the legally allowable versus the informally practicable in bolivia’s domestic timber market
TRANSCRIPT
Forest Policy and Economics xxx (2014) xxx–xxx
FORPOL-01161; No of Pages 9
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Forest Policy and Economics
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The legally allowable versus the informally practicable in Bolivia’s domestictimber market☆
Wil de Jong a,⁎, Walter Cano b,c, Mario Zenteno b, Marlene Soriano d
a CIAS, Kyoto University, Japanb Tropenbos International, Netherlandsc Center for International Forestry Research, Bogor, Indonesiad Instituto Boliviano de Investigación Forestal, Bolivia
☆ This article belongs to the Special Issue: Illegal logginmodes of governance.⁎ Corresponding author.
E-mail address: [email protected] (W. de Jo
http://dx.doi.org/10.1016/j.forpol.2014.07.0011389-9341/© 2014 Elsevier B.V. All rights reserved.
Please cite this article as: de Jong, W., et al.,Policy and Economics (2014), http://dx.doi.o
a b s t r a c t
a r t i c l e i n f oArticle history:Received 30 March 2013Received in revised form 1 July 2014Accepted 1 July 2014Available online xxxx
Keywords:forest legalitylocal forest governanceforest regulation reformsforest tenurecommunity forestrychainsaw operatorsBrazil nuts
We analyze legality in the forest sector in Bolivia, focusing particularly on the domestic timber value chain in thenorthern Bolivian Amazon. Bolivia adopted wide-reaching forest, land and democratic regulatory changes sincethe mid-1990s that were partly intended to reduce illegal logging and related practices. The new forestregulations, in turn, led to new illegal practices because implementation and sanctioning were poor, but alsobecause new forest and land regulations were inadequate and often contradictory. In response, the governmentand various forest agencies adopted new measures to address the new illegal practices. These forest regulatoryand forest policy renovations andmodifications of the last two decades are, for instance, reflected in the domestictimber market of the northern Bolivian Amazon, a region that relies heavily on the forest sector. The paperanalyzes Bolivia’s regulatory changes that were relevant for legality in the forest sector and the multiplemodifications that were made to address shortcomings of these reforms. It also analyses legality in the domestictimber value chain in northern Bolivia. The new actors involved in especially the domestic timber value chainhavemoved away from formal and legal mechanisms to benefit from timber that grows on their land and foreststo practices that were not considered or actually shunned in the law and that appear difficult to regulate. Unlessthese new practices are recognized adequately in a new forestry law, some of the production and trade of thetimber value chain will likely continue to operate at the margin of legality.
© 2014 Elsevier B.V. All rights reserved.
1. Introduction
Since the early 2000s, governments of tropical timber consumingcountries, in particular, EU member states and also the USA, havetried to ensure that timber extraction and trade is legal. Reducing ille-gal timber was expected to address rampant tropical forest destruc-tion, help capture billions of dollars of foregone tropical forestdomestic taxes and reduce unfair competition in forest productmarkets (Gutierrez-Velez and MacDicken, 2008). Initially, measuresmostly focused on tackling illegal or unauthorized actions of largeforest entrepreneurs that engaged in logging and international trade(Tacconi et al., 2003; Tacconi, 2007; Smith, 2002). Since 2001, theWorld Bank has sponsored forest law enforcement and governance(FLEG), which for the first time required that also consumer countriesadopt legislation that reduces illegal logging and illegal trade in
g, legality verification, and new
ng).
The legally allowable versusrg/10.1016/j.forpol.2014.07.0
timber producing countries. Since the 2003 EU’s timber legality actionplan started, reference is made to Forest Law Enforcement,Government and Trade (FLEGT). The FLEGT Action Plan includes notonly strict consumer country timber procurement policies (e.g. Eba'aAtyi et al., 2013), financial due diligence to avoid laundering of illegaltimber money or investment in companies that engage in illegal log-ging (Cashore and Stone, 2012) and voluntary partnership agree-ments (VPA) signed between producer countries and the EU toeliminate illegal timber (e.g. Wiersum and Elands, 2013) but alsoregulations to eliminate illegal timber from countries that have notyet signed VPAs (Cashore and Stone, 2012).
Forest-dependent communities are affected by law enforcementin various ways (Kaimowitz, 2003; Colchester, 2006; Tacconi, 2007).Local communities suffer from inadequate forest law enforcement,when entrepreneurs extract timber from forests on which they de-pend for their livelihoods (Brown, 2013; Chirif and Garcia-Hierro,2007; Colchester, 2006). Communities also engage in illegal activitiesthemselves when they ignore legal procedures because they do notknow them (de Jong et al., 2006) or complying with them is too costlyand cumbersome (Benneker, 2008; Cano, 2012; Gasché, 2012;Pacheco, 2005). Forest communities are also victims of progressive
the informally practicable in Bolivia’s domestic timber market, Forest01
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forest law enforcement, for instance, when they desire to commercial-ize timber or other forest products but administrative requirementsput these opportunities beyond the capacities of forest communities(Pacheco, 2008; de Jong et al., 2010).
A new dimension within the FLEGT debate is how it evolves in tan-demwith regulatory shifts within the forest sector itself (Cashore andStone, 2012; Wiersum and Elands, 2013). Worldwide, the forest sec-tor has experienced profound legal and governance reforms over thelast 20 years or so, oftentimes in response to pressure from interna-tional actors. These reforms have, among others, created opportuni-ties for new actors to engage in logging and trading of timber,including forest communities that obtained property rights of forest-lands and to benefit from the available forest resources (Sunderlinet al., 2008; Chirif and Garcia-Hierro, 2007). Where this has takenplace, complex new forest product value chains and relatedcommercial networks have developed, for instance, in severalcountries in Central America and Mexico (Bray et al., 2003; Nittlerand Tschinkel, 2005).
The super-positioning of global legality demands on top of thenational forest governance reforms adds a new dimension related tolegality of the forest sector. If indeed global FLEGT and its multiple con-tributing measures are to be implemented successfully, eventuallynational forest sectors of countries that export tropical timber need tobe in full compliance with existing legislation. This then raises thefollowing questions: How do actors in new value chains that haveemerged as a result of land and forest property reforms and forest reg-ulatory reforms deal with the existing legislation, but also with thenew requirements that, for instance, VPAs impose on timber valuechains that largely cater for domestic markets? How much do the newforestry actors who engage in domestic forest value chains complywith national forest legislation? If they do not comply with the legalrequirements, is that possibly a result of the existing legislation notbeing adjusted to the realities in those value chains, as suggested bysome (e.g. Kaimowitz, 2003; Colchester, 2006; Cronkleton et al., 2008)?And if so, can that be resolved such that laws and regulations do notunnecessarily constrain domestic timber value chains on which the newowners of tropical forests, mostly communities and smallholders, rely tocapture income from timber? More generally, can legality complianceand its diverse implications for the timber sector inside tropical forestcountries be made compatible with national efforts, supported by inter-nationally operating development cooperation actors, to promote the for-est sector as an engine for rural welfare improvement (Cronkleton et al.,2008; Pacheco et al., 2009)?
To contribute some answers to these questions, we review the re-cent forest governance reforms in Bolivia. We analyze to what extenttheywere devised to address timber legality.We also review how legal-ity compliance is pursued or addressed in the domestic timber valuechain of the northern Bolivian Amazon. Our purpose is to understandlegality compliance in the Bolivian forest sector during a time whenwide reaching reforms intended tomodernize the sector andmake it ac-cessible to new forestry actors: peasant communities, indigenousgroups and small forest owners and entrepreneurs. This will extendthe FLEGT debate which has until date largely focused on forest law en-forcement of corporate actors who engage in international trade. In par-ticular, we try to answer the following questions: What have been theforest reforms in Bolivia to address legality in the sector? Who are thenew forestry actors in the timber value chains, and how were theyaffected by the forest reforms? How much are laws and regulationsadhered by andwhat explains compliance and non-compliance? Andfi-nally, what are the implications of our findings for the current ongoingglobal efforts to increase legality in the forest sector, including of largelydomestic timber or other forest value chains?
In the following section, we first review the forest sector in Boliviaand the regulatory reforms that have taken place over the last decadeand a half. This review especially includes elements of the reform thathad the objectives to include smallholders and communities in the
Please cite this article as: de Jong, W., et al., The legally allowable versusPolicy and Economics (2014), http://dx.doi.org/10.1016/j.forpol.2014.07.0
commercial forest sector, but also to reduce illegal or unauthorizedpractices in the sector. Section 3 focuses on a set ofmore specificmod-ifications of regulations and policies that intended to address prob-lems of the new forest regime. Section 4, in turn, zooms in on thedomestic timber value chain in the northern Bolivian Amazon, therole of peasant communities in that value chain and related legalitycompliance. Section 5 discusses the implications of the research find-ings for Bolivia’s efforts to improve legality in the forest sector andhow these efforts should be considered in the global forestry legalityefforts. Section 6 concludes.
1.1. The northern Bolivian Amazon
The northern Bolivian Amazon is part of the south-western portionof the Amazon watershed and encompasses the Department of Pando,the province of Vaca Diez of the Department of Beni, and a part of theProvince of Iturralde of the Department of La Paz. Its total area isabout 86,000 km2 and was inhabited in 2001 by a population slightlyabove 229,500, of which 34% lived in Pando, 62% in Vaca Diez and 4%in Iturralde (Zenteno, 2013). Of the total population, 27% or 62,000lived in rural settlements. The region is covered with dense tropical for-est that is still over 90% intact. The forest harbors natural rubber andBrazil nut trees and valuable timber species. Fig. 1 provides a map ofthe region.
The regionwas first commercially exploited for quinine and becameone of the major Amazonian rubber producing regions between 1880and 1920 (Fifer, 1970). From the 1920s onwards, forest productionshifted gradually to Brazil nuts. Rubber and Brazil nut exploitation wascontrolled by a selected number of economicallywell-endowed familiesthat held control over large tracts of forests, locally called barracas. Thebarracas commonly had a resident population that worked and lived insettlements inside the forest, mostly under semi-feudal conditions andbound by debt-peonage (Cano et al., 2014a). After the final demise ofrubber exploitation since the second half of the 1980s, the barraca pop-ulationmoved to the cities or to independent settlements (Stoian, 2000;Stoian andHenkemans, 2000). The region is now also an important pro-ducer of timber and cattle (Stoian, 2006; Zenteno, 2013). Cross-bordertrade of commodities is now amajor part of the region’s commercial ac-tivities (Pacheco et al., 2009).
The region has experienced profound institutional reforms becauseof national democratic, land and forest reforms since the mid-1990s(Ruiz, 2005; Zenteno et al., 2014). Forest communities that had nolegal status before the reforms became political administrative unitsand acquired related rights. Municipal and prefectural governmentsobtained new mandates because of wide-reaching decentralization re-forms. The departments of Pando and the Vaca Diez province nowhave 245 rural forest communities, officially registered as TerritorialBase Organizations (Organización Territorial de Base, OTB). In addition,the region has two indigenous territories (Tierras Comunitarias de Ori-gen, TCOs) with multiple indigenous settlements.
1.2. Research methods
The paper is based on literature review and field research carried outduring the first half of 2012 in six communities in the province of VacaDiez and in the town of Riberalta, the main commercial centre in theprovince. The authors also draw extensively from their collective re-search experience in the region since the mid-1990s. The informationon the domestic timber market derives from a wider study on timberand Brazil nut value chains in northern Bolivia (Cano et al., 2013).That study applied two types of semi-structured interviews: one de-signed for owners and suppliers of timber, many of whom are commu-nity residents and one for actors specialized in the commercializationand processing of timber (Table 1).
Qualitative information was collected to understand relationshipsbetween actors, processes of negotiation to define prices and informal
the informally practicable in Bolivia’s domestic timber market, Forest01
Fig. 1. The northern Bolivian Amazon, Department of Pando and the province of Vaca Diez, with the two main indigenous territories (dark grey) and titled Territorial Base Organizations(OTBs, light grey). Source: ABT (2013). (For interpretation of the references to colour in this figure, the reader is referred to the web version of this article.)
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mechanisms to guarantee the flow of raw material along the valuechain. Quantitative data included general household economy dataand data on the contribution of timber to the household economy. Theinterviews also revealed how households made arrangements to selltheir timber, including how contacts were established with possibletraders, how agreements were made and how actual transactions tookplace. In the case of actors engaged in trade and transformation, ques-tions focused on the various steps in the respective operations, howthey were initiated, how agreements were made and how the varioussteps in the operations were executed. The questions also included de-tails of public administrativematters, like costs related to obtaining per-mits to transport timber and payments of taxes. In all of the interviewsquantitative data was collected on costs and incomes.
2. Institutional reforms of Bolivia’s forest sector
Bolivia has a forest cover of close to 53 million ha and in 2010 about8.5 million hectare were subjected to some kind of exploitation right(ABT, 2011). Legality and its implementation played an important rolein the forestry sector dynamics throughout the years. During the1980s, the forest sector was in serious crisis, not only because of thegeneral economic crisis of the country at that time (Quiroga and
Table 1Actor groups engaged in the domestic timber value chain and number of interviews heldwith members of each actor group.
Actor groups Nº of interviews
Brick factory owners 2Community members 13Carpentry owners 4Chainsaw operators 4Development organization 1Furniture factory owner 1Riberalta municipality 1Service provider 1Timber companies 3Sawmill 1Total interviews 35
Please cite this article as: de Jong, W., et al., The legally allowable versusPolicy and Economics (2014), http://dx.doi.org/10.1016/j.forpol.2014.07.0
Salinas, 1996) but also because of poor administration of public forestsassociated with political corruption (Pavez and Bojanic Helbingen,1998). Until the early 1990s, the 1974 Forestry Law was poorlyimplemented and largely benefitted the politically well-connected in-dustrial timber elite. There was very limited incentive to engage insustainable forest management. Forest entrepreneurs operatedunder contracts that lasted only 4–5 years, and management regula-tions were completely ignored (Mancilla, 1994; Pavez and BojanicHelbingen, 1998). Fees were paid based on volumes extracted but for-est tax evasion was widespread. The sector wasmarred by corruption,and forest exploitation opportunities were often handed out as polit-ical favors among cronies (Pavez and Bojanic Helbingen, 1998). Noconsideration was yet given to rural communities and indigenouspeople. Rather intense conflicts occurred during the 1980s when col-onists from the highlands and indigenous people opposed holders oflogging permits on colonists’ and indigenous people’s lands. The per-mit holders had legal status but the rights of colonists and indigenousgroups to forests were completely ignored.
The land and forest reforms of themid 1990s had the intention to in-troduce amodern administration onto the forest sector, with clearly de-fined procedures to replace unauthorized practices, illegality, andcorruption (Pacheco et al., 2010; Silva et al., 2002). The 1996 ForestryLaw created new instruments including forest concessions as they areunderstood today, which can be held for 40 years. In addition, the1996 Forestry Law stipulated per hectare payment of concession fees.It also stipulated that any forest userwhoaims to exploit timber, wheth-er under concession or on communal or private property, was requiredto prepare a general forest management plan and annual operationplans. The law also created opportunities for communities and otherlocal groups to obtain forest exploitation rights.
The land and forest reforms concurred with decentralization of thepublic administration, which significantly increased decision makingautonomy and financial resources to prefectural andmunicipal govern-ments and increased democratic participation in municipal decisionmaking (Ruiz, 2005). The democratic, land and forest reforms had im-portant implications for rural communities in Bolivia, but especiallyfor those located in the tropical forested north. Newly established
the informally practicable in Bolivia’s domestic timber market, Forest01
Table 2Forestland allocation in the northern Bolivian Amazon in 2008.
Type Number 1000 ha Ownership right
Communal (OTB) property 245 2000 Collective and inalienablePrivate property 1631 713 Individual and alienableIndigenous territories (TCOs) 5 1438 Collective and inalienableBrazil nut concessions onstate forestland
237 1535 Usufruct non-transferable
Timber concessions on stateforestland
14 1236 Usufruct non-transferable
Total 6922
Source: Pacheco et al., 2009.
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communities in the north became legally recognized for the very firsttime as OTBs (Ruiz, 2005). The sweeping land reforms provided theseforest communities with legal collective titles over vast tracks of forestsin the tropical lowlands (Table 2). Ethnic indigenous communities ob-tained legal tenure over land as indigenous territories. The resident pop-ulation of both farmer communities and residents of indigenousterritories obtained exclusive rights to exploit forest inside theselands. Concurringly, municipalities gained authority over larger areasof municipal territories, and in case these contained forests, they wereallowed to grant concession rights over forestlands to local social groups(Agrupaciones Sociales del Lugar, ASLs) a new legal entity also createdunder the 1996 Forestry Law. While the land and forest reforms startedsince the mid-1990s, the various land devolution initiatives were accel-erated during the 2006Morales government and have now largely beencompleted (VMT, 2008).
This forest regime, which is still largely in place today, thus recog-nizes five main forestry actors: forest companies that can hold forestconcessions, local social groups, peasant communities, residents of in-digenous territories and private forest owners. Forest companies can re-quest concession rights over forest areas by demonstrating that theyhave the capacity and resources to implement large forest operations.Under the original version of the 1996 Forestry Law and its implantingregulations, concessions holders were to pay a concession fee of US$1per hectare per year, over the entire concession. Local social groups,on the other hand, first have to register as such, which demands an ad-ministrative process that proves that they are a well-organized socialgroup that has a socially acceptable reason to exist. Once this has beencompleted, the process of requesting the rights to exploit forest on mu-nicipal lands is less complicated than in the case of corporate actors.Local social groups are also expected to prepare a general forest man-agement plan. They pay an annual concession fee of US$1 per hectareactually logged in a particular year, which with a 20-year cutting cycledemanded by the law is 5 % of the total area under concession. Thesame applies for farmer and indigenous communities.
Both peasant communities and villages inside indigenous territoriesare also required to prepare a general forest management plan andannual operation plans. A last actor in this list is the private forestowner. The extension of land they ownhas been severely limited duringthe latest land reforms in Bolivia, but they need to follow the same ad-ministrative steps to exploit timber as farmer communities and resi-dents of indigenous territories.
Table 3Forest management plans in the northern Bolivian Departments Pando and Beni.
Farmers community(OTB)
Indigenous(TCO)
Type of FMP No Area (ha) NoPando Over 200 ha 13 126,697
Up to 200 haBeni Over 200 ha 9 85,198
Up to 200 ha 6 497 6
Adapted from ABT, 2011.
Please cite this article as: de Jong, W., et al., The legally allowable versusPolicy and Economics (2014), http://dx.doi.org/10.1016/j.forpol.2014.07.0
In 2009, under theMorales government, a new forest authority, ABTor Autoridad de Fiscalización y Control Social de Bosques y Tierra (Forestand Land Authority), was established to replace the previousSuperintendencia Forestal (Forestry Superintendent). One major differ-ence with its predecessor is that it explicitly prioritizes promoting inte-grated and sustainable management of forests and lands amongBolivia’s rural communities (ABT, 2011). This is in linewith theMoralesgovernment’s National Development Plan (Gobierno Nacional, 2006),which included proposals for the industrialization of natural resourcesand a new round of agrarian reforms to reduce rural poverty. The Na-tional Development Plan increased emphasis on community forestry,away from the excessive emphasis on timber exploitation of the previ-ous legislation from the mid-1990s (MDRA and MA, 2008). A new Lawof Communal Redirection of the Agrarian Reform of 2006 prohibits for-est concessions on public forestlands, as public lands are only to be usedfor settlements under collective ownership (Pacheco et al., 2010).
The situationwith land and forest property rights and timber exploi-tation rights is summarized in Tables 2 and 3. Table 2 gives the land-ownership distribution in northern Bolivia post the forest reformsinitiated since themid-1990s. Thefirst three categories have legally rec-ognized property rightswhile Brazil nut concessions and timber conces-sions are only forest exploitation rights. The five categories, however, doat least in theory not overlap,meaning that land that has one ownershipstatus cannot have another status at the same time. Table 3 providesdata on forest management plans on lands owned by farmer communi-ties, indigenous territories and privately owned lands. The table reflectsthe prominent role that the new and very different actors play in theBolivian forest sector, a sector that until the mid-1990s was dominatedby timber companies.
2.1. Post reform legality challenges
Because of poor control and monitoring, especially in the Depart-ments of Beni, Cochabamba and Pando, illegal logging persisted afterthe 1996 Forestry Law was enacted (FAO, 2003). Andaluz andMancilla (2006) provide data that compare authorized volumes and es-timated truly logged volumes until 2005. The extracted volume exceedsthe authorized volume every single year since 1998, and, for instance,over 50% of the volume logged in 2005 was not authorized. Pacheco(2005: 14) distinguishes five categories of illegal practices in theBolivian forest sector: occupation of forests lands, logging, timber trans-port and trade, forest product processing and accounting practices.Practices of illegal logging include logging in forests where this is notallowed, non-compliance with forest management activities, the useof incorrect information in forest management plans or documents re-quired for transport and trade and extraction of non-authorized species.
Underlying causes of illegality are, for instance, unrealistic rules andexcessive powerwithin the forest administration to allocate permits, in-stitutional weaknesses and the costs of the implementation of forestregulations (Pacheco, 2005: 18). Pacheco et al. (2010) add that the in-creased demand, the uncertainties about the forest regulations, the con-tinuation of forest concessions, the slow process of land tenureregularization as well as the growing competition for access to forestin indigenous territories and state forests all increased illegal logging
community Private owner Total
Area (ha) No Area (ha) No Area (ha)1 680 14 127,3772 471 2 4711 2,500 12 196,257
163 7 1,135 19 1,795
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in Bolivia. Illegality in the Bolivia forest sector results from lack of com-pliance with regulations and inadequate enforcement but also of tooambiguous, poorly designed and sometimes contradictory regulations(Cano et al., 2014b).
3. Adaptations of the forest regulations to address timber legality
Bolivia’s forest administration has since the 1990s reforms imple-mented additional measures to reduce illegal logging. The reformsthemselves intended to take care of illegal activities from before, assummarized above, but they in turn also lead to a new suite of illegal ac-tivities (Contreras-Hermosilla, 2003). One example of too ambiguousmeasures that contributed to illegality is the timber concession feesthat were charged until 2003. The timber concession fee of U$1 perhectare per year over the entire concession area resulted in wide-scalenon-payment of fees, logging from outside concession areas, or compa-nies sourcing timber from smallholders. Supreme Decree (Decreto Su-premo) No. 27024 stipulated that since 2003 fees were reduced to U$1per hectare over the area logged in any given year (Pacheco, 2008). Su-preme Decree 27024 was followed by additional adjustments to im-prove compliance with what forest entrepreneurs considered too rigidforest regulations, for instance, regulations that allowed logging on pri-vate lands up to 200 hectares without a forest management plan, log-ging of up to three hectares in farm holdings that did not exceed 50hectares without a land use plan and allowing local social groups to ini-tiate forest operations with only an annual logging plan in areas desig-nated to be, but not yet formalized as municipal forest reserves(Pacheco, 2008). In addition to these adjustments, regulations were de-vised that allowed timber extractors to clear forestland for agriculture,allowing the timber from the clearing to be sold. This right had a one-time fee that was 15 times higher than the forest tax fee, but an initial5 ha were free of such forest clearance tax (Pacheco, 2008). Many ofthese adjustments were temporary, but the regulation on logging upto 200 ha is still valid in 2014, except that now a simplified general for-est management plan is required and the operation must be completedwithin 2 years.
Even with the adjustments summarized above, forest companiesstarted to make use of numerous loopholes in the legislation, for in-stance, when they approached smallholders who obtained permitsthat allowed them to log areas of up to 200 ha. Companies started tosource timber from smallholders, and this timber appeared in the ad-ministrative records to be logged by the smallholders themselves(Albornoz et al., 2008). Equally, companies began to log timber reservesin indigenous or communal forestlands, in which case the companiestook care of the required paper work on behalf of the community, apractice that became common strategy for timber companies to accesstimber (field interviews; Benneker, 2008). It should be recognizedhere that these activities are not illegal, but they have created opportu-nities for entrepreneurs to circumvent regulations, and also to white-wash illegally sourced timber. In addition, communities often receiveminimal payments for the timber that was extracted from their territo-ry. Many communities report of bad experiences with forest companies(field interviews), which explains why they turn to alternative optionsas explained in Section 4 below.
The full or partly non-compliancewith regulations can also be linkedto a booming domestic demand. In particular, the construction sectorbenefitted from increased government investments under the NationalDevelopment Plan, which caused an important increase in roundwood and sawn timber demand (Andaluz and Mancilla, 2006). Severalstudies have documented this illegal logging, i.e., for northern La Paz(Ibarguen, 2008), Guarayos (Albornoz et al., 2008) and Chiquitania(Killeen et al., 2005).
Local communities in the northern Bolivian Amazon adjusted to thenew opportunities offered by forest regulatory reforms but found it dif-ficult to adequately accommodate to the ambiguous regulations (Cano,2012; Cano et al., 2014b; Cano et al., 2014c). The regional office of the
Please cite this article as: de Jong, W., et al., The legally allowable versusPolicy and Economics (2014), http://dx.doi.org/10.1016/j.forpol.2014.07.0
Forestry Superintendent and later the ABT repeatedly adjusted regula-tions to accommodate communitieswho struggledwith the 1996 ForestLaw. For instance, the annual operation plans presented the first yearafter a general forest management plan had been approved were ap-proved for multiple years. This regulatory adaptation by the forest au-thorities intended to discourage communities to divide and log theirforest areas under other regulations, for instance, the 200-ha norm(SIF, 2006). In 1999, the Forestry Superintendent’s Directive ITE-001/1999 authorized timber logged for non-commercial own use to beused outside the family’s private estate, essentially allowing intra com-munal trade of timber. A more recent adjustment that demonstratesthat problems persisted is ABT’s Directive 032/2012, which allows thatindividual families trade commercially up to 2000 board feet or about4.7 m3 of timber per year. The directive recognized carpentries to bepart of the timber value chain to which rural families sell timber, andit also allowed chainsaw operators to provide the necessary service tofamilies for the primary transformation of timber. Field interviews indi-cate that following that directive, the ABT and the regional farmers’union verbally agreed to allow individual families to extract and selltimber more than once per year. In 2014, ABT prepared a new Directive001/2014 that increases the volume that a single family can sell annual-ly to 3000 board feet, or about 7.08m3. The only requirement is that thetimber has a Certificate of Origen, which is given out by the ABT.
4. Legality in the domestic timber value chain in northern Bolivia
4.1. The domestic timber value chain in northern Bolivia
The domestic timber value chain of northern Bolivia is composed offive links: (1) the owners of the resource, (2) the extractors and collec-tors, (3) the providers of services, (4) the processors of timber and (5)the consumers (Fig. 2). Communities with a Territorial Base Organiza-tion status have a legally prescribed administrative organization, butfamilies are autonomous and operate independently. Communities aregoverned by a communal board, consisting of a president, vice presi-dent, secretary of minutes, secretary of land and territory, and onemember in charge of communal administration. Some communities ap-point a special committee that is in charge of forestry matters, while inother cases, the president together with specially appointed communalrepresentatives are in charge of forestry matters (Cano et al., 2014b).When communities in the region authorize a family to sell timber,they usually charge a fixed amount that oscillates between 10% and30% of the price of the sawn timber, and between US$7 and 13 in caseof sales of standing trees (Cano et al., 2013). Themotives forwhich com-munitymembers individually or communities collectively decide to selltimber influence in large part the negotiations and also the sales price. Ifindividual families decide to sell timber, this is usually triggered by ur-gent needs for cash because of illness, pay for school expenses or tocover food expenses when savings from the previous Brazil nut seasonor food stocks have been depleted (Zenteno et al., 2013). In case com-munities decide collectively to sell timber, the income is designatedfor infrastructure improvement, but also sometimes to assure a cashbonus for everybody, depending on the community social organizationand community board.
The main extractors of timber are chainsaw operators, timbertraders, river timber collectors and forest companies. Chainsaw opera-tors are independent entrepreneurs who usually own a chainsaw anda motorbike and who offer their services to communities. They providetwo essential services: cutting down trees, and subsequently sawing upthe logs into boards and beams. They usually also take care of the ship-ping of the timber from the forest to the locationwhere it is sold. Chain-saw operators are attractive intermediaries for communities becausethey negotiate directly with community members on price and volume,provide immediate cash and take care of necessary permits. In somecases, but less common, timber intermediaries negotiate with commu-nities and buy either sawn timber, or standing timber, in which case
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Fig. 2. Flow chart of the domestic timber value chain of northern Bolivia.
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they contract the chainsaw operators. Two additional extractors of tim-ber are people who collect timber that flows down rivers, which origi-nated from embankments that eroded because of river meandering,and large forest companies, which engagewith communities to procuretimber (Benneker, 2008).
Chainsaw operators are organized in the Chainsaw Operators’ Asso-ciation of Riberalta, which has some 800 members. Our informationsuggests that only 20%–30% of the chainsawoperators use formal proce-dures when sawing timber or trading it with buyers (field interviews).The majority of chainsaw operators rely on timber incomes 9 monthsper year, but they commonly have at least one other town based activ-ity, like motorbike taxi, motor mechanic or petty trader. They also mayengage in Brazil nuts collection during the period of harvesting betweenNovember and December.
Chainsaw operators when seeking timber suppliers generally visitcommunities during a communal assembly, making use of their person-al social networks or family relations. Communitymembers, who are in-terested, offer trees of certain species that are located within their ownplots, or the chainsaw operator presents a list of species that he islooking for. Usually, a community member will request an advance, in-dependent of when the chainsaw operator plans to do the logging.Chainsaw operators, in turn, negotiate with the prospective buyers,like carpentries, sawmills or construction companies. The buyers ofsawn timber may also take the initiative and contact chainsaw opera-tors to inquire if they are in need of timber.
The principal users of timber and wood in general in northernBolivian are small sawmills, carpentries and furnitureworkshops, in ad-dition to construction companies and brick factories. Sawmills obtaintimber directly from communities in which case they may assist withforest management plans, from chainsaw operators, or from river col-lectors. They sell their processed timber to construction companies,and carpentries or furniture workshops. An important part goes tobuyers in Cochabamba and La Paz, and somewhat less to Santa Cruz.Sawmills can also link with timber exporters.
Carpentries and furniture workshops produce finished and semi-finished products for the domestic market. They are represented bythe Association of Small and Medium Carpentry Enterprises, whichhas 22members, and is located in Riberalta. The total number of carpen-tries and furniture workshops, however, is estimated to be 40 (field in-terviews). They mostly obtain their raw material from chainsaw
Please cite this article as: de Jong, W., et al., The legally allowable versusPolicy and Economics (2014), http://dx.doi.org/10.1016/j.forpol.2014.07.0
operators and small sawmills. In addition to construction companieswho obtain their rawmaterial from chainsaw operators and small saw-mills, brick factories that consume firewood are one more consumer ofwood in the region and communities and chainsaw operators often sellwood to brick factories.
4.2. Timber in rural livelihoods in forest communities in northern Bolivia
Communities near Riberalta are nowadays much interested to com-plement Brazil nut and agricultural incomes with timber incomes. Thesales of timber is possible with much less investment than for instance,required for agriculture or Brazil nut collection, since landowners canmake agreements with chainsaw operators or timber companies whowill take care of the logging and administrative procedures (Cano,2012; Zenteno et al., 2013). The income that households obtain fromtimber depends very much on the species that they sell and rangesfrom about US$300/2000 board feet to US$100 (Cano et al., 2013).These figures, therefore, represent the amounts that rural communitiescan obtained under a regulation that limits the amount that can be soldby individual households to that amount. These figures are US$450–150, if single households can sell 3000 board feet.
It is relevant to consider how important timber incomes are for rurallivelihoods in the northern BolivianAmazon. Zenteno (2013) found thatin northern Bolivia, a family in average needs annually about US$3,174,or US$2.15 per person, per day to cover all expenses, including for foodand consumables, education and health. In contrast, the total accumu-lated income of all activities except production and sales of timber andBrazil nut is US$1,350, less than half of the annual needs (Table 4,Zenteno, 2013). Hence, families recur to Brazil nut and timber extrac-tion to cover the difference. While Brazil nut remains the principal op-tion for income to cover family expenses (Zenteno et al., 2013), not allfamilies in the region have the same possibilities to extract the amountof Brazil nuts to make up the difference. An important number of com-munities in the region do not have significant amounts of Brazil nutwithin their communal territory, and residents of those communitieswill often migrate to Brazil nut rich communities to work as seasonalBrazil nut collectors (Cano et al., 2013). Table 5 divides northernBolivian rural residents in three groups, depending on the incomethey derive from Brazil nut collection. For families with low incomesfrom Brazil nuts, selling timber to chainsaw operators is an attractive
the informally practicable in Bolivia’s domestic timber market, Forest01
Table 4Income from traditional activities of households in rural northern Bolivia.
Income source USD
Production of 2 ha agricultural field 1,031Forest based incomes* 22Incomes from fruit production 150Hunting income 151Total 1,354
Source: Zenteno (2013); * other than Brazil nut collection or sales of timber.
Table 6Wood products supply and consumption in Riberalta.
Production m3/year
Fine timber produced by chainsaw operators 50,304Consumption m3/yearCarpentries and furniture workshops 9,400Firewood 22,900Not accounted for 18,004
Source: Interview data.
7W. de Jong et al. / Forest Policy and Economics xxx (2014) xxx–xxx
option. However, accumulated incomes from Brazil nut (between US$77 and 666), timber (between US$150 and 540) and other activities(US$1350) do not add to US$3,174 for an important portion of the re-gion’s rural population.
4.3. Illegality of the domestic timber trade of northern Bolivia
An indication of the mismatch between various statistics that repre-sent timber and other wood products traded is reflected in Table 6. Thetable provides estimates of timber and firewood reported by the mainconsumers in Riberalta and compares this with the estimates of timbersupplied by chainsaw operators. The latter estimate is based on dataprovided by members of the Chainsaw Operator Association ofRiberalta.
Communities sell timber to chainsaw operators, directly to sawmillsor to timber companies. Table 6 gives an amount of fine timber pro-duced by chainsawoperators that exceedsfive times the amount of tim-ber consumed by carpentries and furniture workshops. While losseswill occur if timber passes via sawmills to carpenters and furnitureworkshops, the difference is surprising. One possibility is that importantamounts of timber reported by the Chainsaw Operators Association aresold to the construction sector which also directly derives timber fromchainsaw operators (Fig. 2), but for which no registers were available.We also did not obtain estimates for howmuch firewood chainsaw op-erators sell to firewood consumers (Table 6). Chainsaw operators focuson fine timber, as that yields higher sales prices and thus better profits.However, cutting trees for firewood and transporting it to urban mar-kets requires the same authorization as timber sold by communities.Chainsaw operators commonly use firewood authorizations to sell finetimber which obtains much higher prices, so the figure on firewood isrelevant in the discussion. Construction wood is derived from hard-wood, which is more difficult to saw with chainsaws but easier to pro-cess at sawmills.
A possible explanation of the difference between the figure for car-pentries and furniture workshops and for chainsaw operators ofTable 6 is that carpentries and furniture workshops report less thanthey actually consume. Because there ismore pressure for them to dem-onstrate legal sourcing of timber, they may only report timber that wasprovided with appropriate legal documentation. Another explanation isthat some of the timber goes to the timber companies who export tim-ber, but for which we did not obtain data.
The data from Table 6 are corroborated by the contrast between theamounts of timber extracted from communities. According to the ABTCertificate of Origen database, in the year before fieldwork, villagershad extracted and sold 17,000 m3, but our interviews suggested thisamount to be five times higher. This is also reflected by trends in family
Table 5Classification of the rural population of northern Bolivia according to their capacity tocollect Brazil nut.
Type of Brazil nut producer Average annual Brazil nut income (USD)
Large 660Medium 272Small 77
Source: Zenteno (2013).
Please cite this article as: de Jong, W., et al., The legally allowable versusPolicy and Economics (2014), http://dx.doi.org/10.1016/j.forpol.2014.07.0
timber sales in the north. Cano et al. (2013: 34) report on four farmercommunities with remarkable increase of family sales of timber from2010 to 2011. For instance, the community Desvelo extracted ninetimes more timber in 2011 than in 2010. Some individual householdssold seven times more timber individually than the 4.7 m3 allowed in2012 (field interviews).
5. Discussion
Bolivia is number 17 in terms of forest cover area among all coun-tries in the world and number 10 among tropical forest countries. Thecountry has a vigorous forest sector, which includes some 1,200 regis-tered forest companies and 6,000 processing facilities (Peña-Clarosand Dockry, 2010). In 2013, the country exported US$33 million ofwood product and US$129 million of non-wood products, mainlyBrazil nuts (IDBC, 2013). It is anticipated that Bolivia’s export will be af-fected by the outcome of the negotiations between the country and theEU, related to legality compliance (Notitboliviarural.com, 2014). Boliviais one of the countries that are in the stage of “informing” in the negoti-ations of a Voluntary Partnership Agreementwith the EU (EU FLEGT Fa-cility, 2014). All this implies that legality compliancewithin the Bolivianforest sector is a serious matter that is likely to affect future trade withthe EU.
Domestic timber markets have been included in all VPAs that havebeen signed until date. The signing of VPAs or future selling of timberin EU markets requires that legality compliance is adhered to through-out the producing country timber sector, including timber value chainsthat cater largely to domestic markets. The impact of FLEGT/VPA nego-tiations on domestic timber markets depends primarily on the defini-tion of legality that is adopted. There have been signals from variousquarters about the dangers that strictly agreed definitions of legality inthe negotiations can negatively affect the small and medium size forestcompanies and the communities that derive income from selling ortrading timber, but that often do not fully comply with the current reg-ulation (Bollen and Ozinga, 2013).
Bolivia’s forest regulatory agencies faced challenges on how toachieve the multiple intended objectives of the forest sector regulatoryreforms, which included incorporating new forest users and thus con-tribute to the economic improvement of forest communities previouslyexcluded from the sector. This was a challenge, not the least because ofcontradictions in the legislations, as Cano et al. (2014b) have analyzedin detail, or because important elements of the legislation that were ini-tially designed for the corporate forestry actors could not easily be ad-justed to accommodate farmer communities, indigenous communitiesand local social groups. The original designers of the reforms foresawthat communities as collective owners of forestlands prepare forestmanagement plans to communally exploit their timber. Experiences todo so with external assistance or to engage with forest companieshave both been disappointing (Benneker, 2008; field interviews). Anadditional factor is the culture of distrust and cheating that permeatesthe social climate of the region (Cano, 2012),which prevents communalcollaboration required for the development of forestmanagement plans(field interviews).
Instead, community members in northern Bolivia increasingly optto sell timber individually even though this is illegal under the 1996Forestry Law. When this happens, these actions are often backed by
the informally practicable in Bolivia’s domestic timber market, Forest01
8 W. de Jong et al. / Forest Policy and Economics xxx (2014) xxx–xxx
a community rule or a decision at the community assembly. The forestauthorities essentially have decided to accommodate those commu-nal rules, in a sense legalizing the illegal. This was certainly inspiredby the desire to achieve the objectives of having rural communitiesbenefit from the forests over which they had obtained ownership. An-other explanation formaking the adjustment is that cracking down onnon-authorized operations was not an option. It very possibly couldhave resulted in serious social conflicts in a region that has experi-enced serious political tension and violent conflicts in the recentpast (de Jong et al., 2010).
An important variable in the legality debate is the trend of the roleof forests products and especially timber in rural livelihoods in the re-gion. Data compiled during 2008–2009 show that 42% of ruralincomes (monetary and consumption) is derived from forest productsand about half of that from Brazil nut harvesting (Zenteno et al.,2013). Zenteno et al. (2014) suggest that because of regional demo-graphic changes, communities have increased the total sales ofBrazil nut over the last decade and a half, but this effectively lead toa decline of production per family. A household that only has limitedaccess to Brazil nut trees in combination with low technology agricul-ture will not be able to obtain an income that covers minimum liveli-hood needs and family members migrate for 3 months of the year toremote corners in the forest to collect Brazil nuts for other forestowners. The data provided in Section 4 indicate that rural dwellersin the north are turning to timber to make up for the higher competi-tion over Brazil nut and the increase in family needs. However, whilethe options to also obtain income from timber have increased becauserural villages have become owners of important tracts of land, theopportunities to complement livelihoods with timber are stillconstrained. For a household that can only make US$77 from thesales of Brazil nut (Table 4), selling between US$150 and US$450still will not have enough income to cover minimal householdexpenses.
In response to the land and forest reforms, communities have comeup with their own arrangements of distribution of land, access to Brazilnut tree and, yet to a lesser degree, on how to deal with the sales oftimber (Cano et al., 2014b). In the near future, farmers and indigenouscommunities in the north will need to rely on services provided bychainsaw operators, or communities will improve their own capacityto extract timber by themselves (Cano et al., 2014c). The great benefitfor communities to deal with chainsaw operators is that it allowsthem to negotiate on reasonably equal terms, something that is hardlypossiblewhen communities negotiate with forest companies. Chainsawoperators have been active as independent forest operators in the re-gion for some time but the forest reforms of the 1990s tried to eliminatetheir activities (Pavez and Bojanic Helbingen, 1998). They have re-surged after the land and forest reforms and stepped in to provide a ser-vice, which is highly required by the communal owners of timbers andby the consumers of the wood and timber in urban centers.
At present, Bolivia is considering a revision of the 1996 Forestry Law. It isan open question how the domestic timber value chain as addressed herewill be dealtwith in the new law. The currentMorales Government’s inclineto favor communities in agriculture and forestry matters suggests that thedesignersof the lawmay try toaccommodate the realityof thenorth, provid-ing it is adequately recognized.
Relying entirely and only on the forest management plans modeldoes not appear an option. Unless the current reality is adequatelycovered by a legal frame, the northern Bolivian domestic timber valuechain will continue to operate at the margin of legality, requiring re-peated ad hoc regulatory interventions by the ABT, as has happenedover the last years. If not addressed in a new forestry law, it remainsto be seen how the present reality can adequately be dealt with in pos-sible FLEGT/VPA negotiations. It would require clauses that give the ABTthe mandate to device legal instruments as it deems necessary. Themost sensible option is that the legal ambiguities in the domestic timbersector signaled here are addressed in a new forestry law, in which case
Please cite this article as: de Jong, W., et al., The legally allowable versusPolicy and Economics (2014), http://dx.doi.org/10.1016/j.forpol.2014.07.0
they likely will not pose a problem anymore in future VPA negotiations.Experiences with other VPA negotiations, however, indicate that do-mestic timber value chains are not easily adequately considered inthose negotiations (Bollen and Ozinga, 2013).
6. Conclusion
We have analyzed here the domestic timber value chain in thenorthern Bolivia Amazon and have observed that it presents an impor-tant complementary livelihood opportunity for an important section ofthe rural and urban population of the region, but one that has the poten-tial to become a much larger contribution for the rural population tomeet minimal family needs. At present, this value chain operates in agrey zone between legal and illegal. The forest regulatory agencieshave responded to this situationwith actions of condoning certain prac-tices as well as trying to more strictly impose regulations. A commonpractice now is emitting ad hoc local applicable regulations. Bolivia iscurrently preparing a new forestry law and the current reality of the do-mestic timber value chain ideally should adequately be reflected in thenew law. Bolivia is considering to enter into a VPA because the EU of oneof its main markets. It is important to take the analysis presented hereinto consideration when developing the new forestry law and in VPAnegotiations. The case provides important guidance of how a new regu-latory frame can be accommodated to new practices that are emerging,and to better realize the rural development and poverty reduction po-tential that the domestic timber value chain offers. There can be muchvalue in also considering the case analyzed here in ongoing debates oftimber legality verification and VPA requirements under the interna-tional forestry legality processes.
Acknowledgements
We thank Yeo-chang Youn, Christian Pilegaard Hansen and threeanonymous reviewers for their constructive feedback on earlier draftsof this paper. The original study on forestry value chains was supportedby a grant from the DutchGovernment and some expenses for the prep-aration of the paper were support by two grants from the Japan Societyfor the promotion of Science to Wil de Jong. We also thank TBI and IBIFfor their permission to use the material from the report of the forestryvalue chain study for this paper.
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