October 11, 2011
Public and private finance for the world's forests?: Two experts weigh in
|This is a special debate hosted by mongabay.con on behalf of the Rights and Resources Initiative (RRI) ahead of its upcoming dialogue on “The Status and Role of Public and Private Finance to Reduce Forest Loss and Degradation”, and will be taking place in London on October 12, 2011.|
Sumatra, Indonesia. Photo by Rhett A. Butler
The 11th RRI Dialogue will be webcast live from 08:00 - 15:00 GMT on Wednesday, October 12th in English, French and Spanish. To access the live webcast, click here. Please feel free to distribute this link widely to your contacts.
Since the Dialogue will take stock of lessons learned to date regarding the possibilities of a global forest carbon market and aim to better understand the potentials and limits of each approach, we see some real potential for exciting and diverging opinions.
RRI has partnered with Mongabay.com to present two diverging viewpoints on issues to be discussed at length at tomorrow's dialogue, featuring Vicky Tauli-Corpuz (Executive Director, Tebtebba) and Scott Poynton (Executive Director, The Forest Trust). Biographies for both presenters are below the Q&A section.
1. What are the most important “lessons learned” from the last five years of international action on forests and development in forest areas?
Scott Poynton: I would argue that whilst there has been much action, that few lessons have been learned. Those folks bound up in promoting REDD still seem unable to look beyond it. It seems that, as the list of problems with REDD grew, so too did the comebacks. So, what have I personally learned from this?
Firstly, that REDD proponents believe – in the face of all evidence to the contrary - that our human governance systems can neatly engineer human-to-human and human-to-nature interactions to their desired outcome. That’s not only nonsense, it’s dangerous. It ignores the reality that human life is so complex that the only way to make progress through the morass is to sit down and LISTEN to people and collectively work out solutions. Polarized positions drain energy and insight from discussions and lead to poor outcomes.
This leads to a second lesson - involving the private sector around REDD in the way we have has been a total failure, though no one should be remotely surprised by that. I say that not to discredit the private sector but to point out that we were trying to bring together two groups with very different motivations to solve a problem that required a common platform.
It has been naive to suppose that we could save forests by matching government public money with private sector funds; unless profits can be generated from the process. We’ve spent more time trying to devise schemes to protect private sector investments and guarantee their profits than working out how to protect forests and the rights of those who depend on them. Protecting the rights of one party to the transaction infringes the rights of others, usually the weakest and least able to defend themselves. We’ve seen an explosion of conflict around an issue with common positions.
Notwithstanding people’s motivations, there is common ground that deforestation should be stopped. The problem is that we have failed in our efforts to deal with the complexity of that discussion; specifically by failing to listen and innovate to a good solution. Entrenched, polarized positions never yield a positive outcome.
Vicky Tauli-Corpuz: The need to recognize the rights of forest-dwelling and forest-dependent indigenous peoples and local communities. For a long time, indigenous peoples who have been the best custodians of forests (boreal, tropical, sub-tropical, peat, etc.) have been denied their rights to own, control and manage the forests they traditionally owned, used and occupied. In the past 5 years there has been an increasing recognition of these rights, especially after the adoption by the United Nations General Assembly of the UN Declaration on the Rights of Indigenous Peoples. This is a result also of the increasing strength of Indigenous Peoples' movements at the global, regional and national levels to assert and claim their rights. In step with these movements, there is also an increasing awareness of the importance of Indigenous Peoples’ traditional knowledge and customary governance systems in forests.
However, this does not mean that the rights of Indigenous Peoples over their forests are currently widely respected and protected. Far from it. Many governments still claim ownership and control over forests and the process of changing this continues to be a major challenge for communities. However, there are significant changes in some land tenure systems where indigenous peoples and community rights over forests are acknowledged and protected. Many of these systems still fall short of the full recognition of ownership rights. There is also a failure to address the financial and technical support needs for Indigenous Peoples and local communities—which is require in order to save their forests and at the same time maintain their sustainable forest livelihood systems.
The other important development is the recognition of the role of forests in climate change mitigation and adaptation. Forests have become a major focus in the last 5 years in climate change negotiations as global attention to forests has tremendously increased.
2. What is the best use of public funding to combat forest loss and degradation, given the current state of global markets and international climate negotiations?
Scott Poynton: To answer this, we have to understand why forests are disappearing. I believe they’re disappearing because governments and the private sector make money from their disappearance; it’s not a revolutionary position. Yet, the difference comes in that most argue for regulations or global structures like REDD to create more value for standing forests. As we’ve seen, this has failed.
Forests are disappearing in the process to create the global supply chains that supply global markets, particularly food markets. There is deforestation linked to mining, but deforestation is predominantly an agricultural commodity issue and as the private sector establishes farms, ranches and plantations that destroy forests, it becomes predominantly a private sector issue. Government regulations provide the space – legal or otherwise – for the deforestation to occur, but improving regulatory frameworks is not the only answer, at least not in the short term, as Governments benefit from the wealth generated. No government has put a brake on deforestation to save the planet.
We solution needs to add profit to private sector bottom lines, and I think we have one, though most are totally blind to it.
Global supply chains live and die on customer-supplier interactions. Customers drive innovation down supply chains for cheaper prices, but also improve design and quality, even for environmental and social considerations. Yet if customers push a “No Deforestation” requirement down supply chains – and were serious about excluding suppliers who didn’t innovate accordingly - suppliers would have to respond. To supply “No Deforestation” products, suppliers would need to innovate deforestation out of their supply chains; not easy, but also not impossible. They would have to confront the complexity of doing so; they would have to listen to disenfranchised communities; they would have to work with governments to change regulations.
This is not pie in the sky. Nestle, the world’s largest food manufacturer, has done it and is having a major impact on the global palm oil industry as a consequence. Golden Agri Resources (GAR), Indonesia’s largest palm oil grower, has made (and is implementing) its own No Deforestation commitment. They are talking – for the first time ever – with local NGOs and communities. The pilot is happening before our eyes.
The best use of public funding should support capacity building within the private sector and NGOs to facilitate this sort of change. Governments should look at tax structures for companies implementing No Deforestation commitments, as tax incentives would be an extremely powerful driver.
Vicky Tauli-Corpuz: To combat forest loss and degradation, public funding should be used to support the needed policy reforms establishing recognition of the rights of indigenous peoples to own, manage and control their forests. These should also be used to strengthen and reinforce the traditional knowledge and customary systems of forest management and forest livelihoods which have been proven to be more sustainable. Furthermore, as it is still acknowledged that the poorest people are forest-dependent and forest-dwelling peoples--resources should be used to provide the basic social services these communities require. For instance the results based actions which should be funded under REDD+ should not be limited to funding carbon-focused projects only but the whole range of REDD+ (reducing degradation, enhancing forest carbon stocks and sustainable management of forests). In addition, other core-benefits and safeguards on respecting and promoting rights of Indigenous Peoples and local communities, biodiversity conservation, improving forest governance need to be more transparent and accountable.
Adequate public money should be invested to address the drivers of deforestation which means crafting and enforcing laws which will stop drivers such as industrial logging and the conversion of forests into monoculture tree or agricultural plantations, etc. At the same time public money should support monitoring the implementation of measures which will lower carbon emissions from forests and the way safeguards are being implemented. Basically, public investments should be used to incentivize governments and citizens to protect the forests and enhance their multifunctionality in terms of ecosystem services, cultural and spiritual uses, reform of land tenure systems, and protecting and respecting the rights and livelihoods of indigenous peoples and local communities. Establishing the right policies and mechanisms to ensure that ecosystem services from forests are recognized and valued and that payments should go directly to the people who are primarily responsible for conserving the forests. These communities should be supported through public funds.
3. How should private investment be harnessed to decrease forest loss and enhance rights and livelihoods in forest areas?
Scott Poynton: I would argue that private investment will flow where it has the chance to make the most money. No one “harnesses” private investment.
Private sector investment will flow to companies adding most to shareholder value. When GAR announced that Nestle was resuming palm oil purchases from the company, its share price jumped 3% in a single day - it was the most traded share on the Singapore market. That's adding shareholder value; that's adding profit and it happened because Nestle was satisfied that the oil it was buying had no deforestation footprint, no social issues and its production had respected the rights of local communities. Simple, very simple!
Unilever is now discussing resuming purchases from GAR and their share price will rally further. Since Nestle's announcement, every analyst has produced a report quoting GAR's sustainability actions and partnership with TFT as reason for a strong BUY recommendation...what's so difficult about that?
We don't need to harness anything! As soon as we try, we get into deep complexity and begin operating from a position as engineer, rather than a position of letting the market work to support companies who don't deforest.
The solution is there, we're just so locked into the idea that we have to torture ourselves with nonsensical UN processes that we have to get everyone to agree! There's zero chance of us ever achieving that and yet we know how to produce agri-commodities in a way that protects forests and the rights of people living in forest areas. We can do this today. Now we just need to ensure that the companies that do it right are rewarded with increased shareholder value... easy!
Vicky Tauli-Corpuz: Private investments can be used to enhance forest-related livelihoods of Indigenous Peoples and local communities and strengthen community-forestry initiatives. Small-scale investments or joint ventures with communities should be supported. These could include support to set up community-based enterprises such as sustainable extraction, processing and marketing of non-timber forest products, community-controlled ecotourism, community timber production and sawmills, etc.
Victoria Tauli-Corpuz is Founder and Executive Director of Tebtebba (Indigenous Peoples' International Centre for Policy Research and Education), an indigenous peoples' organization born out of the need for heightened advocacy to have the rights of indigenous peoples respected, protected and fulfilled worldwide. It also advocates and works on the elaboration and operationalization of indigenous peoples' sustainable, self-determined development. Tebtebba actively engaged in the processes which led to the adoption of international human rights law and other international instruments, policies and agreements. These include the UN Declaration on the Rights of Indigenous Peoples (UNDRIP) and the establishment of spaces within the United Nations. Ms. Tauli-Corpuz is the former Chair of the United Nations Permanent Forum on Indigenous Issues.
Scott Poynton is the Executive Director The Forest Trust (TFT) which he founded in March 1999. TFT works with businesses to help them bring responsible products to market. TFT sees deforestation as essentially a supply chain issue, so working with companies to exclude deforestation from their products is a major focus of his and TFT's work. Scott believes that businesses have to make a profit to make such commitments work and so TFT leverages its resources to help companies tell their responsible product stories in the hope that they'll profit and employ more people by doing good business.