of the different land uses and to estimate the benefits in terms of decreased siltation and damage of the dam and other downstream water infrastructure • Analysis will be undertaken of the historical land use of the area, in comparison to the data collected to estimate the impacts of the land use changes that have occurred; PROFOR’s Portfolio of Currently Active Projects 33

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. • Data will also be collected and analyzed on the impact of land use on the incidence of landslides and flooding within the study area, again in comparison of with and without sustainable management practices; • Economic analysis will be undertaken to assess the impact of the different land uses on the potential life span of the dam and the positive or negative impacts on downstream users through flood protection and availability of water for irrigation and domestic consumption; • Willingness to pay surveys will be undertaken of the power companies and other downstream users / beneficiaries; • Estimates will be made of the economic benefit to downstream users of upland sustainable forest and land use management; • An assessment will be made of the suitable level of fees or taxes that may be possible to charge downstream beneficiaries; and, • A sampling methodology will be designed to replicate the monitoring the downstream impact of sustainable land use management throughout the country.

Kosovo: • Survey assessing firewood usage: In the villages and countryside of Kosovo, much of the heating and cooking energy is provided by firewood. Much of this is traditionally collected from both private and state owned forest, some of which is not controlled or regulated. As a first step to understanding the potential for increasing and or improving the efficiency of the use of firewood, a survey will be undertaken to assess the usage of firewood by the population. This survey will also look at the way firewood is harvested, stored / seasoned and burnt. At the same time the survey will assess of the type and efficiency of the stoves used, and the insulation of the buildings being heated.

• Analysis of the supply side, by studying current official levels of production, and potential levels of production from current forest management plans and the national forest inventory. Sawmills will be surveyed to assess their conversion percentage and levels of wood waste being produced and the current use of this waste. Comparisons will be made between current official levels of harvest, the amount assessed from the user and sawmill surveys and the potentially feasible levels of production from the forest inventory and management plan data given the existing infrastructure (i.e. forest roads, bridges etc.).

• Feasibility study to determine suitable heating methods: In many of the rural areas of Kosovo, municipal buildings such as schools and hospitals could benefit from installing modern wood burning boilers to heat the buildings through a centralized heating system, as an alternative to either heating by electricity, use of heating oil and or traditional wood stoves in each room. Feasibility studies will be undertaken to determine the most suitable type of wood burning system to be used (e.g. traditional centralized boilers, use of semi-automated wood chips and or wood pellets), and the economic and environmental viability of switching the fuel to woody biomass while improving the insulation of the buildings for three different scenarios e.g. heating a large hospital in say Pristina using an automated pellet system, smaller village buildings utilizing wood chip and or traditional firewood and or a cluster of residential properties such as an apartment block.

• Carbon financing analysis: To ascertain the potential for securing carbon financing (especially voluntary markets) for a) the carbon sequestered by improving forest management, and b) reduced CO2 emissions by reducing the demand for heating energy from fossil fuels.

Dissemination Dissemination will be done for the project as a whole through a dedicated project website with links to related and relevant sites, the project will also set up two blogs (one for each country) to detail progress, early results and feedback in addition to the usual country based workshops and dissemination events. The project outputs will not only be of interest to other pre-accession countries but also in countries where similar geographical and 34 PROFOR’s Portfolio of Currently Active Projects

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. environmental conditions exist. Efforts will be made to disseminate the results of the research more widely and in international publications if possible.

All outputs, conferences and workshops associated with this project will acknowledge PROFOR support. All final products will include the PROFOR logo.

3. Progress to-date. Please describe progress in completing the activities outlined above, and indicate key outputs which have been completed. The Terms of Reference have been prepared and advertised, and a total of 9 companies, submitted expressions of interest. These were evaluated and the winning company selected. However, due to significant delays in the procurement process, processing the contract and signing by the winning company, the contract was not signed until November 15, 2011.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. None

5. Findings, impacts, knowledge generation, and dissemination to-date. Describe any preliminary impacts and findings from the activities which have been completed so far and efforts made to disseminate the findings. Activities in the field have not yet started. Hopefully the project will lead to increased payment for the environmental services and sustainable forest management

8. Next steps. What happens now? How will the project be brought to closure? Due to the time taken to select the company and sign the contract, it is proposed to request an extension of the project closing date until Oct 31, 2013 (instead of Oct. 1, 2012).

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? The results should be very replicable throughout the Balkan region. The project outputs will be of interest to other pre-EU accession countries but also in countries where similar geographical and environmental conditions exist.

PROFOR’s Portfolio of Currently Active Projects 35

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources which have been mobilized.

PROFOR funding $ 299,812 Other sources of funding (describe below) $ 62,000 Total $ 361,812

What other sources of co-financing have been mobilized? What amounts are involved under each source of co- financing? Bank budget from supervision of the Albania Natural Resources Development Project, Sida Hybrid Trust Fund and possibly the proposed Environmental Services Project.

36 PROFOR’s Portfolio of Currently Active Projects

PES LESSONS TO INFORM SOUTH-SOUTH COOPERATION ON REDD+ IN LATIN AMERICA

http://www.profor.info/profor/knowledge/south-south-learning-payments-environmental-services-redd-latin- america

Project ID: TA-P128692-TAS-TF010687 Region: LAC PROFOR Thematic Area Percent Date prepared: December 9, 2011 Main: Governance 50% Prepared by: Leonel Iglesias Secondary: Financing SFM 50%

When was the grant originally approved?: 6/1/2011 When was the original planned grant completion date?: 8/31/2012 Have any extensions been approved?: No If yes, until when?: Click here to enter a date.

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note, and if any aspect of these has changed. The objective of this proposal is to contribute to the first steps toward setting up a South-South alliance (Phase 1, as described in the background concept note). This contribution will identify, discuss and report lessons learnt from PES that can inform the development of a conceptual framework applicable to REDD+, foster emerging south- south collaboration on the subject, and invite others to join. There have been various pieces of work on benefit sharing which draw lessons from PES schemes, and will serve as inputs to this phase. However, there has never been a comprehensive and systematic documentation of the lessons learned from PES that might apply to REDD+ in the broader sense, including benefit sharing, capacity building, participatory processes, and monitoring and evaluation platforms, and others.

The activities undertaken with PROFOR’s support will shed light on whether and how PES can serve as a building block towards achieving REDD+ so that countries with an existing PES system are clear on the conditions of these contributions, and countries without such systems are better informed before they decide to set up a PES system or a REDD+ strategy. These activities will facilitate sharing information, lessons learned, and innovative ideas related to PES systems.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. The following activities will be part of Phase 1 (setting up a South-South alliance): 1. Develop a concept note that identifies lessons from PES that will inform the design of a REDD+ mechanism.

2. Hold an experts workshop, including PES practitioners from the LAC region and beyond, to discuss PES best lessons learned and share experiences from Costa Rica, Mexico, Ecuador and other countries (e.g., Brazil, Kenya). Available PES experiences in Latin America will be discussed and used to inform the future design of a REDD+ mechanism. This may emphasize benefit sharing among forest-dependent people, as well as the impacts in terms of other technical aspects such as generating participatory mechanisms, undertaking monitoring activities, improving contracts schemes and governance, positive incentives for addressing deforestation drivers, and setting up the legal and institutional framework needed for REDD+ implementation, among others.

3. Disseminate findings on PES available experiences. A meeting will be organized to share information with potential partners and to seek finance for the implementation of the three phases described in the background section. In parallel, we will produce proceedings from the workshop, plus a series of 1- or 2-page glossy notes on experiences and lessons learned, based on the experts’ workshop. After the concept note has been validated by experts in the workshop, the recommendations should be assembled in easy-to-read notes with photographs, etc, PROFOR’s Portfolio of Currently Active Projects 37

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. on different topics and case studies related to PES lessons for REDD+.

The printed material will contribute to preparing the countries to share their experiences and will be a contribution to the development of the South-South cooperation platform established by Costa Rica, Mexico and Ecuador. The meeting with potential partners will be held with the joint purposes of sharing knowledge, finding additional participant countries, and identifying potential financial contributors for implementing the work program of the S-S Platform. In this way, phase 1 will act to catalyze long-term collaboration. Potential financial contributions, including PROFOR and/or other sources, may help Costa Rica, Mexico and Ecuador to build capacity for implementing the work program of the South-South cooperation platform.

3. Progress to-date. Please describe progress in completing the activities outlined above, and indicate key outputs which have been completed. 1. A consultant was hired to develop a paper that identifies lessons from PES that will inform the design of a REDD+ mechanism. Terms of Reference and a Concept Note were designed to hire a consultant to produce a paper on “Lessons Learned for REDD+ from PES and Conservation Incentives Programs. Costa Rica, Ecuador and Mexico”….A draft of this paper was finalized on November 9, 2011. A review of the draft is in progress..

2. A workshop to implement activity number 2 was held in San Jose, Costa Rica.

3. Disseminate findings on PES experiences. A ten pages policy brief was produced as a result of the paper review (from activity number one) at the workshop in San Jose, Costa Rica. This policy brief was produced in English and translated to Spanish. The policy brief and a summary of the PES lessons learned were presented and discussed in a panel session held as a side event of COP 17 of UNFCCC in Durban. Photos, video recording and interviews with participants at this dissemination event are also available.

4. Further dissemination events will be held during the first semester of 2012 to promote findings and to help Costa Rica find contributors to strengthen country capacity to share PES lessons for REDD+.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. An addition has been made to the outcomes initially planned. A special chapter will be included in the main paper on Lessons Learned from PES. The special addition will be Chapter 1: Participation Agreements in National Programs: Challenges and Synergies. The WBI has committed $30,000 to this project because of that addition, so the adjusted budget is now $180,000. If we also consider the contributions in kind from the three countries (Costa Rica, Mexico and Ecuador), which are basically air tickets and perdiem for country representatives to participate in a workshop in Costa Rica and at a Durban side event, then the total budget for this project is now $210,000.

5. Findings, impacts, knowledge generation, and dissemination to-date. Describe any preliminary impacts and findings from the activities which have been completed so far and efforts made to disseminate the findings. As part of their REDD+ strategies, countries need to design equitable benefit sharing systems. Payments for Environmental Services (PES) is an approach in which forest owners are paid to conserve forests, which make them an attractive tool for REDD+ as well. PES are attractive in that they create incentives to preserve forests by using compensation rather than instruments such as legal force, so they also ensure that forest owners benefit. However, PES are no magic wand; like all instruments, they needs to be designed carefully to work effectively. Fortunately, we have considerable experience to draw on, and the three countries that have convened this event have generated the bulk of this experience.

Costa Rica has implemented a nationwide PES program since 1997; Mexico since 2003; Ecuador since 2008. Between them, these programs are currently helping to conserve over 3.5 million ha of forests. Their pioneering 38 PROFOR’s Portfolio of Currently Active Projects

5. Findings, impacts, knowledge generation, and dissemination to-date. Describe any preliminary impacts and findings from the activities which have been completed so far and efforts made to disseminate the findings. work in this area provides useful experiences to countries considering using PES as one of the instruments in a REDD+ strategy. T heir experience shows how to make PES work, but also -- and perhaps just as important – some of the problems to avoid.

The lessons fall into five areas: 1. Participation agreements 2. Equity or social objectives. 3. Trade-offs and synergies between multiple (ecosystem) benefits. 4. Measuring, reporting and verification (MRV) 5. Sustainable finance and administrative costs.

For example, The role of indigenous peoples is a key issue in REDD+. In that regard, it is worth pointing out that Costa Rica's PES program has developed a strong relationship with indigenous communities, and adapted the program's rules to work better in their specific context. At present, Costa Rica's indigenous communities receive more revenue from PES than from all other government support programs combined. Even so, Costa Rica is adjusting the PES system to reflect the interests of indigenous peoples. Mexico can also share it useful experience with PES and indigenous communities.

Efforts to disseminate the lessons learned include the documentation of the lessons, a workshop with more than 20 PES experts and practitioners to discuss relevance and a side event in the CO17 AT Durban to disseminate. A final version of the paper and notes are still pending.

6. Policy framework and relevance to donor activities. Describe how this activity has complemented policy objectives at the national, regional, or global level. Are other donors working in this area and have there been changes since the start of the activity? What has been done to date to ensure this activity complements other donor- supported initiatives? Are there any particular partnerships which have been supported or which have been an outcome of this activity? This review shows that national PES and conservation incentive programs are versatile mechanisms that can evolve into different forms of positive incentives, and provide a wealth of experience for informing the development of REDD+. As shown in the paper, developing a well-established PES program provides a valuable bridge with REDD+. In the REDD+ preparation process, 54 countries have so far expressed interest in developing REDD+ strategies, of which 30 countries have a national readiness proposal with financing plan approved or expected to be approved within a year (FCPF and UN- REDD Programme). Most of these plans mention the use of positive incentives to achieve REDD+ objectives, and have specified PES as the main driver of these strategies. Moreover, many countries have shown a strong interest in the national programs, and several have made country visits with the aim of establishing lines of collaboration for early action. Particular interest has been shown in aspects such as local governance, forest inventories and monitoring systems. A simple way of ensuring that REDD+ plans take the lessons from national experiences into account is for the ‘new’ countries to work together with more experienced ones. Thus Costa Rica, Ecuador and Mexico could act as ‘coaches’ with donor support to avoid such ‘south-to-south’ exchanges becoming a financial burden. For this purpose, Costa Rica, Mexico and Ecuador confirmed their support for a South - South cooperation initiative on PES for REDD+ in Durban in December 2011 in a side event of COP17. Thanks to PROFOR’s support and leadership, there is a reinvigorated discussion on how lessons learned from PES will inform the design of REDD+ national strategies or programs.

8. Next steps. What happens now? How will the project be brought to closure? Project is on-going. The key outputs for this project will be delivered on time.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? Yes, Costa Rica, Mexico and Ecuador are building a stronger South-South Initiative to share the PES lessons and inform the design of REDD+ strategies among REDD+ countries.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources which have been mobilized. PROFOR funding $ 150,000 Other sources of funding (describe below) $ 60,000 Total $ 210,000

What other sources of co-financing have been mobilized? What amounts are involved under each source of co- financing? The WBI provided an additional $30,000 to the project. Additionally, the project benefited from contributions of Costa Rica, Mexico and Ecuador when these countries paid travel costs of their representatives to participate in a Workshop in Costa Rica. The project also benefited from the organization of a side event in the margins of the COP17, which was an excellent opportunity for dissemination and saving more than $200,000 (cost of organizing this event in a different context). For accounting purposes, the project is only considering a direct contribution from the three countries of $30,000 for the travel cost of the country representatives. Co-financing accounts for 40% of the total cost of the activity.

40 PROFOR’s Portfolio of Currently Active Projects

REDESIGNING THE MEXICAN FOREST FUND TO SUPPORT SUSTAINABLE FOREST MANAGEMENT

http://www.profor.info/profor/knowledge/redesigning-mexican-forest-fund-support-sustainable-forest- management

Project ID: TF099407 - P123760 Region: LAC PROFOR Thematic Area Percent Date prepared: December 7, 2011 Main: Financing SFM 75 % Prepared by: Laurent Debroux Secondary: Governance 25 %

When was the grant originally approved?: 3/28/2011 When was the original planned grant completion date?: 11/30/2011 Have any extensions been approved?: Yes If yes, until when?: 7/31/2012

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note, and if any aspect of these has changed. This project, implemented in close collaboration with CONAFOR and the World Bank, would seek to redesign the Forest Fund to become a state-of-the art, best-practices financial mechanism to meet Mexico’s needs related to forests and climate change into the future, by (i) identifying key desirable features in the Forest Fund (managed and hosted within CONAFOR) emerging from the current climate discussions, (ii) drawing from lessons learned elsewhere and (iii) designing those features into the proposal to update the Fund being developed by CONAFOR.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. I. Assess Mexico’s needs in the area of sustainable forest management that could be supported by a Forest Fund. This activity would seek to answer the following questions: What is the current status of the Mexican Forest Fund, including the activities currently supported, and efficiencies and inefficiencies in the system? What are the future objectives of the Forest Fund, what needs would the Forest Fund need to meet, what advantages would a Forest Fund offer over other approaches?

This activity would involve conceptual work to assess current services and potential future financing flows (e.g., international REDD+ compensation), and to determine the future financing needs of the Mexican Forest Fund. This activity will involve a desk review, interviews with key stakeholders, and possibly national and/or regional workshops. The implementation will be done by consultants. Output of this activity includes a report summarizing the results of the workshops and other events and identifying the needs of the Forest Fund.

II. Learn from experiences worldwide in forest financing with a focus on Mexico’s needs. This activity involves a review of forest funds and other mechanisms in Latin America and elsewhere. This will also involve a desk review by international consultants, and will build on previous work supported by the UNFF and its Ad-Hoc Expert Group on Forest Finance, and on previous work on national forest financing strategies supported in the Latin America and Caribbean Region by Tropenbos, the NFP facility, as well as others. The review would focus on aspects that are important for Mexico, as identified in Activity I. This work should also assess aspects of forest funds that facilitate the reception of financing from existing and emerging international mechanisms, such as voluntary contributions from international partners and REDD+, and how to channel those funds to specific actors on the ground. This activity will culminate in a report that outlines past successes and failures of financing mechanisms and identifies international good practices, relevant to Mexico’s needs.

III. Provide recommendations for the Mexican Forest Fund. PROFOR’s Portfolio of Currently Active Projects 41

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. Based on Activities I and II, the consultants will provide a summary that identifies key features that may meet Mexico’s current and future needs, and allow Mexico to take advantage of emerging financing opportunities. The recommendations should be adapted to the feasible options of the Fund, considering Mexico´s legal context.

3. Progress to-date. Please describe progress in completing the activities outlined above, and indicate key outputs which have been completed. Implementation has not yet started. CONAFOR, the Bank’s implementing partner in this activity, has requested an extension period for this activity, in order to align activities and synchronize timetables with those of two other larger Bank operations related to sustainable forest management and climate change. Such alignment will allow the initiative to be part of an overall larger investment framework aimed at addressing climate change issues. The two major Bank operations currently under final design and approval process include: (i) the Mexico Forests Investment Plan (Projects 1 and 2) funded by the Climate Investment Fund’s Forest Investment Program for a total of $42 million; and (ii) the IBRD Forests and Climate Change Sector Investment Loan (SIL) totaling US$300 million. It was agreed that the FIP Projects (approved in October and November 2011) will be combined with the IBRD SIL. The combined IBRD-FIP operation will be presented to the Board on January 31, 2012.

The proposed PROFOR activity (Redesigning the Mexican Forest Fund) remains a critical priority for CONAFOR as it will directly contribute to establishing the needed conditions to ensure proper financial mechanisms to facilitate effective implementation of large investments that will provide technical assistance and financial services for Indigenous peoples and Ejidos communities for sustainable community forestry, and it would provide lessons of global relevance in the field of forests and forest carbon finance.

Expected outputs to be completed by mid 2012 include: I. Inputs for the appropriate redesign of the Mexican Forest Fund drawn from workshops and consultant reports. II. Lessons that can be usefully applied to the design/redesign of forest financing mechanisms in other countries and for REDD+ financing and benefit sharing in forest countries.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. As the timeline has been extended and tasks and activities are just being launched it is too early to identify substantive changes in tasks and outputs at this time.

8. Next steps. What happens now? How will the project be brought to closure? CONAFOR still sees this work as a priority, with the hope to have it completed by June 2012. They are having their annual planning discussions right now. They are also discussing the current processes of the Mexican Forest Fund, as well as the legal aspects in relation to its existing mandate and emerging needs. On that basis, they will update the TORs and consultants’ profile, and send us this updated version by the end of January, so we can then initiate the hiring process.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? As mentioned above it is expected that this PROFOR sponsored activity would be useful for the design/redesign of forest financing mechanisms in other countries worldwide and would contribute to REDD+ financing and benefit sharing mechanisms in forest countries participating in the FCPF and FIP global initiatives.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources which have been mobilized.

PROFOR funding $ 100,000 Other sources of funding (describe below) $ 20,000 Total $ 120,000

What other sources of co-financing have been mobilized? What amounts are involved under each source of co- financing? Other sources (about 17%) correspond to Bank Budget.

PROFOR’s Portfolio of Currently Active Projects 43

C. COORDINATION ACROSS SECTORS

CHILE - FORESTS, TREES AND CONSERVATION IN DEGRADED LANDS

http://www.profor.info/profor/knowledge/chile-forests-trees-and-conservation-degraded-lands

Project ID: TF010227 Region: LAC PROFOR Thematic Area Percent Date prepared: January 5, 2012 Main: Financing SFM 50 % Prepared by: Robert R Davis Secondary: Cross-sectoral coordination 50 %

When was the grant originally approved?: 6/28/2011 When was the original planned grant completion date?: 10/31/2012 Have any extensions been approved?: No If yes, until when?: Click here to enter a date.

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note, and if any aspect of these has changed. Provide state-of-the-art knowledge on best practices and guidance for restoration of degraded forest lands applicable to the Chilean context targeting government agencies and other stakeholders through: (i) a review of the numerous pilots and ad hoc experiences in Chile to restore degraded lands through forestry (including economic, social and environmental benefits); (ii) an analysis of the investment returns on selected experiences to demonstrate that forest land restoration and climate change mitigation can be achieved together with income generation under specific conditions through afforestation and reforestation; (iii) a projection of the carbon sequestration potential from afforestation and reforestation of degraded lands in appropriate areas throughout Chile; and (iv) production of a quality public awareness video on land degradation.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. (i) Overview of land degradation/desertification problem in Chile (actual and potential problem areas), main causes of land degradation and potential target areas for restoration. (ii) Economic and financial evaluations for sustainable forest (and tree) use for protection/management of degraded lands; including, among others, afforestation, water and soil conservation, and protection and management of residual fragments (patches) of natural ecosystems. These analyses include costs, benefits and capacity to deliver ecosystem services such as those for climate change mitigation. (iii) Stakeholder technical guidelines for afforestation and other conservation measures to address remedial, mitigation and protection measures concerning land degradation. (iv)Analysis of alternative payments for environmental services including carbon benefits to promote afforestation/conservation of degraded lands, or services in areas under threat of desertification. Also includes legislation and programs review to identify and recommend incentives of payments for environmental services. (v) Proposal development for a system to monitor desertification and to track progress in remedial efforts to address land degradation. This includes guidelines, criteria and technical considerations for the development of conservation units (districts) in Chile, and recommendations for coding and meta-data for the monitoring system. (vii) Awareness and outreach regarding land degradation. This includes producing a professional quality multimedia/video to contribute to building public awareness about land degradation in Chile – its scope and impacts – and remedial interventions to mitigate degradation, especially those related to forests and trees.

3. Progress to-date. Please describe progress in completing the activities outlined above, and indicate key outputs which have been completed. Terms of Reference for all technical consultants have been negotiated with CONAF and 5 local consultants 44 PROFOR’s Portfolio of Currently Active Projects

3. Progress to-date. Please describe progress in completing the activities outlined above, and indicate key outputs which have been completed. identified and under recruitment. The videographer has been contracted and has initiated filming the Central Chile Matorral ecosystem and interviews with national experts. Filming just completed in the Magellenic Patagonian Steppe and Central Andean Dry Puna ecosystems. A draft sample video has been provided to PROFOR Secretariat.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. No substantive changes in tasks and activity plans have occurred.

5. Findings, impacts, knowledge generation, and dissemination to-date. Describe any preliminary impacts and findings from the activities which have been completed so far and efforts made to disseminate the findings. There have been no findings to date as the work will be starting in 2012. The proposed reports with recommendations and an awareness video are expected to be disseminated in Chile and internationally. A limited number of hard copies of the report and key findings will be disseminated through constituencies from PROFOR and CONAF, Chile’s governmental forest administration agency. CONAF is responsible for disseminating outputs and results on its websites and through hard copies shared with relevant stakeholders in Chile. PROFOR will also publish the report on its website and distribute produced material among interested parties internationally.

6. Policy framework and relevance to donor activities. Describe how this activity has complemented policy objectives at the national, regional, or global level. Are other donors working in this area and have there been changes since the start of the activity? What has been done to date to ensure this activity complements other donor- supported initiatives? Are there any particular partnerships which have been supported or which have been an outcome of this activity? Desertification/land degradation is a major national problem in Chile. CONAF is the leading government agency responsible for coordinating national efforts to prevent and mitigate land degradation. Thus this PROFOR sponsored activity contributes directly to the implementation of desertification/land degradation mitigation national policy. Proposed analyses and knowledge outputs are expected to contribute directly to realizing CONAF objectives by providing an overall scope of the problem and proposed interventions at technical and stakeholder levels. This activity will also deliver financial/economic analyses and potentially other new policy instruments to address forestland degradation in Chile. The proposal builds on ongoing and proposed initiatives within Chile, including the Chile Sustainable Land Management project supported by GEF (focusing on the restoration of degraded lands and measures to slow desertification) and a Bio Carbon Fund project that focuses on reforestation of degraded lands. Fostering strong linkages with these efforts will help advance the impact of this PROFOR sponsored initiative. The design and ongoing implementation of this activity has resulted in lessons learned and incorporated insights obtained from the PROFOR funded initiative, Global Forest Landscape Restoration Partnership led by IUCN and WRI. It is expected that this activity will also benefit from IUCN–WRI partnership work, currently implementing a comprehensive initiative in Ghana, as well as provide feedback from Chile experiences to the Global Forest Landscape Restoration Partnership. Also there is a very good potential for complementary activities and possible collaboration with other World Bank initiatives in forestry with Fundacion Chile and other branches of CONAF. This activity, while specific to Chile, is also expected to generate synergies with ongoing FAO initiatives (for example, developing guidelines for monitoring forest degradation at the global level).

8. Next steps. What happens now? How will the project be brought to closure? The work is still in early stages and consultants still being contracted. Following formal contracting of technical consultants, about 2 – 3 months will be needed to complete the majority of the work. Quality control and international consultants will take another 2 months. The Bank team is in constant contact with CONAF, who is helping to identify and coordinate the consultants and logistics for field activities. The filming will continue over the next 3 months with a final month of editing and feedback from the Bank team. An additional month will be needed for Bank team review and final quality control.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? The possibility of scaling-up and replicating findings and outcomes of this activity is high; especially, given the fact that Chile is currently engaged in the REDD+ initiative through the FCPF and in the GEF’s sustainable land management initiative. Also this PROFOR sponsored activity includes the development of a professional quality video, which provides an effective tool to substantially increase replication potential, in addition to increasing awareness among policy makers and civil society.

What other sources of co-financing have been mobilized? What amounts are involved under each source of co-financing?

Fundacion Chile provided field experts, transport and logistical assistance in filming sequences in the Central Chilean Mattoral. Value about US$1,500 in leveraged, unexpected financing. Co- financing from CONAF accounts for $25,000 (14% of activity costs).

46 PROFOR’s Portfolio of Currently Active Projects

IMPACTS OF CLIMATE CHANGE ON RURAL LANDSCAPES IN BRAZIL

http://www.profor.info/profor/knowledge/impacts-climate-change-rural-landscapes-brazil

Project ID: TF099225 Region: LAC PROFOR Thematic Area Percent Date prepared: December 6, 2011 Main: Cross-sectoral coordination 70 % Prepared by: Erick Fernandes Secondary: Livelihoods 30 %

When was the grant originally approved?: 3/1/2011 When was the original planned grant completion date?: 4/16/2012 Have any extensions been approved?: No If yes, until when?: Click here to enter a date.

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note, and if any aspect of these has changed.

Agricultural expansion is currently a major driver of deforestation in Brazil, generating significant negative feedback loop climate change impacts on remaining forests in Brazil, making its agricultural sector vulnerable to climate variability and thus, threatening food security. This activity aims at:

Sponsoring in the short term four key integrated interventions to improve the assessment of climate change impact on Brazilian agro-ecosystems to 2050 and beyond, by providing an operational framework for broad focus at the landscape level and agro-ecosystem resilience in order to reduce the potential impacts of climate variability and changes on society.

The key specific objectives are: • To refine the available climate change projections for Brazil by integrating global, regional, and local scale modeling currently being tested by the Brazilian National Institute for Space Research (INPE) in Brazil and the regional climate program for South America (CREAS). • To integrate the INPE and CREAS set of tested global and regional models with the state of the art developments in the Brazilian Regional Atmospheric Model (BRAMS). • To make the Brazilian Agro-Eco Zoning a climate-smart model by integrating the high resolution climate projection outputs from the above two specific objectives. • To upgrade the existing Brazilian Land Use Model (BLUM) to a climate-sensitive instrument by interfacing it with state of the art outputs from the three above objectives to allow assessments of climate change induced variability in supply and demand of agricultural commodities, changes in the distribution of land uses and production, and economic impact on agriculture and forestry production and profitability.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note.

(i) Set up a multidisciplinary and multi-agency expert team and prepare terms of reference for experts. (ii) Upgrade Brazil’s current national and the regional climate change projections through updating climate change projections and Agro Eco Zone model outputs, as key inputs for the BLUM by calibrating existing and recently available Brazilian high resolution climate models. (iii) Upgrade the BRAMS meso-scale meteorological model used in weather and climatology forecasting to simulate the impact of climate change on agricultural zones and productivity of major crops. (iv) Calibrate EMBRAPA’s Agro Eco Zone model for all of Brazil to develop projections on production zone suitability for crops, pasture and forest species. PROFOR’s Portfolio of Currently Active Projects 47

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. (v) Upgrading the Brazilian Land Use Model (BLUM) to a climate-sensitive model by integrating the updated climate change projections and Agro Eco Zone model outputs.

Major expected outputs of the activity include: (i) A Brazilian multidisciplinary and multi-agency team formed and collaborating on climate change projections and impact assessments on agriculture and forestry to 2050 and beyond. (ii) Set of state-of-the-art projections for land use and forest land cover change to 2050 – a time frame that is highly relevant to policy makers and investments in agriculture and forestry. (iii) An assessment of distribution of land use and production, based on: (a) projected climate change impacts and production shocks (at a micro-regional level); (b) the economic effects on production, prices and profitability; and (c) the feedback effect of climate change induced variability on distribution of land use; and (d) economic effects on Brazil’s GHG mitigation commitments.

3. Progress to-date. Please describe progress in completing the activities outlined above, and indicate key outputs which have been completed. The following are tasks and activities included in the work plan that have been completed and/or have been launched and are in full-fledged implementation: (i) Set up multidisciplinary and multi-agency team. Organizations or individuals selected to participate in the proposed team to conduct this initiative are all members of key government agencies involved in developing Brazil’s climate change adaptation and mitigation strategies. The team includes: (a) the leading land use change and climate change modeling expert from the Brazilian National Agricultural and Forestry Research Agency (EMBRAPA); (b) the leading climate modeling expert from the University of Campinas (UNICAMP) in Sao Paulo; (c) a key expert in meso-scale meteorological and atmospheric modeling for weather and climate forecasts from the Brazilian Agency for Space Research (INPE); and (d) the lead economist and land use change modeling expert from the Brazilian Institute for International Trade Negotiations (ICONE). (ii) Experts Terms of Reference and Consultant Contracting. Two sets of terms of reference were prepared together with the multidisciplinary team; consultants search processes and appointments were fully completed. Currently consultants have launched activities that are well underway following the activity’s time table (existing and recently available Brazilian high resolution climate models to simulate the impact of climate change on agricultural zones and productivity of major crops). (iii) Calibrate and upgrade the current available Brazilian and South America high resolution climate models. Tasks currently under implementation include: (a) Refining climate change impact projections via global, regional and local scale modeling through the development of regional climate models (RCMs) nested within a GCM to facilitate more robust projections at national to sub-national scales. Using RCMs helps quantify better regional climate change and provide regional climate scenarios for assessing climate change impacts and vulnerability; (b) use of Regional Climate Change Scenarios for South America – CREAS framework approach to generate high resolution RCMs for regional and sectoral impact assessments. The CREAS effort aims at providing high resolution climate change scenarios in South America for raising awareness among government and policy makers in assessing climate change impact, vulnerability and in designing adaptation measures; (c) refining the Agro Eco Zoning Model (EMBRAPA/UNICAMP) – The Agro Climatic Risk and Vulnerability Zoning Model, developed by EMBRAPA and UNICAMP, currently underpins all financial lending for the agricultural sector in Brazil. In order to access rural credit, the Central Bank of Brazil requires mandatory agricultural zoning throughout the country and the EMBRAPA/UNICAMP model indicates “what, where and when” to plant a crop variety according to a zoning system; (d) soil classification and map of the Agro Eco Zoning Approach; (e) identifying cropping areas that are less vulnerable to climate change impacts, based on temperature effects through 2020, 2030 and 2050.

(iv) Upgrade the BRAMS meso-scale meteorological model. Tasks currently under implementation include: (a) Model parameterization, calibration, and scenario impact 48 PROFOR’s Portfolio of Currently Active Projects

3. Progress to-date. Please describe progress in completing the activities outlined above, and indicate key outputs which have been completed. simulations. The BRAMS system is able to incorporate aerosol effects on radiation balance and the hydrological cycle thereby helping to overcome a significant source of inconsistencies in the rainfall projections. The model is equipped with a multiple grid nesting scheme, allowing the equations to be solved simultaneously on any number of interacting computational meshes of differing spatial resolution; (b) incorporation of the geo-referenced climate, soil and topographic data into a land resources database; (c) incorporation of BRAMS to the Coupled Aerosol- Tracer Transport (CATT) model. CATT is a numerical system designed to simulate and study the transport and processes associated with biogenic, biomass burning and anthropogenic emissions. These features enable the BRAMS system to incorporate the aerosol effects on radiation balance and regional hydrological cycles. This modeling system is operational at CPTEC/INPE to provide weather and air quality forecast on a daily basis; and (d) comparison of BRAMS model simulation with ANA observations on rainfall and temperature baseline data – The Brazilian National Water Agency (ANA) and the National Institute of Meteorology (INMET) have daily rainfall and temperature data spanning 30 years. These data sets are critical for both calibrating and validating the climate models.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. Thus far no substantive changes have occurred in the planned tasks and activities.

The proposed work and identified outputs will be the first of their kind and will be available in time for the 2012 UNFCCC conference in Rio. At this point of the implementation of this activity it is too early to identify detailed findings; however, ongoing tasks and consultant work on calibration and upgrading the current available Brazilian and regional high resolution climate models and the upgrading of the BRAMS meso-scale meteorological models would lead us to believe that the approaches and methods also allow developing scenarios of forest land use and deforestation trends related to agriculture production. These models are expected to be extremely useful in setting policy for sustainable use and conservation of forest ecosystems, land use planning and carbon emissions reduction. The state-of-the-art climate projections and impact assessments will be disseminated extensively via (a) the EMBRAPA, INPE, and UNICAMP Institutional Networks, (b) A National Workshop organized by EMBRAPA in April 2012, (c) A side event at the UNFCCC Conference of the Parties (COP18) in Rio in December 2012 (Co-funding from EMBRAPA and WBG); and (d) through the PROFOR website.

This activity also complements and contributes to the South American initiative, particularly in the Amazonian region to produce high resolution climate scenarios for impact assessments (CREAS), and the EU sponsored activity to enhance climate data collection, storage, and access. In addition to the European Union, the UK is also supporting training in and access to the UK Hadley Center modeling system (Providing Regional Climate Scenarios – PRECIS) that is being used by INPE and EMBRAPA in Brazil.

As described previously this PROFOR sponsored activity is based on a partnership involving the World Bank Group, three of Brazil’s leading National Research Agencies and Brazil’s International Institute for Trade Negotiations – a major policy think tank. The climate change modeling component is embedded in the on-going South American Regional Climate Change Scenarios (CREAS) program that also includes the UK Hadley Center and the Europe-South America Network for Climate Change Assessment and Impact Studies (EU CLARIS). The climate modeling approaches currently in development could well be extended to other LCR countries (e.g. Mexico, Argentina, Colombia) via the CREAS network.

7. Implementation Performance. How would you characterize implementation performance? What unexpected opportunities have arisen and how have you been able to take advantage of these? Have there been unanticipated obstacles in implementation? Do you expect any significant delays in completing this activity? What measures are being taken to address any shortcomings in implementation? Despite the challenges posed by the lack of data, or access to long term data that is currently not in digital form, activities are being implemented following the original schedule. Extensive efforts are being made for data collection and data entry to prevent major constraints in developing robust and accurate modeling projections, calibration and validation of new generation models. Thus, it is expected that timelines will be met. Available data developed by government agencies and those of the National Meteorological Institute from 2008 to the present, allow a more accurate climate analysis than in the recent past.

8. Next steps. What happens now? How will the project be brought to closure? (i) Both the meteorological and climate change modeling and the soil and agro-meteorology modeling senior consultants, in close coordination with World Bank TTL and the multidisciplinary and multi-agency project team, will continue collecting, systematizing and synthetizing, and calibrating data to complete the two sets of deliverables. The following are the expected deliverables for the Calibration and upgrading current available Brazilian and South America high resolution climate models: Digital maps, graphs, and tables for the years 2020, 2030, and 2050 at national, state, and municipal scales of (a) productive low risk areas that will become high risk areas for crops indicated in the objectives; (b) unproductive low risk areas that will become high risk areas; (c) unproductive high risk areas that will become low risk areas and thus suitable for cropping; (d) estimates of crop yields in the above three categories of agro-eco zones. If sufficient resources are available, the above crop area and yield estimates (shocks) will be used to estimate economic impacts. Expected deliverables for the Upgrading the BRAMS meso-scale meteorological model task are: (a) model calibration; (b) baseline data set; (c) draft reports; and (d) final report (Policy Notes A-C) (ii) As the above outputs are delivered, the upcoming tasks to be delivered by April 16, 2012 are expected to focus on: (a) calibrating the Brazilian Agro-eco Zoning Model (currently used by the Central Bank of Brazil for rural credit programs) to become a climate smart instrument by integrating high resolution climate projection from the above activities (iii) and (iv); and (b) adjusting the existing Brazilian Land USE Model to become climate 50 PROFOR’s Portfolio of Currently Active Projects

8. Next steps. What happens now? How will the project be brought to closure? sensitive by integrating outputs from activities (iii), (iv) and (v) allowing for the assessment of climate change induced variability on supply and demand of agricultural commodities at the national level; changes in the distribution of land use and production (agriculture, forestry and pasture) in Brazil for given supply and demand scenarios; and economic effects on agriculture and forestry production and profitability.

Calibration of EMBRAPA’s Agro Eco Zone model The Central Bank of Brazil and the EMBRAPA and UNICAMP team members will use the above suite of three regional and one global climate model to simulate climate trends from 1960-1990 and prospective climate trends from 2071 – 2100 (future climate in standard climate modeling) and use statistical interpolation to derive the climate in 2050. Climate projections will then be used to calibrate the Agro Eco Zone model for all of Brazil (5,000 municipalities) to develop projections for production zone suitability for crops, pastures, and forest species.

Climate-sensitive Brazilian Land Use Model (BLUM) ICONE team members will integrate the updated climate change projections and Agro Eco Zone model outputs as inputs to the Brazilian Land Use Model, a partial equilibrium economic model to develop projections of: (a) changes in the distribution of land use and production for given supply and demand scenarios, (b) economic effects on agricultural production, prices and profitability, and (c) feedback effect of climate change induced changes in the distribution of land use, and the economic effects on Brazil’s GHG mitigation targets to 2020.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How?

Potential for replication and scalability of this PROFOR sponsored activity, or key aspects of it, is extensive. Even though it is too early to assess correctly the extent of replication, experiences from this activity could be very useful beyond Brazil, for other Amazonian countries and elsewhere. Potential for replication of key components of this initiative could be even greater if the use of the described features and expected outcomes, adapted to other conditions, are promoted through opportunities offered by mitigation (REDD+) and adaptation efforts at the national level.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources which have been mobilized.

PROFOR funding $ 150000.00 Other sources of funding (describe below) $ 130,000.00 Total $ 280,000.00

What other sources of co-financing have been mobilized? What amounts are involved under each source of co- financing? Brazil Country Management Unit has provisionally allocated US130,000 for this activity (80,000 provisional in FY11) amounting to a 46% co-financing rate.

PROFOR’s Portfolio of Currently Active Projects 51

THE ROLE OF FORESTS IN LOW CARBON GROWTH STRATEGIES

http://www.profor.info/profor/knowledge/role-forestry-low-carbon-growth-strategies

Project ID: TF098897 - P117056 Region: Global PROFOR Thematic Area Percent Date prepared: December 28, 2011 Main: Cross-sectoral coordination 80% Prepared by: Klas Sander (ENV) Secondary: Livelihoods 20%

When was the grant originally approved?: 1/11/2011 When was the original planned grant completion date?: 7/1/2011 Have any extensions been approved?: Yes If yes, until when?: 6/29/2012

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note, and if any aspect of these has changed. Developing policy briefs analyzing the role of forests and forest management for developing and implementing low-carbon growth strategies, including financing options related to low-carbon growth. While the policy briefs will build on experience and data analyses already undertaken in key pilot countries (Mexico, Indonesia, Brazil), it is explicitly intended to provide guidance on the integration of forestry in low-carbon growth strategies at a general level, thus, creating value-added beyond the case study examples.

The original objectives have not changed.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. Review of existing background analyses already carried out in the context of the work for the selected three pilot countries and consolidate the data and analysis relevant for the forestry sector for each of the pilot countries. The findings will be discussed in a policy brief summarizing the critical aspects and issues for including the forestry sector in low-carbon growth strategies. This will also entail a discussion of available financing mechanisms.

3. Progress to-date. Please describe progress in completing the activities outlined above, and indicate key outputs which have been completed. Consultants have been hired and a draft document has been submitted. After an informal review, next steps are as follows: a) Incorporation of comments b) Formal review process c) Finalization of Policy Brief d) Editing and publication of Policy Brief Dissemination activities of the report will follow the publication.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. No, there have been no changes in the planned outputs.

52 PROFOR’s Portfolio of Currently Active Projects

5. Findings, impacts, knowledge generation, and dissemination to-date. Describe any preliminary impacts and findings from the activities which have been completed so far and efforts made to disseminate the findings. Findings are currently still be reviewed and improved. Dissemination will follow the publication of the final report. The draft report outlines the issues and approaches for countries integrating their forestry (and land-use) sector in low-emission development (LED) strategies. Building on the specific examples of Brazil, Indonesia and Mexico, the analysis differentiates specific interventions and policy options for different categories of "forest" countries. For example, where land-use change is identified as a large source of nationally domestically GHGs, the introduction of targeted interventions and land-use policies can address a significant percentage of all domestically generated GHGs. For other countries, where the baseline scenario is characterized by degraded landscape, the potential of forests in LED strategies is found in investments in regeneration of these degraded landscapes. Afforestation and reforestation are specific approaches in this regard. The report also emphasizes that the contribution of GHGs in the context of forest degradation deserves particular analysis and has so far been underemphasized in international dialogue and policy designs.

Last but not least, the report specifically looks at the approaches and issues related to sustainable wood energy and its contribution to LED. While until recently the use of wood-based biomass energy was regarded as a transitional phase of energy use, it is now clear that an increasing number of people will rely on wood-based biomass energy in the future. This does not only apply to the poorest countries, but also applies to MICs and developed economies.

Many recently published energy transition models assume a large part of future energy supplies will be satisfied through (wood-based) biomass energy. Therefore the potential for forests and LED is being recognized in a new light. Denmark, for example, aims to double its forest area over the next rotation period from 10% to 20% land area. In the transition phase, wood demand is increasingly satisfied through imports - some of which is coming from developing countries in Africa and Latin America. The report alludes to these latest developments and identifies areas for future analytical and partnership work.

8. Next steps. What happens now? How will the project be brought to closure? (a) Finalization of Policy Brief, incl. review process (b) Editing and publication, (c) Dissemination activities

PROFOR’s Portfolio of Currently Active Projects 53

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? Given that this is a Policy Brief for a specific topic (Forestry and LED) replication is probably not desired. However, scaling-up analytical work in this area may be considered given the relevance of forests in their contribution to LED.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources which have been mobilized.

PROFOR funding $ 50,000 Other sources of funding (describe below) $ 8,250 Total $ 58,250

What other sources of co-financing have been mobilized? What amounts are involved under each source of co- financing? World Bank core budget represents 8% of the total funding of the activity.

54 PROFOR’s Portfolio of Currently Active Projects

NEPAL FOREST SECTOR STRATEGY

http://www.profor.info/profor/knowledge/nepal-forest-sector-strategy

Project ID: TF096071 - P120509 Region: SAR PROFOR Thematic Area Percent Date January 12, 2012 Main: Governance 75% prepared: Cross-sectoral Prepared by: William B. Magrath Secondary: 25% coordination

When was the grant originally approved?: 3/10/2009 When was the original planned grant completion date?: 5/30/2011 Have any extensions been approved?: Yes If yes, until when?: 2/29/2012

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note, and if any aspect of these has changed. The primary objective of this study is to critically review the strengths and limitations of Nepal’s forest sector. As the original approach was so broad as to be unachievable, the study design was reformulated. The study now focuses on providing a framework for delivering concise messages and strategic guidance to the Ministry of Forestry and Soil Conservation and other audiences on the need for concrete measures to improve mechanisms for resource mobilization in forestry, incentives, and governance.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. The grant has supported 3 workshops, smaller informal consultations and research. A study facilitator has been appointed and located in the Bank’s Nepal Country Office since June and has been engaged in continuous consultations with Ministry of Forestry and Soil Conservation officials and forestry sector stakeholders. A public Launch workshop was held in July introducing the revised approach, identifying potential resource people and lessons learned from earlier policy reforms in Nepali forestry.

To better align with the sector strategy that the Ministry of Forestry and Soil Conservation is preparing, the study program was discussed with the multi-stakeholder Forest Sector Development Strategy Task Force. It was agreed that the study would constitute an analytic contribution to the Government’s process.

A consultant has also been engaged to prepare a desk study summarizing the currently available information on the role of forest resources in Nepali development.

3. Progress to-date. Please describe progress in completing the activities outlined above, and indicate key outputs which have been completed. A summary report was prepared and presented to Ministry of Forestry and Soil Conservation and Members of Parliament, donors, civil society stakeholders and to officials of the National Planning Commission and Ministry of Finance. Substantial achievements were made in securing resources for Nepal’s REDD Readiness efforts, including mobilization of Forest Carbon Partnership support.

A final written report is being finalized.

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4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. None since last Progress Report.

5. Findings, impacts, knowledge generation, and dissemination to-date. Describe any preliminary impacts and findings from the activities which have been completed so far and efforts made to disseminate the findings. Aside from recognizing the success of the Nepali community forestry model in the middle hills, the study so far has highlighted a number of longstanding policy and institutional constraints. These include the distorting effects of the Timber Corporation of Nepal, possibly unjustified differentials in benefit sharing arrangements across forest use categories, persistent reliance on outmoded and hazardous silvicultural prescriptions, the absence of use planning and allocation systems and processes that address conversion of forests to other sustainable uses, and a generalized failure to develop and deploy robust forest management planning over the government-managed forest area. Approaches to these challenges will form the core of a reform agenda that will be framed by the report.

8. Next steps. What happens now? How will the project be brought to closure? A final report is now under preparation for dissemination and there will be a final dissemination workshop.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? The report’s conceptual framework is highly replicable and should be of wide interest as a model for replication.

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10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources which have been mobilized.

PROFOR funding $ 142,300 Other sources of funding (describe below) $ 9,500 Total $ 151,800

What other sources of co-financing have been mobilized? What amounts are involved under each source of co- financing? The study has been facilitated by linkage with FCPF operations. Additionally, at least $5000 eq. has been mobilized from FAO Cooperative Programme.

PROFOR’s Portfolio of Currently Active Projects 57

USING FORESTS TO ENHANCE RESILIENCE TO CLIMATE CHANGE

http://www.profor.info/profor/knowledge/using-forests-enhance-resilience-climate-change

Project ID: P112670 Region: Global PROFOR Thematic Area Percent Date prepared: December 8, 2011 Main: Cross-sectoral coordination 100% Prepared by: Diji Chandrasekharan Behr Secondary: 0%

When was the grant originally approved?: 2/1/2009 When was the original planned grant completion date?: 12/30/2010 Have any extensions been approved?: Yes If yes, until when?: 12/13/2012

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note, and if any aspect of these has changed. Looking at current and projected (for the next 20-50 years) impacts of climate change, this study aims to answer the following questions: • In populated landscapes of mixed land uses, how can forests contribute to enhancing social and environmental resilience of local populations, agricultural systems and energy systems found in the landscape? • What management regimes for forests can realize the potential of forests to enhance resilience? The management regimes could include a range of activities including restoration of degraded lands, reforestation/afforestation, protection, etc. • What are the institutional arrangements and public expenditure requirements to facilitate the use of forests for climate change resilience?

The study will examine these questions at a theoretical level as well as a practical level in three countries. At the country level, this study will select representative landscapes and analyze the following: (i) Potential impact of climate change on land uses within representative landscapes (ii) Measures currently being taken to build social and environmental resilience to climate change (iii) How forests are/can contribute to such measures (iv) Economic rationale to using forests to enhance resilience rather than an alternative approach, (v) Associated trade-offs resulting from managing forests for enhancing social and environmental resilience to climate change (vi) Institutional arrangements in place and needed for promoting the use of forests

The study aims to inform planning and policy making processes, and is targeted towards decision-makers and development practitioners.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. i) Review relevant work (including gray literature and project material) on ecosystem services, climate change modeling, environmental and social resilience, and linkage between different ways of managing forests and provision of services and goods. The aim is to document the state of knowledge on issues regarding climate change, resilience, use of forests for adapting to climate change, and institutional and financial requirements for using forests to enhance resilience to climate change. (ii) Develop the approach and analytical framework that will be used for this study. This will require, among other things, examining: o management practices (formal and informal systems that cover forest management, monitoring and law enforcement) that are often used for forests in landscapes with a mosaic of land uses 58 PROFOR’s Portfolio of Currently Active Projects

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. o models to predict potential impact of climate change (in the next 20-50 years) on landscapes with a mosaic of land uses that include forests, trees, and agriculture (i.e., impacts on fire frequency and patterns, pests, nutrient requirements, forest and agricultural productivity, soil erosion, livelihoods, etc.) o experts’ view on what is needed (in terms of resource management, financial inputs and institutional support) to enhance resilience of local populations in these landscapes, how these needs are currently being met, and the potential contribution of forests. (iii) Prepare a paper on the state of knowledge regarding the role of forests in enhancing resilience to climate change, and the analytical framework for this study. (iv) In three countries (Burkina Faso, Lao PDR, Honduras): o Carry out key informant interviews and review of relevant literature and project information to capture what is known about the threat of climate change in the country and what is being done to respond to this threat. o Meet with government development partner staff to inform them about the study and the analytical framework (in Burkina the link will be between forests and the energy sector, in Lao PDR it will be between forests and the agriculture sector, and in Honduras it will be between forest and the urban water sector) o Conduct at least one workshop with the relevant stakeholders to inform them about the study, to launch the work, and obtain inputs from experts o Use a range of methods (including participatory and qualitative approaches) to collect needed primary and secondary data for the analytical framework. This data would potentially be on: * climate impacts as determined in models and through ground realities, * gap assessment between measures needed and available to enhance resilience of local populations and systems. This would examine: a. measures needed to enhance resilience, b. measures in place to enhance resilience * potential contribution of forests and trees (e.g., through restoration of degraded forest lands, reforestation, concerted development of contiguous agroforestry systems, changes in management of standing forests, or a combination of these and other management practices) * institutional arrangements and financial resources used for supporting and motivating climate resilient land use practices (including managing forest lands for provision of climate resilient benefits), o Present what are possible trade-offs of using the different forest -based approaches to enhancing resilience o Conduct a cost benefit analysis of the different ways of using forests vis-à-vis other measures to enhance resilience (this should be considered for a 20 year timeframe) o Identify what are the needed institutional and public expenditure implications at the national and subnational level to effectively motivate the use of forests. This would involve, among other things: * identifying which institutions are currently involved in climate change * examining what measures they are adopting and how are they using forests/trees in the landscape to enhance resilience climate change * assessing how the decisions are made * ascertaining what institutional measures are needed (linkages among agencies in government or among private partners and government, or other arrangements o Prepare country reports regarding the work done at the country level and recommendations for why and how forests should be used to enhance resilience. o Conduct a workshop to share and validate the findings of the study to the relevant national stakeholders and to mainstream the options for using forests to integrate. (v) Prepare a synthesis report that links the framework and findings from the three country cases, common findings that are worth noting, and lessons for other countries. This would focus on capturing the needed institutional arrangements and public expenditure requirements. The primary audience for this report would be development partners. (vi) Implement the dissemination strategy.

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2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. The outputs envisaged are: (i) Document capturing the state of knowledge on key issues raised above, and the logic underlying the analytical framework and approach used in this study. A brief version of this report will be prepared for sharing more widely with government and other key stakeholders in the three selected countries. (ii) Three individual county reports that document how trees and forests are being (or could be) used and enhance resilience to climate change, the economic rationale for using forests, and the institutional and public expenditure requirements to stimulating such use of forests. (iii) (At a minimum) Two workshops (at the appropriate level – national or subnational) involving all key stakeholders each of the three countries. The objective of one workshop would be to launch the country level activity and obtain inputs from experts and key stakeholders, and the second workshop would be structured to present the main recommendations, get feedback and buy-in for the options. (iv) A synthesis report summarizing of approach of the study and the main findings for each of the three country case studies and the main common findings (for donors and development partners). This would focus on capturing the needed institutional arrangements and public expenditure requirements.

3. Progress to-date. Please describe progress in completing the activities outlined above, and indicate key outputs which have been completed. The following has been achieved to date: - A recipient executed grant agreement has been signed between the World Bank and CIFOR to enable CIFOR to implement this work. - A MoU between the government of Lao PDR and CIFOR should be signed by the end of the year. - The analytical framework that will be adopted has been discussed between PROFOR staff and CIFOR and will be finalized shortly. - The three World Bank country programs in the three countries where the activities are being implemented are on board and have indicated that they hope to use the outputs of this study to inform their dialogue with government. - A draft of the global state of the knowledge report has been produced by CIFOR. PROFOR will be working from this draft to finalize the product and make it accessible to a broad audience in the form of a PROFOR working paper (see findings section). - The methodological framework has been developed. It includes clarifying how the question of resilience and adaptation will be handled. This is important because one of the challenges about working on adaptation to climate change is framing the question so that the study captures adaptation to climate changes rather than other shocks. In this study it is assumed that increasing resilience to climate change is equivalent to reducing vulnerability to climate change. How vulnerable a system (whether biophysical or social) is to shocks or shifts associated with climate change depends on how much the system is exposed to changes (e.g., is the system exposed to significant variations in rainfall and temperature, or is it exposed to minor changes), how sensitive it is to these changes (e.g., does a small change in frequency of rain result in a species or function associated with the system becoming irreplaceable), and what is the capacity of the system to moderate or cope with the changes. Using this framework, helping a system adapt to climate change involves reducing its exposure, lowering its sensitivity and increasing its adaptive capacity. The question in the case studies, therefore is how forests can provide such services for other sectors.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. The activity component focused on expenditure issues has been removed. CIFOR will not be using existing Public Expenditure Reviews (PER) or doing a “PER light” to understand the expenditure implications associated with using ecosystem based adaptation measures. This change has also moved this activity completely into the cross- sectoral pillar of PROFOR (previously it had 20% under SFM financing). There has been no other substantive change.

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5. Findings, impacts, knowledge generation, and dissemination to-date. Describe any preliminary impacts and findings from the activities which have been completed so far and efforts made to disseminate the findings. UNFCCC (2007) estimates that the cost of adaptation in agriculture, coastal zones, forestry, fisheries, health, infrastructure, and water supply combined will reach $44 billion to $166 billion per year by 2030 globally. For developing countries, the cost is between $28 billion and $67 billion. The long term benefit of making investments in adaptation will exceed the cost if the horizon is stretched to 2100. In the more immediate future, however, there is a need to explore how to meet or lower adaptation costs so that the economic, social and environmental benefits exceed the costs. Examples of how forests can contribute to lowering the cost of adaptation include: • Lowering cost of protecting coastal areas from floods and erosion – in Vietnam, planting and protecting nearly 12,000 hectares of mangroves cost US$1.1. million per year but saved an annual expenditure of US$ 7.3 million for dyke maintenance (Tallis et al., 2008) • In Orissa, India, the state could reduce the loss of lives to super cyclones by 92% by investing in restoring mangrove forests. Mangrove forests can significantly lower the degree of house damage in areas within 10 kilometers of the coast. Mangroves could also reduce loss of life and animals. A hectare of mangrove forest land is estimated to reduce damage by US$43,352 while costing US $8,670 and having regeneration costs of US$ 110. These forest-based measures compare to the establishment of a cyclone shelter which costs roughly US$ 72,000. • Lowering cost of adapting hydropower generation to changed in climate (especially under high climate change projections) - in Kenya, a rapid assessment of measures for adapting hydropower generation to the anticipated impact of climate change to the Tana river basin found that without adaptation measures the cost of climate change would range from US$2 million to US$66 million for the hydropower, irrigation and drinking water sector. Using the most extreme climate change projections, it was found that ecosystem based adaptation systems (including sustainable land management to minimize erosion) is more profitable than an infrastructure based approach. • In New York City, natural water purification systems cost roughly US$ 1-1.5 billion -- significantly less than the estimated cost of filtration at US$6-8 billion plus US$300-500 million/year as operating costs. This example, while not explicitly related to climate change, illustrates the potential saved costs from using forest based measures.

There are few studies that explore how forest-based adaptation measures compare to other adaptation measures. Among these, most are focused on riverine forests and few examine upland forests. Most studies in this area show that investments in forest based measures for adaptation (whether climate change or other changes) can be profitable. Examples include: • The Economics of Ecosystems and Biodiversity (TEEB) Climate Issues Update (2009), which suggests that the potential social returns of restoring degraded ecosystems can reach 40% for mangroves and woodland/shrublands, 50% for tropical forests, and 79% for grasslands when the multiple ecosystem services provided are taken into account. • Studies on the role of forest resources (e.g., through community based forest management) in provisioning services that assist communities to emerge from poverty (e.g., in Lao PDR, non-timber forest products are estimated to provide households with roughly 40% of their income). Studies exploring how forests can contribute to adaptation (without comparing the use of forest-based adaptation measures with other adaptation measures) help justify investment. These studies, however, do not, in times of scarce financial resources, provide decision-makers with a clear sense of trade-offs – more specifically how good this investment is compared to other options.

Work on forest and adaptation is not new. Donors (Switzerland, DFID, EU and others) have been supporting work on adaptation through their support for IUFRO, CIFOR, and other programs on adaptation. This activity aims to complement these studies in several ways: building on approaches that these other programs have developed, focusing on the interaction between forests and other sectors, and drawing lessons from three country cases for a broader audience.

8. Next steps. What happens now? How will the project be brought to closure? Immediate next steps are for the selection process to be completed and for the launch of this work.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? At this point in time, replication potential has not been considered.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources which have been mobilized. PROFOR funding $ 200,000 Other sources of funding (describe below) $ 510,000 Total $ 710,000 What other sources of co-financing have been mobilized? What amounts are involved under each source of co-financing? Co-financing has been mobilized from TFESSD (USD 500,000) and BB (USD 10,000).

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D. GOVERNANCE

ESTABLISHING A NETWORK OF CONTROLLED DELIVERY UNITS FOR FOREST LAW ENFORCEMENT

http://www.profor.info/profor/knowledge/establishing-network-controlled-delivery-units-forest-law- enforcement

Project ID: P127640 - TF010338 Region: Global PROFOR Thematic Area Percent Date prepared: January 11, 2012 Main: Governance 90 % Prepared by: William B. Magrath Secondary: Cross-sectoral coordination 10 %

When was the grant originally approved?: 7/31/2011 When was the original planned grant completion date?: 6/29/2012 Have any extensions been approved?: No If yes, until when?: Click here to enter a date.

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note, and if any aspect of these has changed. The objective of the project is to reduce international trade and trafficking in illicitly obtained forest products, especially but not only timber, by developing and mobilizing a collaborative network of Customs and forest law enforcement agencies and officials. By equipping this community of practice with knowledge of the controlled delivery (CD) technique and by building relationships, communications channels and confidence in the integrity and intention of members of the community of practice, the project will help to lend credibility to Customs enforcement and increase smugglers’ perceptions of the risk of detection and apprehension.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. 1.Identify and select one mid or senior level officer each from police, Customs and prosecutor or judge in 20 selected countries, 2. Organize a training event for 60-65 selected officers, with a period of 3-4 days (the training event is most likely to be convened in the United Arab Emirates which is anticipated to be a co-financier). This will include development of training modules, compilation of additional training and reference material and case study documentation. 3. Conduct experimental controlled delivery operations, built upon the model of training plus operational exercise. 4. Follow up with the participants to make sure a national CD team is established in each country, maintain contacts with them and provide necessary support on their daily operation, 5. Prepare an assessment of the outcomes and impacts of the training and follow-up activities, recording specific results (such as enforcement actions and seizures of contraband, etc.). As appropriate, this may involve a small meeting of representatives of agencies taking part in resultant enforcement actions and the lead agencies (and is likely to be done in conjunction with an International Consortium on Combating Wildlife Crime (ICCWC) Senior Experts Group meeting), an on-line survey of participating agencies, and other evaluations.

Outputs a) Establish National Controlled Delivery Units, and further international controlled delivery networks oriented toward forestry and wildlife smuggling control. b) Increased confidence and capacity of enforcement staff in participating countries c) Enhanced mutual trust and cooperation of agencies both at national and international level. d) Help bring tangible results via eliminating transnational criminal groups involving in serious and large scale illegal timber trade and wildlife trafficking. PROFOR’s Portfolio of Currently Active Projects 63

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. e) A comprehensive report and assessment.

Note: The project intends to target 20 countries on the basis that these countries constitute a substantial share of the estimated trade in illicit forest products (as a source, destination or transit point). As an effective controlled deliveries enforcement network needs to be able to accommodate the unanticipated/unknown direction of trade for specific future target consignments of contraband, it is essential that training and networking be conducted on a sufficiently broad basis.

Subsequent to this training activity, interaction among members of the community of practice will be sustained through existing mechanisms for Customs and law enforcement collaboration that are maintained by individual countries and by World Customs Organization (WCO), INTERPOL, the Secretary-General of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) and UN Office on Drugs and Crime (UNODC).

3. Progress to-date. Please describe progress in completing the activities outlined above, and indicate key outputs which have been completed. A major international workshop was held in Shanghai, December 7-8, 2011 with 50 participants from 18 African and Asian countries and experts from the Bank, the World Customs Organization, INTERPOL, the UN Office on Drugs and Crime, South Africa, Belgium and the Netherlands. The workshop covered forest and wildlife crime and law enforcement in China, global wildlife and timber smuggling routes, wildlife and timber methods and detection, controlled delivery techniques (including financial aspects), prosecution and group activities aimed at building and ongoing network of practitioners.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. None besides a location change for the workshop (held in Shanghai China rather than in the United Arab Emirates).

5. Findings, impacts, knowledge generation, and dissemination to-date. Describe any preliminary impacts and findings from the activities which have been completed so far and efforts made to disseminate the findings. Discussions at the Shanghai workshop identified a number of institutional and operational challenges constraining conduct of Controlled Delivery operations. Institutional challenges include: legislative issues (laws related to CITES authorities); trust among national agencies and potential international partners; political support; technical and logistical resource. Operational challenges identified include skills and knowledge, corruption, further networking needs. Opportunities for further support include assistance on legal reforms and prosecutions. The World Customs Organization undertook to give participants access to its secure Environet Platform in order to exchange information and INTERPOL will provide support for future operations using its Econet system.

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8. Next steps. What happens now? How will the project be brought to closure? Workshop follow up, as proposed in the Project Proposal, will monitor participants’ future collaboration and possible conduct of Controlled Delivery operations.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? The project already demonstrates the scope for delivering training to a multi-country audience in a specific operational law enforcement technique directly applicable to forestry and natural resources. The critical element is the identification of discrete topics amenable to being addressed in short sessions. This identification requires involvement of experienced law enforcement professionals with knowledge of the range of realistically relevant techniques.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources which have been mobilized.

PROFOR funding $ 150,000 Other sources of funding (describe below) $ 100,000 Total $ 250,000

What other sources of co-financing have been mobilized? What amounts are involved under each source of co- financing? In-kind contributions of resource specialist and experts were provided by the Netherlands and Belgium

PROFOR’s Portfolio of Currently Active Projects 65

FIELD-TESTING GOVERNANCE BUILDING BLOCKS (BURKINA FASO); FIELD MANUAL ON FOREST GOVERNANCE DIAGNOSTICS

http://www.profor.info/profor/knowledge/assessing-forest-governance-burkina-faso

Project ID: P118837 Region: Global PROFOR Thematic Area Percent Date prepared: January 9, 2012 Main: Governance 100% Prepared by: Nalin M. Kishor Secondary: Choose an item. %

When was the grant originally approved?: 1/17/2011 When was the original planned grant completion date?: 5/31/2011 Have any extensions been approved?: Yes If yes, until when?: 4/30/2012

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note, and if any aspect of these has changed. Burkina Faso is a Sahelian savannah country which has experienced continued degradation of its natural resources including forests. Poor governance is seen as an important contributing factor to this degradation. A major objective of this initiative is the application of a forest governance diagnostic tool to construct a baseline assessment of the forest governance situation in Burkina Faso and to pinpoint the areas requiring highest priority reforms. A forest governance reform strategy for the country will then be formulated on the basis of the diagnostics. A recent report, “Roots for Good Forest Outcomes – An Analytical Framework for Governance Reforms” (referred to as the “Roots” report below), provides guidance for a governance diagnostic tool.

A second objective of this work is to support the production of a field manual to facilitate the application of forest governance diagnostics in any country interested in improving the quality of forest governance. The field manual will draw upon the lessons learned from the application of the diagnostics in Uganda (through a separate PROFOR activity) and Burkina, as well as applications of the “Roots” framework by other agencies (for example, in Kenya by Indufor).

There has been no change in the content of the work as originally proposed in the Concept Note.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. Two overall tasks with their own activities:

A. A systematic application of the forest governance diagnostics tool in Burkina Faso involving the following four steps: Step I: Preparation of a Forest Governance Assessment Report. Step II: Development of a diagnostic questionnaire. Step III: Assessment of the questionnaire by multi-stakeholder representatives. Step IV: Tabulation of Results and Preparation of Issues Report: This step will involve the collating and tabulation of the information obtained from the first three steps.

The 3 specific outputs expected from task A are: 1. Background Country Assessment Report 2. Customized Questionnaire with stakeholder responses 3. Final Forest Governance Issues Report and a draft forest governance reform strategy.

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2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. B. Production of a forest governance diagnostics field-manual, drawing upon the lessons learned from the field applications.

3. Progress to-date. Please describe progress in completing the activities outlined above, and indicate key outputs which have been completed. Task A: . A background country assessment report finalized in February 2011 (“Rapport de base sur la Gouvernance Forestière au Burkina Faso,” in French). 2. Customized questionnaire (in French) was finalized in October 2011. 3. A multi-stakeholder workshop was held on October 12, 2011. The workshop report and draft strategy are under preparation and should be available in English in early 2012.

Task B: An outline of the field-manual has been produced.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. The basic scope of the work has not changed. However the budget has increased substantially largely because of a significant increase in the input of time by PROFOR TTL, which was not anticipated at the time of the formulation of this project. A major reason for increase in the PROFOR TTL’s time has arisen from relatively weak support by the local consultant hired for the Burkina Faso field work.

5. Findings, impacts, knowledge generation, and dissemination to-date. Describe any preliminary impacts and findings from the activities which have been completed so far and efforts made to disseminate the findings. The background forest governance country assessment report identified a number of areas likely to pose governance challenges in Burkina Faso. These range from weaknesses of participatory processes and lack of conflict resolution mechanisms, to lack of knowledge about forest legislation, low competence of forest agencies, weak law enforcement and corruption and lack of transparency in fiscal and budgetary processes. The assessment report has been widely disseminated and these issues have been included into the draft Forest Investment Program (FIP) Plan for the country (see also #6 below).

8. Next steps. What happens now? How will the project be brought to closure? The PROFOR activity will be brought to closure with (i) the finalization of the Burkina workshop report which will identify the priority areas requiring action, and (ii)the compilation of the field manual on forest governance diagnostics.

Beyond the PROFOR activity time span, efforts to improve governance in Burkina Faso will include a detailed discussion of the report with the government and other stakeholders with the objective of incorporating specific project components dealing with forest governance issues in the FIP Plan for the country.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? A recommendation coming out of the October multi-stakeholder workshop in Burkina was for a systematic replication of similar workshops in other parts of the country. It was suggested that this would contribute to disseminating information about the state of forest governance in the country, involve all stakeholders and build up a strong momentum for reforms.

Similar forest governance workshops may indeed be organized in the country over the next few months, utilizing a preparation grant under FIP.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources which have been mobilized.

PROFOR funding $ 385,000 Other sources of funding (describe below) $ 21,450 Total $ 406,450

What other sources of co-financing have been mobilized? What amounts are involved under each source of co- financing? FIP grant administered by MEDD-Burkina of approximately USD 7,500 and FLEG TF for $13,951. Other sources of co-financing represent 5.2% of the total cost of the activity.

As approved by the Board on a non-objection basis, PROFOR funding has been increased from $150,000 to $385,000 of which, $307,734 has been spent (as of Nov. 30, 2011).

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REFORM OF STATE FOREST MANAGEMENT IN NORTHEAST CHINA

http://www.profor.info/profor/knowledge/reform-state-forest-management-northeast-china

Project ID: TF096883 - P121870 Region: EAP PROFOR Thematic Area Percent Date prepared: December 8, 2011 Main: Governance 80% Prepared by: Andrew Goodland Secondary: Livelihoods 20%

When was the grant originally approved?: 3/26/2010 When was the original planned grant completion date?: 12/31/2011 Have any extensions been approved?: Yes If yes, until when?: 6/30/2012

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note, and if any aspect of these has changed. Develop a roadmap for the State Forestry Administration (SFA) of China to support policy and institutional reforms in key state forest management areas in Northeast China and to promote the transformation of state forest management towards economic viability, sustainable forest resource management, and local livelihood security.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. (i) A desk-review of state forest management reform efforts in other countries relevant to the Chinese reform context with a particular focus on (a) approaches and models for separating policy and regulatory functions from forest management service functions and (b) forest land tenure arrangements. (ii) A historical review of state forest management in the Northeast covering the establishment of the state forest estate in the 1950s, state forest management performance (natural resource management and economic efficiency) and documentation and review of the reform efforts implemented since the 1980s opening policy until today. (iii) An in-depth analysis of the existing extensive data on forest resources and socio-economic conditions from the 2005 and 2009 surveys. (iv) A critical review of performance and lessons at existing pilot reform sites and state forest enterprises (SFEs). (v) Formulation of a practical plan for the transformation of state forest areas/SFEs into a system of economic viable state or private entities based on sustainable forest management and clear separation of public and private functions. This exercise will include the identification of the specific objectives of the reform effort based on an analysis of critical priority policy, institutional, and management issues.

Activities will also include: (i) A number of field missions to the Northeast and consultation workshops at national and provincial levels involving key stakeholders, including SFA, MOF, and NDRC. (ii) Policy briefs for high-level Government audiences on each of the above. (iii) Consultation with workers, forest dwellers and other stakeholders on the ground. (iv) A consolidated final report and roadmap for reform. (v) Preparation of annual progress report and final activity report as per the PROFOR reporting requirements.

3. Progress to-date. Please describe progress in completing the activities outlined above, and indicate key outputs which have been completed. A contract for the study was signed with the University of Peking in September 2010. Since that time the following activities have been completed or are on-going: Five draft reports have been written (in Chinese and English): PROFOR’s Portfolio of Currently Active Projects 69

3. Progress to-date. Please describe progress in completing the activities outlined above, and indicate key outputs which have been completed. (i) A Study on the History of State Forest Enterprises System in Northeast China (ii) Reforms of State-Owned Forest Sector in Eastern Europe: A Comparative Study in Eight Eastern European Countries (iii) An Evaluation on State Forest Reforms of Northeast China (iv) Key State-Owned Forest Areas in Northeast of China: Reform Paths and Policy Implications (v) Reform Strategy in Key State Forest Area of Northeast and Inner Mongolia of China

These reports are currently under review by the task team, and will be finalized in early 2012.

In addition, the following consultation and field trip was made: -On April 10, 2011, a consultation was held with key stakeholders in the NE forest reform agenda, including the State Forest Agency, Ministry of Finance, National Development and Reform Commission, and representatives from the north east provinces.

-In October 2011, the Bank task team joined the PROFOR consultants on a trip to Heilongjiang to see firsthand the issues which the consultants were studying.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. None

The issues: Due to many years of over-logging, negligence of cultivation and institutional shortcomings, the state forest area of Northeast China and Inner Mongolia has faced severe resource and financial crises since mid-1980s. In the beginning of 21st century, 60 forest bureaus out of 84 had almost depleted their mature or over-aged forests. Forest bureaus in this area were confronted with unprecedented challenges, i.e., the “two crises” (resource crisis and economic crisis) and social stability problems. In such a context, in order to address the crises, the National Forest Protection Program (NFPP) was launched. However, since NFPP did not touch the root of institutional shortcomings, the future of SFEs in the area was still worrisome. The quality of state forest resources declined steadily, and forest area increasingly shrunk in some regions; forest enterprises had heavy social burdens, and modern enterprise system was difficult to build up; economic revival and industrial restructuring in forest area was hard to carry out; workers’ livelihood was unsatisfactory and social instabilities were increasingly accumulated.

Put simply, the state forest area of Inner Mongolia and Northeast China did not take the advantage of NFPP to build up a development system and mechanism of relatively long-term capability and sustainability. Institutional reform in this area is imperative. In recent years, China’s key state forest areas have put much effort in the exploration of their own reforms. Due to different definitions based on location and function, their reform modes and contents differed, and they have explored a variety of paths in deepening their reforms. There emerged six forest bureaus for pilot reforms, i.e., Inner Mongolia Forest Group, Jilin Forest Group, Northwest (Xinjiang, Qinghai) State Forest Area, Qinghe Forest Bureau, Shibazhan Forest Bureau and Yichun State Forest Area, with various reform models. These reform models have presented fresh experiences and operational examples for the promotion of reform.

The study describes these on-going reform processes in detail.

Future directions for reform: There exist three proposals for the development of new forest resource management 70 PROFOR’s Portfolio of Currently Active Projects

5. Findings, impacts, knowledge generation, and dissemination to-date. Describe any preliminary impacts and findings from the activities which have been completed so far and efforts made to disseminate the findings. system. One is to establish a set of centralized state forest management agencies; the second is to delegate state forest management responsibility completely to provincial government to establish a localized forest management system; the third is a combination of the former two, namely coexistence of centrally directed forest management system and localized system. The task of developing viable business models in the state forest regions is also on the agenda. At present, the reform has merely touched some of the long-existed problems in forest management institutions and mechanisms, while slow reform progress has been due to the reasons that many of the key issues are not addressed but need external forces to get support from both the central and local governments.

The study aims to facilitate and inform the on-going discussion and lay down the critical issues that will need to be resolved, while offering options for the future.

8. Next steps. What happens now? How will the project be brought to closure? The key reports were submitted in draft to the Bank supervision team in early December 2011. These are now under review and comments will be provided back to the consultant team in early 2012. The aim is to have the reports completed by March 2012.

Dissemination and Consultation. Using the Bank Budget that has been allocated to the task in FY12, a consultation and dissemination event will be held in Spring 2012. This may include bringing an international expert of reform processes to present similar experiences in other reform countries (most likely from Eastern Europe).

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? State Forest Enterprises are not a unique Chinese feature. Therefore the study's findings will have global relevance. Lessons learned in China may be relevant to Vietnam and other Mekong Delta countries, and possibly beyond this region. The global relevance of the study is reflected in its dissemination strategy which will include the production of policy briefs to be disseminated to relevant institutions in Vietnam and other potentially interested countries.

PROFOR’s Portfolio of Currently Active Projects 71

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources which have been mobilized.

PROFOR funding $ 150,000 Other sources of funding (describe below) $ 50,000 Total $ 200,000

What other sources of co-financing have been mobilized? What amounts are involved under each source of co- financing? The World Bank will be the source of co-financing in the amount of $ 50,000.

72 PROFOR’s Portfolio of Currently Active Projects

CERTIFICATION AND VERIFICATION AS A TOOL FOR SFM IN SOUTHEAST ASIA

http://www.profor.info/profor/knowledge/certification-tool-sustainable-forest-management-and-good- governance-south-east-asia

Project ID: TF096856 - P121965 Region: EAP PROFOR Thematic Area Percent Date prepared: December 9, 2011 Main: Governance 50% Prepared by: Stefanie Sieber Secondary: Financing SFM 50%

When was the grant originally approved?: 5/15/2010 When was the original planned grant completion date?: 4/30/2011 Have any extensions been approved?: Yes If yes, until when?: 6/30/2012

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note, and if any aspect of these has changed. The overall objective is to improve the management of forests and assure legality of the forest products trade by strengthening linkages between certification schemes and the enforcement of forest laws. The immediate objectives are to understand (i) the degree to which certification and verification schemes address and provide verification of legal compliance, (ii) the current and potential impact of certification as a tool for facilitating law enforcement, and (iii) how linkages between certification and forest law enforcement could be strengthened. To achieve this objective the study will: - assess the status and perceived credibility of certification and verification schemes in the sub-region. - illustrate the extent to which different certification and verification schemes offer proof of compliance with national laws and regulations, and whether such schemes could provide a tool for facilitating forest law enforcement. - identity lessons from the application of certification and verification schemes to inform the design of VPA mechanisms. - make recommendations to strengthen the links between certification and verification schemes and forest law enforcement. The study will also illustrate the potential of certification to be used as part of company qualifications with financial credit institutions.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. Activities: The activities will include desk-based literature survey, analysis of certification and verification schemes and audit reports, and surveys. The project team needs to include expertise in certification and verification (activities 1 – 3) and expertise in forestry investment and due diligence (activity 4). 1. Review of the status of certification in Vietnam, Lao, Thailand, Malaysia, and Indonesia 2. Comparative analysis of certification and verification schemes in the sub-region 2.1 Comparative analysis of certification and verification schemes 2.2 Evaluation of the international credibility of certification and verification schemes 2.3 Review and analysis of the extent to which certification and verification schemes offer proof of compliance with national laws and regulations 2.4 Identification of key lessons from application of certification and verification schemes to inform the design of mechanisms for verification of legality and verification of supply chain control as required within a VPA 3. Assessment of the current and potential impact of certification as a tool for facilitating forest law enforcement 4. Exploration of whether certification is being or could be used as part of company qualifications with financial PROFOR’s Portfolio of Currently Active Projects 73

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. credit institutions

Outputs: Consolidated report with executive summary Policy brief Workshop (depending on quality of final output and availability of budget)

3. Progress to-date. Please describe progress in completing the activities outlined above, and indicate key outputs which have been completed. The Activities 1-4 under the project were completed by the contracted consultants (Indufor Oy). In particular, their work included a review of the status of certification in Southeast Asia (activity 1), a comparative analysis of the certification and verification schemes in the sub-region (activity 2), an assessment of the current and potential impact of certification as a tool for facilitating forest law enforcement (activity 3), and an exploration of whether certification is being or could be used as part of company qualifications with financial credit institutions (activity 4). The contracted consultants delivered their first reports on time – one report covering activities 1-3, a second report covering activity 4 – and received comments from World Bank staff and the Government of Lao PDR. The contracted consultants addressed these comments in the revised version of the final reports, but only partially due to time constraints. The final revised reports were submitted to the World Bank on October 7, 2011.

The reports were subsequently consolidated and edited by the World Bank and shared with external peer reviewers from CIFOR, the Rainforest Alliance, and World Bank staff in the South Asia Region. Some of the feedback pointed to lapses that need to be remedied such as: - Imprecise use of terminology: The terminology, in particular with regards to “sustainable forest management” and “good forest governance,” was not clearly defined in the report and used inconsistently. - Poor referencing: Many statements in the report were poorly referenced and often too general and unsubstantiated. The literature review was incomplete. - Lack of methodological framework: The assumptions used to determine the potential increase in certified area and the amount of certified products were not defined in the text.

The trust fund date was extended to June 30, 2012 and a consultant will be hired to allow for report revisions.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. Yes. To disseminate this study, EASER organized a partner event called “Finding the Road to Sustainable Forest Management – Innovations and Lessons in Forest Governance” at the Asia Pacific Forestry Week 2011 in Beijing. The main results of the study were supposed to be presented as part of this event, which also featured presentations by World Bank specialists and government officials from the Asia-Pacific region. However, due to the negative feedback from the external peer reviewers we decided not to disseminate the study at this stage. As commitments had already been made to speakers and to the conference organizers, the partner event still went ahead with the support from PROFOR. The final product will be disseminated online as a pdf on the PROFOR website.

5. Findings, impacts, knowledge generation, and dissemination to-date. Describe any preliminary impacts and findings from the activities which have been completed so far and efforts made to disseminate the findings. The report provides a first assessment of the certification and verification systems in place in the subregion. It shows that a variety of certification and verification schemes have been launched in recent years in Southeast Asia, which are either managed by independent certification bodies, national institutions, or government bodies. These schemes range from voluntary forest and chain of custody certification, to mandatory legality verification schemes, the so called timber legality assurance schemes (TLASs). There are significant differences in their scopes and 74 PROFOR’s Portfolio of Currently Active Projects

5. Findings, impacts, knowledge generation, and dissemination to-date. Describe any preliminary impacts and findings from the activities which have been completed so far and efforts made to disseminate the findings. verification procedures. Adoption of these schemes appears low. For instance, only 12% of the production forest area is currently certified and that share is even lower in forest plantations. Furthermore, these averages mask considerable differences across countries, with Malaysia and – to a lesser extent Indonesia – leading the certification effort. In contrast, Laos, Vietnam and Thailand are lagging behind significantly. However, the countries in the region are aiming to increase timber production in forest plantations substantially and to promote certification of these areas. The analysis shows that the potential to increase certification in natural and plantation forests is thus large, particularly in Indonesia and Malaysia. The report argues that some complementarities exist between law enforcement and certification and legality verification schemes, but that a range of actors needs to be mobilized to realize them. The key actors include development banks and other donors, government institutions, certification bodies, companies operating in the forestry sector, international and local banks as well as Non-governmental organizations. Efforts should focus on (i) increasing areas under certification and legality verification and (ii) supporting countries in Southeast Asia to recognize voluntary certification as a source of legal evidence and build national TLASs. This will only be possible if the different standards are clearly defined and attempts are made to harmonize them by consulting with all key stakeholders.

6. Policy framework and relevance to donor activities. Describe how this activity has complemented policy objectives at the national, regional, or global level. Are other donors working in this area and have there been changes since the start of the activity? What has been done to date to ensure this activity complements other donor- supported initiatives? Are there any particular partnerships which have been supported or which have been an outcome of this activity? The study is consistent with national FLEG/T processes and policy priorities in the subregion: - Vietnam: has launched the FLEGT process in 2010 with the aim of negotiating a VPA with the EU. Commitment to sustainable management and certification of production forests is included in the Vietnam Forest Development Strategy (2006 – 2020). - Laos: does not have a TLAS yet, but is currently in the information and pre-negotiation stage of the VPA process. Its commitment to improving forest law enforcement is apparent from the new Forestry Law (2007), which provided for establishment of a Forest Inspection Department. The Forestry Strategy of 2005 is supportive of certification in production forest areas. - Malaysia: has been negotiating a VPA with the EU since September 2006 and has developed a TLAS as part of this process. Its commitment to sustainable management of production forests is included in the National Timber Industry Policy (NATIP 2009-2020), as is the promotion of certification (Malaysian Timber Certification Scheme), and Sabah has a pledge to attain certified status for all FMUs by 2014. - Thailand: no ongoing national processes consistent with the study have been identified. - Indonesia: committed to the FLEGT process, concluded VPA negotiations with the EU in May 2011, and has developed its own TLAS. The government has a priority policy to eliminate illegal logging, with specific legislation issued in 2005; it also set targets for the sustainable management of forest concessions. The proposed study is also consistent with the World Bank’s endorsement of certification (as set out in OP 3.36), the Bank’s commitment to strengthening FLEG in Southeast Asia, and with the EU’s commitment to promoting FLEGT in Asia. It is also complementary to several donor country priorities and initiatives: - EU: support to the EU-Indonesia FLEGT Support Project; and the Regional Support Programme for the EU FLEGT Action Plan in Asia. - Finland: support to the forest sector in Indonesia; Laos, where the SUFORD Project is piloting group certification in production forest areas; and Vietnam where the Forest Sector Development Project is promoting group certification amongst tree farmers. - Germany: support to the forest sector in Indonesia; in Vietnam where certification is being piloted in several state forest companies; and in the region through cooperation with ASEAN on regional certification and legality initiatives. - UK: support through its Forest Governance and Trade Programme (2006-2011) for VPA negotiations in Malaysia PROFOR’s Portfolio of Currently Active Projects 75

8. Next steps. What happens now? How will the project be brought to closure? The next steps will involve drafting the TOR for the revision of the report and hiring a short-term senior consultant, who is an expert on certification and verification schemes in the region. The assignment is expected to commence in early 2012 and should be completed in 23 days. The main tasks are to provide quality assurance; add analysis and restructure the report so that implementable and actionable policy recommendations can be derived by the time the activity closes in June.

Follow up steps: It would be important to update this study in a few years’ time to assess the progress the region has made in developing certification and verification schemes. If progress has been slow, a forum with key stakeholders could be established with the aim to develop a harmonized and standardized system of certification, verification, and legality assurance schemes.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? A similar study (following the same broad objectives) could be undertaken in any other region of the world. In fact, such a comparative analysis could provide important lessons on the main issues and challenges countries face when implementing certification and verification systems. This would help inform the dialogue on developing and implementing a harmonized and standardized system of certification, verification, and legality assurance schemes worldwide.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources which have been mobilized.

PROFOR funding $ 214,750 Other sources of funding (describe below) $ Click here to enter text. Total $ 214,750

What other sources of co-financing have been mobilized? What amounts are involved under each source of co- financing? NA

76 PROFOR’s Portfolio of Currently Active Projects

WORKSHOP ON EVALUATION OF SFM CERTIFICATION

http://www.profor.info/profor/knowledge/evaluating-effectiveness-and-impact-forest-certification

Project ID: P127960 Region: Global PROFOR Thematic Area Percent Date prepared: December 13, 2011 Main: Governance 80% Prepared by: Tuukka Castrén Secondary: Financing SFM 20%

When was the grant originally approved?: 11/7/2011 When was the original planned grant completion date?: 4/13/2012 Have any extensions been approved?: No If yes, until when?: Click here to enter a date.

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note, and if any aspect of these has changed. The objectives of this activity are to i) assemble an overview of available quantitative and qualitative approaches used for evaluating the impact of tropical timber certification, ii) engage Bank staff and researchers from tropical forest regions (e.g. Brazil, Congo Basin countries, Indonesia) in the process of developing analytical methodologies, and iii) produce a synthesis document defining the approach and issues for future research on SFM certification.

Based on the outcomes of the workshop, it is anticipated that a major research proposal will be developed for submission to e.g. US National Science Foundation’s (NSF) Coupled Human and Natural Systems program or comparable programs in Europe by PROFOR partner in the workshop (Centre de Coopération Internationale en Recherche Agronomique pour le Développement – CIRAD/France, Center for International Forestry Research - CIFOR and University of Florida, USA). In addition, the participants from major tropical forest countries (e.g. Brazil, Congo Basin countries, Indonesia) will likely submit linked proposals to their own governments and international agencies after the workshop. PROFOR contribution would be catalytic and it would not be directly involved in the subsequent scientific research activities.

All the proposed activities will support assessing the Bank’s approach to SFM certification. While these are not linked activities, the results from this activity could also be used as an input for the on-going IEG evaluation of the World Bank forest portfolio. The activity will enable informed assessment of the Bank’s approach to forest certification and sector development also more widely.

The following activities have been or will be undertaken: i) Review of available qualitative and quantitative approaches to evaluation of tropical timber certification. This will help in producing a synthesis document defining the research agenda. It will also expose workshop participants to different evaluation methods. ii) Engage researchers from the regions where research will be implemented in the development of methodologies. This leads to stakeholder oriented impact evaluation research agenda. iii) Preparation of a workshop report which demonstrates the current scientific and applied knowledge on evaluation of SFM certification. PROFOR has hired a consultant (Dr. Claudia Romero from University of FlORIDA) to prepare a report on the process and what are the practical implications for development practitioners.

Additionally, while not an integral part of the PROFOR grant, the workshop will assemble the expertise needed to PROFOR’s Portfolio of Currently Active Projects 77

The partner organizations organized a preparatory workshop for key participants in early October, 2011.

3. Progress to-date. Please describe progress in completing the activities outlined above, and indicate key outputs which have been completed. Two workshops have been held: a preparatory session in Virginia, USA (October 2011) and the main workshop in Montpellier, France (November 2011).

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. None

5. Findings, impacts, knowledge generation, and dissemination to-date. Describe any preliminary impacts and findings from the activities which have been completed so far and efforts made to disseminate the findings. In the deliberations in the Montpellier workshop, it was evident that the approach is still to be defined in more detail. While all participants shared the interest in understanding better what the impact of SFM certification would be, the entry points and comparisons were still open; what is the counter-factual to certified forest, what would be baseline and how the deal with attribution problem (correlation is not the same as causality).

In addition, methodological issues were discussed; e.g. is the program aiming at evaluating or researching the impact? Both are valid approaches but lead to different methodological choices.

8. Next steps. What happens now? How will the project be brought to closure? The workshop report and consultant report will become available in early 2012 after which there will be a peer review of the product.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? The main approach in this activity could well be replicated. PROFOR could provide catalytic funding for research activities that will have both academic and practical relevance. However, it is essential that the main findings be presented in practical term with direct and immediate relevance for development practitioners.

78 PROFOR’s Portfolio of Currently Active Projects

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources which have been mobilized.

PROFOR funding $ 42,600 Other sources of funding (describe below) $ 70,000 Total $ 112,600

What other sources of co-financing have been mobilized? What amounts are involved under each source of co- financing? Co-financing from CIRAD, CIFOR and University of Florida. Bank staff will be funded through BB allocation.

PROFOR Activities Completed in CY2011 79

III. PROFOR ACTIVITIES COMPLETED IN CY2011

A. LIVELIHOODS

DESERT CLOUD FORESTS IN YEMEN AND OMAN: ADAPTING A UNIQUE ECOSYSTEM TO CLIMATE CHANGE

http://www.profor.info/profor/knowledge/desert-cloud-forests-yemen-and-oman

Project ID: TF097421 - P118304 Region: MENA PROFOR Thematic Area Percent Date prepared: November 20, 2011 Main: Livelihoods 50% Prepared by: Gabriella Izzi Secondary: Cross-sectoral coordination 50%

When was the grant originally approved?: 5/28/2010 When was the original planned grant completion date?: 2/29/2012 Have any extensions been approved?: No If yes, what was the revised grant completion date?: Click here to enter a date.

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note. Did these change during implementation? How and why? The objective of the activity was to propose climate-proofing strategies for the sustainable use and conservation of Desert Cloud Forests in Yemen (Hawf region) and Oman (Dhofar region), and specifically: - undertake an assessment of the Desert Cloud Forests identifying knowledge and information gaps, and defining the effects of climate change on the ecosystem; - explore the full range of goods and services associated with the Desert Cloud Forests and their contribution to meet basic needs of poor communities, defining local population' practices within this fragile ecosystem, and identifying future challenges in relation to climate change; and - derive best practices on how to manage, conserve, and promote Desert Cloud Forests both as a national and regional heritage.

The objectives of the activity changed during implementation due to the socio-political turmoil in Yemen. The activity was initially limited to Oman, then closed ahead of time.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. As originally conceived, the activities included the following:

A. Demarcating the study area & Identifying key stakeholders - This component aimed at: (i) demarcating geographically the study area; and (ii) identifying relevant stakeholders to be involved throughout the implementation of the activity. Expected actors were: Authorities having jurisdiction on the area or involved in climate change issues (Local authorities, Sheiks, Ministries, etc) in both Yemen and Oman; Representatives of the local communities and Civil society in both Yemen and Oman; and Representatives of the scientific and academic community, both within and outside the Region.

B. Assessing the scientific background & Exploring management options - This component aimed to compile the extensive knowledge available on Desert Cloud Forests, and to identify relevant information gaps. The qualitative analysis had to concentrate on: (i) the contribution of fog forests to the hydrological cycle; (ii) risks related to climate change, under different scenarios of temperature increase, precipitation variability, and change in air 80 80PROFOR Activities Completed in CY2011

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. humidity; and (iii) interactions between the forests environment and human population activities (see Component C). Hypotheses on possible management options had to be developed, also on the base of similar experiences in different environments.

C. Exploring local population behavior in relation to the Desert Cloud Forests - This component aimed at exploring the relationships and interactions between the local population and the Desert Cloud Forests, both in terms of (i) benefits (contribution that forest products provide to meet basic needs of poor communities); and (ii) threats (overexploitation of natural resources and impacts on the overall livelihood of the region and sustainability of the ecosystem). A primary survey was planned to collect information on past and current trends in forest use (wood, grazing, tourism, etc) by the local population, together with compiling traditional knowledge and local best practices. Data from secondary sources had to supplement the primary surveys. Formal consultations were planned to offer a platform for discussion among different stakeholders, facilitating the dialogue between local population, Civil society, and relevant authorities (Local authorities, Sheiks, Ministries, etc). Particular emphasis had to be put in analyzing how climate change could be an increasing risk at household level.

D. Developing proposals for a sustainable integrated forest management - This component aimed to explore options for improving sustainable management of Desert Cloud Forests in Yemen and Oman and the welfare of local communities that depend on them, taking in due account future uncertainties linked to climate change. A final workshop had to be organized for the dissemination of the acquired know-how.

The expected outputs consisted of: (i) an intermediate document presenting the background mechanisms at the base of the Desert Cloud Forests, allowing evaluating the possible adaptation of the ecosystem to climate change, and reporting on the stage of knowledge and critical gaps to fill (to be included in the final report, see point iv); (ii) an intermediate document presenting current use of the Desert Cloud Forests by the local population and the relevance of the ecosystem for household income as resulting from the on-field survey (to be included in the final report, see point iv); (iii) an intermediate document on the best management options on the base of suggestions offered by the scientific and academic community in the Region and elsewhere, building up on the local good management practices as resulting from the on-field survey (to be included in the final report, see point iv); (iv) a final workshop to discuss and disseminate the results to relevant stakeholders in the Region, with the presentation of the final report summarizing the gained knowledge; and (v) a synthetic case study for the electronic dissemination of the results of the activity through PROFOR website.

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. By completion (end CY2011), component B described above was partially carried out, with the preparation of a report assessing the scientific background of the Desert Cloud Forests. The report was prepared by Prof. Elfatih A. B. Eltahir (Professor at the Massachusetts Institute of Technology, MIT).

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. Only a part of the overall activity was carried out, with the cancellation of parts A, C, and D.

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? The report produced under the grant presents the hydrological background of the Desert Cloud Forests, describes its unique characteristics, and presents the plants typical of the area. There was no dissemination of the report produced.

PROFOR Activities Completed in CY2011 81

8. Next steps. What happens now, following the activity’s completion? Once the situation in Yemen will stabilize, the re-engagement of the World Bank and PROFOR in the area of the Desert Cloud Forests could be re-assessed.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? n/a

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources were mobilized.

PROFOR funding $ 150000 Other sources of funding (describe below) $ 0 Total $ 150,000

What other sources of co-financing were mobilized? What amounts are involved under each source of co-financing? No co-financing was available. NB: Out of the $150,000 approved by PROFOR, only $20,000 were spent. The activity has been closed.

82 82PROFOR Activities Completed in CY2011

FOREST CONNECT II

http://www.profor.info/profor/knowledge/forest-connect-supporting-small-and-medium-forest-enterprises- toolkit

Project ID: P121502 - PO7156060 Region: Global PROFOR Thematic Area Percent Date prepared: December 20, 2011 Main: Livelihoods 60% Prepared by: Duncan Macqueen, IIED Secondary: Financing SFM 40%

When was the grant originally approved?: 1/9/2010 When was the original planned grant completion date?: 12/31/2011 Have any extensions been approved?: Yes If yes, what was the revised grant completion date?: 6/19/2012

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note. Did these change during implementation? How and why? The project’s objective, building on a first phase of multi-donor PROFOR support in the development of the guidance modules, is to test and enrich guidance modules for the facilitation of support for small and medium forest enterprises – helping to build social, economic and environmental sustainability amongst SMFEs and their associations by connecting them: • to emerging markets - by strengthening associations and enhancing market links; • to service providers – by strengthening information about, and markets for, financial service and business development service providers – based around sustainable practices; and, • to National Forest Programme (NFP) processes – by empowering them to shape policy processes that control the broader business environment. There have been no changes to the original objectives.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. IIED proposed to continue running this project in partnership with FAO and lead agencies in Burkina Faso, Ghana, Guatemala, Guyana, Mozambique and Nepal countries with whom the Forest Connect initiative has already begun in response to situation analysis and strong demand.

Extensive project team experience of guidance module development and testing (e.g. of the PROFOR Poverty Forests Linkages toolkit) shows that such guidance almost never gets used by people reading about them in a book or website and then learning and applying them alone. Guidance modules get spread through demonstrations and practice – which demands an action research approach to developing, testing and enriching them. Adequate time for guidance module testing and enrichment is an important issue – as is the need to set and stick to progress targets. Having now completed all milestones in the first phase, and as agreed with PROFOR as the trigger for the second phase of funding – the team had produced a complete draft framework of the guidance modules carrying the PROFOR logo. The Forest Connect networking site (www.forestconnect.ning.com) has been used to spread awareness of this product and has invited comment. In addition the team has spread news of the draft in relevant meetings (such as the two sessions in the World Forestry Congress in Buenos Aires) and other fora (such as emailing the NFP coaches of the NFP Facility) and presenting a paper at a meeting on smallholder forestry in Montpellier (Macqueen, D.J. 2010. Building profitable and sustainable community forest enterprises: enabling conditions. Paper presented at the International Conference on “Taking stock of smallholder and community forestry: Where do we go from here?” 24 - 26 March 2010, Montpellier, France). An article summarizing the process and impact of the Forest Connect project in general (Macqueen,D.J. 2008. Forest Connect: reducing poverty and deforestation through support to community forest enterprises. International forestry review 10 (4): 670-675) PROFOR Activities Completed in CY2011 83

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. and the networking site in particular (Macqueen, D.J. (2009) Web 2.0 tools to promote social networking for the Forest Connect alliance. Participatory learning and action PLA notes 59: 34-39) have been published.

The proposed outputs and activities in this second phase of work are summarized below:

Output 1 – Learning event to plan how to test and enrich the guidance modules. In Activity 1.1, country partners and small enterprise experts will be invited to assess how the proposed guidance modules might best be tested and adjusted in the light of national and broader international experience. A pre-workshop questionnaire will be used to help participants evaluate and plan their programs of work. These plans will be synthesized about how to capture learning from this testing phase in order to enrich the guidance modules (for example adding case study boxes from a greater number of countries – or refining what the guidance actually says). Guidance modules will then be revised and enriched accordingly in Output 2.

Output 2 – Testing and enriching the guidance modules through in-country action learning. Building on the feedback from Phase 1, the main focus of phase 2 will be to assess, refine and enrich with examples the practical tactics that are useful in facilitating better outcomes for SMFEs and their associations. A particular emphasis will therefore be on the modules that relate to the national facilitators acting to support SMFEs in countries. Activity 2.1 will continue to involve direct use of guidance modules in six countries to facilitate the connection of SMFEs and their association to markets, leveraging innovative new Financial Services (FS) and Business Development Services (BDS) provision and improving representation in policy processes that define the business environment. It will strengthen the capacity amongst institutional facilitators of Forest Connect so as to ensure longer-term ownership and sustainability of the approach. It will seek to establish trust with SMFE associations and develop information platforms, which are sensitive to both the need to pool information, but also to respect commercial confidentiality. It will also ground-truth the 16 main modules and ensure wider transferability – especially through the NFP Facility hosted by FAO, whose manager has reiterated his commitment to roll out the guidance modules with the Facility’s partner country agencies. It will document useful examples to be inserted into and enrich the final product. It will also make available brief stand alone materials originating from each partner countries on specific facilitation activities in support of small forest enterprises.

Output 3. – Awareness building, publication and launch of the guidance modules. Activity 3.1 will involve a number of missions to spread knowledge of the existence of the guidance modules identified through ongoing discussions with PROFOR. Participation in meeting of NFP-Facility coaches will be a priority as will COFO in late 2010 and the FAO Regional Forestry Commissions which is a forum for Forest Directors but also more and more civil society representation. Conference events such as the Commonwealth Forestry Conference in June-July 2010 and the IUFRO World Forest Conference in August 2010 will also be targeted. Activity 3.2 will involve the production and launch of the guidance modules once all revisions have been made. It is envisaged that both hard copy and electronic formats of the toolkit will be made available in English, French and Spanish. A power-point presentation of the toolkit will be prepared for wider publicity events by PROFOR, FAP, the NFP Facility and IIED.

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. OUTPUT 1. Following receipt of the first payment in September 2010 (and final contract revision on 2 December 2010) the Forest Connect international team moved to identify an appropriate location for a Forest Connect planning workshop in Ethiopia in 15-18 February 2011. Farm Africa was contracted as host for the event at the Global Hotel in Addis Ababa. A questionnaire was circulated to participants from 12 country teams to ensure that they brought powerpoints and written case studies of attempts to use the toolkit on facilitation of support to small forest enterprises. At the workshop itself, country reports highlighted examples of how the toolkit had been used and what the resultant impacts had been. Interactive exercises looked at each of the 16 modules to contribute practical advice from in-country support to small forest enterprises. A field trip helped to illustrate the substantial 84 84PROFOR Activities Completed in CY2011

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. progress that had been made in newly supported community Forest Cooperatives across the country. A workshop report was prepared and submitted to PROFOR.

Output 2. Counterpart frame funding from IIED has enabled the development of phase 2 work plans in Ghana, Guyana and Mozambique. PROFOR funded subcontracts with FAO Forest Connect partners in Burkina Faso, Guatemala, and Nepal. Together, IIED and FAO also supported a further 6 partner countries to test and contribute examples to the toolkit. Each of twelve country teams contributed in some way to the further development and enrichment to the modules of the toolkit linked to in-country work. For example for ‘Module 4 Introducing a useful facilitation approach,’ the Malawi team provided examples of both successful (Basketware furniture producers) and unsuccessful facilitation (honey production); for ‘Module 5 Planning and sequencing activities’ – a 3Rs methodology was used to re-orientate SMFE support project in Ethiopia; a stakeholder workshop and steering committee were developed to guide work in Ghana; a series of events led to the prioritization of work on bamboo and rattan furniture, mulberry bark and two medicinal plant products in Laos; ‘Module 6 Conducting SMFE diagnostics’ – research was compiled and published in Burkina Faso, Ghana and Liberia; ‘Module 7 Mapping and benchmarking service providers’ – yellow pages were developed in Burkina Faso and Ghana of service providers; ‘Module 8 Developing communication strategies’ – market information system developed using mobile phones were documented from Burkina Faso, a website was developed in Liberia, a small forest enterprise network established in Mali; ‘Module 9 Increasing market understanding’ – producer groups orientation workshops were held in Burkina Faso, eco-tourism exchanges took place in Guatemala, market understanding groups were founded in Mali; ‘Module 10 Participatory value chain analysis’ – examples were drawn in from Aloe market analysis in Kenya and the wintergreen market chain in Nepal; ‘Module 11 Product development’ – essential oil production was pioneered in Ethiopia, artisanal wood products were developed in Guatemala, ecotourism activities emerged in Guyana, honey, wood craft and bamboo furniture products were developed in Malawi, baobab products were packed in Mali, bamboo furniture and craft products were showcased in Mozambique, wintergreen oils and bio- briquettes made of charcoal were developed in Nepal; ‘Module 12 Facilitation of business development services’ – systematization of service needs was prioritized and links with service providers improved in Guatemala; ‘Module 13 Financial services’ – women’s credit and savings co-operatives were established in Ethiopia; ‘Module 14 Enterprise structures and governance’ – a Forest Cooperative health check methodology was developed in Ethiopia, and taken and tested in China, training on democratic governance structures took place in Guatemala, coconut producer associations were strengthened in Mozambique; ‘Module 15 – Ecological sustainability’ – FSC chain of custody certification for hand-made paper production was secured in Nepal; ‘Module 16 Policy research for change’ – research on domestic timber and NTFP issues was undertaken in Ghana, research on Arapaima management to guide policies successfully effected policy change in Guyana, a complete policy analysis in Liberia relating to small forest enterprises was also undertaken. A series of in-country ‘stories of success’ from the work of Forest Connect are being prepared as stand-alone materials from Burkina Faso (complete), Ghana (complete), Guatemala (complete), Guyana (in preparation), Mozambique (delayed until January), Nepal (complete).

Output 3. As part of general awareness raising, Forest Connect participated in and distributed Ghana, Mozambique and Ethiopia SMFE diagnostics at the Commonwealth Forestry Conference in July 2010. Planned participation in the IUFRO World Forest Conference in August 2010 was made impossible by family issues (imminent baby) of the lead researcher. Instead, the Forest Connect team has been making major contributions to a series of eight dialogues of The Forest Dialogue on Investing in Locally Controlled Forestry, and the IIED project leader is part of the editorial team for the production of the TFD Review of that ILCF dialogue stream. A major development was the active positioning by both IIED and FAO to mainstream the work of Forest Connect into the core business of the future NFP Facility (now called the Forest Partnership Facility). A final proposal has now been prepared for comment by donors to the NFP facility. IIED has built in ongoing support for Forest Connect into two major proposals to DFID. Forest Connect work was publicized also through one report, one background paper to a World Bank/PROFOR forest landscape investment forum (Nairobi, May 2011) and one peer reviewed article (see below).

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4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. As noted in the preceding report, substantial delays in implementation occurred due to uncertainties regarding contractual arrangements with PROFOR that have now been resolved. The team felt there should be no problem in condensing activities into the remaining time period – especially since activities had already been started in three of the six partner countries, but when asked if a no-cost extension would be useful, the project team agreed that an extension until the end of March 2012 would ensure a better quality of final product. There was also a request for additional funds made to support the publication of a yellow pages book of Ghanaian SMFEs and service providers and capture some useful outcomes in Malawi.

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? As noted in the summary of Output 2 above, there have been substantial impacts in each of the core countries through the work of the Forest Connect Team.

In Burkina Faso, Forest Connect has provided valuable insight on the NTFP sector (structure, information needs, potential BDS, governance of producer associations) and the challenges/priorities of SMFEs themselves. This well researched information has been critical in backing up argument for developing an NTFP sector based on SMFEs and to develop rational, well justified plans to convince donors and government agencies to support SMFEs in the NTFP sector. Outcomes of FC have informed: (i) National planning on forestry and rural enterprise development in a period when Government was setting up APFNL, and developing a national Forest Investment Plan; (ii) Expansion of TREE AID’s own village tree enterprise programs to assist newly established micro-enterprises with access to markets and services (iii) Decisions of other service providers (including MFIs), helping them to refine their service offers to match the needs of SMFEs. Forest Connect was a catalyst for TREE AID to employ a full time senior specialist on Enterprise Support to compliment a team with technical backgrounds in natural resource management. It supported the participation of TREE AID at national forums where they were able to raise the profile of NTFP SMFEs. It also provided a practical vehicle for closer collaboration between TREE AID and CIFOR on participatory value chain analysis.

In Ghana, the multi-stakeholder steering committee has enabled the project to prioritize a series of key small forest enterprise commodities: wood-fuel production and trade, community-based ecotourism, wood carving and trade, carpentry and wood processing, bush meat, mushrooms and snails, medicinal plants and herbal products preparation and trade, Shea butter production and trade, Herbs and spices production and trade [e.g. black pepper] cola nut trade, chewstick and chew-sponges, essential oils, gums, dyes, Allanblackia, sweeteners, palm wine tapping and local gin distillation, and plantation development (nursery, plantation establishment).work on priority commodities. The other success factor has been the consultative approach adopted by the project. This has made it possible to address felt needs of stakeholders/practitioners. As an example, consultative meetings with about 50 honeybee keepers /honey producers in the central forest belt around Kumasi at the start of the project led to the incorporation of new interventions which were not foreseen from the beginning. These interventions were training and capacity building: the honey producers have now been trained on “addressing threats to honey production” and the construction of improved beehives. The market requirements assessment which was carried out was not initially planned either, however the steering committee thought such a study would provide the necessary information for focusing the initial interventions of certification, packaging, labeling for supermarkets and other market outlets. In terms of supporting people from disadvantaged or marginalized groups, chainsaw operators who were hitherto criminalized have now been brought to the table to dialogue on finding lasting solutions to illegal logging. This was mainly through our project on illegal chain-sawing. Stronger associations of Domestic lumber traders (DOLTA) are emerging; some of them have succeeded in attracting financial resources for capacity building and advocacy.

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5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? In Guatemala, ecotourism exchanges among community touristic destinations (Mayan biosphere, west highlands, Caribbean coast and coffee plantations) allowed the development of integrated communications strategies and a national platform for SMFE tour operations: “Heart of the forest” limited company. Advisory and training work on democratic practices, transparency and accountability within community forest enterprises led to a greater promotion of equity and led to the transformative development of a small forest enterprise in a former refugee community (the Nuevo Mexico cooperative). Building on local ideas and resources empowered members of various communities with more rigorous assessment of product prototypes on cost and quality issues. Value chain analysis led to good feedback and product innovation. Business plan development for the SMFE Tikonel, in central highlands of Guatemala, led to the systematization of what services were needed, and development of a portfolio of business development services for other SMFEs. Product development for xate led to stronger leadership of Xate's Committee a consolidated offer of xate to the market, better quality control, improved packaging and transportation and increased overall production. In all, support has touched some 63 SMFEs that span 300 communities (linked to 750,000 has of forest land). Future expectations include increased coverage of SMFE support on business planning and business development services, support to a network of umbrella community forestry organizations (gathered in National Alliance) and integration of SMFEs within the Forest Sector Financial Strategy.

In Guyana, early diagnostic work and the establishment of a website advertising community forest products has greatly increased awareness of the small forest enterprise sector in the country. Partly attributed to this work, the Guyana Forestry Commission has deliberately expanded the number of community forest areas in the country from 27 in 2007 to 62 in 2011 – including both indigenous peoples associations (and both titled and State Forest Permission lands) and other community forest associations on State Forest Permission land. Mainstreaming of Forest Connect work within a youth training institute in the Makushi Indian territories led to students who have graduated from the Centre since its establishment in 2007 being employed in various positions in the NRDDB in positions in the tourism and fisheries sector and have gone on to train and work with Institutions like the Iwokrama International Centre as tour guides and park rangers. Some have already been elected to the positions of Toshao (local chiefs), Deputy Toshao and village councilors, in their communities. Forest Connect support helped with product development, for example, improving the quality of labels of the “Medicine from Trees” products. The team showcased these new labels at a local fair recently and were pleased with the results and orders. In total, support in Guyana has focused on six main Amerindian titled land holders and about 50-100 individual entrepreneurs.

In Mozambique, the diagnostic of SMFE’s challenges drew attention to major issues to do with legislative rights, market access and a lack of enterprise organization. The team initially opted to promote more efficient uses of bamboo, as a stand for income generation and environmental preservation. As a result, there is now a greater diversity of products on the market (vases, tables etc) and increased income in the study area. A second focus was integral use of coconut in order to lead to poverty alleviation. Here the impacts of training and exchange visit activities led to improvement of living conditions (increase income from the sale of some products) and more effective and complete utilization of coconut resources (not just the leaf and coconut fruit). The team wishes now to establish demonstration plots for tree plantations in the vicinity of Maputo to encourage the entrepreneurial supply of timber and fuelwood to the capital. Findings have also informed inputs to possible mechanisms to reduce deforestation within the National REDD+ strategy.

In Nepal, the diagnostic study on SMFEs and their associations within Nepal improved the accessibility of the information on SMFEs in Nepal. The web directory of SMFEs has made available detailed information on 872 SMFEs categorized under 12 major product classifications: ayurvedic clinic, essential oil, furniture, handmade paper, health and beauty care, input supplier, natural fiber, NTFP trade, resin and turpentine, spices, silk, and unspecified. The directory is at http://www.ansab.org/fcn/smfedatabase.php. Directories of critical services and PROFOR Activities Completed in CY2011 87

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? service providers for SMFEs and CFUGs have improved access to information on service providers as per their specific service need, which was not easily available before and would otherwise take more of their time and effort. Specific value chain studies of Jatamansi, Orthodox Tea, Ginger, Lentils and Off-season vegetables have shaped intervention design and program implementation in the sectors. A Forest Connect Nepal website was established that now makes available the monthly price information for 32 products in 6 different markets. Project supported meetings have prompted the Government of Nepal to revive the Herbs and NTFP Coordination Committee (HNCC) based on the recommendations from one meeting. Forest Connect Nepal also initiated a national level association of producer groups and community enterprises by expanding the institutional system and capability of the Nepal Herbs and Herbal Products Association (NEHHPA), a business membership organization made up of Nepali enterprises producing or processing natural products. Forest Connect representation in various national for a such as NNN, HNCC and the Public Private Alliance (PPA), have led to collaborative programs and activities with organizations like NEHHPA and Himalayan Naturals that have been designed to be beneficial for the joint promotion of CBFEs in Nepal. They have also led to improved understanding among government officials and policy makers, with an official mandate for ANSAB (the Forest Connect lead) to develop policy provisions related to SMFEs, technologies for different NTFP enterprises, and the market and supply situation for various value chains. Eight toolkits developed by ANSAB have been used by the Center for Forest and People (RECOFTC) of Bangkok to design their flagship training course on community based forest enterprises.

Papers and reports produced this year beyond the country work described above include:

Buss, C., Elson, D., Macqueen, D.J. and Saint Laurent, C. (2011) Opportunities and constraints for investing in forests and trees in landscapes. Background Paper for the Investment Forum on Mobilizing Investment in Trees and Landscape Restoration, 25-27 May 2011, Nairobi, Kenya. Program on Forests (PROFOR), Washington D.C., USA.

Macqueen, D.J. and Grouwels, S. (2011) A social alliance: ICTs link small-scale forestry enterprises in 12 countries. ICT Update 59: 7

De Marsh, P. and Macqueen, D.J. (2011) Recommendations for a support strategy for small and medium scale, formal and non-formal forest enterprises - Part of the Forest Connect alliance work to support small forest enterprises in Ethiopia. IIED, London, UK.

A further paper has been prepared and accepted for a special edition of the Small Scale Forestry Journal.

7. Implementation Performance. How would you characterize implementation performance? What unexpected opportunities arose during implementation and how have you been able to take advantage of these? Were there significant unanticipated obstacles during implementation? Despite early delays to project implementation (through contractual delays) the project team has been working hard to steer a highly complex body of work in multiple country contexts. While the quality and scale of impact varies widely by country this is largely an effect of different institutional capacity across those countries. The coordinating team feels that implementation has broadly been highly impressive in the countries where the project has operated. There is a genuine sense of alliance between the core country teams and the broader Forest Connect alliance, that has helped those teams to share findings and make really useful inputs into a range of in-country programs (notably around REDD+). We have also taken full advantage of the interim redesign of the NFP Facility to ensure that Forest Connect approaches and findings are now the core business of that facility (should the donors agree to fund it). Useful engagement with global alliances of family, community and indigenous foresters through the Growing Forest Partnership initiative and its related dialogue stream on Investing in Locally Controlled Forestry have also been seized to spread ideas and impact far beyond what was initially anticipated by this project.

8. Next steps. What happens now, following the activity’s completion? The next steps are to complete the product and reporting obligations for the final three months of the project. New funding proposals to DFID, and through the new Forest Partnership Facility are being submitted to build on this work – focusing increasingly on support to small forest enterprises that enhance “biocapacity,” intensify the production of food, feed, fuel and fibre, and help increase climate change resilience and mitigation.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? There is enormous potential to replicate the establishment of national facilitation hubs for small forest enterprise support across the world (notably through the Forest Partnership Facility), and make use of some of the guidance modules to help strengthen the capacity of such entities. As REDD schemes and the Forest Investment Program move beyond the planning phase, there will be an increasingly urgent need to see how REDD and FIP finances can realistically be channeled to the multiple small forest enterprises (many of which are community or community- based) who play an important role in contributing to or mitigating the effects of other land use processes involving deforestation and degradation. At that point, strong national programs that have detailed engagement activities with those small forest enterprises might be much in demand.

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10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources were mobilized.

PROFOR funding $ 255,000 Other sources of funding (describe below) $ 356,710 Total $ 611,710

What other sources of co-financing were mobilized? What amounts are involved under each source of co-financing? IIED, FAO and the NFP Facility are all contributing co-financing to this initiative. By the end of the project the total contributions will be $134,565 from IIED, $99,215 from FAO and $100,880 from the NFP Facility. WB contribution from BB is $22,050. Cofinancing accounts for 58% of total activity costs.

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FORESTS AND FRAGILE STATES

http://www.profor.info/profor/knowledge/forests-fragility-and-conflict

Project ID: P120757 Region: Global PROFOR Thematic Area Percent Date prepared: January 31, 2012 Main: Livelihoods 80% Prepared by: Peter A. Dewees Secondary: Governance 20%

When was the grant originally approved?: 1/4/2010 When was the original planned grant completion date?: 9/30/2010 Have any extensions been approved?: Yes If yes, what was the revised grant completion date?: 6/30/2011

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note. Did these change during implementation? How and why? The objective of this activity is to provide a critical review and synthesis of some of the key issues and post-conflict policies associated with forests, fragile states and conflict, and to develop guidance about how these issues might be addressed in future policy and development assistance discussions. These objectives did not change during implementation.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. The primary output from this activity will be the preparation of a synthesis paper. The synthesis paper will be based on a selection of background papers prepared by experts in the area of conflict and forests. The synthesis paper is expected to examine three particular themes in depth: * the impact of conflict and fragility on forests, with a special focus on cross-sectoral post-conflict issues associated with the management of forest resources, * the mechanisms and channels of financial flows from forest extraction to state and non-state belligerents, which thereby facilitate or prolong conflict, and * the characteristics of fragile states that should be the focus of reform in post-conflict interventions in order to improve protection of forests and forest-based livelihoods and to mitigate further conflict.

The development of a synthesis of material around these three themes will contribute to the articulation of a strategic approach to dealing with forest management in post-conflict operations, for example, and may contribute to developing guidelines for the coordination and sequencing of interventions for more effective protection of forests, local livelihoods, and the advancement of development goals.

Theme 1: The impact of conflict and state fragility on forests: Global forests are under significant threat from the fragile state-conflict-poverty nexus. Conflict-driven forest loss -- whether caused by belligerents using timber to fund conflict or by conflict-affected people seeking access to fuel or alternative livelihoods--has a direct impact on the management of global public goods such as carbon and biodiversity, as well as on national resource-based economies and locally important forest-based livelihoods. Yet, in some cases, conflict has acted as a buffer to forest loss by shutting down logging operations, whether because of security concerns or market changes (such as decreased market demand due to timber sanctions, decreased operations due to security and reputational risks). Whether forest cover will be protected or degraded by active conflict is a highly contextual question.

However, other components of forests are likely to be less ambiguously affected by conflict. For example, pressure on wildlife populations increases when bushmeat serves as an emergency source of food for IDPs/refugees, communities who abandon agriculture due to repeated looting, and belligerents who are under-provisioned and PROFOR Activities Completed in CY2011 91

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. encamped in or near forests.

Further, post-conflict environments almost always increases pressures on forests-- negative impacts that in many cases could be mitigated through more coordinated planning and sequencing of donor interventions. For example, these pressures come from increased forest industry investments and trade expected to kick-start local economic growth and create jobs; increased access to conservation forest due to infrastructure improvements such as roads and ports as part of reconstruction and job stimulus programs; use of conservation forested by long-enduring refugee camps or resettlements for returning IDPs/refugees and ex-combatants, the increased use of forests for livelihoods once security is improved and markets reinvigorated. These dynamics and their interplay are poorly understood and often have unintended negative consequences for forest protection and forest-based livelihoods, as well as further exacerbating conflict dynamics.

The proposed work will assess the impacts of increased post-conflict pressures on forest cover, wildlife and local forest livelihoods and rights, as well as how these new pressures may further inflame conflict and further undermine development goals. A special focus will be on the ways that donor interventions can mitigate or exacerbate these pressures to inform a strategy for productive engagement in post conflict environments.

The proposed work will compare data from key case countries on forest loss in conflict and in post-conflict environments, and will examine possible correlations between benefit sharing peace agreements involving forest ministries and amount of post-conflict forest loss and frequency of post-conflict violence incidents

Theme 2: Commodity trafficking and financial flows from forests to conflict: The economic value of timber can contribute to the outbreak of conflict by providing funds for weapons, paying and supplying belligerents. Low-tech extraction of so-called "lootable" commodities such as timber (and alluvial gemstones and some minerals) has been demonstrated to facilitate conflict and to prolong its duration. The relative ease of extracting these resources allows otherwise militarily weak parties the financial means to take up arms, and also provides the incentive to continue doing so by providing "leaky" revenues easily pocketed by belligerents.

Much of the analysis to date on conflict timber has focused on correlative studies, leaving the precise channels of revenue flows from timber to conflict poorly articulated. Additionally, some critics charge that blunt instruments such as commodity sanctions aimed at cutting these financial ties may have unintended consequences of crippling the livelihoods of already vulnerable communities using resource extraction as alternative coping mechanisms during conflict (for example because frequent looting by belligerents has made farming untenable).

The proposed review will improve an understanding about the specific mechanisms for timber revenue flows to armed conflict, and how these financial flows and the social networks that facilitate them change in post-conflict environments from civil or interstate war to organized crime (through the trafficking of illegal timber). Regional and international flows of finance and timber will be a special focus, both as a means of preventing conflict spill- over to other countries and to make best use of international instruments for cutting financial supports for violence. To the extent possible, the review will carry out a commodity and revenue chain analysis for timber in a few key cases (such as Liberia, CDI, Cambodia, Aceh). It will examine the dynamics which affect the social networks which facilitate financial flows to deepen an understanding of how to control these flows in conflict and post- conflict environments. Are there war-time social networks which can be better integrated into post-conflict settings, for example, and mobilized for peacebuilding? (The conventional post-conflict approach emphasizes demobilization and anti-crime measures which are geared toward disrupting these networks but which this can be potentially destablilizing.). Finally, the review will consider the strengths and weaknesses of different international instruments to reduce the flow timber revenues for financing conflict.

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2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. challenges for managing and protecting forests. What are the characteristics of fragile states which should be the focus of reform, supported by post-conflict interventions, in order to improve protection of forests and forest- based livelihoods and to mitigate further conflict?

The proposed work will identify the characteristics of fragile states that generate conflict and which increase the vulnerability of forests and forest-based livelihoods to conflict, and the ways that specific donor interventions have mitigated or exacerbated these characteristics. Special focus will be provided on identifying obstacles to effective coordination between interventions. Targeting these characteristics for reform and avoiding donor actions that worsen the problem will help build momentum for change that will more effectively protect forests and forest livelihoods, as well as work to achieve development goals and conflict prevention more generally.

The precarious dynamics of post-conflict environments remain poorly understood, including by donor agencies which are working in these countries. Of particular concern are the factors relevant to forest use that contribute to renewed violence, sometimes in different forms, such organized crime or electoral violence. What are the positive and negative roles of donor interventions in these dynamics?

One unique aspect of post-conflict environments is a sense of urgency, which can be a powerful source of momentum for reform. A sense of urgency can also mean that the medium- to long-term goals of building governance institutions and clarification and equalization of local resource rights are compromised in an effort to quickly deliver visible economic returns through increased foreign investment or macroeconomic restructuring.

Yet, donor interventions in post-conflict states are undermined when they overlook root causes and political contexts, overestimate state capacities for implementation, and work in isolation and cross purposes to each other. More coordination and attention to sequencing is needed among the variety of agencies undertaking conflict mitigation, reconstruction, and institutional reform to develop the enabling conditions for peace-building. Concepts of coherence and "do no harm" have become accepted wisdom in post-conflict development, yet the real operational and epistemological obstacles to effective coordination remain under-examined.

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. Three background papers were commissioned on the subjects of forests and demobilization, the financial flows which fuel war, and forests and transnational crime. A synthesis paper was drafted, and was circulated for internal and external peer review. An editor was contracted to finalize the 4 papers into a volume, and this was published in conjunction with publication of the World Development Report on Conflict and Development, which came out in April 2011. The WDR team has drawn on the background papers in its analysis of the impact of access on natural resources on conflict, and has referenced the work supported by PROFOR.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. There were no substantive changes in planned outputs.

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? Fragile states, defined by their failure to deliver security and basic services to their citizens, suffer from a complex array of weaknesses-in economic management, but also in political legitimacy, regulatory quality, social inclusion, and institutional effectiveness. Often these weaknesses can lead to violent conflict, but the precise mechanisms of how fragility leads to conflict is often underexplored.

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5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? Although quantitative evidence shows that economic dependence on natural resources tends to increase the likelihood that fragile states will experience civil war, most research has focused on oil, gas, and diamonds, rather than forestry. However, very extensive areas of the world's forests are found in countries which have been assessed to be either failed states or which are at moderate risk of becoming failed states. Furthermore, forests are valuable for to local subsistence livelihoods, timber and other commercially valuable forest products, as well as ecosystem services including forest carbon and biodiversity. This makes the linkage between forests and fragile states of significant importance to local poverty reduction, national and global trade, and global public goods. The understanding and mitigating pressures on forests in fragile states also clearly has important implications for the donor community's interventions in both the forest sector and conflict and post conflict programming.

This activity has provided a synthesis of key themes and current knowledge about the linkages between forests, armed conflict, poverty, and various aspects of state fragility. The main themes include: * how predatory, incapable or absent states are 'fragile' in different ways, and their diverse relationships to forests and conflict; the mechanisms by which forests facilitate or prolong conflict, including: financial flows from logging to state and non-state belligerents, the use of forests as patronage, the traffic of weapons by loggers, and the employment of belligerents by logging companies for security; * the impact of conflict and fragility on forests and forest livelihoods, with a focus on cross-sectoral issues associated with the management of forests after conflicts end; and, * the focus of reform in post-conflict interventions in order to more effectively protect forests and forest-based livelihoods, and to mitigate further conflict.

Because forests have multiple and often competing constituencies for commercial, subsistence and cultural uses, they are frequently the center of struggles over control of access and use. While these conflicts can be widespread, most tend to be non-violent, or if violence breaks out it tends to be localized. Indeed the quantitative evidence available shows that countries with large amounts of forest (either in total area or as a proportion of national territory) are no more likely to experience civil war than those without forest. However, there is an association between likelihood of conflict and size of the forest industry. Additionally, for countries experiencing civil war and that also have other extractive resources available, abundance of forest increases the duration of the conflict. This effect is heightened with increasing accessibility of forest. That is, forests do not cause conflict and armed conflicts tend not to be fought over forests, but rather armed conflicts are often exacerbated by certain aspects of forest use, especially when forests are easy to loot.

Dissemination efforts have paralleled the launching of the World Development Report on Conflict and Development. The background papers as well as the synthesis paper have been posted on the WDR website, as well as on PROFOR’s website.

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8. Next steps. What happens now, following the activity’s completion? The synthesis paper is an important reference paper. There are strong synergies with our work on forest governance and livelihoods, and to the extent that it contributes to strengthening PROFOR’s portfolio in these areas, it is an important contribution. However, the Bank lacks the specific skill set needed to develop a further PROFOR work program in the area of forests, fragility, and conflict, and other institutions may be better placed to do this, rather than PROFOR or the World Bank.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? The approach to hiring in the technical skills to prepare a report like this is probably not good practice. It would be better to build on internal skills, interests, and capacity, rather than to have to rely almost completely on the provision of external inputs.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources were mobilized.

PROFOR funding $ 166,451 Other sources of funding (describe below) $ 29,393 Total $ 195,844

What other sources of co-financing were mobilized? What amounts are involved under each source of co-financing? Cofinancing from the Bank Administrative Budget.

PROFOR Activities Completed in CY2011 95

FORESTS AND RURAL LIVELIHOODS IN THE KYRGYZ REPUBLIC - DEVELOPMENT POTENTIALS http://www.profor.info/profor/knowledge/forests-and-rural-livelihood-kyrgyz-republic-development-potentials

Project ID: TF095391 Region: ECA PROFOR Thematic Area Percent Date prepared: December 7, 2011 Main: Governance 50% Prepared by: Andrew Mitchell Secondary: Livelihoods 50%

When was the grant originally approved?: 11/1/2009 When was the original planned grant completion date?: 10/31/2011 Have any extensions been approved?: Yes If yes, what was the revised grant completion date?: 11/30/2011

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note. Did these change during implementation? How and why? The study has two major objectives: 1) it is aimed at reviewing and analyzing structural and institutional hindrances which if addressed could increase benefits from forest resources received by poor segments of rural population. This study will provide suggestions for policy makers on further improvements in forest management; 2) value chain analysis for major Non-Timber Forest Products (NTFPs) will provide recommendations on improvement in benefits sharing received by forestry enterprises from NTFPs with local communities. No aspects of these have been changed, but with the request from the State Agency for Environment and Forestry, special attention will be paid to issues of management of municipal forests.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. The study was to be implemented on three tracks: 1) legal and institutional review for understanding forest management framework on the local level; 2) study of market chain of NTFPs from forest to domestic markets, including to exporters, to identify bottlenecks and possibly to increase benefits from these products for local communities; 3) review of forest management and use arrangements in forest communities, including of governance issues. Key outputs include a report on the results of the study and recommendations for policy makers.

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. 1. The Rural Development Fund, a Kyrgyz based NGO, was hired to review the legal and institutional framework at the forest enterprise (Leskhos) level. 2. An international consultant on social issues developed the conceptual and theoretical framework and research strategy for a third track on governance issues and access to NTFPs by forest communities which served as guidance for RDF to develop the detailed study methodology. 3. Five forestry farms (leskhozes) were selected for the study and agreed with the State Agency for Environment Protection and Forestry (SAEPF). Currently, RDF is engaged with the leskhozes and signed a memorandum of cooperation with them. 4. A structured interviews questionnaire was developed and implemented to obtain an understanding of the issues associated with access to NTFPs by forest communities and their participation in decision making on management and use of these resources. 5. RDF translated the questionnaire into local languages and tested them in two areas. Based on the testing, some modifications were made. This major tool for survey was then implemented in the 5 areas. 6. RDF selected and trained interviewers on the survey sample and issues. 7. The international consultant for the value chain of NTFPs undertook detailed study and field work, concentrating on the most important product – walnuts. A detailed report was prepared with concrete 96 96PROFOR Activities Completed in CY2011

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. recommendations for this tree product. Stakeholder workshops were held with high buy in and participation from government institutions as well as other relevant stakeholders. 8. Final reports were also prepared by RDF and the social scientist, which provided insightful and useful recommendations. 9. A participatory final workshop was held that included the preparation of a workshop report. 10. Final reports were printed and distributed in the local language.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. No changes in the planned outputs have occurred.

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? For detailed findings and recommendations please refer to the final reports of the social scientist and value chain specialist. Key conclusions and recommendations include:

A: Policy and Administrative Framework There are seven key recommendations for possible avenues to alter the current dynamics of forestry management in order to have forests to be utilized to maximum benefit and sustainably. The current set of relationships reflects historical antecedents, making change difficult. There are no extraordinary circumstances that would provide a window of opportunity for a drastic shift to overhaul leskhoz; indeed, one of the difficulties has been the relatively low priority given to the sector by the national government. Therefore, the approach to reforms must be to build on existing positive elements among current actors and within existing structures by improving the incentive structure to contribute to sustainable forest management (SFM).

1. Review and ensure alignment within policy direction, the legislative underpinning of that policy, and on- the-ground realities of how forests are used now and can reasonably expected to be used in the future. 2. Address the poor incentive structures within leskhoz management by revising their administrative and financing frameworks. 3. Integrate management of leskhoz lands that are suitable for pasture to the overall pasture management systems. 4. Increase the involvement of communities through a deliberate, gradual process. 5. Consider other implementation modalities for Community Based Forest Management. 6. Consider an enhanced role for local governments in holding leskhoz accountable. 7. Secure assistance to continue capacity support at both the national and local levels.

B: Value Chain Analysis Even before the ethnic violence that erupted in June 2010 in the major cites of Osh and Jalal-Abad, the local economy in Jalal-Abad provinces was depressed. It is now desperately in need of capital investment in industry, manufacturing and job creation. The walnut value chain provides valuable employment and income for thousands of poor people in both forest areas and in cities and towns. Poor people, especially women, lack access to micro- credit to grow their walnut businesses. Kernels are the major export. With lack of support infrastructure and industries, the majority of the potential value addition is exported to Turkey and Iran. The Government lacks budget for infrastructure development, incentives for industrialisation and establishment of support industries for a manufacturing base and budgets to promote Kyrgyz products overseas.

Survey findings have shown that improvements to the efficiency of the walnut value chain in Jalal-Abad could improve the income and livelihoods of many participants, increase employment through value addition and PROFOR Activities Completed in CY2011 97

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? increase the national GDP through exports. Regional economic growth, if equitably distributed, could also serve to reduce ethnic tensions and division. Support to improve the efficiency of value chains of walnuts and other NTFPS would also help to promote sustainable walnut-fruit forestry management practices, currently under threat from increased population pressure, deforestation and livestock farming.

This activity yielded many specific recommendations. For example:

-The Decree of the President of KR № 331 (2006) to prohibit all cutting of walnut trees and limbs may be counterproductive in its efforts to reduce deforestation. A more pragmatic approach that allows Leskhoze staff to give permission to leaseholders to prune and maintain existing wild trees – as allowed for kitchen walnut trees- may provide a basis for more sustainable management conditions in wild forests. Recommendation: Review the impact on wild walnut forests of the Decree № 331 (2006). The Moratorium on cutting valuable species is considered temporary. Any future revision of legislation on forest offences will override existing Decrees, thus effectively changing the situation.

- The post harvest systems and market related infrastructure for walnut in Toskool-Ata Leskhoze are poor. Farmers lack drying and storage facilities. Access roads to remote forest areas are lacking. Walnuts sold “wet” immediately after harvest means that an opportunity to dry, store and process walnuts into kernels is lost. Poor households could gain much income and employment during winter months. Marketing arrangements may be considered limited. Some leaseholders sell individually to local traders in Massy. Recommendation: More complex arrangements for bulking, sales in volume, negotiated sale prices with larger traders could be developed, if farmers were to sell collectively. The development of local micro-credit schemes to assist poorer farmers should be considered.

- A review of walnut and kernel products on sale in major supermarkets chains revealed that only a few processed products were available, which indicates that consumers mainly shop for walnuts or kernels in retail bazaars; there is limited growth or diversification of manufactured walnut products for domestic consumption. The opportunity to exploit a niche market for particular products aimed at middle or high income groups is not being developed. No organic labelled products were on offer. Recommendation: How to support processors and manufactures of walnut and NTFP products to gain access to niche markets should be reviewed, including organic certification.

C. Dissemination Key findings, conclusions and recommendations were published and distributed in local language reports and in English. A well attended and participatory final workshop was held in Bishkek.

8. Next steps. What happens now, following the activity’s completion? The reports have been produced locally in the appropriate languages and disseminated. Given the lack of an ongoing Bank operation in the sector locally, it will be difficult to follow up on the recommendations and the needed action and reform. However other countries can gain from the methodology used during this study to analyze the linkages between governance, livelihoods and sustainable forest management (in a context of limited data). PROFOR is considering giving the main report on Forest Management and Use in the Kyrgyz Republic broader exposure through its distribution and communication networks.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? The process of surveying stakeholders, users and officials has proved to be extremely informative and useful. This approach would be good to replicate in the region. The findings and conclusions are also very suitable for further dissemination to neighboring countries. This would require suitable funding being provided – something which the PROFOR Secretariat is considering at present.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources were mobilized.

PROFOR funding $ 120,000 Other sources of funding (describe below) $ - Total $ 120,000

What other sources of co-financing were mobilized? What amounts are involved under each source of co-financing? US$ 56K funding was to have come from the overall Tien Shan Ecosystem Development Project supervision budget. However, this project has cancelled in April 2011, for a number of reasons. Supervision was therefore undertaken remotely, using other budget lines.

PROFOR Activities Completed in CY2011 99

IMPROVING RURAL LIVELIHOODS AND SUSTAINABLE DRY WOODLAND MANAGEMENT IN EASTERN AND SOUTHERN AFRICA http://www.profor.info/profor/knowledge/improving-rural-livelihoods-and-sustainable-management-dryland- forests-eastern-and-souther

Project ID: TF095258 - P116320 Region: AFR PROFOR Thematic Area Percent Date prepared: January 20, 2012 Main: Financing SFM 50% Prepared by: Simon Rietbergen Secondary: Livelihoods 50%

When was the grant originally approved?: 9/17/2009 When was the original planned grant completion date?: 2/26/2010 Have any extensions been approved?: Yes If yes, what was the revised grant completion date?: 1/15/2012

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note. Did these change during implementation? How and why? The objective of this activity was to support the articulation of the Africa Forest Strategic Action Plan, which aims to describe challenges and opportunities for enhancing forest and related sector development in Sub-Saharan Africa, through a more in-depth review of the issues in the dryland ecosystems of East and Southern Africa, building on existing programs and projects, literature, and lessons learnt from past interventions.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. The proposed activities and outputs were: • Review of dryland forestry documentation on “non-Miombo” countries such as Kenya, Ethiopia, Sudan, Botswana, Namibia and South Africa and define challenges and opportunities in forest management, including successes and/or failures to avoid redundancy in options proposed. • For the Miombo (and relying on the recently completed PROFOR funded studies), determine information gaps that may need to be filled to ensure that there is adequate data to complete the overall Africa-wide strategy objectives. • Conduct a quick assessment of potential impacts of climate change on dryland forests and identify the appropriate adaptation measures. • Conduct in-country analysis (countries to be determined) and provide concrete examples of activities that have worked well on the ground, those that have not and draw conclusions for potential scaling-up where feasible. • Determine challenges and opportunities for the dryland forests (incl. Miombo) and develop options with an Action Plan; roles and responsibilities; partners; and, if possible, indications of required financing • Dissemination to counterparts and partners for comments and additional suggestions.

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. The study reviewed 16 out of 23 countries in the Southern and Eastern Africa sub-region, which were grouped in 6 country clusters as follows: (i) South Africa, Botswana and Namibia, (ii) Mozambique, Zimbabwe and Zambia; (iii) Tanzania; (iv) Kenya, Ethiopia, Eritrea, Somalia and, Djibouti; (v) Uganda, Rwanda; and (vi) Sudan(northern).

The country clusters were developed around the main forests and woodland ecosystems types, and the nature of forest industries. From each country cluster, one representative country was selected and visited for the in depth review.

The sub-regional overview was predominantly based on review of available literature including quantitative and 100 100PROFOR Activities Completed in CY2011

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. qualitative forest sector data, supported by information collected through interviews held in sample countries. Although the bulk of information was accessed through the Internet, the data was acquired from a wide range of sources including mainly (i) Government publications on national statistics on forest sector, budgets, trade and investment statistics, national finance and planning; (ii) Civil Society literature - various national and regional conservation NGOs particularly those active in the forestry sector; and (iii) Private Sector publications including annual reports and specific investment information where it was available.

From each country cluster, one representative country was selected for an in-depth review. The in-depth review involved visits to the countries and interviews with key representatives of (i) Government (Forest Departments, Revenue Services, Central Statistics and Investment Centers); (ii) national and international Civil Society and in some cases Donor representatives; and (iii) Private Sector.

A short workshop was also planned to share results of the study but this could not be completed in time.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. With the exception of the cancellation of the workshop, there were no substantive changes in activities undertaken or outputs planned.

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? The study has provided an overview of the economic activity, including the informal sector, and the stakeholders involved in the forest sector in the sub-region, and generated considerable new information required for improved decision making.

In particular, the study has generated a wealth of information on the forest sector activities of private industries, small and medium forest enterprises and local communities, as well as an improved understanding of cross- sectoral linkages (with farming, stock-raising and household energy among others) and impacts on people’s livelihoods and the economy as a whole. The study has demonstrated that there is sufficient data and information to allow for the design of sub-regional and country level strategies to pursue sustainable forest management and build the capacity of key actors in that area. However, this information is highly scattered and not consolidated in many instances.

The contribution of the current study in remedying this situation will be valuable once it is published and disseminated.

The study, once published and disseminated, is likely to influence donor and government policies and practices regarding dryland forest conservation and management as well as attitudes and practices of other forest sector PROFOR Activities Completed in CY2011 101

8. Next steps. What happens now, following the activity’s completion? The World Bank will share the study with its client countries and with other financial and technical partners in the Eastern and Southern Africa sub-region. IUCN, the contractor for the study, is in dialogue on forest policy issues with government and non-government stakeholders in a number of countries in the sub-region, and will use the report of the study to animate this dialogue. PROFOR donors and partners will be encouraged to join the dialogue as well.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? The methodology employed for this study could be usefully replicated in forest related studies of other African sub-regions or country clusters elsewhere in the world.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources were mobilized.

PROFOR funding $ 150,000 Other sources of funding (describe below) $ 25,000 Total $ 175,000

What other sources of co-financing were mobilized? What amounts are involved under each source of co-financing? $25,000 in World Bank budget financing.

102 102PROFOR Activities Completed in CY2011

LESSONS LEARNED FROM AN AGRO-SILVO-PASTORAL TECHNOLOGY TRANSFER FROM COSTA RICA TO CAMEROON

http://www.profor.info/profor/knowledge/lessons-learned-agro-silvo-pastoral-technology-transfer-costa-rica- cameroon

Project ID: P117899 Region: AFR PROFOR Thematic Area Percent Date prepared: December 30, 2011 Main: Cross-sectoral coordination 50% Prepared by: Jonathan Agwe Secondary: Livelihoods 50%

When was the grant originally approved?: 9/22/2011 When was the original planned grant completion date?: 12/30/2011 Have any extensions been approved?: Yes If yes, what was the revised grant completion date?: 1/31/2012

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note. Did these change during implementation? How and why? The objective of the project was to seek partnership and collaboration with PROFOR to: (i) collect, collate, and document lessons learned from a pilot agro-silvo-pastoral technology transfer from Costa Rica to Cameroon; and (ii) develop and implement a dissemination strategy that will convey the lessons learned to a wide and diversified stakeholder, including notably, donors, academia, civil society, and policy makers on how to conduct a genuine and successful south-south knowledge transfer collaboration that involves the grassroots and to explore potential donors for scaling up/out.

The objective did not change during implementation.

ii) Develop and implement a dissemination strategy that will convey the lessons learned to a wide and diversified stakeholder, including notably, donors, academia, civil society, and policy makers on how to conduct a genuine and successful south-south agro-silvo-pastoral knowledge transfer collaboration that involves the grassroots.

Dissemination will be carried out in workshops, in summary notes, and in documents. The kinds of messages in the briefs, bulletins and workshops will be a combination of "how to’s", impact stories, beneficiary perceptions, and "policy or enabling conditions."

The team expects to convey key thematic messages such as but not limited: a) Reversing pasture degradation is achievable by applying restoration ecology principles. b) Increasing forage availability can be done through the establishment of fodder banks. c) Forage budgeting is the basis for efficient year-round feeding strategies for animals. d) Incorporating trees into the prevalent crop-livestock systems diversifies and increases the sustainability of livelihoods. e) Gender economic empowerment can be achieved through implementing zero-grazing systems with small ruminants feeding from fodder banks and fodder trees. f) Policies and enabling environments that encourage access to markets by the poor will contribute greatly to reducing the poverty trap. PROFOR Activities Completed in CY2011 103

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. iii) Organize a workshop in Cameroon to discuss with potential donors for scaling up/out.

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. Two draft documents have been produced as follows: a) Lessons learned for scaling up/out the south-south Tugi Silvopastoral Technology Pilot; b) Dissemination strategy for the lessons learned from the south-south Tugi Silvopastoral Technology Pilot;

Two workshops were organized as follows: a) Bamenda – provincial level workshop on lessons learned for scaling up/out the south-south Tugi Silvopastoral Technology Pilot; b) Yaounde – national level workshop on lessons learned for scaling up/out the south-south Tugi Silvopastral Technology Pilot;

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. One workshop was planned at the national level but at the start of implementation, it became apparent that inviting stakeholders from the province, where the pilot was implemented, to the capital city, where the one workshop was to take place, was going to be very costly. The TTL, in consultation with the consultant, decided to organize one workshop at provincial level as well..

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? Key outputs: Stakeholder Participation: 50 stakeholders participated in the provincial level workshop of Dec. 5, 2011. Participants included 6 members of the provincial administration, 4 provincial heads of relevant technical ministries, 3 mayors/municipal administrators, 3 representatives of farmer and development organizations, 20 members of the media, and 4 representatives from the civil society/NGOs.

30 stakeholders participated in the national level workshop of Dec. 15, 2011. Participants included 4 heads of relevant technical ministries; 9 representatives of international/development/donor community who are also members of the rural development thematic group coordinated by the Country AFTAR unit; 3 World Bank staff, 6 members of national media networks, and 8 representatives from the civil society/NGOs.

Recommendations made were based on answers to the following questions a) What is the present state (situation analysis) of the silvopastoral technology in the Region where the south- south technology was piloted? b) Given the limited resources (money, men, equipment, time) what are the 5 most important and sustainable solutions to the problems identified in the lessons learned? c) What are the most concrete feasible proposals for how to expand the experience from pilot to other communities in the Region and nationally, and who would be the primary stakeholder champions?

And the main messages generated centered around themes to look at: a) Crop-livestock-environment integration; b) Farmer-grazer conflicts and environmental degradation; c) Enabling environment (policies and institutional issues); 104 104PROFOR Activities Completed in CY2011

Means of conveyance of the main messages: a) 3 Provincial and 3 National radio programs reaching out to all listeners nationwide; b) 3 Provincial and 1 National newspapers reaching out to all readers nationwide; c) 2 Provincial and 1 National TV program reaching out to all television viewers nationwide; d) CDs to 80 stakeholder participants that attended the two workshops; e) Proceedings of the two workshops to be produced in both hard and soft copies and distributed by email and posted online.

The lessons learned are complementing other donor-supported initiatives in Cameroon on sustainable environmental and climate change management, productivity improvement, food security, and poverty alleviation.

The workshops brought together stakeholders from the donor community, government, technical ministries, municipal administrators, civil society, academia, farmers, and the press to raise their awareness of the south- south silvopastoral technology transfer collaboration. Although no particular partnerships have ensued from this activity, the AFTAR unit in the World Bank Cameroon Country Office will be exploring the lessons learned for their planned discussions with the government of Cameroon and the rest of the relevant local representatives of donor community on rural development, agriculture productivity improvement, and food security strategy.

8. Next steps. What happens now, following the activity’s completion? Organize a BBL or workshop within the World Bank to further disseminate the lessons learned. Follow up on proposals submitted for resources for scaling up/out. CATIE – the Costa Rica based Tropical Agriculture Research and Higher Education Center --is discussing with the Dutch government for resources to scale out the pilot to a sub-African project.

PROFOR Activities Completed in CY2011 105

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? There is a huge potential for replication, starting with more than the 2,000 livestock farmers in the municipality where the pilot was implemented. Farmers in the Region continue to express interest and have contacted the implementing agencies for information and assistance to access technical and financial help to replicate the technologies on their farms. Replication and/or scaling up would require additional resources.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources were mobilized.

PROFOR funding $ 30,000.00 Other sources of funding (describe below) $ 302,000.00 Total $ 332,000.00

What other sources of co-financing were mobilized? What amounts are involved under each source of co-financing? PROFOR funding (Sept 2011 – Jan 2012) complemented TFESSD funds used for the first phase of the pilot (Oct. 2010 – Sept 2011). No co-financing was mobilized during the three-month implementation of the lessons learned activity.

106 106PROFOR Activities Completed in CY2011

SUPPORT FOR FOREST DAY 5 AND FOR THE DRY FORESTS SYMPOSIUM

http://www.profor.info/profor/events/forest-day-5-durban-south-africa

Project ID: P126473 Region: Global PROFOR Thematic Area Percent Date Cross-sectoral January 31, 2012 Main: 100 % prepared: coordination Prepared by: Peter A. Dewees Secondary: Choose an item. %

When was the grant originally approved?: 9/20/2011 When was the original planned grant completion date?: 4/30/2012 Have any extensions been approved?: No If yes, what was the revised grant completion date?: Click here to enter a date.

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note. Did these change during implementation? How and why? The combined effects of deforestation, land degradation and soil exhaustion are particularly severe in the Africa drylands, leading to desertification and threatening the livelihoods of millions of people. These factors, exacerbated by climate change, are driven by over exploitation of forests, trees, bush and grazing land, inadequate management of water and soil resources as well as poverty and limited development opportunities. Climate change in particular is demanding a renewed response to address the environmental and development challenges in the drylands African countries. Dryland people have developed resilient and adaptive livelihood systems and practices that enable their survival in difficult conditions. Various promising approaches, in a number of cases based on traditional practices, have emerged to reverse deforestation, as well as to contribute to improving livelihoods and enhanced adaptive capacity. There are growing market opportunities as well, for bringing extensive areas of dry woodland under better management, by tapping in to significant market demands for woodland products.

To date, most international climate change discussions have focused on reducing emissions from deforestation and forest degradation in moist, tropical forests (mainly the Amazon and Congo Basins and Indonesia), very much overlooking the world's dry forest areas. The Dry Forests conference and Forest Day 5 in Durban, held in conjunction with the UNFCCC Conference of the Parties, are expected to offer a major opportunity to fill that awareness and research gap at a time when people are starting to understand the role of forests in protecting the adaptive capacity of rural populations and the vulnerability of forest-dependent people to climate change. The “African COP” will also place particular emphasis on food security in the wake of a devastating drought in the Horn of Africa and concerns over declining productivity in degraded areas. In this respect, the two events will help drive the message that healthy, climate-smart landscapes (including forests and farms), poverty reduction and food security go hand in hand.

The objective of this activity is to contribute to collective efforts to raise awareness of successful ecosystem-based management techniques for dry forests and drylands that could help reduce deforestation and forest degradation while improving food security and increasing livelihoods in a changing climate. The intention is to build on the past successful sponsorship experience at Forest Day 4 and bring knowledge related to the management of miombo woodlands and private investment in trees and landscape restoration to broad and influential audiences. These objectives were not changed during implementation.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. PROFOR will support two conferences in Durban: one on Dry Forests (Dec. 1st, 2011), the other on the full range of forests & climate change issues, in cooperation with the Collaborative Partnership on Forests (Forest Day 5, Dec. PROFOR Activities Completed in CY2011 107

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. 4th 2011). The annual Forest Day event is one of the most influential global events on forests, which seeks to identify and discuss key research and policy issues for tropical forests to be addressed in the following year. Typically 1,000- 1,500 world leaders, scientists, donors, media, policymakers, NGOs, indigenous peoples groups and climate negotiators attend each year.

In addition to providing financial support for these events, this activity will involve providing direct support for the following activities:

A--Editing, publishing and launching hard copies of an updated report on “Managing the Miombo Woodlands of Southern Africa: Policies, incentives and options for the rural poor” (earlier first circulated as a World Bank paper as an outcome of PROFOR support in May 2008). The report will be launched at the Dry Forests conference and also shared at Forest Day 5.

B--Formatting and publishing a short overview piece (with a CD of the full report) that summarizes the main messages of the Investing in Trees and Landscape Restoration activity (Nairobi Investment Forum, May 2011) These will be available to participants at Forest Day 5.

C--Co-organizing one of eight high-level panels at Forest Day 5 on the following theme: "Landscape approaches -- Change and adaptation in African drylands: reversing deforestation while contributing to food security" The panel will be one of two sessions organized as a joint Forest Day/ Agriculture and Rural Development Day event.

D--Liasing with ARD Day, the World Bank's ARD department and other partners to encourage integrated approaches to forests and farmland.

E--Communicating both before and after the Durban events (through stories, blogs, videos, etc) to a broader public interested in forests and climate change. (Possibly reporting in the field on dry forest issues to lend human depth to the story)

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. All the activities outlined above have been completed as planned.

The paper, “Managing the Miombo Woodlands of Southern Africa: Policies, incentives and options for the rural poor,” was updated with new material, and was published as a PROFOR paper. The extensive series of working papers which were prepared for this paper were revised, edited, and posted as an on-line Annex to the main paper. The paper was launched at the Dry Forests Conference on December 1, and its key findings were presented and discussed at the Conference. Around 200 of these were distributed at the Dry Forests Conference and at Forest Day.

The outcomes from the Nairobi Forum on Investing in Trees and Landscape Restoration were summarized in a short PROFOR paper, and the final papers from the Forum were edited into a document which was included with the summary paper a CD. Around 250 copies if this were distributed at Forest Day.

The high level panel on “Change and adaptation in African drylands: reversing deforestation while contributing to food security” was convened at Forest Day, and around 300 people participated. The session was opened by the ADG Forests from FAO, Eduardo Briales-Rojas. The keynote was given by Andrew Steer, the World Bank’s Special Envoy for Climate Change.

With respect to coordination with Agriculture and Rural Development Day, which preceded Forest Day, PROFOR staff also actively participated in this, and chaired a panel on experience with Climate Smart Agriculture in Niger, 108 108PROFOR Activities Completed in CY2011

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. which focused on the rehabilitation of degraded landscapes with Faidherbia albida.

Several blogs on the Durban events appeared on the PROFOR website, including one about a visit to the traditional medicine market in Durban, and another about the cottage industry around the collection of the wild Marula fruit. Additional blogs were posted on other sites, in particular one from the World Bank’s Vice President for the Sustainable Development Network, which cited PROFOR studies, and in which she emphasized the value of adaptation based mitigation.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. There were no changes in planned outputs.

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? These activities are expected to help raise the profile of dryland and dryforest issues and bolster landscape approaches to adaptation and mitigation in poor, rural areas of Africa. Tree-based technologies form a big part of the arsenal of tools that make up “climate-smart agriculture,” a concept which agriculture, environment and finance ministers are beginning to embrace and is expected to gain traction in the Durban climate negotiations and high-level side events. The whole activity was geared toward knowledge generation and dissemination. Hard copy publications will support panel interventions. Main messages were summarized and spread online through blogs, stories, videos and other social media.

8. Next steps. What happens now, following the activity’s completion? Click here to enter text.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? There is good potential for replicating this kind of initiative, in particular, as an example of how partnerships can be developed and promoted by focusing on common themes.

PROFOR Activities Completed in CY2011 109

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources were mobilized.

PROFOR funding $ 74,419 Other sources of funding (describe below) $ 7,500 Total $ 81,919

What other sources of co-financing were mobilized? What amounts are involved under each source of co-financing? We received cofinancing from the Bank’s Administrative budget. We have excluded reference to total financing for Forest Day 5 and for the Dry Forests Conference, which totaled several hundreds of thousands of dollars. We may update this information once final accounting is available from CIFOR.

110 110PROFOR Activities Completed in CY2011

TARGETING WATERSHED REHABILITATION INVESTMENTS IN TURKEY

http://www.profor.info/profor/knowledge/targeting-watershed-rehabilitation-investments-turkey

Project ID: TF094282 Region: ECA PROFOR Thematic Area Percent Date January 15, 2012 Main: Livelihoods 60% prepared: Prepared by: Peter A. Dewees Secondary: Financing SFM 40%

When was the grant originally approved?: 4/1/2009 When was the original planned grant completion date?: 9/30/2011 Have any extensions been approved?: Yes If yes, what was the revised grant completion date?: 1/16/2012

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note. Did these change during implementation? How and why? To develop and implement a methodology for prioritizing investments in watershed rehabilitation on the basis of clear and objective criteria, reflecting the risks, the extent and nature of land degradation and deforestation and, to the extent possible, incorporating poverty alleviation objectives.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. The activity is being implemented in three stages. The first stage has involved mobilizing technical skills and developing partnerships with local organizations and institutions to contribute to the development of the risk mapping exercise, identifying institutions with good technical skills, and focusing on the scope for introducing methodological innovations. The first stage resulted in a technical workshop to develop the work program for implementation of the rest of the project. A key outcome of the first stage was a draft paper describing the proposed methodology for the risk mapping assessment; this is being revised during subsequent stages to capture the lessons learned during the exercise.

The second stage has focused on developing the datasets needed to complete the analysis. Changes in biomass will be measured by NDVI. The approach has been applied in studies of land degradation at the micro-catchment level, as well as to national-level and global assessments. The data are globally available for 26 years and will be complemented by climatic data to enable the development of spatial indicators of rain-use efficiency. The landscape will be stratified using land cover and soil and terrain data to enable a more localized analysis of the NDVI data. Concurrently, the field team will compile household expenditure datasets, and will ensure that these are geo-referenced for later analysis; these datasets are believed to exist within the Turkish State Institute of Statistics but their level of data aggregation is not known.

The third stage is focusing on a comprehensive analysis of the available data and presenting the findings at a workshop in Turkey involving key stakeholders within Government and civil society. The key outputs are expected to be: 1) spatial indicators of land degradation at the national level. One of the key indicators of land degradation will be rain-use efficiency (RUE), and specifically RUE-adjusted net primary productivity which defines hot spots of land degradation where both RUE and NPP have declined over time; 2) the spatial distribution of household expenditure, derived from datasets available in Turkey; 3) the spatial distribution of a third indicator, to be developed, which will compare land degradation with household expenditure, better to understand where poverty and land degradation are closely linked.

Stage one requires close collaboration with the national institutions already involved in partnership with the Bank PROFOR Activities Completed in CY2011 111

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. and, also, local technical agencies or companies that will provide supporting data, validate the results in the field, and take up these activities following completion of this consultancy.

For stages two and three, several adaptations of the methodology and additional activities are proposed to meet Turkey’s needs: use of the 1km-definition MODIS data as well as the 8-km GIMMS dataset used in the FAO project; incorporation of energy-use efficiency into the index of land degradation and improvement - to take account of global warming; exploration of a new mapping of land use change that might be incorporated into the indicator of land degradation; development of indices of vulnerability to land degradation using ground cover, slope and rainfall intensity – all these are possible by interpretation of existing remotely sensed data.

For the critical analysis in stage three, preliminary workshops will be very helpful - both to decide on the best courses of action and to achieve ownership of the approach by those institutions that are expected to use it. The process is complex and may take longer than indicated in the original project proposal.

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. 1) An inception workshop was held in Ankara in November 2009; an inception report was has been prepared and submitted; 2) A technical meeting was held successfully at ISRIC, Holland in April 2010 with all the principals and with key Turkish counterparts; A methodology paper has been prepared and submitted; 3) An interim progress report has been prepared and submitted. 4) Biophysical (mainly NDVI, climate, DEM) and socio-economic data has been collected and compiled into geo- referenced datasets; trend of NDVI, climate (precipitation and Temperature) have been mapped. 5) Modeling for analysis of bio-physical and socio-economic data is in preparation 6) A final draft report was prepared, and extensively reviewed internally and externally. The final deliverables constituted an extensive series of maps, accompanied by the draft final report, which has not been made publicly available.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. The Secretariat was not confident that the quality of the final report was sufficient to meet a minimum standard; the contractor working on the report was not able to mobilize the resources needed to make the changes required to bring it to an acceptable standard, and so further work on this activity was halted. The expectation is that PROFOR will separately commission a policy brief which summarizes the report’s main findings in a format which is accessible to a wider readership.

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? Methodologically, the approach taken to carry out a trend analysis of NDVI and climate influences appears to be robust. The mapping exercise has clearly established where land degradation in Turkey has been most severe, as well as the areas where recovery has progressed as a result of sustained investment. The initial mapping provides clear guidance where physical investments are needed to reduce land degradation, however, this, in itself tells little about the extent to which people are affected by degradation.

The second stage of the analysis was intended to established where poverty rates and land degradation problems intersected, with the idea of targeting specific areas with public investment in land rehabilitation – with the impacts of both bringing degraded back into production, and creating employment for poor rural communities. The special challenge was in constructing poverty maps. Information about the incidence of poverty in Turkey has 112 112PROFOR Activities Completed in CY2011

As a proxy, the analysts were able to collect data from the UNDP Human Development Report, but it was not available at a scale which might have been useful.

Two general findings are of particular interest. First, the data shows that strong greening has taken place in the interior of Turkey, despite declining rainfall in these areas and increased temperatures. This is really remarkable, and suggests that strong human interventions have contributed to significant agricultural carbon increases. These have averaged around 450 kg C per ha over the 26 year period assessed, equivalent to 900 kg of biomass per ha. Arguably, these trends are an outcome of better land management practices, as well as profound changes in agricultural policy.

With respect to the land degradation data, the same analysis considered changes in Rainfall Use Efficiency over the period assessed -- how much greenness do you get for every inch of rainfall which falls, and how this has changed over time. Again, it shows very significant improvements in the interior of the country, but also points out where a lot of hard work still needs to be done, particularly in the northeast and southwest corners, where land degradation hotspots are identified.

The work closely complements other activities underway globally on mapping the potential for landscape rehabilitation.

None of the outputs have been systematically disseminated. As noted earlier, the quality of the text which accompanied the maps was of a low standard, and it would need to be significantly redrafted to make it useful. PROFOR will commission the preparation of a policy brief around the issue of land degradation and “re-greening” so that some of its findings can be made more widely available.

8. Next steps. What happens now, following the activity’s completion? The Turkish national strategy for watershed rehabilitation is under preparation, and the mapping work has been an important input to this. PROFOR Activities Completed in CY2011 113

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? There is very good potential for replicating the approaches taken in this project. At the national level, the development of risk maps is a relatively straightforward exercise, and should helpfully identify the scope for land rehabilitation measures. The innovative aspect of this project’s design was the incorporation of socio-economic data in the overlays. The usefulness of this approach largely on data availability, and, as demonstrated in this case, could not be achieved because of the lack of data. Similar activities have been carried out in the context of the GEF-funded LADA project, executed by FAO (and in which ISRIC is also partner). The LADA project comes to an end but follow-up activities are foreseen as well as expansion of these activities beyond the six current pilot countries. The mutual experiences of LADA and “TULADA” may offer ground for further efforts.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources were mobilized.

PROFOR funding $ 160,036 Other sources of funding (describe below) $ 17,600 Total $ 177,600

What other sources of co-financing were mobilized? What amounts are involved under each source of co-financing? World Bank Administrative Budget of around $17,600. Additional co-financing generated for preparation of national watershed rehabilitation strategy.

114 114PROFOR Activities Completed in CY2011

PRO-POOR REDD - HOW WILL WE KNOW?: A TOOLBOX FOR SOCIAL IMPACT ASSESSMENT OF MULTIPLE-BENEFIT FOREST CARBON PROJECTS

http://www.profor.info/profor/knowledge/social-impact-assessment-forest-carbon-projects-toolkit

Project ID: P112065 - PO7152226 Region: Global PROFOR Thematic Area Percent Date October 31, 2011 Main: Livelihoods 90% prepared: Prepared by: Michael Richards Secondary: Financing SFM 10%

When was the grant originally approved?: 7/31/2009 When was the original planned grant completion date?: 2/28/2010 Have any extensions been approved?: Yes If yes, what was the revised grant completion date?: 3/30/2012

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note. Did these change during implementation? How and why? The goal of this Activity is to promote win-win poverty and environmental outcomes from high quality multiple- benefit forest carbon projects. The specific objective is to develop a robust impact assessment or M&E toolbox for use by carbon project developers so that they can cost-effectively meet the verification requirements of the Climate, Community & Biodiversity (CCB) Standards and other comparable standards.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. 1. Inception workshop for detailed research planning between the four partners. 2. A review of methods being used by the first tranche of CCB validated projects, and by other projects in the ‘implementation’ phase. 3. Development of a provisional toolbox and methodological guidance, building on the Forest Trends research already carried out, and including some early practice case studies from step 2. 4. Field trials: selection and application of ‘best-bet’ methods to a small sample (3-5) of CCB validated BioCarbon Fund and ‘Katoomba Incubator’ projects. This will include selecting and testing a core set of indicators. Technical assistance will be provided to selected projects. 5. Revision and consolidation of the toolbox, integrating case study material from the field trials, and using a manual design specialist. The draft toolbox will also be sent out for Peer Review (e.g., by CARE International which is known to have a strong interest in this area), and comments will also be solicited from CCBA members via the CCBA review process. 6. Finalizing written outputs: a toolbox type manual; inputs into Katoomba Group ‘Getting Started in REDD’ manual (independently funded); and policy briefs (see Outputs). These outputs will be initially in English - additional funding will be sought for other language versions. 7. Website, publication and other dissemination activities (see Outputs). Additional funds will be sought for other language versions. 8. Guidance to project developers provided at Katoomba Incubator project clinics to be held 2-3 times per annum (independently funded), and at CCBA REDD facilitation workshops in Peru.

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. Activities 1, 2 and 3 were completed and reported on in 2009 and 2010.

Activity 4: Field trials of the Manual (Version 1) were undertaken with the indigenous Surui REDD project in Acre PROFOR Activities Completed in CY2011 115

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. State, Brazil in February 2011; with the Alto Huayabamba Conservation Concession (CCAH) in San Martin Department, Peru in March 2011; and with the GuateCarbon REDD project involving community concessions in the Maya Biosphere Reserve, Guatemala in March 2011. A report of the three case studies was submitted to PROFOR in June 2011 entitled: “Field Testing the ‘Theory of Change’ Approach to Social Impact Assessment of REDD+ Projects: Case Studies from Brazil, Guatemala and Peru” including 3 annexes. Activity 5: Version 1 of the Manual was thoroughly revised and consolidated in response to the three field trials, three peer reviews, and two training workshops for project proponents, as well as detailed comments from various sources including Phil Franks of CARE International and a REDD project developer in Indonesia (Fauna & Flora International). The peer reviewers were: Paul Francis, former Social Development Advisor of the World Bank; Dr Kate Schreckenberger of Southampton University, main author of “Social assessment of conservation initiatives: A review of rapid methodologies” (IIED, 2010); and Paddy Doherty, Credibility Tools Manager of the ISEAL Alliance. An important decision was to include guidance on biodiversity impact assessment (with additional funding from Rockefeller Foundation) in Version 2.

Activity 6: Finalizing written outputs: (a) Part 1 of the “Social and Biodiversity Impact Assessment (SBIA) Manual for REDD+ Projects” (Version 2) was released on Forest Trends’ website in October 2011, and Parts 2 (Social Impact Assessment Toolbox) and 3 (Biodiversity Impact Assessment Toolbox) are being released in November 2011; (b) A chapter of the Forest Trends’ Guidance Document “Building Forest Carbon Projects” for project developers: “Social Impacts Guidance: Key Assessment Issues for Forest Carbon Projects.” http://www.forest- trends.org/documents/files/doc_2870.pdf; (c): Richards, M. & Panfil, S. 2011. “Towards cost-effective social impact assessment of REDD+ projects: meeting the challenge of multiple benefit standards.” International Forestry Review Vol. 13 (1): 1-12.

Activity 7: (a) Website developed: www.forest-trends.org/publications/SBIA_Manual; (b) Flyer for SBIA Manual: “REDD+ Projects: Good or Bad for Local People and their Environment” for distribution at 17th Conference of Parties of UNFCCCC, Durban, and distributed at other meetings held in Q4 2011, e.g., RRI REDD+ Dialogue, London 12 October; (c) Translation of SBIA Manual to French and Spanish with Rockefeller Foundation funding managed by CCBA.

Activity 8: Guidance to project developers has been provided by regional training workshops held in Peru (June 2010), Tanzania (October 2010), Kenya (August 2011 with GEF-UNDP funding) and DRC (September 2011 with USAID-Translinks funding). This has resulted in training of approximately 80 terrestrial carbon project developers and other REDD+ stakeholders from about 10 countries. These workshops involved hands-on training using ‘real’ REDD+ projects as case studies over a period of 3-4 days.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. The 2010 report details changes in planned outputs in 2010, including the decision to hold training workshops prior to field testing the Manual. The field trials, peer reviews and publication of Version 2 of the Manual therefore took place in 2011. The other main change in 2011 was to integrate biodiversity impact assessment into Version 2 of the Manual. It was felt by CCBA in particular that it would be best for project proponents to be able to source guidance for meeting the CCB Standards in one manual, and because the ‘theory of change’ approach was also relevant for biodiversity impacts. The toolbox sections of the SBIA Manual however maintain a separation between social impact assessment tools or methods (Part 2) and biodiversity impact assessment tools (Part 3).

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? Findings: Our experience during field testing and further training in social impact assessment is that the benefits of 116 116PROFOR Activities Completed in CY2011

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? using the ‘theory of change’ approach to impact assessment go well beyond the generation of a credible social monitoring plan which can meet the CCB or other multiple benefit standards. These wider benefits include: strategic project design necessary for achieving social and biodiversity objectives (clear objectives are essential for identifying monitoring indicators); participation of project stakeholders; promotion of adaptive project management; and the ease of understanding and explaining the results to a range of stakeholders.

We have continued to refine the methodology, and to see how to make it more accessible. The experiences particularly made us realize that projects need more guidance for ensuring effective participation of local stakeholders in the process, since, as mentioned in the 2010 report, it is quite challenging for them. Keys to better participation include the quality of the ‘focal issue working group’ facilitators (so the latter need to be more carefully selected and trained); some prior training or exposure for community participants; the use of a ‘practice activity’ to develop good practice consultation skills; and various issues around the more effective participation of local stakeholders, especially women. Some of these issues were picked up by an educationalist who observed the pedagogy and information transmission methods; her observations particularly informed the two Annexes to Part 1, the second of which is a set of guidance notes for the working group facilitators which should reduce the time wasted and interference to the process as a result of continually having to seek guidance from one of the main workshop facilitators. Other learning points included the need for a combined training and planning workshop, prior to doing the ‘real thing’; the need for very careful planning of the workshop, especially the participants, including finding a good balance of stakeholders; providing more support to local, especially female, participants; and the observation that it is better to carry out the selection of indicators and development of the monitoring plan in a smaller group since this stage proved very difficult for tired local participants (4 days is an upper limit on workshop length).

We continue to think that the Open Standards approach of the Conservation Measures Partnership is highly appropriate for terrestrial carbon projects, and can be cost-effective for projects, especially considering the wider benefits, but that an expert facilitator is required for the training and the ‘implementation’ workshops, so it is therefore not as cheap as originally hoped. While the training workshops provide project proponents with a strong introduction to the method, it is misleading to claim they can then go away and do it on their own. However, the data collection, analysis and reporting stages should be possible with minimal external support. Based partly on the costs in the three case studies, we think that for most projects the cost of generating a credible social monitoring plan using this approach will be in the range $25,000-35,000 depending on various factors (this is still far cheaper than using a traditional ‘matching methods’ approach such as the quasi-experimental method, which could be three or four times more expensive when data processing and analysis costs are included).

Dissemination is partly covered under question 4 (activities 6 and 7) including through further project training, a chapter in the widely distributed ‘Building Forest Carbon Projects’ manual, and a peer reviewed article in International Forestry Review. There have also been numerous other meetings at which the authors have had the opportunity to discuss or present the Manual, for example, at a USAID “Expert Workshop on the Social Dimensions of REDD+” on 17-19 October 2011. However one urgent need is to train the auditors of the CCB Standard, since their understanding of the methodology is unclear. An example of uptake is from Tanzania, where the Tropical Forest Conservation Group (TFCG) REDD project in Lindi District has undertaken a large scale SIA exercise in 2011 following their participation in the SIA Training workshop in Zanzibar in October 2010.

8. Next steps. What happens now, following the activity’s completion? The main future activities are dissemination of the SBIA Manual through all possible channels, including distribution of flyers at Forests Day and appropriate side-events in Durban (17th COP of UNFCCC), and participation by Michael Richards on a Panel at Woods Hole Research Centre side-event on 1st December; on the websites of the four NGO partners, and other key websites such as REDD-net.org (version 1 of the Manual has been held on this website); the Forests-L and Climate-L List Serves; training workshops for project developers (contingent on funding, we plan to hold these in the Mekong Region, Mexico and DRC); urgently needed training of auditors of the CCB Standards; and discussion of the potential to apply the ‘theory of change’ method at the national REDD+ level (preliminary discussions have taken place with the Forest Carbon Partnership Facility as regards its complementarity to the Strategic Social and Environmental Assessment (SESA) process), and in LISA- REDD. The methodology will also be adapted to the requirements of assessing gender and other social issues in the context of payments for watershed services (PWS) projects (see 9).

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? Replication potential is strong at various levels. Firstly, we expect to continue to respond to the demand for SIA training workshops and technical assistance at the project level; secondly we hope that the methodology can be applied at the national REDD+ level as mentioned under question 8; and thirdly the approach will be adapted over 118 118PROFOR Activities Completed in CY2011

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? the course of the next 2-3 years to the social assessment of PWS projects following a grant to Forest Trends by the Swiss Development Cooperation (SDC). SDC has particularly asked Forest Trends to provide support to PWS projects in the analysis of gender issues. There is also unexplored potential to use the methodology as part of the FPIC process.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources were mobilized.

PROFOR funding $ 101,457 Other sources of funding (describe below) $ 137,283 Total $ 231,883

What other sources of co-financing were mobilized? What amounts are involved under each source of co-financing? USAID for $85,000, Morgan Stanley for $25,000 (in sponsorship of the report), and the Royal Norwegian Embassy and the University of Dar Es Salaam for $10,000. GEF has contributed $5,000 towards the SIA workshop. CCBA has contributed and estimated 27K in staff time, Rainforest Alliance and FFI contributing an estimated $5,000 per organization. In addition to the co-financing reported, Rockefeller Funds administered by CCBA were utilized to primarily pay for the Peru workshop, with additional smaller contributions provided directly by CARE International and Tanzania Forest Conservation Group.

PROFOR Activities Completed in CY2011 119

B. FINANCING SUSTAINABLE FOREST MANAGEMENT

EVALUATING THE EFFECTIVENESS OF PUBLIC SPENDING IN THE FORESTRY SECTOR

http://www.profor.info/profor/knowledge/forest-sector-public-expenditure-reviews-toolkit

Project ID: P121305 Region: Global PROFOR Thematic Area Percent Date prepared: November 23, 2011 Main: Financing SFM 100% Prepared by: Nalin M. Kishor Secondary: Choose an item. %

When was the grant originally approved?: 3/19/2010 When was the original planned grant completion date?: 6/30/2011 Have any extensions been approved?: Yes If yes, what was the revised grant completion date?: 2/6/2012

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note. Did these change during implementation? How and why? The objective of this activity is to build a body of global good practices as it relates to the preparation of work on public spending in the forests sector, elaborating on the importance of public expenditures to support forest conservation and management, as well as addressing the question of how the effectiveness of these expenditures can be assessed, and how their quality can be enhanced for better development outcomes.

There was no change from the project’s original objectives.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. To take this idea forward, work is to be carried out in two phases. Phase 1 was expected to involve: (i) carrying out a stock-taking of public expenditure analysis efforts in the forests sector, as well as of efforts to establish the effectiveness and efficiency of public spending in the forestry sector, (ii) examining public expenditure analysis work from other sectors to build up a compendium of global good practice examples which could be used in the forests sector, (iii) then, drawing upon this knowledge, preparing a guidance note, including a set of principles which articulate a best practice approach to public expenditure analysis for the forest sector.

The second phase, which was expected to follow completion of the first phase, was meant to test the recommendations in the guidance note through a pilot exercise in one country, which would then be refined and revised. Pending further consultations with the Bank’s operational regions, the guidance note was to be finalized, and sectoral reviews were expected to be launched in three countries.

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. The first phase of this work has been completed as planned. The compendium of forest public expenditure reviews has been completed, and a set of Guidelines for drafting forest PERs was prepared. The compendium of public expenditure reviews related to forests, agriculture and the environment has been exhaustive, covering 61 sectoral PERs, and represents the first time this type of extensive review has been carried out. The Guidelines were disseminated widely in draft, for comment, particularly through the Bank’s network of public sector management specialists, and included extensive guidance about preparing forest PERs. The team carried out additional work on institutional effectiveness in the forests sector, which is also reported in the review and compendium. The Guidelines were discussed at a one-day workshop held at the World Bank (in December 2010) with a range of 120 120PROFOR Activities Completed in CY2011

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. forests specialists, public sector management specialists, financial management experts, and others. Feedback on the structure and recommendations of the guidelines was sought from workshop participants as well as from independent peer reviewers, and this feedback was used to finalize the Guidelines. There was a consensus among peer reviewers and workshop participants that the final output, which was prepared after the workshop, was of sufficient quality that it did not require further field testing. The final report, “Forest Sector Public Expenditure Reviews: Review and Guidance Note”, is available on the PROFOR website and has been widely disseminated through internal and external networks.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. While the original plan was to field test the guidelines, and then to finalize them after the field testing, the view of the peer reviewers was that the guidelines were sufficiently comprehensive and robust and did not require further testing. On the basis of this recommendation, the draft guidelines were finalized. Further work under the proposed second phase has been postponed until funding becomes available. Interest in sectoral PERs has been solicited, and a list of countries where we might consider financing a detailed forest sector PER has been prepared (currently comprised of Bolivia, Ghana, Indonesia and Albania). Any further action will be delayed until funding becomes available.

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? In terms of fact finding, the report found that, globally, very few forest sector PERs have been undertaken. Of the 61 agricultural/NRM/environment PERs reviewed, only 14 focused to any degree on forests. Few of these seemed to be particularly robust because of inconsistencies in definitions, data problems, inconsistencies between policy priorities and planned budget allocations, lack of clear linkages of public sector expenditures to intended outcomes and limited analysis as regards examination of the efficiency and effectiveness of forest public expenditures. In addition, the review suggested that sectoral spending could be difficult to capture when multiple institutions have responsibilities for delivery against different aspects of a country’s forest policy (for example, when responsibilities are split between forest conservation and forest management, or between forestry and agroforestry institutions.)

The final report provides highly practical support and guidance by defining a common framework for carrying out a forest sector PER; and focuses on how to address the above mentioned deficiencies.

The final report has been circulated widely through internal networks (for example, the Bank’s network of public sector management specialists), and externally. It was extensively referenced. Hard copies were circulated during a side event at the UNFF meetings in 2011 and distributed to the Collaborative Partnership on Forests (CPF) Ad- hoc Group on Forest Finance. There will be opportunities for further use and circulation of this paper at the Organization Led Initiative (OLI) which is being organized by the CPF.

The public expenditure framework for forests is especially important in the context of REDD+ initiatives. Mobilizing donor-dependent forest carbon finance effectively will require a greater understanding of how funds are allocated and spent through the budgetary framework. Without an understanding of how spending on forests features in budgetary processes (viz other sectoral spending), climate finance could be poorly targeted at achieving good forest mitigation and adaptation outcomes.

A key question for public spending is how policy priorities are reflected in the spending framework. Policies may be excellent on paper, but are toothless if they are not backed up by a robust expenditure framework, hence, the importance of placing the budgetary framework in a sound policy context.

8. Next steps. What happens now, following the activity’s completion? Once PROFOR’s funding pipeline becomes clear, if the budget allows, the Secretariat will explore the feasibility of initiating Forest Sector PERs in up to three countries. PROFOR will continue to disseminate the Guidelines and will look for opportunities to support their implementation in countries with interests in undertaking a systematic analysis of public expenditures in their forests sector.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? The preparation of Guidelines like these is a highly effective means of ensuring that there is a common platform for understanding how specific activities – such as Forests Sector Public Expenditure Reviews – should be carried out. PROFOR has typically contributed to preparing Guidelines, like these, in the past, and will continue to do so, when there are strategic interests around common themes. As the Guidelines are rolled out, we would expect Forests PERs to become somewhat more common.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources that were mobilized. PROFOR funding $ 140,791 Other sources of funding (describe below) $ 16,140 Total $ 156,931 What other sources of co-financing were mobilized? What amounts are involved under each source of co-financing? Other sources: Bank Budget ($16,140) for Staff Time. PROFOR Funding was increased from $130,000 to $150,000 in CY11.

122 122PROFOR Activities Completed in CY2011

LANDSCAPE RESTORATION AND MANAGEMENT FORUM

http://www.profor.info/profor/knowledge/mobilizing-private-investment-trees-and-landscape-restoration

Project ID: P125756 & P117427 Region: AFR PROFOR Thematic Area Percent Date prepared: January 9, 2012 Main: Financing SFM 100% Prepared by: Peter Dewees Secondary: Choose an item. %

When was the grant originally approved?: 2/3/2011 When was the original planned grant completion date?: 3/30/2012 Have any extensions been approved?: No If yes, what was the revised grant completion date?: Click here to enter a date.

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note. Did these change during implementation? How and why? In the past, the World Bank with the support of the Program on Forests (PROFOR) has supported several Investment Forums, which sought to link private sector interest with opportunities for forest development. Building on this past experience, PROFOR is proposing to support an Investment Forum on Landscape Restoration and Management. The proposed Investment Forum, its preparation, as well as its follow-up, are conceived as an element in a strategy shared by PROFOR and other partners to raise awareness among, and to engage with, key policy and decision makers in Africa, so as to catalyze policy reforms and investments to scale up landscape restoration and management systems. The challenge ahead is not so much a shortage of scientific knowledge about suitable agroforestry, forest regeneration, or more intensive farm forestry systems, but rather a lack of understanding of farmers' and investors specific constraints to adoption, and deficiencies in policy support and investments to scale up already well proven techniques. The Investment Forum is proposed to capitalize on the very large body of knowledge and experience on landscape restoration techniques acquired during the last three decades, to focus on dissemination of the most promising systems, and on generating interest in investment, in particular, to: <> Raise awareness among key investors and decision makers and to encourage them to use the opportunities that sustainable landscape restoration and management systems represent for poverty alleviation, REDD+, ecological landscape restoration, and for improved and sustainable livelihoods; <> Identify factors that constrain more widespread adoption of forest and tree-based landscape restoration measures, especially at the farmer level, and how to address these, through measures such as the ongoing Agroforestry Policy Initiative (API) being developed by the World Agroforestry Centre (ICRAF) in collaboration with FAO and other partners. <> Secure commitments from decision makers, donors and different types of investors for follow up action where opportunities have been identified for scaling up well proven systems and for removing well identified constraints to wider adoption. The objectives outlined in the original Concept Note did not change during implementation.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. To achieve the objectives described above, the Forum will be organized around a two-day intensive program, dedicated to explore the investment potential for forest and tree-based landscape restoration and management approaches and opportunities for enhancing local livelihoods, increasing resilience, and creating good returns for investors. The Forum is not conceived of as a one-off event, but rather as a pivotal milestone in a longer-term process of creating a platform for engaging key decision makers and investors. A substantial part of the work of this activity, particularly the preparation of background material which can contribute to the development of an action plan or a strategy paper, will take place before the Forum, to ensure PROFOR Activities Completed in CY2011 123

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. that participants will be able to engage in follow-up policy reforms, programmatic decisions and investments to promote landscape restoration and agroforestry in interested African countries. The outcomes will be elaborated in a participatory manner to create ownership and buy-in from key national players (Government planners, national focal people for REDD+, WB Country Director and DPL team, etc.). As inputs to the Investment Forum - indeed as critical background papers which should help inform and guide the deliberations at the Forum - three seminal analytic pieces will be prepared. These are intended to address the following themes: An overview paper is envisaged which will describe the tree-based technologies and approaches which can restore and enhance the functionality of rural farming landscapes in Africa, and which can serve both to help restore landscapes and which could generate private investment interest;

A second paper will be prepared to describe where landscape restoration measures have the greatest potential in Africa. It would consider both the spatial potential for landscape restoration, and would incorporate overlays of tenure and ownership better to be able to describe the places where tree planting measures would have the greatest potential for generating private investment.

A third paper would be prepared which describes constraints and opportunities for investment, focusing both on limiting factors which constrain the private sector from investing in tree-based landscape rehabilitation measures, as well as the factors which are increasing the interest of the private sector in investing in forests and trees in landscapes. The format of the Forum will follow along the presentation of the three background papers. In addition to keynote and closing presentations, three plenary presentations will focus on the subjects outlined by the three background papers. The plenary presentations will be immediately followed by panel discussions involving practitioners, local land owners, investors, and financing institutions to more fully explore the themes presented in the plenary presentations. The aim would be to identify key questions which should be addressed in the Action Plan. The themes which the Forum will address will include: <> An overview of strategies for creating an enabling policy environment for investing in landscape restoration. The Forum will focus on cross-cutting policy reforms that are needed to mainstream landscape restoration measures such as agroforestry and more intensive land rehabilitation strategies into agricultural landscapes and to address the challenge of landscape restoration: access to capital and insurance, land tenure reforms, access to improved tree germplasm, how to disseminate knowledge-intensive techniques through farmer-to-farmer exchange visits, etc. The review of factors that constrain wider adoption at farmer level will provide a useful background for these discussions, which will then in turn help to refine strategic directions of the Draft Action Plan (that will serve as a follow-up to the Forum). <> Investment opportunities in the Africa Region and elsewhere. The Forum will provide an opportunity to focus on well-proven landscape restoration measures which are mature enough for rapid scaling up. The discussions will be informed by the previously described material that will provide information on costs, benefits and practical guidance for implementation of specific landscape management and restoration systems. It is expected that the attention will concentrate on a relatively small number of very promising systems which have demonstrated clear returns to different investors. It should be noted that the term 'investor' is used to cover a spectrum of resourceful stakeholders, including, first and foremost, farmers themselves. <> Development of a strategy to support investment. This Forum will build on and consolidate different commitments from participants to the Forum into a final strategy that will specify follow-up policy actions, programs and investments at national level in key Africa countries, but also at global level (linking it with the API, The Hague's Roadmap, the WB Strategic Action Plan for the sector in Africa, and other initiatives). This Concept Note does not financially cover follow-up actions, but it is expected that the strategy will catalyze future efforts and investments from other partners.

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3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. The Investment Forum was convened in Nairobi in late May 2011. It attracted around 150 participants, and was co-sponsored by ICRAF, IUCN, EcoAgriculture Partners, and TerrAfrica. The objectives of the activity were fully met. The two day event stimulated a series of lively discussions and interactions between entrepreneurs, investors, and representatives from financial institutions, community-based NGOs, governments and donors. The full Forum report was published in two forms: an abbreviated summary, which included a CD of all the background paper and material, and a full report, which included all the background material.

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? The Forum brought together about 100 participants: representatives of private sector financial institutions, forest and agribusiness companies, local communities, national forest associations, high level national government policy leaders, research institutions and development partners. Participants worked to identify immediate investment opportunities, the main constraints to investment, and policy and institutional reforms needed to overcome those constraints.

The Forum was structured around four sessions: three based on the background papers published in this volume, as well as a session on private sector perspectives. These sessions were preceded by a welcome address from Dr. Dennis Garrity, then Director General of the World Agroforestry Center, opening remarks by Dr. Romano Kiome, Permanent Secretary, Ministry of Agriculture, Kenya, and a keynote speech by Hon. Stanislas Kamanzi, Minister of Environment and Natural Resources, Republic of Rwanda, . The forum ended with working group sessions focusing on questions determined by the participants and a final session summarizing some of the Forum’s key messages.

The outputs have been widely disseminated, including at Forest Day 5 in Durban, which was held in conjunction with the UNFCCC Conference of the Parties.

6. Policy framework and relevance to donor activities. Describe how this activity has complemented policy objectives at the national, regional, or global level. Have other donors been working in this area? If so, how has this activity complemented other donor-supported initiatives? Are there any particular partnerships which have been supported or which have been an outcome of this activity? keeping producer margins low and consumer prices high. A simplified regulatory regime which favors the capacity of producers to manage trees could contribute to expanding markets. Trade associations have shown they can play a role in promoting market diversification, in improving the prospects for niche market entry, and in establishing product standards. Payments for environmental services can help. Markets for environmental services from trees and from better- managed farming landscapes are potentially quite important – for carbon sequestration, for biodiversity conservation, for tourism, for watershed management – and these could be more fully developed in line with the emergence of new financing instruments and international commitments. Experience so far has suggested that these types of initiatives are most successful when they are integrated with other rural development activities. Combined with direct benefits such as productivity increases and improved climate resilience, payments for environmental services (PES) may provide additional incentives for local people to manage trees and landscapes more sustainably. Forestry organizations need to be revitalized. Forestry organizations are generally underfunded and not aligned with the major thrusts of rural development efforts. There is also much resistance to change, even though a failure to adapt increases forest organizations’ marginalization. Perhaps the biggest challenge for forest organizations in the region is the need for a reorientation from their earlier roles, which were largely regulatory, to roles which have a much stronger service-delivery orientation, aligned with the poverty mitigation agenda. The skill set which currently characterizes forest organizations in much of Africa, and the budget processes which allocate public resources for forest management, is largely not relevant for meeting the challenges of managing trees in farming systems. Similarly, with only a few exceptions, forest research institutions have demonstrated a limited understanding of the complexities of tree cultivation and management to meet local needs. It may be that wider responsibilities for service delivery should shift to other institutions with greater capacity for engaging local stakeholders in improving natural resource management. Rural development efforts should work across sectors and forge synergies. To increase investment in trees and landscape restoration on a meaningful scale, government and donor-led initiatives must go beyond forest sector authorities and engage a wide range of public and private stakeholders including water, agriculture, livestock, energy, lands, environment finance and planning authorities; producer groups; civil society organizations including business associations; food companies; and private investors. Policies which support good governance encourage private investment. Throughout Africa, countries which have the strongest framework for good governance consistently generate the most significant sources of private investment. This is no less true for investing in trees and landscape restoration, as investors must have the confidence that their rights and investment outcomes are protected. Conversely, policies which improve land, water and tree governance can minimize the risks of large-scale land acquisitions. Large-scale land acquisitions are increasingly a reality in Africa and present both risks and opportunities. Policies that strengthen information access and protect existing land rights can help ensure that land transfers are voluntary and beneficial to local people. A sound policy framework can help attract responsible agro-investors who respect a set of basic principles and strengthen food security rather than putting it in jeopardy. At the individual farmer level, adequate legislation that recognizes farmers’ rights to the trees on their farm can also provide incentives for land restoration and sustainable land management practices. The activity complemented a wide range of other activities in the region, supported by multiple donors. The activity was completed successfully primarily because of the partnerships established with ICRAF, IUCN, EcoAgriculture Partners and TerrAfrica.

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8. Next steps. What happens now, following the activity’s completion? There is an expectation that a follow-on Investment Forum should be convened in 2 years in Africa, and clearly, there is interest in developing similar discussions in other regions outside of Africa.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? PROFOR has supported a series of Investment Fora and the model has proven to be quite useful for stimulating entrepreneurs and investors to collaborate and to engage.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources were mobilized.

PROFOR funding $ 167,000 Other sources of funding (describe below) $ 28,533 Total $ 195,533

What other sources of co-financing were mobilized? What amounts are involved under each source of co-financing? WB Administrative budget ($8,533) and TerrAfrica ($20,000). In addition, ICRAF, EcoAgriculture Partners and IUCN each contributed substantial additional resources in staff time and travel costs, and ICRAF provided logistic support and the use of its facilities. Cofinancing accounted for around 15% of cash outlays.

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C. COORDINATION ACROSS SECTORS

ASSESSMENT OF FOREST LANDSCAPE RESTORATION POTENTIAL IN GHANA

http://www.profor.info/profor/knowledge/forest-landscape-restoration-ghana

Project ID: TF096980 (P116320) Region: AFR PROFOR Thematic Area Percent Date prepared: January 16, 2012 Main: Financing SFM 50% Prepared by: Simon Rietbergen Secondary: Livelihoods 50%

When was the grant originally approved?: 5/3/2010 When was the original planned grant completion date?: 12/31/2010 Have any extensions been approved?: Yes If yes, what was the revised grant completion date?: 9/30/2011

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note. Did these change during implementation? How and why? The objective of this project is to provide decision-makers and opinion leaders from different sectors in Ghana with critical preliminary information and analysis on opportunities for restoration of lost forests and degraded lands as a basis for national REDD+ strategies within the context of multifunctional land use. A second objective is to develop the first iteration of a framework methodology and approach to assessing forest landscape restoration (FLR) opportunities that could be applied in other countries, and to use this methodology and the results of the national FLR assessment to increase awareness in the UNFCCC arena of the extent and nature of the restoration opportunity, and its potential contribution in addressing climate change. These objectives were not changed during implementation.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. The planned activities were grouped under three broad categories: a) Preliminary national assessment of FLR potential, including mapping, assessment of carbon potential and economic analysis b) Development of recommendations on the contribution of forest landscape restoration as input to national REDD-plus and the global debate on REDD-plus and indications of opportunities for investment c) Development and dissemination of framework methodology for additional and comprehensive national FLR assessments

The key outputs envisaged were: -Preliminary national assessments of FLR potential presented in leaflet form, including: - -Extent of FLR potential (characterized by principal FLR types) -Location of potential FLR candidate areas -Location of degradation hotspots -Estimate of carbon potential (tonnes CO2) -Estimation of potential costs (USD) -Socio-political considerations -Framework methodology for comprehensive national FLR assessments presented in leaflet form -Framework for identification of indicators of degradation/restoration -Recommendations on the contribution of FLR to national REDD-plus or low carbon development strategies -PowerPoint presentation incorporating the above information

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3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. The activity has given rise to the following key outputs: - An overall report describing the forest degradation assessment methodology developed and the multi- stakeholder workshop organized to consult on the methodology and raise awareness on the importance of Forest Landscape Restoration (FLR) - A set of high quality maps of the status of forest and woodland cover in all of Ghana’s Forest Reserves, both in the high forest and the savannah zone, based on satellite imagery and selected ‘ground-truthing’. - A PowerPoint presentation explaining the importance of FLR, the forest degradation assessment methodology used, and the assessment results. - A draft restoration opportunities map for parts of Southern Ghana, based on processing and refinement of results from two regional workshops.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. The final output delivered by the project is a preliminary national assessment of forest degradation inside forest reserves and a methodology for carrying out this assessment, rather than an assessment of Forest landscape restoration (FLR) potential nationwide as originally planned. For the time being, the forest reserve cover maps produced under the grant do not contain any indication of where the highest potential for FLR is (e.g. identification of sites with highest carbon potential, or sites with lowest restoration cost) other than indicating whether or not the forests are degraded. However, a draft restoration opportunities map was produced for parts of Southern Ghana, based on processing and refinement of results from two regional workshops. Furthermore, CERSGIS and its partners obtained funding from the German International Climate Initiative (ICI) to produce the assessment of national FLR potential (including off-reserve areas). The forest reserve cover maps and multi- stakeholder awareness of the importance of FLR generated thanks to the PROFOR grant will form a key input for the ICI-funded follow-up.

The landscape of Ghana can very roughly be divided into six parts, as follows:

Biophysical region Legal status 1. On reserves 2. Off reserves A. Savannah B. Transition C. Forest

The CERSGIS team and its partners IUCN and WRI made the strategic decision to begin developing a national assessment method from the forest reserves (C1 in the table) with the intent to later expand across the entire country, using the additional time and funds provided by the German International Climate Initiative (ICI). There are several reasons for this decision: • The characteristics of the different biophysical regions are very different, calling for a differentiation of the method. • The constraints on restoration are much smaller on reserves than off reserves. On reserves in the forest zone, the presence of degradation implies that an opportunity for restoration is also present (this is emphatically not true off reserves). • Forest reserves provide an easier and better known starting point than other parts. • There was a strong interest in Ghana to assess the degradation status of the reserves against the 1995 baseline by Hawthorne and Abu-Juam. No resources were available to repeat the ground inventory that was conducted in the mid 1990’s. This situation represented an opportunity for the project to engage the Ministry and the Forestry Commission, to use their data, and to develop and test a remote sensing based method that would enable repeated assessment of the status of the reserves. The idea was to gain experiences of the link between remotely sensed and ground based information that could later be extended to other parts of the country.

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4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. The original scope and outputs of the study were probably too ambitious in view of the geodata (see below) and forest data availability, which is very limited outside forest reserves in Ghana and in view of the challenges involved in translating degradation data into an assessment of restoration potential with everything that that implies (economic analysis, field-level stakeholder consultation, etc).

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? The project generated a methodology for assessing forest degradation in Ghana (see details below), as well as a large quantity of valuable information on the current status of Ghana’s forest reserves – showing that significant degradation had taken place since the previous systematic assessment carried out in 1995 by Hawthorne and Abu- Juam. During the dissemination workshop held in Accra on 22 March 2011, this information was shared with a diverse audience consisting of Government and civil society organizations working in the forestry sector, community based organizations, Development Partners, research institutions, and the Ministry responsible for Forestry. The maps turned out to be very effective as a communication tool. The final report of the project will be widely disseminated in electronic form.

The methodology for assessing forest degradation involved the following: a. Image acquisition and pre-processing b. Image processing classification and field validation c. Map composition and presentation

Landsat data between 1999 and 2010 images were acquired and examined to judge any missing scenes or data gap including cloud cover. Scenes selected for the mapping were almost cloud free except some patches in some scenes. The vegetation bands (Bands 3 and 4 of Landsat) were further examined and used for the classification after the necessary geometric and radiometric corrections. Band 3 (Red) is a useful band for discriminating among different kinds of vegetation, and band 4 (Near infrared) is especially responsive to the amount of vegetation biomass present in a scene. It is also useful for distinguishing between vegetation and soil, and for seeing the boundaries of bodies of water. All images have been geo-referenced to UTM Zone 30, WGS 84.

The image processing focused principally on processing Landsat Thematic Mapper (TM) Enhanced Thematic Mapper Plus (ETM+) satellite images, and in certain cases where good Landsat scenes were not available, ASTER Images. Digital topographic data layers including settlement locations, road and stream network were used as ancillary information sources.

For the image classification, an unsupervised classification with an ISODATA (Iterative Self-organizing Data Analysis) algorithm was performed on image scenes to group pixels with similar spectral response into unique clusters of different classes. The homogeneous clusters corresponding to specific forest cover types were assigned appropriate cover classes based on reference data from color composite images, high resolution images where available and expert ground knowledge. Color composite images helped identify the different forest cover types, thus clusters of homogeneous reflectance were merged together.

The mapping was validated in the field, in order to assess mapping accuracy. Reserves were randomly sampled for each vegetation zone for field validation. Sample sites easily assessable were selected within each of the sampled Reserves for ground-truthing. The validation concentrated on areas where the accuracy was known to be lower. These areas were edited to reflect the ground-truth, so as to improve mapping accuracy.

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The Forest Carbon Partnership Facility (FCPF) assists developing countries in their efforts to reduce emissions from deforestation and forest degradation (REDD) by providing value to standing forests. Ghana is an active participant in the FCPF Readiness Mechanism. As noted in Ghana’s RPP, “By and large, the problem is one of gradual ‘degradation’ rather than ‘deforestation’”. Ghana has already been investing seriously in a range of restoration initiatives.

This work is also timely in Ghana given that Ghana recently was selected as one of the countries in which the multilateral Banks will engage through the Forest Investment Program (FIP). FIP has resources for transformational investments and grants linked to climate change. Ghana also has an active Growing Forest Partnerships program which will be a vehicle for transmitting the information generated through this activity to a broader constituency as well as get their inputs on how to most effectively integrate forest landscape restoration into the broader REDD strategy and national development agenda.

Ghana has already been collaborating with a number of donors and partners in a range of forest restoration initiatives. The country is an active member of the Global Partnership on Forest Landscape Restoration (GPFLR), a worldwide network that unites influential governments, major UN and non-governmental organizations, companies and individuals in a community of practice, enabling them to share best practice, build cooperation and exchange new ideas and solutions. GPFLR works at two levels: it raises awareness of real world FLR experiences and makes available the tools and knowledge to support practitioners in the field, while at the same time building support for FLR with decision-makers and opinion-formers, both at local and international level, and influencing legal, political and institutional frameworks to support FLR. PROFOR and several PROFOR donors (Finland, UK, Japan, Switzerland, Italy, and Netherlands) are also members of the Global Partnership on Forest Landscape Restoration (GPFLR).

The information generated by this analysis will assist the World Bank, the PROFOR donors and other actors with an interest in development assistance and climate mitigation and adaptation to integrate and capitalize on the potential for forest landscape restoration in their policies and activities. Once the follow-up work funded by the German International Climate Initiative will have been completed (see below) it will also assist in decision-making, e.g., as climate investment funds are being allocated.

7. Implementation Performance. How would you characterize implementation performance? What unexpected opportunities arose during implementation and how have you been able to take advantage of these? Were there significant unanticipated obstacles during implementation? Overall implementation performance was satisfactory, despite delays and more technical difficulties than anticipated. There were major delays in getting the tender issued and the contract signed. This was in part due to the introduction of a new Bank software for consultant procurement, which had a lot of glitches and with which the Task Team was unfamiliar, and in part due to the fact that it took a long time for the contract to be signed after the award, as the organization that submitted the winning bid had not previously been registered as a World Bank vendor – a process that was much more time-consuming than anticipated. Implementation performance has been hampered by serious shortcomings in the geodata infrastructure of Ghana, which made the project more difficult than was anticipated. Lack of data and processing capacity has turned out to be a significant obstacle that has PROFOR Activities Completed in CY2011 131

8. Next steps. What happens now, following the activity’s completion? The work on FLR assessment continues under the German-funded International Climate Initiative. This will develop the forest degradation assessment methodology developed under the PROFOR grant into a fully fledged FLR assessment potential methodology. It will also develop specific recommendations on the contribution of FLR to national REDD+ or low carbon development strategies.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? There is significant potential for replication of the forest degradation assessment methodology in other coastal West African countries, especially since the methodology has been developed for both tropical moist forests and savannah woodlands.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources were mobilized.

PROFOR funding $ 150,000 Other sources of funding (describe below) $ 34,200 Total $ 184,200

What other sources of co-financing were mobilized? What amounts are involved under each source of co-financing? IUCN: $25,650; UK Government: $8,550 . Co-financing amounted to 19% of activity costs.

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BIOCHAR SYSTEMS FOR SMALLHOLDERS IN DEVELOPING COUNTRIES

http://www.profor.info/profor/knowledge/biochar-systems-smallholders-developing-countries

Project ID: TF 097404 Region: Global PROFOR Thematic Area Percent Date prepared: December 22, 2011 Main: Cross-sectoral coordination 85% Prepared by: Sebastian Scholz Secondary: Livelihoods 15 %

When was the grant originally approved?: 7/14/2010 When was the original planned grant completion date?: 2/28/2011 Have any extensions been approved?: Yes If yes, what was the revised grant completion date?: 12/31/2011

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note. Did these change during implementation? How and why? (i) Generate independent knowledge on the use of Biochar systems in low and middle income country conditions, with particular focus on Biochar systems accessible to smallholders, under specific consideration of potential risks associated to those systems; (ii) Inform in a comprehensive manner World Bank staff and management about Biochar systems, as potential opportunity for future World Bank engagement within the area of forest landscape restoration, sustainable intensification of agriculture (a key element in any REDD strategy), and land-based climate change mitigation and adaptation initiatives; (iii) Provide easily understandable background information to development partners and client countries on the potential and challenges for Biochar use under different climatic and development constraints.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. The task comprised a combination of analytical work (knowledge creation), knowledge exchange, and awareness raising for a new technology. (i) Elaboration of a discussion paper and an information brief on Biochar with a particular focus on possible applications for smallholders in developing countries, and an analysis of upcoming methodological developments that aim at assessing the potential of Biochar in the context of climate change mitigation and adaptation as well as the potential to bring Biochar into carbon markets in the near future. Expected Outputs: Discussion paper/Report and Information brief. (ii) Consultations with experts, data collection and use of life-cycle assessment (LCA) analysis to produce a typology of Biochar systems for low and middle income developing country conditions, comparing social, economic and GHG mitigation potential. Expected Output: Biochar Guidance Group established. (iii) Participation in the third International Biochar Conference held from Sept.12-15, 2010 in Brazil. Expected Output: Back to the Office Report on the International Biochar Conference. (iv) Organization of a workshop at WB headquarters on Biochar applications in developing countries (with a focus on smallholders), benefiting from the participation of key external experts. Expected output: Workshop on Biochar applications for Bank Staff; Task Team Leaders, and selected external partners.

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. (i) A comprehensive report on smallholder-driven biochar systems and their opportunities as well as potential sustainability-related risks is currently in its very final phases of preparation. A World Bank decision meeting is being scheduled for early 2012 with the aim to have the report ready by Rio+20 for wider dissemination. Comments received so far on the draft final report from the external biochar guidance group have been very positive. The report will likely be published within the World Bank’s studies series. In parallel and as an additional PROFOR Activities Completed in CY2011 133

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. output, the team has prepared and submitted a scientific article on biochar systems. The article has been submitted to AMBIO.

(ii) The team made extra efforts, reaching out to five outstanding scientists and professional experts to establish an external Biochar Guidance Group. The main objective of the group was to assist in quality assurance, by promoting a broad and inclusive consensus building process and guiding the Task Team throughout the process of this knowledge product preparation. Members of the external Biochar Guidance Group included (i) Pedro Sanchez, a well-known soil scientist, Director of the Tropical Agriculture and the Rural Environment Program, Senior Research Scholar and Director of the Millennium Villages Project at the Earth Institute at Columbia University. He also directs AfSIS, the African Soils Information Service, developing the digital soils map of the world. (ii) Rosina M. Bierbaum, Dean, School of Natural Resources and Environment, Professor, Natural Resources and Environmental Policy, University of Michigan. Dr. Bierbaum served in environmental science policy elected and appointed leadership positions in both the legislative and executive branches of United States government. Dr. Bierbaum was selected to co-direct the WB’s World Development Report 2010 (on climate change). (iii) Sasha Lyutse, a Policy Analyst at NRDC's Center for Market Innovation, focusing on climate and energy policy in the agricultural sector. (iv) Patricia (Pipa) Elias, a forest science and policy consultant. She has represented the Union of Concerned Scientists at the UN climate negotiations, working to create science-based REDD+ policies. In the past she has worked for the US Forest Service and conducted soil chemistry research in the Appalachian forests. (v) Dr. Christian Witt, Senior Program Officer, Agricultural Development at The Bill & Melinda Gates Foundation, where he manages the initiative on soil health aiming to increase soil fertility and productivity in smallholder farming. He had a long career at the International Rice Research Institute (IRRI) in the Philippines.

(iii) The team also participated in the third International Biochar Conference that was held on Sept.12-15, 2010 in Brazil. Thomas Sembres (Biochar Task Team Member) attended the third International Biochar Conference in Rio de Janeiro, co-hosted by the International Biochar Initiative (IBI) and Embrapa (affiliated to the Brazilian Ministry of Agriculture). This conference was followed by a field trip (Sept 16 – 19) to the Amazon to visit some of the renowned sites of “terra preta de indios” (highly fertile and carbon-rich anthropogenic soils). The conference was very timely given that the Bank team had started to work on Biochar just shortly before the conference, with the support of PROFOR and BioCF. The International Biochar Conference, which takes place every two years, convened the core of the small, but fast-growing Biochar community: soil scientists, businesses, agronomists, stove people, etc.

(iv) Successful organization of a workshop on Biochar systems at WB headquarters on May 11, 2011. The workshop benefitted from the participation of a number of World Bank staff as well as about 30 external experts coming from the following institutions: CARE USA, Bill & Melinda Gates Foundation, Blue Moon Fund, Cornell University, UC Berkeley, Forest Trends, Union of Concerned Scientists, UNREDD, NGOs, and private sector representatives. Knowledge sharing and consensus building, informing the forthcoming Biochar report, were key elements of the workshop.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. In order to comply with recommendations of the project concept note review meeting, early on in the implementation of this PROFOR sponsored activity, a decision was made to include an additional task that involved a consultative process to foster the establishment of an external Biochar Guidance Group as described above. The team successfully managed this additional constraint and was able to build further consensus around Biochar systems, particularly with stakeholders outside the Bank.

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5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? Main finding: By promoting initiatives and practices to produce Biochar from existing ‘true biomass waste’ (resulting from dead trees, branches, woody debris, agricultural debris etc.), smallholders could sustainably produce their food while contributing to reducing forest fires, improving soil quality, reducing greenhouse gas emissions, sequestering carbon in soils, and using clean energy.

Some of the findings of the 2010 Biochar conference included: • Biochar stoves could be a win-win-win-win strategy, by drastically reducing indoor air pollution, reducing pressure on woody biomass, providing Biochar for soil improvement, and a means for C sequestration, while still providing the essential heat that people are looking for. • Comprehensive life-cycle assessments (LCAs) of the CC mitigation and economic potential of Biochar systems are being developed, but only in developed countries. Nobody is working on Biochar LCAs in developing countries, with one exception (Biochar stoves in Kenya, Cornell University). • Numerous unknowns remain on Biochar (e.g., stability of Biochar in soils and stability of soil organic matter following Biochar application). A key message is that Biochar is not the same as terra preta. • An important potential pitfall is the risk of potentially disrupting the nutrient cycle (already under stress by the unilateral flow of agricultural products from rural to urban areas) if Biochar is not applied at the point of biomass collection. Many pointed out that biomass for Biochar should not only come from waste biomass, but also from biomass that is not used for compost (e.g., rice husks). • During field visits in the Amazon, it was discussed that soils enriched with Biochar (s) might be closer to the “terra mulata” than to the “terra preta” soils. Terra mulata soils are also pre-Columbian anthropogenic improved soils, but of a relatively poorer quality compared to terra preta (terra mulata corresponded to agricultural soils under special management while terra preta is believed to be where different wastes were deposited).

Dissemination: The final report will be ready in early 2012, as indicated above. In addition, the team has submitted a scientific article (as a spin-off of the broader report) to the scientific journal ‘AMBIO.’ PROFOR also posted a video on Biochar for a general audience.

Background information and discussion material on a relatively unknown topic such as Biochar will eventually benefit the agendas of global policy dialogue on mitigation and adaptation to climate change (for ex. climate smart agriculture). Specifically, findings and completed outputs from this initiative would be potentially useful in enriching agendas and contents of global guidelines and technical assistance programs for developing national REDD+ strategies and FIP investment plans. Outputs are expected to assist those engaged in the development of sound protocols in order to promote smallholder Biochar initiatives into carbon markets.

Growing donor interest and assistance in this topic area is helping to highlight the importance of Biochar systems, particularly for smallholders and resource-poor rural households at the global level. Among others, the European Union has began sponsoring several activities related to Biochar such as the Biochar Applications publication in PROFOR Activities Completed in CY2011 135

8. Next steps. What happens now, following the activity’s completion? Based on the activity’s outcomes, the team is proposing the very preliminary indicative follow-up activities for the World Bank: (i) analytical and advisory activity anchored in the Energy or Agriculture and Rural Development departments; (ii) a pilot project by regional experts in LAC; (iii) development of a Biochar methodology for access to carbon markets by BioCF; (iv) fostering partnerships around Biochar research and project incubation; (v) country-level analysis of Biochar opportunities and risks to inform REDD+ national strategies and FIP investment plans and other global and national initiatives. The team would also like to explore further opportunities to more widely disseminate the study during the upcoming Rio+20 summit in June 2012 within the broader theme of climate smart agriculture, which will be one of the key subjects of the summit.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? This activity was primarily conceived as the initial step of a collective longer learning process about Biochar and as a catalyst for prospective future World Bank operations in rural development and natural resource management and conservation. Publications and the workshop findings have contributed to setting prospective future priorities for Bank operations in a variety of countries.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources were mobilized. PROFOR funding $ 50,000 Other sources of funding (describe below) $ 32,000 Total $ 82,000 What other sources of co-financing were mobilized? What amounts are involved under each source of co-financing? The World Bank’s BioCarbon Fund co-sponsored this activity with USD 20,000. In addition, USD 12,000 from the Carbon War Room has been secured.

136 136PROFOR Activities Completed in CY2011

ECONOMIC GROWTH AND DRIVERS OF DEFORESTATION IN THE CONGO BASIN

http://www.profor.info/profor/knowledge/economic-growth-and-drivers-deforestation-congo-basin

Project ID: TF093774 - P116024 Region: AFR PROFOR Thematic Area Percent Date prepared: May 13, 2011 Main: Cross-sectoral coordination 100% Prepared by: Carole Megevand Secondary: Choose an item. %

When was the grant originally approved?: 2/9/2009 When was the original planned grant completion date?: 12/31/2009 Have any extensions been approved?: Yes If yes, what was the revised grant completion date?: 4/30/2011

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note. Did these change during implementation? How and why? The overall objective of this study is to provide an in-depth analysis of the major drivers of deforestation and forest degradation for the next decades in the countries of the Congo Basin and robust methodological tools to support them in the setting up of forward looking national scenarios, based on different development trajectories. The proposed approach is a multi-sectoral analysis led at the regional level. This analysis will develop models, run different scenarios and make assumptions of potential impacts on forest cover of economic activities. Modeling tools exist to predict future trends and patterns of land-use change: these are typically econometric models supported by geographical data (GIS). These spatial models combine historical trends of change in land-use with assumptions on crucial factors such as population, market prices for major commodities, policies and infrastructure. Other features such as soils and distance to markets can also be taken into account.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. Activity 1: Technical coordination for the study: the study consists in a joint effort of different partners (financial and technical). The objective of this activity 1 is to ensure a strong coordination amongst the different technical partners. Output: Terms of references for the overall study (Concept note), and joint work plan with clear repartition of roles and responsibilities

Activity 2: Identification of knowledge gaps. The quality of the whole study will strongly rely on the quality of data that will be collected at the national level. There are already some data on the different sectors covered by the study (agriculture, infrastructure, mining, energy…); however they are widespread, not up-to-date. There is a need to first identify (i) the data that exist in the countries and that can directly feed the model and (ii) the need to collect new –or update old- data. The activity will consist in a dialogue with the different actors (OFAC/FORAF, Ministries, private sector and civil society). This dialogue could be organized around a round-table in Kinshasa and will be hosted by FORAF, which is the regional organization, whose mandate consists in collecting all forest-related data (including impacts of the economic sectors on the forest cover) Output: Identification (and collection) of existing data and clear understanding of data that need to be collected. Production of a roadmap for the data collection process at the national level.

Activity 3: Modeling methodology: the development of the modeling tool (or more precisely the modalities of adaptation of existing modeling tools to the Congo Basin context) needs to be done at an early stage as it will influence the types of data need to be collected. It is proposed that a first modeling tool be developed to adequately represent the forest sector of the Congo Basin. Though the modeling methodology needs to be further discussed, it is expected that it will not only rely on variables such as population, commodity prices, fuelwood use but will also PROFOR Activities Completed in CY2011 137

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. capture policy and institutional issues (those issues will be assessed by the CIRAD team as part of the initiative financed by the FNAP -see below- and technical discussions have already started to see how these information can be integrated in the modeling tool) Output: Development of a modeling tool adapted to the Congo Basin. Scenarios elaborated for three countries (minimum).

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. Activity 1: Technical coordination of the study. Three regional workshops were organized over the past 2 years to coordinate the overall study on “Economic Growth & Drivers of deforestation in the Congo Basin”: Kinshasa (January 2009), Douala (November 2009) and Douala (June 2010). These regional workshops gathered around 50 persons (representatives of the 6 Congo Basin countries, COMIFAC, CEEAC, FORAF/OFAC, CIRAD, IIASA, WRI, WWF, ICRAF, World Bank-FCPF, ONFI…). These workshops were an opportunity for the technical partners to exchange on the various activities planned in the sub- region and to build synergies and complementarities: one example is the strong complementarity of the PROFOR- supported study with the IIASA-led modeling exercise and the CIRAD-led prospective study.

Major outputs under this Activity 1: (i) Workshop in Kinshasa, January 2009: Produced a “Note de Cadrage” (concept note) that presented the activities to be carried out, as well as roles and responsibilities. Based on this nite, the World Bank team prepared a Concept Note for its AAA on “Modeling Impacts of Development Trajectories on Forest Cover and GHG Emissions in the Congo Basin”. (ii) Workshop in Douala, November 2009: Presentation of the preliminary results of the IIASA model. Training on the GLOBIOM tool. Policy Note for the Negotiators, in preparation of the UNFCCC COP-15 in Copenhagen. A Briefing Note on “Reference levels and Trends of deforestation in the Congo Basin” has been presented and widely disseminated during a side-event organized by the COMIFAC at the COP. (iii) Workshop in Douala, June 2010: Presentation of the final results of the IIASA Model as well as sectoral studies (Agriculture, Mining and Energy). Training on the GLOBIOM/CONGOBIOM tool.

Activity 2: Identification of knowledge gap and data collection. In line with the recommendations from the workshop held in November 2009, a data collection campaign was launched in the six Congo Basin countries (Cameroon, Central African Republic, Gabon, Democratic Republic of Congo, Equatorial Guinea and Republic of Congo). This campaign was conducted from March till May 2010, under the overall coordination of the firm ONFI: the campaign highly relied on national consultants and expert, who participated in the regional meetings. The approach followed was the following: (i) definition of the grid for the database: this grid had to be consistent with the requirements from the IIASA model and had to reflect the data availability (accessibility) in the countries, (ii) data collection by National consultants (in close coordination with the ONFI team), and (iii) integration of the newly collected data within the GLOBIOM model. The refined results were presented to the country representatives during the June 2010 workshop in Douala.

Major Output of this Activity 2 (i) country-specific data, collected and included in the GLOBIOM model.

Activity 3”: Modeling methodology Works on modeling exercise have started on June 2009. The CongoBIOM model has been created by adjusting the GLOBIOM model, set up by the Austrian research institute IIASA, to reflect Congo Basin realities. It is worth noting that PROFOR only covered 10 percent of the total costs to elaborate the CongoBIOM model, the main contributor being the DFID. Additionally sector-specific analysis was conducted in three sectors (Mining, Agriculture, Energy), to complement the modeling exercise. As per national representatives’ request, there was a need to qualitatively present the future 138 138PROFOR Activities Completed in CY2011

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. drivers of deforestation to complement the more quantitative approach proposed by the CongoBIOM model.

Major outputs of the Activity 3: (i) Elaboration of the CongoBIOM model, specific to the Congo Basin countries. (ii) Report describing the results of the CongoBIOM model on the potential drivers of deforestation (under different scenarios and shocks) (ii) Three sectoral analytical works describing impacts of Agriculture, Mining and Energy developments on forest cover in the Congo Basin.

A World Bank Economic and Sector Work (ESW) Report, compiling the results from the different works, is currently being finalized.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. The activities were implemented according to the initial work plan.

5. Findings, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant. What outputs were disseminated, and how? Findings and knowledge generation: The findings of the PROFOR Activity have been extremely interesting and important for the Congo Basin countries, in the sense that the factors of deforestation –including their diversity- are better understood. While in 2007, the Congo Basin countries mainly considered that logging activities were the major drivers of deforestation in the Congo Basin, they now understand that deforestation can be driven by sectors other than forestry (including Agriculture, Mining, Energy, Infrastructure); they are also now well aware that deforestation can also be driven –even indirectly- by external factors such as commodity prices and global demand for agricultural products (meat, biofuels).The knowledge generated from this activity (as well as related activity such as the McKinsey report in DRC) is critically important for the Congo Basin countries as they are preparing their REDD+ strategies.

The regional model allows policy makers to quantify the impact of “policy shocks”, such as (i) increase of meat demand at the international level by by 15% by 2030, and (ii) increase of the international biofuels demand by 15% by 2030. Those shocks are likely to have significant impacts on forest loss in the Congo Basin. However, it seems that the Congo Basin would be less affected than the South-East Asia tropical forests and the Amazonian tropical forests. Moreover, the impacts would be indirect. For instance, under the policy shock related to meat demand, it is very unlikely that livestock will significantly increase in the Congo Basin, however, the development of pastures in the Amazon to respond to this demand would create a leakage of some crops from the Amazon to the Congo Basin (“substitution effect”). Under the Biofuel policy shock, similarly the direct impact is not likely to be very important despite the fact that most of the countries have already been approached by some investors to develop palm oil plantations. It seems that the Congo basin countries have potential in terms of land suitability for such plantations but that poor infrastructure and governance remain major constraints to large-scale plantation developments. Hence poor infrastructure and governance still act as major “protection” factors for the Congo Basin forests: the other regions (South-East Asia and the Amazon) still have comparative advantages since they offer a better investment climate. The model also ran assumption on the rehabilitation of the road network in the Congo Basin. It found that a rehabilitated road network would largely impact the forest cover mainly because of agricultural expansion and better market connections.

The Activity, while mobilizing international expertise from Northern countries (Austria, France), relied heavily on national experts to collect data and reflect country-specific circumstances. This successful collaboration between international and national experts was highly appreciated and allowed for an outstanding ownership of the Activity Outputs at the country level.

PROFOR Activities Completed in CY2011 139

5. Findings, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant. What outputs were disseminated, and how? Dissemination: Outputs were largely disseminated all along the activity implementation. A Policy Note was presented during a side-event organized by COMIFAC at the COP-15 in Copenhagen. The results from modeling exercise were presented at a well-attended session during the World Bank Sustainable Development Network learning week (January 2010, over 250 participants), a regional Ministerial workshop in Kinshasa on October 2010. A report compiling the results of the different analytical works conducted under this activity as well as under different Trust Fund-financed activities is being finalized. A folder with briefs on various sectoral impacts is also being prepared for further dissemination.

Relevance to donor activities: the activity has been conducted in a very participatory and inclusive manner. The regional workshops were an ideal opportunity to build synergies and complementarities with on-going and planned activities by other donors (for example, the prospective study on the forestry sector, led by CIRAD).

7. Implementation Performance. How would you characterize implementation performance? What unexpected opportunities arose during implementation and how have you been able to take advantage of these? Were there significant unanticipated obstacles during implementation? While it is always a challenge to conduct regional activities and ensure a strong commitment from all the different stakeholders, this activity has benefitted from a very strong interest by all the Congo Basin countries as well as the regional organization COMIFAC since its launching. In the context of the international discussions on REDD, the activity was clearly perceived as a critical contribution to help the Congo Basin countries to better position themselves. The major challenge was related to the disconnect between the highly sophisticated tool (GLOBIOM model) that was used for the activity and the weak capacities at the country level. The remediation plan was to: (i) complement the modeling exercise with sectoral studies (more qualitative analysis to further describe the inter-linkages between the sectoral developments and the forest cover) and (ii) organize workshops (minimum 3 days) to widely discuss results of the model (“Role play” methods were used during this workshop to help the participants understand the trade-offs between the different sectors under a REDD strategy).

8. Next steps. What happens now, following the activity’s completion? The major remaining activity is the compilation of all the outputs of the different analytical works as part of an ESW, to be finalized in FY12 and widely disseminated thereafter. This activity is currently on-going with other financing resources. The report will then be widely disseminated within the Congo basin region as well as in 140 140PROFOR Activities Completed in CY2011

8. Next steps. What happens now, following the activity’s completion? international fora.

Beyond this Activity, the Congo Basin countries have largely expressed their interest in moving forward with this exercise both at the regional level and at the national level.

(i) Modeling exercise at the Regional Level: IIASA has submitted a request to the German Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) for a 4-year activity on “Global REDD land use modeling” in the Congo Basin and in the Amazonia (total Budget: 4 million Euros)

(ii) REDD+ and Integrated development in the Congo Basin: as part of the Regional REDD project financed by the GEF ($13 million), a follow up analytical work is planned to be conducted to emphasize the cross-sectoral nature of REDD+ and the importance to engage meaningfully with policymakers in the agriculture, infrastructure and other sectors. Findings of this analytical work will provide recommendations for high-level policy discussions that will be facilitated at the level of CEEAC (Communaute Economique de l’Afrique Centrale).

(iii) REDD strategy at the national Level: all the six Congo Basin countries are selected under the FCPF (some are also UN-REDD countries). Those countries that have submitted their Readiness-Proposal Plan (DRC and Rep. of Congo) have mentioned a downscaling of the regional modeling exercise at the national level.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? The replication potential is huge. As indicated above, Congo Basin countries are interested in down-scaling the modeling exercise at the country-level. In addition, some preliminary discussions (at the margin of international meetings such as the FCPF meetings), with countries from other regions (including from South-East Asia) have indicated a strong interest for such a modeling approach. As countries have to define their reference emission levels, they are having a hard time identifying drivers of deforestation. Modeling tools could help them to better qualify and quantify those external drivers.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources were mobilized. PROFOR funding $ 121,771 Other sources of funding (describe below) $ 558,000 Total $ 679,771 What other sources of co-financing were mobilized? What amounts are involved? DFID : $170,000; FCPF: $45,000; Norway: $193,000; TFESSD: $150,000.

PROFOR Activities Completed in CY2011 141

FOREST INDONESIA CONFERENCE: ALTERNATIVES FUTURES TO MEET DEMANDS FOR FOOD, FIBER, FUEL AND REDD+ http://www.profor.info/profor/events/forests-indonesia-alternative-futures-meet-demands-food-fibre-fuel-and- redd

Project ID: P124086 Region: EAP PROFOR Thematic Area Percent Date prepared: December 18, 2011 Main: Cross-sectoral coordination 100% Prepared by: Paul Lemaistre Secondary: Choose an item. %

When was the grant originally approved?: 7/14/2011 When was the original planned grant completion date?: 12/31/2011 Have any extensions been approved?: No If yes, what was the revised grant completion date?: Click here to enter a date.

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note. Did these change during implementation? How and why? The original project’s objectives were to identify the challenges and opportunities facing Indonesia’s forests today against the broader trends of climate change and global trade and investment, and examine ways to overcome the former and maximize the latter. The objectives of the project did not change during implementation. A more detailed description of the objectives is below: i. Provide a forum for a wide range of business and finance sector representatives to discuss the challenges and opportunities arising from the Government of Indonesia (GOI) pledge to reduce carbon emissions and the required legal and policy frameworks; ii. Provide or clarify facts on key issues related to land availability, emissions targets, and the impacts of environmental policy on economic development; iii. Better understand the multiple demands from various sectors being placed on forests and their implications for forests and economic development; iv. Consider alternative land use and policy options to accommodate national development goals, meet the needs of forest-dependent communities, and maintain forest resources; v. Provide a platform for a discussion on ways to strengthen the link between economic and social development and environmental objectives through REDD+; vi. Highlight the positive contribution that REDD+ can play in transitioning Indonesia to a low carbon development plan, while providing solutions to the problems caused by global climate change.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. The original concept note allocated US$10,000 in funding to the event: US$4,300 to the hiring costs for a meeting room at the venue (Shangri-La Hotel, Jakarta); and US$5,700 for publication and printing costs of research and promotional materials. After additional consultation with the PROFOR Secretariat, the funding amount to the CIFOR conference was increased to US$ 15,000 and additional PROFOR resources were mobilized to ensure the Secretariat was able to produce material and to participate in the Conference as well, bringing total PROFOR costs to $27,000.

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. The event provided a platform for almost 1,000 key leaders from all sectors to discuss the challenges and opportunities faced by Indonesia in the sustainable use of its forests. One clear result was to put forests back on the agenda in Indonesia. The event also promoted donor cooperation and coordination as the Governments of Norway, 142 142PROFOR Activities Completed in CY2011

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. United Kingdom, and Australia, as well as the Climate and Land Use Alliance (CLUA) and PROFOR joined together in sponsoring the conference. During, before and after the event, several high-level political side meetings were conducted with senior representatives of the sponsoring nations and donors. President Yudhoyono’s opening speech included a pledge dedicating the last three years of his presidency to protecting forests, which many saw as renewed commitment from the Government of Indonesia. The President also called on business leaders to enhance the environmental sustainability of their operations and recognized that the government needed to do more to address the primary sources of Indonesia’s greenhouse gas emissions. The Forests Indonesia conference successfully passed the target number of attendees and secured active participation from all forest stakeholders, including policy makers, key business leaders and civil society representatives. Some 1,305 people registered online to attend the conference and at least 935 attended on the day, including journalists from 13 of Indonesia’s provinces. The private sector made up the largest percentage of participants (23%), closely followed by members of governments (21%). Females made up about 35% of the participants. Key outputs are included in section 5 below.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. n/a

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? Throughout the day, more than 37 speakers, panelists and moderators debated and addressed forestry-related issues, including Louise Hand, Australia's Ambassador for Climate Change, Kuntoro Mangkusubroto, Chair of Indonesia's REDD+ Task Force and the Presidential Work Unit for Development Monitoring and Oversight (UKP4), Agus Purnomo, Special Advisor to the President on Climate Change, and Syahrin Daulay, Head of National Development Planning from Central Kalimantan as panelists. Shinta Kamdani, Vice Chairman for Environment and Climate Change at the Indonesian Chamber of Commerce (KADIN), Peter Heng, Managing Director of Communications and Sustainability at Golden Agri Resources, Nana Suparna, Vice Chair of Indonesian Forest Concession Holders (APHI), Joko Supriyono, Secretary General of the Indonesian Oil Palm Producers (GAPKI), and Sukianto Lusli from the Indonesian Ecosystem Restoration Forum also spoke to represent the business sector. The World Bank’s Special Envoy for Climate Change Andrew Steer also delivered an address.

Discussions continued over breakfast, lunch, tea-breaks; during a cocktail reception (some 500 participants stayed on until the end); and at 10 booths sponsored by IGOs, NGOs, governments and private companies. CIFOR alone disseminated 11,650 research publications at the event. CIFOR also conducted an extensive outreach effort, which included sponsoring 19 journalists from 13 Indonesian provinces to travel to Jakarta for the conference. Communications staff from CIFOR arranged press conferences and interviews and disseminated press releases. As a result, more than 122 articles and broadcasts arising from the conference appeared from 23 September to 14 October 2011.

Other outreach activities: - One-hour live TV discussion on Metro TV on 'REDD+ in the transition to low-carbon economy', featuring Frances Seymour, CIFOR Director General, Agus Purnomo, Special Advisor to the President on Climate Change, and Dharsono Hartono, President of PT Rimba Makmur Utama, who represented the private sector in REDD+. - Commemorative booklet from the President's office containing his speech in English and Indonesian, which was sent to all conference participants. - A summary of all products for media outreach, including speeches, blog stories, media reports and videos, was sent a week after the event to more than 19,000 stakeholders on CIFOR's mailing list that may benefit from the conference, including almost 500 UNFCCC negotiators who will represent the forestry sector at COP 17 in Durban. - Two media advisories promoting Forests Indonesia were disseminated to more than 1,000 national and PROFOR Activities Completed in CY2011 143

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? international journalists - 18 videos from the conference made available on Youtube featuring expert interviews and all the speeches from the conference - Press briefing in Jakarta on 26 September to introduce the Forests Indonesia conference to 19 journalists invited from across Indonesia. Two press conferences were held during Forests Indonesia with high-level speakers. About 35 reporters from local, national and international media attended both. - A website in English and Indonesian was built specifically for Forests Indonesia to include the program, speakers, speeches, registration, funding and media partners, blog stories and voting results. - Ten blog stories (in English and Indonesian) written by five writers employed by CIFOR appeared online within four days of the event, to capture and disseminate key messages and to further raise awareness of the challenges and opportunities related to the future of Indonesia's forests. - Live video web streaming of the conference - CIFOR engaged a professional photographer to document Forests Indonesia.

8. Next steps. What happens now, following the activity’s completion? A summary of all products for media outreach, including speeches, blog stories, media reports and videos, was sent a week after the event to more than 19,000 stakeholders on CIFOR's mailing list that may benefit from the 144 144PROFOR Activities Completed in CY2011

8. Next steps. What happens now, following the activity’s completion? conference, including almost 500 UNFCCC negotiators who will represent the forestry sector at COP 17 in Durban. CIFOR also used the results and knowledge generated by the conference in the organization of Forest Day 5 COP 17.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? CIFOR is considering making this an annual event, similar to Forest Day at the UNFCCC events. This depends on the availability of CIFOR resources, namely staff time, and their ability to raise similar amounts of funding for subsequent editions.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources were mobilized.

PROFOR funding $ 27,000.00 Other sources of funding (describe below) $ 244,843.00 Total $ 271,843.00

What other sources of co-financing were mobilized? What amounts are involved under each source of co-financing? Norwegian Embassy US$ 100,000 UK Climate Change Unit US$ 50,000 AusAID US$ 29,500 CLUA US$ 25,000 Booths (10) US$ 2,800 CIFOR in-kind US$25,000 (estimated)

All funding partners were recognized across all marketing platforms and products developed for the conference, including the Forests Indonesia website, flyer, poster, program book, goody bag and t-shirt. Funding partners will continue to be recognized on Forests Indonesia web pages over the next year.

PROFOR Activities Completed in CY2011 145

FORESTRY IN SUB-SAHARAN AFRICA: CHALLENGES AND OPPORTUNITIES

http://www.profor.info/profor/knowledge/forests-sub-saharan-africa-challenges-opportunities

Project ID: TF094281 - P116320 Region: AFR PROFOR Thematic Area Percent Date prepared: January 19, 2012 Main: Financing SFM 50% Prepared by: Simon Rietbergen Secondary: Livelihoods 50%

When was the grant originally approved?: 4/23/2009 When was the original planned grant completion date?: 2/28/2010 Have any extensions been approved?: Yes If yes, what was the revised grant completion date?: 1/15/2012

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note. Did these change during implementation? How and why? The overall objective of this activity is to determine the major forest related issues and challenges in sub-Saharan Africa; as well as propose options for addressing the challenges. These proposals would then be shared with a number of partners to come up with a coherent approach and action plan to address these issues, including roles and responsibilities, partners, and if possible indications of required financing, and identify the Bank’s comparative advantage in operationalizing the options. The information will also be shared with stakeholders in client countries through consultations aimed at refining and verifying its accuracy and applicability, as well as promoting buy-in and ownership of the process and final output by client countries, building capacity and disseminating knowledge.

Based on this activity, the Africa region will develop its regional strategy on forestry that will articulate a prioritized road map for the Bank to help its clients meet their main goals in developing their forestry sector in a sustainable manner in terms of livelihoods, economic development and public goods. This strategy will also promote an integrated approach to land and forest management, with an aim to improve development results in all sectors.

It is expected that this work will help African countries that wish to do so in developing national forest strategies, by using the knowledge and experience of the Bank and other key technical and financial partners to assist them in prioritizing needed actions and increasing financing to the forest sector.

The strategy will be based on several regional studies covering three “target ecological zones” (delineated according to their predominant forest vegetation type): (1) “North of the Equator” tropical “dry”, often referred to as arid SSA (mainly Sahel, East Africa); (2) Tropical “humid”, often referred to as Central Africa (CA) and Humid West Africa (HWA); and (3) “South of the Equator” tropical “dry”, often referred to as Eastern and Southern Africa (ESA), as well as a more in-depth strategy study for Humid West Africa (covering the Upper Guinea sub-region of the West Africa Guinean Forest zone), and a “Climate Change Thematic Framework Paper” dealing with Sub- Saharan Africa as a whole. It will attempt to collate the information from these different studies, as well as additional research as necessary, into a comprehensive document outlining general themes for Sub-Saharan Africa as well as specific sub-regional issues, challenges, and opportunities.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. • Review of forestry documentation on Sub-Saharan Africa. • Determination of geographical sub-regions and scope of study. • Determination of challenges and issues in the sub-regions, giving emphasis also to what has been implemented with success or failure to avoid redundancy in options proposed. 146 146PROFOR Activities Completed in CY2011

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. • Recommended options with an Action Plan; roles and responsibilities; partners and if possible indications of required financing. • Dissemination to partners for comments and additional suggestions. • The main output would be a document, shared with different partners in development that charts a strategic direction of the needs in forest development in the Sub-Saharan African countries; and defines which ones could be supported by the Bank.

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. The project has: - Synthesized background papers on forest-related issues in three sub-regions of Sub-Saharan Africa and on climate change and forests in Sub-Saharan Africa (these papers were financed by PROFOR and other sources but not from this activity). - Produced a strategic action plan for re-engagement on forest-related issues, through a combination of forest sector-wide investments aligned with country development strategies in the humid forest zone and through integration of forest and woodland related issues in other sectoral operations (for example, agriculture, energy, infrastructure, private sector development, social protection) in Africa’s drylands. - The final document for sharing with the Bank’s partners is currently being finalized; dissemination will be done mainly through the Bank’s country offices in Sub-Saharan Africa, as well as through electronic means.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. There have been some changes in activities undertaken or outputs planned, including the cancellation of formal external consultations (as it proved impossible to mobilize the additional funding required) and the fact that dissemination will take place after the closing date of the PROFOR grant due to time constraints.

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? Key findings include the large and often underestimated economic contribution of forests to development in Sub- Saharan Africa, the fact that contrary to earlier projections these contributions continue to be very important (e.g. charcoal is a multi-billion dollar business in Africa and will continue to grow for the foreseeable future), ways to ensure that this economic contribution is better quantified, and means of integrating forest and woodland related issues in other sectoral development efforts. The paper “Forests Trees and Woodlands in Africa: A Strategic Action Plan for Engagement” has two linked key messages: (i) The first is that enhanced forest, tree and woodland management can play a key role in achieving the goals of the Africa strategy. Employment generation, improving competitiveness as well as building resilience and reducing vulnerability are the overall objectives of the World Bank’s forest engagement in Sub-Saharan Africa. (ii) The second is that in many countries the most effective approaches will be outside the traditional forestry institutions and will involve working through operations and reforms supported through other sectors. The paper was peer reviewed in January 2012. Finalization and dissemination of outputs is to start shortly.

8. Next steps. What happens now, following the activity’s completion? The final document for sharing with the Bank’s partners is currently being finalized. Dissemination will be done mainly through the Bank’s country offices in Sub-Saharan Africa, as well as through electronic means, as it has been impossible to mobilize additional funding for physical dissemination events.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? The methodology could be used for developing strategic action plans for other sectors with many cross-sectoral linkages.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources were mobilized. PROFOR funding $ 150,000 Other sources of funding (describe below) $ 24,000 Total $ 174,000 What other sources of co-financing were mobilized? What amounts are involved under each source of co-financing? FAO-CP Program US$24,000.

148 148PROFOR Activities Completed in CY2011

IMPLICATIONS OF CHANGES IN AGRO-FOOD AND FUEL PRICES ON RURAL LIVELIHOODS AND FORESTS IN SYRIA

http://www.profor.info/profor/knowledge/implications-changes-agro-food-and-fuel-prices-rural-livelihoods- and-forests-syria

Project ID: TF094632 - P113856 Region: MENA PROFOR Thematic Area Percent Date prepared: December 13, 2011 Main: Livelihoods 100% Prepared by: Sanne Tikjoeb/Dorte Verner Secondary: Financing SFM %

When was the grant originally approved?: 6/1/2009 When was the original planned grant completion date?: 6/30/2011 Have any extensions been approved?: Yes If yes, what was the revised grant completion date?: 12/31/2011

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note. Did these change during implementation? How and why? The broad objective of this activity is to analyze the impacts of changes in agro-food and fuel prices on rural livelihoods and forests in Syria. Specific objectives include: - analyzing the implications of recent price changes on farmers’ welfare; - exploring farmers’ behavior related to use.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. A. Identifying the study area Based on consultations with relevant stakeholders, this component identifies the study area according to the following criteria: (i) existence of a forest site with high biodiversity value, eg. the Cedar Forest PA; (ii) presence of farmers in the proximity of these forests; (iii) evidence that international price changes affected local markets; (iv) rich data availability on past and present forest uses (eg. statistics, internal databases etc.). The study area should be sufficiently large that different parts of it are affected differently by the increases in agri-food and fuel prices (eg because of differences in distance from markets).

B. Examining the impacts of international agro-food and fuel prices on local prices and on farmers’ welfare This component examines the impacts of the agro-food and fuel price changes since 2006 on rural households located in the study area. It: (i) explores the relationship between international and local prices for selected products relevant for the households; (ii) builds farm budgets for these products. Building farm budgets will require detailed information on revenues (eg. crops, wood collection, sales of other products) and costs (eg. fertilizers, pesticides, water for irrigation, labor) per unit area. Data will be collected from secondary sources, supplemented by primary farm surveys, when necessary. The results of this analysis will provide insights into how price changes affected the farmers’ income, thus enabling us to determine who gained and who lost from these changes.

C. Exploring farmers’ behavior related to rural activities and forest use This component attempts to relate the changes in farmers’ welfare with observed or declared changes in rural activities and forest use. Establishing these relationships is difficult, as changes in forest use during such a short period of time are often not observable or not well documented. The current fall in fuel prices, which disrupted the previous trend in price changes makes the problem even more complicated. These factors unavoidably limit the analysis to testing possible hypothesis (scenarios) on how changes in farmers’ welfare affected the pressure on forests. A primary survey will be conducted to collect information on past and current trends in forest use (eg. PROFOR Activities Completed in CY2011 149

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. wood, grazing, tourism, etc). When necessary, this will be complemented by use of satellite imagery allowing for land use comparisons at different points of time.

D. Examining the potential for sustainable integrated forest management in the study area This component explores options for improving sustainable forest management in the study area and the welfare of local communities that depend on them (eg. market based mechanisms). Identification of these options will be based on the results of the analysis previously described, interviews with stakeholders as well as best practice examples of options implemented elsewhere (such as LAC region).

Expected outputs: The outputs will consist of: (i) a report analyzing the impacts of the changes in agro-food and fuel prices on rural livelihoods and forests in Syria; (ii) a dissemination workshop to discuss and disseminate the results to interested stakeholders.

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. At the end of 2010, the Government of Syria was presented and consulted on this knowledge activity. The Government, specifically the Ministry of Agriculture (including the Minister himself), expressed the thought that climate variability and change was becoming an increasingly big problem in Syria and requested that climate change be included in the ongoing task. Therefore the activity was renamed Syria Rural Development in a Changing Climate (P114169), which has a complementary scope of activities on rural livelihoods in the context of climate change. This has broadened the scope of the original PROFOR task to include the price effects emerging from stresses of climate change. Given the last statement in 1, this has proven to be a successful strategy to get the Government interested in forestry. However, since February 2011 the political crisis in Syria has prevented World Bank staff and consultants from traveling to Syria. Teams working on Syria were asked to stop dialogue and work with the government until the situation had stabilized (which is still, as of Dec 2011, not the case). Therefore the qualitative field work in West Syria has not begun and does not look like it can happen soon.

IFPRI was hired to model the impact of climate change and food and fuel prices on the agricultural sector and rural livelihoods. The report assesses both local and global economic impacts of climate change in the Syrian Arab Republic. Syria is an important case study given the country’s location in a region that is consistently projected to be among the hardest hit by climate change. In addition, both global and local impacts matter for Syria’s future development, given its status as a net food and energy importing country. In addition to economic data, the model also relied on global and historical climate data downscaled to Syria with projected scenarios at a detailed spatial scale for year 2030, 2050, and 2100. This work was undertaken by Robert Wilby of Loughborough University in England. The policy recommendations therefore include possible adaptation measures to build resilience to the impact of climate change and its effect on local, rural livelihoods.

Different outputs have been produced. First, a report by IFPRI titled “Global and Local Economic Impacts of Climate Change and Options for Adaptation - The Case of the Syrian Arab Republic”. The draft report and model were presented to the State Planning Commission in September 2010 and used as input to advise the State Planning Commission for its 11th Five Year Plan (A policy note for the government of Syria was produced). Second, this work has fed directly into a larger (draft) report on “Syria Rural Development in a Changing Climate”, chapter 2, 3 and 6 on policy directions (which is on hold as we cannot finalize it and share it with the government because of the political situation).

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. The scope has been expanded to include perspectives on climate change and the expected impact that climate change will have on global food and fuel prices. This also implies that the set of recommendations has broadened to include a focus on identifying sustainable adaptation solutions to the challenges faced by global economic and 150 150PROFOR Activities Completed in CY2011

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. climatic changes.

At the time of the last donor report in January 2011, clearance to proceed with Component C was pending. Conducting field work in Syria is subject to Government approval and collaboration. However, the forested area is located in East Syria, the area that is most affected by the conflicts (North of Latakia is mainly an Alawite area). Therefore this area is closely monitored and controlled by the Government, which has complicated and delayed progress on this component. Unfortunately, clearance to conduct field work was not granted. Given that all missions to Syria have been suspended since March of 2011, it has not been possible to complete this component.

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? Strong results have emerged, particularly from Activity B: Examining the impacts of international agro-food and fuel prices on local prices and on farmers’ welfare. Below are a few brief, summarized statements from the draft report:

1) Global climate change is projected to reduce economic growth, resulting in a significant reduction in GDP compared to a situation without climate change by 2050. 2) Global impacts of climate change accumulate over time and if no policy action is taken could lower the annual GDP growth rate by up to 1 percentage point by 2050. 3) Yet, the agricultural sector benefits from higher world food prices and grows above baseline levels. 4) Impacts on agricultural growth vary by agro-ecological zone depending on their production structure. 5) Households are negatively affected under all global scenarios and real incomes of all groups decrease until 2050. 6) Real incomes decline most under the climate change with energy price increases scenario and are 10 percent lower in 2050 than without climate change. 7) The poorest households are the hardest hit by global changes.

These findings were presented to the State Planning Commission during the latest mission to Syria, in September 2010 and in a policy note prepared for the GoS.

A dissemination seminar is envisioned as soon as missions to Syria resume. All World Bank core budget has be reallocated to other country tasks hence we do not foresee this happening before Fiscal Year 2013.

PROFOR Activities Completed in CY2011 151

7. Implementation Performance. How would you characterize implementation performance? What unexpected opportunities arose during implementation and how have you been able to take advantage of these? Were there significant unanticipated obstacles during implementation? The project has encountered multiple delays due to various changes in TTL leadership and Sector Manager, but the team managed to produce substantial outputs. Following initial delays due to changes in staff in the department and the transfer of task team leadership, effective from January, 2010, the task has progressed well. The difficult working relationship with the Government of Syria, given the World Bank’s absence for decades, has made the task take longer than in other countries because there was little built-up trust in the Bank. Finally, the recent unrest in Syria and the suspension of missions since March of 2011 has complicated the final field work, production of final draft and delivery to the Government. Regardless, the project outputs will hopefully be the basis for continuing and advancing the dialogue on agricultural and environmental issues between the Government and the Bank once normal working relations resume.

8. Next steps. What happens now, following the activity’s completion? Given the circumstances in Syria, all missions have been suspended since March 2011. The final tasks, report and dissimination workshop will be planned when missions resume. As mentioned above under point 7, the project outputs will hopefully be the basis for collaboration on agricultural issues going forward.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? The project methodology is already being replicated in other countries such as Tunisia and Yemen (downscaling climate data and building a general equilibrium model to estimate the impact of global changes on local livelihoods). The report will also inform the ongoing Flagship report in the MENA region: Adaptation to a Changing Climate in the Arab Countries.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources were mobilized.

PROFOR funding $ 150,000 Other sources of funding (describe below) $ 413,908.55 Total $ 563,908.55

What other sources of co-financing were mobilized? What amounts are involved under each source of co-financing? In addition to the $150,000 granted by PROFOR, the activity is supported by 100,000 from IFPRI and World Bank budget of $200,000.

152 152PROFOR Activities Completed in CY2011

LARGE-SCALE LAND ACQUISITION FOR AGRICULTURAL OR NATURAL RESOURCE-BASED USES

http://www.profor.info/profor/knowledge/large-scale-acquisition-land-rights-agricultural-or-natural-resource- based-use

Project ID: P115663 – P123183 Region: Global PROFOR Thematic Area Percent Date prepared: January 30, 2011 Main: Governance 60% Prepared by: Klaus Deininger Secondary: Livelihoods 40%

When was the grant originally approved?: 1/30/2009 When was the original planned grant completion date?: 2/18/2011 Have any extensions been approved?: Yes If yes, what was the revised grant completion date?: 12/31/2011

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note. Did these change during implementation? How and why? The main goals of the activity were to (i) provide evidence on the magnitude of large scale land acquisitions both globally and at the country level; (ii) illustrate the underlying mechanisms with case studies; (iii) draw policy conclusions, especially regarding the interaction between agricultural and forest land; and (iv) disseminate findings to a wide range of stakeholders. An objective added subsequently was to mainstream the tool used to assess the policy, legal, and institutional framework for large scale land acquisition by including it in the land governance framework that was applied by the Bank in a wide range of country settings.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. A project inventory collected official data on all large-scale (typically > 500 ha) investments for agriculture or natural resource-based use (e.g. forestry, carbon sequestration) proposed or implemented in the past 5 years. To assess whether the drive towards land acquisition seen after the 2008 commodity price spike is a temporary aberration or part of a longer-term pattern, we reviewed patterns of past land expansion and predictions of future demand for commodities as well as land.

To assess the extent and effectiveness of relevant country-level regulations in addressing the area of large scale agro-enterprise , we designed a structured questionnaire for assessment of the policy, legal, and institutional framework (PLIAF) that builds on the methodology of the World Bank’s land governance framework and used it in 14 countries (in Brazil, the Democratic Republic of the Congo, Ethiopia, Indonesia, Liberia, Mexico, Mozambique, Nigeria, Pakistan, Peru, Sudan, Tanzania, Ukraine, and Zambia). A total of 42 dimensions of the policy, legal, and institutional framework for land-related investment were assessed in a multi-stakeholder process with three main steps: (i) a country coordinator collected data necessary to rank each of the dimensions (indicators) and circulated this information to experts recruited to assess indicators grouped into “panels”; (ii) panels of experts assessed individual dimensions based on the background data; and (iii) the initial assessments made by the panels of experts were revised based on additional feedback and complementary information.

Social (and in some cases environmental) case studies helped to ground-truth PLIAF results and evaluate impacts of individual investments through site visits and interviews. Due to the time- and data-intensive nature of these case studies, only 3 were completed per country in the following countries: DRC, Liberia (substituted for Nigeria), Mexico, Mozambique, Tanzania, Ukraine, Zambia.

Although press reports refer to intentions rather than actual land allocations or implementation on the ground, they can illustrate the nature and magnitude of investor intentions. Cross-checking the information from media PROFOR Activities Completed in CY2011 153

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. reports against official inventories in the field suggests that, for projects that moved forward, information from blogs and media was in line with the facts.

To identify potential land supply at the country level, we used agroecological modeling to simulate, for every pixel on the global map, the potential output from rainfed cultivation of five major crops. Linking this to current land use, population density, infrastructure access, and other variables allowed us to determine the land that might be suitable for expansion of these crops given the current climate. This approach allowed us to quantify the scope for expansion of area and intensification on land already cultivated as the two main sources of higher output. The first was done by identifying currently noncultivated areas with different attributes that could be suitable for rainfed cultivation of main crops. The second was done by quantifying the gap between actual and potential yield for currently cultivated areas.

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. The report from the activity is available at http://elibrary.worldbank.org/content/book/9780821385913. It has been shared with key policymakers at the national and state level, multilateral and bilateral development partners, academia, civil society, and international organizations during a series of workshops and conferences. It also received press coverage in the Financial Times, the New York Times, the Guardian, Le Monde, Spiegel, and key national newspapers, and was presented at a Ministerial Meeting convened by the African Union as well as a range of investor conferences in key affected countries.

Based on the activity, the global dialogue on the issue of large-scale agro-enterprise has gradually shifted towards a more cautioned approach that puts local rights holders first while recognizing the potential opportunities presented by outside investment in developing rural agricultural lands. The World Bank recognizes that large scale agricultural investment poses significant challenges which can be addressed successfully only if stakeholders collaborate effectively. Together with FAO, IFAD, UNCTAD and other partners it has formulated seven principles that all involved should adhere to for investments to do no harm, be sustainable, and contribute to development. These principles as well as the published report, were endorsed by the Bank’s Vice Presidents.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. There were three types of changes. First, the intense interest in and the highly politicized nature of the debate on large scale land acquisition resulted in some delays. Second, there have been a number of additional outputs such as working papers on the role of large farms (forthcoming, World Development) and determinants of the global land rush (under review, Journal of Development Economics). Third, in the context of mainstreaming the land governance assessment framework, modules on large scale agricultural investment or forest tenure have been or are being applied in Nigeria, Ghana, South Africa, Malawi, Ukraine, Georgia, and DRC.

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? The results of the activity were synthesized in a World Bank report. The report is structured as follows: Chapter 1— Land expansion: Drivers, underlying factors, and key impacts. The chapter quantifies past land expansion and, based on key drivers, highlights predictions for current and potential future demand for land expansion. It uses differences in regional experience to highlight how policy affects the nature, magnitude, and impact of investments and to demonstrate risks and opportunities. This is linked to determinants of the agricultural production structure and the implications for fair land valuations. Chapter 2— Is the recent ‘land rush’ different? To provide an answer to this question we rely on press reports on demand for land; inventories of registered transactions; and case studies based on field visits to assess social impacts of actual investments on the ground. Media reports highlight the magnitude of investor interest, the 154 154PROFOR Activities Completed in CY2011

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? pervasive implementation gaps, and the focus on countries with weak land governance. Project inventories point toward the overriding importance of policies, illustrated by differences in the amounts of land transferred and the number of jobs or land-related investment generated. Case studies show that investments can bring significant benefits, but that they can also impose high costs borne disproportionately by vulnerable groups. This implies that, in many cases, potential benefits from such transfers are not realized or outweighed by negative impacts. As such, measures may be needed to improve capacity on all sides and monitoring of actual outcomes to bring about improvements. Chapter 3— The scope and desirability of land expansion. The focus of the debate thus far has been almost exclusively on investors’ demand for land rather than the potential for expanding cultivated area or increasing productivity on currently cultivated area from a country perspective. Adopting the latter will help in at least two ways. First, it highlights the fact that any investments need to help countries achieve their development objectives rather than the other way around, that for many countries improving the productivity of smallholder farmers will have a much larger impact on poverty reduction than promotion of large-scale land acquisition, and that if a country decides that attracting investors is in its best interest, ways that such investments benefit local populations must be high up on the agenda. Geographically referenced data on land potential also allows to check whether investors focus on the most productive areas and fully use available potential and to identify hotspots that might attract investor interest in the future. To quantify, at the country level, the supply of land with unused agroecological and economic potential where cultivation would not eliminate environmental services or displace existing land users without their agreement. As a proxy, we map currently uncultivated, unprotected, and unforested land in areas of low population density reasonably close to infrastructure agronomically suitable for rainfed cultivation of wheat, sugarcane, oil palm, maize, or soybeans. We combine this with an assessment of the yield gap, i.e. the percentage share of potentially attainable yields actually obtained on areas currently cultivated, to illustrate that area expansion will not always be the most desirable or beneficial option. Even if it is, benefits may be maximized by linking it to ways of increasing smallholder productivity (e.g. through technology spillovers or market access). If technology is not widely used locally, this also implies a need for closer scrutiny of investors’ technical proposals and more specific descriptions of how spillovers to local producers are expected to occur. Chapter 4—The policy, legal, and institutional framework. If there is potential for sustainable agro-investment outcomes but outcomes are far from optimal, it is necessary to explore the framework under which these investments are conducted. There is broad consensus that the framework governing large-scale land acquisition in sample countries should have five attributes: • Legal recognition and actual demarcation of rights to land and associated natural resources and the way communities are consulted and decisions made. • Representative mechanisms should ensure that transfers of rights to land and other resources are voluntary and that all interested parties are consulted, not captured by a narrow elite. • Clear rules and impartial, open, and cost-effective mechanisms should guide interactions with investors. • The investments’ economic viability and consistency with broader goals of food security should be assessed and publicized. • Adherence to standards for environmental and social sustainability should be ensured during project preparation and implementation. Extensive review of arrangements in place in 14 countries helps identify good practice examples that have helped achieve good outcomes and thus can guide countries with weak frameworks. At the same time, it points to a large number of gaps that are likely to lead to some of the negative impacts observed in practice. Addressing these quickly, in a way that focuses on high priority areas and complements existing initiatives, will be critical if investments are to live up to their potential rather than cause significant damage and harm. Chapter 5— Moving from challenge to opportunity. How can governments, the private sector, and civil society address the risks and respond to opportunities opened by large-scale investment? For governments, what is needed to provide the basis for strategic decisions is an assessment of (i) current and potential future comparative PROFOR Activities Completed in CY2011 155

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? advantage in terms of not only availability of suitable land but also infrastructure, evolution of the labor force and human capital, and anticipated changes in the environment; (ii) the institutional framework for investors (and its implementation) and how consistent it is (and its implementation) with the goals of attracting serious investors, respecting land rights and sharing benefits with locals, and monitoring performance; and (iii) potentially available land, existing claims to such land, and the scope and need for employment generation. We developed a typology of countries by potential land availability and yield gap to help countries assess the extent to which large-scale investment will be an option and, if yes, how to shape such investment to contribute to national development. In many cases the most desirable mechanism for investment in the agricultural sector will be providing support to existing smallholders. If investment in land acquisition is desirable, attention will need to be given to the gaps identified in case studies and in the review of policy and legal frameworks. Although industry- led initiatives are not always simple to establish, drawing on them for technical guidance and building on accepted financial sector performance standards offer considerable potential. International institutions and civil society actors can complement this with effective mechanisms involving all stakeholders to monitor and improve land governance and increase disclosure and access to information. This would include dissemination, capacity building, and support to implementation and effective monitoring of a common set of standards. Debate on how to shape it, followed by concrete steps, will be a high priority.

In both 2010 and 2011, results from the activity have featured prominently in the Annual Bank Conference on Land and Poverty which provided an excellent platform for experience sharing and a basis for coordination on this issue within the Bank group. In addition to World Bank dissemination activities, PROFOR also shared this report online: it was featured on the homepage of its website and the object of short videos with the main report author: http://www.profor.info/profor/knowledge/large-scale-acquisition-land-rights-agricultural-or-natural-resource- based-use

8. Next steps. What happens now, following the activity’s completion? Follow up activities are underway in three main areas. First, a number of Bank operations aim to promote private agricultural investment and the results from the activity serve to provide a basis for operational support in terms of policy advice, elaboration of model contracts, ways to ensure transparent procedures, and adhering to social and environmental standards. This also provides the basis for impact assessments to explore the viability and benefits 156 156PROFOR Activities Completed in CY2011

8. Next steps. What happens now, following the activity’s completion? from innovative business models. Second, a number of civil society initiatives have picked up on the principles, trying to make them operational and providing a framework for monitoring. Finally, research is ongoing in a number of areas, especially following up on specific elements of the model to assess potential land values and monitoring the productive performance and evolution of large farms in a number of countries.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? Given the global nature of the study, replication potential is low. However, there is significant potential to build on what has been accomplished.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources were mobilized.

PROFOR funding $ 340,409 Other sources of funding (describe below) $ 980,000 Total $ 1,330,409

What other sources of co-financing were mobilized? What amounts are involved under each source of co-financing? Other sources of funding include the TFESSD Trust Fund, BB, SDC support, the FAO cooperative program, the Hewlett Foundation, and the Bill and Melinda Gates Foundation.

PROFOR Activities Completed in CY2011 157

LANDSCAPES OF OPPORTUNITY

http://www.profor.info/profor/knowledge/assessing-potential-forest-landscape-restoration

Project ID: P117427 - PO7152712 Region: Global PROFOR Thematic Area Percent Date prepared: December 16, 2011 Main: Cross-sectoral coordination 100% Prepared by: Carole Saint-Laurent, IUCN Secondary: Choose an item. %

When was the grant originally approved?: 9/24/2009 When was the original planned grant completion date?: 9/20/2010 Have any extensions been approved?: Yes If yes, what was the revised grant completion date?: 9/30/2011

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note. Did these change during implementation? How and why? The objective of this activity is to create awareness among decision-makers and the public about the potential for restoration of degraded lands through forest landscape restoration and to underpin the design of policies and initiatives to capture the potential wide range of benefits from restoration.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. The Activities and Outputs described below encompass those from the original project proposal as well as the extension which had been agreed with project partners.

Activity 1. Develop methodology and communications strategy. Survey data, information and potential case studies. Planned output: Description of methodology. Activity 2. Conduct preliminary global mapping of candidate landscapes for restoration. Planned outputs: Preliminary global map and statistics on area, climate/carbon, livelihoods. Refined preliminary global map and statistics. Activity 3. Validate and refine preliminary global map. Conduct case studies. Planned outputs: Regional maps. Statistics on areas, climate/carbon, livelihoods. Case studies. Activity 4. Produce interpretive guide and outreach materials. Develop follow up strategy. Planned outputs: Leaflet. Website information. Final document, including maps, statistics, review of literature/data research, description of methodology, next steps. Activity 5. Presentations at GPFLR event, WFC, UNFCCC COP 15 and 16. Activity 6. Conduct further consultation; Refine results and analysis.

Summary of planned outputs: Output 1. Maps of areas available at global and regional level. Output 2. Statistics on areas, climate/carbon, livelihoods. Output 3. Description of literature/data research. Output 4. Description of methodology. Output 5. Final document containing above plus review of opportunities and challenges, brief case studies, list of next steps. Output 6. Dissemination activities at Forest Day 4, including a film by John Liu, panelists/moderator for adaptation sub-plenary, printed materials, booth.

158 158PROFOR Activities Completed in CY2011

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs.

Activity 1: The methodology for the global assessment and the conceptualization behind it was refined through several iterations and consultations with a number of experts. A survey of data and other information was kept up to date and added to as the assessment has been refined. The communications strategy was updated on an ongoing basis as additional dissemination opportunities presented themselves or were created.

Activity 2: A preliminary global map and statistics were produced for the November 2009 high level round table on FLR in London and the results were announced in a press release that received a huge amount of press coverage around the world.

Activity 3: To validate the global map, regional maps and statistics were produced as well as national maps for Indonesia and Uganda. These national ‘straw’ maps were reviewed by WRI staff and compared against other information sources. A proper national assessment would need to be built from the bottom up (rather than from global data sets down) and so would require a distinct methodology as well as country ownership of the mapping process. Existing case studies on the GPFLR website were reformulated according to a more consistent format and others were added with the result that there are now full descriptions of 20 case studies available to illustrate different types of restoration opportunities. The Africa Regional map was produced in advance of the Nairobi Forum on Investment in Trees and Landscape Restoration.

Activity 4. An interpretive guide was produced that includes a description of the methodology, the maps, statistics, analysis, description of data research, case studies, and a list of suggested next steps.

Activity 5. Presentations of the project work and findings were made at a series of events. These include: - the November 2009 GPFLR high level round table on FLR in London, - Forest Day 3 during UNFCCC COP 15 through Markku Simula’s keynote address in the restoration sub-plenary and in Gerhard Dieterle’s remarks as a panelist, - Forest Day 4 UNFCCC COP 16 through the statements made by panelist Tim Rollinson (UK) and Stewart Maginnis’ (IUCN) presentation to the mitigation + adaptation learning event.

In addition to these planned presentations, the project was presented at the Commonwealth Forestry Conference in June 2010 by Tim Rollinson (as chair of the conference) and Bill Jackson of IUCN in his keynote address; also by Lars Laestadius of WRI and Bill Jackson in presentations at the CBD COP in Nagoya in October 2010, by Stewart Maginnis in a press briefing at the UNFCCC COP 16 on December 8, 2010, and by Tim Rollinson at a side event at UNFF-9 in January 2011. In addition Lars Laestadius (WRI) presented the project’s findings to a side event of the International Emissions Trading Association during the UNFCCC COP16 and to the PBL Netherlands Environmental Assessment Agency as input to the modeling that led to the new CBD Strategic Plan (including the new restoration target.) These supplementary dissemination activities had not been planned but were felt to offer good opportunities for further presenting the project’s findings to additional audiences and did result in strong positive responses from a range of people, countries and organizations. The maps and findings have been made available through the PROFOR, GPFLR, WRI and IUCN websites. A small sampling of the reporting on the global map follows: A posting in Brazil based on an interview given by a WRI staff person has received 8,000 hits so far (www.oeco.com.br/multimedia/geonoticias/24575-mapa-global-das-areas-degradadas. Jonathan Lash’s presentation at the Washington Press Club on stories to watch for 2011 has a slide with the map: www.wri.org/stories/2011/01/environmental-stories-watch-2011#slideshare. See also www.cnn.com/2010/TECH/innovation/12/13/forest.restoration/index.html for an interview with Carole Saint- Laurent (IUCN). Savings in the project extension (UNFCCC COP16) budget made possible an extra round of dissemination activities during UNFF-9.

Activity 6. As noted above, the maps, statistics and analysis underwent several iterations with refined results and analysis having been disseminated at UNFCCC COP 16 and UNFF-9. While not specifically anticipated by the PROFOR Activities Completed in CY2011 159

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. project, we also carried out a survey of interest in conducting national assessments involving all of the members of the GPFLR online discussion forum. There was strong support for this, following support for regional workshops and provisions of tools and guidelines.

SUMMARY OF PLANNED OUTPUTS PRODUCED: Global map and statistics. Full-color leaflet for November 2009 London Roundtable and for Forest Day 4/UNFCCC COP16. Electronic version of global map. Regional maps and statistics. 2 national maps (Indonesia and Uganda). Brief case studies. Film by John Liu for Forest Day 4. Participation of Tim Rollinson, chair of GPFLR, in Forest Day 4. Booth for dissemination of information at Forest Day 4. Interpretive guide/final document including the global map and statistics, brief case studies, description of literature/data research, description of the methodology, review of key opportunities and challenges, list of suggested next steps.

SUMMARY OF ADDITIONAL OUTPUTS PRODUCED: A third color leaflet (in 3 languages) including the global map and statistics referred to above, plus descriptive text and background information for UNFF-9. Poster of global map. Powerpoint slides of the global maps. Google Earth files of the global maps. Presentations at the Commonwealth Forestry Conference, CBD COP in Nagoya, UNFCCC COP16 side event and press briefing, UNFF-9 side event. Online survey of practitioners views on conducting assessments of restoration potential.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these.

See section 2 regarding supplemental events and outputs as well as modifications.

Initially, a livelihoods analysis had been anticipated, but available global data sets were not adequate to allow this type of analysis to be completed. This is something that would need to be undertaken through country-driven national assessment processes. The final documentation from this activity contains reflections on how this could be done. We invested our effort instead in the development of a Google Earth file, which was an extremely effective visual representation of the global assessment.

The participation of a minister from Rwanda in Forest Day 4 did not, in the end, require support from this project. The resources were deployed instead to increasing dissemination activities during the UNFCCC COP16 and UNFF9.

The November 2009 assessment found that there are more than 1 billion hectares of lost and degraded forest landscapes that offer opportunities for wide-scale and mosaic restoration. The November 2010 assessment increased this figure to about 1.5 billion hectares, based on analysis of new data for agricultural lands. We were 160 160PROFOR Activities Completed in CY2011

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? also able at this point to indicate opportunities for a third type of restoration activity – protective, in addition to mosaic and wide-scale. Please see section 3 for an overview of the means by which the project results were disseminated and examples of the uptake by the media of the project findings.

The assessment played a critical role in increasing recognition among decision makers, opinion leaders and experts of the potential role of landscape restoration in addressing climate change and other challenges. This work was particularly timely and useful as its results were fed into important policy discussions, particularly the UNFCCC negotiations on REDD-plus, the development of the REDD+ Partnership, the development of the new CBD Strategic Plan, and preparations for UNFF-9.

During the term of the project we observed how the importance of restoration has attracted increasing recognition and interest. This is most tangibly reflected in the move from a narrow focus in the UNFCCC negotiations on avoided deforestation to a UNFCCC COP-16 decision that recognizes the full scope of REDD-plus including enhancement of forest carbon stocks, but also in the adoption of a new CBD Aichi target 15 on restoration, the presentations and general discourse at Forest Day 4 in Cancun, and in the Secretary-General’s report for and the decision of UNFF-9.

Examples of follow up interest include (1) a preliminary national assessment in Ghana, which is being carried out by CERSGIS (Ghana), with IUCN and WRI (with PROFOR support) to better identify the potential at the national level for forest landscape restoration; and (2) the German BMU International Climate Initiative deciding to support IUCN and other partners in developing national assessment tools (including a framework for identifying biodiversity indicators, and economic FLR analysis) as well as a national assessment pilot in Mexico and some follow up work in Ghana.

Going forward, the work will continue to influence policy processes. A ministerial level meeting on forest and landscape restoration, hosted by Germany and IUCN on behalf of the GPFLR in September 2011 in Bonn (following up on the London event of November 2009) built upon this work to highlight the importance of and opportunities for landscape restoration and suggest ways that these can be capitalized upon in policy and practice.

As noted above, in carrying out the project it became clear that a distinct approach would be needed for carrying out national assessments. The issues surrounding this are described above. We were, however, able to produce regional information and national ‘straw’ maps for two countries (Indonesia and Uganda).

Activities were implemented on time and the project was extended to allow even more dissemination of its findings. We identified extra opportunities for dissemination and these are described above.

Foreseen difficulties included the general paucity of and limitations imposed by using global data sets as well as PROFOR Activities Completed in CY2011 161

8. Next steps. What happens now, following the activity’s completion?

The project catalyzed strong interest in forest landscape restoration. At the analytical level, next steps including expanding on the restoration opportunity assessment across the boreal region and updating the global map to reflect this (work which BMU contracted WRI to undertake on behalf of the GPFLR) and producing a linked carbon mitigation opportunity map (work which BMU contracted WRI to undertake), using the global opportunities map, in partnership with UNEP-WCMC as a restoration module within the Carbon and Biodiversity Atlas and LifeWeb Tool.

Another stream of follow up activity is to develop and test national level assessment methods that learn from the approach of the global assessment while also integrating the additional complexity and information that presents itself at the national level, e.g. stakeholder claims and interactions, tenure and poverty information, etc. Some of this work began in 2011 with seed funding to CERSGIS (Ghana) from PROFOR and to IUCN from the German BMU International Climate Initiative (for Ghana, Mexico, framework methodologies).

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How?

The global assessment is capable of replication as the assessment method has been rigorously described. It is capable of being refined at the global level and replicated at the regional level. Elements of the global methodology will be helpful to those undertaking national assessments though as described above a special methodology will be needed for these. National data is much more detailed and there is also additional information that exists at that level which does not exist at the global level, e.g. on poverty and tenure. Also at the national level there are ownership and stakeholder relationship issues that do not arise at the global level, posing requirements on process and inclusiveness. Notwithstanding these considerations, the global assessment methodology does provide a sound starting point for developing a national methodology and it did catalyze country interest in undertaking national assessments.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources were mobilized. PROFOR funding $ 161,365 Other sources of funding (describe below) $ 54,700 Total $ 216,065 What other sources of co-financing were mobilized? What amounts are involved under each source of co-financing? Co-financing for IUCN staff time, travel and publications was secured from Netherlands DGIS in the amount of $35,700 (through the IUCN Livelihoods and Landscapes Strategy) and the balance from IUCN core funds. Co- financing for the first launch of the project findings at the November 2009 high level round table in London was secured from DFID and the Forestry Commission of Great Britain who sponsored the event. The Forestry Commission and the US Forest Service had provided the seed money for the initial development of the global assessment approach on which this PROFOR activity was based. Co-financing accounts for 25% of the total cost.

162 162PROFOR Activities Completed in CY2011

WEST AFRICA FORESTS STRATEGY

http://www.profor.info/profor/knowledge/west-africa-forest-strategy

Project ID: TF094706 - P116320 Region: AFR PROFOR Thematic Area Percent Date prepared: March 9, 2011 Main: Financing SFM 50% Prepared by: Nyaneba Nkrumah Secondary: Livelihoods 50%

When was the grant originally approved?: 6/30/2009 When was the original planned grant completion date?: 2/22/2011 Have any extensions been approved?: Yes If yes, what was the revised grant completion date?: 4/30/2011

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note. Did these change during implementation? How and why? The objective of the activity is a study that assesses the forestry sector in West Africa ultimately leading to a World Bank West Africa Forest Strategy (WAFS) which addresses sustainable management of tree and forest resources in West African countries. The strategy will feed into the World Bank Environment Strategy for Africa that can be shared and used by the donor community. The aim of the strategy is to ensure conservation and sustainable use of forests, the maintenance of forest ecosystem services, and the fair and equitable sharing of revenues and benefits from forest resources. Specifically, the Strategy aims at aligning and coordinating existing and planned activities to ensure coherence and to build on its comparative advantages in the various instruments to address deforestation and forest degradation in West Africa. These instruments include budget support operations, investment operations, technical assistance and advisory services.

While each country has its own path of sustainable forest management, a regional approach is aimed to address the inter-country economic linkages and trade relations as well as to address the social, governance and conflict dimensions which are not contained within separate national boundaries.

Furthermore, a regional approach is beneficial to analyze shared problems and shared solutions. The strategy will thus emphasize and lend support to strengthening of the regional cooperation on forestry already established and inter-alia builds on the ECOWAS Treaty and UEMOA Treaty, and the Manu River initiative.

This activity is also one in a series of regional and thematic activities that will eventually feed into a new World Bank Africa Region Forest Strategy, currently under development, which will articulate a prioritized road map for countries in Sub-Sahara Africa and development organizations to meet their main goals in developing the forestry sector in a sustainable manner in terms of livelihoods, economic development and public goods.

The proposed activity will also contribute to policy work at the country and regional levels. A coherent, concrete analysis of forest sector management and investment, adapted to country context, capabilities, and needs, will serve as a blueprint for country officials and Bank staff, making it easier for countries to implement sustainable forest and land management, alone or with Bank support. Increased ease of implementation and a unifying framework will improve the enabling environment for upscaling sustainable forest and land management, leading to an increase in the number and scale of country-led sustainable forest and land management investments and PROFOR Activities Completed in CY2011 163

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. interventions on-the-ground. The consultation process, as well as the final strategy, helped to pinpoint priority zones, risks, and benefits, contributing to government buy-in and ensuring investment is channeled towards socioeconomically and environmentally important areas. By fostering collaboration and sharing of information and lessons learnt, a regional sector strategy will help overcome fragmentation and increase impact in individual countries.

The study’s assessment included the following elements:

• An assessment and analysis of key issues and opportunities for improved forest management in High Forest, proposed priority actions and instruments by country (Guinea, Sierra Leone, Liberia, Cote d’Ivoire, Ghana, Guinea-Bissau) • Identification of opportunities for linking up with existing forums on forest in West Africa, including i) West Africa Forest Dialogue underway with ECOWAS, IUCN, and FAO, ii) dialogue within ITTO-led activities, iii) national level activities such as the Liberia Forest initiative, and iv) activities of bi-lateral donors and NGOs. Understanding and influencing these partners will be important to scale up successful approaches learned at country level. • Examination of how to engage governments, and possibly identify a country to the champion for a subset of countries to implement a pilot of a new future Bank operation on forests. • Review of best practice and existing instruments for addressing threats in sustainable forest management and monitoring, e.g. FLEGT/VPA • Building on lessons from the Ghana EITI++ scoping exercise for non-renewable and renewable natural resources, examine how this approach might be used as framework at regional level • Identification of financing instruments, including carbon finance and forest funds (and building on the results of the Ghana Carbon Finance Review) • Review of the current World Bank Portfolio, and identify possible instruments for implementation of various part of the WAFS • Extraction of lessons from existing WB forest related initiatives (Benin, Liberia, Nigeria, Senegal, Burkina Faso, Cote d’Ivoire, Sierra Leone, and Ghana) • A program for outreach and partnership, and action plan which will be incorporated into a strategy for West Africa Forestry.

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs.

All commissioned studies and reports have been completed and submitted, after incorporating comments from PROFOR and different stakeholders. These studies and reports include: - West Africa Forest Strategy - Sector Analysis Report - Ghana Case Study - Liberia Case Study - Guinea Forest Sector Review - Sierra Leone Forest Sector Review - Côte d'Ivoire Forest Sector Review - Stakeholders Meeting Reports for Sierra Leone, Liberia , Côte d'Ivoire, Ghana, and Guinea

A final internal workshop to discuss the outputs of the study was conducted at the World Bank on December 15th, 2010. It was attended by Bank staff with West-Africa related operational experience. The workshop’s purpose was to discuss the outcomes of the humid West Africa forest strategy exercise and how they relate to the greater Africa Regional Forest Strategic Action Plan. The key outputs of the studies are an overall strategy for West Africa as well as a detailed technical analysis of the forestry sector in these countries (drivers of deforestation, analysis of forest industries and the incentives, disincentives that distort the sector, and all supply and demand chains related to the 164 164PROFOR Activities Completed in CY2011

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. sector).

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. There have been no substantive changes in the activities undertaken or the outputs planned. However corrective steps were taken to avoid overlap with another PROFOR activity (see #7 below).

5. Findings, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant. What outputs were disseminated, and how? The five countries of the sub-region differ in a number of important respects with regard to their forested areas, though they also show some similarities. In the three more easterly countries (Côte d’Ivoire, Ghana and Liberia) the timber industry has historically been much more important than in the other two. In all five cases, rural energy is an important aspect of the forest economy and depends largely on wood fuels (fuel wood and charcoal), though except for Liberia, most of these are sourced from outside the Humid Forest Zone. In all five cases, forest sector policy has failed to shake off its colonial inheritance, and has ill-served the interests of the society, particularly as demographic pressures have grown. Forest industry has had an excessive influence over forest policy, but has not made a commensurate contribution to growth and poverty alleviation, while most domestic needs (whether for timber, wood fuels or other products) have been consigned to structural illegality. The condition of the forests is deteriorating in all five cases, and in two hitherto important timber producers, industry supply is nearing crisis. Among the causes of this deterioration are preferential terms for the timber industry, which encourage value- detraction rather than value addition; neglect of the legitimate needs of domestic consumers; and a lack of incentives to landowners and farmers to conserve and regenerate the stock. Where timber has high value, farmers have been better advised to keep it off their land. And where revenues from the industry are shared, these fail to reach the immediate land managers and incentivize them appropriately. Plantations are an important aspect of current policy in most instances, though implementation of plantation policy generally leaves much to be desired.

There is an urgent need to increase public buy-in for forest conservation and public commitment to sound management. The means by which this might be brought about are generally agreed – they would be likely to involve promotion of responsible management and risk mitigation in the small and medium sub-sector, including community forestry. There have been some successes at the policy level, but these are generally few and far between. The EU’s FLEGT initiative has done much to improve the governance of the export industry, but has limited traction over the overall balance of forest enterprise. The situation is likely to change in the coming years, however, with increased recognition of the extra-sectoral influences on the forest, and of the need to foster policies which harmonize the interests of the various sectors which have an impact on the condition of the resource. Climate change policies, particularly REDD+, are likely to reemphasize these links, and to the extent that financial transfers under REDD are performance-based, they could lead to a shift in power to the benefit of the immediate forest managers. In all five countries, agriculture and mining are central pillars of current national growth strategies, and the forest sector will have to accommodate the implications of this if its own needs are to be recognized in public policy.

A number of opportunities exist for the Bank to increase its forestry profile, helping to generalize good practice and building regional capacity to confront the coming challenges. Among the primarily country-level issues of interest to the Bank’s forest strategy, where the Bank might support partner governments in advancing policy, are: restructuring of forest industry to promote value addition and foster economic growth; improving forest governance and public finance management; balancing supply and demand issues in export and domestic markets and addressing the issue of ‘illegal’ chainsaw logging; support for small and medium forest enterprises and community forestry; reforming tree and land tenure so as to favor forest conservation and regeneration; reforming revenue sharing arrangements and channeling these so that these provide incentives to farmers and land owners; integrating REDD+ and other climate actions into forest policy; and improving the sustainability of rural energy (wood fuel & charcoal). PROFOR Activities Completed in CY2011 165

5. Findings, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant. What outputs were disseminated, and how?

Among the primarily sub-regional issues are: improving the governance of cross border trade in a context of FLEGT, and helping harmonize sub-regional trade policies; enhancing the geographical information and forest inventory data available for sub-regional policy making and trade controls; institutional capacity building to support sub-regional policy coherence; investing in the cross-border dimensions of protected area management; and developing awareness of the extra-sectoral implications of forest policies across the sub-region.

The most immediate requirement, within the Bank, is for harmonization of strategies with the Carbon Finance Unit, as investments through funds such as the Forest Investment Program are potentially far in excess of levels of the forest finance hitherto available, and will need careful management if they are not to overwhelm existing agendas. At the same time, because they are so large, they have the potential to encourage the kinds of radical action which, though widely recognized as necessary, governments have been reluctant to undertake.

At the level of project actions, the two areas that most commend themselves are payments for environmental services, and realistic and workable approaches to rural energy.

Finally, given the extreme polarization of the interest groups who are dependent on the forest for their livelihoods, the World Bank’s environmental and social safeguard policies provide an important standard to prevent and mitigate undue harm to people and their environment. These standards complement and reinforce a number of national commitments, and the Bank will therefore use its safeguard policies to promote broad-based dialogue and participation.

In terms of dissemination outside of the bank, the methodology utilized a series of stakeholder meetings as a mechanism for engaging counterparts, particularly country counterparts in the process. During this process, there was open engagement and discussion on the key issues presented here in this strategy. The documents will also formally be put on the PROFOR website to encourage a wider dissemination of the documents. Within the Bank, there has already been dissemination of the documents within and outside the region to ensure discussion of the issues.

The team worked closely with the following organizations: (i) Food and Agriculture Organization of the United Nations (FAO), (ii) IUCN – The world Conservation Union, and (iii) International Tropical Timber Organization (ITTO), (iv) ECOWAS - Economic Community Of West African States, (v) UEMOA - West African Economic and Monetary Union. In addition, the team will also work closely with the European Commission (EC), USAID, and The Netherlands.

The proposed activity built and expanded on existing activities at country level, as well as on regional activities, including: - The Project on Climate Change Adaptation Capacity Support in the Sahel; - The Programme on Early Warning and Prevision of agricultural productions in the Sahel; - The Regional Programme for the Promotion of Alternative Domestic Energies in the Sahel (PREDAS); - The Regional Solar Energy Programme Phase II; - Seasonal Predictions in West Africa (PRESAO); - The Mali/Niger Tintelout and Mali/Mauritania/Senegal (Tafacirga area) projects, funded by CILSS; 166 166PROFOR Activities Completed in CY2011

The issues discussed in the sector piece and the strategy, are issues that have been discussed at the national and regional level. ECOWAS, in particular, is working on a regional approach to forestry and environmental issues across West Africa and it has been particularly important to understand where their dialogue is regarding the main issues forestry faces in West Africa and to be a part of the solution. The next step from this completion is to engage on a deeper level with local and international stakeholders and particularly ECOWAS, to determine what policies and financial mechanisms need to be put in place to sustainably manage forests in West Africa.

There were significant overlaps with another regional PROFOR funded project, which required detailed discussion between the teams. A separate PROFOR activity funded a regional study that focused on forestry issues in the same West African countries that were the intended subjects of this activity. Since that regional study had already produced a short overview of forestry issues in each of the countries (something originally planned as part of this activity) and a desk review of the key issues in the forestry sector across Africa had already been compiled and represented a broad overview of the issues (entitled “Phase 1, Present Situation and Past Experience in Central Africa and Humid West Africa”), the team decided to take corrective action to ensure complimentarily and to avoid overlaps. As a result, this activity conducted a more detailed in-country assessment of the issues and focused on both forest demand and supply issues not assessed under the regional study. (In general, work during implementation of this activity was conducted in tandem with the regional study to produce complementary documents.) Since the initial work had already been done by the regional forestry study, the consultants were able to launch directly into in-depth country assessments and dialogue, producing an initial draft output sooner than initially planned.

8. Next steps. What happens now, following the activity’s completion? The next steps include a) wider dissemination; b) continued dialogue, particularly in-country with our country office staff which will begin to highlight some of the key issues and how to move forward both nationally and regionally; c) determining what to prioritize in Country Assistance Strategies.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? This was a study which helped in the production of a strategy. The next point on the horizon is not a replication but rather a move into activity planning and implementation.

PROFOR Activities Completed in CY2011 167

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources were mobilized.

PROFOR funding $ 148,885 Other sources of funding (describe below) $ 15,000 Total $ 163,885

What other sources of co-financing were mobilized? What amounts are involved? World Bank financing was mobilized ($15,000)

168 168PROFOR Activities Completed in CY2011

D. GOVERNANCE

DEVELOPMENT OF NATIONAL TIMBER YIELD TABLES FOR MAHOGANY

http://www.profor.info/profor/knowledge/national-timber-yield-tables-mahogany

Project ID: P118824 Region: LAC PROFOR Thematic Area Percent Date prepared: December 13, 2011 Main: Governance 70% Prepared by: Edgar Maravi Secondary: Livelihoods 30%

When was the grant originally approved?: 11/24/2009 When was the original planned grant completion date?: 10/31/2011 Have any extensions been approved?: Yes If yes, what was the revised grant completion date?: 3/30/2012

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note. Did these change during implementation? How and why? Component 1: Contribute to applying simple and consistent parameters for estimating the standing volume of trees selected for harvest and the resulting yield of export grade sawn wood on a per tree basis • Provide technical assistance to CONAP and INAB (Guatemala) and OSINFOR (Peru) in the participatory preparation and approval of their respective National Timber Yield Tables for Mahogany (Swietenia macrophylla) and potentially for Spanish Cedar (Cedrela odorata), based on statistically reliable conversion factors from standing volume and export grade sawn wood through modest funding and technical assistance from international experts. • Develop a user friendly data processing spreadsheet (simple software), that based on field calculated timber yields per tree, would facilitate the generation of valid yield tables organized in a minimal configured system for small data sets for wide dissemination among forestry operators.

Component 2: Foster environmental and social best practices in Forest industry – Indigenous community logging contracts: • Provide technical and modest funding assistance in support of ORAU Ucayali -Veduria Forestal Comunitaria (VFC) team activities that allow contribution of field timber yield data from community forestry activities for the development of national tables and monitoring activities to combat and prevent illegal logging and unsound social practices resulting from logging industry (“madereros”) - Indigenous Peoples logging contracts.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. This activity included two components: a) Developing the Mahogany Yield Table; and b) Fostering social and environmental best practices in Forest industry – Indigenous community logging contracts.

Component 1: Developing the Mahogany Yield Table and VERITAS Calculator National Yield Tables for Guatemala and Peru: This activity included the following completed tasks (i) primary data and information collection, systematization and synthesis from organizations, concessionaires and other forest operators for Mahogany and Spanish cedar; (ii) field work plan design with participation of forest stakeholders and government officers; (iii) in-field primary information and data collection in the forests and in the forest industry’s saw mills; (iv) information and data entry, systematization and synthesis and information and data processing; (v) development of the national yield tables and volumetric conversion factors (final versions). PROFOR Activities Completed in CY2011 169

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note.

Spreadsheet software (metric system) program development: This activity included the following implemented tasks: (i) data file format and settings for national yield table; (ii) import and export table formats; (iii) protocols for recording and data entry; (iv) protocols for data calibration and conversion factors; (v) format for national yield table; and (vi) template for data processing spreadsheet (calculator).

Component 2: Fostering social and environmental best practices in Forest industry – Indigenous community logging contracts Forest industry – Indigenous community logging contracts Assistance for Veduria Forestal Comunitaria activities: This activity included the following tasks: (i) selection, monitoring and follow-up of at least two cases of community social control of forest industry –Indigenous community commercial timber contracts in Contamana, Pucallpa and Atalaya provinces; (ii) prepare reports and lessons learned regarding the social control cases related to forest industry – indigenous community logging contracts.

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. Technical assistance through our implementing partner Intercooperation has produced quality outputs in Guatemala, but results have been poor in Peru due to the change in interest of OSINFOR and Direccion General Forestal in engaging in this initiative (see # 4).

Component 1: Developing the Mahogany Yield Table and VERITAS Calculator (i) National yield tables and volumetric conversion factors for Mahogany – but only in Guatemala

Building on previous FLEG program activities and with technical assistance from Intercooperation and PROFOR, a multi-sectoral technical team from our partner organizations (INAB and CONAP) engaged in laborious field work to develop a national mahogany table for Guatemala. With direct participation of forest stakeholders from community concessionaires, a field work plan was developed and implemented for five forest concessions – La Union, Chosquitan, Rio Chanchich, Carmelita and San Andres- totaling 18,154 hectares and located in El Peten, Guatemala. The field work plan also included activities in five sawmills from local cooperatives and communities in Suchitecos, San Andres Laborantes del Bosque, Custodios de la Selva y Cooperativa Carmelita. The team completed primary data and information collection, systematization and synthesis from approximately 50 selected sample trees per concession from a forest census of the five above listed forest concessions. Once information and data collection from the forest was completed, data entry, systematization and processing to calculate the standing volume was organized. Information included geographic location and DBH data from a total of 241 standing mahogany trees. A chain of custody for each of these trees was designed. Field activities also included the round wood volume calculation for all resulting logs per each tree as well as mill processing and board grading. Field work was followed by extensive final data entry, processing, regression analysis and development of the volume table and the respective volumetric conversion factors (final versions).

Based on the data analysis and according to the results obtained by the VERITAS calculator, total average volume of export grade sawn wood including branches for mahogany in Guatemala is approximately 3.328 m3 per tree. Complying with the mandate of CITES International, CONAP (Guatemala’s CITES authority) fully incorporated the newly developed national yield table in its country report.

(ii) Data processing spreadsheet template in Guatemala has been completed beyond the original expected plans as the activities allowed the development of a custom made application – the VERITAS Timber Volume Calculator.

Collaborative efforts between Intercooperation and the SDN Forest Team/PROFOR and software consultants 170 170PROFOR Activities Completed in CY2011

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. resulted in the development of an effective, practical and user friendly computer software that uses Microsoft Excel as a framework. By entering only the DBH, the VERITAS calculator is able to determine in real time and with high accuracy the expected volume of a given tree in all export timber grades according to the NHLA (US National Hardwood Lumber Association) classification. It works using pre-established formulas based on the volumetric conversion factors from the respective national yield table and could be used potentially for other timber species (with the right conversion factors).

These two products (yield tables and calculator) are expected to be used globally by forest stakeholders to complement verification of timber legality and chain of custody schemes. They were presented by Guatemala at the 4th meeting of the CITES Mahogany Working Group on November 7-10, 2011, with the goal that these two tools be endorsed by the CITES International for wider use in other Mahogany producer countries.

Component 2 Fostering social and environmental best practices in Forest industry – Indigenous community logging contracts:

Activities implemented by the Veduria Forestal Comunitaria team in Peru focused on monitoring and providing technical assistance to Indigenous communities on: (i) negotiation and implementation of actual logging contracts; (ii) conflict resolution related to logging contracts; (iii) preventing and controlling illegal logging; and (iv) assisting communities with specific forest land tenure issues. Specifically, activities of Indigenous people leaders and promoters from the VFC team resulted in helping communities improve negotiations and/or implementation of logging contracts from 11 communities with the logging industry located in Contamana and Atalaya provinces in Peru. Monitored contracts include: 1) C. Dulce Gloria I – San Francisco SRL; 2) C. Dulce Gloria II – Mark Baker; 3) C. Tupac Amaru- Servicios Forestales Conexos SRL; 4) C. Nueva Pierola – Ramon Estrella Lopez; 5) Dulce Gloria III – Maquinarias Forestales SAC; 6) C. Puerto Esperanza – Forestal Mendoza EIRL; 7) Puerto Belen – Inversiones Forestales Said SAC; 8) C. Tahuarapa – CEDACHL EIRL; 9) C. Bambu – Maderas Peruanas SAC; 10) C. Caco Macaya – Industrias Forestales BJ SAC; 11) C. Nativa Tupac Amaru II - Servicios Forestales SRL.

Field activities included participatory technical assistance and training on: (i) reviewing communities’ forest management plans and annual operational plans, forest census and forest permits; (ii) reviewing existing contracts or proposals for prospective contracts (species to be harvested, expected trade volumes, benefit sharing/prices, etc.); (iii) monitoring silvicultural operations and environmental compliance; (iv) participation and training on volume calculation and negotiations; (v) monitoring and facilitating benefit sharing and payments. The VFC team has also assisted 22 cases of communities facing forest land tenure problems resulting from overlapping land rights with forest concessions granted to the logging industry.

Outputs from the assistance and capacity building implemented by the VFC team include: (i) a set of eight principles and criteria for guiding monitoring activities of logging contracts between communities, loggers and traders; (ii) operational protocols for actual on the ground monitoring of logging contracts that describe several tasks (assessing commercial transactions and contracts, inputs and responsibilities from participant parties, administrative and fiscal regulatory compliance, timber prices/ benefit sharing, identification of social, environmental and law compliance challenges such as selective logging, overharvesting, illegal logging etc.)..

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. Tasks related to the national yield table for Peru were put on hold due to sectoral conflicts of national forest policy and legislation that resulted in slow response and a lack of stakeholder buy-in for agreed upon activities. After several unsuccessful attempts from Intercooperation, a decision was made to adjust plans and promote instead activities aimed at informing newly appointed authorities on the importance for Peru to fulfill its international obligations. Given that the national yield table and the VERITAS calculator could contribute not only to CITES compliance, but also offer a lasting contribution to address the extensive illegal logging in the country, plans were PROFOR Activities Completed in CY2011 171

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. made to sponsor a bi-national exchange process. Plans included visits to Peru from CONAP, INAB staff and forest concessionaires from Guatemala. The aim of this activity was to promote dialogue with Peruvian forest authorities and forest stakeholders to foster buy-in from high level officials from Peru and other stakeholders to ensure commitments in complying properly with CITES. The experience sharing event in Lima, Peru was implemented on February 8-10, 2012. Guatemala visitors together with Intercooperation shared Guatemala’s experience in developing the national table and the VERITAS calculator with 29 senior officers from the Ministry of Agriculture, Ministry of Environment and OSINFOR and reported back on the recent 4th meeting of the CITES mahogany working group.

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? Component 1: Developing the Mahogany Yield Table and VERITAS Calculator Guatemala’s implementation plan and field report describing step by step the development of its national table and the self-explanatory format of the VERITAS Timber Volume Calculator are useful tools that are applicable beyond Guatemala. They could be valuable tools for other mahogany producer countries to comply with CITES requirements. Presentations and discussions on the use and relevance of these two knowledge products during the week-long 4th meeting of the CITES mahogany working group in El Peten Guatemala on November 7 – 11, 2011 generated interest from international delegations from other mahogany producer countries. Uploading these two outputs on the respective websites of CONAP, INAB, PROFOR and eventually CITES International will increase wide dissemination of these knowledge products at national and global levels.

Component 2: Fostering social and environmental best practices in Forest industry – Indigenous community logging contracts Veduria Forestal Comunitaria findings, field experiences and guiding principles and operational protocols for monitoring logging contracts resulted from the technical assistance work of the VFC team in 33 indigenous communities. These outputs are being used beyond the two pilot provinces and it is expected that this experience will be promoted nationwide by other national and sub-national indigenous people organizations similar to ORAU. Additionally, all material collected from these experiences will serve as part of baseline information for the development of guiding principles and criteria for monitoring logging contracts beyond Peru.

Among other findings, monitoring 11 logging contracts confirmed the fact that the asymmetric conditions in the contract negotiations generated a consistent pattern of inequality and lack of transparency of contract terms and conditions. Logging companies’ focus was on selective and over exploitation of only two or three species of high commercial value. In several cases logging took place without forest permits. In most of the cases contribution of communities to the forestry operations was limited to their forest resources and participation only in the selection of standing trees to be logged. All other job opportunities generated by logging operations were conducted by labor brought in by the logging industry from outside the community. Benefits received by communities were in actual timber in a proportion that fluctuated from 80 to 70 percent of the total extracted volume for loggers and 20 to 30 percent for communities. Communities were free to sell their share to any trader; however, in most of the cases communities ended up selling their share to the logging industry and frequently prices paid for that timber were 50 percent less than those of the local market. Income and sales taxes were not even considered in the contracts. Volume calculation was made unilaterally by the logger and frequently using methods that allowed miscalculation and unfair “discounts” all in favor of the logger.

A major challenge results from the fact that very often the logging industry, on behalf of the indigenous communities, is in charge of obtaining forest permits thus taking full control over the use of those legal documents. Most frequently communities are not aware that those permits are misused by loggers to launder illegally harvested timber from elsewhere making communities liable for those illegal activities. 172 172PROFOR Activities Completed in CY2011

All three outputs once adjusted, recalibrated and assembled will form a practical tool kit for forest control and supervision, expected to be disseminated globally.

Component 2: Activities implemented by the VFC team have played an outstanding role in the national forest policy debate particularly in 2010 and early 2011 through an unprecedented contribution to policy and legislation reform in the country. Together with other grassroots organizations the VFC team played a critical leading role in making a dramatic contribution in the negotiations between the government – forest stakeholder roundtables aiming at forest policy and legislation reform. VFC eventually developed a full alternative forestry bill submitted to the Peruvian Congress which not only addressed tenure issues of indigenous communities, but also included a substantial environmental content of critical national interest. This alternative bill proposed a regulatory framework with positive impact on sustainable forest resources use and forest ecosystem protection and conservation. All these are expected to become important reference points in the upcoming Congressional review of the hastily approved forest law by the previous Administration.

These activities have complemented and will continue to complement other donor efforts such as those from ITTO that provided additional funding for this activity and the efforts of the EU and FAO. Outputs are poised to have lasting contribution to ensure verification of timber legality and traceability and complementing chain of custody initiatives (by identifying red flags or anomalies in timber flow data and accounts), topics extremely relevant for such global policy frameworks and initiatives as those under DFID forest governance, FLEGT-VPAs, EU’s Regulation No 995-2010, the US Lacey Act and Forest Certification efforts. All of these have potential to enlist bi-lateral and multi-lateral donor efforts to improve forest control and supervision through the use of alternative options to those tools and systems based on costly and sophisticated technology.

In addition to Intercooperation - PROFOR – ITTO partnership this PROFOR sponsored activity has fostered such partnerships in Guatemala as those among INAB-CONAP- Intercooperation and CONAP-Community concessionaire organizations and the Empresa Comunitarias de Servicios del Bosque.

8. Next steps. What happens now, following the activity’s completion? Materials and resulting knowledge tools from this activity will be used in other mahogany producer countries. Further endorsement of CITES International of the Guatemala national table and VERITAS Calculator will positively influence this outcome.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? As mentioned above, based on the experiences gained in Guatemala and Peru in developing the described tools, it is expected that the replication of all outputs of this activity has significant potential in other Mahogany producer countries in Africa, Asia and Latin America, as they must also comply with CITES requirements. This also offers an opportunity for governments and bi-lateral aid donors to launch similar activities for developing adapted versions of these tools to specific country conditions to effectively contribute to ensuring timber legality, traceability and complement chain of custody initiatives. For instance, IBAMA, the Brazilian government Institute for Environment and Renewable Natural Resources, has already adapted the methodology to Brazil conditions and has prepared a proposal to be funded by ITTO for developing its table for Spanish cedar (Cedrela Odorata).

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources were mobilized.

PROFOR funding $ 67,124 Other sources of funding (describe below) $ 77,440 Total $ 144,564

What other sources of co-financing were mobilized? What amounts are involved under each source of co-financing? FLEG Trust Fund

174 174PROFOR Activities Completed in CY2011

FIELD-TESTING GOVERNANCE BUILDING BLOCKS (UGANDA)

http://www.profor.info/profor/knowledge/defining-forest-governance-indicators

Project ID: P118837 Region: Global PROFOR Thematic Area Percent Date prepared: January 23, 2012 Main: Governance 100% Prepared by: Nalin M. Kishor Secondary: Choose an item. %

When was the grant originally approved?: 8/20/2009 When was the original planned grant completion date?: 9/30/2010 Have any extensions been approved?: No If yes, what was the revised grant completion date?: Click here to enter a date.

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note. Did these change during implementation? How and why? A major objective of this initiative is the application of a forest governance diagnostic tool to construct a baseline assessment of the forest governance situation in Uganda and to pinpoint the areas requiring highest priority reforms. A forest governance reform strategy for the country will then be formulated on the basis of the diagnostics. (A recent report, “Roots for Good Forest Outcomes – An Analytical Framework for Governance Reforms” --hereinafter referred to as the “Roots Framework”-- provides guidance for a governance diagnostic tool).

The second objective of this work is to support the production of a field manual for the application of forest governance diagnostics in any country interested in improving the quality of forest governance. The field manual will draw upon the lessons learned from the application of the diagnostics in Burkina Faso, as-well-as applications of the “Roots Framework” by other agencies (e.g., in Kenya by Indufor).

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. Original project activities consisted of field-testing the governance diagnostics approach in Uganda, and then further in 3 other countries through follow up activities (Burkina Faso and 2 others still to be identified).

An ambitious set of outputs were expected from the overall project activities:

(1) A field-guide for forest governance assessments, which provides a clear set of instructions and guidance on how to apply the approach in the field. The field-guide will include: (i) A field-tested generic questionnaire, based on the pillars and their subcomponents proposed in the “Roots Framework”, (ii) Detailed procedural guidelines for the implementation of the stakeholder survey-based approach (including customization of the generic questionnaire for a specific country) and pros and cons of different options; terms-of-reference for experts, facilitators, survey administrators, etc.; guidance on the recording of information and interpretation of results; suggestions on effective formats for the presentation of results; and, suggestions for efficient replications of the exercise in future. (2) Individual country reports on the baseline forest governance situation in the countries targeted for field- testing. This will draw upon the results from field-testing the tool. These assessments will provide the foundation for the development of country strategies and action plans for forest governance reforms. (3) A report synthesizing results from the fieldwork in the different countries where the questionnaire would have been administered, and the broad lessons learned.

Note: As explained in item#4 below, the scope of the original project had to be scaled down considerably, including PROFOR Activities Completed in CY2011 175

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. completing only one field-test. Thus, the activities implemented, lessons learned and outputs produced pertain largely to the Uganda pilot, as detailed in item#3 below.

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. The project has produced: 1. A generic forestry governance diagnostics questionnaire (containing 97 questions arranged under five pillars of forest governance). 2. A background paper on the status of forest governance for Uganda. 3. A customized questionnaire and its assessment for Uganda. 4. A country report on the baseline assessment of forest governance (via assessment of the customized questionnaire in a national multistakeholder workshop) and elements of a reform strategy for Uganda. All of these are available on the PROFOR website-- http://www.profor.info/profor/knowledge/defining-forest- governance-indicators

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. The original project envisaged field-testing the diagnostic approach in 4 countries (Uganda plus 3 more) and collating lessons learned into a sophistical toolkit (as detailed in item#2 above) etc. However, the scope of the original project had to be modified due to cost and product quality reasons. First, the development of the generic questionnaire (to measure the baseline) ended up becoming a much more costly exercise than anticipated. Second, a (first) pilot test for Uganda was considered a prerequisite to test the basic workability of the approach and gather early learning lessons, before proceeding with field-testing in other countries. Thus, this project produced only a generic questionnaire and its application in Uganda.

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? This project included organizing a multistakeholder workshop in Uganda which produced a baseline assessment of the forest governance situation in the country. Based on this, a forest governance reform strategy was drafted, which identified the key areas needing improvement. The important overall lesson emerging from the Uganda field-test suggests that the approach followed is workable, credible and helpful in identifying governance problems and building stakeholder consensus; and will likely work in other countries. The results of the Uganda pilot exercise have been presented at various international for a: the International Governance Indicators Symposium at Stockholm in September 2010; the COFO meeting in Rome in October 2010; and WRI’s Governance for Forests workshop in Washington in May 2011. The country assessment report, generic questionnaire and the detailed results of the Uganda pilot exercise are available on the PROFOR website.

8. Next steps. What happens now, following the activity’s completion? Lessons learned from the Uganda pilot are being used to motivate a similar diagnostic approach in Burkina Faso where a draft report has been prepared and will shortly be presented to the government for further discussions. Field application of this approach is also being implemented in 4 oblasts in Russia. The experiences from these countries will be collated to produce a field-manual to undertake forest governance assessments . This will be then rolled-out to facilitate more widespread implementation.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? There is a very strong potential to replicate the process followed in Uganda, in other countries, to develop a baseline assessment of the forest governance situation, develop an action plan for reforms and to identify indicators to monitor progress of those reforms. (This has already been supported in Burkina Faso, by the Bank, and in Kenya by the Government of Finland/Indufor).

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources were mobilized.

PROFOR funding $ 150,166 Other sources of funding (describe below) $ 168,573 Total $ 318,739

What other sources of co-financing were mobilized? What amounts are involved under each source of co-financing? FLEG Trust Fund, funded by the EU and DFID and Bank Budget (BB). Co-financing accounts for 53% of total activity costs.

PROFOR Activities Completed in CY2011 177

GOVERNANCE INDICATORS SYMPOSIUM

http://www.profor.info/profor/events/stockholm-symposium-forest-governance-indicators

Project ID: P122845 Region: Global PROFOR Thematic Area Percent Date prepared: November 30, 2011 Main: Governance 100% Prepared by: Nalin M. Kishor Secondary: Choose an item. %

When was the grant originally approved?: 7/22/2010 When was the original planned grant completion date?: 2/28/2011 Have any extensions been approved?: Yes If yes, what was the revised grant completion date?: 7/29/2011

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note. Did these change during implementation? How and why? The overall objective of the Symposium was to move towards the development of practical and feasible frameworks for assessing and monitoring the quality of forest governance. A specific objective was to foster collaboration to avoid overlap and duplication of effort across institutions and initiatives.

NOTE: The objectives changed substantially. The Stockholm Symposium was originally conceived as a one-time learning event. However, a key outcome of the event was the need for the development of a common framework of principles and criteria for forest governance. This, it was agreed, would be achieved via the formation of a core- group led by the Bank and FAO, through a series of draft reports and discussion workshops. (This change is was accompanied by a request for a budget increase and request for extension of closing date to 6/15/2011).

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. The International Symposium on Indicators to Assess and Monitor the Quality of Forest Governance took place on 13-14 September 2010 in Stockholm. It was jointly organized by the United Nations (UN) Food and Agriculture Organization (FAO), the Program on Forests (PROFOR), the World Bank, and the Swedish International Development Cooperation Agency (Sida). The Symposium drew together a variety of participants including government officials, academics, and civil society leaders from countries interested in forest governance reform; representatives of international civil society organizations interested in understanding or improving forest governance; and experts from international and bilateral development organizations such as Sida, the British Department for International Development (DFID), FAO, and the World Bank.

The main output from the Symposium was a report on the Symposium proceedings to facilitate dissemination of the main conclusions and promote wider discussions. The Symposium report is available on the PROFOR and Sida websites.

The Symposium led to an improved understanding among participants of: (i) the existing tools and techniques to diagnose and monitor forest governance and the strengths and limitations of these, (ii) the inter-linkages between national diagnostic and monitoring needs and emerging international reporting requirements for forest governance, (iii) how the needs for indicators vary in specific applications and what they may have in common, and, (iv) how to ensure coherence among ongoing initiatives so that duplication can be eliminated.

A key decision of the Symposium was to create a core group of forestry practitioners, led by FAO and the World Bank, to develop a common core framework of Principles and Criteria for forest governance diagnostics and indicator development. 178 178PROFOR Activities Completed in CY2011

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. A core set (or common framework) of "principles and criteria" for assessing and monitoring forest governance was developed. The report, “Framework for Assessing and Monitoring Forest Governance” was released at an expert group meeting in May 2011, in Rome. (Available for download at: www.profor.info).

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. As stated in #1 above, the activity changed from a one-off event to a process culminating with the release of the Framework report in May 2011.

Rationale for the Change: The Stockholm Symposium recognized that a number of organizations have developed or were developing frameworks to assess and monitor the quality of forest governance, for a variety of applications, including FLEGT-VPA and REDD+. There was agreement that better coherence between these initiatives was needed and that it would be desirable to develop and share a core set (or common framework) of "principles and criteria" for assessing and monitoring forest governance. Several advantages were seen including that the core set would provide the foundation for detailed indicators which should be developed at country level, by the countries themselves, so that they could be adapted to each country situation.

New activities included in the expanded scope: It was agreed that FAO and the World Bank would take the lead in bringing together a core group of experts to produce the core framework. There were two face-to-face expert group meetings (Washington DC in January 2011 and Varazdin, Croatia in March 2011) and several virtual discussions. The final document was released at an expert group meeting in May 2011, in Rome. The report, "Framework for Assessing and Monitoring Forest Governance" is available for download at: www.profor.info.

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? 1. The “Framework…” document proposed a working definition of good governance based on three pillars and six principles and provided a common language and common concepts for assessing governance. Forest governance practitioners recognized the wide range of applications for the document: advocacy; government-led reform; catalyzing change in how governance is measured; research; better understanding the dynamics of forest; monitoring progress (through the use of intelligent indicators); providing information for REDD+; assessing investment risks and performance in implementing REDD+.

Preliminary impacts: Policy makers and practitioners have started using the framework as a point of departure for thinking about forest governance issues and their measurement.

The raison d’etre for this project was to bring about collaboration among the various development agencies, donors etc. engaged in the process of diagnostics and indicator development. To a large extent, the project succeeded in achieving this, as proven by the agreement to join hand to develop a common framework. The project also promoted cooperation among institutions such as Chatham House, European Forest Institute (EFI), FAO, Sida, PROFOR Activities Completed in CY2011 179

In the context of potential collaboration, the Rome meeting identified several opportunities for application of the Framework document: o Training and piloting activities (e.g. assisting with guiding the Participatory Governance Assessment (PGA) methodology of UNDP in the context of UN-REDD), o REDD+, FIP and VPA implementation, o National Forest Programmes (coordinated by FAO), o Academic research on governance, with particular interest at Forestry Policy and Economics Education Research (FOPER) and EFI.

8. Next steps. What happens now, following the activity’s completion? Specifically, it is envisaged to: 1. Field-test the Framework in a few countries, with PROFOR support, 2. Dissemination the Framework widely (e.g. through an e-network and/or website), 3. Further analyze synergies among initiatives and encourage coordination between existing tools, 4. Organize a "community of practice" to collect and share information on country best practice, 5. Organize an international meeting in about an year’s time to review the field-test and refine the Framework.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? The types of partnerships which were an outcome of the Stockholm Symposium are obvious aspects of this activity which should, can, and are being replicated..

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources were mobilized. PROFOR funding $ 171,917 Other sources of funding (describe below) $ 87,424 Total $ 259,341 What other sources of co-financing were mobilized? What amounts are involved under each source of co-financing? Bank Budget ($19,924), FAO ($30,000) and EFI ($37,500). Cofinancing accounts for 37% of total activity costs. Notes: 1) In 2011, PROFOR budget was increased from $95,000 to $172,000 to cover expanded scope of activities, as approved by the Board on a non-objection basis. 2) Cofunding was provided by the World Bank ($19,924) for travel and staff time as well as by FAO (approx. $30,000) and EFI (approx. $37,500) for workshop-related activities.

180 180PROFOR Activities Completed in CY2011

INFORMATION TECHNOLOGY AND MANAGEMENT IN FOREST GOVERNANCE

http://www.profor.info/profor/knowledge/information-management-and-forest-governance

Project ID: P118846 Region: Global PROFOR Thematic Area Percent Date prepared: January 27, 2012 Main: Governance 100% Prepared by: Tuukka Castrén Secondary: Choose an item. %

When was the grant originally approved?: 3/22/2010. When was the original planned grant completion date?: 11/30/2010 Have any extensions been approved?: Yes If yes, what was the revised grant completion date?: 12/30/2011

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note. Did these change during implementation? How and why? The overarching goal was to support client country governments and development partners in making forest governance more effective and inclusive through information management and use of Information and Communication Technology (ICT). The specific objectives of this Economic and Sector Work (ESW) study were to: - develop a framework to understand the role and contribution of information management and ICT in forest governance; - analyze the enabling factors for increased uptake of ICT in the forest sector and explore the potential for expanding the use of ICT to improve governance; - identify gaps and development needs to support innovation; - and analyze and disseminate innovations and best practices of ICT use in the forest sector. The objectives did not change during implementation.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. The main activities were: - preparation of three country studies on ICT and forest governance - preparation of an ESW study based on the country studies, interviews and other material - dissemination

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. All expected outputs were produced. The main report was published online and in hardcopy in July 2011; country reports were published online only.

The main study, titled “Forest Governance 2.0: A Primer on ICTs and Governance”, explores a whole range of uses of ICTs, including increasing public participation and improving law enforcement and economic efficiency, to improve governance in the forest sector. It draws on current and planned initiatives, both from within the sector as well as outside, from secondary sources and country reports from Finland, Ghana and Uganda. The technologies explored range from simple (e.g. cell phone applications and community radio) to more high-tech applications (e.g. LiDAR or real-time fire alerts). The emphasis is on simple, low cost tools that will spur the demand and supply of good governance by increasing the engagement of key stakeholders in the process.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. No changes. The concept note had mentioned the potential for electronic dissemination of some applications. However, this did not take place. The opportunity to contribute and include the main findings of this study in the PROFOR Activities Completed in CY2011 181

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. “ICT and Agriculture Sourcebook” was an unforeseen opportunity to disseminate the report findings.

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? Findings: - increased access to ICT has led to innovation and therefore also traditional uses in mapping, measuring and monitoring forests carbon can become more efficient, cost-effective and inclusive - increased use of technology has led new ways of working that would not have been feasible previously. E.g. crowdsourcing and participatory mapping have been made possible by new devices and the convergence of ‘small ICT’ (e.g. cell phones and Internet) and ‘big ICT’ (remote sensing and earth observation systems) - ICT has been used to improve both demand and supply of good governance in the forest sector - technology is used and has potential: alone it does not change the landscape and projects have to be well designed and sustainable.

Remaining challenges: - little systematic approach to ICT application; use often limited to one-off experiments - linking ICT development to institutional reforms is a challenge - little information on costs, sustainability or scaling up

It is essential that technology development and use of ICT is not only driven by the technology itself. In addition, the traditional project design issues have to be considered (incentives, defining the right problem, sustainability etc.).

The report was able to define 10 key principles for successful ICT development:

i) Be familiar with national ICT policies and e-readiness. Projects can be developed in countries with low readiness, but they must be designed accordingly. ii) Define the problem clearly, assess the information needs, and compare possible solutions. iii) Determine the best entry points and the appropriate technology iv) Design culturally appropriate and relevant content. v) Involve end users and publicize the service. vi) In designing projects, consider costs, long-term financial sustainability, and scalability. vii) Address data security and privacy issues, and develop risk mitigation to prevent misuse of technology and inaccurate data. viii) Ensure that there is adequate information on the resource (for example, forest inventories and resource assessments) or readiness to improve data collection. ix) Identify the right stakeholders and ensure their participation and avoid local elite capture; include indigenous peoples, women, and rural poor. x) Ensure buy-in from forest authorities at all levels.

Dissemination took place through distribution of the physical report (500 copies) and in dialogue with various partners and stakeholder groups. The research project has also been introduced in the several international events attended by the project team. While no stand-alone dissemination events were organized, the Knowledge page associated with the report was the third most popular knowledge content on the PROFOR website in 2011 last year with 628 pageviews (http://www.profor.info/profor/knowledge/information-management-and-forest- governance). Additionally, the main findings of the report were summarized in a specific module in the “ICT and Agriculture Sourcebook” which was made available online at http://www.ictinagriculture.org/ictinag/ and launched with a World Bank panel discussion on January 18, 2012, and highlighted in the overview of an upcoming publication on Benefit Sharing. 182 182PROFOR Activities Completed in CY2011

However, this study is the first to offer a comprehensive cross-sectoral mapping of initiatives and has raised notable interest. The project team has been asked to give presentations based on the report in various settings. Requests for copies of the report have come for example from World Bank colleagues in Ghana in the context of ongoing policy dialogue and support to the forest sector in Ghana (FCPF, the NREG DPO series, technical assistance and the FIP). Ghana is contracting the development of a wood tracking system under the NREG support for the VPA. World Bank staff who will be sharing the Forest Governance report “hope the study will increase our partners understanding of both the potential and limitations of IT approaches to Natural Resources governance.” (Flavio Chaves, Natural Resources Mgmt. Spec. based in Ghana). The findings from the study have already influenced Bank operations as can be seen from the Russian Federation Forest Fire Response Project (P123923), Rep. of Congo Forests and Economic Diversification Project (P124085) and the Strategic Action Plan for World Bank Engagement in Forests, Trees and Woodlands in Africa (supported by PROFOR).

8. Next steps. What happens now, following the activity’s completion? The activity is a ‘one off’ research product. However, based on the interest generated by the report, the SDN Forests Team has received a $300,000 grant from the Korean Trust Fund for fieldwork in Moldova and Lao PDR on e- transformation in forest administration. This work will be based on the findings in the Forest Governance 2.0 - report.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? No. The study was a global mapping exercise. Next steps will happen at the country level.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources were mobilized. PROFOR funding $ 123,239 Other sources of funding (describe below) $ 39,100 Total $ 250,357 What other sources of co-financing were mobilized? What amounts are involved under each source of co-financing? Bank budget ($30,724) and EU and DFID -funded FLEG TF ($8,376). In addition, TTL funded through the Externally Funded Staffing Program (EFSP) by the Government of Finland for $88,504. Co-financing accounts for 24% of the total cost of the activity.

PROFOR Activities Completed in CY2011 183

LIBERIA CHAIN OF CUSTODY SYSTEM PROJECT

http://www.profor.info/profor/knowledge/supporting-development-liberias-chain-custody-system

Project ID: TF096170 Region: AFR PROFOR Thematic Area Percent Date prepared: December 14, 2011 Main: Financing SFM 50% Louis Tian-Pierquin, Jim Smyle, Prepared by: Secondary: Governance 50% Oliver Braedt

When was the grant originally approved?: 3/8/2010 When was the original planned grant completion date?: 3/15/2011 Have any extensions been approved?: Yes If yes, what was the revised grant completion date?: 12/31/2011

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note. Did these change during implementation? How and why? The overall objective of the Liberia National Chain of Custody System (CoC) is to capture the economic potential of the Liberia forest sector and its associated benefits for rural livelihoods and national growth through a comprehensive monitoring system, ensuring that wood products and associated revenues are tracked and accounted for, as well as to avoid the export of illegal timber. This objective was unchanged during project implementation. The project had three main aims: 1. build, operate and transfer to the Government of Liberia a functioning system allowing for: (a) tracking all wood products originating from forest contracts areas allocated by the Government of Liberia through every step of the supply chain; (b) issuing invoices and monitoring payments of forest-related fees to the Government of Liberia; and (c) issuing timber export permits subject to full compliance with wood product tracking and payment monitoring standards. 2. build the capacity of governmental agencies to effectively manage the CoC (Forestry Development Authority (FDA), Ministry of Finance (MoF) and Central Bank of Liberia (CBL)) and to provide training to forest sector companies allowing them to comply with the requirements of the Chain of Custody System. 3. Transfer knowledge by developing and implementing dissemination activities. This to ensure that lessons learnt in Liberia from the development of the CoC benefit other countries willing to engage in similar initiatives and inform the general debate on forest monitoring, timber traceability and legality standards.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. A. Project Management. Through the establishment of a strong management team the objective was to: (a) ensure that the material, financial and human resources for the CoC are adequately managed to guarantee implementation of project activities; and (b) ensure a satisfactory level of collaboration between the key agencies. B. Forest sector monitoring. This activity was undertaken to carry out all field verifications in partnership with FDA and deploy project staff accordingly to verify compliance of logging companies. C. Information System configuration and management. This activity was to: (a) finalize the configuration of the information system based on lessons learnt; (b) record, upload and reconcile data collected in the field for the CoC Information System; and (c) issue compliance reports verifying the performance of logging companies against CoC criteria. D. Training and dissemination. These activities aimed to: (a) build the capacity of governmental and private sector staff through training sessions, and the organization of workshops for forest sector stakeholders; (b) ensure that relevant lessons from the CoC are disseminated at the national and international level; and (c) develop and implement a detailed strategy for disseminating information and relevant materials.

184 184PROFOR Activities Completed in CY2011

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. The Liberian CoC initiative was launched in 2008 with the technical and financial support of the US Government. SGS, a Swiss inspection and verification company, was contracted by the Government of Liberia to develop and operate the CoC. The FDA was charged with supervising SGS and operating the CoC in partnership with SGS. By the time US Government support for the CoC ended in 2009 (as originally programmed), the system had not reached financial self-sufficiency and its operation was not ready to be transferred to the FDA as had been originally assumed.

At the request of the Government of Liberia, the World Bank obtained an additional US$0.8 million to finance the continued development and implementation of the CoC system. The resources came from the World Bank’s FLEG and PROFOR Trust Funds (TF096154 and TF096170) with each providing one-half of the total amount. They became effective in March 2010. The FLEG Grant closed in 2010 and the PROFOR Grant was due to close on June 30, 2011, but was extended until December 31, 2011 in order to achieve financial self-sufficiency.

An extension of the closing date was arranged along with additional funding in the amount of US$0.75 million from PROFOR. The extension and additional funding allowed the system to continue to operate until timber concession operations achieved the export volumes required for the CoC’s financial viability. The extensions and additional financing ultimately enabled the establishment of one of the world’s first national-level timber CoC system and allowed for the development of new approaches, standards and technical instruments for dissemination to both national and international forest sector stakeholders.

PROFOR’s support was critical in establishing a technically, institutionally and financially viable system that may be operated and sustained by the Government of Liberia. The accomplishments of the project under each activity from 2010 to 2011 are presented below.

A- Project Management • Adequate numbers of SGS and FDA personnel were deployed both in the main offices in Monrovia and in all field locations to ensure coverage of all logging concessions controlled through the CoC and to collect all necessary logging data. With PROFOR financing, an additional office was established in the port city of Buchanan and 13 new field staff recruited and trained; • Tree/log identification tags were made available to all timber companies requesting them. The tags are a basic tool that allows the CoC staff to digitally register and track all harvested logs from the stump to the port of export; • FDA personnel have been integrated into the SGS operational teams and main office where they participate and receive daily on-the-job training in the operation of the CoC; • SGS provides accurate and detailed status reports weekly to MoF and the CoC steering Committee, an arrangement that has resulted in MoF’s growing interest, support and sense of ownership of the CoC; • Senior management of FDA, MoF and UNMIL Civil affairs continue to attend CoC Steering Committee meetings and to follow closely its performance; and • The Managing Director of FDA supports the COC system and monitors the timeliness of MOF’s payments to SGS Liberfor for the services rendered. In several cases where payments had lagged, he intervened to request that they be expedited. • Despite the challenging implementation environment − a function of the country’s generally limited technical and management capacity, the difficulty of accessing goods and equipment, the challenging climatic conditions, lack of basic infrastructure, etc. − the project was able to utilize all of the PROFOR funds as per the amended budgets;

B – Forest sector monitoring • SGS, in partnership with FDA, undertook regular field inspections in 11 logging concessions (FMCs, TSCs and PUPs) during 2010 and in 16 logging concessions during 2011. In total 34 logging concessions (contract areas including: 7 FMCs, 9 TSCs and 16 PUPs) have been registered as of December 2011, out of which 9 are currently harvesting. The inspections took place in all 9 of these active sites, as well as in 7 additional registered sites where blocks and harvesting preparation works have started. [Through these inspections, SGS PROFOR Activities Completed in CY2011 185

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. Liberfor verified the compliance of the logging companies with CoC requirements for mapping and inventory of the planned logging sites, for harvesting practices, and for data collection on timber volumes harvested and exported.

C - Information System Configuration and Management • Continuous improvements of the information system were realized as project staff capitalized on learning and experience in order to better adapt the system to the requirements of the field operations and to make the tracking of logs from felling to export more efficient; • Between 2010 and 2011 a total of 34 sites have been registered. In 16 sites, tree enumeration data started to be entered within the system, with the harvestable trees identified, tagged and geo-referenced within the concessions, and their management and harvesting operations may now be initiated; • Production Data from 8 sites has been recorded, uploaded to the system and reconciled, confirming that enumeration data, felling and log cutting (bucking) data, and transport records from the concession to the port (waybills) are consistent and that the related fees are invoiced to the concessionaire for payment; • Total timber volumes tracked through the CoC amounted to 126,694m3 in 2010 and to 123,594m3 as of November 15, 2011. The stumpage fees collected in 2010 and 2011 came to a total of US$1.20 million -- revenue that accrued to government. There are still some outstanding stumpage fee to be paid from 2010 and 2011 due to the fact that, so far, the Ministry of Finance (MoF), in an attempt to jump start the logging industry, authorized the logging companies to pay the stumpage fees only for logs that were about to be exported (so not based on logs harvested, but on logs already at port). Thus, the current average stumpage fee in Liberia is approximately of US$15.8/m3. Nonetheless the MoF plans to have all outstanding stumpage fees being paid in 2012. MoF wants to start collecting the full stumpage fee at the harvesting stage as of 2012. • Through the enabling of legal timber exports controlled by the CoC, export volumes increased significantly, from 10,592 m3 in 2010 to 65,194 m3 in 2011, generating US$1.03 million in export tax revenues to government. The (Logs harvested but not yet exported are currently stocked either at ports or in landing sites.).

D - Training and dissemination In terms of training, SGS Liberfor has: − organized and provided 9 special workshops to logging company and FDA personnel on CoC procedures for export, on new norms and procedures for timber inventories, and on the design of regulatory compliance procedures in sawmills; − delivered a systematic training program − between 2010 and 2011 comprising some 178 “hands-on” training sessions in the field − to field staff of private companies and the FDA on technical areas such as forest mapping, tree enumeration methodologies, proper tagging techniques and log recording practices, among others; and − provided presentations on CoC requirements and procedures to forestry students at the University of Liberia and, in 2011, organized a field trip for students to experience firsthand the operation of the CoC within a concession. All of the 20 registered logging companies have received some training in 2011 -- either while participating voluntarily in organized training sessions or when they individually requested some technical support from the service provider.

In terms of dissemination and sharing of lessons learned, SGS Liberfor has: − assisted FAO’s in its “Building Capacity of the County Forest Committee Forums and of County Forest Development Committees (CFDC)” program, which is aimed at helping forest communities’ representatives to better understand the National Forest Reform Process, including the role of the CoC in ensuring community benefits; − participated in numerous workshops and consultations on forest sector development in Liberia, maintaining good relations and fluid communications with forest sector donor partners (e.g., USAID, World Bank, EU/VPA, UNMIL, FAO, NGOs, etc.); and − been an institutional memory and invaluable source of field-based, technical and financial information on a broad array of key topics to all organizations and individuals working on forest sector issues, evaluations and analysis. 186 186PROFOR Activities Completed in CY2011

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. There have there been no substantive changes in the activities undertaken, or in the planned outputs. However initial funding was nearly doubled and the project timeframe extended to allow the system to continue to operate until timber concession operations achieved the export volumes required for the CoC’s financial viability requested. Though the transfer of the CoC operation to the FDA remains a planned output of the project, it has not been completed yet as FDA still requires further capacity building before being able to operate the CoC on its own.

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? As a pilot program, the CoC has been successful in designing, developing, establishing and substantially advancing in the transfer to national control of one of the world’s first functioning national-level chain of custody system for forest concessions. That system has been demonstrated to provide the required level of control of commercial logging activities in order to ensure the legality of the logs and to track the concessionaire’s payment of all required fees and taxes. As an instrument for monitoring forest management and harvesting practices, it has demonstrably contributed to the advance of the country’s sustainable forest resource management goals as well as to a better understanding of the status and potential of commercial forestry in Liberia.

Establishing a sophisticated CoC system has been a major challenge in a Liberia’s country context: education level and staff capacity are very low; almost one generation of technical capacity has been eroded due to the prolonged civil unrests; roads and technical equipment are insufficient and often in very poor conditions, posing a constant obstacle to the smooth implementation of projects. In addition, institutional capacity and managerial expertise is a critical handicap to project management in Liberia in general, not only in the forestry sector. That the CoC systemhas been establisshed in the fragile environment of a post conflict country both speaks to the quality of the accomplishment as well as to the value of the learning that has been generated by the experience.

Finally, it generates and disseminates large volumes of valuable data on forest concessions resources, species inventories, up-to-date concession maps, and financial data upon which the oversight and management of the commercial forest subsector rely, specifically: • weekly summaries of CoC activities are prepared and submitted to MoF, FDA and other stakeholders. These reports include details of harvesting production, timber transport, entry into port and exports, details of the revenues generated, status of the land rental payments by concessionaires, and the amounts due to communities and counties; • detailed field and financial reports, which are reviewed and endorsed by the CoC steering committee, are prepared monthly and distributed to all who request them. SGS Liberfor also shares its field and financial reports upon request; and • the Liberfor website − as yet not functional − will make the CoC information available to the public.

The CoC system itself has now gone through a number of iterations and been regularly improved upon, based on implementation experience and testing under actual field operations. As a result, the operations manual (Standard Operation Procedure documentation) can be utilized to expand the role of the CoC in Liberia (e.g., for implementation of the VPA in domestic markets) or for efficient replication in other countries.

Finally, in addition to the dissemination activities mentioned previously in Section 3 of this document, the CoC system has attracted a great deal of attention and achieved, globally, a high profile. The Liberian CoC is a rare example of how in a relatively short period of time a country can go from being known as a purveyor of “blood timber” to a model of export of legal timber. Forest private sector interests are keenly aware that without the CoC, Liberia’s prior reputation would make it difficult to sell its timber into higher value markets in Europe and the United States. Some insight into the dissemination impacts can be appreciated from a simple Google search. While (on 10 December 2011) a search on “+Liberia+sanctions+timber OR log*” returned 278,000 hits a search on “+Liberia+’chain of custody’” returns 189,000. As many of the former’s hits are tied to the lifting of sanctions, PROFOR Activities Completed in CY2011 187

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? global awareness of the CoC is arguably at or exceeds the level of global awareness of the sanctions at this time. To benchmark that level of awareness, a search on “Ellen Johnson Sirleaf” the Nobel Prize winning president of Liberia, returns 3.5 million hits.

In the 2007 Liberia Poverty Reduction Strategy (PRS), extractives industries, including forestry were given a central role to play in generating revenue for the Government through payment of taxes and royalties and benefits for communities through the redistribution to them of a percentage of the national benefits. Since 2009, the CoC is the primary instrument for calculating, collecting and monitoring of these payments, and contributes to the Liberia Extractive Industry Transparency InitiativeUnder the PRS II, currently being prepared by the Government of Liberia, it is expected that commercial forestry and the CoC will continue to play a central role in Liberia’s development strategy.

Finally, the CoC is the foundation for the development and implementation of the Voluntary Partnership Agreement (VPA) signed on 27 July 2011 between the EU and the Government of Liberia in the context of FLEGT. The European Forest Institute has assessed the system and confirmed its compliance with the requirements of Annex 5 of the VPA on CoC. Full implementation of the VPA will require the extension of the CoC to the domestic as well as the export markets. While the relevance of the CoC is not dependent on the outcome of the VPA, nonetheless, a successful implementation of the VPA would enhance the scope and coverage of the CoC.

7. Implementation Performance. How would you characterize implementation performance? What unexpected opportunities arose during implementation and how have you been able to take advantage of these? Were there significant unanticipated obstacles during implementation? The performance of the CoC has been satisfactory. This is a true achievement given the challenging conditions under which it has been implemented: unforeseen delays in start-up of concessions logging activities and low log export volumes; slow payment of taxes by companies; unstable financial support from GoL slowing the development and growth of the CoC; unavoidable delays in the PROFOR funds disbursement process; etc. Despite these limitations, Liberia now has an operational CoC system through which revenues from the large forest concessions are properly tracked and for the most part captured, and concession logging practices are subjected to scrutiny to ensure compliance with national technical norms and guidelines for sustainable forest management. Now that the existing concessions are beginning to perform (though years later than anticipated) and exports are increasing, the CoC is finally reaching the point of financial viability.

The low capacity of the local institutions charged with the financial management of the PROFOR funds was an 188 188PROFOR Activities Completed in CY2011

The areas where some improvements in performance are desirable include: • System software still needs some configuration improvements. Some data entry is still done manually by clerks and the automatic CoC data reconciliation software (developed by a sub-contractor, Helveta) must be rechecked by SGS staff; • A final dissemination strategy with its work plan is not yet in place. It is still unclear how the lessons learned will be shared and promoted in other countries. Also the LiberFor website is still not functional and providing the public access to data that is supposed to be available; and • Despite systematic, significant and continuous efforts to train FDA personnel and transfer the CoC operation to the FDA, it is not yet prepared to fully operate and sustain the system at this time. LiberFor is still dependant on the additional capacity provided by SGS and continued capacity building for FDA is required.

8. Next steps. What happens now, following the activity’s completion? It is projected that the CoC will be fully financially viable in 2012 thus the next step for the CoC is to operate and be maintained without further financial support from the donor partners. With the closing of the PROFOR funding on 31 December 2011, there are no additional external funds available for the CoC. The areas in which improvements are still required are: (1) the configuration of the CoC system software; (2) the implementation of a dissemination strategy (e.g. summarizing and sharing the Standard operational procedures developed, participating in workshop/seminar gathering organization involved in implementing a timber CoC in other countries) and in particular the update of the Liberfor Website with key findings and data from the CoC made available to public access on-line; and (c) the transfer of the CoC operation to the FDA. These are all deliverables under the current overall contract between SGS and the Government of Liberia (the PROFOR/FLEG support to the CoC was supporting the overall Liberfor effort, which is still handled under a separate contract that started in 2007). This contract is still ongoing and is ending in October 2012. Before this end date SGS and FDA are to complete the remaining tasks so as to fulfill the Liberfor objectives. 2012 will test the relevance and adequacy of the CoC system.

The next major step for the CoC, once its economic viability is confirmed, would be the transfer of the CoC operation to the FDA. But, as explained above this doesn’t seem possible until FDA capacity is built further.

If the CoC proves self-sufficient financially and log volumes from concessions continue to increase as national peace and security are sustained and transport infrastructures improved, the CoC will soon need to expand its operations. This implies that the CoC would also require additional field officers and trainers, and additional logistic support. This will be possible if the GoL maintains its commitment to the CoC and translates this commitment into the required budgetary support and allocation for the CoC. As part of the contract between the service provider and the government of Liberia (Liberfor contract), public awareness and training on the CoC (in particular for the students in Forestry curriculums in Liberia) will be pursued and increased. Finally, as a platform that may be built upon for other future purposes, it is also foreseen that the CoC could contribute in overcoming other challenges in commercial forestry in Liberia, both inside and outside of large-scale industrial forest concessions, such as: • Improving the regulation and control of logging on private lands (Private Use Permits) and Community Forestry; • The control of and revenue collection from timber from chainsaw logging (pitsawing) (for which new PROFOR Activities Completed in CY2011 189

8. Next steps. What happens now, following the activity’s completion? regulations are currently being validated); and • The development of the VPA that has been signed between the EU and the Government of Liberia in the context of FLEGT.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? The LiberFor pilot project may be adopted or stand as a reference for forest CoCs developments in other countries. As previously noted, the Liberia CoC is already a high profile model that has been fully tested, proven, costed and rolled out. ITTO, FAO, EFI (for VPA), USAID, World Bank and many other international organizations are aware and cognizant of its success. While special attention is likely to be paid to the Liberian CoC experience and lessons learnt within the West Africa context, the pilot has itself created enough momentum to likely see its replication/reference utilized in other tropical countries around the world where independent certification of timber legality is required for export to US and European markets (and soon, Australia).

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources were mobilized.

PROFOR funding $ 1,150,000 Other sources of funding (describe below) $ 851,200 Total $ 2,001,200

What other sources of co-financing were mobilized? What amounts are involved under each source of co-financing? FLEG Trust Fund = USD 400,000 and Government of Liberia = USD 451,200, in 2010. Co-financing accounts for 47% of total activity costs.

190 190PROFOR Activities Completed in CY2011

MEKONG REGIONAL FLEG PLAN DEVELOPMENT PHASE I

http://www.profor.info/profor/knowledge/forest-law-enforcement-and-governance-mekong-region

Project ID: TF094063 - P116594 Region: EAP PROFOR Thematic Area Percent Date prepared: December 5, 2011 Main: Governance 100% Prepared by: Tuukka Castrén Secondary: Choose an item. %

When was the grant originally approved?: 3/18/2009 When was the original planned grant completion date?: 12/31/2009 Have any extensions been approved?: Yes If yes, what was the revised grant completion date?: 7/26/2011

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note. Did these change during implementation? How and why? The overall objective of the Mekong FLEG program was to strengthen forest governance in the program countries to promote sustainable forest management and increase forests' contribution to improved livelihoods of forest dependent local populations and national economic development while ensuring the protection of global public goods.

The project purpose in the preparatory phase is to prepare a regional project on forest governance and law enforcement to be implemented through regional and national activities.

NB: This activity was approved before the current PROFOR Activity Concept Note template was launched. Therefore, a World Bank Project Concept Note (PCN) was prepared instead. It has a slightly different format, but covers the same key issues as the current PROFOR template.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. a) stock-taking and assessment of on-going activities and reform needs in forest governance b) country and regional consultations on the regional action plan and designing country-level activities c) two regional workshops on the Mekong FLEG action plan d) preparatory work for implementation.

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. All expected project activities were completed, except for item d) preparatory work for implementation (see #4 below). The main output of the project is a two-part report published in April 2011. The first part analyzes the forest governance and law enforcement landscape in the Mekong region and the second part presents a comprehensive set of proposals for regional FLEG activities in the Mekong region. The project also organized two workshops (Vientiane, Lao PDR and Hanoi, Vietnam, November 2009). The reports from these workshops are available on the PROFOR-website.

The project was able to produce a comprehensive mapping of regional FLEG activities and actors. As planned, the activity identified opportunities for governments and civil society partners for contributing to forest governance reforms in the region. It also demonstrated that there clearly is a regional dimension for forest governance and law enforcement, even if most issues need to be addressed at national level. However, the workshops and country consultant reports clearly showed that some elements of FLEG could be best addressed by cross-border action. The workshops were also able to facilitate interactions between stakeholders in the region.

PROFOR Activities Completed in CY2011 191

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. The reports are available at http://www.profor.info/profor/knowledge/forest-law-enforcement-and-governance- mekong-region

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. The original proposal was to have a planning phase and then seek donor funding for implementation. Preliminary discussions with a donor were launched to ensure funding for a 2–4 year program. The preparatory PROFOR- project therefore included resources for the implementation of some regional activities. However, the donor funding did not materialize and changes in the project set-up were required. The changes did not change the objectives of the project; their main impact was on the follow-up activities.

Deviations from the original work program were as follows: i) Due to extensive delays in consultant performance and the need to select a new consultant team halfway through the project implementation, the project was severely delayed. ii) As mentioned above, funding for the implementation phase did not materialize as expected. Consequently, it was decided that the project concepts in the report should be presented as a ‘menu of options’ for various organizations – both national and international to implement rather than a single program. This allows for implementation based on available resources. iii) Some sub-activities were revised to reflect better client needs (e.g. a regional launch workshop was replaced by national workshops). iv) Activities in Cambodia had to be downscaled due to some sensitivities having developed in the relationship between the World Bank and the country. These issues were not related to this activity as such.

Reducing the number of workshop and streamlining the activities led to cost savings (see #7).

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? The main findings from the projects are: i) FLEG issues in the Mekong region are highly relevant and various stakeholders like national governments, civil society, private sector and international partners (both development and trade related) have worked actively on the topic. Changes in international environment (e.g. EU FLEGT action plan with VPAs and US Lacey act as well as REDD+) have became an additional incentive to improve forest governance in the region. ii) It is recognized that FLEG issues are mostly national. However, there is also clear regional and international dimensions that would benefit from cross-border activities. These can be based on either cross-fertilization and learning from each others’ national programs (e.g. how to strengthen judicial systems or building curricula for professional training) or tackling issues that have direct cross-border dimension (e.g. trade in timber coming from land conversion sites, peer reviews or improving trade statistics). iii) Mekong countries have notable national and regional capacity to address forest governance issues. However, this capacity is often fragmented and FLEG issues are not well integrated in formal education and professional development curricula. Therefore, it would be beneficial to have FLEG support programs with external funding. However, these should use local capacity to the extent possible and aim at mainstreaming FLEG in national forest sector structures.

192 192PROFOR Activities Completed in CY2011

FLEG issues have gained increasing attention through several initiatives and policy processes. Now that Vietnam has entered a VPA negotiation phase with the EU, there is an increased momentum in the region. Additionally, REDD+ programs like FCPF and UN-REDD emphasize governance and legality issues. This has increased interest in FLEG as well.

As for the project implementation, it faced unexpected delays. The original project design was highly dependent on consultants, and one international consultant in particular. Delays in the consultant’s work led to severe delays in overall progress. Replacing consultants in the middle of the project is time consuming due to availability and time schedule constraints. These delays led a) to resource reallocation by the prospective donor and b) risk that some findings from the project fieldwork would become dated by the time the final reports were finalized. The project was less involved in Cambodia than expected due to unanticipated constrains. Despite these challenges, the overall findings of the report are seen as relevant.

The activity was implemented well below budget. The actual costs for PROFOR were $131 300 while the budget was $234 200. The main cost savings came from below budget expenditure on workshops and studies. Also Bank staff costs were covered by non-PROFOR sources.

8. Next steps. What happens now, following the activity’s completion? The project prepared a workplan for further action. As the next steps, PROFOR secretariat, together with Bank’s East and Pacific Region (EAP) and Mekong country offices, is looking for ways to start implementing some of the proposals. This will be closely aligned with the Bank’s on-going engagement in REDD+ initiatives and support to VPA processes. This will pave way for the next phase of PROFOR engagement in the Mekong region.

The interest for the Bank’s engagement in FLEG in Asia was well demonstrated in the recent Asia-Pacific Forestry Week in Beijing (November 2011).

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? The approach is estimated to be appropriate in supporting existing forest governance processes in partner countries. Unfortunately, the unanticipated delays in project implementation led to a situation where the feasibility of the project concept could not be fully assessed.

PROFOR Activities Completed in CY2011 193

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources were mobilized.

PROFOR funding $ 131,259 Other sources of funding (describe below) $ 52,442 Total $ 283,701

What other sources of co-financing were mobilized? What amounts are involved under each source of co-financing? TTL funded through the Externally Funded Staffing Program (EFSP) by the Government of Finland.

194 194PROFOR Activities Completed in CY2011

PILOT PROJECT ON TIMBER-SUPPLY AUDITS TO FOREST INDUSTRY IN GUATEMALA INAB

http://www.profor.info/profor/knowledge/auditing-timber-supply-forest-industry-guatemala

Project ID: PO7154684 Region: LAC PROFOR Thematic Area Percent Date prepared: December 1, 2011 Main: Governance 100% Prepared by: E. Maravi Secondary: Choose an item. %

When was the grant originally approved?: 4/30/2010 When was the original planned grant completion date?: 6/30/2011 Have any extensions been approved?: Yes If yes, what was the revised grant completion date?: 12/31/2011

1. Objectives. Describe the project’s objectives, as outlined in the original Concept Note. Did these change during implementation? How and why? Provide technical assistance and capacity building to INAB and other government agencies to design and implement INAB’s Forest Audit System to ensure the control and verification of timber supply in the forest industry (saw mills, processing plants, lumber yards and timber trade warehouses) located in selected Regional administrations in Guatemala. Provide technical expertise, build capacity, assist and advise selected INAB Regional Administration teams in ensuring legality of timber by: (i) assisting INAB staff in planning and implementing forest audit campaigns; establishing due diligence to determine the legality of timber volumes in lumber yards, processing plants and warehouses; and providing technical support for processing the cross-checking of respective approved volumes per POAs, permits and authorizations, using approved yield conversion factors to determine the legal origin of processed timber inventories; (ii) cross checking estimated volumes in processing plants and trade warehouses with the respective forest permits and authorizations; and (iii) developing guidelines for forest audits and verification that would serve as a guiding tool for INAB staff to conduct forest control and supervision activities, and as a knowledge product to be disseminated elsewhere.

2. Activities. Describe the activities which were originally to be implemented, and the key outputs envisaged. This should be taken from the original Activity Concept Note. (i) Technical assistance to INAB teams from selected Regional Offices on onsite forest audits. Output: List of priority Subnational/Regional areas for pilot project implementation (ii) Planning and technical assistance to develop a pilot plan identifying unregistered, illegal forestry products processing plants and warehouses in selected regions. Output: Baseline data with registered and unregistered timber and other forest products processing plants and trading warehouses. (iii) Technical assistance in the design and implementation of an onsite auditing plan for registered forest industries in compliance with current legislation. This includes establishing schemes for checks and balances system allowing the cross-checking of information related to timber supply and comparing against forest permits, transportation permits, forestry licenses etc. Output: At least 12 forest audit campaigns of processing and trading warehouses. (iv) Develop a forest audit manual. Output: Forest Industry Auditing Technical Manual. (v) Prepare and implement law enforcement campaigns to prevent operation of illegal plants and warehouses. Output: Law enforcement interdiction plan.

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. (i) Technical assistance to INAB teams from selected Regional offices on onsite forest audits: The PROFOR PROFOR Activities Completed in CY2011 195

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. sponsored pilot project has supported increased quality and more comprehensive technical assistance to INAB’s selected Regional office teams to take on forest law enforcement activities, thus substantially expanding forest industry audit activities in three subnational areas (Regions). Selected regional pilot teams have conducted forest audits with assistance from INAB central headquarters, CATIE Guatemala and the INAB FLEG Technical Advisory Committee (CTA). The pilot teams involved representation from relevant government agencies, forest stakeholders, academic and other organizations, such as CONAP (National Council of Protected Areas), the Institute of Agriculture, Natural Resources and Environment of Rafael Landivar University (IARNA/URL); Guatemala’s forest industry trade union; Forest Cluster of Guatemala; ASOREMA, a national network of environmental NGOs; and CATIE Guatemala. Pilot project implementation was launched based on the design and implementation of an Annual operational plan. The plan included an initial task that guided prioritization of the most relevant Subnational areas (Regions) to launch pilot activities. Prioritized regional pilot areas included: Region I: Guatemala department; Region III: Zacapa, Izabal, Chiquimula and Progreso departments; and Region V: Chimaltenango y Sacatepequez departments. Priority areas were selected based on three main criteria: (a) number of forest industry processing plants and trading facilities; (b) existence of main routes of transportation with significant flow of forest products; and (c) existing local capacity of INAB and human resources for the implementation of planned activities.

(ii) Planning and technical assistance to develop a pilot plan to identify unregistered, illegal forest products processing plants and warehouses in selected Regions: A first comprehensive census produced actual (geo- referenced) location of all registered and newly detected informal and illegal sawmill plants, secondary transformation factories, and forest products trading warehouses. Results include: Total processing plants and warehouses in Guatemala’s pilot areas equal to 1,235 plants; 748 ( about 60%) are legally registered and geo- referenced in the INAB forest control system and 496 (40%) are operating illegally or informally. The largest number of processing plants and warehouses (436) are located in Region I: Guatemala, followed by Region V: Chimaltenango – Sacatepequez. This represents approximately 59% of the total registered industries. All of these plants and trade facilities are now listed, located (geo-referenced) and identified by their respective owner. This is key information to conduct effective enforcement campaigns. It is alarming to confirm that almost five hundred of these plants are illegal/unregistered facilities and are spread throughout the three pilot regions. To date and as a direct result of the project, about 26% (128) of those plants operating illegally have been formalized, and it is expected that these numbers will increase rapidly. Only 9 (2%) out of 496 of these illegal facilities are sawmills; the rest are secondary processing plants (55%) and trade warehouses (43%). This may indicate that most processing of illegally harvested timber takes place in legal sawmills.

(iii) Technical assistance in the design and implementation of an onsite auditing plan for registered forestry industries in compliance with current legislation: Over the past 12 months this sub-activity included 342 onsite auditing inspections and GPS location of the existing 748 legal processing plants and warehouses. This represents 31% more than the number of forest audit inspections made in 2009. The prioritized companies were selected based on the high volume of processed raw material. Out of the 342 facilities 99 warehouses and 122 sawmills were found to have law compliance problems. According to the administrative procedures those found at fault would have five working days to address observations – all of them related to lack of documentation and proof the legal origin of timber or firewood. About half (47%) of these 221 found at fault provided the paper work or resolved audit inspection observations. Sixty-three of those found at fault were sawmills that never presented documentation proving the legal origin of the timber. A smaller percentage (37%) was made up of timber trading warehouses. Forest audit inspections have not only identified those plants and facilities operating illegally but also have resulted in positive responses to formalization and legalization. One hundred and twenty-eight (26 %) of these formerly illegal plants and facilities are now fully registered. This will result in increased fiscal collection and prevention of illegal logging and related trade but also in improving the quality of forest control and supervision.

(iv) Develop a forest audit manual: Based on the onsite forest audit inspections and identification of illegal processing plants and warehouses, INAB together with CATIE Guatemala have developed the first version of the 196 196PROFOR Activities Completed in CY2011

3. Progress at completion. Please describe what the activity has accomplished, and describe key outputs. Forest Industry Auditing Technical Manual (attached). This tool is now distributed to INAB staff to be used as a guiding instrument to conduct forest audits. This first version will be adjusted later on to incorporate additional input collected from further field experiences.

(v) Prepare and implement law enforcement operative campaigns of illegal plants and warehouses: As part of the follow-up to the forest audit activities INAB has prepared a Law Enforcement Interdiction Plan which includes: a) initiation of administrative processes against 490 processing plants and trade warehouses that were found working without proper licenses or those that were unable to demonstrate the legal origin of the forest products in their facilities; b) once judiciary authorities provide respective authorizations, out of these 490 cases, some illegal sawmills and warehouses will be selected to implement a SWAT type interdiction operative by regional teams together with other law enforcement authorities.

4. Changes in planned outputs. Have there been any substantive changes in the activities undertaken, or in any of the outputs planned? If so, please describe these. None

(i) An important outcome of the onsite auditing activities included the development and implementation of an electronic information system that allows cross control of the supplied raw material to the forest industry and approved volume by forest permits. This will allow verification of the legal origin of timber and or firewood. (ii) Also as a result of the project, an online database that includes all 748 registered companies is now operational. This baseline data linked to INAB’s main information system is currently active providing access for three type of users: (a) the forest industry to access their respective accounts to comply with online quarterly reports; (b) the INAB authorized staff to use data and monitor reporting compliance and verification; and (c) authorized INAB senior officers to review and make necessary changes and adjustments to the overall baseline data. The baseline data for forest control allows activation, expansion and updating on a quarterly basis of all forest industry and trade dossiers. Data collected include input and output of raw material and processed timber and firewood movement. This has been structured through two newly established databases: a) the IASI database (initials stand for its name in Spanish) – sawmill and forest industry report and initial starting balance; and (b) the ITEMAS database (quarterly timber balance of incoming raw material and outgoing timber) – both currently hosted and maintained in the SIFGUA, INAB’s main Forest Statistics Information System. (iii) The pilot project has proved to be useful for the development of an overall baseline data of the total existing volume of timber stock in processing plants and warehouses. This is central to the functioning of a cross checking system, to compare this volume of timber stock with the overall approved volume from all forest permits. This data eventually will help to calculate the estimated dimension of illegal logging at the national level. Results will be extremely helpful to use in crafting national policy, making decisions related to institutional and program reforms and/or re-alignment to prevent and control illegal logging and related trade. (iv) Apparently in Guatemala most of the legal (registered) sawmills and trading warehouses (77%) were processing undocumented timber with an initial volume of 19,000 m3 and a Guatemala market value of about US$6 million, mostly timber from pine forests. This also includes timber from tree species protected under the CITES convention, for example, Mahogany (Swietenia macrophylla) and Spanish Cedar (Cedrellla odorata) with an estimated value of about US$200,000. According to INAB reports, the forest industry was able to demonstrate the legality of about 7,275 m3 with the proper paper work. Final results of volume and value of timber found without proof of legal origin (to be confiscated by INAB) was 11,735 m3 with a total domestic value of US$3,330,000. This outcome alone has proved the cost effectiveness and worthwhile nature of the PROFOR investment in this initiative. (v) By providing onsite technical assistance to 51 companies in calculating and establishing their respective PROFOR Activities Completed in CY2011 197

5. Findings, impacts, knowledge generation, and dissemination. Summarize the key findings which were an outcome of the activities supported by this grant and any preliminary impacts. What outputs were disseminated, and how? yield conversion factors for all of the processed timber species, the project has allowed INAB and the forest industry to better and more accurately demonstrate the legal origin of timber, in addition to providing useful information for business plans and foster efficiency of processing plants. (vi) Another clear outcome of this PROFOR sponsored initiative is the fact that before launching the project, only 28% of the legally registered processing plants and warehouses complied with their quarterly reporting obligations. Now as a result of the project, 80% have fulfilled their quarterly reporting obligation. (vii) INAB’s Technical and training assistance to the forest industry on the use of electronic reporting through the above described ITEMAS database resulted in the updating of 865 dossiers. This represents an additional 152 out of the 224 companies in default which have updated their dossiers and begun again to comply with their respective reporting obligations. (viii) As a result of all activities of the project, 490 processing plants and trade facilities were found at fault, and currently they are under administrative processes. Once these administrative processes are completed, INAB will formally present cases for which there is sufficient grounds for suspecting law violations before the Judiciary system. So far as a result of the pilot project, nine cases have been handed over to the Federal environmental attorney. (ix) The data and field observations reveal that the widespread network of actors operating illegally may be in part due to lack of information and awareness of the regulatory framework for formal forestry activities. Also, such operations may be due to over-regulation that inflicts forest stakeholders with high transaction costs of registration and formalization. However, it also seems that key factors are speculation, greed and tax evasion together with poor forest law enforcement. Additionally, it is also important to highlight the existence of other socio-economic challenges responsible for illegal activities such as lack of financial services for small stakeholders, rural unemployment and poverty particularly for those dedicated to firewood extraction.

Disseminated outputs Forest Industry Auditing Technical Manual has been disseminated internally within INAB staff including both for Central and Regional teams. Next steps include dissemination within CONAP (the forest protected areas authority) that has forest control and supervision responsibilities in forest protected areas and their respective buffer zones. The Forest Manual includes several chapters: (I) Legal framework; (II) Identifying legal and illegal plants and facilities; (III) Organizing a case dossier or processing files; (IV) Step by step onsite forest audits; (V) Guiding analyses of documents and relevant information; (VI) Methods and protocols for volume calculation and quantification of timber, logs, firewood and charcoal; (VII) Lumber yard inventories and registration of entry books and logs for cross controls in onsite audits; (VIII) Onsite audit results; (IX) Forest Audit Aid Memoire. This manual will serve as the basis for developing a generic version of a Forest audit manual for global use as part of a new PROFOR proposed initiative.

(i) The project has directly and effectively contributed to the stated commitment of the current Guatemala Administration to combat illegal activities in the forest sector. The high level political will to address illegal logging is demonstrated by the Multi-sectorial Presidential Commission to Combat Illegal Activities in the Forest Sector chaired by the Vice-President of Guatemala. In addition to the above described implemented activities, the project 198 198PROFOR Activities Completed in CY2011

7. Implementation Performance. How would you characterize implementation performance? What unexpected opportunities arose during implementation and how have you been able to take advantage of these? Were there significant unanticipated obstacles during implementation? (i) The INAB-CATIE Guatemala partnership has been an effective and efficient project implementer. Intended deliverables and outcomes were completed as described in the Concept Note and respective terms of reference. While a no cost short extension was granted it was only for providing additional time to ensure better quality of deliverables and the final report. Field operations were implemented according to the original timeline. (ii) Because of effective implementation and sound technical capacity, the pilot project was able to take advantage of an unexpected opportunity to support INAB to respond to a high level national policy dialogue on forests by assisting INAB’s Senior Managers to present a case on the importance of the socio-economic and environmental implications of the use of firewood in the country. With data drawn from the project and CATIE Guatemala’s readiness to respond to this topic, the project was able to facilitate the preparation of the Firewood in Guatemala: Impact Challenges and Recommendations Policy Brief for distribution to and consideration by the multi-sectoral Presidential commission and other high level government stakeholders.

8. Next steps. What happens now, following the activity’s completion? The INAB and CATIE Guatemala partnership is expected to secure follow-up activities through technical assistance to be provided by the FINFOR regional project sponsored by the government of Finland and implemented by CATIE Turrialba in partnership with CATIE Guatemala. Dissemination and training on the Forest Audit Manual will be a priority for those activities.

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? (i) At the national level forest audits are expected to be implemented in the two other forest regions of the country. (ii) The rich experiences drawn from the this pilot project, particularly those related to timber volumes cross controls, forest audits protocols, yield conversion factors, and baseline data development and updating, will be incorporated in the prospective PROFOR Forest Control and Supervision Tool kit that is expected to be PROFOR Activities Completed in CY2011 199

9. Replication potential. Do you see any potential for replication of any key aspects of this activity? How? disseminated globally. (iii) Also planned is a cross-fertilization and experience exchange between Guatemala and Peru forest stakeholders on forest audits, forest cross controls and checks and balances strategies.

10. Expenditures. Specify the total budget, funds requested from PROFOR, and any leveraging of other funding sources were mobilized.

PROFOR funding $ 115,096 Other sources of funding (describe below) $ 73,800 Total $ 188,896

What other sources of co-financing were mobilized? What amounts are involved under each source of co-financing? FLEG funds ($73,800) represent 17% of the total cost of the activity.