public private partnership in forestry management
TRANSCRIPT
Ani Adiwinata Nawir (CIFOR) presentation in ‘Course on Governance of Landscapes, Forests and People’
(Amazon Room, CIFOR Campus Bogor, 27 August 2015)This PPT is protected by CIFOR Intellectual Property Right Policy,
proper citation is required for any use(s) partially or all of the information provided here
Public-Private Partnership in Forestry Management:Case of partnership scheme in forestry management
in Indonesia
Ani Adiwinata Nawir, PhDSocioeconomics Scientist, Forests and Livelihoods Research (LIV Portfolio)
Center for International Forestry Research (CIFOR)
Presented in Course on Governance of Landscapes, Forests and PeopleAmazon Room, CIFOR Campus Bogor, 27 August, 2014
Scope of presentation:
1. Public-Private Partnership (PPP) –some understandings
2. Why does Public-Private Partnership Scheme become an option?
3. Effectiveness of the partnership4. Trade-offs & challenges to consider5. Ensuring the effectiveness of
public-private partnership at the landscape level
1. Public-Private Partnership (PPP) – some understandings
1. There is no overarching definition for public-private partnerships:PPP is an umbrella notion covering a wide range of economic activity and is in constant evolution(Source: Speech by Commissioner Frits Bolkenstein, DG Internal Market)
2. PPP is the private sector’s involvement in developing/managing facilities & services for the economy & society to function (Yescombe, 2007)
3. Such partnerships are characterized by the sharing of investment, risk, responsibility and reward between the partners.
4. PPP ≈ Privatization 5. More common in infrastructure development (e.g. roads, public water
facilities)6. Less developed in natural resources management (including forests)
TFA 2020 was catalyzed by The Consumer Goods Forum (CGF) commitment to mobilize resources within their respective businesses to help achieve zero net deforestation by 2020.
TFA 2020 is engaging with governments around the world, a range of civil society organizations active in both producer and consumer nations, smallholder farmers and indigenous representatives and multinational corporations (Source:http://www.tfa2020.com/index.php/about-tfa2020)
Other initiatives: Responsible Business Forum, & TEEB Business Coalition
Example:Tropical Forest Alliance (TFA)
New Buzzwords: Public-Private-People Partnership
Source: Presentation at Tropical Landscape Summit by Felipe Calderon–Former President of Mexico and Chair, Global Commission of the Economy and the Climate, 2015
One of the strategy for forestry plantation developmentAlternative mechanism to
acknowledge community rights
Access to benefits transferred from commercialised forestry management based on contract with clear responsibilities and rights
Cooperative
Alternative to: resolving conflicts securing wood supply strategy for risk management
Company
State
Contract agreement
2. Why does Public-Private Partnership Scheme become an option?
(1) An alternative approach in CF responding to governance failures
in forest management
Negative ecological impacts &
socioeconomic benefits disparity:local community
& industry
Sharp increases in fuel prices
Sustainable development paradigm and the
Sustainable Livelihoods Approach (SLA)
Common Property Resource Management
Regime
Collaborative management
concept
Decentralisation & devolution policies
Economic globalization through trade liberalisation
‘Forest for people’Objectives:
Releasing the pressures on natural forests and meeting the peoples’ subsistence needs
Focused onafforestation programs
The balance between conservation &
development objectives for sustainable forest
management
Focussed on livelihood strategies
Shift from passive to active participation: combining collaborative and adaptive management
Management principles have not been robust enough to
face new challenges: economic globalization
Collective actions through collaborative management (co-
management)
Diversity of income generation options: Payment for Environmental Services (PES) & REDD
Key d
river
s infl
uenc
ing
the ev
olving
appr
oach
esEv
olving
appr
oach
es
1970s 1980s 1990s 2000s - presentPeriods
Climate Change & REDD+ Regimes
Implemented in various forms to involve communityManagement
of forestry resources
Types of control or ownership of resources
Private Communal State
Communal
Private lands organised by community institutions
Communal on community lands
State land allocated for community-based forestry
projects (e.g. reforestation projects)
Private
Privately managed forestsaround households (e.g. farm forestry)
Privately-managed on community lands
(e.g. Customary land in Borneo: tembawang)
Public land allocation schemes to be individually managed
Co-management
Co-management on privately-owned lands
(e.g. outgrower schemes)
Co-management on communal lands
(e.g. Joint Forest Management)
State lands allocated to community group
(e.g. CBFM in Nepal & the Philippines)
2. Why does Public-Private Partnership Scheme become an option?
(2) As an approach in conflict resolution
The dynamics of tenurial conditions behind the partnership scheme initiatives (case of Indonesia)
Company right: state-nested systemCommunity partner:
Company-nested system
Commercialization: towards more market-oriented production processes
Globalization: a close association between ‘global’ and ‘local’ or ‘glocalization’ (Robertson,1995 in Haan, 2000)Promoted as a way to reduce poverty bycreating new niche markets and potential buyers of scarce forest products: multilateral agreements – AFTA, NAFTA
2. Why does Public-Private Partnership Scheme become an option?:(3) Empowering (community bargaining power) in facing challenges under
globalized and commercialized economics - so can benefit local communities
Direct and indirect land use changes driven by foreign companies’ investments in agricultural and forestry plantations: Moratorium in Indonesia: Oil palm companies look for lands in new regions
Source: Nawir et al., 2011
CF management principles have not been robust enough to face the new challenges coming from trade liberalisationThe slow pace of development for community empowerment, communities involved in CF do not have: adequate management and financial capacity the business knowledge and skills required to deal with
international investors and tradersImpacts of globalisation & trade liberalisation – which partnership with
company might be crucial local products cannot compete with imported mass-produced
products a drop in prices and profits received by local producers; increased pressure on forests:
they have to switch to unsustainable practices to compensate the decreasing returns from the drop in price and profits
Bundle of rights Ownership position
Owner Proprietor Claimant Authorised user Authorised entrant
Access √ √ √ √ √
Withdrawal √ √ √ √
Management √ √ √ √
Exclusion √ √
Alienation √
State forests Public-Private Partnership
Scheme
Common cases
3. Effectiveness of the partnership: Bundle of rights
Collaborative arrangements Relevant schemes 1.
A pure state-nested system, with the community rights granted
directly by the state
Community-based forest management schemes
inside state forests
2.
Company is part of a state-nested system and community is one
layer down, embedded in rights granted for the company
Community-company
partnership scheme inside state forests
3.
An exchange system between company and community
Community-company
partnership scheme on household-owned lands (outside state forests)
Notes: S-State, Comp-Company, and C-Community. Sources: Analysed from case studies using the framework adapted from Carlsson and Berkes (2005).
S
C
S
C
Possible co-arrangements under partnerships
Categories of land status Requirements and implications for rights assurance 1. Communal land belongs to the
village (including adat lands, but not tembawang b)
• Community members respect the land status as required by adat or customary rules
• May not be administered within the land status categories according to state law
2. Individually-owned land based on paper from the Head of Village on land status or SKT- Surat Keterangan Tanah
• Approved by the Head of the Village and respected by communities in neighbouring villages
• Can be upgraded to obtain land certificate from the office of National Land Agency (BPN – Badan Pertanahan Nasional) at provincial level
3. Individually-owned land based on paper from the Head of Dusun (sub-village) or SPH-Surat Pengakuan Hak
• Approved by the Head of Dusun (sub-village) and may be respected between villages
• May be upgraded to obtain land certificate with additional administration procedures
4. Individually-owned land based on land certificate
• Legalised land status and approved by all levels of government authorities
• Respected by all parties 5. Paper on right over
transmigration areas
• Secured land status under government resettlement/transmigration program
• Respected by all parties
Challenges for effective bundle of rights: a range of land status affecting the rights assurance
(Case of Indonesia)
Introducing the programme
Ground survey & land delineation
Communities submit the proposal to company
Verifying the status of land legality
Signing the contract agreement
Implementation(Land preparation, planting, maintenance & thinning)
Feasibility study
Processes in partnership development: important in clarifying land boundaries
Clarifying land boundaries
Contractual agreement: rights & responsibilities(Case of partnership scheme in forestry plantation mgm, Indonesia)
Companies Communities (as a group)Responsible for managing lands and plantation, including paying expenses for land clearing, planting, and maintaining plantations
• To form a Forest Farmer Co-operative• Co-operative members bounded by a contract
agreement• Will not prevent company from having access to the
areas managed under partnership schemes
Companies Communities (as a group)• Has full rights and access over the
land under the period of contract• Right to harvest planted trees• Decide the royalty under benefit-
sharing agreement
• First priority to be employed as a labourer • Receiving incentives: land value & infrastructure• Royalty paid to community partners based on total
volume or weight of timber harvested, varies based on distance and type of land)
• Benefit from community development programs: rubber, agroforestry, native species, & credit facilities
Responsibilities
Rights
Comparison of the proportions of the different cost components: partnership scheme and industrial plantation (BAU) – Case of Indonesia
Cost components
Proportion of cost
Partnership schemesIndustrial plantation
A B
1. Investment 17% 23% 22%
2. Plantation development costs 11% 51% 59%
3. Timber harvesting and transporting 7% 1% 1%
4. Overhead 37% 23% 17%
5. Transaction costs 29% 2% -Total 100% 100% 100%
File: Compilation Jambi & Sanggau 220611.xls - Comparison Kemitraan & HTI (2)
Example of high transaction costs: Requirements for harvesting & transporting timber applied to
partnership schemes ≈ industrial plantations
Transit logyard/logpond
Logs landing Logyard/logpond Felling compartment
Concession areas
FA-FKB
FA-FKB
FA-FKB
DKB-FA (Logs inspection &
verification register)
PSDH Payment
LHP (Felling report)
FA-FKB
RKT
(Annual Work plan)
LHC (Timber cruising report)
Wood based primary industry
5. Ensuring the effectiveness of public-private partnership at the landscape level:
(1) Identifying & dealing with the complexities of problems
Upstream forests: honey trees (Boan:Tetramales nudiflora)
Downstream area: City of Sumbawa
Sumbawa island
Conserving watersheds: upstream forestsMain program of FMU in eastern Indonesia (Sumbawa) - 32,776 Ha
(Limited production forest – 55%, production forest – 23%, protected forest – 22%)
Main watersheds
(1) Managing protected forest while enhancing livelihoods
(4) Rehabilitating degraded area while enhancing livelihoods
District capital city:Sumbawa Besar
(3) Illegal logging in state-own company rehabilitated forests
(2) Forest encroachment
(2) Dealing with competition with other investment alternative, such as oil palm plantations developed under partnership scheme
Tree growing partnership schemes Oil palm plantation partnership schemes
Sources of vulnerability for land owners:Low productivity and quantity harvestedTimber buying prices are set under market price Fires – partnership scheme can reduce the risksTheft (illegal logging in planted acacia)
Sources of vulnerability for land owners:High risk of losing the land partiallyInternational price fluctuationsToo many brokers/middle-menImproper post-harvesting treatment - low buying
price Over-repayment of credit by land owners due
lack of transparency mechanism for records on paid credit
Companies also bear some risks due to:Paying high transaction costsAbandoned tree grower commitments - due to
more interesting economic optionsSocial conflicts hit timber plantation companies
harder than oil palm companies
Companies also bear some risks due to:Paying high transaction costsInternational price fluctuations & boycott by
international consumersIncreasingly low quality of products – no
company assistance, mainly after credit payments finish
Risks should be communicated to prospective community partners
Household income portfolio
Timber uses & trading
Privately-owned lands
Protected forestsor nature reserve
Domesticated NTFPs: e.g. candle nuts
Policy regulating access to utilize the forests
(Limited) extractive NTFPs: honey
Timber management permit
Verifying timber legality
NTFPs Processing & Market
Timber processing & marketing
Transporting timber
Transporting NTFPs
Regulated locally based national policy
Customary norms & rules
Regulated locally based national policy
(3) Effectiveness at the landscape level: opportunities for scaling-upIntegrated along the supply chain (production, marketing & processing
(4) Ensuring the effectiveness at the landscape level: A framework for strengthening policy and economic incentives
(Case of community-company partnership scheme for timber plantation development in Indonesia)