Forests contribute to the livelihoods of more than 1.6 billion people. Forests and the forest products industry are a source of economic growth and employment, with the value of global forest products traded internationally reaching US$270 billion, of which developing countries account for 20 percent and more.

Worldwide, forest industries provide employment (both formal and informal) for approximately 50 million people...

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  • Introduction-Opportunities and Challenges in the Forest Sector

    Covering 26 percent of the Earth’s land surface, forests play a significant role in realizing the Millennium Development Goal of halving the number of people living in absolute poverty by 2015. Unfortunately, rural development strategies often neglect forests because forests have been mistakenly viewed as being outside the mainstream of agricultural development. In addition to the lumber and wood products industry, the gathering and marketing of hundreds of forest products, such as forest fruits, fuelwood, and medicinal products, constitutes an economic activity of enormous scale.

    As human populations grow and countries around the world become more affluent, the demand for wood forest products, both solid wood and pulp and paper, will increase too. In 2005, removals of roundwood were valued at about US$64 billion, an increase of about 11 percent over removals in 1990. The demand for nonwood forest products has also increased slightly since 1990, with removals estimated at US$4.7 billion in 2005.

    Forests constitute global public goods, which, to be maintained, must be both protected and managed sustainably. At present, however, less than 5 percent of tropical forests are being managed sustainably...

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  • Forests for Poverty Reduction

    The majority of the world’s poor are concentrated in rural areas and depend on natural resources for their livelihoods. It is estimated that 60 million Indigenous Peoples are totally dependent on forests, 350 million people are highly forest dependent, and 1.2 billion are dependent on agroforestry. The scale and significance of poverty issues on forest lands demand that poverty alleviation efforts give special attention to forest areas and the people living in them.

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  • Engaging the Private Sector in Forest Sector Development

    Sustainable forest management (SFM) requires substantial financial resources. Developing countries need to explore and encourage all sources and mechanisms of funding for the forest sector to achieve SFM. The private sector is expected to play the lead role in global economic and production activities. Private investment in the forestry sector in developing countries and countries in transition is estimated at US$15 billion per year, or up to nine times more than current official development assistance flows.

    To date, private investment in SFM has been concentrated in developed countries. Although this trend is changing, the need remains to motivate similar investment in developing countries to maximize the full potential of SFM, because investments required for harvesting and processing can be large. The investments on this scale can only come from global corporations or joint ventures involving local partners and development banks willing to cover the risk. Furthermore, ensuring that these large investments are made in a socially and environmentally responsible manner is essential to preventing destructive use of forest resources.

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  • Meeting the Growing Demand for Forest Products: Plantation Forestry and Harvesting Operations in Natural Forests

    As a result of significant increases in demand for wood, the global wood market is undergoing rapid changes, putting considerable and increasing pressure on the world’s remaining natural forests. Without significant investment in promoting sustainable forest management (SFM) efforts and in plantation management, it must be expected that increasing demand for wood will lead to further degradation and fragmentation of forests and permanent deforestation. To successfully change this situation, international wood demand must be met through sustainable wood production from natural forests and plantation management. To facilitate such a process, markets must increasingly adopt mechanisms that not only ensure sustainable forestry and conservation, but also provide satisfactory livelihood opportunities for forest-dependent communities, and promote sustainable economic development for all nations, including countries with low forest cover. Therefore, the sustainable production of wood to meet increasing demand will continue to play a predominant role in the discussion of how to achieve global targets for forest management...

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  • Optimizing Forest Functions in Landscapes

    The landscape approach (defined as a geographical construct that includes not only biophysical features of an area but also its cultural and institutional attributes) has recently begun to be incorporated in the conceptualization of geographical spaces for forestry management. A landscape approach is a conceptual framework that allows for a structured way of viewing the broader impacts and implications of any major investment or intervention in the rural sector. It describes interventions at spatial scales that attempt to optimize the spatial relations and interactions among the range of land cover types, institutions, and human activities in an area of interest.

    Forests are part of a diverse livelihood portfolio for a large number of rural poor. In addition, the productive use of forests can significantly contribute to economic development, while the management of biological and ecological services from forests can provide numerous local as well as global environmental benefits. As noted in the strategy, forests (and their users and beneficiaries) both impact and are affected by policies and actions in other sectors, as well as by biophysical changes in adjoining or biologically linked areas. In this context, optimizing forest functions in a landscape can unlock the full potential of forests.

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  • Improving Forest Governance

    Forest sector governance refers to the ways in which officials and institutions (both formal and informal) acquire and exercise authority in the management of the resources of the sector to sustain and improve the welfare and quality of life for those whose livelihoods depend on the sector. Good governance is fundamental to achieving positive and sustained development outcomes in the sector, including efficiency of resource management, increased contribution to economic growth and to environmental services, and equitable distribution of benefits.

    The rationale for the Bank to engage in improving forest governance in client countries is twofold. On one hand, broader governance reform processes, such as decentralization and devolution, and public sector reforms present direct opportunities to which the forest sector needs to respond. On the other hand, illegal logging, corruption, and other forest sector crimes, such as arson, poaching, land encroachment, trade in endangered fauna and flora, and evasion of legal taxes and royalties, indicate weaknesses in forest sector governance that need to be addressed. In developing countries, illegal logging in public lands alone causes estimated losses in assets and revenue in excess of US$10 billion annually, more than six times the total official development assistance dedicated to the sustainable management of forests. The global magnitude of the problem as estimated by its direct monetary impacts is staggering. The associated physical, environmental, and social impacts resulting from poor governance are even more extensive and serious.

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  • Mainstreaming Forests into Development Policy and Planning

    One of the targets under the Millennium Development Goal for ensuring environmental sustainability requires that countries integrate the principles of sustainable development into country policies and programs and reverse the loss of environmental resources. In line with this, macro policy reforms should give foremost consideration to ensuring enabling conditions for sustainable development, enhancing synergies and minimizing negative impacts on natural resources. For forests, the combined impacts of economic activities outside the forest sector are often significantly greater than those produced by economic activity within the sector itself.

    Several policy areas can impact forests and forest development, including macroeconomic policies (fiscal, monetary, trade, privatization, and public expenditure policies); population and social affairs; agriculture, fisheries, game management, livestock; rural and regional development, land use planning, land tenure; infrastructure; industry; energy; environment and tourism.

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  • Monitoring and Information Systems for Forest Management

    Information and monitoring systems for the forest sector are instrumental for effective policies and planning, prioritizing interventions, valuation of forest resources, efficient investments, and engendering accountability. Relevant forest information that is systematically and periodically collected can enable effective implementation of policies, inform decision making, and guide management. Current and accurate information on forests can also help raise the profile of the sector and increase awareness of forest resources’ potential.

    Emerging financing opportunities for sustainable forest management under the climate change agenda will require effective systems for monitoring forest cover and carbon emissions, and additional information on the resource base and drivers of change. More specifically, efforts to enhance the contribution of forests to reducing carbon emissions (through reduced emissions from avoided deforestation and degradation [REDD] initiatives) will require participating countries to establish a credible reference scenario on REDD based on methodological guidance from the UN Framework Commission on Climate Change.

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  • Guidance on Implementing Forests Policy Op 4:36

    The World Bank has 10 key policies that are critical to ensuring that potentially adverse environmental and social consequences are identified, minimized, and mitigated, as well as a policy on disclosure. In the context of forests, the Operational Policy on Forests (OP 4.36) is proactive in both identifying and protecting critical forest conservation areas and in supporting improved forest management in production forests outside these areas.

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  • Applying Forest Policy OP 4.36

    The objective of OP 4.36 is to assist clients to harness the potential of forests to reduce poverty in a sustainable manner, effectively integrate forests into sustainable economic development, and protect the vital local and global environmental services and values of forests.

    OP 4.36 applies to all Bank investment operations that potentially impact forests, regardless of whether they are specific forestry sector investments. It also encourages the incorporation of forest issues in Country Assistance Strategies (CASs), and addresses cross-sectoral impacts on forests. The policy provides for conservation of critical natural habitats and prohibits Bank financing of any commercial harvesting or plantation development in critical natural habitats. It also allows for proactive investment support to improve forest management outside critical forest areas, with explicit safeguards to ensure that such Bank-financed operations comply with independent certification standards acceptable to the Bank, or operations with an agreed upon, time-bound action plan to establish compliance with these standards.

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  • Consultation and Communications in Forest Sector Activities

    Consultation and communication in forest sector projects are important to build coalitions, manage risk, create transparency, and formalize mechanisms for participation and responses to stakeholder concerns. Consultation enables the involvement of indigenous groups and other marginalized and vulnerable groups (including women and youth). A well-designed communications strategy facilitates transparency while contributing to the long-term sustainability of a project. The two strategies are intertwined. Consultation requires communication and communication enhances and is reinforced by consultation.

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  • Forest Certification Assessment Guide: Summary on Use

    Paralleling the growing demand for wood products is the growing demand for the verification of the sustainability of the forest management from which those products are derived. With the introduction of the Bank’s Forests Policy in 2002 (Operational Policy 4.36), the Bank made its support for commercial harvesting contingent on certification of operations under an acceptable system, with the exception of small-scale landholders and operations under community forest management and joint forest management. . Alternatively, support can be provided under the condition of adherence to a time-bound action plan to pursue certification under an acceptable system within a certain time frame. Consequently, assessment of certification systems against Bank requirements is a necessary step in the project appraisal process for this kind of investment. Assessment of certification systems for compliance with these Bank provisions requires an in-depth analysis of the standards and applied procedures. In this chapter, the available instruments for the assessment of certification systems and the lessons learned so far are described, and the application of time-bound action plans for certification are given consideration.

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Last updated - June 26, 2008