Safeguarding Biodiversity and Communities:Lessons Learned in the Context of the World Bank

Safeguard Review

World Bank/ IMF Spring Meetings 2015April 14, 2015

Korinna Horta, Ph.D.

WBG: the world’s largest source of multilateral funding for

forests.

WBG forest-related lending in the period from FY 02 to FY 12 has totaled at least US$ 4.1 billion (The World Bank Group, Forest and Trees in Sustainable Landscapes, Action Plan, FY 14-16, Concept Note, May 20, 2013, p.5.)

Multiplier Effect: an estimated 3 - 4 times as much.

+ influential pioneering role on REDD+ financed by Trust Funds (Forest Carbon Partnership Facility, Forest Investment Program);

OED in 2000/ IEG in 2012on forest lending

• Inadequate reflection of social, institutional and political realities on the ground in project design and implementation;

• A lack of participatory approaches;• A lack of attention to poverty reduction;

IEG in 2012:• No evidence of environmental sustainability of both

tropical timber concessions and protected areas.

OED, “A Review of the World Bank’s 1991 Forest Strategy and its Implementation,” Volume 1, Main Report, January 13, 2000.

IEG, “Managing Forest Resources for Sustainable Development – An Evaluation of World Bank Group Experience, December 2012.

Inter-Sectoral Linkages

OED already called in 1991 for a forest policy that pays close attention to inter-sectoral linkages

(OED Précis, Forestry Development: A Review of Bank Experience, June 1991).

New Urgency:• Adding $ 100 billion in new financing capacity for infra-

structure development in so-called middle income countries;

• Establishing a US $1 billion fund to map natural resources in Africa and unearth a US$ 1 trillion of minerals on the continent.

Almost half of Forest-Related Loans Exempt form Safeguards?

• In the period FY02-FY12, an estimated 40% of forest sector funding was supported by DPLs, including support for policy and institutional reforms of tropical timber concession management.

• IEG “It is vital to seek consistency among the approaches

followed in these growing segments of the portfolio to ensure coherence in environmental and social sustainability outcomes.”

(IEG, Evaluative Directions for the World Bank Group’s Safeguards and Sustainability Policies, 2011, p.17. )

IEG 2012: Lack of meaningful participation translates into lack of sustainability

• “Sustainability of the environmental outcomes in three-quarters of Bank-supported projects was found to be at risk” (xix).

• “The lack of meaningful integration of communities into integrated conservation management schemes is one reason why sustainability of these systems is lacking” (xix).

IEG on Land Management

• Focus is on technical interventions

• Lack of “attention to the rights of the people to the land or involvement of beneficiaries in the management of these areas” (xx).

1991 Forest Policy Paper versus2002 Forest Strategy

1991- Ban on direct financing of industrial logging operations in primary moist tropical forests

2002 – The ban was overturned with the argument that supporting industrial operations in tropical moist forest was integral to poverty reduction.

Results according to IEG (2012)

• “World Bank policy advice and projects that have supported the reform of industrial timber concession regimes have usually neglected or underestimated the non-timber values and uses of the forests, with respect to the livelihoods of forest-dependent people, their traditional claims, socio-cultural values, and overall sense of security” (xxi).

IEG (2012): Lack of evidence for poverty reduction, what about the environment?

• “Evidence is also lacking that concessioned natural forests are managed sustainably” (xxi).

• And certification? According to IEG, certification remains a

challenge with less than 50% of projects using wood from natural or plantation forests achieving certification as planned.

Key IEG (2012) Recommendation

A comprehensive public review of the economic, environmental and social outcomes associated with Bank support for industrial timber concession reforms in tropical moist countries with weak governance .

Reaction to the IEG’s Core Recommendation

World Bank Management: No need to deal with this, since OP 4.36 is clear about

conditions for World Bank support of forest management in moist tropical forest countries and carrying out the IEG Recommendation would only interfere with the Safeguard Review (Management Response Feb 4, 2013).

CODE: “The Committee was not in favor of undertaking a parallel

review to the ongoing safeguard review” (Committee on Development Effectiveness, February 4, 2013)

Reality Check

• The Safeguard Review has not addressed IEG findings and recommendations in any way.

• Instead it proposes to replace the existing OP 4.36 (Forests) and OP 4.04 (Natural Habitats) with draft ESS 6 on biodiversity – which represents a huge step backwards and serious dilution of the existing policy language.

ESS 6 on Biodiversity: A huge step backwards and a serious dilution of existing policy language

• Eliminates policy language protecting forests;

• Fails to recognize the rights and roles of forest-dependent peoples and the multiple uses of forests;

• Allows for the conversion and degradation of all natural habitats, including critical habitats and protected areas;

Draft ESS 6

• Offsets are permitted in all habitats, there are no longer any “no-go zones”;

• A green lights for the support of logging in all types of forests;

• Independent forest certification is not longer required for plantations.

ESS 6 fails to address

• Illegal logging, financial crimes and supply chain assessment;

• Development Policy Lending

• Upstream and Intersectoral Planning

Adopt recommendations ofIEG Evaluations and other World Bank studies

• Justice for Forests Study (2012) (M. Pereira Gonçalves,M.Panjer, T.S. Greenberg, W. Magrath):

Combat illegal logging by attacking corruption

• Protected Area Effectiveness in Reducing Tropical Deforestation (2009)

(Andrew Nelson, Kenneth Chomitz):

Protected areas that permit sustainable use are effective in preventing deforestation, indigenous areas are even more effective (Latin America)