4 March 2004
By Bank Information Center (BIC)
NGO Forum on ADB
Environmental Defense
Centre for Organisation Research & Education (CORE)
Oxfam Community Aid Abroad
March 2004
Problem Statement
The ADB has been reviewing its 1995 Forest Policy since June 2000. The Bank claims that it has consulted with more than 500 people during workshops in Bangladesh, Pakistan, the Philippines and Sri Lanka. However, civil society groups monitoring the process have found the review to be very flawed and lacking in transparency. The following are some inconsistencies that have occurred in the review process:
- Although the ADB held a series of workshops beginning in June 2000, it concluded the “external” portion of its review in February 2002 before it had widely released and solicited input on the first Working Paper draft of the proposed policy. The Bank claims that the current (and probably forthcoming) stage of the review is “internal.” Thus the ADB has closed any opportunity to engage in public debate with external stakeholders on the actual substance of the proposed Policy.
- In June 2003, and only after much civil society pressure, ADB posted a draft of the policy on its website and indicated that they welcomed comments. The Board of Directors met in July 2003 and discussed and rejected this version. However, the website was never updated to reflect this and external stakeholders were faced with commenting on an already rejected proposal.
- At the moment the ADB's web-site states that the Bank's Forest Policy Review Team is finalizing revisions to the June 2003 version and a revised draft “will be made available for stakeholder comments by January 2004”, at which point the ADB will accept comments for four weeks. However, as of the date of this briefing (February 2004), the revised version is still not available.
The ADB’s review process has been almost completely internal. The Bank has not explained how it will decide which comments are to be included and which are to be ignored. Given the flawed process behind the preparation of the Bank's new forest policy, the latest publicly available draft has serious failings and in many ways is a step backwards from the 1995 version.
The previous policy explicitly prohibits the ADB from lending to any projects that would damage forests. It also made Environmental Impact Assessments compulsory for any project that might affect forests. These two important provisions are absent in the latest available draft and are likely to be completely lost in the current review. The current draft is very weak in a number of other areas including:
- An assumption that more ADB investment in the forestry sector will lead to better management and reduced rates of deforestation even though the ADB has not conducted an independent analysis of the impact of its lending on forests so it cannot rightly assume that increased lending will produce better results in this sector.
- Although the Policy recognizes the importance of forests to Indigenous Peoples, it does not go far enough in securing their rights when their access to forests is threatened.
- The policy suggests the ADB is committed to promoting carbon-sequestration projects, though the Bank has not yet consulted with forest dependent communities about the potential benefits and risks of such projects.
- Though the Policy acknowledges that there has been “corruption, a lack of transparency, and inefficient and unsustainable forest exploitation” in Asia, it does not go on to explain how it will prevent corruption in its projects that affect forests.
- The proposed Policy lacks clear definitions to distinguish plantations from natural forests.
Case Study- Tree Plantation for Livelihood Improvement Project, Laos**
In Laos, industrial plantation forestry is being promoted in some villages through the Asian Development Bank (ADB)-supported Plantation Project. In the most recent form of this project, a private company with majority New Zealand ownership --BGA Lao Plantations-- has been granted concessions to develop eucalyptus plantations on 50,000 hectares of land in central Laos (of which only a small amount has so far been planted). At Ban Nao Neua, in Xaibouli district, villagers reported that 100 hectares of their dry dipterocarp forest area was destroyed before being planted with eucalyptus in the mid-1990s. The ADB Plantation Project supported the eucalyptus planting.
Villagers observed that the forest resources they used to depend upon when the area was covered with natural forest could no longer be found in the eucalyptus plantation. ADB consultants tried to reassure the villagers that their plantation would not cause soil fertility problems, but locals remained skeptical. The foreign consultants associated with the project could not speak the Lao language, and the villagers reported that they were not able to clearly express their concerns to them. Finally, when the ADB suggested that villagers convert more of their land into eucalyptus plantations, the villagers refused and they have not planted any additional eucalyptus on common lands since then.
Another concern is that forests managed as commons by communities will be replaced with privately-owned industrial tree farms, thus marginalizing the poor and disadvantaged groups in society who previously relied on these commons resources for their livelihoods. For example, wild mushrooms are one of the most important sources of cash income for villagers in Ban Palay, and the best areas for collecting mushrooms are in the dry dipterocarp forests that are beginning to be converted into eucalyptus plantations. They now stand to lose this critical source of livelihood.
Proposed Reforms
The ADB's forest policy must provide safeguards to protect the forests and people of the region by preventing ADB funding of projects that might damage forests. Without commitment from the ADB to adhere to clearly stated principles and standards the Policy serves more as a mission statement rather than a tool which could be used to safeguard the region’s forests. We call on donors to take the following steps toward ensuring that the review process results in an improved Forest Policy:
- ADB should conduct an independent, in-depth review of the impact of ADB lending on forests in the Asia Pacific region. This review should not be limited to forest projects but should include all projects (roads, hydropower, etc.) where forests have been affected. The review should be open and involve the informed participation of forest dependent communities, NGOs, governments, and other interested external stakeholders
- The flawed, non-transparent and non-participatory manner in which the current review has been conducted should not be accepted as a legitimate and adequate form of consultation by donors. A process should be initiated whereby the fundamentals of the policy should be examined in an open and transparent manner with all external stakeholders.
- The new Forest Policy should explicitly apply to all aspects of ADB lending which have a potential impact on forests
- The new Forest Policy should require that Environmental Impact Assessments be carried out for all ADB projects that affect forests
- The importance of Indigenous People’s rights must be clearly stated in the Policy and the right to prior informed consent must be guaranteed in the Policy.
- The Policy should not endorse carbon-sequestration projects. Before developing an institutional position on carbon sequestration the ADB must first engage in discussion and debate with governments and citizens, particularly forest dependent communities, in an informed and participatory manner about the potential benefits and risks of such projects.
- The Forest Policy should require an assessment of corruption risks in projects that will affect forests, and identify steps to be taken during project identification and implementation to prevent or uncover such risks.
- The Policy should clearly state that plantations are not forests and that country or regional forest cover statistics should clearly differentiate between forests and plantations.
Notes
* June 2003 version
** Case Study from Chris Lang article in WRM's bulletin Nº 59, June 2002 available at http://www.wrm.org.uy/bulletin/59/Laos.html