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Company-Community Forestry Partnerships Company-community forestry partnerships From raw deals to mutual gains? An international review with proposals for improving forests, enterprise and livelihoods James Mayers and Sonja Vermeulen 2002 A component of the international collaborative research project steered by IIED: Instruments for sustainable private sector forestry Copies of this report are available from:. Earthprint Limited, Orders Department, P.O. Box 119, Stevenage, Hertfordshire, SG1 4TP. e-mail: [email protected] http://www.earthprint.com For enquiries – Tel: +44 1438 748111 Fax: +44 1438 748844 e-mail: [email protected] Correspondence should be addressed to : James Mayers or Sonja Vermeulen, Forestry and Land Use Programme, International Institute for Environment and Development, 3 Endsleigh St, London WC1H 0DD, UK. Tel: +44 207 388 2117 Fax: +44 207 388 2826 e-mail: [email protected] or [email protected] http://www.iied.org Citation: Mayers, J. and Vermeulen, S. 2002. Company-community forestry partnerships: From raw deals to mutual gains? Instruments for sustainable private sector forestry series. International Institute for Environment and Development, London. Design: Eileen Higgins Cover photos: James Mayers Illustration on cover and chapter pages : © Christine Bass Print: by Russell Press, Nottingham, UK. Printed on Sovereign Silk 115gsm, 100% chlorine free Instruments for sustainable private sector forestry is a project co-ordinated by the International Institute for Environment and Development (IIED) and is supported by the UK Department for International Development and the European Commission. The Instruments for sustainable private sector forestry publication series derives from this project. Other studies in the series to date are: ! Foreign portfolio investment and Sustainable development: a study of the forest products sector in emerging markets. Maryanne Grieg-Gran, Tessa Westbrook, Mark Mansley, Steve Bass and Nick Robins. 1998 ! Privatising sustainable forestry: a global review of trends and challenges. Natasha Landell-Mills and Jason Ford. 1999 ! Economic instruments for tropical forests: the Congo Basin case. Alain Karsenty. 2000 ! Certification’s impacts on forests, stakeholders and supply chains. Stephen Bass, Kirsti Thornber, Matthew Markopoulos, Sarah Roberts, Maryanne Grieg-Gran. 2001 ! Raising the stakes: impacts of privatisation, certification and partnerships in South African forestry. James Mayers, Jeremy Evans and Tim Foy. 2001 ! Production, privatisation and preservation in Papua New Guinea forestry. Colin Hunt (ed). 2002 ! The new foresters: The role of private enterprise in the Indian forestry sector. Sushil Saigal, Hema Arora and S. S. Rizvi. 2002 ! Getting the private sector to work for the public good: instruments for sustainable private sector forestry in China. Lu Wenming, Natasha Landell-Mills, Liu Jonlong, Xu Jintao and Lin Can. 2002 ! Silver bullet or fools’ gold? A global review of markets for forest environmental services and their impact on the poor. Natasha Landell-Mills and Ina T. Porras. 2002 ! Instruments for sustainable private sector forestry in Brazil: an analysis of needs, challenges and opportunities for natural forest management and small-scale plantation forestry. Virgilio Viana, Peter May, Lucineide Lago, Olivier Dubois and Maryanne Grieg-Gran. 2002 These studies are available from Earthprint Limited at the above address. Contents Executive summary i Acknowledgements xvi Acronyms xvii 1 Introduction 1 1.1 Aim of this report 1 1.2 Working definitions of some key terms 2 1.3 Structure of this report 3 1.4 List of partnerships studied in this review 3 2 Why and how are partnerships emerging 7 2.1 What current contexts frame the emergence of forestry Partnerships? 7 2.2 Emerging forms of partnership 15 2.3 Typologies of company-community forestry deals 21 3 South Africa: Outgrower schemes with livelihood benefits 25 3.1 Outgrower schemes 25 3.2 Community-based deals 40 3.3 Corporate social responsibility investments 43 4 India: Farm forestry kick-started by industry-farmer relationships 45 4.1 Emergence of competitive markets in farm forestry 45 4.2 Lessons learned by companies 47 4.3 Lessons learned by farmers 49 4.4 Making a long-term future for short-term contracts 54 5 Indonesia: Third party roles and venture partnerships 55 5.1 Xylo Inda Pratama (Faber Castell) and local landowners in South Sumatra 55 5.2 Basic taungya scheme turns to venture partnerships – PT Perhutani and local farmers in West Java 59 6 Papua New Guinea: Notorious logging rip-offs and better timber lease deals 67 6.1 ‘Communities’ that become ‘companies’ 68 6.2 Urging greater democracy – new models of community organisation in forestry 71 6.3 Problems of representation and scale 72 6.4 Companies and communities – going their own way 72 6.5 Lease, lease-back system – successful in oil palm, potential from timber 73 7 Ghana: Social responsibility agreements 77 7.1 Code of conduct and social obligations 78 7.2 Procedures for developing a Social Responsibility Agreement 80 7.3 Local perceptions of SRAs ` 80 7.4 The outlook for SRAs in Ghana – and elsewhere? 81 8 Canada: First Nation forestry contracts and joint ventures 83 8.1 The rise of small-scale First Nation forestry companies 83 8.2 Motives to enter partnerships 85 8.3 The gamut of business arrangements 86 8.4 Emerging pitfalls and opportunities 88 9 Taking stock of themes, impacts and trends in partnerships 91 9.1 Partnerships: substance beyond the hype? 91 9.2 Impacts of deals on companies, communities and forests 93 9.3 How partnerships function 102 9.4 Thorny issues 110 10 What next: ways to convert raw deals into mutual gains 117 10.1 Factors which seem to explain success in partnerships 117 10.2 Next steps and enduring challenges 124 10.3 The future for company-community deals 128 References 129 Annexe A 137 Annexe B 140 Executive summary Introduction All sorts of deals have been struck between forestry companies and local communities over the years. Companies have sought to make deals to secure access to land and labour, and continuous supplies of wood – as well as to demonstrate their good neighbourly intentions. Communities have sought employment, technology, infrastructure, social services and sources of income – and secure access to a wide range of forest products. The International Institute for Environment and Development (IIED), together with a range of collaborative research partners, has examined 57 examples of company-community forestry partnership in 23 countries1. The aim of this work is to identify lessons on the driving forces for partnerships, the nature of the deals involved, their impacts, and the ways in which they might be improved and spread. The examples cover a wide range of arrangements: from farmer outgrower schemes to supplement company-grown fibre, to community intercropping between company trees, to local agreements around local timber and tourism concessions, to joint ventures where communities put in land and labour, to plantation protection services, to access and compensation agreements (Figure 1 overleaf). The study generated detailed results on deals in six countries, namely South Africa, India, Indonesia, Papua New Guinea, Ghana and Canada, and supplemented this with a set of shorter examples of deals from around the world. This set of examples represents a global sample rather than a comprehensive review2. 1. South Africa, India, Indonesia, Papua New Guinea, Ghana, Canada, Brazil, China, Guatemala, Nicaragua, Honduras, Mexico, Colombia, Zimbabwe, Philippines, Thailand, Solomon Islands, Vanuatu, Australia, New Zealand, Portugal, Ireland and USA. 2. The following working definitions are used in this report: ! Companies include large-scale corporations through to small-scale private enterprises – the key feature being that they are organised for making profit ! Communities include farmers and individual local “actors” as well as community-level units of social organisation such as farmers’ groups, product user groups and cooperatives. When community groups organise for profit, there is an overlap between ‘company’ and ‘community’. ! Forestry is the art of planting, tending and managing forests and trees for goods and services. It may take place in dense forest, open woodlands, agroforestry, smallholder woodlots, and commercial scale plantations. ! Partnerships are relationships and agreements that are actively entered into, on the expectation of benefit, by two or more parties. This report uses the term partnership to describe a very wide range of contracts and informal arrangements between companies and communities. Partnerships are a means to share risk between the two parties, and third parties often play important supportive roles. Figure 1 Company-community foresty partnerships studied Total cases = 57 Land leased from Others* 9% Outgrower farmers 9% schemes 26% Group certification with company support 5% Concessions leased from communities 12% Joint ventures 25% Farm forestry Farm forestry crop-share 7% support 7% Notes on Figure 1: The main products from outgrower schemes, joint ventures and farm forestry are timber, commodity wood or pulp. *Others include: corporate social responsibility projects, forest environmental service agreements and co-management for non-timber forest products. A growing role for partnerships in forest governance? Partnerships are of considerable interest in the search for effective governance mechanisms in an age of opportunities and threats created by globalisation. Globalisation
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