Workshop:Forest Policies and

Sustainable Developmentin the Amazon

Rio de Janeiro - Brazil, 14 - 16 July, 1997

FUNDAÇÃO BRASILEIRA PARA O DESENVOLVIMENTO SUSTENTÁVEL

UNITED NATIONS DEVELOPMENT PROGRAMME

Preface

There can be no question of the importance of the subject of thisworkshop. Forests have become a sustainable development issue ofhighest priority for many countries. The Amazon is the largest tropical

forest covering almost five (5) million Km2, is home to seventeen (17) millionpeople and harbors the greatest biological diversity on the planet.

Since the Earth Summit in Rio economic globalisation and a rapid increasein transnational corporate operations and investments as well as in the devel-opment and transfer of technology have transformed global demand for andmarkets and trade in forest products, especially timber.

Brazil has been a leader in the extensive international dialogue on alltypes of forests which has been carried out during the Earth Summit and sincethen within the Intergovernmental Panel on Forests (IPF). Brazil is expected tocontinue its active participation in the Intergovernmental Forum on Forests(IFF) during the next three years.

At present there is increased recognition of a close relationship betweenthe national forest policy and international events. There is full realisation andacceptance in Brazil that sustainable development and conservation of its Ama-zon forest is a pivotal issue for the country. At the same time the internationalcommunity has agreed upon a detailed programme of work towards sustain-able forest management which is to be carried forward within each nationalsituation.

Recognising this crucial point in time, the Brazilian Foundation for Sustain-able Development, a civil society organisation, with the full backing of theGovernment of Brazil, conceptualised this workshop and requested UNDP tocollaborate in co-sponsoring it. The idea was to assemble a diverse group ofthe most knowledgeable national and international experts representing thenatural and social sciences, the private sector and civil society. The expertswere asked to focus on economic, biological and institutional aspects of poli-cies which affect forests in the Brazil Amazon and to formulate recommenda-tions taking into consideration IPF�s proposals for action, particularly thoserelated to �national forest programmes�, �the underlying causes of deforesta-tion�, �traditional forest knowledge� and �trade and environment�.

Discussions of sustainable forest management anywhere, and particularlyin the Amazon, involve sensitive issues where strong ideological positionsexist. The Workshop discussions were open, wide-ranging and unrestricted.We believe that the participants developed some very useful and practicalrecommendations which can serve to advance the science and art of sustain-able forest management in the Amazon. These recommendations are set out inthe Report of the Working Groups and in the Executive Summary of the Work-shop Results.

The Workshop was based on the premise that large areas of the Amazoncan and should be dedicated to the protection of natural resources. The Gov-ernment of Brazil has made an impressive start on this, and everyone involvedrealizes that great efforts and advances in building the capacity to manageprotected areas are urgently needed.

In addition to a protected area system, sustainable forest managementinvolving harvesting of timber and other products and services is appropriateover extensive areas. There is however a great deal to be done to reach thisgoal. Following the right steps could place Brazil in a leadership position in thiscrucial area of sustainable development.

The ingenuity and efficiency of the private sector will be required tomanage such operations. The government must be involved to protect publicbenefits and services and to ensure that local communities including indigenouspeople receive equitable benefits. This will require new kinds of public-private partnerships that need to be piloted and replicated.

An equally significant challenge will be to develop viable ways so that allthose who benefit from the ecological services of the Amazon can contributeequitably for its sustainable management. The harsh reality is that existingmarket forces will lead the local user to liquidate the resource. The paltrybenefits this provides are minimal compared to the full value of the forest. Thisis an urgent agenda for the international community.

Any event, project or meeting on an issue as complex and intractable asthis one can only make a small contribution toward progress to sustainabledevelopment. The Brazilian Foundation for Sustainable Development and UNDPwill continue to collaborate with the Brazil Government on the work that mustgo forward from here, especially the great need for capacity building in manysectors and at several levels.

Israel Klabin Ralph SchmidtPresident Director, Forest Programme

Brazilian Foundation Sustainable Energy andfor Sustainable Development Environment Division, UNDP

Sumário

PREFACE .................................................................................................................................... 3

EXECUTIVE SUMMARY ............................................................................................................ 7Angelo A. dos SantosMilagre NuvungaEneas Salati

ECONOMIC CONSIDERATIONSPERTAINING TO THE EXPANSION OF LOGGING IN THE AMAZON ........................... 15Jeffrey R. Vincent

IMPACT OF INTERNATIONALTROPICAL TIMBER TRADE ON THE AMAZON RAINFOREST ........................................ 25M. L. Joshi

MERCADO NACIONAL DE MADEIRAS TROPICAIS ............................................................ 41Ivan Tomaselli

GERAÇÃO, DISPONIBILIDADEE USO DE INFORMAÇÕES PARA MANEJAR FLORESTAS NA AMAZÔNIA ..................... 51Paulo Barreto

CERTIFICAÇÃO SOCIOAMBIENTAL,BOM MANEJO FLORESTAL E POLÍTICAS PÚBLICAS ...................................................... 61Virgílio M. Viana

FOREST CONCESSION POLICIESAND SUSTAINABLE FOREST MANAGEMENT OF TROPICAL FORESTS ......................... 71John A. Gray

POLÍTICA FLORESTAL COERENTE PARA AMAZÔNIA ....................................................... 113Adalberto VeríssimoCarlos Souza Júnior

SOME SUGGESTED CONTRACT PROVISIONS FOR FORESTRYCONTRACTS ON LAND OWNED BY THE FEDERATIVE REPUBLIC OF BRAZIL ........ 119David N. Smith

ANNOTATED BIBLIOGRAPHY............................................................................................. 135Namrita Kapur

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1. Introduction

1.1 Aspects of the Problem

Since most of the African forests are extinct and the remaining rain forests are seriouslyendangered by the large contingents of populations seeking new land for settlement, the abun-dant African tropical rain forests of yesterday have now only a small share in the internationaltimber market.

In recent decades, Southeast Asia has played the role of supplier to the world tropicalhardwood market, adopting an exploitation policy which has led to the exhaustion of its forestreserves and seriously endangering this region with such megabiodiversity. After depleting theirown forest reserves, the exporting and importing countries of Southeast Asia adopted a policy toboycott the predatory exploitation of the forests in that region.

The constant demand for timber on the international market forced the countries operating inthat part of the world to seek new sources of raw material and the target moved to the Amazon.Over the past few months, the Brazilian press has had headlines on the increased presence ofinternational timber companies in the Amazon. Independent research institutes have shown thatthe onslaught on the Amazon has already started via Surinam and Guyana.

The international tropical hardwood market is not the predominant reason for deforestation.There are only a few species which are marketed but the exploitation itself and opening up ofroads to alochthonous populations are the main reason for the impact on forest degradation.Brazil does not yet have an institutional public policy framework which can stand against themass destruction associated with this heavily predatory industry. The Amazon rain forest, the lastlarge forested area on the planet, has never been so endangered as at this moment.

The Amazon forest sector has only a tiny share in the international timber market anddomestic economy, but contributes significantly at a regional level. This economic importanceconfronts the fact that forest harvesting in the region occurs on a predatory basis; activity whichrepeats the history of the Atlantic rain forest exploitation, as all Brazilians know too well.

The predatory use of forest resources has various reasons, among which are included: notenough public areas for sustainable forest production, distorted policies (transport, energy, farm-ing, etc.), lack of loan incentives to the sector, deficient forest monitoring, low timber value dueto the abundance of stockpiling and low economic and social return for the local populations inthe use of such resources.

In order to draw up a new development model according to the international agreementssigned at UNCED 92, environmental preservation and economic success must go together.

Executive SummaryAngelo A. dos Santos 1

Milagre Nuvunga 2

Eneas Salati 3

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As a general principle of this seminar,much emphasis was given to the Amazonforest�s representing an environmental priorityfor Brazil and the rest of the planet. A suitablestrategy must be drawn up for the use of theregion�s natural resources, at two fundamentallevels, in order to be feasible:

�Design for use of timber potential�Associate this use with sustainability criteria.

With regard to defining public policies,the aspects which were discussed during thedebates and which require close co-operationfrom the government and civil society as awhole in order to help bring them about, are:

�The region�s need for sustainable eco-nomic development, adopting the criteriadefined by economic-ecological zoning.

�The inclusion of other economic sectors,that is, industry, sustainable farming, min-ing and any activity which can increasethe local income, distributing it properlyto benefit the region and, consequently,provide socio-economic alternatives topreserve the forest resources.The overall recommendation of the semi-

nar is:� carry out a socio-economic and ecological

zoning on proper scales. This zoning willbe the basis for locating areas to imple-ment Sustainable Forest Management.

� install technologically advanced monitor-ing systems which provide real time datato the overseeing institutions.

� implement a transparent and independentmonitoring of public and private activitiesas a fundamental tool for democratising thesupervision system. The objective is toinvolve civil society as a major partner inthis supervision, in order to help society,in practice, to be taught and participate inunderstanding the concepts ofsustainability.

� create a set of simple rules in order tocontrol the timber trade.

� create clear and consistent principles (forall parties) to guide the negotiations foragreements between public and privateinstitutions.

� include in the forest management agree-ments NTFP - no timber forest productsand also eco-tourism.

�grant certificates to Sustainable Forest Man-agement operations as a potential tool for

its adoption. Independent assessments ofresources and operations must be made.

� integrate the forest policy with other sec-tors (joining intersectoral policy).

� transparency in operations and decisions.� create a program for capacity building at

federal, state and community levels aim-ing at implementing appropriate sustain-able development projects.

� introduce the variable � environmentalservices � when formulating a sustainabledevelopment strategy for the Amazon.The most important environmental ser-vices provided by the forest in relation tothe balanced regional and global climateare the maintenance of water cycles, car-bon retention, soil conservation andbiodiversity.

� implement environmental accounting toadd the high value of the forest�s environ-mental services.

� extend the international cooperation to en-hance the capacity building and developnew markets for forest services.It was evident that the institutional and

juridical-legal instruments to ensure successfulsustainable forest management are inadequate.The recommended priorities are:

The seminar delegates made commentsthat:

�with regard to fair and proper compensa-tion systems, the climate and biodiversityagreements approved express articlescontaining the plan for mechanisms whichadd value to the environmental services.Approval of such mechanisms has encour-aged Brazil, and other tropical rain forestcountries, to expect incoming foreignfunds which are required to implementsustainable development. It is worth men-tioning that what has been established inthe Agreements is guaranteed as an Inter-national Treaty by the signatory countries.

�There is the need for a strategic sustain-able development project in the defor-ested and already degraded areas in thesouthern Amazon basin, spreading as faras the cerrado, for which the governmentwould find foreign public and privatefunds.

�The clearest policy imperative is to con-tinue to reduce and eliminate public sub-sidies for unsustainable development.

2. General Principles Conclusions And Recommendations

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Where ecological economic zoning definesa land use as unsustainable, governmentprogrammes should not promote it. Pub-licly funded road building can representsuch a subsidy.

� Land ownership and markets have a funda-mental influence over forest management.Where land ownership is unclear, as it is inmany areas of the Brazil Amazon, there is astrong disincentive to sustain forest (or anyother) resources. There is still a strong ten-dency to more easily recognise title on landthat has been cleared. (See section on lawand institutions for more on this).

�Due to technology developments the in-ternational timber trade is becoming moreof a commodity trade, demanding an in-creasingly high number of species (insteadof the very specialised traditional marketconcentrating on very few species). Thiscould drastically alter harvesting in theAmazon toward clear cutting; the Govern-ment must monitor and control this situa-tion with great care. It can be noted how-ever that if there is a deliberate land con-version policy, then clear cutting is a ra-tional use of forest resources on thosesites.

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3.1. Group 1 Conclusions: EconomicAspects Of The Forest Issue

International investment in tropical log-ging is shifting toward Latin America, afterseveral decades during which Southeast Asiancountries like Malaysia, Indonesia and thePhilippines attracted the bulk of investmentand produced an overwhelming share of thetropical timber entering international markets.This is a historic shift, analogous to the shiftfrom West Africa to Southeast Asia after WorldWar II. It is driven by the same two factors.The first is the depletion of readily available,low-cost supplies of old-growth timber in thecurrently dominant re-gion (Southeast Asia to-day, West Africa afterWorld War II). This hasinduced the logging in-dustry to look for thenext cheapest source oftropical timber, whichturns out to be the for-ests of Latin America.The second factor istechnological develop-ments that have gener-ated uses for trees ofpreviously unmarketable species and sizeclasses. After World War II, the key develop-ment was technology for making low-cost ply-wood from Southeast Asian dipterocarps. To-day, the key development is milling technolo-gies that permit the use of small-diameter logsin making solid-wood products and mixed spe-cies in making fibre products.

While the first factor may be viewed asincreasing logging pressure in Latin America onan extensive scale (the area logged), the sec-ond increases the intensity of logging (the vol-ume of timber extracted per hectare). Together,the two factors signal an increasingcommoditisation of the Latin American loggingindustry. The industry will continue to shiftfrom selective extraction of large trees of a few,high-value species (notably, mahogany) towardheavier harvesting of a broader range of spe-cies with end uses in construction and otherutility purposes. This represents a shift from aquality orientation to a quantity orientation.

The increase in logging activity in LatinAmerica is unlikely to be accompanied by sub-

stantially higher international log prices. Thereis simply not much evidence that projectedglobal demands for timber will outstrip pro-spective supplies and put significant upwardpressure on prices. Forest areas and timberstocks in temperate countries dominate theglobal timber economy and they are stable orrising. Moreover, logs from natural forests facecompetition from plantation timber and a vari-ety of nonwood substitutes. The emerginginternational market opportunity facing LatinAmerica is therefore one of a gradually risingshare of the tropical timber trade as produc-tion in Southeast Asia declines, with interna-tional log prices remaining approximately con-

stant in inflation-ad-justed terms. It willnot be a bonanza ofrapidly rising pricesstemming from the in-ability of the world tocope with mountingtropical timber scarcity.

The long-run sta-bility of internationallog prices does notmean, however, thatthe timber value ofLatin American forests

will not rise. It will, as the prices of speciesthat previously were not exported rise fromtheir current levels in the domestic market to-ward prevailing international prices. Logprices will also rise for species that are notexported. In recent years, most countries inLatin America have abandoned their statist ori-entation and liberalised their economies. Mar-ket reforms have already raised economicgrowth rates dramatically in several countries.This growth can be expected to raise domes-tic demand for wood and thus put upwardpressure on domestic prices.

In combination with the increased inten-sity of logging, higher prices for exported anddomestic logs will cause the aggregate stump-age value � logging revenue minus logging cost� of accessible forests to rise significantly.Stumpage values to the order of US$ 10,000-20,000 per hectare are today not uncommon inmature tropical logging regions like Malaysia.This is apparently 1-2 orders of magnitudelarger than current stumpage values in LatinAmerican forests.

3. Work Group Conclusions

Rather than sustainabledevelopment, tropical logging

has tended to be associated withboom-and-bust development, in

many cases leaving impoverishedsocieties and degraded

forests in its wake.

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Superficially, the rising stumpage valueof Latin American forests would seem to bodewell for both economic development and con-servation. Logging will generate greater rev-enue for the government and greater profitsfor industry, which can be used to financehigher levels of public and private investmentsin support of development objectives. Therising value also means that forests should bebetter able to outcompete alternative land uses(particularly agriculture) and that investmentsin forest management should be financiallymore viable.

Unfortunately, experience in regions thathave preceded Latin America as the new fron-tier of tropical logging indicates that thesepositive outcomes have historically been morethe exception than the rule. Rather than sus-tainable development, tropical logging hastended to be associated with boom-and-bustdevelopment, in many cases leaving impover-ished societies and degraded forests in itswake. The reasons include a variety of mar-ket and policy failures, which are discussed indetail in numerous books and reports.

With reference to commercial and in-dustrial policies, the delegates suggest thefollowing as fields for defining public poli-cies:

� Increase in research, development andtraining investments, especially to techni-cally and commercially facilitate the ex-ploitation of a larger number of species.Since these investments are of a publicnature, they depend on government orprivate initiatives and funding;

�Creation of incentives for secondary tim-ber processing activities in the region.They shall be performed using suitable in-struments to minimise the degradation offorest resources;

� Imposing commercial restrictions on ex-porting untreated products tends to be in-efficient because of the importance of thehome market and the resulting monitoringand supervising difficulties;

� Foreign capital policies shall be proactiveand not restrictive since foreign capitalmay come to play a major role in thescale-up by introducing the foreign mar-kets� own new extraction technologies. Toprevent profit spread and loss of regionaladded value, a tax policy is required toencourage industrial verticalisation.

�Transportation policies shall be adoptedwith caution, since opening up highwaysis known to be one of the main causes of

the deforestation process. Thus, highwayinvestment shall be consistent with pres-ervation objectives and must, therefore,be adapted to and facilitate ecological zon-ing and forest concession policies.

3.2. Group 2 Conclusions - Techno-scientific Aspects Of Forest Management

On the basis of theoretical ideas and thesupport principally of the results of experi-mental projects undertaken in the Amazon, theseminar delegates strongly maintain that:

Sustainable Management of the Ama-zon rain forest is possible since:

� the forest which survives forest exploita-tion responds positively to the reductionin its original density;

� it is possible to advise on tree-cutting andcontrol the size of the clearing and, conse-quently, the micro-climatic conditions;

� it is possible to identify the species whichrequire vital nutrients for their growth anddevelopment, by forest succession control;

� the diameter increase of managed trees isdouble that of virgin forest;

� it is possible to increase the volume ofcommercial species by using appropriateforestry methods;

�managed forest accumulates more carbonthan virgin forest.The delegates also suggest the following

as areas for defining public policies, withoutwhich management programmes would be se-riously prejudiced with regard to theirsustainability:

�Establish general guidelines, criteria andsustainability indicators of forest manage-ment for the Amazon.

�Review and update the supervision sys-tem, including personnel training, inde-pendent in-house audit, access to newequipment, technologies and methodolo-gies.

�Guarantee forest research funding, oncompetitive bases (invitations to bid), alongthe lines defined by the scientific commu-nity, public authorities and productive sec-tor.

�Encourage integrated and co-operative co-ordination among the institutions whichwork with environmental monitoring us-ing remote sensing.

�Organise advanced forestry courses, in-cluding personnel training at all levels,preparing educational material on forest

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onmanagement and support for demonstra-tion projects (industry, government, andteaching and research institutions).

�Recover any existing information on for-est management and basic and applied re-search considered as a pre-requisite formanagement.

�Co-ordinate with SIVAM/SIPAM - Amazon-iam Survey Sistem - to access monitoringdata.

3.3. Group 3 Conclusions - InstitutionalAspects And Concessions

First, this group identified two guidelinesfor formulating policies as orientation for thedebates on this subject:

�The increase and consolidation of publicforest areas (federal, state, municipal) fortimber production, and goods and servicesunrelated to timber.

�The organisation of SFM (Sustainable For-eign Management) in the Amazon as a keyitem in the region�s sustainable develop-ment.

n Land Ownership and SFMThe group spent considerable time on

the question of land ownership, as well as oneconomic matters. Land ownership is in achaotic state in many areas of the Amazon,and this leads to several negative and seriousconsequences for SFM. The fundamentalpoints in the relationship between the landownership and management question are asfollows4 :

� in cases where land ownership is uncer-tain, individuals and companies find it hardto make long term investments in forestsand have little or no incentive to maintainor protect the resources;

� the primary requirement to legalise SFM isthe land ownership deed;

�where land ownership is uncertain, gov-ernments do not, then, have solid groundto negotiate agreements with privateorganisations for forest management;

�uncertain land ownership leads to defor-estation without any economic objectiveswhatsoever, other than that of claimingownership;

�uncertain land ownership causesgeneralised conflict and an out-law sys-tem, and encourages criminal activity;

� institutional debility and uncertainties re-garding land ownership and use, the pro-

posed solution for which is a policy ofland concessions based on the previousecological zoning of the region, whosebasic features would be:� long term contracts;� availability of large areas;�management restrictions and minimised

government monitoring;� contracts with agents whose responsibil-

ity and legal guarantees are clearly de-fined;

� clear definition of penalties and commer-cial law courts;

� transparency in rules for bidding;� agreement with the adopted transporta-

tion policy;�need to create an agency primarily fo-

cusing on forest management eitherwithin or outside IBAMA�s - Brazilian En-vironment Agency - scope.

Also on the question of land ownershipand SFM, the group emphasised the difficultyin reaching SFM in unregulated private land.This is closely related to the work of the Groupon Economic Aspects of the Forest Question,which assumes that, from the strictly economicviewpoint, without taking into account exter-nal factors, it is currently more profitable toliquidate the forest resources than managethem and conserve them for extraction in thedistant future.

This underlies the principle, recom-mended by the seminar, that public landshould be extended to being used as produc-tive forests.

Partnerships could, then, be formed be-tween the public and private sectors, basedon forest management agreements aiming atSFM.

It is also acknowledged that the Braziliangovernment has substantial powers to regulateprivate forested land. Although SFM on un-regulated private land has been considered adifficult task, there may be cases in the futurein which a large private property can makeagreements with the government, based onapproved management plans which may re-sult in SFM. (See, however, the discussion inthe economic section on payment for forestservices in benefit of the public.)

n Land Ownership and Economic-Ecological Zoning

A lot of work has been done on ecologi-cal-economic zoning in the Brazilian Amazon.Nevertheless, this is a very complex area andrequires an increasing understanding of the

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ecosystems and human ecology in the Ama-zon. A major research programme must be un-dertaken.

Land use zoning is not only a technicalexercise. There may be overlapping and con-flicting issues. These conflicting issues maybe supported by different groups of interests.A land use zoning programme needs to in-clude conflict solving and mediation mecha-nisms.

The spread of the public forest land willrequire the basis of knowledge of an ecologi-cal-economic land use zoning plan. Based onan SIG, this would identify future areas of sus-tainable farming potential; it would identify themost important areas for biodiversity or water-shed preservation; it would consider the pro-tected indigenous reserves and identify anynew appropriate areas; it would identify po-tential mining areas; it would identify forestmanagement areas for various managementlevels, such as tourism, non-timber extractivismand timber production.

n Legal and Institutional Aspects of LandOwnership and SFM

To organise its discussion on legal andinstitutional issues, the group created an oper-ating matrix. For each field indicated, thegroup pointed out areas where state media-tion is necessary to create public policies.

Public Forest LandPublic Forest Land is the most promising

in achieving sustainable management of natu-ral forests.a) Public/Legal

�Development of a legal structure for for-est management agreement policy (con-cessions).

� Seeking authority for long term contracts(with performance-based annual renewalor rescission).

b) Public/Economic Policy�Development of forest management

agreement models for timber and non-tim-

ber products.�Establishing monitoring procedures by

government (federal and state) and non-government organisations.

c) Public/Institutional�Decentralised administration at state and

community levels.� Setting up dynamic institutional capacity

building programmes at federal, state, mu-nicipal and community grass root levels.

� Independent monitoring, transparent andaccessible to groups of interests. (Mayprovide a basis for future certificate con-cession to forest products.)

Private Forest Landd) Private/Legal

�Clarify land possession in order to removeuncertainties and clearly define land whichcan be used for the public forest system.

�Define and adopt SFM criteria and indica-tors.

� Simplify and streamline the regulations onforest management for private land own-ers.

e) Private/Economic Policy�Regulate extraction (quantity of trees per

ha; interval between cutting cycles; widthof fire prevention corridors).

� Implement SFM-supportive tax provisions(for instance, territorial tax - ITR).

� Include local communities in the monitor-ing systems.

�Grant medium-size subsidies to anyone in-terested in developing non-profit commu-nity management systems.

f) Private/Institutional (see Appendix II: Pri-vate Land Implementation Plan)

�Develop a partnership between publicand private organisations to evaluate theforest resources.

� Set up financial lending mechanisms (lowinterest for approved SFM operators).

� Set up partnerships between public andprivate organisations for SFM on largescale private properties.

Structure for Legal and Institutional Considerations

LAND OWNERSHIP ISSUES

Legal Economic Policy Institutional

Public 1* 2 3Private 4 5 6Indigenous & Community 7 8 9

* the figures listed in these columns correspond to the numbers of the following sub-items.

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onGrant subsidies and other support for com-munity-based SFM.

Indigenous and Community Landg) Indigenous-Community/Legal

�Clarify the legal structure to make it com-patible with SFM.

�Clarify the communal ownership systemby developing innovative mechanisms.

h) Indigenous-Community/Economic Policy�Undertake government supervision on

land use and forest extraction practices.�Develop a policy to create jobs in SFM for

the poor rural population.�Draw up a policy to use public forest rev-

enue in benefit of the community, such asschools and medical clinics.

i) Indigenous-Community/Institutional� Strengthen the capacity to assess proce-

dures, negotiate agreements and manageforest resources.

�Ensure full participation of the indigenouspeoples.

�Reinforce co-operation between FUNAI -Brazilian Agency for Native Americans-and IBAMA - Brazilian EnvironmentalAgency.

�Develop intensive work programmes forfibre production and charcoal stockpilingin degraded land where there are signs ofa competitive edge.

n General Principles For Creating APublic Concession Policy

The term �Forest Concession� may havethe unfortunate connotation of assigning pub-lic resources or referring to non-renewable re-

sources. The group suggested the term �for-est management agreement� to emphasise thatthis must be an agreement in which the gov-ernment needs to retain substantial control andongoing responsibility.

The �concessions� may be for timberor non-timber products or for ecotourism.

�Establish standards for environmental/eco-logical projections and sustainable develop-ment.

�Tax project which gives the government afair value for its timber and other resources.

�Conceive agreements where there may beas much self-imposition as possible to re-duce the administration bureaucracy ingovernment departments.

� Include insurance-performance and pen-alties to ensure compliance of contracts.

�Periodical reports and assessments regard-ing company performance.

�Monitoring committee involving local com-munities.

�Transfer regulations � only with govern-ment permission.

�Technical assistance to local communities.�Define the size (and time) of agreement

concession with growth and increase inthe managed Amazon rain forest.

� Establish different concessions for differ-ent Amazon ecosystems.

�Consider the unusable tree species.�Assess the regulation process of timber ex-

ploitation.� Stipulate limits on use of forest property.� Link transfer of concession to forest certi-

fication.

Notes

1 Coordinator For External Affairs - Fundação Brasileira para o Desenvolvimento Sustentável (Brazil)2 Forest Capacity Programme Advisor - SEED/BPPS - United Nations Development Programme (USA)3 Technical Director - Fundação Brasileira para o Desenvolvimento Sustentável (Brazil)4 The group is aware that they had not been invited because of their specialised knowledge on matters of land

ownership and possession, but does recognise the vital importance of such matters. This may be an areafor follow-up work.

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1. Background: changing conditionsin international and domestic markets

International investment in tropical logging is shifting toward Latin America, after severaldecades during which Southeast Asian countries like Malaysia, Indonesia, and the Philippinesattracted the bulk of investment and produced an overwhelming share of the tropical timberentering international markets. This is a historic shift, analogous to the shift from West Africa toSoutheast Asia after World War II (Laarman 1988). It is driven by the same two factors. The firstis the depletion of readily available, low-cost supplies of old-growth timber in the currentlydominant region (Southeast Asia today, West Africa after World War II). This has induced thelogging industry to look for the next cheapest source of tropical timber, which turns out to be theforests of Latin America. The second factor is technological developments that have generateduses for trees of previously unmarketable species and size classes. After World War II, the keydevelopment was technology for making low-cost plywood from Southeast Asian dipterocarps.Today, the key development is milling technologies that permit the use of small-diameter logs inmaking solid-wood products and mixed species in making fiber products.

While the first factor may be viewed as increasing logging pressure in Latin America on anextensive scale (the area logged), the second increases the intensity of logging (the volume oftimber extracted per hectare). Together, the two factors signal an increasing commoditization ofthe Latin American logging industry. The industry will continue to shift from selective extractionof large trees of a few, high-value species (notably, mahogany) toward heavier harvesting of abroader range of species with end uses in construction and other utility purposes. This representsa shift from a quality orientation to a quantity orientation.

The increase in logging activity in Latin America is unlikely to be accompanied by substan-tially higher international log prices. There is simply not much evidence that projected globaldemands for timber will outstrip prospective supplies and put significant upward pressure onprices (Sedjo and Lyon 1990, FAO 1997a). Forest areas and timber stocks in temperate countriesdominate the global timber economy, and they are stable or rising (FAO 1997b). Moreover, logsfrom natural forests face competition from plantation timber and a variety of nonwood substitutes.

The emerging international market opportunity facing Latin America is therefore one of agradually rising share of the tropical timber trade as production in Southeast Asia declines, withinternational log prices remaining approximately constant in inflation-adjusted terms. It will not

EconomicConsiderationsPertaining to theExpansion of Loggingin the Amazon

Jeffrey R. Vincent 1

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onbe a bonanza of rapidly rising prices stem-ming from the inability of the world to copewith mounting tropical timber scarcity.

The long-run stability of international logprices does not mean, however, that the timbervalue of Latin American forests will not rise. Itwill, as the prices of species that become ex-portable rise from their currently lower levelsin the domestic market toward prevailing inter-national prices. Log prices will also rise forspecies that are not exported. In recent years,most countries in Latin America have aban-doned their statist orientation and liberalizedtheir economies. Market reforms have alreadyraised economic growth rates dramatically inseveral countries. This growth can be expectedto raise domestic demand for wood and thusput upward pressure on domestic log prices.

In combination with the increased inten-sity of logging, higher prices for exported anddomestic logs will causethe aggregate stumpagevalue � logging revenueminus logging cost � ofaccessible forests to risesignificantly. Stumpagevalues on the order ofUS$10,000-20,000 perhectare are today not un-common in mature tropi-cal logging regions likeMalaysia.2 This is appar-ently 1-2 orders of mag-nitude larger than currentstumpage values in Latin American forests.

Superficially, the rising stumpage valueof Latin American forests would seem to bodewell for both economic development and con-servation. It means that logging will generategreater revenue for the government andgreater profits for industry, which can be usedto finance higher levels of public and privateinvestments in support of development objec-tives. It also means that forests should be bet-

ter able to outcompete alternative land uses,particularly agriculture, and that investmentsin forest management should be financiallymore viable.

Unfortunately, experience in regions thathave preceded Latin America at the frontier oftropical logging indicates that these positiveoutcomes have historically been more the ex-ception than the rule. Rather than sustainabledevelopment, tropical logging has tended tobe associated with boom-and-bust develop-ment (Vincent 1992b). In many cases, it hasleft impoverished societies and degraded for-ests in its wake. The reasons include a varietyof market and policy failures, which have beendiscussed in detail in numerous books and re-ports (see especially Repetto and Gillis 1988).

My purpose here is not to review this lit-erature, but rather to highlight four policy objec-tives that Brazilian decisionmakers should focus

on to increase thechances that Brazil as anation, and not just theBrazilian forestry indus-try, will reap long-runbenefits from increasedlogging in the Amazon.I take as given that log-ging will indeed in-crease in the Amazon,without passing judg-ment on the desirabilityor undesirability of thatdevelopment. The

policy recommendations in this paper are inten-tionally at a rather general level. My aim is the�big picture,� which often gets lost in forestrypolicy discussions due to the complexity of for-est resources and the diverse array of demandsplaced on them. Moreover, Gray (1997) hasalready covered many of the �micro� issues re-lated to timber pricing and timber concessionagreements that this paper might otherwise haveaddressed.

My purpose here is not to reviewthis literature, but rather to

highlight four policy objectives thatBrazilian decisionmakers shouldfocus on to increase the chances

that Brazil as a nation, and not justthe Brazilian forestry industry...

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Tropical deforestation is not an unprec-edented phenomenon. Large-scale deforesta-tion occurred at rapid rates during the pre-industrial era in most countries that are cur-rently considered developed. In many cases,the conversion of forests to alternative usesmakes economic sense: the benefits outweighthe costs, even after factoring in nonmarketenvironmental benefits and costs (e.g., water-shed protection, carbon sequestration,biodiversity protection, etc.). When land allo-cation is determined solely by market deci-sions, however � which appears to be the casein the Amazon today � typically too much for-est is converted. There are two reasons forthis. The first is that land markets typicallyignore some or all of the environmental ben-efits of forests. The benefits have social value,but they are externalities from the point ofview of buyers and sellers in land markets.That is, they do not affect private returns fromuse of the land.

The second reason is that policies inmany countries favor forest conversion,through the provision of various subsidies andother incentives. This exacerbates market fail-ures related to the first reason. The case oftax breaks and subsidized rural credit for ranch-ing in the Amazon is well-known (Browder1988, Mahar 1989, Binswanger 1991). Al-though the Brazilian government has appar-ently reduced ranching subsidies, other explicitand implicit subsidies favoring agricultureprobably still exist, as they do in virtually ev-ery country. Removing these subsidies is afirst step toward ensuring that increased log-ging in the Amazon does not stimulate exces-sive deforestation as logging roads improveaccess to currently remote areas. It also makessense economically: subsidies impose costs onthe overall economy, in the form of inefficientuse of available labor and capital resources,that typically exceed the benefits reaped bythe favored industries. Economic reform pro-grams typically involve the politically difficulttask of removing or reducing such subsidies.In this way, the pursuit of good economic poli-cies outside the forest sector is a key ingredi-ent in minimizing deforestation.

Good economic policies contribute in an-other way as well. Developed countries havesucceeded in stabilizing their forest areas notso much because they have established forestreserves that they have zealously and success-fully protected from encroachment, but ratherbecause they have developed their economiesand thereby generated off-farm sources of em-ployment for the rural population. Successfuleconomic diversification into manufacturingand services siphons labor out of agricultureand thus reduces pressures to encroach on for-estland. For example, much of the public for-est area in the United States consists of �landsthat nobody wanted�: although it might havebeen physically capable of supporting someform of agricultural use,3 the cost of convertingthe land exceeded the prospective returns fromthe standpoint of private individuals and com-panies. They preferred to invest their time andresources in other economic pursuits.

U.S. evidence indicates that economicdevelopment can do more than simply slowthe rate of agricultural expansion. It can ac-tually reverse it. Forestry is less labor-inten-sive than agriculture and thus is favored, inrelative terms, by rising labor costs. Much ofthe private forest area in the U.S. consists oflands that were formerly in agriculture butwent out of production as industrialization andurbanization drove up the cost of rural labor(Clawson 1979). A similar process of a re-ceding agricultural frontier can be observedtoday in some of the most rapidly industrial-izing developing countries, such as Malaysia(Vincent, Rozali, and Associates 1997).

The Brazilian government should there-fore carefully examine policies in sectors thatmight compete with forests for use of land inthe Amazon, to ensure that those policies donot discriminate in favor of nonforest sectors.It should also continue to pursue economicreforms that liberalize the economy and pro-mote sustained economic growth. These ac-tions on their own are not sufficient for ensur-ing the proper level of forest protection, butthey are essential preconditions. They helpensure that the sector-specific policies de-scribed in the next three sections will succeed.

2. First objective:pursue sound economic policies outside the forest sector

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The conversion of agricultural lands backto forests as the U.S. developed was due notonly to rising labor costs, but also to risingstumpage values. The latter reflected deple-tion of old-growth timber stocks, a process thatis in its final stages today.4 Available histori-cal evidence indicates that stumpage marketswere quite efficient in signaling rising scarcityeven in frontier areas during the 19th century(Johnson and Libecap 1980). In response torising stumpage values, private forest ownersin the U.S. not only expanded the area undertheir control but also intensified their manage-ment of those lands. Similar adjustments haveoccurred on private forestlands in Western Eu-rope and Japan during this century.

On the surface, two characteristics ofAmazonian forestry suggest that similar market-driven adjustments might occur there. First, al-though precise estimates are difficult to obtain,much of the forestland in the Amazon is undersome form of private ownership. Second, andas noted at the beginning of this paper, stump-

3. Second objective:clarify and strengthen forest property rights

age values are likely to rise in the Amazon.Unfortunately, a key ingredient is missing inthe Amazon: clear and secure forest propertyrights. Many land claims in the Amazon arevaguely defined or overlapping. They are notbacked up by legally enforceable land titles.Such weak property rights discourage investorsfrom making the types of investments in forestmanagement that have occurred on privatelands in temperate developed countries duringthis century.

By clarifying and strengthening forestproperty rights, the Brazilian government canboost private forest owners� incentive to keeptheir lands in forestry on a permanent basis.This is obviously more easily said than done.It is difficult to imagine a more politicallycharged issue in Latin America than land re-form. In the absence of such reform, how-ever, many forests under the control of privateparties will be converted inappropriately toagriculture, harvested too rapidly, or leftunmanaged after logging.

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The Brazilian government recently an-nounced plans to open 2.2 million hectares ofpublic forests in the Amazon for logging(Schemo 1997). This marks the first time thatlogging has been allowed on public lands inthe Amazon. Many environmentalists havecriticized the decision on the grounds that itwill accelerate losses of important nontimbervalues, both through the direct impacts of log-ging and indirectly through improved accessprovided by logging roads.

That forests provide multiple values iswidely recognized both inside and outside Bra-zil. One way to provide those values is throughmultiple-use forestry: stand-level managementaimed at producing theoptimal mix of timber andnontimber values.5 Thisis the approach that ispresented in most for-estry textbooks (e.g.,Pearse 1990). It is con-sistent with so-called�new forestry� (Franklin1989) and with manydefinitions of sustainableforestry. It assumes thatthe best way to managetradeoffs between timberand nontimber values, and thereby ensure thatthe forest generates the greatest possible con-tribution to society, is through modification ofstand-level forest management practices. Forexample, rotations might be lengthened andlogging intensity reduced in order to reducethe negative impacts of logging on nontimbervalues.

The alternative approach is dominant-usemanagement: zoning the forest estate into ar-eas managed more or less exclusively forsingle uses. Under this approach, the forestestate generates both timber and nontimbervalues, but individual stands do not necessar-ily, except perhaps incidentally. The key stepin dominant-use management is the allocationof stands among alternative uses. Some standsare managed intensively for timber produc-tion, without altering the management regimesignificantly to take into account nontimbervalues. By and large, those values enter tim-ber management decisions only insofar as they

influence timber production. Nontimber val-ues are the focus of management activities inother stands, typically ones with steep slopesprone to erosion, with unique habitat, or withother environmentally sensitive features.

Neither approach is economically supe-rior in all forest types. The choice approachis an empirical matter, which depends on ad-ministrative and ecological considerations. Inthe Amazon, I would wager that further analy-sis would reveal dominant use to be superiorto multiple use for both administrative andecological reasons. Dominant-use managementtends to be simpler to implement and adminis-ter, because it involves fewer objectives at the

operational level (thestand). In areas zonedfor timber production,the system is basicallystraightforward timbermanagement; in areaszoned for nontimbervalues, it tends towardcomplete protection.Simplicity is an attrac-tive characteristic in afrontier region like theAmazon, where moni-toring is difficult. Infra-

structure decisions would be a principal meansof passively enforcing zoning decisions, bykeeping roads and railroads out of and far fromareas not zoned for logging.

Dominant use tends to be superior tomultiple use when ecological conditions aresuch that the tradeoffs between timber andnontimber values are sharp, i.e. when thereare strong negative externalities between thetwo.6 Then, spatially separating the two usescan generate greater outputs of both than at-tempting to produce both in the same stand.Compared to multiple use, dominant use in-volves opening a smaller area for logging, butmanaging that area more intensively for tim-ber production. The consequence is that anyreduction in the output of nontimber values inareas zoned for timber production is more thancompensated for by the increased area setaside purely for nontimber values. In a studyof U.S. national forests, Bowes and Krutilla(1989) found that dominant-use management

4. Third objective:zone public forests for dominant uses

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Infrastructure decisionswould be a principal means of

passively enforcing zoningdecisions, by keeping roads and

railroads out of and far from areasnot zoned for logging.

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onusually generated a higher aggregate value offorest-related values than multiple-use man-agement, even in relatively uniform forests.Similar results and rationale are presented inSwallow, Parks, and Wear (1990), Swallow andWear (1993), Vincent and Binkley (1993,1994), and Helfand and Whitney (1994).

If Amazonian forests are indeed as eco-logically sensitive as most accounts suggest,then dominant-use management is even more

likely to be superior in them than in temperateforests. As the Brazilian government proceedswith the development of policies for public for-ests in the Amazon, it should therefore care-fully consider which areas to zone for timberproduction and which to zone for protection ofnontimber values. Dominant use should enableit to generate higher levels of both timber andnontimber values from Amazonian forests thanthe multiple-use alternative.

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Definitions of sustainable forestry usuallyemphasize regulating harvests to produce aneven flow of timber over time. The standardrecommendation for achieving this is to calcu-late an annual allowable cut (AAC) and then toopen for logging an annual area (coupe) con-sistent with the AAC. For example, if the tim-ber rotation � the length of time from regen-eration to harvest � is 50 years, then the an-nual coupe is 1/50th of the total forest area.

Like multiple-use management, althoughthis approach appears sensible and sound, inpractice it might not be desirable. One reasonis simple economics. If all the timber in a for-est is currently mature, and stumpage valuesare unlikely to rise significantly in the future,7

then a country or region loses by not harvest-ing the timber as quickly as possible. In thatcase, rapid harvesting � a timber boom � gen-erates a much higher net present value thaneven-flow harvesting. Consider the case of100,000 hectares of mature forest, where theoptimal rotation age is 50 years and the dis-count rate is 10 percent. Under even-flow har-vesting, 2,000 hectares (1/50th of the forest)are harvested every year. The net presentvalue of the current and future stream of tim-ber harvests is then 20,000 times the stump-age value of a single hectare.8 An alternativeis pulse harvesting: harvesting all 100,000hectares immediately, and subsequently har-vesting them again at 50-year intervals. Un-der this approach, the net present value is100,859 times the stumpage value of a singlehectare.9 Even-flow management thus reducesthe capital value of the forest for timber pro-duction by more than four-fifths. This is aheavy cost for any country to bear, especiallya developing country.

As noted earlier, however, stumpage val-ues probably will rise in the Amazon. Thisindicates one reason for not taking pulse har-vesting to the extreme: a sufficiently rapid in-crease in stumpage values might make itworthwhile to delay harvesting some maturestands. This point does not necessarily imply,however, that the opposite extreme of even-flow harvesting is superior. Instead, it suggeststhat the optimal harvest schedule lies some-where between the two extremes. Similarly,two other objections to pulse harvesting most

likely point toward an intermediate solutionrather than even flow. These are that pulseharvesting: (i) can have severe environmentalimpacts due the large-scale logging it implies,and (ii) affords little opportunity to learn aboutthe impacts of logging and make adjustmentsalong the way. In the example above, even-flow harvesting is superior to pulse harvestingonly if it provides incremental benefits in theform of either nontimber values or improvedinformation that offset at least the four-fifthsloss in timber value. While this might be thecase in some forests, there is no reason tobelieve that it would be the case in all. More-over, in situations where dominant-use is thesuperior strategy for managing the forest es-tate, provision of nontimber values is not themain objective in timber-production forestsanyway.

The most fundamental reason for not at-taching too much importance to even-flow har-vesting is that, despite its appearance, it is nota sufficient condition for ensuring the perma-nent production of forest-related goods andservices. Ensuring that requires regenerationof the forest following logging. Even-flowharvesting only ensures that timber productionis constant during the first cycle of harvestingin the forest. Without adequate regeneration,even-flow harvesting is no more than forestmining, albeit mining at a uniform and predict-able rate. Once all the forest has been loggedonce, if none of it regenerates successfully,then further logging will not be possible.

Adequate regeneration is thus the mostfundamental sustainability criterion. In design-ing forestry policies and regulations for theAmazon, the Brazilian government should em-phasize this condition first and foremost. Itshould treat annual allowable cuts, which rep-resent no more than the façade of sustainability,as a second-order criterion. In a situation of lim-ited capacity to monitor logging and to enforceassociated laws and regulations, the govern-ment would be well-advised to concentrate itsefforts on ensuring that logging is performed insuch a way that the forest grows back. Effortexpended on calculating and enforcing annualallowable cuts is effort drawn away from thedesign and enforcement of regulations aimed atpromoting regeneration.

5. Fourth objective:regulate logging to ensure forest regeneration

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onMoreover, in a situation where the stand-

ing forest has substantial timber value, as willincreasingly be the case in the Amazon, anyattempt to enforce rigid annual allowable cutswill encounter an increasing incidence of ille-gal logging. Illegal logging is already wide-spread in the Amazon, accounting for 80 per-cent of the timber harvest according to a re-cent government study (Schemo 1997). Com-batting illegal logging is one reason the gov-ernment decided to open public forests forlogging.

Allowing market demand to determine theannual area harvested is a more pragmatic ap-proach than even-flow harvest scheduling. Itis more likely to succeed on administrative andeconomic grounds. It removes an artificial sup-ply constraint, the annual allowable cut, whichartificially causes logging activities to be clas-sified as illegal and thus pushes them outsidethe ambit of governmentregulation. To the extentthat, as argued above,pulse harvesting or someintermediate approach iseconomically superior toeven-flow harvesting, ademand-driven ap-proach also raises thepresent value of timberproduction.

This approach isnot synonymous withuncontrolled logging.The government would need to solicit andevaluate logging proposals from domestic andforeign firms. In evaluating those proposals, itwould need to confirm that: (i) the area pro-posed for logging is in forests zoned for tim-ber production; (ii) those forests are economi-cally mature from the standpoint of timber pro-duction; (iii) the logging companies will payfair market value for the timber harvestingrights (on this, see Gray (1997) and the refer-ences therein); and (iv) the companies havethe technical capability to log the forest in amanner consistent with silvicultural principles.The company�s past performance would bethe best source of information on this last point.

Three final economic considerations re-lated to forest regeneration are worth noting.First, as an activity involving a long time hori-zon, forest management is particularly sensi-tive to risk and uncertainty. Even-flow harvest-ing restrictions exacerbate price fluctuations,by preventing increases in production whenmarkets are strong (hence, prices escalate un-

necessarily) and by preventing decreaseswhen markets are weak (hence, prices col-lapse unnecessarily). The cost of predictableharvest levels is increased price volatility,which raises the risks facing investments inforest regeneration and management, as wellas in logging and processing.

Second, economic instruments like per-formance bonds can be used to induce loggersto abide by regulations critical for the achieve-ment of regeneration objectives. In a perfor-mance bond system, operators are required tobuy a bond of specified value that in effectinsures their performance. The value is usu-ally linked to the cost of prospective damagethat might result from poor logging practices,or to the cost of remedial activity to offsetsuch damage. The government retains someor all of the face value of the bond if theoperator violates certain regulations. To en-

sure neutrality, thebond can be held by athird party (not thegovernment) from thetime it is purchaseduntil any disputes re-lated to its ultimate dis-position are settled.The Brazilian govern-ment should considerintroducing a bondingsystem for loggingcompanies in the Ama-zon and elsewhere in

the country.Finally, in addition to phasing out subsi-

dies and other incentives that unduly favornonforestry activities, the government shouldtake care not to offer implicit or explicit subsi-dies to the wood-processing industry that re-duce the returns to investments in forest re-generation. The prime example is log-exportrestrictions, which many countries haveadopted in order to promote local wood pro-cessing. While this policy often achieves itsstated aim, it typically has two unintended andoften overlooked negative consequences.First, by removing the competitive pressureon the wood-processing industry, it reducesthe incentive for the industry to use wood ef-ficiently. The case of the Indonesian plywoodindustry is well-known in this regard (Gillis1988). The consequence is that the cost ofeach job created in processing is often enor-mous. In Peninsular Malaysia, each US$2,200per year sawmill job created by log-export re-strictions actually cost the economy about

The governmentwould need to solicitand evaluate logging

proposals from domesticand foreign firms.

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US$6,100 after accounting for wastage in pro-cessing and forgone revenue from log exports(Vincent 1992a).

Second, and more to the point of this sec-tion, log-export restrictions reduce log pricesand thus stumpage values. Stumpage values di-rectly influence the return on forestry invest-ments made by public and private forest own-ers. The log-export restrictions in PeninsularMalaysia reduced domestic log prices by about25 percent compared to international prices.With logging costs accounting for about half ofinternational log prices, the impact was to cutstumpage values in half. Logging costs areprobably even higher relative to log prices inthe Amazon, due to the great distances involvedand the limited development of roads and otherinfrastructure. The relative impact of any re-duction in log prices upon stumpage valueswould consequently be even greater than inPeninsular Malaysia.

The Brazilian government would there-fore be well-advised to refrain from restrictinglog exports as a means of promoting local pro-cessing of timber from the Amazon. It shouldeither not intervene in the processing sector atall, or it should identify specific impedimentsto processing and address them directly. Theprincipal impediment cannot be the price ofAmazonian logs, which is much lower for Bra-zilian processors than for processors in import-ing countries, who must pay international ship-ping costs on top of the Brazilian price.

ConclusionsThe Brazilian government faces great chal-

lenges in the Amazon with regard to increasedlogging activity on both public and private for-estlands. This paper has attempted to highlightthe most important policy objectives the gov-ernment should emphasize in addressing thosechallenges. It ignores many issues that are im-portant to one or more groups of Brazilianstakeholders, and it does not discuss institutionaland other issues critical to the implementationof the recommendations it presents. Hopefully,however, it provides a useful perspective onthe economic context for these issues. The vastsize, unique attributes, and complexity of theAmazon make it the preeminent example of aforest region where seeing the forest for thetrees is essential in formulating successful de-velopment policies.

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�Timber prices in the U.S. South: past trendsand outlook for the future.� Southern Jour-nal of Applied Forestry 12(1):15-18.

Binswanger, Hans P. 1991. �Brazilian policiesthat encourage deforestation in the Amazon.�World Development 19(7):821-829.

Bowes, Michael D., and John V. Krutilla. 1989.Multiple Use Management: The Economics ofPublic Forestlands. Johns Hopkins UniversityPress, Baltimore, Maryland.

Browder, John O. 1988. �Public policy and de-forestation in the Brazilian Amazon.� Ch. 6 inPublic Policies and the Misuse of Forest Re-sources, Robert Repetto and Malcolm Gillis,eds. Cambridge University Press, New York.

Clawson, Marian. 1979. �Forestry in the longsweep of American history.� Science204:1168-1174.

FAO. 1997a. FAO Provisional Outlook for Glob-al Forest Products Consumption, Productionand Trade to 2010. FAO, Rome.

FAO. 1997b. State of the World�s Forests 1997.FAO, Rome.

Franklin, Jerry. 1989. �Towards a new for-estry.� American Forests 95:37-44.

Gillis, Malcolm. 1988. �Indonesia.� Ch. 2 inPublic Policies and the Misuse of Forest Re-sources, Robert Repetto and Malcolm Gillis,eds. Cambridge University Press, New York.

Gray, John A. 1997. �Forest concession poli-cies and sustainable forest management oftropical forests.� Paper prepared for Work-shop on Forest Policies and Sustainable De-velopment in the Amazon, held July 14-16,1997 in Rio de Janeiro. United Nations De-velopment Program, New York.

Helfand, Gloria E., and Marilyn D. Whitney.1994. �Efficient multiple-use forestry mayrequire land-use specialization: comment.�Land Economics 70(3):391-395.

Johnson, Ronald N., and Gary D. Libecap. 1980.�Efficient markets and Great Lakes timber: aconservation issue reexamined.� Explorationsin Economic History 17:372-385.

Laarman, Jan G. 1988. �Export of tropical hard-woods in the Twentieth Century.� Chapter7 in World Deforestation in the TwentiethCentury, John F. Richards and Richard P.Tucker, eds. Duke University Press, Durham,North Carolina.

Mahar, Dennis J. 1991. Government Policiesand Deforestation in Brazil�s Amazon Re-gion. World Bank, Washington, D.C.

24

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onPearse, Peter H. 1990. Introduction to Forestry

Economics. UBC Press, Vancouver, BritishColumbia.

Repetto, Robert, and Malcolm Gillis, eds. 1988.Public Policies and the Misuse of Forest Re-sources. Cambridge University Press, New York.

Schemo, Diana Jean. 1997. �To fight outlaws,Brazil opens rain forest to loggers.� NewYork Times, July 12, 1997.

Sedjo, Roger A., and Kenneth S. Lyon. 1990.The Long-Term Adequacy of World TimberSupply. Resources for the Future, Washing-ton, D.C.

Swallow, Stephen K., P.J. Parks, and David N.Wear. 1990. �Policy-relevant nonconvexitiesin the production of multiple forest ben-efits.� Journal of Environmental Economicsand Management 19:264-280.

Swallow, Stephen K., and David N. Wear. 1993.�Spatial interactions in multiple use forestryand substitution and wealth effects for thesingle stand.� Journal of Environmental Eco-nomics and Management 25:103-120.

Vincent, Jeffrey R. 1992a. �A simple,nonspatial modeling approach for analyzing

a country�s forest-products trade policies.�In Forestry Sector Analysis for DevelopingCountries, Richard Haynes, Patrice Harou,and Judy Mikowski, eds. Special Report No.10, CINTRAFOR, University of Washington,Seattle.

Vincent, Jeffrey R. 1992b. �The tropical tim-ber trade and sustainable development.� Sci-ence 256:1651-1655.

Vincent, Jeffrey R., and Clark S. Binkley. 1993.�Efficient multiple-use forestry may requireland-use specialization.� Land Economics69(4):370-376.

Vincent, Jeffrey R., and Clark S. Binkley. 1994.�Efficient multiple-use forestry may requireland-use specialization: reply.� Land Eco-nomics 70(3):396-397.

Vincent, Jeffrey R., Rozali Mohamed Ali, andAssociates. 1997. Environment and Devel-opment in a Resource-Rich Economy: Ma-laysia under the New Economic Policy.Harvard University Press for Harvard Insti-tute for International Development.

Notes

1 Fellow of the Institute, Harvard Institute for International Development (USA)2 Personal communication from Prof. Awang Noor Abdul Ghani, Faculty of Forestry, University, Pertanian

Malaysia (December 17, 1996).3 Of course, some of the land was not even technically capable of agricultural production, e.g. large stretches

of arid and mountainous lands in western states.4 Consequently, stumpage values in the U.S. are unlikely to rise as rapidly in the future as in the past (Binkley

and Vincent 1987).5 This is a narrow definition of multiple-use forestry, as it pertains to the stand rather than the forest estate.6 This statement is a bit imprecise, but it serves to make the point. Technically, dominant use tends to be

superior when the forestry production set is nonconvex, i.e. when the second-order conditions formaximizing the social profits of forestry are violated.

7 Specifically, if they are unlikely to rise as rapidly as the discount rate.8 The formula is: 100,000 / T / i.9 The formula is: 100,000 ha / [1-(1+i)-T], where i is the discount rate and T the optimal rotation age.

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1. Introduction

The unabated depletion and degradation of tropical forests has become a serious globalissue. Growing populations put pressure on forests for more land to be converted to croplandand other uses while demands for products from existing forests continue to rise. Concerns abouttropical deforestation have drawn attention to examine the role of timber production and trade ontropical deforestation (Barbier et al 1990).

According to latest estimates from the Food and Agriculture Organization (FAO), Brazilcontains about 5.5 million square kilometers of tropical forests (FAO 1997). Almost all of Brazil�stropical forests, most of which are tropical rainforests, are in the Amazon basin, a region com-monly known as Amazonia (Mahar 1989). Brazil alone contains nearly one-third (31.8%) of theworld�s tropical forests (FAO 1997).

Asia has been the leading producer and exporter of tropical forest products in world marketfor many years. But Asian exports have started declining, due to among other things, increasingdomestic consumption and reduced harvest levels. In the meanwhile, production and exportsfrom South America, particularly from Brazil are rising. The dynamics of production, trade andresource potentials have attracted the attention of international timber corporations, particularlyAsian corporations to exploit Brazil�s tropical forests. This development raises an internationaldimension to the issue of environmental sustainability; how will increasing international timbertrade impact the Amazon forest conservation? This paper describes present trends in production,consumption and international trade of tropical forest products, and identifies major player coun-tries, and possible impacts of increased timber production in the Brazilian Amazonia. This paperhelps provide a basis for planning sustainable forest management and economic development inthe Amazon region.

Impact ofInternational TropicalTimber Trade on theAmazon Rainforest

M. L. Joshi1

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

26

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Tropical forests make up one half of thetotal forest areas of the world (1.7 billion ha).More than 44 percent of tropical forests arelocated within three countries, namely Brazil,Zaire and Indonesia. Between 1980 and 1995,approximately 200 million ha of tropical for-ests were lost (FAO 1997). Most of the defor-estation has occurred in developing countriesof the tropical region. The annual rate of for-est loss is highest in Asia-Oceania (1.0%), but

actual annual loss of natural tropical forest areawas highest in South America (5.7 million ha).Among the nations, Brazil is losing its forestsat the highest amount of 2.55 million ha a year,followed by Indonesia at the rate of 1.08 mil-lion hectares.

Studies indicate that commercial loggingis not a dominant factor in deforestation butneither is it blameless. In aggregate, it is re-sponsible for only 6 to 15 percent of tropical

2. Tropical forests○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Table 1. World production of forest products, 1970-94

1970-19941970 1990 1994 1970=100

quantity percent quantity percent quantity percent

Total roundwood (mn m3) world developed developingFuelwood & charcoal (mn m3) world developed developingIndustrial roundwood (mn m3) world developed developingSawnwood (mn m3) world developed developingWood-based panels (mn m3) world developed developingWood pulp (mn ton) world developed developingPaper & paperboard (mn tons) world developed developing

Source: FAO 1997

246312571206

1185 187 998

12781070 208

415 361 54

70 63 6

103 96 7

126 118 9

100 51 49

100 16 84

100 51 49

100 87 13

100 91 9

100 93 7

100 93 7

349915591947

1780 2341546

17181318 401

505 395 110

124 100 24

166 141 25

240 200 40

100 45 55

100 13 87

100 77 23

100 78 22

100 81 19

100 85 15

100 83 17

335813182122

1891 1911700

14671051 417

413 303 110

127 92 36

172 137 35

269 213 57

100 39 61

100 10 90

100 72 28

100 73 27

100 73 27

100 80 20

100 79 21

136105176

160105170

115 98200

100 84204

180144567

167143520

213180633

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27

deforestation worldwide, yet its impact couldbe significant in a few specific regions andcountries (Bowyer 1997, Burgess 1993). About8 percent of tropical hardwood timber enterthe international market. Thus, the role of in-ternational trade on deforestation looks insig-nificant (Barbier et al. 1994), but even this

translates into an extensive loss of forests. Inaddition, logging practices generally result insignificant damage even when deforestation isnot the immediate outcome. Logging roadsopen up interior areas once inaccessible tohumans, thus paving a way to mass immigra-tion, squatting and land conversions.

Table 2. Volume of world production and trade in forest products in 1970 and 1994

1970 1994 percentage change

industrial roundwood (mn m3) production exports exports as a % of productionsawnwood and sleepers (mn m3) production exports exports as a % of productionwood-based panels (mn m3) production exports exports as a % of productionwood pulp (mn ton) production exports exports as a % of productionpaper and paperboards (mn ton) production exports exports as a % of production

Sources: FAO 1997

1,278.093.67.3

4,15.057.413.8

70.09.7

13.8

103.016.916.6

126.023.418.6

1,467.0 113.4 7.7

413.0 107.3 26.1

127.0 38.2 26.9

172.0 31.6 20.4

269.0 72.7 27.0

14.821.2

�

�86.989.1

81.4293.894.9

67.087.022.9

113.5210.745.1

93.6

57.4

9.7

4.8

16.9

23.4

39.5

5.4

1.2

0.7

0.04

0.09

41.0

9.4

12.4

14.5

0.2

0.4

113.4

107.6

38.2

17.7

31.6

72.7

24.3

10.3

14.9

12.6

2.6

4.4

21.4

9.6

39.0

71.2

8.2

6.1

21.2

89.1

293.8

268.8

87.0

210.7

-38.5

90.7

1141.7

1700.0

6400.0

4788.9

Table 3. Exports of forest products, 1970 and 1994

1970 1994 %change %changein world in tropicalexports exports

world tropical % from world tropical % fromtotal total tropical total total tropical

industrial roundwood (mn m3)

sawnwood (mn m3)

wood-based panels (mn m3)

plywood (mn m3)

woodpulp (mn ton)

paper & paperboards (mn ton)

Source: FAO 1997

28

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Industrial roundwood production world-wide has been growing steadily for severaldecades. In 1994 total global production ofroundwood was 3,358 million m3, of whichindustrial roundwood made up about 1,467million m3 and fuelwood and charcoal ac-counted for 1,891 million m3. Out of 1467million m3, about 113 million m3 roundwood(7.7%) entered the international market (Table1). Industrial roundwood entering the interna-tional market accounts for 6-8 percent of thetotal world industrial roundwood production(Table 2). The value of global consumptionof wood and wood products is estimated to bearound $400 billion (FAO 1997). Out of this,the world trade in forest products in 1994 wasestimated to be about $114 billion.

Table 1 shows a general upward trend inthe production of all wood products since1970. Between 1970 and 1994 the produc-tion growth rates in paper and paperboardsfor developed countries were substantial. Therates for developing countries were signifi-cantly higher. However, most output expan-sion in developing countries went to meetfuelwood demands, and developed countrieslead developing countries by a large marginin production of processed higher value prod-ucts. Production and consumption of forestproducts declined slightly from the historicaltrend after 1990, mainly because of lingeringeffects of the political and economic restruc-turing in the former USSR (FAO 1997).

Consumption of forest products increasewith increases in both population and income.The latest FAO statistics indicate that globalpopulation increased by 50 percent and con-sumption of wood increased by 36 percentbetween 1970 and 1994. World income mea-sured as real Gross Domestic Products (GDP)increased by 103 percent in the same period(FAO 1997). Most of the population growthoccurs in developing countries. As a result,consumption of forest products in developingcountries is growing at much higher rates thanthat of developed nations (FAO 1997).

Although all regions saw increases inconsumption, the increase in Asia was dra-matic. It increased its roundwood consump-tion from 15 percent of world consumption in1970 to 21 percent in 1994, surpassing that ofEurope, and its paper and paperboards con-sumption from 15 to 30 percent (FAO 1997).

Production of industrial roundwood inSouth America is quite significant, approach-ing one-tenth of the world total. Africa haslimited production at present. Both regionshave the resource potential to increase thesupply of forest products from natural forests,but many large forest areas in Africa and SouthAmerica are inaccessible, both physically andeconomically. However, wood availabilityfrom plantations in Oceania, South Americaand the southern United States will increasesupply of forest products.

3.1. International tradeInternational trade in forest products has

been rising both in volume and value of ex-ports (Table 2). Exports of industrial round-wood increased by 21 percent between 1970and 1994, although its share in total round-wood production has remained the same at7.3 percent. Exports of other processed prod-ucts also rose substantially. For example,sawnwood exports have doubled to 107 mil-lion m3, panels increased almost fourfold to38 million m3, pulpwood almost doubled to32 million tons and paper and paperboardstripled to 73 million tons during this period(FAO 1997).

Industrialized nations dominate worldtrade in forest products, accounting for about80 percent of the value of both exports andimports (FAO 1997, Barbier et al. 1994). Theirdominance in 1994 was greatest in pulp, pa-per and packaging. Canada and the USA aloneaccounted for almost one third of exports.Similarly the USA and Japan accounted for 30percent of all imports (FAO 1997).

n Tropical forestsand international trade

Estimates of the share of tropical indus-trial roundwood in total world production rangefrom 15 percent (FAO 1997) to 30 percent(Barbier et al. 1994). Tropical countries in-creased their share of international trade dur-ing the 1970-94 period substantially, particu-larly in wood-based panels, plywood, wood-pulp and paper products. (Table 3). In 1994,only industrial roundwood exports declinedfrom their 1970 level.

The growth in wood-based panel ex-ports, especially plywood, by tropical coun-tries is spectacular. A list of major producers,

3. Production, consumption and trade of forest products○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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exporters and consumer countries in tropicalforest products is included in Table 4. Today,tropical plywood exports account for morethan 71 percent of the world plywood trade.Indonesia leads the world in plywood export,with 46 percent of the market. Malaysia andBrazil follow with 17 and 4 percent of theinternational market share.

Many South American and Asian coun-tries have also become important exporters inwood pulp and paper products. Tropical tim-ber trade accounted for about $12.1 billioneach in 1994 and 1995, about 10.6 percentshare in world timber trade (Pleydell andJohnson 1996).

A few developing countries, particularlyfrom Asia and South America are emerging asimportant participants in the world tropical tim-ber trade by importing tropical timbers andexporting secondary processed forest prod-ucts. China, Taiwan,South Korea, the Philip-pines and Thailand haveemerged as leading im-porters of tropical indus-trial roundwood and semifinished wood-products.

Tropical countriesaccounted for 75 percentof the production andconsumption of fuel-wood and charcoal in1994. In contrast, theyaccounted for only 17percent of production and 20 percent of con-sumption of world industrial roundwood. Pa-per and paperboard consumption raisedsharply in developing countries, mostly inAsia, which raised its share from 15 to 30 per-cent in the period 1970-94. On a per capitabasis, consumption of all commodities includ-ing sawnwood and newsprint has continued togrow since 1970. Per capita consumption indeveloping countries increased from 2 to 6percent of developed country levels in 1970to 10 percent or more in 1994 (FAO 1997).

Asia and Oceania lead in tropical timberproduction and exports, followed by Africa,while Central and South American countries�share in timber production and exports aremodest (Barbier et al. 1994). However, Africaand South America have been able to increasetheir share in the past decade. Asia�s share ofexports of tropical forest products declinedfrom 87 percent in 1987 to 80 percent in 1996(Pleydell and Johnson 1997).

Tropical timber trade is mostly directed

to Europe and Japan. Major importers of tropi-cal timber products are Japan (37%), Europeanunion (26%), China (21%) and S. Korea (9%)(ITTO 1996). European markets have tradi-tionally relied on African producers for theirtropical wood products. Except for Coted�Ivoire and Ghana, Africa still exports unpro-cessed logs. Indonesia, Malaysia, the Philip-pines have imposed partial to full bans on un-processed log exports in response to past ex-cessive harvesting and environmental con-cerns, and also to promote value added do-mestic processing. Papua New Guinea andother Asian sources (Solomon Islands,Indochina) have increased exports dramaticallyin response to the decline in Malaysian ex-ports, but none have the resources or infra-structure to make an equivalent impact onoverall supply situation. Brazil is the mainexporter from Latin America but Chile and Ar-

gentina are also in-creasing their exports.Some Southeast Asiancountries such as Cam-bodia, Laos and Viet-nam are future poten-tial producers of tropi-cal timber.

While the produc-tion of tropical round-wood has beensteadily increasingover the past few de-cades, domestic con-

sumption of forest products has been growingat an even faster rate due to population andincome growth. The rapid growth in timberdemand in many tropical countries coupledwith declining forest resources has led to re-duced timber exports and increased timberimports. As a result, many tropical timber pro-ducing countries such as Thailand and the Phil-ippines are becoming net timber importers.

Despite the decline in production in In-donesia and Malaysia, production may increasein both countries for a few more years be-cause of two large development projects.Indonesia is clearing one million ha of forestsfor an agricultural development project inKalimantan that will supply about 6 million m3

of timber for three years, and in Malaysia a69,000 ha forest clearing is being created inSarawak, for dam construction (ITTO 1996).

Since the 1980s, South Korea, Singaporeand Taiwan also started importing wood prod-ucts in substantial volumes. They used suchimports for domestic consumption as well as

Despite the decline in productionin Indonesia and Malaysia,

production may increase in bothcountries for a few more years

because of two largedevelopment projects.

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onfor producing higher valued secondary pro-cessed wood products (SPWP) such as furni-ture and mouldings for export. Other coun-tries such as Indonesia, Malaysia, Thailand andChina have aggressively pursued this trend andhave become the four largest developingSPWP exporters (Pleydell and Johnson 1997).

n Principal tropical species tradedOne striking feature of tropical forests is

the large diversity of tree and other plant spe-cies found there. However, only a few timberspecies have commercial value. In SoutheastAsia most commercially valuable species areMeranti (Shorea spp.), Keruing (dipterocarpusspp.), Kapur (Dryobalanops spp.), Ramin(Gonystylus spp.) and Seraya. Taun is a highlyvaluable timber species from Papua NewGuinea. In South America, Mahogany (Swieteniamacrophylla, S. mahogani), Cedar (Cedrelaspp.) and Virula (Virola surinamensis) are threemain timber species for export. Other lesserused from South America are Tauraru (Couratarispp.), Curupixa (Micropholis venulosa), Jatoba(Hymenaea courbaril), Quaruba verdadeira(Vochysia spp.) and Tatajuba (Bagassaguianensis). The most popular species ex-ported from Africa are Sipo, Sapelli, Okoume,Ozigo, Niangon, Moabi, Agba and Moaba.

Tropical forests also produce largeamounts of non-wood forest products whichhave a growing international market. Ediblenuts, mushrooms, medicinal plants, rattan,palm, aromatic oils, honey and many otherproducts are now traded internationally. Pres-ently, at least 150 non-wood forest productsare exported, generating a substantial numberof jobs and revenues for producer countries.One estimate puts total value of such exportsat $1,100 million (FAO 1997). China is themajor supplier but India, Indonesia, Malaysia,Thailand and Brazil also export non-wood for-est products. For example, Indonesia and Ma-laysia exported a large volume of rattan, while

Brazil is famous for its brazilnuts. The con-sumer markets for most of these products areJapan, European Union and North America.

n Large timber corporations in AsiaThere are many large timber companies

with huge financial and political powers inSoutheast Asia. They hold large tracts of for-est lands in many Asian and Oceania countriesunder liberal concession arrangements. Someof these companies have also started operat-ing in South American countries, and othersare seeking similar opportunities. The follow-ing is a comprehensive but not complete listof timber companies operating in SoutheastAsia and South America (source: ITTO 1996and the Internet).

Indonesia1. Barito Pacific Timber Co., (the largest

company controlling over 5 million ha)2. Citra Lamtaro Gung Persada3. Kiana Kertas4. Takengon Pulp and Paper Utama5. Gudang Garam6. Riau Andalan Mill7. Nippon Paper and Marubeni (Japanese)8. Madera International (U.S.)9. Ikeuchi Group (US based)10. Uniseraya Group11. MUSA (working in Suriname)12. Suri-Atlantic (working in Suriname13. Panin Group

In Malaysia1. Jaya Tiasa, (the largest company)2. Kumpulan Emas3. Rimbunan Hijau Group4. Cakara Alam (working in Papua New

Guinea)5. Berjaya Timber Industries (working in

Suriname)6. SINO-PNG Pty. Ltd.(working in Papua

New Guinea)

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The inflation-adjusted real price index forforest products has been fairly stable since 1969.There was some decline between 1974 to 1984but it has been picking up gradually since then.The real price of tropical logs has followed thisgeneral price trend with some brief sharp fluc-tuations in the 1970s. The real price of tropicalsawnwood was similar, but with larger fluctua-tions. For other forest products, includingwood-based panels, pulp, and paper andpaperboards, real prices continued to risethroughout the 1980s (FAO 1997, Barbier et al.1994). For tropical forest products, this long-termincrease may reflect both increasing scarcity andincreasing demand. Real prices for most pri-mary tropical products exhibited strong rises inearly 1993 caused by the cessation of Sabah(Malaysia) log exports but showed stable or de-

clining trend since then, 1995-96 (ITTO 1996).There are regional differences in the export

prices of tropical forest products. For example,Africa generally commanded higher unit nominalprices for industrial roundwood during the period1983-94 than Asia. In 1983 the average nominalexport price for African logs was $90 per m3

compared to $80 for Asian logs. In 1994, theprices were $169 and $103 per m3 respectively.For non-coniferous sawnwood, the respectiveprices for Africa and Asia in 1994 were $416 and$391, while that for South America was $309. In1994, average export prices for Indonesian andArgentinean tropical sawnwood were highest at$664 and $525 per m3. The variation in prices ispartly due to the species, consumer preferencesand quality of export products.

4. Price trends○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

MalaysiaPapua NewGuineaGabonMyanmarCameroonGhanaCote d�IvoireCongoZaire

JapanTaiwanS. KoreaThailandChinaFranceIndiaPhilippinesItalyPortugal

MalaysiaBrazilCote d�IvoireCongoCameroonGermanyNetherlandsJapan

ChinaJapanTaiwanGermanyItaly

IndonesiaMalaysiaBrazilTaiwan

JapanChinaUSAS. KoreaTaiwan

Table 4. Major producers, exporters and importers of tropical forest products, 1995

Production Exports Imports

Roundwood MalaysiaIndonesiaBrazilIndiaPapua New GuineaEcuadorCameroonCote d�IvoireGabonPeruMyanmarGhanaVenezuelaPhilippinesColombia

Veneer MalaysiaBrazilJapanCote d�IvoireTaiwanItalyThailandGhanaIndonesia

Plywood IndonesiaJapanMalaysiaBrazilS. Korea

Source: Johnson, S. (Tropical Forest Update, 1996/1 for roundwood data, and 1996/3 for veneer and plywood data)Note: Developed countries such as Japan and European countries, and newly emerging countries such as Taiwan and S. Koreaproduce and export veneer and plywood from imported roundwood.

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The historical trend of increasing demandfor forest products is expected to continue intothe future. Many recent analyses concludethat at the global level there should not bewood scarcity, and a real long-term global in-crease in prices is unlikely. However, nostudy foresees plentiful supplies either. De-spite a projected global adequacy betweendemand and supply, there could be local short-ages of some products. A regional shortage offorest products may occur in developing coun-tries that lack the capacity to participate ad-equately in international trade. Moreover,emerging concerns for environment will havea profound impact on timber production po-tential. For example, shifting emphasis on for-est management from timber production toecosystem management significantly reducedtimber supply from U.S. public forests.

Asia will have an increasing impact on theworld forest products economy. Asia�s con-sumption of many industrial forest products al-ready equals or exceeds that of Europe (FAO1997). The growth in demands for forest prod-ucts, caused by its expanding population andeconomy, are outpacing the supply potentialsof the region. Thus exports of many forest

products from Asia will further decline whileimports will continue to grow in the future.

As with any commodity in internationaltrade, export reduction in one region will resultin higher timber prices in all regions, whichprompts higher cost producers to expand theirproduction levels (Perez-Garcia 1995). Declin-ing tropical hardwood inventory could raise sawlog prices 60 to 80 percent above 1990 levelsby the year 2000, particularly in Southeast Asia(Barbier et al. 1994). Declining exports fromAsia has prompted Asian buyers to search forother sources of timber supply. South Americais most likely to play a major role in timber sup-ply in coming decades, with Brazil as the majorproducer and exporter (Sedjo 1995). The Ama-zon has high potential for timber production.

Another effect of product scarcity is prod-uct substitution. Evidence suggests that the ten-dency to substitute non-tropical wood productsand/or non-wood products for tropical forestproducts is increasing. New processing tech-nologies such as Medium Density Fiberboard(MDF) and veneer lamination are gaining rapidmarket share in forest products trade (Barbieret al. 1994, Pleydell and Johnson 1997).

5. Future trend○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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33

765

321

545864

111

333129

112

887

107109110

666875

���

887

111

484745

���

���

123124128

141312

91422

221712

777

252425

171715

202325

113115119

202224

��1

434035

333

374042

111

���

105106107

14.915.817.3

0.20.10.1

7.87.67.5

0.40.40.4

13.913.513.1

0.20.20.1

0.10.10.1

37.636.838.6

13.913.512.9

1.61.92.8

7.77.77.2

0.20.20.2

12.612.612.9

0.80.80.9

1.21.52.1

38.038.439.1

14.516.520.5

2.21.92.2

15.215.314.8

1.41.41.5

35.034.732.3

1.21.11.0

0.20.10.1

69.771.072.3

6.45.95.1

1.61.72.1

21.522.622.5

0.20.20.2

41.041.242.6

0.60.70.9

1.31.61.8

72.774.075.3

Table 5. Projected trade flow in 2000 and 2010

projected trade

Industrial roundwood Sawnwood and sleepers wood-based panels paper and paperboards(million m3) (million m3) (million m3) (million ton)

Region/year imports exports imports exports imports exports imports exports

Asia

1994 2000 2010

South America

1994 2000 2010

North/Central America

1994 2000 2010

Africa

1994 2000 2010

Europe

1994 2000 2010

Oceania

1994 2000 2010

former USSR

1994 2000 2010

World

1994 2000 2010

Source: FAO (1997)

34

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Table 6. Production and exports of forest products in South America, 1994

South America Brazil Argentina Chile Others

industrial roundwood (1000 m3) production percent

export percent

sawnwood (1000 m3) production percent

export percent

wood-based panels (1000 m3) production percent

export percent

plywood (1000 m3) production percent

export percent

wood-pulp (1000 tons) production percent

export percent

paper and paperboards (1000 tons) production percent

export percent

Source: FAO 1996

121,128100.0

8,952100.0

26,027100.0

2,713100.0

5,068100.0

1,638100.0

1,339100.0

835100.0

8,754100.0

3,925100.0

9,098100.0

1,569100.0

77,90364.3

1,60017.9

18,62871.6

1,42452.5

2,55250.4

1,22374.7

96071.7

72686.9

5,79566.2

2,18655.7

5,73063.0

1,28281.7

5,8614.8

5646.3

9983.8

40.1

75214.8

191.1

594.4

00.0

7258.3

1523.9

93110.2

60.4

23,30319.2

6,53172.9

3,36412.9

96835.7

72214.2

26015.9

644.8

121.4

1,95522.3

1,58540.4

5536.0

17311.0

14,06111.7

2572.9

3,03711.7

31711.7

1,04220.6

1368.3

25619.1

9711.6

2793.2

20.0

1,88420.7

1086.9

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FAO�s recent projection indicates distinctchanges in forest products trade flows (Table5). For most products, Asian imports will in-crease while exports will decline. In contrast,South America will increase its exports. Forexample, the region is projected to increaseindustrial roundwood exports from the current9 million m3 to 14 million m3 in 2000 and 22million m3 in 2010. Imports to and exportsfrom Africa and Oceania will likely remain at1994 levels into the years 2000 and 2010.

One obvious impact of increasing tropi-cal timber trade and declining role of Asianproducers would be pressure to increase tim-ber exports from Brazil�snatural forests. Brazil isthe principal SouthAmerican producer andexporter, leading othermajor countries like Ar-gentina and Chile bywide margins. In 1994,Brazil produced 78 mil-lion cum of industrialroundwood and ex-ported 7 million m3. Incomparison, Argentina�sproduction and exportswere 6 and 1 million m3 respectively, andthose of Chile were 23 and 2 million m3, re-spectively (Table 6).

Brazil is the fifth largest country in theworld (851.2 million hectare land area) andpossesses the largest expanse of tropical for-ests in the Amazon basin to the north. A roughestimate puts total growing stock in Brazil�sforests at 56.1 billion m3 (WRIL 1995). An-other estimate puts the growing stock at 45-55m3 of commercial timber per hectare and itsnatural and plantation forests had a standingvalue in 1994 of more than $3 trillion (Reis

1995). Most of the forest lands are govern-ment owned (87%).

The forestry sector comprised about 5 per-cent of Brazil�s gross national product in 1994.The forest products industry in the Amazon re-gion provides approximately 220,000 jobs (Reis1995). Forest products exports in 1994 were$2.57 billion (FAO 1996). Within Brazil, theState of Para produces about 60 percent ofBrazil�s tropical timber exports (Pastore 1995)

The pulp and paper industry relies prin-cipally on plantation forests located in thesouthern part of Brazil for its raw materials.The industry produced 5.4 million tons of pa-

per products in 1993from 23 million m3 ofwood, almost entirelyfrom extensive forestplantations (pulpwoodfrom natural forests4%). Output is expand-ing, 5.8 million tons in1995, and $13,000 mil-lion in new invest-ments are estimated forthe next 10 years(Kenny 1997).

Production forestareas are often assigned to local sawmills orpanel producers under a concession arrange-ment. This stipulates the species and volumesthat are removed from an area on an annualbasis. A significant volume of material, how-ever, reaches the open market from illegal log-ging, and legal and illegal land conversion ac-tivities. Harvesting operations still rely prima-rily on manual labor with some mechaniza-tion, using chain-saws, skidders and trucks.Natural forests are harvested in selective log-ging basis while plantations are clear-cut(WRIL 1995).

6. Impacts of increasing timber tradein Brazil�s Amazon forests

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

The forestry sector comprisedabout 5 percent of Brazil�s

gross national product in 1994.The forest products industry

in the Amazon regionprovides approximately

220,000 jobs

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Changing world tropical timber trade equa-tion will certainly impact economic, environmen-tal and social conditions in the Amazon forests ofBrazil. Increase in harvesting, processing, trans-portation of forest products from the Amazonforests will increase jobs, income and changeinstitutions. Changes will occur in sectors di-rectly connected with forestry such as logging,transportation and processing, to higher valuedsecondary processed wood products (SPWP),and also in service sectors like banking and fi-nance. Government revenues from royalties,fees and taxes from timber harvesting, and for-eign exchange earnings from exports of forestproducts could be sub-stantial. However, itwould be difficult to pre-cisely predict where,when and how muchbenefits from expandedtimber harvesting and in-ternational trade will oc-cur. Critics are alwaysskeptical of large outsideinvestments benefitinglocal economy and localpopulation. Studies fromAsian tropical countriessuggest that economic benefits from increasedforest harvesting usually go to logging and pro-cessing companies and migrant workers. More-over, modern capital intensive forestry opera-tions create fewer jobs per unit of investmentsthan before (Barber et al. 1994). Another pos-sible impact of expanded forestry operations isdisruption of the social fabric of indigenouspeople whose social and cultural lifestyle couldbe greatly affected by forestry activities.

The most sensitive issue of possible in-creased timber harvesting and trade relates tothe environmental implications. What will bethe impact of these activities on thesustainability of the tropical rainforest? Stud-ies on the links between timber trade and en-vironment are numerous, conflicting and com-plex (Bourke 1995). Although commerciallogging is not a major factor in deforestation, itcould impact the Amazon forests in two ways.First is the direct impact associated with tim-ber extraction. The Amazon forests have onlya few commercially important timber species

available and they are widely scattered. Thus,the extraction of those species involves ex-tensive disturbances. Studies in the State ofPara have found that logging activities damagelarge numbers of other trees and saplings. Forexample, extraction of one tree damages, onaverage, 26 other trees of diameter above 10cm. In terms of real wood volume, the dam-aged tree volume could exceed the extractedvolume by as much as 2 to 1 ratio (Uhl et al1991, Verissimo et al. 1992).

Harvesting of timber involves extensivelogging road construction in the forests. Theconstruction and use of logging roads disturbs

the vegetation, soil andhydrological cycles.Moreover, road buildingand logging impact in-directly through creatingforest access. This of-ten encourages activi-ties such as shifting cul-tivation, permanentfarming and ranching,which lead to furtherdeforestation and degra-dation. In the northernBrazilian Amazon, the

increase in national highways network overthe period of 1975-88 and extent of deforesta-tion are highly correlated (Barbier et al. 1994).Thus, logging roads in the Amazon for ex-panded harvesting will most likely increasepressure for changing the land uses.

Most of the Amazon forests in Brazil arenot under any formal management regimes(WRIL 1995). However, one FAO/UNDP studyhas indicated that managing Amazon forestssustainably for industrial forestry is both eco-nomically viable and technically feasible(Schmidt 1987). If planned and implementedproperly certain forestry activities could havepositive impacts rather than negative. Sustain-able forest management would require asound forest policy and expanded institutionalarrangements to maintain productive capacityof the forests and restrict consequences of har-vesting. For this, however, a far energeticleadership in forestry is needed in Brazil(Sirmon 1996).

7. Impacts○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Most of the Amazon forests inBrazil are not under any formal

management regimes (WRIL 1995).However, one FAO/UNDP study has

indicated that managing Amazonforests sustainably for industrial

forestry is both economically viableand technically feasible

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8.1. ConcessionsMost tropical forests in the world are gov-

ernment owned and the common practice oftimber operation is to award logging conces-sions to timber industries. The practice of offer-ing timber concessions to international compa-nies has emerged as a critical issue in resourcerich countries of South America. Brazil givestimber concessions to private companies to har-vest in its public. In recent years, Suriname,Guyana, Venezuela and Nicaragua have grantedlarge concessions or are considering doing so.In 1994, Suriname considered granting 4.5 mil-lion ha of forests to Asian timber companies.Guyana granted a concession to a company aforest estate of about 2million (about half thesize of Switzerland).Venezuela has grantedabout 3 million ha in for-est concession and con-sidering another 9 mil-lion ha including Ama-zon forests to offer.Since 1995, Belize hasgranted about a quartermillion ha. Internationalcompanies are activelyseeking concessions inBolivia and Peru (FAO 1997, WRI 1996).

Studies from across the tropical countriessuggest that such concessions fail to collect trueeconomic rent (stumpage value). Most coun-tries in Asia and Africa receive a fraction oftheir potential economic rent and award �wind-fall� profits to the concessionaires from suchtimber concessions (Barbier et al. 1994). Forexample, in Indonesia, the concession systemcould capture only 33 percent of potential eco-nomic rent between 1979 and 1982, and thePhilippines realized only 11 percent. Only inthe Sabah State of Malaysia the concession couldrealize about 78 percent of the potential rent.Therefore, Brazil and other South Americancountries must carefully analyze the continuinguse of concessions for opening the Amazon fortimber operations in coming years. They mustdevelop a sound policy in granting harvestingconcessions to timber companies so that eco-nomic and environmental returns are maxi-mized.

8.2. International trade agreementsInternational timber trade will be in-

creasingly influenced by international tradeprotocols such as the General Agreement onTariffs and Trade (GATT) and the Conventionon International Trade in Endangered Speciesof Wild Fauna and Flora (CITES), which havedifferent, and sometimes conflicting agendas.GATT is geared towards full liberalization ofinternational trade, including trade in tropicaltimber. Its basic principles are non-discrimi-nation between like-products and eliminationof trade restrictions. On the other side, CITESaims to protect endangered animal and plantspecies by restricting international trade.

Tropical timber trade isalso influenced by theInternational TropicalTimber Agreement(ITTA) whose goals areboth promoting inter-national trade in tropi-cal timber as well asachieving sustainablemanagement of tropicalforests. To accomplishthis ITTA advocates in-ternalization of all en-vironmental costs and

promotion of sustainable forest managementthrough incentives and certification pro-cesses. Rising concerns about tropical defor-estation has led to consumer awareness inmany industrialized consumer countries. Thishas prompted consumer movements to boy-cott tropical timber altogether, or to restrictimports to products coming from sustainablymanaged tropical forests. ITTA�s second aimof achieving sustainable management of tropi-cal forests coincides with consumer-driven�Green-wood� certification movement.

The underlying differences between dif-ferent international agreements should even-tually be resolved but it is most likely thatfuture timber trade will be heavily influencedby world public opinions and tropical coun-tries must direct their policies to sustainableforest management.

8. Issues○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Therefore, Brazil and otherSouth American countries mustcarefully analyze the continuinguse of concessions for opening

the Amazon for timberoperations in coming years.

38

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The transition in global economy andtropical timber trade will certainly have pro-found impact on Brazil�s Amazon forest. In-crease in demand and shrinking of traditionalAsian supply regions will undoubtedly bringmore pressure to open up the Amazon. Thispresents both opportunities for sustainableeconomic development and risks of depletingthe world�s last relatively intact tropical eco-system.

Experiences from the past suggest thatmost tropical countries have failed to utilizetheir forest resources for sustainable economicand environmental benefits. Faulty policiessuch as inappropriately valuing forests in com-parison to other land uses and providing inap-propriate economic incentives to businesseshave contributed to these failures. Propervaluation of environmental and social costs isnecessary to make forestry a viable land use

option. Therefore proper pricing is the key tosustainable management of tropical forests.

If Brazil is to meet the increased de-mand and sustain its forests it needs to paymore attention to technical aspects of Amazo-nian forest management. Given the complex-ity of Amazon forest�s ecosystem and the lim-its of current knowledge much more researchis needed to fully understand the silviculturaland harvesting problems of the Amazon for-ests.

Last but not least, adequate concern forand involvement of local populations in for-estry operations should not be forgotten. Ben-efits from forests should be equitably distrib-uted among the members of the society, par-ticularly, the native inhabitants of the forests.In many instances, the success of a policy de-pends upon how effectively public participa-tion could be mobilized.

9. Implications○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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39

LiteratureBarber, C.V., N.C. Johnson and E. Hafild. 1994.

Breaking the logjam: Obstacles to forest policyreform in Indonesia and the United States.World Resources Institute, Washington, D.C.

Barbier, E.B. 1996. Trade and environmentrelating to forest products and services:Consultant�s background report. Paperprepared for the ITTO Third Session of theIntergovernmental Panel on forests, Geneva,9-20 September 1996.

Barbier, E.B., J.C. Burgess, J. Bishop and B.Aylward. 1994. The economics of the tro-pical timber trade. Earthscan publications,London, U.K.

Bowyer, J.L. 1997. Strategies for ensuring thesurvival of tropical forests: Can logging be oneof them? Forest Products Journal 47(2): 15-24.

Bourke, I.J. 1995. International trade in forestproducts and the environment. Unasylva183(46):11-17.

FAO. 1997. The state of the world�s forests1997. (FAO Homepage on the Internet).

FAO. 1996. FAO yearbook 1994: forestproducts 1983-94. FAO forestry Series no.29, Rome, Italy.

ITTO. 1996. Annual review and assessment ofthe world tropical timber situation. (ITTOHome page on the Internet).

Kenny, J. 1997. The Brazilian expansionseems to just grow on and on. Pulp andPaper International, 39(3): 23-27. March.

Mahar, D.J. 1989. Government policies anddeforestation in Brazil�s Amazon region.World Bank, Washington, D.C.

Pastore, F., Jr. 1995. Lesser used species: Anexperiment in Brazil. Tropical ForestUpdate 5(2):11. June.

Perez-Garcia, J.M. 1995 Global economic and

land-use consequences of North Americantimberland withdrawals. Journal of Forestry93(7):29-33.

Pleydell, G. and S. Johnson. 1997. Tropicaltimber trade trends: 1987-1996. TropicalForest Update 7(1).

Repetto, R. 1988. The forest for the trees?Government policies and the misuse offorest resources. World Resources Institute,Washington, D.C.

Reis, M.S. 1995. Country profile: Brazil. Tro-pical Forest Update, 5(3): 24-25. September.

Reis, M.S. 1995. Disseminating ITTOguidelines and criteria in Brazil. TropicalForest Update 5(2):11. June.

Sedjo, R.A. 1995. Local logging: Globaleffects. Journal of Forestry 93(7):25-28.

Sirmon, J.M. 1996. Facing tomorrow: Brazil�sdifficult forestry choices. Journal of Forestry,October, p.9-12.

Uhl, C., A.Verissimo and M.M. Mattos. 1991.Social, economic, and ecologicalconsequences of selective logging in anAmazon frontier: the case of Thailand.Forest Ecology and Management 46:243-73.December.

Verissimo, A., Berreto, P. and M.Mattos. 1992.Logging impacts and prospects forsustainable forest management in an oldAmazonian frontier: the case ofParagominas. Forest Ecology andManagement 55:169-99. December.

Wood Resources International Ltd. (WRIL).1995. Forest resources and forestry practicesof selected world regions. Reston, VA.

World Resources Institute. 1996. Worldresources 1996-97. World ResourcesInstitute, Washington, D.C.

Notes

1 Auburn University - Alabama, USA.

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1. Apresentação

Historicamente o mercado nacional madeireiro sempre teve uma forte participação de ma-deiras de folhosas, particularmente as tropicais. Entre as espécies registradas na história colonialdo país, e que tiveram representatividade no comércio, menciona-se o pau-brasil e o jacarandá daBahia.

Na realidade, a produção destas madeiras esteve relacionada ao processo de ocupação dacosta brasileira, e a maioria da madeira produzida foi originária da Mata Atlântica.

Com a colonização da região Sul, as florestas do planalto ou das �matas dos pinhais�passaram a ter uma forte contribuição no suprimento das demandas nacionais de madeira.

A disponibilização de grandes volumes de madeira de Araucaria angustifolia, pela amplia-ção das fronteiras agrícolas, foi um fator importante. No entanto, existem outros fatores quefacilitaram o desenvolvimento da atividade madeireira baseada naquela espécie, entre eles cita-se os grandes volumes por unidade de área e a qualidade da madeira. Em pouco tempo o �pinho�passou a ser a mais importante madeira tanto para o mercado nacional como para exportação.

Juntamente com o pinho, usado principalmente para construção, outras espécies de folhosasda região dos pinhais passaram a ganhar o mercado, entre elas cita-se a imbuía, que por muitosanos foi uma das principais para a indústria moveleira.

Da mesma forma como ocorreu na região sul, a disponibilização de madeira pelo avanço dasfronteiras agropecuárias foi fator determinante no desenvolvimento da indústria madeireira naregião norte. Isto ocorreu particularmente na década de 70, e coincidiu com a redução da ofertade madeira, tanto de pinho como de folhosas, na região sul.

Apesar do rápido crescimento na oferta e produção de madeira de plantios localizados nosul, as florestas tropicais são, e deverão continuar sendo, a principal fonte de matéria prima paraatender o mercado nacional de produtos de madeira sólida.

Apresenta-se neste documento uma abordagem geral sobre o mercado nacional de produtosbaseados em madeiras tropicais, que pode ser considerado como o maior mercado mundial paramadeiras tropicais.

Mercado Nacional deMadeiras Tropicais

Ivan Tomaselli 1

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

42

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2.1. Produtos, Aplicações e PrincipaisEspécies

Embora a literatura cite um grande nú-mero de produtos passíveis de serem obtidosa partir da madeira, na realidade, quando con-siderado o processamento primário, pode-seobter basicamente três produtos: cavacos, ser-rados e lâminas.

É a partir destes produtos primários quepode-se obter uma série de produtos, comvariados níveis de transformação. Assim sendo,de cavacos pode-se obter polpa e papel, alémde chapas reconstituídas (tais como aglomera-do, MDF, OSB), a partir de serrados obtém-semolduras, perfis, assoalhos, forros e componen-tes para móveis e, a partir de lâminas, compen-sados e diversos tipos de painéis e revestimen-tos.

No Brasil as madeiras tropicais são utili-zadas na indústria basicamente para produçãode serrados e lâminas.

Os serrados são empregados principalmen-te na construção civil na forma bruta. A utiliza-ção para produtos de maior valor agregado naconstrução civil e na indústria de móveis é limi-tada a umas poucas espécies consideradas no-bres e decorativas, a exemplo do mogno.

As lâminas são utilizadas para produçãode compensados e, em pequena proporção(laminas faqueadas), para revestimento de ou-tros tipos de painéis. A principal aplicação docompensado é na confecção de móveis. Naconstrução civil o compensado é aplicado qua-se que exclusivamente para formas de con-creto e fechamentos temporários de obras.

O mercado nacional de produtos de ma-deira, assim como o internacional, é bastanteseletivo em termos de espécies. Istoexplica-se tanto pela tradição emoda, que leva o cliente final a pre-ferir determinadas espécies, bemcomo pela tendência em reduzir avariabilidade nas linhas de produção.

Sob o ponto de vista da unidadede transformação um menor númerode espécies é sempre desejável, poisleva a processos industriais mais uni-formes, procedimentos repetitivos emais facilmente controláveis.

O angelim, cedro, freijó, ipê, ja-tobá, maçaranduba, sucupira,tatajuba, cedrinho, cedrorana e mog-no são nomes comerciais de espéci-

es largamente conhecidas no mercado de ma-deira serrada. Na produção de lâminastorneadas e faqueadas são conhecidas e pro-duzidas lâminas, em maior escala, das espéci-es virola, pinho cuiabano ou paricá, amescla,mangue, sumaúma, mogno e cedro.

Embora em princípio o número de espé-cies utilizadas na produção de serrados e lâmi-nas seja grande, a base florestal, representadano caso pela floresta tropical da Amazônia,possui uma grande diversidade de espécies, eas hoje produzidas e comercializadas repre-sentam uma pequena porcentagem do total.

Ampliar o número de espécies em uso éconsiderado como fator fundamental à viabi-lização da atividade florestal/industrial na re-gião Amazônica. Esforços têm sido feitos tantopelos laboratórios de pesquisa como pela pró-pria indústria.

Não existem dados precisos quanto aosavanços tidos em relação ao aumento no nú-mero de espécies em utilização no mercadonacional. Um dos indicativos que se pode uti-lizar para avaliar os progressos na introduçãode novas espécies no mercado, é o númerode espécies exportadas.

Na figura 01 apresenta-se, com base eminformações compiladas pela AIMEX para o pe-ríodo 1989-1995, o número de espécies que emseu conjunto representaram cerca de 80% dasexportações de madeira serrada do Estado doPará. Como pode ser observado em 1989 o con-junto de quatro espécies representaram 80% dasexportações, já em 1996 para o mesmo per-centual foi necessário considerar vinte espécies.Para o mercado nacional existem indícios queeste número é substancialmente mais alto.

2. Produção e Consumo○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

1989 1990 1991 1992 1993 1994 1995 19960

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Fig. 01 - Número de Espécies Responsáveis por 80% dasExportações do Pará (adaptado dos relatórios AIMEX)

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2.2. Evolução Histórica da Produção eConsumo

As estatísticas nacionais para produtos flo-restais, especialmente para produtos de ma-deira sólida, são bastante frágeis. Apresenta-se na figura 02 a evolução da produção e doconsumo de madeira serrada tropical no Brasilcom base em dados disponíveis.

Como pode ser observado, apesar dopaís ter enfrentado um período recessivo nadécada de 80 e nos primeiros anos da décadade 90, tanto a produção como o consumo demadeira serrada tropical cresceu.

Os índices de crescimento observados fo-ram acima da média mundial para madeiraserrada. O crescimento na produção brasileirade madeira serrada tropical nos últimos 10anos foi de aproximadamente 25% e no con-sumo praticamente 20%. A produção nacionalatual de madeira serrada tropical é estimadaem aproximadamente 13,3 milhões de metroscúbicos e o consumo em 12,3 milhões.

Na figura 03 apresentam-se as informa-ções disponíveis para produção e consumo decompensado baseado emmadeiras tropicais para operíodo 1987-96. Nos volu-mes apresentados estãotambém incorporados osvolumes de compensado dotipo �combí�. Este tipo decompensado é conhecidointernacionalmente por serproduzido normalmentecom a parte central (miolo)formada por lâminas deconíferas e a capa de umamadeira tropical.

Os dados apresentadosindicam que, ao contrário damadeira serrada, o compen-sado de madeira tropicalteve, para o período consi-derado, um crescimentomuito pequeno na produçãoe uma queda no consumonacional.

No lado da produção,o maior nível foi atingidoem 1993, quando foramproduzidos 1,75 milhões demetros cúbicos. A razão,principalmente para oatingimento deste nível,está associada a um merca-do internacional extrema-mente favorável, tanto em

volumes como em preços. A produção atualpara compensados baseados em madeiras tro-picais é estimada em cerca de 1,4 milhões demetros cúbicos, basicamente o mesmo nívelde produção do final da última década.

O consumo nacional do produto estáabaixo do consumo dos últimos anos da déca-da de 80. A redução no consumo nacional decompensados de madeira tropical é resultadoda sua substituição por compensados de pinus,principalmente na construção civil e em em-balagens, e do avanço dos painéis recons-tituídos (aglomerado e MDF) na indústriamoveleira. O consumo nacional de compensa-do tem se mantido entre 700 e 800 mil metroscúbicos por ano desde 1994.

2.3. Fluxo de Produtos e PrincipaisCentros de Consumo

Os principais centros de consumo de pro-dutos de madeira tropical estão localizados nosul e sudeste. A madeira é transportada dasregiões de produção, particularmente do MatoGrosso, Rondônia, Pará e Maranhão para o

Fig. 02 - Produção e Consumo de Madeira Serrada Tropical no Brasil

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O transporte é um forte componente nopreço de madeira tropical nos principaismercados nacionais. Precariedade das estra-das e outras implicações de ordem logísticaelevam os custos de frete, que atingem va-lores de R$80,00 a R$100,00 por metro cú-bico no caso de madeira serrada, represen-tando para algumas espécies entre 30 a 40%do preço do produto nos grandes mercadosconsumidores.

A grande São Paulo continua sendo o prin-cipal centro consumidor de madeira serrada ecompensado do país. Somente uma parte docompensado que chega a São Paulo é oriundode fábricas instaladas na Amazônia. O Paranápossui uma forte indústria de compensado, que

importa quantidades significantes de lâminas demadeiras tropicais, e compete no grande mer-cado representado por São Paulo. Existem, por-tanto, fluxos de madeira tropical no sentido nor-te-sul e também no sentido inverso.

São ainda importantes centros consumi-dores o Rio de Janeiro, Belo Horizonte e ospólos moveleiros (São Bento do Sul-SC, BentoGonçalvez-RS, Ubá-MG e outros). Na realida-de, existe uma tendência dos pólos move-leiros deixarem de ser grandes consumidoresde madeiras tropicais originárias da Amazônia.Por razões de custo, as empresas estão substi-tuindo os produtos tradicionais baseados emmadeiras tropicais por produtos baseados ma-deiras de plantios (pinus e eucalyptus) e tam-bém por reconstituídos.

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3.1. Cadeia de ProduçãoA indústria brasileira responsável pela

produção de serrados, lâminas e compensadosbaseada em madeira tropical é extremamentefragmentada. Predominam pequenas indústri-as, de origem familiar, com limitações de capi-tal e tecnologicamente desatualizadas.

Estas características são, sem dúvida, fa-tor limitante ao desenvolvimento e à competi-tividade, particularmente quando se trata deprodutos primários de baixo valor agregado.

Existem várias centenas de pequenas ser-rarias e laminadoras, localizadas em regiõesremotas, com produção média anual inferior a6.000m3. Estas empre-sas não têm capacida-de financeira de operara plena capacidade,manter estoques regula-dores, ou de atualizarseus equipamentos.

As pequenas em-presas, pela debilidadefinanceira, compramsua madeira no merca-do �spot�, normalmentesuprida por toreiros. Al-gumas empresas adqui-rem lotes de madeira em pé e terceirizam aoperação de exploração e transporte.

Empresas consideradas de grande porteque operam com madeira tropical no Brasilsão poucas. Em geral, são consideradas comode grande porte empresas que produzem aci-ma de 25 ou 30 mil metros cúbicos por ano, oque na realidade são pequenos volumes paraos padrões internacionais.

As empresas de maior porte procuram ter

operações mais organizadas, normalmenteverticalizadas, que incluem a exploração, trans-porte e processamento industrial. Embora exis-tam na região Amazônica empresas nesta ca-tegoria que estejam envolvidas em processa-mento secundário, e esta seja uma tendêncianatural para os próximos anos, um grande nú-mero de empresas agregam valor em unida-des localizadas em outras regiões.

3.2. Cadeia de ComercializaçãoA maioria dos produtores de madeira tropi-

cal vende seus produtos nos grandes centrosconsumidores utilizando-se de estrutura de re-

presentantes, que têmforte influência, inclusivena formação de preços,na forma de co-mercialização e em outrosaspectos. As empresaspequenas muitas vezessão fragilizadas por esteimportante elemento dacadeia de distribuição.

O nível de profis-sionalização dos repre-sentantes deixa a dese-jar, e é comum ter um

indivíduo representando empresas concorren-tes no mesmo mercado. A remuneração éestabelecida através de um percentual sobreas vendas, que varia entre 4 e 5%.

Outro componente importante da cadeiade distribuição são os distribuidores. Eles do-minam o mercado de grandes centros, especi-almente no caso do compensado. Em geral sãoaltamente capitalizados e trabalham com gran-des estoques.

3. Caracterização dos Agentes da Cadeia○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

As pequenas empresas, peladebilidade financeira, compram sua

madeira no mercado �spot�,normalmente suprida por toreiros.

Algumas empresas adquirem lotes demadeira em pé e terceirizam a

operação de exploração e transporte.

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4.1. Formação de preçosAs empresas de maior porte utilizam-se

de alguns instrumentos básicos para custea-mento da produção e formação do preço, masem geral isto não ocorre nas pequenas em-presas. A formação de preço é um dos pon-tos fracos dos produtores de madeira tropi-cal. Normalmente são baseados na necessida-de de �fazer caixa� para atender necessida-des emergenciais.

A remuneração da floresta e dos inves-timentos fixos (custos de reposição) normal-mente não são considerados na análise darentabilidade da indústria de madeira tropi-cal. Esta, aliás, tem sido uma prática tambémda indústria madeireira localizada em outrasregiões, o que levou gradativamente a desca-pitalização e o subseqüente desaparecimen-to da atividade.

4.2. Preços HistóricosOs preços de madeira tropical têm uma

variação mais ampla do que as de coníferas.Isto porque as madeiras tropicais, pelo menosa maioria delas, podem ser enquadradas nacategoria de especialidade.

Na figura 04, é apresentada uma sériehistórica de preços de toras de madeiras tro-picais tradicionais no mercado: mogno, ipê ejatobá. No mesmo gráfico, apresenta-se o pre-ço para toras de pinus, produzidas em reflo-restamentos na região sul. Para fins de com-paração todos os preços apresentados refe-rem-se a toras colocadas no pátio das indús-trias.

Como pode ser observado, no períodoanalisado (92-97) os preços de toras para todasas espécies foram ascendentes. As toras demogno praticamente duplicaram no período, e

o preço atual é em torno deUS$300.00 por metro cúbi-co. Outras espécies tropi-cais, como é o caso do ipê edo jatobá, também tiveramum aumento significativo depreço: cerca de 40% no pe-ríodo analisado.

O limite inferior depreço para toras de madei-ras tropicais comerciais éem torno de US$35.00 pormetro cúbico posto pátio.Este valor aplica-se paramadeiras de construção (es-pécies pouco conhecidas) epara madeiras utilizadaspara produção de lâminaspara miolo de compensado.O preço destas espécies émuito próximo ao preçopraticado para toras depinus de boa qualidade nosul do Brasil.

Em geral, o preço damadeira em tora para madei-ras tropicais é baixo quandocomparado ao praticado naMalásia e Indonésia, os mai-ores supridores mundiais demadeiras tropicais.

Uma série histórica depreços praticados no merca-do nacional para madeira

4. Preços e rendas geradas○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Fig. 05 - Preços de Madeira Serrada no mercado nacional

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serrada de mogno, ipê ejatobá é apresentada na fi-gura 05. Os preços apresen-tados referem-se a preços demadeira colocada nos gran-des centros consumidoreslocalizados no sul, portantoincluem os custos de trans-porte.

Da mesma forma queas toras, os preços são as-cendentes no período co-berto pelo gráfico apresen-tado. O preço atual para omogno no mercado domés-tico é em torno deUS$800.00 por metro cúbi-co, praticamente o dobro dovalor praticado até 1994. Ospreços atuais para ipê e jatobá variam entreUS$350.00 e US$400.00 por metro cúbico.

O limite inferior de preço é para espéci-es destinadas à construção, que podem ser in-cluídas na categoria de espécies pouco co-nhecidas. Estas espécies concorrem com algu-mas espécies nativas de florestas remanescen-tes no sul e com a madeira de eucalyptus deplantios. O preço praticado para estas espéci-es varia entre US$220.00 e US$250.00 pormetro cúbico, o que significa um preço míni-mo FOB indústria no norte de US$140.00 pormetro cúbico.

Uma série histórica de preços para com-pensado é apresentada na figura 06. Os va-lores refletem um produto de alto valor agre-gado, como é o caso do compensado decora-tivo de mogno, e chapas de uso geral comoas de virola com espessura de 15 mm. Todosos compensados são para a indústriamoveleira e os preços são os praticados nosmercados consumidores (custo de frete em-butido).

Embora o consumo tenha se retraído, asérie histórica aponta para uma tendência depreços ascendentes. Nos últimos meses o pre-ço vêm caindo, mas de qualquer forma, en-contram-se acima dos preços internacionais. Opreço atual do compensado de 4mm revestidocom mogno faqueado é em torno deUS$1,300.00 por metro cúbico.

O limite inferior para compensado pro-duzido de madeira tropical é para chapas des-tinadas à embalagem ou para forma de con-creto do tipo descartável. Este compensado écomercializado a preços máximos deUS$300.00 por metro cúbico, próximo aos pre-ços do produto produzido com pinus.

4.3. CompetitividadeA indústria de madeira tropical nacional

vem perdendo a sua competitividade ao lon-go do tempo, tanto no mercado nacional comointernacional. A perda de competitividadeestá relacionada a vários fatores. Para o mer-cado doméstico os fatores mais importantessão:

� crescentes custos de transporte;� redução na disponibilidade de espécies de

alto valor como por exemplo o mogno;�necessidade de maiores investimentos na

base florestal advindos de imposições le-gais;

� falta de escala de produção quando ope-rando com espécies de menor valor;

�obsoletismo dos equipamentos por falta deinvestimentos.Também é um fator importante na perda

de competitividade da indústria de madeiratropical a disponibilização de madeira de me-nor custo, produzida nos reflorestamentos lo-calizados, no sul do país.

4.4. rendas geradasNão existem informações precisas quan-

to às rendas geradas na cadeia nacional deprodução e comercialização de madeiras tro-picais.

Estima-se que, somente na base de pro-dução (transformação primária), a atividademadeireira gere entre R$4 e R$5 bilhões porano. Se incluídas a transformação secundária ea cadeia de distribuição e comercialização estevalor atinge pelo menos R$12 bilhões, repre-sentando cerca de 2% do PIB nacional.

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Com base na evolução histórica da pro-dução e do mercado nacional, bem como con-siderando aspectos macroeconômicos e ten-dências gerais de desenvolvimento setorial,apresenta-se a seguir as perspectivas para aprodução de madeiras tropicais:

n Quanto aos VolumesTanto a produção como o consumo do-

méstico de madeira serrada tropical deverácontinuar a crescer nos próximos anos. O cres-cimento deverá superar o do consumo nacio-nal, mas existem boas possibilidades de am-pliar as exportações.

Na área de lâminas e compensados demadeiras tropicais é esperada uma estabilida-de tanto na produção como no consumo

n Quanto aos PreçosDe uma maneira geral, não existem mar-

gens para novos aumentos de preço. A redu-ção de oferta para algumas espécies poderálevar a um aumento no preço, mas serão casosisolados. A maioria das espécies deverá man-ter o nível atual de preços, mesmo que hajamaumentos nos custos.

n Quando à CompetitividadePara os próximos anos, a madeira tropical

deverá enfrentar novos concorrentes, entre os

quais o eucalyptus para madeira serrada, e aschapas reconstituídas, particularmente o MDF,para o compensado.

De certa forma, os acabamentos sintéti-cos (papéis melamínicos, e outros), tambémcompetem com madeiras tropicais, substituin-do lâminas faqueadas decorativas.

O aumento da competitividade da madei-ra tropical passa por uma reestruturação subs-tancial de toda cadeia de produção e comer-cialização, e isto será determinante para a so-brevivência da atividade.

n Quanto aos ProdutosA madeira serrada e o compensado conti-

nuarão sendo os produtos mais importantes emtermos de volume. No entanto, produtos demaior valor agregado passarão a ser deter-minantes na viabilização da indústria florestalda região Amazônica.

n Quantos aos Participantes da CadeiaA cadeia de produção e comercialização

vai receber novos participantes ao longo dospróximos anos. Eles terão maior capacidadede investimento e gestão do negócio e, por-tanto, poderão corroborar para melhorar a efi-ciência e a competitividade da indústria nacio-nal de madeira tropical.

5. Perspectivas○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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O conceito moderno considera que omercado é a base para a geração de rendasfundamentais à sustentabilidade. O mercadonacional é acessível a madeiras tropicais, maso seu potencial não tem sido totalmente ex-plorado.

As perspectivas apontam para umagradativa perda de competitividade da madei-ra tropical no mercado nacional e, conseqüen-temente, da perda da capacidade de utilizaçãodo potencial representado pela floresta Ama-zônica para a melhoria das condições sociais,econômicas e ambientais da região.

Os esforços para a reversão deste quadropassam por uma estreita cooperação entre oagente transformador, representado pelo setorprivado, e o agente promotor e regulador dodesenvolvimento, representado pelo setor pú-blico. Entre as ações a serem implementadas,e que têm relação com o mercado de formageral, considera-se como prioritário:

n Investimentos maciços em pesquisa,desenvolvimento e treinamento

Os investimentos em pesquisa, desenvol-vimento e treinamento deverão, entre outrosaspectos, considerar a necessidade de aumen-tar o número de espécies em utilização e in-troduzi-las no mercado para compatibilizarcom a base florestal, agregar maior valor naorigem, melhorar a produtividade e a qualida-de dos produtos.

n Reduzir a fragmentação da indústriaprimária

Mecanismos deverão ser criados para fa-cilitar o estabelecimento de unidade de maiorcapacidade de produção na indústria de trans-

formação primária, atraindo novos participan-tes, que possam estabelecer e gerenciar maio-res escalas de produção e, ainda, integrar ati-vidades e processos para a plena utilização dopotencial.

n Incentivar a indústria detransformação secundária na região

A agregação de valor na origem é umadas alternativas para melhorar a competiti-vidade da madeira tropical no mercado. A ati-vidade tem um importante componente social,por poder ser viabilizada em unidades de me-nor porte, e, também, por gerar um grandenúmero de empregos. É, no entanto, necessá-rio planejar criteriosamente o estabelecimentoe ordenar o seu crescimento, focando os gran-des mercados que melhor possam remuneraros produtos.

n Desenvolver um serviço de mercadoO órgão gestor do desenvolvimento flo-

restal deve ter à disposição, tanto para usopróprio como dos agentes envolvidos na pro-dução e comercialização de produtos flores-tais, informações atualizadas de mercado. Es-tas informações corroboram para a transparên-cia do mercado, e são fundamentais para aatração de investimentos e para a ampliaçãodo mercado de madeiras tropicais.

O principal fato a ser considerado é deque o mercado é cada vez mais competitivo, eregulá-lo é tarefa do passado. Se concordadoque o mercado é a principal fonte de geraçãode rendas para garantir a sustentabilidade dasflorestas tropicais, todas as ações que possamser tomadas para melhorar a competitividadeda madeira tropical são importantes.

6. Conclusões e Recomendações○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Nota

1 Diretor da STCP Engenharia de Projetos, Professor da UFPr.

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1. Sumário

Esse trabalho primeiro discute a existência e o uso das informações necessárias para omanejo de florestas amazônicas. Depois, sugere medidas para estimular o uso destas informaçõese para a contínua geração de informações relevantes.

O manejo da floresta requer informações sobre as características da floresta e das espécies,métodos de exploração florestal, técnicas para tratamento silvicultural e para conservação eproteção florestal. Informações sobre esses assuntos, em geral, são escassas. O planejamento daexploração é a parte melhor desenvolvida, o que permite a extração de madeira com baixoimpacto deixando a floresta com potencial para regeneração. Sabe-se da necessidade de usartécnicas de regeneração artifical como plantio em clareiras para algumas das espécies madeirieras.Há pouco conhecimento sobre os impactos da exploração na biodiversidade e são necessáriasmais informações sobre produtividade florestal em diferentes sítios. Informações são escassaspela falta de investimentos e pela pouca atenção dada à pesquisa aplicada ao manejo.

Além disso, as informações existentes raramente são usadas nos projetos de manejo. Issoocorre pela baixa demanda ao uso das técnicas de manejo e pela escassez de programas deextensão florestal. A demanda por informações sobre manejo seria aumentada por medidas comosuporte econômico e cobrança do cumprimento das leis florestais e ambientais. Essas medidassão tratadas em outros capítulos desta publicação (ex: certificação florestal e aspectos econômicosda questão florestal). As seguintes medidas são sugeridas para aumentar o uso e geração deinformações relevantes ao manejo florestal:

� Estimular a criação de programas de extensão relevantes ao desenvolvimento do setor flores-tal. É importante acoplar a extensão florestal a projetos de desenvolvimento rural onde osetor florestal é potencialmente importante. É importante começar com os aspectos do mane-jo, que resultam em benefícios mais expressivos para o público-alvo e sejam de curto prazo,como a valoração dos seus recursos. Esses benefícios abrem portas para trabalhos de maislongo prazo que tenham impactos positivos em aspectos importantes, mas talvez menosvalorizados pelos usuários do recurso (ex: conservação de biodiversidade).

� Investir na preparação de materiais educativos sobre manejo florestal. Em geral há carênciade materiais em português e em formatos adequados para os públicos-alvo.

�Criar e implementar mecanismos de atualização das recomendações de manejo. Esses meca-nismos são necessários para o desenvolvimento de práticas mais adequadas para cada região,incluindo aspectos técnicos e legais.

Geração,Disponibilidadee Uso de Informaçõespara ManejarFlorestas na Amazônia

Paulo Barreto 1

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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on�Garantir financiamento sustentado para

pesquisas em quantidade e tempo adequa-dos. A pesquisa e desenvolvimento deve-riam ser feitos principalmente com rendi-mentos financeiros de fundos de uso ex-clusivo para pesquisa. Pelo menos dois ti-pos de fundos seriam desejáveis. Projetosde desenvolvimento florestal do setor pú-blico e privado deveriam criar seus pró-prios fundos desde a sua fase inicial. Os

participantes dos projetos definiriam asprioridades de pesquisa junto com pesqui-sadores de acordo com os objetivos domanejo. Esse mecanismo ajudaria a esti-mular o desenvolvimento de pesquisasmais relevantes para os problemas locais.Também deveriam existir fundos para pes-quisa mais básica e estratégica (ex: merca-do, tecnologia da madeira, proteção àbiodiversidade) a nível regional.

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Florestas produzem vários bens e servi-ços. O uso de certos recursos florestais podeconflitar com a existência ou qualidade de ou-tros bens e serviços que, geralmente, são benspúblicos. Por exemplo, a exploração desor-denada de madeira pode causar erosão do soloque afeta a qualidade da água dos rios, afetan-do a pesca ou o uso da água nas cidades. NoBrasil, existem leis que regulam o uso das flo-restas para garantir que os bens e serviçospúblicos sejam protegidos.

Nesse trabalho, discute-se as informa-ções e medidas necessárias para manejar flo-restas da Amazônia para produção de madei-ra que respeite os bens e serviços públicosda floresta. Assume-se aqui que os objetivosdeclarados na legislação florestal são deman-das genuinamente de interesse público. Issoinclui a proteção da biodiversidade e de áre-as sensitivas como margens de rios e áreasdeclivosas.

O trabalho primeiro descreve as infor-mações necessárias para manejar florestasamazônicas e discute o nível de conhecimentosobre estas informações. Depois, discute osfatores que dificultam a geração e uso das in-

formações. Finalmente, sugere como melhorara geração e disponibilidade de informaçõespara garantir o uso adequado da floresta.

2.1. O que é silvicultura e manejoflorestal?

Silvicultura é um conjunto de medidasaplicadas a floresta para a produção de certosobjetivos. Como existem vários tipos de flo-resta e diversos objetivos (ex: obter renda pro-duzindo madeira ou óleos medicinais), exis-tem várias formas de praticar silvicultura. Aorganização das práticas silviculturais, ao lon-go do tempo e do espaço, e a estimativa e aavaliação de seu desempenho em relação aosobjetivos é o manejo ou administração flores-tal. Por exemplo, o plano de manejo estipulaonde e quando cortar madeira e avalia os ren-dimentos destes cortes. O plano de manejotambém inclui medidas de proteção dos bense serviços públicos como as áreas sensitivas ea manuteção da diversidade de espécies. Pla-nos de manejo não são eternos e devem pre-ver mecanismos de adaptação às mudançaseconômicas, sociais e ambientais.

2. Introdução○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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O manejo da floresta depende de vários ti-pos de informações que incluem característicasda floresta e das espécies, métodos de explora-ção florestal, técnicas para tratamento silviculturale para conservação e proteção florestal (Tabela1). O nível de conhecimento e uso destas infor-mações serão discutidos a seguir.

O manejo da floresta deve começar com oentendimento dos fatores que governam a re-produção e o crescimento das espécies flores-tais. Esses fatores incluem o solo, o clima, ascaracterísticas de cada espécie e a interaçãoentre espécies. O conhecimento dos processosde regeneração permite o desenho de medidaspara regeneração eficiente das espécies.

O nível de informação sobre os padrõesde transformações naturais (ex: sazonalidadedo clima e efeitos navegetação) e a compo-sição das florestas daAmazônia é entre razo-ável e bom. O projetoRadamBrasil, que levan-tou os recursos naturaisda região nos anos 70,caracteriza os tipos flo-restais da Amazôniaque é muito útil paraplanejar o manejo dasflorestas regionais.Contudo, parte das in-formações, principalmente sobre ecologia flo-restal, deve ser reinterpretada com base eminformações que têm sido coletadas em flores-tas tropicais nos últimos 25 anos (ex:Hartshorn, 1978; Brokaw, 1980 e 1982; Baléee Campbell, 1990 e Terborgh, 1992)

O entendimento da biologia e ecologia dasespécies é incompleto e pouco tem sido feitopara transformar essas informações em suges-tões de manejo. Um avanço nesse sentido foi otrabalho de Martini et al (1994). Eles classifica-ram 305 espécies madeireiras da Amazôniaquanto ao pontencial para aumentarem ou so-frerem redução de população devido à explo-ração madeireira. A classificação foi baseada eminformações dos herbários da Embrapa/CPATUe do Museu Emílio Goeldi e no julgamento deum botânico especialista (Nelson Rosa, um dosautores do trabalho) com 25 anos de experiên-cia na região. Eles encontraram que 41 espéci-es (13%) provavelmente sofram redução de

população, 217 (71%) se mantenham na popu-lação e 47 (15%) devem aumentar a populaçãoapós a exploração. As informações do trabalhopermitem a elaboração de planos tentativospara a reprodução natural de muitas das espé-cies madeireiras. O trabalho também indica anecessidade de métodos artificiais para melho-rar a regeneração de outras espécies, tais comoplantios de mudas nas áreas abertas pela ex-ploração (ex: plantios de enriquecimento). Con-tudo, ainda é necessário dar um passo além.Por exemplo, fazendo indicações de como aspráticas de exploração poderiam mudar paraestimular a regeneração natural das espéciesmenos aptas a regenerar e quais os métodosmais eficientes para regeneração artificial.

A interação entre fauna e flora é impor-tante para a regenera-ção das espécies ma-deireiras e conservaçãoda biodiversidade. Porexemplo, o estudo deMartini et al (1994) re-vela que 53% das 305espécies têm seus fru-tos dispersos por ma-míferos e 41% são dis-persos por pássaros. Noentanto, existe poucoconhecimento de comoa fauna afeta a repro-

dução, dispersão e estabelecimento das es-pécies madeireiras no ambiente natural. Alémdisso, poucos estudos avaliaram como a ex-ploração afeta estas interações no curto e lon-go prazo após a exploração (Thiollay, 1992 eJonhs, 1996). Mais escassos ainda são os es-tudos que avaliam como as diferentes inten-sidades de exploração afetam a fauna. Final-mente, as sugestões para minimizar os im-pactos da exploração sobre a fauna (Johns,1986; Terborgh, 1992 e Frumhoff, 1995) ge-ralmente não são utilizadas pelos poucos pla-nos de manejo na região. Essas informaçõesnão são usadas por diversos motivos incluin-do despreparo dos técnicos (falta de leiturade literatura especializada que usualmenteestá em língua estrangeira), dificuldade deacesso às informações atualizadas (ex: litera-tura defasada nas bibliotecas locais) e falta deestímulo e cobrança para melhorar os planosde manejo.

3. Disponibilidade e uso das informações necessárias aomanejo da floresta

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O manejo da floresta deve começarcom o entendimento dos fatores que

governam a reprodução e ocrescimento das espécies florestais.

Esses fatores incluem o solo, oclima, as características de cada

espécie e a interação entre espécies.

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3.1. Estimativa da produção e daprodutividade florestal

Estimativas da produção e da produtivi-dade florestal são essenciais para avaliar o de-sempenho econômico do manejo. As estimati-vas de produção dependem de bons inventá-rios florestais. O projeto RadamBrasil e inven-tários produzidos pela FAO (Food andAgriculture Organization) são boas referênciasiniciais sobre a composição e o volume demadeira disponíveis nas florestas amazônicas.Obviamente, é necessário inventariar cadapropriedade para planejar especificamente oseu manejo. Existem metodologias adequadaspara estes inventários (ex: trabalhos da Facul-dade de Ciências Agrárias do Pará e do Institu-to Nacional de Pesquisas da Amazônia).

As estimativas de produtividade depen-dem de informações sobre a qualidade do sítio(capacidade produtiva da área) e de estudos docrescimento das espécies em cada tipo de sítio.Infelizmente ainda não foram desenvolvidos ín-dices de produtividadepara cada tipo florestal.Por isso, os planejadorestêm que se basear emavaliações qualitativas esimulações. Por exem-plo, para definir classesde produtividade osplanejadores podem sevaler dos indicadores declasses de capacidadenatural do uso da terrado projeto RadamBrasil.Deve-se observar queestas classes servem para comparar qualitativa-mente o potencial produtivo entre áreas e nãopara estimar a produtividade de cada área.

O conhecimento sobre o potencial decrescimento das espécies ainda é precário,embora avanços tenham ocorrido em algumasregiões. Existem poucos estudos que avaliamo crescimento das espécies no longo prazo eem diversos tipos de sítio. Estudos de longoprazo têm sido feitos pela Embrapa/Cpatu (Sil-va, 1989) que monitora o crescimento de ár-vores após a exploração por mais de 13 anosna Floresta Nacional do Tapajós. Esses estu-dos revelam os principais fatores condicio-nando o crescimento, como a exposição à luz.O entendimento desses fatores permite o de-senvolvimento de técnicas para influenciarcrescimento, como o corte de cipós e desbas-tes (redução do número de árvores ocupandoum dado espaço para aumentar o crescimentodas árvores restantes).

Dada a falta de medições de longo prazo,a estimativa dos períodos de colheita é aindatentativa. A rotação (período entre o estabeleci-mento da regeneração nas áreas abertas pelaexploração e o corte das árvores) deve ficarem torno de, pelo menos, 70-80 anos para asespécies com crescimento mediano. O ciclosde corte têm sido estimados em torno de 20 a33 anos (Silva, 1989 e Barreto et al 1993) paraa exploração que deixa árvores remanescentesde tamanho médio (30-45 cm) para um próxi-mo corte2.

3.2. Conservação e proteção florestalÉ preciso planejar medidas para proteger

espécies e a capacidade produtiva da floresta(ex: qualidade do solo). Existe bom nível de in-formação sobre os impactos físicos imediatos daexploração florestal e como estes impactos po-dem ser diminuídos através do uso adequado deequipamentos e planejamento (SUDAM, 1978;Hendrison, 1990; Johns et al 1996). O uso destas

técnicas em Paragomi-nas, no leste da Amazô-nia, reduziu em cerca de33% a área de florestaafetada pela exploração(Johns et al 1996). Issoajuda a minimizar a ero-são e compactação dosolo. A redução da aber-tura do dossel ajuda tam-bém a diminuir o risco deincêndio florestal(Holdsworth e Uhl,1997).

A legislação florestal requer a preserva-ção das margens de rios e lagoas e áreas dedeclive acentuado para conservação do solo eágua e de espécies. No entanto, essas medidasnão são suficientes para a proteção de váriasespécies, pois algumas espécies só crescem emáreas fora da influência dos rios e lagos (ex:terrenos mais secos). Além disso, tem sido de-monstrado que algumas espécies animais sãodependentes de trechos de floresta madura. Porisso, é necessário deixar áreas de floresta ma-dura intacta além das margens dos rios. Estasáreas funcionariam como refúgio para as espé-cies que seriam perturbadas pela exploração.Após a regeneração da floresta explorada, asespécies animais poderiam dispersar para ou-tros trechos da floresta. Essas áreas seriam tam-bém reservas de produção de sementes de es-pécies mais raras. É necessário notar que assugestões para proteção de fauna devem serconsideradas como �hipóteses de trabalho�. Ou

As estimativas de produtividadedependem de informações sobre a

qualidade do sítio (capacidadeprodutiva da área) e de estudos docrescimento das espécies em cada

tipo de sítio.

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onseja, estas sugestões devem ser implementadase avaliadas quanto à necessidade e suficiênciapara proteger a fauna. Mas, como foi dito antes,as sugestões para proteção da fauna ainda nãosão sequer incorporadas na grande maioria dosplanos de manejo regional.

3.3. A rentabilidade econômica do manejoAnálises sobre a rentabilidade da explo-

ração e manejo florestal na Amazônia são ra-ras, o que dificulta a tomada de decisão porparte de investidores e proprietários rurais. Arentabilidade pode ser analisada no curto e nolongo prazo. A extração de madeira, mesmode forma desordenada, como tipicamente é fei-ta, é lucrativa (Veríssimo et al., 1992, Veríssimoet al, 1989, Veríssimo et al, 1995). No entanto,essa exploração desperdiça os recursos flores-tais e causa muitos danos desnecessários à flo-resta. Esses desperdícios e danos podem sergrandemente reduzidos através do planeja-mento da exploração. Estudos na Amazônia eno sudeste Asiático mostram que estas práticasaumentam a rentabilidade da exploração. Noleste do Pará, Barreto et al (no prelo) estima-ram o custo do planejamento da extração emUS$1,87 por m3 de madeira explorada. O be-

nefício financeiro do planejamento da extra-ção foi cerca de 2 vezes maior (US$3,64/m3)do que os custos. Esse benefício foi resultadoda maior produtividade do trabalho e na redu-ção de perdas de madeira. Por exemplo, naexploração sem planejamento, 26,5% do volu-me derrubado foi perdido enquanto que a per-da com planejamento foi de apenas 1%.

No longo prazo deve-se considerar arentabilidade de manter e explorar a florestano futuro. Dada a escassez de informações so-bre crescimento e incertezas sobre preços demadeira no futuro, pode-se apenas estimar estarentabilidade através de simulações. Porexemplo, o manejo florestal, incluindo extra-ção planejada para reduzir os danos às árvoresresiduais e tratamentos silviculturais, resultamem um acúmulo de madeira após o primeirocorte que é maior do que em áreas sem mane-jo (Barreto et al, 1993). O valor líquido pre-sente da exploração com manejo seria entre30 e 38% maior do que sem manejo respecti-vamente para taxas de desconto entre 20 e6%/ano. Esse tipo de análise é imprescindívelpara orientar, mesmo que de forma genérica,o planejamento do manejo florestal.

Tabela 1: Informações necessárias para manejar a floresta

CARACTERÍSTICAS DA FLORESTA E DAS ESPÉCIESPadrão de distúrbios naturais e desenvolvimento dos tipos florestaisComposição da florestaSistemas reprodutivos e padrões de reprodução das espéciesSistemas de dispersão de sementesGerminação e sobrevivência juvenilEstabelecimento e crescimento das espécies

MÉTODOS DE EXPLORAÇÃOViabilidade técnicaViabilidade econômica

TRATAMENTOS SILVICULTURAISViabilidade técnica de tratamentos para aumentar crescimentoRentabilidade de tratamentos para aumentar crescimentoViabilidade técnica para aumentar regeneraçãoDefinição de custos e benefícios para aumentar custos

CONSERVAÇÃO E PROTEÇÃOConservação do soloConservação da faunaPrevenção de incêndiosConservação da flora madeireiraConservação da flora não madeireira

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O manejo, para produzir benefícios eco-nômicos e ambientais, demanda uma grandequantidade de informações (Tabela 1). No en-tanto, existe escassez de informações sobremuitos dos tópicos importantes para o sucessodo manejo. As informações existentes permi-tem a elaboração de planos tentativos de ma-nejo. O planejamento da exploração é a partemelhor desenvolvida, o que permite a extra-ção de madeira com baixo impacto deixando afloresta com potencial para regeneração. Noentanto, os impactos da exploração nabiodiversidade ainda precisam ser melhor en-tendidos. Ainda é preciso também melhoresinformações sobre produtividade florestal emdiferentes sítios.

A geração de informação tem sido proble-mática, primeiro pela escassez de recursos sus-tentados e em quantida-de suficiente para a pes-quisa. Por exemplo, re-centemente o FUNBIO(Fundo Nacional para aBiodiversidade) aprovouUS$ 2.4 milhões paraprojetos de pesquisa edesenvolvimento queajudem a conservar abiodiversidade em todoo Brasil. Esse valor aten-deu a apenas cerca de1% da demanda oriundade projetos com mérito para aprovação (Ciên-cia Hoje, 1997). Um segundo problema é quepouquíssimos estudos na área florestal têmabordado o manejo florestal. Por exemplo, umarevisão da literatura florestal produzida na Ama-zônia indicou que só 3% dos trabalhos trataramde manejo florestal e apenas 1% tratou de práti-cas de exploração (Weaver, 1991).

A situação é agravada pelo fato de queas informações existentes raramente são usa-das nos projetos de manejo. Parte do proble-ma tem sido a baixa demanda pelas informa-ções. As informações só serão relevantes se omanejo florestal for considerado importante.Porém, a maioria dos usuários da floresta nãorecebem sinais claros disso. Por exemplo, alegislação florestal é freqüentemente desres-peitada sem punições e mecanismos de su-porte ao manejo são quase inexistentes (ex:crédito). A segunda área de problema tem sidoa escassez de programas de extensão flores-

tal. Um terceiro problema é o despreparo demuitos dos técnicos regionais, como por exem-plo a falta de leitura da literatura especializadaque, em muitos casos, está em línguas estran-geiras. Portanto, o sucesso do manejo florestaldepende de duas linhas gerais de ação: umaque estimule o uso da informação existente eoutra que estimule a geração de informaçõesrelevantes.

Os mecanismos que estimulem a deman-da de informações sobre manejo como suporteeconômico e cobrança do cumprimento da leisão tratados em outros artigos desta publicação.

4.1. Sugestões para melhorar e aumentaro uso das informações disponíveis sobremanejo

� Estimular a criação de programas de ex-tensão relevantes aodesenvolvimento do se-tor florestal. É importan-te acoplar a extensãoflorestal a projetos dedesenvolvimento ruralonde o setor florestalseja potencialmente im-portante. É importanteatuar primeiro onde osbenefícios da extensãopodem ser mais expres-sivos e atrativos para opúblico-alvo. Por exem-

plo, a quantificação e valoração dos recur-sos através de inventários florestais e es-tudos de mercado e preço ajudam a evitara sub-valorização feita pelos compradoresde madeira. A redução de ineficiências daexploração através do planejamento daexploração ajudam a aumentar os lucros.O planejamento da exploração ajuda a re-duzir os danos à floresta. Esses ganhosimediatos ajudam a obter credibilidadepara implementar medidas importantes,mas que talvez sejam menos valorizadaspelos proprietários rurais (ex: conserva-ção de biodiversidade).

� Investir na preparação de materiais edu-cativos sobre manejo florestal. Em geral,há carência de materias em português eem formatos adequados para os públicos-alvo. Filmes curtos em vídeo são úteis parainformação mais genérica e em larga es-cala. Manuais e cartilhas são necessários

4. Os fatores condicionantes da situação atual e alternativas○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

A geração de informação temsido problemática primeiro pela

escassez de recursossustentados e em quantidadesuficiente para a pesquisa.

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onpara aspectos mais técnicos e detalhadosdo manejo, usados para o treinamento deextensionistas, por exemplo. Projetos de-monstrativos de manejo são úteis comocentros de treinamento.

�Criar e implementar mecanismos de atua-lização das recomendações de manejo. Es-ses mecanismos são necessários para o de-senvolvimento de práticas mais adequa-das para cada região, incluindo aspectostécnicos e legais. Isso poderia ser feitopor grupos regionais que sistematicamen-te coletam, avaliam e interpretam infor-mações e geram recomendações atualiza-das sobre como melhorar o manejo. É pre-ciso também incluir nestes grupos especi-alistas que fazem pesquisas relevantespara silvicultura, mas que não são profissi-onais trabalhando tradicionalmente nestaárea. Aí se incluem profissionais comobiólogos especialistas em botânica e emfauna. A legislação florestal já prevê a cri-ação de Câmaras Técnicas dentro das Su-perintendências do IBAMA (Instituto Bra-sileiro dos Recursos Naturais Renováveis)com a função de avaliar e criar práticaslocais. O IBAMA, acadêmicos e proprietá-rios rurais poderiam promover o desen-volvimento de modelos de manejo ade-quados a cada região.

4.2. Sugestões para a geração deinformações sobre o manejo florestal

�Garantir financiamento sustentado parapesquisas em quantidade e tempo adequa-dos. A pesquisa em desenvolvimento de-veria ser feita principalmente com rendi-mentos financeiros de fundos de uso ex-clusivo para pesquisa. Pelo menos dois ti-pos de fundos seriam desejáveis. Projetosde desenvolvimento florestal do setor pú-blico e privado deveriam criar seus pró-prios fundos desde a sua fase inicial. Osparticipantes dos projetos definiriam asprioridades de pesquisa junto com pesqui-sadores de acordo com objetivos do ma-nejo. Esse mecanismo ajudaria a estimularo desenvolvimento de pesquisas mais re-levantes para os problemas locais. Tam-bém deveriam existir fundos para pesqui-sa mais básica e estratégica (ex: mercado,tecnologia da madeira, proteção àbiodiversidade) a nível regional. Esses fun-dos deveriam ser administrados como fun-dos privados para benefício público. OFUNBIO, único fundo brasileiro deste tipo,é administrado por membros do governo,

de organizações não governamentais, aca-dêmicos e empresários. Essa experiência,apesar de inicial, parece promissora.O planejamento e implementação dessas

sugestões deve ser o mais flexível possívelpara permitir adaptações às oportunidades eobstáculos das diferentes regiões. O projetopiloto para conservação das florestas tropicaisfinanciado pelo G7 e o governo brasileiro, queopera vários projetos de extensão e apoio àpesquisa, oferece grande oportunidade paraaprendizado. Os técnicos do governo, dosagentes financiadores e os beneficiários dosprojetos devem ser consultados para avaliarcomo programas de suporte ao manejo pode-riam ser melhor desenhados e implementados.

ConclusõesO uso sustentável dos bens e serviços

das florestas da Amazônia dependem do apro-veitamento das informações disponíveis e dageração contínua de informações sobre o de-sempenho da floresta submetida ao manejo. Épreciso usar a extensão florestal como elemen-to catalizador da adoção do manejo florestal.Pesquisa e desenvolvimento devem ser finan-ciados principalmente através dos rendimen-tos de fundos de pesquisa que podem ser dedois tipos. Um que atenda especificamenteprojetos de desenvolvimento florestal e outroque atenda demandas da pesquisa básica edemandas de pesquisa estratégica a nível re-gional. Sem geração e uso adequado de infor-mações, o sucesso da exploração florestal naAmazônia estará em risco.

LiteraturaBalée, W. and Campbell, D. G. 1990. Evidence

for successional status of liana forest (XinguRiver Basin, Amazonian Brazil). Biotropica22:36-47.

Barreto, P. Amaral, P. Vidal, E. and Uhl, C. Inpress. Costs and benefits of forest manage-ment for timber production in easternAmazonia. Forest Ecology and Management.

Barreto, P. Uhl, C e Yared, J. O potencial deprodução sustentável de madeira emParagominas-Pa na Amazônia Oriental: con-siderações ecológicas e econômicas. In:Congresso Florestal Brasileiro, 7, 1993.Anais.., São Paulo: Sociedade Brasileira deSilvicultura/Sociedade Brasileira de Enge-nheiros Florestais, 1993, v.1, p 387-392.

Barros, A. and Uhl, C. 1995. Logging along the

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Amazon River and estuary: Patterns,problems and potential. Forest Ecology andManagement 77:87-105.

Brokaw, N.V. 1980. Gap-phase regenerationin a new tropical forest. P.H.D Dissertation.University of Chicago, Chicago, Illinois, USA.

Brokaw, N.V. 1982. Treefalls: Frequency,timing and consequences. Pp. 101-108.In E.G. Leigh, Jr., A.S. Rand, and D.M.Windsor (eds.) The Ecology of a TropicalForest: Seasonal Rythms and Long TermChanges. Smithsonian Institution Press, Wa-shington, D.C., USA.

Ciência Hoje.1997. FUNBIO, um pequenogrande fundo. Ciência Hoje 128: 27-29

Frumhoff, P. C. 1995. Conserving wildlife intropical forests managed for timber.Bioscience 45:456-464.

Hartshorn, G.S. 1978. Tree falls and tropicalforest dynamics. pp. 617-638. In: P.B.Tomlinson and M.H. Zimmermann (eds.)Tropical Trees as Living Systems.Cambridge University Press, England.

Hendrison, J.1990. Damage-controlled loggingin managed rain forest in Suriname. In:Ecology and Management of Tropical RainForests in Suriname. Wageningen AgriculturalUniversity, Netherlands.

Holdsworth, A. R. and Uhl, C. 1997. Fire inAmazonian selectively logged rain forestand the potential for fire reduction.Ecological Applications

Johns, A. D. 1986. Effects of habitat disturbanceon rainforest wildlife in Brazilian Amazonia.World Wildlife Fund U.S. Washington, USA.

Johns, J. Barreto, P. and Uhl, C. 1996. Logging

damage in planned and unplanned loggingoperations and its implications forsustainable timber production in the easternAmazon. Forest Ecology and Management,89:59-77.

Silva, J. N. M. 1989. The behaviour of the tro-pical rain forest of the Brazilian Amazonafter logging. P.H.D. Dissertation. OxfodUniversity, Oxford, England.

SUDAM, 1978. Estudo de viabilidade técnico-econômica da exploração mecanizada emfloresta de terra firme, região de Curuá-Una.Belém, PA, Brasil.

Terborgh, J. 1992. Diversity and the tropicalrain forest. Scientifc American Library. NewYork, USA.

Thiollay, J-M. 1992. The influence of selectivelogging on bird species diversity in aGuianian rain forest. Conservation Biology6:47-63.

Uhl, C. Barreto, P. Veríssimo, A. Vidal, E.Amaral, P. Barros, A. C. Souza, C. Jr. Johns, J.Gerwing, J. 1997. Natural resourcesmanagement in the Brazilian Amazon: anintegrated research approach Bioscience47:160-168.

Veríssimo, A. Barreto, P. Mattos, M. Tarifa, R.and Uhl, C. 1992. Logging impact andprospects for sustainable forest managementin an old Amazonian frontier: the case ofParagominas. Forest Ecology and Manage-ment. 55: 169-199.

Weaver, 1991. Tropical forest management �research activities at Curuá-una, Brazil.Technical Report nr BRA/88/006.UnitedNations Development Programme.

Notas

1 Instituto do Homem e Meio Ambiente da Amazônia2 Neste caso, a exploração não abre espaço para o estabelecimento de novas plantas pequenas, mas sim abre

espaço para o crescimento das árvores de tamanho médio já estabelecidas ao redor das árvores que sãoexploradas.

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1. Introdução

A necessidade de repensar os paradigmas e mudar o atual estilo de desenvolvimento estáclaramente estabelecida numa série de documentos de ampla aceitação internacional, inclusive aAgenda 21, aprovada na Rio-92. Um dos debates críticos da atualidade é acerca dos instrumentosmais eficazes para apoiar a promoção de mudanças efetivas no atual estilo de desenvolvimento,especialmente as atividades relacionadas com o manejo florestal. A certificação socioambientalrepresenta um instrumento promissor para esse fim.

A certificação socioambiental oferece um mecanismo para que consumidores, governos einstituições independentes criem estímulos para a adoção de sistemas de manejo florestalambientalmente apropriados, socialmente benéficos e economicamente viáveis. A lógica dacertificação socioambiental é simples: os produtores que praticam o bom manejo florestal têmcustos adicionais e seus produtos precisam ser valorizados pelo mercado e apoiados por políticaspúblicas coerentes (Viana 1996a).

Apesar do enorme desenvolvimento da certificação socioambiental independente nos últi-mos anos, existe ainda uma grande carência de informações para subsidiar o debate sobre os seuspotenciais e limites (Viana et al 1996). O objetivo desse texto é fornecer uma pequena contribui-ção para a análise do papel da certificação florestal como instrumento para a promoção dodesenvolvimento rural sustentável.

CertificaçãoSocioambiental,Bom Manejo Florestale Políticas Públicas

Virgílio M. Viana1

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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2. FSC e ISO 14.000○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Um tema que tem gerado certa polêmicaé a relação entre FSC e ISO 14000. Tratam-sede dois sistemas de certificação com conceitose práticas bastante diferentes e que muitasvezes são confundidos entre si inapropria-damente. A principal diferença entre os dois éo fato da ISO certificar apenas a existência deum sistema de gerenciamento ambiental efici-ente, sem considerar padrões mínimos de de-sempenho, enquanto o FSC estabelece padrõesmínimos de desempenho, descritos nos seus�Princípios e Critérios� (Viana 1996a).

2.1. FSCA relação dos consumidores com o setor

florestal destaca-se dos demais em função deuma série de fatores. O primeiro é intrínsecoà própria atividade florestal: talvez seja o setoronde um problemaambiental esteja maisclaramente associado auma determinada classede produto como, porexemplo, a degradaçãoda cobertura florestal ea produção de madeira.Além disso, muitos sis-temas de produção flo-restal estão diretamenterelacionados com aconservação de culturastradicionais, variandodesde os lapões na Escandinávia até os serin-gueiros e índios na Amazônia. Isso afeta pro-fundamente a atitude dos consumidores deprodutos florestais e foi um ingrediente im-portante no surgimento do movimento decertificação socioambiental.

A preocupação dos consumidores eONGs foi o elemento central na origem doFSC (Pearce 1992, Jeanrenaud e Sullivan 1994,Ervin 1996). O setor florestal abrigou um mo-vimento voltado para a certificação socio-ambiental que resultou na definição de princí-pios e critérios para o bom manejo florestal(veja seção 3). Esses princípios e critérios fo-ram definidos a partir de um processo de con-sultas internacionais, que envolveu milharesde indivíduos e instituições e centenas deworkshops em dezenas de países. Esse pro-cesso de definição culminou no desenvolvi-mento de uma instituição credenciadora decertificadores independentes, chamada FSC -

Conselho Florestal Mundial (Ervin 1996).O FSC é a primeira e única instituição

credenciadora de certificadores na área flores-tal. Trata-se de uma instituição internacional,não governamental, sem fins lucrativos, base-ada em Oaxaca, México. Foi fundada em1993, com o objetivo de promover a conser-vação florestal através do credenciamento emonitoramento de certificadores de florestassubmetidas a práticas de �bom manejo�. O FSCpossui amplo apoio do setor ambientalista,crescente apoio do setor empresarial e vemrecebendo crescente atenção pelos governosde diferentes países (Viana et al 1996).

Existem várias críticas ao FSC. Segmentosligados à indústria e alguns governos recla-mam da pequena participação no processo detomadas de decisiões do FSC. Originalmente,

o processo de tomadade decisões do FSC (As-sembléia e ConselhoDiretor) estava divididoem câmaras, com 25%para o setor empresari-al e 75% para os setoressocial e ambiental. Apartir de julho de 1996a estrutura foi alterada,contemplando agorauma participação pari-tária (33%) para os dife-rentes segmentos: eco-

nômico, social e ambiental. Desde a criaçãodo FSC, os órgãos governamentais têm direitode participação nas Assembléias, sem direito avoto. Isso permanece até hoje.

Com relação à participação governamen-tal no FSC, deve ser relembrado, em primeirolugar, o caráter voluntário da certificação flo-restal. Em segundo lugar, vale enfatizar que,tanto a nível nacional quanto internacional, acredibilidade de órgãos governamentais decontrole ambiental é baixa, fato demonstradopor uma série de pesquisas. O Brasil não éexcessão. No período de 1992 a 1997, umaampla pesquisa nacional revelou que o brasi-leiro atribui responsabilidade crescente às en-tidades ecológicas 28 e 32% respectivamente,e responsabilidade decrescente ao governofederal, 51 e 48% respectivamente; na reso-lução de problemas ambientais (MMA, MASTe ISER 1997). Em terceiro lugar, existe umatendência internacional de aumentar o papel

O FSC possui amplo apoio do setorambientalista, crescente apoio do

setor empresarial e vem recebendocrescente atenção pelos governos de

diferentes países.

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da sociedade civil no processo de tomada dedecisões sobre sistemas de produção que afe-tam de forma significativa a qualidade am-biental (veja seção 4).

Um recente estudo encomendado pelaOrganização de Madeiras Tropicais (ITTO-OIMT), indica que, para ter sucesso, um pro-grama de certificação não deve ser controladopelos setores que possuem potenciais confli-tos de interesse com a certificação (ITTO 1994,Ghazalli e Simula 1994). O caráter indepen-dente do FSC reforça a importância de manteruma participação equilibrada dos diferentessetores no processo de tomada de decisão. Éexatamente isso que dá credibilidade às ativi-dades do FSC.

Existe uma série de processos sendo de-senvolvidos a nível nacional e regional, com oobjetivo de detalhar os princípios e critérios doFSC para as diversas realidades existentes. NoBrasil, por exemplo, existe um Grupo de Tra-balho, composto por representantes dos seto-res ambientalista (Green-peace, Amigos da Terra,WWF e Funatura, Ima-zon), social (FASE,COIAB, GTA, VitaeCivilis, FTIMC e ISA) eempresarial (SBS,AIMEX, ABRACAVE,FARESP e ANFPC), alémde observadores ligadosao setor acadêmico(ESALQ/USP e IPT), FSCinternacional, governo(MMA) e certificadores(IMAFLORA). O Grupo de Trabalho é secreta-riado pela WWF e tem como principal agendaa definição de critérios e indicadores para acertificação de florestas plantadas e florestas na-turais de terra firme da Amazônia.

2.2. ISO 14000A Organização Internacional de Padroni-

zação (International Organization forStandartization ISO) é a maior e mais impor-tante instituição padronizadora do mundo. Foiestabelecida em 1946 na Suíça com o objetivode facilitar o comércio internacional de produ-tos e serviços e estimular a cooperação cientí-fica e tecnológica internacional através da pa-dronização. Com a série de padrões ISO 9000,a ISO desenvolveu o conceito de qualidadetotal, que teve grande aceitação no Brasil e noexterior. Com a nova série ISO 14000 (em fasede elaboração), a ISO pretende padronizar sis-temas de gerenciamento ambiental.

Um estudo realizado pela BenchmarkEnvironmental Consulting para o EuropeanEnvironmental Bureau revela uma série deproblemas relacionados com a ISO 14001. Oprimeiro problema está relacionado com a di-ficuldade do uso da ISO 14001 na imple-mentação da Agenda 21 e outros acordos in-ternacionais. Isso se deve a uma série de fato-res fundamentais como, por exemplo, o con-trole do processo ISO pelo setor industrial dospaíses industrializados e a pequena participa-ção de ONGs, pequenas empresas e governosde países em desenvolvimento.

Um segundo problema é o fato da ISO14001 demandar apenas a obediência à legis-lação dos países onde estão situadas as em-presas e não à legislação dos países de ori-gem (no caso de empresas multinacionais).Isso é particularmente grave pois contrariauma tendência estabelecida na Agenda 21, queestabelece recomendações para empresasmultinacionais �introduzirem diretrizes e com-

promissos de adoção depadrões não menos ri-gorosos do que nosseus países de origem�.Abre, portanto, a possi-bilidade de certificaçãode empresas com de-sempenhos ambientaismedíocres mas situadasem países com legisla-ções ambientais menosrigorosas. Pode, indire-tamente, contribuir paraa exportação de �indús-

tria sujas� dos países industrializados para oTerceiro Mundo.

Um terceiro problema é o fato dacertificação através da ISO 14001 atestar aconformidade de uma empresa com os proce-dimentos e metas estabelecidas por ela pró-pria. Por exemplo, uma empresa que joga umatonelada/mês de mercúrio num rio próximo,situada num país que não tenha legislação es-pecífica sobre o tema, pode ser certificadadesde que ela tenha um plano para reduzir acarga poluidora nos próximos 5, 10 ou 50 anos.Em outro exemplo, uma empresa que usa clo-ro no processo de produção de papel podeestabelecer uma meta de abandonar o uso decloro gradualmente ao longo dos próximos 150anos - desde que isso seja legal no país - eainda assim ser certificada pela ISO. Não secertifica, portanto, o desempenho diante depadrões mínimos fixados externamente à em-presa. Trata-se de uma simples certificação de

O caráter independente do FSCreforça a importância de manteruma participação equilibrada dosdiferentes setores no processo detomada de decisão. É exatamente

isso que dá credibilidade àsatividades do FSC.

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ondesempenho diante de metas auto-esta-belecidas, em conformidade com a legislaçãolocal. Obviamente, muitas metas e níveis dedesempenho não seriam aprovados por orga-nizações ambientalistas e movimentos sociaistanto locais quanto internacionais.

Um quarto problema é a ausência de cri-térios voltados para os padrões de saúde esegurança do trabalho e distribuição dos bene-fícios sociais. Isso não é tratado pela ISO14001 e é um retrocesso em relação à tendên-cia internacional, consagrada na Rio-92, deanalisar de forma holística e integrada os siste-mas de produção. Essa análise holística envol-ve uma compatibilização dos objetivos sociaiscom os objetivos econômicos e ambientais.

Outro problema é o caráter confidencialdas informações ambientais sobre empresascertificadas pela ISO. Isso vai contra a tendên-cia internacional, reforçada pela Agenda 21,que assegura o �direito ao conhecimento� dosimpactos ambientais eestabelece uma série derecomendações para oacesso a informações.

O Global ForestPolicy Project, um con-sórcio de grandes ONGsambientalistas que tema missão de acompanharasssuntos relacionadoscom políticas florestais anível internacional, comsede em Washington,sintetiza os principaisproblemas que levam o setor ambientalista ater dificultades em aceitar a ISO 14001:

(i) o fato da certificação ser voltada paraconformidade com os padrões fixados pelaprópria empresa e não desempenho diante depadrões fixados com a participação de dife-rentes grupos de interesse;

(ii) a inexperiência da ISO em lidar comsistemas ecológicos complexos como o casodas florestas, diante do seu caráter historica-mente voltado para as ciências exatas;

(iii) as dificuldades impostas à participaçãoefetiva e equilibrada dos diferentes grupos deinteresse relacionados com a atividade florestal:

(iv) o fato dos padrões da ISO estarempraticamente não testados e submetidos a ve-rificação independente por outras instituições.

O sistema ISO teve sucesso enquanto li-dou com problemas relacionados com a quali-dade da gerência empresarial e as espe-cificações técnicas, desenvolvidas, mensuradase monitoradas pelo próprio setor empresarial.

Se a eficiência gerencial é um assunto de pe-queno interesse público, o impacto ambientalde atividades empresariais é um tema de gran-de interesse público. Ao tratar problemasambientais da mesma forma que problemasoperacionais de engenharia industrial, oenfoque ISO enfrenta sérias limitações na áreaflorestal. Essas limitações devem perdurar en-quanto inexistirem padrões de desempenhoamplamente acordados e aceitos, for desne-cessário o acesso público aos resultados dasauditorias, e permanecerem contradiçõesconceituais com instrumentos internacional-mente aprovados, como a Agenda 21.

A certificação pela ISO 14001, no seupresente formato, tem sérias limitações parauso no setor florestal e é motivo de preocupa-ção de vários setores comprometidos com aviabilização do manejo florestal sustentável.

A atual certificação ISO 14001 pode, en-tretanto, ter um papel positivo dentro de um

processo de melhoriada qualidade ambientaldos sistemas de produ-ção de bens. Um dosaspectos positivos daISO é o fato das empre-sas assumirem compro-missos para a melhoriacontínua da qualidadeambiental dos sistemasprodutivos. Em muitoscasos, a certificaçãoleva ao enfrentamentode problemas crônicos,

com o estabelecimento de metas específicaspara o seu questionamento. Outro aspectopositivo é o fato da certificação através dosistema ISO requerer o cumprimento da le-gislação ambiental federal, estadual e muni-cipal. Isso representa, em muitos casos, umavanço significativo em termos de melhoriaambiental.

Um sistema de normas internas para defi-nição e monitoramento de impactos ambientaiscertificado pela ISO 14001 facilita o aprimora-mento do sistema de gestão ambiental do pro-dutor. Entretanto, esse tipo de certificação nãopode ser utilizado como base para a rotulagemde produtos oriundos de áreas de bom manejoflorestal nem para o marketing empresarial. Orisco são casos de propaganda enganosa, ondea simples existência de um sistema de gerên-cias ambientais possa ser vendida como umatestado de bom desempenho ambiental.

A certificação pela ISO 14001, noseu presente formato, tem sérias

limitações para uso no setorflorestal e é motivo de

preocupação de vários setorescomprometidos com a viabilizaçãodo manejo florestal sustentável.

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Houve uma mudança paradigmática sig-nificativa no setor florestal nos últimos tem-pos, parcialmente relacionada com a certi-ficação florestal. O conceito ocidental de ma-nejo florestal foi o precursor da idéia desustentabilidade da produção. Foi na Alema-nha, no século XVIII, que foi idealizado o con-ceito de �produção sustentada�, dependendoda intensidade e freqüência da colheita e dostratamentos aplicados à floresta. Nasceu aí oconceito de �manejo sob regime de rendimen-to sustentado�, que focalizava o problema dasustentabilidade da produção de florestas ma-nejadas.

Na década de 80, sob a influência dostrabalhos da Comissão Bruntland, surgiu o con-ceito de �manejo florestal sustentável�(�sustainable forestry�), que abordava as di-mensões sociais e ambientais da produção,para as gerações atuais e futuras, expandindoassim a dimensão estritamente econômica doconceito tradicional de �manejo sob regime derendimento sustentado�.

Finalmente, na década de 90, com o ad-vento da certificação socioambiental, surgiu anecessidade de traduzir o conceito de �manejoflorestal sustentável� para algo mais prático,passível de uma avaliação objetiva e repli-cável. Surgiu aí o conceito de �bom manejo

florestal� (�good forest management� ou�forest stewardship�), que representa as me-lhores práticas de manejo, capazes de promo-ver a conservação ambiental e a melhoria daqualidade de vida das comunidades locais,considerando a viabilidade econômica e o es-tado da arte do conhecimento científico e tra-dicional. Trata-se de um conceito que buscaavaliar objetivamente a aplicação de boas prá-ticas de manejo que, por sua vez, devem vari-ar entre diferentes situações e, num mesmolocal, ao longo do tempo.

A certificação florestal representa um fa-tor que deve contribuir de forma decisiva paraa reformulação dos paradigmas das ciênciasflorestais e práticas de manejo florestal. É fun-damental que as instituições de ensino e pes-quisa participem das discussões acerca dosprocessos de certificação em andamento. Essaparticipação tem, por um lado, a importantetarefa de contribuir para o aprimoramento dabase científica para a certificação florestal.Além disso, as instuições acadêmicas devemutilizar essas oportunidades para reformularseus programas de pesquisa e ensino, ade-quando-os aos novos paradigmas que farãoparte das atividades florestais nas próximasdécadas.

3. O conceito de bom manejo florestal○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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A certificação socioambiental surgiu comoresultado de um processo de negociação inten-so, na busca constante de consenso entre osdiferentes grupos de interesse. Dentre essesdestacam-se os movimentos sociais eambientalistas e o setor empresarial, para quema certificação tem diferentes significados.

4.1. A certificação e os movimentossociais e ambientalistas

A certificação socioambiental pelo FSCrepresenta uma ferramenta extremamente ino-vadora para os movimentos sociais e ambien-talistas, com o objetivo de estimular sistemasde produção mais sustentáveis (Jeanrenaud eSullivan 1994). Existem vários elementos quesubsidiam essa avaliação. Talvez o mais im-portante seja a sintonia com o ideal de desen-volvimento sustentávele, em especial, a con-sonância com importan-tes avanços obtidos naAgenda 21. Incluem-seaí as recomendaçõespara que empresasmultinacionais �adotemdiretrizes e compromis-sos de adoção de pa-drões não menos rigo-rosos do que nos seuspaíses de origem�. Éprofundamente diferen-te da ISO 14000, que abre a possibilidade decertificação de empresas com desempenhosambientais medíocres mas situadas em paísescom legislações ambientais menos rigoras. Acertificação socioambiental pelo FSC não con-tribui, portanto, para a exportação de �indús-tria sujas� dos países industrializados para oTerceiro Mundo.

O sistema de certificação socioambientalpelo FSC tem um nível de participação dasONGs ambientalistas e movimentos sociaisímpar. No caso da certificação do ConselhoMundial para o Manejo Florestal (FSC), asONGs ambientalistas e movimentos sociaistêm 66% do poder decisório, com 33% cada.Esse balanço é radicalmente diferente nocaso da ISO, onde a participação desses ato-res é mínima, com pouquíssimo poderdecisório. É também muito diferente da mai-oria dos fóruns internacionais como, porexemplo, a ITTO.

Os resultados das auditorias decertificação socioambiental são públicos. Issopermite o acesso das ONGs ao acompanha-mento do processo de melhoria de desempe-nho do produtor, face aos condicionantes erecomendações da auditoria ambiental. Alémdisso, essa transparência permite o acompa-nhamento do próprio trabalho dos certifica-dores, facilitando denúncias junto aos meca-nismos de apelação do FSC.

A certificação socioambiental avalia o de-sempenho dos produtores diante de padrõesmínimos de desempenho. Isso dá uma mensa-gem clara ao consumidor quanto à qualidadesocioambiental do processo produtivo. Facilitacampanhas voltadas para a conscientizaçãopública organizadas por ONGs ambientalistase movimentos sociais. Isso é profundamente

distinto da ISO, que nãocertifica o nível de de-sempenho, mas apenasa existência de um sis-tema de gerenciamentoambiental.

Apesar dos váriosaspectos positivos paraos movimentos sociais eambientalistas, a certi-ficação socioambientalpelo FSC apresenta de-safios significativos(Faillace 1996). Talvez

o mais importante seja o monitoramento cons-tante da ação dos certificadores. É fundamen-tal a participação das ONGs nos processos decertificação, com o objetivo de assegurar queos pontos críticos de cada sistema de manejoflorestal sejam devidamente considerados. Essaparticipação é fundamental para dar transpa-rência e credibilidade aos processos de cer-tificação. Além disso, é fundamental a partici-pação das ONGs na estrutura do FSC. Comouma instituição nova, em fase de consolida-ção, o FSC precisa do constante apoio dasONGs para manter o seu ideário original.

4.2. A certificação e o setor empresarialA certificação socioambiental tem sido

encarada pelo setor empresarial de duas for-mas principais. A primeira vê na certificaçãouma imposição descabida de novos custos aossistemas de produção florestal, impostos pelomovimento ambientalista e pelas indústrias dos

4. A certificação socioambiental e os grupos de interesse○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

A certificação socioambiental peloFSC representa uma ferramentaextremamente inovadora para os

movimentos sociais eambientalistas, com o objetivo de

estimular sistemas de produção maissustentáveis.

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países desenvolvidos. Por outro lado, algunsvêem na certificação uma oportunidade de ne-gócio, capaz de alavancar vendas e conquistarmercados (Eisen 1994). De maneira geral po-demos dizer que, como instrumento voluntá-rio, haverá sempre espaço � agora e no futuro� para mercados que não valorizam a certi-ficação como característica dos produtos flo-restais. Assim, a certificação não é uma impo-sição a todos, apenas uma necessidade para oacesso a determinados mercados. Podemos di-zer também que existem inúmeras oportuni-dades promissoras para usar a certificaçãocomo um instrumento gerador de bons negó-cios. Assim, a certificação pode ser efetiva-mente uma boa oportunidade para empresári-os com visão estratégica.

Há controvérsia com relação ao mercadode produtos certificados. A perspectiva maisconservadora é que a certificação será maisútil para o acesso aos mercados, cada vez maisfechados e competitivos. A perspectiva maisotimista é que a certifi-cação criará condiçõespara a obtenção de pre-ços superiores paraprodutos certificados,acesso diferenciado acrédito e benefícios fis-cais (Viana et al 1996).

Alguns mercados jáestão marchando rapida-mente para a certificaçãoflorestal, notadamente,Inglaterra, Alemanha eHolanda. Outros paísesda Europa, Estados Unidos, Canadá e Austráliavêm logo a seguir. Mais distantes estão os mer-cados asiáticos, Oriente Médio e América Latina.Na Inglaterra, por exemplo, um grupo de em-presas que consomem ou revendem produtosflorestais madereiros e não-madeireiros (WWF-95 �buyers group�) movimenta cerca de US$ 3bilhões/ano e definiu a data de 1999 como ameta para a comercialização de 100% dos pro-dutos florestais com certificado de origem. É va-lioso considerar as motivações que envolvemgrandes compradores de madeira a optar pelacertificação: (i) estratégia de marketing insti-tucional, (ii) estratégia diferenciada de competi-ção por diferentes segmentos do mercado, (iii)motivação dos próprios funcionários.

Do ponto de vista estratégico, a certi-ficação pode funcionar como um instrumentoeficaz para a manutenção de mercados com-pradores de madeiras tropicais, especialmentena Europa. Um estudo realizado pelo �Center

for European Economic Research� deMannheim, Alemanha, concluiu que acertificação pode contribuir para a reversão datendência de declínio da demanda em váriossegmentos do mercado em razão de campa-nhas anti-consumo de madeiras tropicais.

As indústrias exportadoras brasileiras quepossuem efetivamente boas práticas de manejoflorestal e são �certificáveis� podem ter vanta-gens comparativas em relação aos seus compe-tidores nacionais e internacionais. Trata-se deum fator capaz de diferenciar os competidores,garantir maiores fatias no mercado e, eventual-mente, preços superiores para seus produtos.De uma maneira geral, quanto mais cedo forfeita a certificação maiores serão as vantagens.

Além disso, vários segmentos do setor flo-restal brasileiro, notadamente o setor de celulo-se e papel, possuem práticas de manejo com-patíveis com outras operações certificadas a ní-vel internacional. Para os segmentos onde aspráticas de manejo necessitam melhorias sensí-

veis, notadamente o se-tor de madeira serradade florestas nativas, acertificação pode repre-sentar um aliado impor-tante para as ações go-vernamentais voltadaspara a promoção do ma-nejo sustentável.

Um elemento novoé o fato de várias insti-tuições financeiras - in-cluindo o Banco Mundi-al, BNDES, Banco Axial

e diversos fundos de investimento - estaremconsiderando a certificação socioambiental paraa concessão de financiamentos para o setor flo-restal. Trata-se de um fato novo, que tende aconsolidar-se como tendência e deve causar umgrande impacto para o setor empresarial.

Um dos maiores desafios da certificaçãosocioambiental é contribuir para a viabilidadeeconômica do bom manejo florestal. Para issoa certificação deve contribuir para (i) pagar oscustos adicionais do bom manejo florestal emrelação aos sistemas convencionais de mane-jo, (ii) pagar os custos diretos da certificação,incluindo as auditorias periódicas, (iii) ofere-cer uma remuneração adicional ao produtor,como atraente econômico e (iv) facilitar acomercialização dos produtos.

Assim como para os movimentos sociais eambientalistas, a participação do setor empresa-rial no FSC é fundamental. Uma das principaisrazões é o realismo que o setor assegura às dis-

Um dos maiores desafios dacertificação socioambiental

é contribuir para a viabilidadeeconômica do bommanejo florestal.

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oncussões, que muitas vezes têm participantes compouco conhecimento sobre aspectos opera-cionais e econômicos da produção florestal.

4.3. A certificação socioambiental epolíticas públicas

Existe um crescente interesse na formula-ção de políticas públicas voltadas para o apoioao manejo florestal. Isso inclui regiões com reali-dades contrastantes, variando desde as florestasboreais da Sibéria e Canadá até as florestas tropi-cais da Amazônia e África. Uma das perguntascentrais desse debate é: como a certificaçãopode contribuir para a formulação e imple-mentação de políticas públicas coerentes?

O ponto de partida para a análise dessaquestão é o reconhecimento de um novo con-texto histórico na formulação de políticas públi-cas. Tradicionalmente, na maior parte dos paí-ses, as políticas florestais eram formuladas pe-los governos. Mais recentemente, especialmen-te na Europa e EUA, existe uma tendência defortalecimento do papeldas ONGs e do setorprivado na formulação eimplementação de polí-ticas públicas. Isso mui-tas vezes envolve a co-laboração direta entreONGs e o setor priva-do, com os governos as-sumindo uma funçãomais de monitoramentoe apoio. Uma das justifi-cativas para essa ten-dência é a insatisfaçãodas ONGs e do setor privado diante dos atuaisinstrumentos de políticas públicas (Elliott 1996).

Existem vários exemplos da crescenteparticipação de ONGs na formulação eimplementação de políticas públicas tambémno Brasil. Talvez o caso que mereça maiordestaque é o Conselho Nacional de Meio Am-biente (CONAMA), que possui uma grandeparticipação não governamental na sua estru-tura deliberativa. Um recente estudo, feito pe-las ONGs Grupo de Trabalho Amazônico(GTA) e Amigos da Terra, aponta diretrizespara a formulação de políticas públicas coe-rentes com o ideal de desenvolvimento sus-tentável para a Amazônia (Smeraldi 1996).Uma série de estudos sobre o setor florestalrealizado pela ONG IMAZON (Barros eVeríssimo 1996) tem fornecido subsídios críti-cos na formulação de políticas públicas.

Um tema bastante debatido é o papel dosgovernos na certificação socioambiental. Desde

a perspectiva mais tradicional, que não conse-gue internalizar as vantagens de um sistema demonitoramento sem o controle absoluto do es-tado, a certificação florestal deveria ser papeldo governo. Trata-se de uma posição que me-rece uma reflexão profunda. Se os mecanismosatuais de controle florestal são tão ineficientes(veja Barros e Veríssimo 1996, Veríssimo eAmaral 1996), mesmo com um espectrotemático mais limitado, como eles poderiam al-cançar a credibilidade necessária lidando comparâmetros mais complexos como os envolvi-dos com a certificação socioambiental? Qualseria o custo de formulação e implantação deum sistema governamental de certificação? Porque não destinar esses recursos a outras ativi-dades como, por exemplo, a educação florestalde nível médio ou a serviços de extensão flo-restal, nitidamente dentro do papel dos gover-nos e francamente deficitários? Quais seriam asvantagens de um sistema governamental decertificação? De que valeria um certificado go-

vernamental se os con-sumidores - do Brasil eexterior - não conferemcredibilidade a ele?

Muitas vezes a cer-tificação socioambientalé tratada como uma bar-reira comercial não al-fandegária dos paísesindustrializados e, por-tanto, contra os interes-ses dos países em de-senvolvimento. Essaanálise merece um sé-

rio reparo. Em primeiro lugar, a certificaçãovoluntária não conflita com as diretrizes da Or-ganização Mundial de Comércio (Droogsma etal 1994). Por outro lado, se a certificação esti-mula a disseminação de sistemas de manejode melhor qualidade ambiental e social, e ain-da assegura vantagens econômicas e comerci-ais a esses sistemas em detrimento de siste-mas convencionais de produção predatória ede poucos benefícios sociais; como ela podeser considerada conflitante com os interessesdos países em desenvolvimento?

A certificação socioambiental pelo FSCrepresenta uma nova ferramenta, com elemen-tos inovadores para a formulação de políticaspúblicas voltadas para o estímulo a sistemasde produção mais sustentáveis. Existem trêsfatores que tornam a certificação socioam-biental uma ferramenta atraente na formulaçãoe implementação de políticas públicas. Primei-ro é a sintonia conceitual da certificação

Na maior parte dos países, aspolíticas florestais eram formuladas

pelos governos. Recentemente,especialmente na Europa e EUA,

existe uma tendência defortalecimento do papel das ONGs e

do setor privado na formulação eimplementação de políticas públicas.

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socioambiental com os princípios de desen-volvimento sustentável, consagrados na Rio-92. A certificação socioambiental incorpora osmúltiplos objetivos do desenvolvimento sus-tentável, identificando sistemas de produçãoambientalmente apropriados, socialmente jus-tos e economicamente viáveis, capazes degerar benefícios para as gerações atuais e fu-turas. Segundo, a certificação socioambientalpossui elevada credibilidade, dado o seu cará-ter independente e participativo e à sua estru-tura de funcionamento. A participação equili-brada dos setores empresarial, ambientalista emovimentos sociais é um dos pilares dacredibilidade do sistema. O FSC possui diver-sos mecanismos para o esclarecimento de dú-vidas e o recebimento e avaliação de denúnci-as. Além disso, os certificadores sofrem audi-torias periódicas, que podem resultar no seudescredeciamento, com perda imediata dacertificação dos produtores certificados inapro-priadamente. Terceiro, a certificação não re-presenta custos adicionais para os governos.Isso significa um elemento importante na es-tratégia geral de diminuição dos custos de es-truturas estatais de monitoramento.

A avaliação de políticas voltadas para odesenvolvimento sustentável requer indicado-res objetivos, com custo operacional barato ede alta cofiabilidade (Camino e Müller 1993).A certificação socioambiental pelo FSC ofere-ce um indicador útil para a implementação depolíticas públicas para a promoção do manejoflorestal. Para os países da Bacia Amazônica,por exemplo, a eficácia de políticas governa-mentais voltadas para a promoção do manejoflorestal pode ser aferida através de dois indi-cadores simples: (i) a proporção dos produtosoriundos de áreas de bom manejo florestal e(ii) a proporção da área florestal sob regimede bom manejo florestal (Viana 1995). Se, porexemplo, uma determinada região, país ouestado possuir menos de 1% da produção flo-restal oriunda de florestas bem manejadas, umameta das políticas florestais é elevar essepercentual. A eficácia dessas políticas podeser medida através da evolução desse percen-tual ao longo dos anos.

Um dos países com posicionamento maisarrojado com relação à certificação é a Costa Rica,que instituiu um sistema (em fase de implanta-ção) que deverá acompanhar e reconhecer acertificação feita por instituições não-governa-mentais, credenciadas pelo Governo, através deum �Conselho de Notáveis�. Os produtores certi-ficados devem receber um pagamanto (cerca deUS$ 70/ha/ano) pelos serviços ambientais (gás

carbônico, água, etc) como estímulo para as boaspráticas de manejo florestal.

A certificação florestal tem assumido umpapel de crescente importância nos fóruns inter-nacionais. Uma dessas iniciativas é o PainelIntergovernamental sobre Florestas (IPF), que éparte da Comissão de Desenvolvimento Susten-tável (CSD) das Nações Unidas (ONU). Uma sé-rie de conferências internacionais tem abordadoo tema da certificação e sua importância para oapoio ao bom manejo florestal. Um evento quemerece destaque é a �International Conferenceon Certification and Labelling of Forest Products�,organizada pelo Governo da Austrália (Ministryof Primary Industries), em parceria com o PainelIntergovernamental sobre Florestas, realizada emBrisbane, Austrália, em 1996. O documento finalda Conferência representa um avanço histórico anível governamental e não governamental comrelação à certificação florestal. Uma das conclu-sões da Conferência, que trata do reconhecimen-to da �certificação e rotulagem como uma ferra-menta com potencial para contribuir para o ma-nejo sustentável de florestas� representa umamudança radical em relação ao posicionamentodos governos, indústrias e ONGs em relação aalguns anos atrás.

Apesar do potencial da certificaçãosocioambiental como ferramenta auxiliar àimplementação de instrumentos de políticaspúblicas, é fundamental ressaltar o fato de quea solução dos problemas florestais é complexae envolve um conjunto de ações (Elliott 1996).Na Amazônia são inúmeras as inadequaçõesdos atuais instrumentos de políticas públicas(Hummel e Freitas 1997). É amplamente acei-to o fato de que existe uma necessidade deamplas reformas nas políticas públicas. Essasreformas devem incluir políticas setoriais (flo-restais) e inter-setoriais. A certificação podedar apenas uma modesta contribuição, comoum catalisador de mudanças (Viana 1996b).

ConclusãoA certificação pode servir como uma fer-

ramenta capaz de auxiliar a implementação eavaliar a eficácia de políticas nacionais e inter-nacionais dirigidas para o apoio ao bom mane-jo florestal. Se essas políticas públicas resulta-rem, por exemplo, na certificação de 10% daprodução florestal da Amazônia até o ano2000, teremos dado um passo inequívoco nosentido do desenvolvimento sustentável ecumprimento dos nossos compromissos naAgenda 21.

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onA certificação deve continuar como um

instrumento de mercado, de caráter voluntárioe não-governamental para assegurar seu po-tencial de catalisador de mudanças no setorflorestal. A certificação pode aumentar a capa-cidade da indústria de manter e expandir suaparticipação em mercados importantes e, aomesmo tempo, representar um importante es-tímulo para a conservação dos recursos flores-tais brasileiros através do manejo sustentável.

Os benefícios da certificação no estímuloao bom manejo florestal devem ser comple-mentados por políticas públicas que facilitemo acesso ao crédito privado para investimen-tos e/ou criem incentivos diferenciados paraprodutores certificados.

LiteraturaBarros, A.C. e Veríssimo, A. 1996 (org). A Ex-

pansão da Atividade Madereira na Amazô-nia. Instituto do Homem e Meio Ambienteda Amazônia - IMAZON, Belém.

Camino, R. d. e. M., S. 1993. Sostenibilidad dela agricultura y los recursos naturales. SeriesSostenibilidad de la agricultura y los recursosnaturales. San José, Costa Rica, IICA/GTZ.

Droogsma, W. D., J. H. Jans and R. Uylenburg.1994. Legal Means for Restricting the Importof Non-Sustainably Produced (Tropical)Timber. Series. Legal Means for Restrictingthe Import of Non-Sustainably Produced(Tropical) Timber. Amsterdam, Centre forEnvironmental Law, IUCN/WWF.

Eisen, M. 1994. What marketers want fromtimber certification. Timber Certification:Implications for Tropical Forest Manage-ment. Yale School of Forestry andEnvironmental Studies, New Haven, CT.

Ervin, J. 1996. The consultative process. In:Viana, V.M., J. Ervin, C. Elliot, R. Donovanand H. Gholz (eds). Certification of ForestProducts: Issues and Perspectives. IslandPress, Washingotn, USA.

Elliott, C. 1996. In: Viana, V.M., J. Ervin, C.Elliot, R. Donovan and H. Gholz (eds).Certification of Forest Products: Issues andPerspectives. Island Press, Washingotn, USA.

Elliot, C. e Viana, V.M. 1996. PotentialInequalities and Unintended Efects ofCertification. In: Viana, V.M.; Ervin, J., Dono-van, R.; Elliot, C. e Ghoz, H. (eds) Certification

of forest products: Issues and Perspectives. IslandPress, Washington, D.C., EUA.

Faillace, S.T. 1996. A quem interessa o FSC.FASE, Cadernos de Proposta 4:17-25.

Ghazali, B. H. and M. Simula. 1994. CertificationSchemes for All Timber and Timber Products.Yokohama, Japan, International TropicalTimber Organization (ITTO).

Hummel, A.C. e Freitas, J.V. 1997. Plano demanejo sustentável versus desmatamento. ACrítica 19/6/97, Manaus.

ITTO. 1994. Report on the Working Party onCertification of all Timber and TimberProducts. Cartagena, Colombia, InternationalTropical Timber Organization (ITTO).

Jeanrenaud, J. P. and F. Sullivan. 1994. TimberCertification and the Forest Stewardship Council:a WWF Perspective. Goldaming, Surrey, UK,World Wide Fund for Nature (WWF).

MMA, MAST e ISER 1997. O que o brasileiropensa sobre meio ambiente, desenvolvi-mento e sustentabilidade. Ministério do MeioAmbiente e da Amazônia Legal, Brasília.

Pearce, F. 1992. Timber trade stripped of itsgreen veneer. New Scientist April: 4.

Smeraldi, R. (ed.) 1996. Políticas Públicas Coe-rentes para uma Amazônia Sustentável.Amigos da Terra Internacional e Grupo deTrabalho Amazônico, Brasília.

Veríssimo, A. e Amaral, P. 1996. ExploraçãoFlorestal na Amazônia: Situação Atual e Pers-pectivas. FASE, Cadernos Propostas 4: 9-16.

Viana, V.M. 1995. Elements for the elaborationof criteria and indicators of forestsustainability in the Amazon Basin. In: Tra-tado de cooperation Amazonica, Tarapoto.Propuesta de Tarapoto sobre Critérios e Indi-cadores de Sostenabilidad del BosqueAmazonico; Memorias del Taller Regional.Lima, TCA, P.15-8.

Viana, V.M., J. Ervin, C. Elliot, R. Donovan andH. Gholz 1996 (eds). Certification of ForestProducts: Issues and Perspectives. IslandPress, Washingotn, USA.

Viana, V.M. 1996a. Certificação Florestal: ISO14.000 e FSC. FASE, Cadernos de Proposta4:26-29.

Viana, V.M. 1996b. Certification as a Catalystfor Change in Tropical Forest Management.In: Viana, V.M., J. Ervin, C. Elliot, R.Donovan and H. Gholz (eds). Certificationof Forest Products: Issues and Perspectives.Island Press, Washington, USA.

Nota

1 Depto. de Ciências Florestais ESALQ/USP

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Forest ConcessionPolicies andSustainable ForestManagementof Tropical Forests

John A. Gray1

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

1. IntroductionForest concessions have been reasonably successful in encouraging forest based economic

development in a number of forest rich developing countries. They have not been very success-ful in encouraging sustainable management of tropical forests (Repetto and Gillis 1988: Poore etal 1989; Grut, Gray and Egli 1991). For example, in Indonesia forest concession policies and thecountry�s rich tropical forests contributed to the very remarkable growth in forest products output,exports and contribution to economic growth, particularly since 1980 (Gray 1996b). However,this contribution may be short lived. As a result of the rapid expansion of forest production, thesupply of highly valuable tropical timber from natural forests will begin to shrink by the year2000 (Gray 1996b).

Poore et al (1989), in a widely quoted study of tropical forest management, found that less than1% of natural tropical forests (less that 1 million hectares) were under sustainable forest management.However the situation may not be as bad as the figures suggest. Not all countries with tropical forestswere included and only rough estimates were made for major forest countries such as Indonesia andMalaysia (Sharma et al 1992). Elsewhere, Poore pointed out that several countries have substantialareas of forest that do not quite qualify as under sustainable management. A small additional effortwould bring these forest under sustainable management, and in most countries logged areas could bebrought into sustainable forest production with little effort (Palmer and Synnott 1992).

In this paper we examine some of the problems with present forest concessions and issues inmaking concessions more effective (in Part 1), some alternatives to forest concessions (in Part 2),and the experiences of forest concessions in a number of countries. The forest concession experi-ences of other countries are summarized in a series of case studies in the annex to the paper.

We then present a set of proposals designed to deal with the problems and issues in forestconcessions and make forest concession more sustainable (in Part 3). We present a detailedseries of steps designed to improve the concession allocation process, concession contracts,forest management on concessions, and the monitoring and supervision of concessions. Theseimprovements are designed to introduce performance incentives into the allocation and operationof concessions. Changes are also proposed in the structure of forest fees to better reflect thevalues of both the timber and the concessions, to make fees easier to collect, and to provideeconomic incentives for concession management.

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Many tropical countries face problems inachieving sustainable management of theirvaluable tropical forests and on forest conces-sions. There are increasing population pres-sures from agricultural incursion into forestlands. Unless tropical forests can be protectedand managed, there will be little forest left tomeet the country�s growth in domestic demandfor forest products, to meet increased exportdemands, to contribute to the country�s eco-nomic development and development of theforested regions.

In an era of reduced government budgetsforest management and protection has becomeincreasingly difficult. In many countries, withcutbacks in staff and funding the agencies andministries responsible do not have the capa-bilities to manage the forests, or to superviseon-the-ground forest activities. Thus just whentropical forests are most in need of manage-ment and protection,the government is leastable to do so.

Although not acomplete list of all theissues involved in for-est concessions, someof the important onesare discussed. Readersmay wish to add others.

2.1. Public or PrivateForest Management

At issue in manycountries is whether tropical forests should bepublicly or privately owned and managed.Forestry in developing countries faces diffi-culties in the regulation, control and supervi-sion of concessions distributed throughout thecountry. Forest concessions are, by nature, inremote areas. Supervision and monitoring ofconcession by government forest services isdifficult. Faced with these problems manyconcerned for the survival of tropical forestshave argued for cancelling concessions andclosing down logging operations. With cut-backs of the government sector others haveargued for deregulation of forestry and thetransfer of tenure and forestry responsibilitiesto private sector concessionaires. Neither islikely to be successful.

Closing down of logging activities andcancelling of concessions would preserve the

forest from encroachment by logging and log-ging roads, but it could leave forest areas un-protected and open to claim for conversion toother uses, principally farming. Unused landdoes not stay unclaimed for long in most tropi-cal countries, witness the invasion of forestreserves where government does not have theresources to protect them. In addition, withno revenue from forests, governments willhave little inclination to protect them. That iswhy logging bans in Thailand and Ecuadorhave not slowed deforestation.

The deregulation and transfer of respon-sibilities to private sector concessionaire isnot likely to be successful either. This solu-tion may be appropriate for forest planta-tions, but there are too many non-timber andenvironmental benefits from natural tropicalforests for deregulation to be an efficient so-lution.

For natural tropicalforests there are oppor-tunities to strengthenforest concession con-tracts and procedures, tosupport forest manage-ment with economic in-centives, to encourageor require concession-aires to undertake forestmanagement activities,and to put forest man-agement and conces-sion management on a

more businesslike footing. These proposedimprovements are discussed below, in Part 3.

There are also opportunities to maintainpublic control of forest concessions, but toprivatize or contract out certain forestry ac-tivities, regulatory functions, or services suchas forest inventory, scaling and grading, in-spection of concessions, forest nursery opera-tions, tree planting, and other forest manage-ment operations. The activities privatized orcontracted out will still need to be supervisedfor performance, but the day-to-day opera-tional activities can be delegated. Concessionperformance could be evaluated by an inde-pendent organization or �inspection service�.Greater use might be made of refundable per-formance bonds, refundable at the end of eachmanagement plan upon demonstration of sat-isfactory performance.

2. Forest Concession Issues○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

In an era of reducedgovernment budgets forestmanagement and protection

has becomeincreasingly difficult.

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2.2. Length of Concession TenureIn many tropical countries the short

length of concession tenure is often identifiedas a reason for the unwillingness of the con-cessionaires to manage the forest and to prac-tice sustained yield forestry. It is commonlyproposed that longer, more secure concessiontenures would provide the required incentivefor sustainable forest management. Yet, longterm leases may not be the answer. Underlong term tenures, or even privatization of theforest, concessionaires may continue to liqui-date, rather than manage slow growing tropi-cal forests (Vincent 1990, Gray 1994).

Where growth rates of tropical forests, involume and value, are low, below rates of re-turn on other investments, concessionaires willhave no incentive to manage the forests, evenunder long term, or secure tenure. Given theslow growth rates of most tropical high forests,well below private sector rates of return, longterm tenures or privatization will not providesufficient incentive for concessionaires to prac-tice sustained yield forestry. Concessionaireswill liquidate the forestsand invest the proceedselsewhere at a higherrate of return.

In practice, underslow growth rates, shortterm tenures may bebetter. There is someevidence from Indone-sia that short term ten-ures, renewable uponforest management per-formance, provide astronger incentive toforest management than long term tenures(Gray and Hadi 1989, Gray and Hadi 1990).

Long term leases can have another disad-vantage. If the lease-holder or concessionairemismanages the forest, it may be more diffi-cult to get rid of him than if he has a shortterm contract of say five years.

Instead, a more appropriate form of ten-ure might be a concession contract of 15 to 20years, renewable every 5 to 10 years subjectto inspection and performance evaluation ofthe concession. This is the type of tenureoffered under Forest Management Licences inseveral Canadian Provinces. To ensure impar-tiality, inspections could be carried out by anindependent agency, as proposed below.

2.3. Concession SizeThe size of concessions varies enor-

mously among and within tropical countries(Grut, Gray and Egli 1991). In some countriesconcessions are too small to support viablesilviculture, logging and transport units.

More often concessions are beyond theneeds of concessionaires. In many tropicalcountries fees on forest concessions are mi-nor, often negligible. As a result there is littleor no cost to the industry acquiring and hold-ing large concession areas. Concessionairesacquire large forest areas, often more for fu-ture �insurance� purposes or speculation thatfor regular timber supplies. Not only does thismean that public resources are lying idle, butthese unused forests are, paradoxically, alsothe ones that are especially prone to defores-tation by shifting cultivators. With excess for-est area, the industry has little incentive to con-trol encroachment, or to manage the area.

Consolidation of concessions of less thanthe optimum range should be encouraged bymaking them transferable, particularly to adja-cent concessions. Division of concessionslarger than the optimum range should be also

be encouraged. At re-newal, concessionswhich have been oper-ated at less than say 75or 80 percent of theirannual allowable cutcould be reduced insize. This would freearea for reallocation.

2.4. ConcessionManagementIncentives

In most countriesthe concession agreements do not provide suffi-cient incentives for forest management nor in-clude measurable performance requirements.Arrangements for supervision and monitoring areweak or non-existent (Grut, Gray and Egli 1991).

Incentives can be used to support theregulation and management of concessions.These can be positive incentives - paymentsor reduced fees based on performance - ornegative - penalties or loss of deposits for non-performance.

The granting of interim concession li-censes which are converted to a second stageinterim licence or operating licence upon dem-onstrated performance is a useful approach.It puts the onus on the concessionaire to dem-onstrate his performance, rather than requiringthe forestry department to be continuallychecking upon performance.

In many tropical countries fees onforest concessions are minor, often

negligible. As a result there islittle or no cost to the industry

acquiring and holding largeconcession areas.

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onConcession management might include

greater use of guarantee performance depos-its and refunds upon performance. Prepay-ment of forest fees will ensure that conces-sionaires are up-to-date with payment of theirfees. Performance deposits can be required atvarious stages in the concession application,approval and granting. However, concession-aires would need to be confident of the returnof their deposits if the system is to provideincentives for forest management.

The concession renewal provisions at 5to 10 year intervals, mentioned above, are an-other example. Other incentives are intro-duced into the proposals of Part 3, below.

2.5. Impact of Forest Fees on ConcessionManagement

The forest revenue system and of the for-est fees on timber and on concessions can havea significant effect on forest management andthe performance of forest concessions.

Problems of low forest prices on timberand of low fees on forest concession holdingsare common to devel-oped countries (Re-petto and Gillis 1988).There are few countriesin which forests areproperly priced andeconomic incentivesused to encourage effi-cient utilization and sus-tainable forest manage-ment. Thus there arepotentially large ben-efits from modest im-provements in the for-est revenue systems of most countries (Gray1997).

Low forest revenues can result eitherfrom low forest fees, set at levels well belowthe value of the timber, or from low collectionrates, the result of weak and inefficient collec-tion systems. Both are common problems offorest revenue systems in West and CentralAfrica and in South East Asia, and both contrib-ute to low forest revenues yields (Grut, Grayand Egli 1991, Gray 1983).

Low forest fees distort forest manage-ment decisions, encourage inefficiencies inutilization, silvicultural investment, and conser-vation. Low forest fees mean that timber isunderpriced and encourage poor utilization oftimber in the forest and by processing indus-tries. Poor collection rates direct individualefforts away from productive activity towards

avoidance and evasion, �rent seeking�, �bribetaking� and other �unofficial� payments. Lowforest fees and revenues make forest manage-ment and forest renewal uneconomic. Lowforest fees provide insufficient revenue tofund government forest management and su-pervision of concession operations andjeopardise the long term financial and biologi-cal sustainability of tropical forestry.

Forest fees on the timber cut along withfees on forest concessions � set at levels thatreflect the value of the timber and of conces-sions � can: (1) deter the overexploitation oftropical forests, (2) provide economic incen-tives for sustainable management of tropicalforests and more efficient utilization of tropi-cal timber, and (3) generate the revenues tofinance forest management and regeneration,making tropical forestry both financially andeconomically sustainable.

A more significant share of forest rev-enues could be collected through concessionfees. Concession fees could include: (1) aninitial concession licence fee; (2) an annual

concession fee basedon the concession area,on the inventory vol-ume, or on the annualallowable cut; or (3) bo-nus bids on conces-sions, where conces-sions are allocated bycompetitive applicationand through oral auc-tion, or sealed tender.

Concession fees,properly designed, canserve a number of for-

est policy objectives. First, concession feesare much easier to collect than stumpage feeson timber. With stumpage fees forestry de-partments are dependent on accurate and cor-rect scaling of the timber cut, often carriedout by the concessionaires. As a result of thisand other factors, forestry departments col-lect only a small fraction of the stumpage feesdue. With a concession fee there are no suchproblems.

Second, concession fees serve to reflectthe security value of timber supply providedby the concession. This security value is animportant and real value to concession hold-ers, the insurance value of a guaranteed tim-ber supply. Concession fees can discouragethe non-productive efforts (lobbying, persua-sion, influence, or bribery) �invested� in ob-taining a concession (�rent seeking,� as it is

Low forest fees distort forestmanagement decisions, encourage

inefficiencies in utilization,silvicultural investment, and

conservation.

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termed), and so channel efforts into more pro-ductive activities.

Third, concession fees can encouragebetter management of concessions, more in-tensive forest management within concessions,and less speculative acquisition. Low or zeroconcession fees provide the wrong incentive.They encourage the acquisition of conces-sions, make the acquisition of large conces-sion areas cheap, and thus encourage �cream-ing� or �high grading�, and waste.

2.6. Bidding for ConcessionsConcessions are too often allocated in an

arbitrary fashion, which invites corruption.Persons who have no knowledge of the forestindustry, and no intention of entering it, aresometimes awarded concessions which theythen sell or contract out. Rent which shouldgo the owner of the forest, is dissipated else-where.

When there is adequate competition, con-cessions should preferably be allocatedthrough bidding. Concessions sold by biddingprovide an indications of what should becharged on concessions where competition isnot possible (Gray 1983, Gray and Hadi 1989).

Competitive allocation has advantages. Itavoids the difficult administrative decisions inchoosing among competing applicants. It al-locates concession areas to those processorsto whom they are most productive and valu-able. Finally, it generates revenue to the for-est owners, be they governments or localcommunities.

Bidding has another advantage. Theprices bid for concessions are a market basedindicator of whether forest fees on the timberharvested are at the right level. If forest feesare low, profits from harvesting timber will belarge, concessions financially attractive, andthe �bonus prices� bid for new concession willbe high. On the other hand, if forest feesfully reflect the value of the standing timberon concessions, then the bids for concessionswill reflect only the security of timber supplyvalue of concessions.

It is recommended that competitive allo-cation of concessions by sealed tender be ap-plied first to new concessions in areas of thecountry where competition can be expected.Competitive bidding could also be used in re-allocating concessions returned, expired andnot renewed, or cancelled for non-perfor-mance, perhaps with existing holders beinggiven the option of matching the winning bids.

Auction procedures would need to be un-der tight control, to ensure that bidding is com-petitive and that the concession is awarded tothe highest bidder, or the highest ranking bid-der where technical competence and other fac-tors as well as price are considered. Biddingconditions can also be tailored to the country�sindustrial strategy. For example, to preventlarge companies from acquiring large areas,concessions could be auctioned in small butmanageable units, and small companies with-out concessions given bidding preferences.The concession allocation procedures might beentrusted to an independent auctioneer.

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Forest concessions or other tenure ar-rangement for slow growing tropical forestsrequire care in their design, because of thediversity of outputs of tropical forests (privatecommercial outputs such as timber. These in-clude common property outputs such as fruitand nuts, medicinal plants, game, etc., and thediversity of non-market (public or collective)outputs such as water quality benefits,biodiversity values and other values.

In addition to forest concessions, a range ofalternative forest tenures is possible. Not all areappropriate to tropical forests. Some are moreappropriate to plantation forests, others to tem-perate forests. Here we survey a several alterna-tive tenures, and evaluate them in terms of theireconomic effects and suitability for managementof slow growing, natural tropical forests.

3.1. Privatization of ConcessionsPrivatization of concessions is equal to a

concession of infiniteduration. The govern-ment or local commu-nity, as the owner of theforest and the seller ofthe wood, could con-tinue to collect forestfees from the privateconcessionaire. Likemost privatization, itwould have to be linkedto regulation (legisla-tion) and supervision.Although sustainedyield forestry in the natural tropical forests canbe economically profitable to the country, inmost cases sustained yield forestry is not profit-able to the concessionaire. Private manage-ment of forests is only financially profitable ifthe growth rate in value of the forest biomass(the volume of the residual stand after logging)is greater than the concessionaire�s opportunitycost rate of return (Gray 1994). If the growthrate in value is less than the concessionaire�sopportunity cost rate of return, theconcessionaire�s financial choice will be to minethe forest, to take all merchantable trees andabandon the remnant stand to fate.

Growth rates of physical biomass of 1%to 3% per year, combined with the growth inreal value per cubic metre of 1% to 2% peryear (relative to other prices and inflation as a

result of increasing scarcity of timber), wouldyield a combined growth in value estimates ofbetween 1% to 4% per year. This is well be-low the opportunity cost rates of return onalternative investments for concessionaires inmost developing countries.

Slow growth is one reason whyprivatization of concessions, that is of the forestalone, or the forest plus the land, must becoupled with regulations of forest managementperformance.

Privatization will not maximize overall so-cial benefits from tropical forestry. Privatizationwill not ensure production of non-timber forestproducts, or of the non-market, public, or col-lective benefits of the forest such as water man-agement benefits, erosion control benefits, en-vironmental and biological diversity benefits.

3.2. Privatization of the Forest But Not theLand

Privatization of theforest excluding theland involves the sale ofthe existing forest cropand future crops for aspecified time period,or perhaps forever.This is the modeladopted in NewZealand for the sale ofthat country�s exoticplantation forests (pri-marily radiata pine,Pinus radiata), with the

forests sold in lots, by sealed tenders and in-ternational bidding. The sale was for the ex-isting crop of trees, plus the land use rights togrow a second forest crop on a 35 year rota-tion, or to use the land for other purposes.Bids were for an initial payment with no fur-ther fees on timber harvested. If it were notfor the legal challenge of Maori land claims,the New Zealand Government might have soldthe land as well. In the first round auction,held in July 1990, most of the sealed bids wererejected as too low. Only two bids, covering15% of the forest area offered, were acceptedby the government. The government thenmoved to sell the remainder by negotiation.

Privatization of forests may be appropri-ate for fast growing plantation forests, but notfor natural tropical forests that grow slowly

3. Alternative Forest Tenures○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Privatization of forests may beappropriate for fast growing

plantation forests, but not fornatural tropical forests that grow

slowly and generate additional non-timber benefits.

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and generate additional non-timber benefits.Plantation forests involve large initial capitalinvestments. Security of tenure is required toallow recovery of the investment. Plantationsproduce primarily market outputs of wood orother products. Non-timber outputs and non-market environmental values are usually muchless than in natural tropical forests. For plan-tation forests these non-timber and non-mar-ket values can often be protected by contractclauses, easements, or by separate land uselegislation.

3.3. Privatization of Both the Forest andForest Land

Privatization could be taken one step fur-ther, to the sale of the forests and the lands.This is the approach taken by the British For-estry Commission in selling a portion of theCommission�s forest plantations. It is also themodel used in Chile in the sale of plantationsand more recently in the sale of Chile�s naturalforests. Again, this approach is more appro-priate to fast growing forest plantations than toslow growing natural tropical forests. As sug-gested above, for natu-ral tropical forestswhere non-timber andnon-market benefits aresignificant, privatizationwill not ensure contin-ued production of thesenon-market benefits.

3.4. ForestManagementLicences

In Forest Manage-ment Licences, the for-est tenure system common in Canada, the ten-ure is for the annual allowable cut of the geo-graphically defined forest area, and for a speci-fied length of time. The licensee has rights tothe volume of timber equal to the annual al-lowable cut at prevailing forest fees. Thestanding timber remains the property of thegovernment, as owner, until approval of theannual cutting plan and logging. The forestfees could either be the normal forest feesapplied on other tenures, or forest fees estab-lished in the licence argument and adjusted bya pre-established formula. In exchange forthe security of timber supply without compe-tition, the licensee agrees to take on forestmanagement and forest renewal activities, ei-ther with or without compensation.

This approach is found in several Cana-

dian provinces. In Canada jurisdiction over for-est resources is delegated to the provinces.The provinces of British Columbia, Alberta,Saskatchewan, Manitoba, Ontario, Quebec,New Brunswick and Newfoundland all pro-vide examples, each with variations in termsand conditions and in management obligations.

Forest management licences in mostprovinces are for a 20-year period. A fewhave shorter or longer periods, 10 or 25 years.But in almost all provinces, the licence is sub-ject to a performance review and is renew-able periodically, at 5-year intervals in mostprovinces, 10-year intervals in others. Reviewand renewal provides a continuing incentivefor performance of forest management activi-ties. The licensee, who values the security oftimber supply, is willing to undertake forestmanagement and regeneration in order to pre-serve this security of supply. With adequateperformance, tenure becomes continuing, al-most perpetual. In almost all provinces thereare provisions to allow withdrawal of up to 5or 10 percent of the area at the review, ifrequired for specific alternative land uses, as

parks or reserves.Forest manage-

ment and reforestationexpenditures are han-dled differently in eachprovince. Other fea-tures of the forest man-agement licence ar-rangements vary amongthe eight provinces andprovide an opportunityfor comparison andevaluation of actual ex-periences.

3.5. Selling Timber with a Guarantee ofFuture Supply

Under this model, companies have ten-ure rights either to a guaranteed share of theannual allowable cut or to a specified volumefrom a specific managed forest area. The ten-ure is to a guaranteed wood supply rather thanto a specific area. Examples of this alternativeare found in the timber quota systems of theCanadian provinces of British Columbia,Alberta, Manitoba and Quebec. Thus indi-vidual Canadian provinces provide examplesof several forms of tenure, and a rich experi-ence of successes and problems.

Under this form of forest tenure, the for-est is managed by the forestry departmentrather than by the tenure holders. In British

In exchange for the security oftimber supply without competition,

the licensee agrees to take onforest management and forest

renewal activities, either with orwithout compensation.

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onColumbia the provincial forest service is re-sponsible for both forest management and re-forestation. In Alberta, most quota holders areresponsible for reforestation. The smaller op-erator may either reforest or pay a reforesta-tion fee. In same provinces such as Manitoba,additional, unallocated annual allowable cuthas been auctioned by sealed tender. In mostprovinces timber quotas are for a fixed term.They have normally been renewed when fullyutilized, subject to performance. Quotas notfully used are commonly renewed for a re-duced volume. Therefore the incentive is �useit or lose it�.

3.6. Selling Standing Timber Under ShortTerm Sales

Under this approach the forestry depart-ment is responsible for management of theforest, for designating, surveying and sellingblocks of timber under one, two, three, or five-year timber sales (or perhaps longer terms).The forestry department is responsible for su-pervising logging, and for regeneration after-wards. This is the traditional timber salemodel.

This model is illustrated by the UnitedStates Forest Service and Bureau of Land Man-agement Timber Sales procedures. Examplesare also found in Canadian Provinces (BritishColumbia, Alberta, Manitoba, Ontario). TheHonduras case study in the Annex (see be-low) provides a Latin American example of

timber sales. Limited use is also made of tim-ber sales in West Africa and South East Asia,mostly for plantation timber. (Gray 1983, Grut,Gray and Egli 1991). In Gabon, per-tree tim-ber sales are provided for in the legislation.The system has not been implemented be-cause the forestry department is not able tomark the trees or control cutting (Grut, Grayand Egli 1991).

Timber sales can be by open auction orsealed tender bidding, or allocated at adminis-tratively set forest fees.

3.7. Selling Felled Timber at Roadside orat Central Log Yards

In this model the forestry department isresponsible not only for managing the forest,and allocating areas for logging, but also forthe logging. Logging can be done by the de-partment itself or by contractors hired by thedepartment. Timber can be sold at the road-side, at fixed prices or in lots by auction. Al-ternatively logs can be transported to a centrallog yard and sold in regular sales by openauction, sealed tender, or at fixed prices.

This model is used in several Europeancountries (e.g. Sweden, Finland, West Ger-many) and in several developing countries(e.g. Tanzania). In Thailand, before loggingwas banned, the government-owned ForestIndustries Organization sold logs by publicauction (Gray 1983).

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4.1. A Framework for the Management ofForest Concessions

There are opportunities to make forestconcession managment more effective andmore sustainable. In Part 3 we offer somesuggestions for improvements. We outlinesteps for the allocation, supervision and moni-toring to improve forest concessions, alongwith suggestions for strengthening the forestrevenue system on concessions.

The forest management concessions pro-posed differ from the present forest conces-sions (timber supply concessions) found inmost countries. The forest management con-cessions proposed are designed to achieveprotection and sustainable management of for-est lands for both timber and non-timber forestland uses. They involve contracts with pri-vate sector forest industry companies to un-dertake management duties and responsibili-ties for both timber andnon-timber uses in ex-change for security oftimber supply.

Most countries al-ready have concessionprocedures. The majorproblems are in imple-menting and enforcingthem. The concessionprocedures proposedhere are intended tostrengthen and extendthe existing procedures,to focus on their implementation, and on con-cession supervision and monitoring. The keyis to introduce the right incentives into the con-cessions agreements and forest managementrequirements.

The forest concession procedures pro-posed involve first the allocation of conces-sion contracts by bidding or other competitiveallocation, followed by the management of theconcession by the concessionaire, and super-vision, monitoring, and auditing of concessionoperations by the government or an indepen-dent agency.

However, to implement a policy of allo-cating lands to forest management concessions,forest rich countries still need to build the ca-pacity to carry out the concession policies pro-posed: to evaluate potential concessionaires,carry out auctions of concessions, negotiate

with powerful and experienced forest compa-nies, and carry out the monitoring and super-vision of forestry and logging activities on con-cessions. Guyana, for example, put a morato-rium on the granting of new concessions andsought foreign assistance to strengthen its abil-ity in negotiating concessions and in monitor-ing and control of concession performance(Sizer 1996, and the Guyana case study be-low).

4.2. Concession Allocation Proceduresand Steps

The forest concession procedures pro-posed involve first the allocation of conces-sion contracts by bidding or other competitiveallocation, followed by the management of theconcession by the concessionaire, and super-vision, monitoring, and auditing of concessionoperations by the government or an indepen-

dent agency. In thissection the steps in theallocation of forest man-agement concessionsare outlined. The stepsin the management andsupervision of forestmanagement conces-sions are described indetail in the next sec-tion.

The concession al-location and manage-ment procedures de-

scribed below are based on several sources:the ITTO Guidelines (�Guidelines for the Sus-tainable Management of Natural Tropical For-ests� and �Guidelines for the Establishment andSustainable Management of Planted TropicalForests�); the experiences and problems facedby Ghana and a number of other countries inWest and Central Africa; by Indonesia and Ma-laysia in South East Asia; by Honduras, Nicara-gua, Guyana and Suriname in Latin America;and among developed countries, the experi-ence of Canadian provinces with forest con-cessions and short term timber sales (ITTO1992, ITTO 1993, Gray 1983; Grut, Gray andEgli 1991, Gray and Hadi 1989, Gray and Hadi1990, Gray and Hägerby 1997, Sizer 1996,Sizer and Rice 1995). The experiences of anumber of these countries are summarized inthe Annex, below.

4. Making Forest Concessions Sustainable○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

The forest management concessionsproposed are designed to achieve

protection and sustainablemanagement of forest lands for

both timber and non-timber forestland uses.

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onThese procedures and steps are designed

to extend present concession procedures, andare substantially more complete than thepresent concession procedures of most coun-tries. They are designed as practical steps tostrengthen the protection of the forest estateand to achieve sustainable forest management.If implemented they could also provide thebasis for certification of forest managementand of forest products.

Each step is intended to be establishedwith �time limits� specifying maximum or mini-mum times for completion and procedures tobe followed if the time limits can not be met.

These forest concession conditions, allo-cation procedures, and forest managementprocedures are designed for application tostate lands. The procedures, with some modi-fication could also be used by communities, orby groups of private forest owners, for forestmanagement concessions on community ofprivate lands.

4.3. Concession Allocation Steps

Step 1 � Ensure theArea is Not Encum-bered by Other LandOwnership or Land UseRestrictions

An important firststep is to ensure thatland claims are settledand that tenure rights toboth the land and thetimber are clear beforeproceeding. If landtenures and forest ten-ures are not settled or are unclear granting ofa forest concession should be delayed untiltenure issues are settled.

It is also important to ensure that the areais not covered by land use restrictions such asa biological or other reserve that would pre-clude timber harvesting and forest manage-ment. This should be clarified early, beforeproceeding.

Step 2 � Initiation of the Proposed ForestManagement Concession

In many countries the initiative for conces-sions has come from the applicant, with the ap-plicant choosing the area applied for. Under thisapproach the better forest areas for timber pro-duction will be all taken up first, leaving the gov-ernment responsible for management of the re-maining patchwork of less attractive forest areas.

The recommended approach (used insome Canadian provinces) is for the govern-ment to take the initiative and identify areas forpotential concessions. The Government wouldthen invite expressions of interest in the areasfor subsequent tendering. This puts the initia-tive in the hands of the Government. The Gov-ernment chooses the forest areas to be man-aged under concessions, in line with regionaland national development objectives, ratherthan the private industry�s objectives. It allowsthe Government to achieve competition andbidding for concession areas higher bids.

This approach does not require the gov-ernment agency to make the forest inventory.Interested parties would have to satisfy them-selves of the quantity, species and quality ofthe area offered. A government forest inven-tory would reduce uncertainty for interestedparties, save each the expense of an inven-tory, and likely result in higher bids. How-ever, the Government would have to financethe forest inventory, and either carry out theinventory itself, or contract it out to a reliable,

independent privatesector forestry consult-ing company.

Step 3 � Advertise theAreas and Invite Expres-sions of Interest

Once land andforest tenure rights aresettled, and the areadefined, the next stepis to invite expressionsof interest from poten-tial concessionaires.

The potential concession would be advertisedin major forest industry trade journals in NorthAmerica, Central and South America, Europeand Asia. Interested parties would be invitedto indicate their interest and invited to submitinformation for pre-qualification of bidders.

The bid conditions, concession managementrequirements and other terms and conditions ofthe forest concession would be made available atthis time to provide prospective bidders withknowledge of what is expected of them.

Minimum pre-qualification requirementwould be established and indicated in the an-nouncement. A deadline of perhaps two tothree months would be given for submissionof the pre-qualification materials.

Step 4 � Pre-Qualification of BiddersInformation to be submitted for pre-quali-

In many countries the initiative forconcessions has come from theapplicant, with the applicantchoosing the area applied for.

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fication would include company financial andownership information, subsidiary and relatedcompanies, information on their operations inthe country and in other countries, annual re-ports to shareholders and audited statementsfor the past three years, and preliminary infor-mation on their proposed operations in rela-tion to the concession. More detailed informa-tion would be required of qualified bidders aspart of their tender.

Step 5 � Approval of Qualified BiddersIt is suggested that the agency respon-

sible for forest administration has a limitedtime to evaluate the pre-qualification materi-als and notify qualified bidders. Two monthsmight be sufficient. The evaluation of pre-qualification need not slow the concessionprocess. In the meantime, potential bidderscould examine the concession area and pre-pare their bids.

Approval would be based on the finan-cial strength of the companies, their experi-ence in forest management and experience inlogging and processing operations elsewhere,and on their initial proposed utilization andconcession operations plans. National compa-nies might be favored in pre-qualification bypreferential pre-qualification conditions.

Pre-qualified bidders would be an-nounced. No appeal would be allowed bythose who did not pre-qualify. Appeals wouldslow and complicate the allocation process.

Step 6 � Time for Evaluation of the Area andTimber, and Prepare Proposals

Pre-qualified bidders would be eligible toinspect the site and undertake a low-intensityreconnaissance inventory to satisfy themselvesof the quantity and quality of the timber.

Two or more qualified bidders might wishto jointly undertake and fund a reconnaissanceinventory. Bidders would be required to sub-mit the details of their inventory, methods andresults along with their bids.

Seriously interested companies will al-ready have had time to evaluate the area andtimber and prepare their proposals from theinitial advertising of the area. However, addi-tional time should be allowed for developmentof proposals. Perhaps three to five monthswould be sufficient additional time.

Step 7 � Submission of BidsThe deadline for receiving bids would

have to be strictly observed to avoid any ap-peals or legal challenges.

It is recommended that concession bid-ding be by sealed tender. For transparency,tenders should be opened publicly. It is sug-gested that bidding be based on bonus bids.Bonuses would be in addition to the normalstumpage prices, area fees and other charges.The bonus bids would consist of two compo-nents: (1) an annual bonus payments per hect-are on the concession, and (2) a lump sumbonus paid upon signing the contract.

Other non-monetary components of thebid to be considered in comparing bids mightinclude: the proposed forest utilization plan,the degree of processing proposed, the em-ployment generated, the community develop-ment proposals, and the environmental man-agement proposals.

Step 8 � Selection of the Winning BidWith pre-qualification of bidders, all bid-

ders should have the necessary experienceand abilities to carry out the concession man-agement obligation. If all proposals meet thepreviously established concession conditionsthe decision should then be based primarily,or perhaps exclusively on the financial termsof the proposals. In that case the choice ofthe winning bid should be easy.

If the bids contain additional proposalson utilization, economic development of thearea, social or environmental proposals, be-yond those in the previously established con-cession conditions, it would be necessary tocompare the financial and non-financial pro-posals. However, these conditions would bedifficult to compare objectively. It is sug-gested that only when the bonus bids wereequal, or within, say 5% or 10% would thenon-monetary proposals in the bid be consid-ered.

If it is desirable to give preference tonational companies (such as those with major-ity, two-thirds, or higher national ownership),then the nature and extent of the preferenceshould be stated in the initial announcementconcession offer and in the request for bids.

Step 9 � Concession Contract and SigningThe forest management concession con-

tract conditions are described in detail in thenext section. The forest management conces-sion contract would cover the concessionairesrights and obligations; along with the condi-tions for the management and operation of thecommercial forest lands within the concession,and for the protection and management of non-timber producing areas within the concession.

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onThe contract conditions should follow a

standardized form, with special conditions,rights and obligations that apply to the area inquestion in a separate annex. Separate annexeswould cover the boundary description, specialforest management requirements, such as thosefor management of pine stands, special envi-ronmental management conditions of environ-mental areas within the concession, etc.

4.4. The Forest Management Contract:Conditions, Steps and Approvals

To be effective, the forest managementconcession contract must provide certainty ofrights and obligations and security of tenurefor the concession holder to carry out his man-agement obligations. The conditions of theconcession contract also need to be specified,with clear performance standards, laid out instages, in order to provide strong incentivesfor compliance. These staged performancesteps are described in sequence below.

Step 1 � Boundary MarkingClear and permanent definition of the

concession boundary isa vital and practical firststep to forest manage-ment. It is crucial inmaintaining the integrityof the forest, and forprotection of the areafrom incursions. It is anessential first step tomapping and inventoryof the forest and othernon-forest resources tobe managed under theconcession agreement.It is not possible to define the area for sustain-able forest management, nor to derive a mean-ingful annual allowable cut without first defin-ing the areas of forest to be managed.

In many countries, concession boundarieshave not been marked, sometimes for yearsafter the concession has been granted. In In-donesia, by the 1990�s, the boundaries of manyconcessions had still not been marked, twentyyears after the concessions had been granted(Gray and Hadi, 1990)(see also the Indonesiancase study in the Annex). In some cases con-cessions have been granted with overlappingboundaries, none of them marked. Similarproblems of boundary marking have occurredin Africa (Grut, Gray, and Egli 1991).

To provide an incentive for completion,permanent boundary marking should be com-

pleted and inspected by a designated date,not more than 18 months after signing the con-cession contract. Concession boundaries adja-cent to the initial cutting area should be com-pleted, inspected and approved before log-ging is allowed to begin.

Step 2 � Mapping of the Concession AreaMapping of the concession area is a

closely related and important second a pre-requisite for a reliable forest inventory and for-est management plans. Mapping should in-clude the physical features of the entire con-cession area, both the forested and non-forestareas, as well as the non-timber, environmen-tal and heritage features.

Deadlines would be provided for map-ping of each section of the concession and forcompletion of the entire area. Logging opera-tions would not be approved until mapping iscompleted over at least the initial operatingarea of the concession.

Step 3 � Access ControlAn important condition for sustainable

forestry is maintainingthe integrity of the for-est estate by protectionof the area from incur-sion and conversioninto poor quality, mar-ginal agricultural andgrazing land. To pre-vent agricultural incur-sion the concessionholder would be re-quired to control access.

Only persons orcommunities with al-

ready established residency within the con-cession area would be allowed free access.New settlement would be excluded. Agricul-tural development should be allowed only inlimited areas adjacent to existing settlements,and only by established residents of the areaor their descendants.

Step 4 � Forest Inventory and EnvironmentalInventory

The forest inventory should be completedbefore full scale harvesting is approved. Aninterim operational plan could be approvedfor an initial operating area, provided the for-est inventory has been completed and an in-terim management plan approved for that ini-tial operating area. However, to provide anincentive for completion of the forest inven-

Only persons or communitieswith already established

residency within the concessionarea would be allowed free

access. New settlement wouldbe excluded.

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tory and management plan, this interim oper-ating plan and the interim management planwould be valid only for 12 to 14 months andnot extended.

Forest inventory guidelines are provided,for example, by the Food and Agriculture Or-ganization (FAO 1992).

In addition to the forest inventory, an en-vironmental inventory would be required.Concessionaires would be expected to protectand manage the entire area and the other re-sources, including areas outside the designatedforest operating area.

Deadlines would be set for the start andcompletion of both the forest inventory andthe environmental inventory. Interim deadlinescould also be set for completion of both in-ventories for the initial operating area.

Step 5 � Forest Management Plan and Envi-ronmental Management Plan

Tropical forests provide a wide range offorest products (logs, fuelwood, foods andfruits, medicinal plants, wildlife) as well as awide range of non-timber forest products (sub-sistence livelihood for forest dwelling peoples,watershed and environmental protection anderosion control, biodiversity values, and envi-ronmental tourism). These other non-timberforest products can often be equal to the valueof timber production, but it is timber produc-tion that is usually dominant in forest manage-ment. Timber production generates the rev-enues earned by governments and landown-ers, and provides the basis to finance the pro-tection of the forest and the management forthe other non-timber forest products and ben-efits. As a result, the important non-timberforest products and benefits may be neglected.The management of forest concessions there-fore must generate a balance between timberproduction and the other, non-timber forestoutputs and benefits. It is for this reason thatboth a Forest Management Plan and an Envi-ronmental Management Plan are called for.

The Environmental Management Planwould parallel the Forest Management Plan,following a similar pattern. The Environmen-tal Management Plan would differ from theusual Environmental Impact Statement (EIA),which merely documents the environmentalresources and the impacts of a developmentproposal. Instead, the Environmental Manage-ment Plan would focus on the protection andmanagement of the environmental resources(including cultural and heritage resources)within the concession boundaries.

For production forests, the managementplan will provide firm guidelines on the an-nual yields, by species that can be cut for for-est products, from which areas, and underwhich harvesting methods. For protection for-ests, the management plan would regulate themanagement of forest for water supply, ero-sion control, for conservation of biodiversity,for non-timber uses, or for recreation, and en-vironmental tourism, and amenity values.

Requiring forest management plans willnot lead to successful implementation of for-est management on the ground. Nor will theapproval of forest management plans lead tothe implementation of forest management.Implementation of forest management alsodepends on a firm commitment by the Gov-ernment and the concessionaire to allocatefunds, personnel and other resources to carryout forest management, and for supervisionand monitoring over the life of the manage-ment plan.

The forest management plan and the en-vironmental management plan would be ap-proved by the government agency responsiblefor the administration of forest concessions.However, the agency may not have the staff,resources and field capability to evaluate themanagement plans. If so, it would be neces-sary to contract out the evaluation of the man-agement plans to an independent organizationor private sector consulting firm. To ensureindependence the organization or consultingfirm may have to be recruited internationally.

Step 6 � Road PlanThe initial road plan would provide the

location of the main road system, and theplanned location of main branch roads, accom-panied by an overall map and detailed mapsshowing the location of the main roads andthe main branch roads.

The road plan would include road speci-fications on right-of-ways, roadbed, ditchingand culverts, surface materials, the level andfrequency of maintenance and repair. Theroad plan would also include environmentalconditions on stream crossing, minimum dis-tance from streams, treatment of embankmentsand cuts to control erosion. The road planwould include conditions for gravel pits andprohibit gravel removal from streams.

The road plan would be approved by theagency responsible for administration of forestconcessions prior to construction. If theagency does not have the capability to evalu-ate the road plan, evaluation may be con-

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ontracted out to an independent organization orconsulting firm.

Step 7 � Forest Utilization PlanThe utilization plan would be based on

the forest inventory and forest managementplan, and on the species composition, sizes,and quality (including defect) of the timbersupply. Processing plants need to be designedto match not only the volumes of timber avail-able, but also the species composition, sizesand quality (defect) of the timber supply. Alltoo often processing plants are built beforethe forest inventory is completed, or are basedon an inadequate forest inventory. The resultis a processing plant that is inappropriate tothe timber supply, high cost, unprofitable,wasteful of the forest resource, and contrib-utes little to the economy.

The processing plant is an important con-tribution to the development of communitiesand the region. Thus the utilization plan isclosely linked to the concession social devel-opment plan.

The location of processing facilities, andnature, size and employment involved are im-portant parts of the concession agreement.Any changes in the location, nature or size ofthe processing facilities should require ap-proval.

The concession contract should also con-tain commitments by the concession owner onthe size, capacity, start and completion of con-struction, and start of operations of the plant.Any deviation from these commitments shouldrequire approval.

For each processing plant, the forestutilization�s plan should specify:

�The physical location of each plant.�The capacity, per shift, of each sub-unit,

number of shifts planned per week, oper-ating period (days/year, and weeks/year),and capacity at maximum possible operat-ing level.

�Employment per shift of each sub-unit,man-hours per week and per year basedon the planned operating schedule and atmaximum possible operating level.

�The description of facilities and equipmentfor each sub-unit.

� Schedule of construction, start-up and fulloperation of the processing plants as sub-units.

�Outline of future modifications, improve-ments, and expansionsThe utilization plan would require ap-

proval by the agency responsible for adminis-

tration of forest concessions prior to construc-tion. If the agency does not have the capabil-ity for evaluation, it may be necessary to con-tract out the evaluation to an independent or-ganization or consulting firm.

Step 8 � Social and Community Develop-ment Plan

The community and social developmentplan should document commitments on thepart of the concessionaire to community andsocial development.

It should document:�Local community uses within the conces-

sion area for timber use, fuelwood, non-timber forest products, hunting, agricul-tural land uses, and other traditional landuses within the area.

�Access rights and access control of others.�Community support for schools, health

clinics, transportation.� Local employment commitments and na-

ture of any local employment preferences�Training commitments.

The plan would also require approval bythe agency responsible for administration offorest concessions.

Step 9 � Initial Annual Operating Area PlanThe initial operating area plan should in-

clude the following components which are keyto forest management and can be readilymonitored on the ground:Logging Plan Layout on the Ground:

The careful layout of roads, landings, andskid roads on the ground is a key requirement.It is probably the single most important practi-cal step to environmentally improved loggingand sustainable forest management of unevenaged tropical forests. Layout of the loggingplan (roads, landings, and skid roads) on theground can also benefit the concession ownerby lowering logging costs, reducing damageto felled trees and improved recovery fromthe forest.

Proper layout of roads on the ground canfacilitate road construction, reduce environ-mental damage, and reduce erosion. Properroad layout can also avoid wet lands, reduceroad problems, and thus lower log transporta-tion costs. Layout of landings on the groundcan avoid wet locations and reduce skiddingdistance. Layout on the ground of skid roadcan make it easier to fell trees in the rightdirection to facilitate skidding and reduce dam-age to felled trees and the residual stand, re-ducing logging cost and minimizing logging

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damage. It is a simple practical �win-win�situation.

Approval would require �on-the-ground�inspection and verification. If the agency re-sponsible for administration of forest conces-sions does not have the resources to under-take �on-the-ground� inspection and verifica-tion of logging plans, then it may be neces-sary to contract out the inspection to a fullyindependent organization or private sectorfirm.Marking of Trees:

It is recommended that the concessionowner, rather than the concession administra-tion agency, be responsible for marking thetrees to be cut. In this way the marking oftrees for cutting can be better integrated withforest operations and not hold up logging. Itis recommended that marking be carried outafter the roads and landings are laid out on theground, and that theconcession administra-tion agency staff theninspect and approveboth the marking andthe logging plan at thesame time by on-the-ground inspection. Skidroads would then be laidout after the trees aremarked.

4.5. Monitoring andInspection ofConcession Performance

Regular reporting by concessionaires onimplementation of each of the concessionmanagement steps above is the first stage insupervision and monitoring of forest manage-ment on concessions. On the ground supervi-sion and monitoring of these concession man-agement steps is essential to achieve sustain-able management on forest concessions.

On the ground inspection of forestboundaries, proper layout of roads and inspec-tion of road plans, on-the-ground inspectionof logging plan layout and marking of trees,and on-the-ground inspection of logged areasfollowing logging are key monitoring indica-tors.

If the forest agency is not equipped,staffed and financed to carry out on-the-groundinspection of concessions, the alternative is tocontract out the on-the-ground inspections toprivate sector firms of reliable reputation andimpartiality with the ability and trained staff tocarry out the work accurately and conscien-

tiously. It may be necessary to contract withforestry inspection firms internationally to en-sure impartiality.

If the country is to achieve sustainableforest management on forest concessions away must be found to fund and implement onthe ground inspection and supervision of con-cession. It is proposed that a portion of theforest fees collected be allocated to a fund tofinance on the ground inspection and supervi-sion of forest concessions. Unless field in-spection capabilities are strengthened grant-ing further concessions can be dangerous.

Monitoring and evaluation would involvethe following steps:Boundary Marking:

Boundary marking is a key step in man-agement of forest concessions and in the pre-vention of agricultural incursions. Performancein completing boundary marking can be moni-

tored relatively easily.As boundaries are re-quired to be clearly de-fined, they could be ef-fectively checked fromthe air, from small air-craft at low levels.Boundary markingshould be completedand checked within thetime limits specified inthe concession contractand before logging op-erations begin.

Boundary Maintenance:It is important that concession boundaries

be maintained and kept clearly defined. Moni-toring of boundary maintenance is also rela-tively easy. Boundary maintenance can bemonitored by spot checks at pre-determinedintervals, every two or every three years, byground spot checks of different sections of theboundaries, or by inspection from aircraft.Mapping, Forest Inventory and EnvironmentalInventory:

Evaluation of the accuracy of the forestand environmental inventories is important, butis not easy. It requires time consuming andcostly on-the-ground checking.

The accuracy of the mapping can bemonitored by checked randomly selected ar-eas on the ground against the map, but eventhis will be expensive and time consuming.The forest inventory can be checked in thesame way, by re-measuring randomly selectedinventory sample plots, and by checking for-est types from the forest inventory maps

The processing plant is animportant contribution to the

development of communities andthe region. Thus the utilization planis closely linked to the concession

social development plan.

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onagainst the forest types found on the ground.The environmental inventory can be checkedby selective comparison of the environmentalinventory data against the environmental con-ditions on the ground.

Checking of these inventories is expen-sive and time consuming. Often governmentagencies will not have the capacity for on-the-ground checking. Consequently, it is recom-mended that supervision of concessions con-centrate instead on monitoring road planning,layout and construction, and on monitoring treemarking, logging plan layout, and post-logginginspections.Forest Management Plans and EnvironmentalManagement Plans:

Forest and environmental managementplans can be evaluated against the require-ments and standards specified in the conces-sion regulations and in the concession con-tract. However, these would be �office� or�paper� based evaluations. Without on-the-ground checking, there is no guarantee thatthe management plans match conditions on theground.Road Planning and Construction:

A well designed road system and properroad construction will contribute to an efficientlogging system, reduce logging and log trans-port costs, and minimize the environmentalimpacts of logging. This should provide con-cessionaires with an incentive for efficientroad planning and construction. However, inpractice, with a very short term horizon, con-cessionaires often put insufficient effort intoroad planning and construction. The result isinefficient road layout, expensive log trans-portation, and environmental damage frompoor road layout.

Monitoring of road planning can be donerelatively easily by evaluating the road plansand accompanying maps to ensure the ad-equate road standards are specified, that roadsare located away from streams, and thatstream crossings, culverts and ditches meetenvironmental standards and minimize envi-ronmental impacts. On-the-ground checks canquickly verify the accuracy of the plans andmaps.

Road location and construction shouldalso be monitored on the ground, soon afterconstruction and before logging begins, to en-sure that the road layout matches the layout onthe road plan and maps, and to correct anyproblems early. Inspection of roads shortlyafter construction should be relatively easy asaccess is then easy. For efficiency, road in-

spection can be combined with on-the groundinspection of the logging plan and inspectionof the tree marking. It is important that theon-the-ground inspection of road layout, thelogging plan, and tree marking be done andapproved before logging begins.Post-Harvest Inspection of the Cutting Area:

The cutting area should be inspected onthe ground again following logging to ensurethat the logging was done according to thesilvicultural plan, that logging was done in linewith environmental requirements and withminimum damage to the residual stand, thatonly marked trees were cut, that logs andfelled trees are not left, and that trees thatshould be cut are harvested.Other Areas for Supervision, Inspection andAuditing:

The other areas for supervision, inspec-tion and auditing of forest concessions include:

�Forest Security and Protection.� Silvicultural Management and Reforesta-

tion.�Community Development.�Continuous Forest Inventory.

4.6. Review and Extension of theConcession License

For slow growing natural tropical forests,longer term tenure may not attain sustainableforest management, or environmental protec-tion of the non-timber benefits, as suggestedabove. If the growth rates of the forest arelow, below private sector interest rates andthe rates of returns earned elsewhere, longterm secure tenure is not sufficient to providean incentive for managing the concessionsustainably. Instead, long term tenure (orprivatization of forests) will result in �highgrading� and �mining� the forest, leading torapid depletion of tropical forests (Gray 1994,Gray 1997).

Instead, sustainable forest managementmay be better achieved if concessions are is-sued for limited terms, and are renewable,subject to audit and satisfactory performancereview as proposed. The performance reviewprovides the incentive for concessionaires tomanage the forests sustainably both for timberand for the non-timber environmental benefits.

It is therefore proposed that concessionterms be relatively short, perhaps 10 to 12years. With a concession term of say 12years, an interim review is suggested in thefifth year to ensure performance meets theconditions of the concession contract and tocorrect any deficiencies early. A full perfor-

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mance review would then be carried out inthe tenth year, two years before the final year(year 12). To ensure an unbiased and inde-pendent review, it is suggested that the per-formance evaluation (or audit) be carried outby an external, internationally recognized con-sulting firm or forestry organization.

If the performance evaluation meets theconditions of the concession agreement, theconcession would be extended an additionalten years, to year 22. A second interim re-view in the fifteenth year is recommended. Ifthe full performance review in the twentiethyear is satisfactory, the concession would berenewed for a further 10 years. After that areview every ten years prior to renewal shouldbe adequate.

The concession contract should allow forchanges to the concession area and bound-aries, within defined limits, and for renegotia-tion of the terms and conditions to accommo-date changes in circumstances on either side.The concession agreement should contain pro-cedures for renegotiation of changes.

4.7. Improving Forest Fees onConcessions

Appropriate pricing policies for timberand concessions can provide economic incen-tives for improved forest management. Ap-propriate pricing can help deteroverexploitation and encourage more efficientutilization of timber. Appropriate pricing oftimber and concessions can also generate therevenue to make forest management finan-cially sustainable.

Forest fees on timber and concessionsshould be set to reflect the value of the forestresource. Stumpage value is the value of thestanding timber and can be derived from themarket price of the logs or forest products pro-duced, minus the following costs: (a) loggingand log transportation costs, (b) in the case ofprocessed wood products, the costs of pro-cessing, and (c) an allowance for normal prof-its on investments in logging and processing.Stumpage values are captured either as: (1)forest revenues (stumpage prices, fees, ortaxes) collected by the owner of the timberrights (landowner, government, community ortraditional owner), or as (2) above-normal prof-its collected by the forest industry.

Timber concessions also have value, avalue in addition to the stumpage value ofstanding timber. Concessions provide a guar-anteed, secure supply of timber to the forestindustry. Forest concessions become corpo-

rate assets, and are often sold or traded. Theseconcession values can be captured by sepa-rate concession fees. Concession fees have anumber of advantages and are recommended.

Problems of low forest fees on timber andon forest concessions are common to manydeveloping countries (Repetto and Gillis 1988;Grut, Gray and Egli 1991)(see also the countrycase studies in the Annex). For most countriesthere are large benefits from even modest im-provements in their present forest revenuesystems and pricing policies. Fees levied innational currencies decline in value from bothinflation and depreciation of the currency.Even those set in US dollars suffer from gen-eral world inflation of 2% or more per year.

n Recommended Forest Pricing Policieson Concessions

The pricing policies and fees proposedare designed to contribute to the long-termmanagement and conservation of tropical for-ests: (1) by raising fees to reflect the value ofthe forest and forest concessions, (2) by struc-turing fees to provide incentives for improvedutilization and forest management, (3) by gen-erating the revenue to make forestry a worth-while investment for government, and (4) byproviding the revenue to finance improvedforest management. The proposals includefive elements:

1. Annual concession fees� An Area based annual concession

fee at rates that generate significant revenuesand incentives for forest management is rec-ommended. Annual concession fees shouldbecome a major revenue source. They cansupplement, partly or fully replace difficult tocollect volume based stumpage prices andexport taxes. To this end the present annualarea charges should be raised substantially.

2. Initial concession fees� An initial concession fee is recom-

mended, designed to generate sufficient rev-enues to cover the administrative costs ingranting concessions, and to discourage frivo-lous or speculative acquisition.

3. Bidding on concessions� It is recommended that concessions

be allocated by bidding (by sealed tender ororal auction), based on bonus bids. Bonusbids would reflect the �security value� of thesecure timber supply provided by the conces-sion, as well as capturing a share of the stump-

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onage value of timber that is not reflected inforest fees on timber harvested.

4. Minimum forest fees� Minimum volume-based stumpage

prices are recommended. These should behigh enough to reflect: (a) the administrativecosts in supervision, inspection, forest renewaland forest management, scaling and collectionof revenues, and (b) the environmental andother non-market values, the �opportunitycost� values that are precluded by harvestingtropical timber. Minimum volume-based feescan improve efficiency and prevent �belowcost� or �below opportunity cost� harvestingof tropical forests.

� Minimum area-based fees on for-est concession, are recommended to reflectthe environmental and non-market �opportu-nity cost� values of alternative forest land usesthat are involved in the allocation of tropicalforest areas to timber production.

5. A Fund to Finance ForestManagement, Supervision andMonitoring of Concessions

� It is recommended that a substantialproportion, 50% or more, of forest revenuesfrom concessions be allocated to a fund andused to finance the supervision and monitor-ing of logging and forest management activi-ties on concessions.

n Forest Fees on State Lands OutsideConcessions:

Outside forest concessions the responsi-bility for forest management rests with thegovernment rather than the operator. Thusforest fees on state lands outside concessionsshould be higher than on concessions, reflect-ing the reduced forest management and pro-tection responsibilities of the company. Areafees outside forest concessions are also rec-ommended. They would apply only to thecutting area.

n Forest Fees on Community and PrivateLands:

Timber on community lands and privatelands are the property of the owner. Usuallyprices on standing timber or felled timber arenegotiated between buyer and seller. How-ever, in most cases there are only a few buy-ers and many land owners. With few buyersand little competition for timber on private andcommunity lands the government has a role inestablishing minimum stumpage prices as

�floor prices� to protect the landowners� andcommunities� interests and ensure fair prices.It is recommended that the schedule of stump-age and area charges applied to state forestlands outside concessions be used as the mini-mum prices on private and community lands.

SummaryThe paper has introduced the important

factors to consider in deciding on a system forgranting management concessions. The pro-posals provide a framework for forest conces-sion contracts and for a forest revenue systemand pricing policies. In summary there are anumber of key points to emphasise:

1. The importance of having the landtenure clearly settled before taking any stepsto offer concessions. Even preliminary stepsto offer additional concession areas may cre-ate land rights conflicts over anticipated futurerevenues.

2. Initiatives to offer new concession ar-eas should come from the Government, notfrom potential concessionaires. Concessionsshould be offered only in situations wherethere will be several interested parties andcompetition for the area. Bidding should beencouraged in allocation of areas, to avoid cor-ruption and maximize the benefits and rev-enues.

3. An effective state forest administra-tion with field capabilities is required for su-pervision and monitoring of concession activi-ties. This will ensure efficient operation ofconcessions, ecologically as well as economi-cally. The services can be contracted, or del-egated, but the supervision and monitoringfunction must be in place.

4. It is important that the concession con-tract and conditions incorporate incentives(positive and negative) for protection and sus-tainable management of the area for timberproduction and for other uses.

5. The concession contract conditionsand concession fees should discourage con-cessionaires from acquiring more concessionarea than required to supply his processingplant. The proposed area charges would dis-courage acquisition of too large an area, re-flect the value of the concession and be easyto collect revenue source.

6. Forest fees should reflect the value ofthe timber and concessions. It is importantthat forest fees and the forest revenue systembe easily implemented and require a minimum

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of effort from the authorities to operate. Areabased fees are recommended. They are easyto implement, easy to collect, reflect the valueof concessions, and provide incentives for ef-ficient management of concessions.

7. A substantial proportion of the forestrevenues generated should be directed to afund to finance the supervision and monitor-ing of forest activities, and to finance invest-ment in sustainable forest management to en-sure continued production of timber and otherenvironmental benefits from forest lands.

LiteratureArmitage, Ian (1997) �Practical Steps Contrib-

uting to Sustainable Tropical Forest Manage-ment for Wood Production in Asia�, WorldForestry Congress, Antalya, Turkey, Octo-ber 1997.

Comision Mundial Forestal y de DesarrolloSostenible (CMFDS) (1996) �La Discusión deAntecedentes Empapela: Audiencia Re-gional America Latina y el Caribe�, San José,Costa Rica, 2-3 December, 1996.

Conference on the Ecological, Social & PoliticalIssues of the Certification of Forest Manage-ment, May 13-16, 1996, Putrajaya, Selanor,Malaysia, Proceedings, Vancouver, B.C.,Canada, Faculty of Forestry, University ofBritish Columbia; Serdab, Selangor, Malay-sia, Faculty of Forestry, University PertanianMalaysia.

Egli, Nicola (1990) �Country Case Studies ofForest Fees and Concessions in West andCentral Africa�, World Bank, Africa Techni-cal Department, (mimeo).

de Camino Velozo, Ronnie (1997) �LasCondiciones Generales para el Manejo For-estal en Nicaragua y en la Región Autónomadel Atlántico Norte�, San José, Costa Rica,Agencia Sueca de Cooperación Internacionalpara el Desarrollo (ASDI), January 1997.

FAO (1992) Manual of Forest Inventory withSpecial Reference to Mixed Tropical Forests,FAO Forestry Paper No. 27, Rome, Foodand Agriculture Organization of the UnitedNations.

Gray, John A. (1983) Forest Revenue Systemsin Developing Countries, FAO Forestry Pa-per 43, Rome: Food and Agriculture Orga-nization of the United Nations, 1983.

Gray, John A. (1987) Ingresos FicalesProcedentes de los Montes en los países enDesarrollo, Estudio FAO Montes 43, Rome,

Organización de las Naciones Unidas parala Agricultura y la Alimentación.

Gray, John A and Soetrisno Hadi (1989) For-est Concessions in Indonesia: InstitutionalAspects, Ministry of Forestry, Governmentof Indonesia, Food and Agriculture Organi-zation of the United Nations, UTF/INS/065/INS: Forestry Studies, Field Document No:VI-1, Jakarta, July 1989.

Gray, John A. and Soetrisno Hadi (1990) Fis-cal Policies and Pricing in Indonesian For-estry, Ministry of Forestry, Government ofIndonesia, Food and Agriculture Organiza-tion of the United Nations, UTF/INS/065/INS: Forestry Studies, Field Document No:VI-3, Jakarta, April 1990.

Gray, John A. (1992) Forest Revenue Mecha-nisms and Pricing Policies, Prepared for theOntario Ministry of Natural Resources, For-est Values, Sustainable Forestry Programme,Toronto: Queens Printer of Ontario, Nov.1992, (ISBN 0-7729-9780-2).

Gray, John A. (1994) �The Economics ofTropical Forest Management: Private Deple-tion versus Public Sustained Management�,The Malaysian Forester, Vol. 57, Issue 3 & 4(1994) pp. 171-177.

Gray, John A. (1996a) �Tropical Forest Pric-ing Policies and Rent Collection in South EastAsia�, Journal of Asia Pacific Economy Vol.1, No. 2 (Sept. 1996) pp 171-184.

Gray, John A. (1996b) �Desarrollo del SectorForestal de Indonesia: Su Contribución a laEconomía y al Ingreso por Exportaciones�(Development of the Indonesian Forest Sec-tor: Its Contribution to the Economy and Ex-port Earning) Seminario: Desarrollo delPotencial Exportador del Sector Forestal enNicaragua, MIFIN/MEDE Proyeto Núcleo Es-pecial para Análisis e Implementación,Managua, Nicaragua, December 10, 1996.

Gray, John A. (1997) �Underpricing and Over-exploitation of Tropical Forests: Forest Pric-ing in the Management, Conservation andPreservation of Tropical Forests�, Journal ofSustainable Forestry, Vol. 4, No. ½. (1997)pp. 75-97.

Gray, John A. and Yuri Yevdokimov (1997) �IsTropical Forest Management EconomicallySustainable?: The Economics of Depletionand Sustainable Management� XI World For-estry Congress, Antalya, Turkey, 13-22 Oc-tober 1997.

Gray, John A. and Hägerby, Lennart (1997)�Forest Concessions in Nicaragua: Policiesand Pricing�, Forest Estate Aministration,

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onMinistry of the Environment and Natural Re-sources, ADFOREST/MARENA, Managua,Nicaragua, May 1997.

Gray, John A. and Hägerby, Lennart (1997)�Concessiones Forestales en Nicaragua:Políticas y Preciando�, Administración For-estal Estal, Ministerio del Ambiente yRecursos Naturales, ADFOREST/MARENA,Managua, Nicaragua, May 1997.

Grut, Mikael; Gray, John A.; and Egli, Nicolas(1991) Forest Pricing and Concession Poli-cies: Managing the High Forests of West andCentral Africa, World Bank Technical PaperNumber 143, Africa Technical DepartmentSeries, Washington, D. C., The World Bank

International Tropical Timber Organization(ITTO) (1992) ITTO Guidelines for the Sus-tainable Management of Natural TropicalForests, ITTO Policy Development SeriesNo.1, Yokohama, Japan, July 1992.

International Tropical Timber Organization(ITTO) (1992) ITTO Criteria for the Mea-surement of Sustainable Tropical ForestManagement, ITTO Policy DevelopmentSeries No.3, Yokohama, Japan, March1992.

International Tropical Timber Organization(ITTO) (1993) ITTO Guidelines for the Es-tablishment and Sustainable Management ofPlanted Tropical Forests, ITTO Policy De-velopment Series No.4, Yokohama, Japan,January 1993.

Palmer, John and Synnott, Timothy J. (1992)�The Management of Natural Forests� inSharma, Narendra (ed.) (1992) Managing theWorld�s Forests: Looking for Balance betweenConservation and Development. Dubuque,Iowa, Kendall-Hunt Publishing.

Palmer, John and Marshall, Mary (1996) �For-est Revenues Systems in Guyana�, U.K.Overseas Development Administration,Guyana Forestry Commission SupportProject, Summertown, Oxford, UK OX2 7AY:

Tropical Forestry Services Ltd., 3 BeechcroftRoad.

Poore, Duncan; Burgess, Peter; Palmer, John;Rietenbergen, Simon; and Synnnott, Timo-thy (1989) No Timber Without Trees:Sustainability in the Tropical Forest, A Studyfor the International Tropical Timber Orga-nization, London, Eng., Earthscan Press.

Repetto, Robert and Malcolm Gillis (1988)Public Policies and the Misuse of Forest Re-sources. New York, Cambridge UniversityPress.

Sharma, Narendra (ed.) (1992) Managing theWorld�s Forests: Looking for Balance betweenConservation and Development. Dubuque,Iowa, Kendall-Hunt Publishing.

Sharma, Narendra; Rowe, Raymond; Grut,Mikael; Kramer, Randal; Gregersen, Hans(1992) �Conditions for Sustainable Develop-ment�, in Sharma, Narendra (ed.) (1992)Managing the World�s Forests: Looking forBalance between Conservation and Develop-ment. Dubuque, Iowa, Kendall-Hunt Pub-lishing.

Sizer, Nigel and Richard Rice (1995) Backs tothe Wall in Suriname: Forest Policy in aCountry in Crisis, Washington, D.C., WorldResources Institute.

Sizer, Nigel (1996) Profit Without Plunder:Reaping Revenue from Guyana�s TropicalForests Without Destroying Them, Washing-ton, D.C., World Resources Institute, Sep-tember 1996.

Vincent, Jeffrey R. 1990. �Rent Capture andthe Feasibility of Tropical Forest Manage-ment�. Land Economics. Vol.66, No. 2, May,pp. 212-223.

World Commission on Forestry and SustainableDevelopment (WCFSD) (1996) �BackgroundDiscussion Paper: Latin America and the Ca-ribbean Regional Hearings�, San José, CostaRica, 2-3 December, 1996.

Note

1 Department of Economics, University of Manitoba, Winnipeg, Canada

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ANNEX: CASE STUDIES OF FOREST CON-CESSIONS AND FOREST FEES

1. Forest Concessions and Forest Fees inWest and Central Africa

IntroductionThe case study of forest concessions in

West and Central Africa is drawn from MikaelGrut, John A. Gray, and Nicolas Egli, �ForestPricing and Concession Policies: Managing theHigh Forests of West and Central Africa�,World Bank Technical Paper Number 143, Af-rica Technical Department Series, Washington,D. C., 1991.

Concession Management and TenureIssues

Forestry in West and Central Africa, as inother developing countries, faces difficultiesin the regulation, control and supervision ofconcessions distributed throughout the coun-try, by nature in remote areas. In Cameroon,as in many other countries, regeneration fol-lowing logging is required in the forest code,but the requirements are not specified and notenforced (Egli 1990). The majority of conces-sions have no precise forest management plan(working plan). Management plans are re-quired only for state forests (Egli 1990).Gabon�s new forest code was written in 1982.However, the decree for its application hadnot been signed by 1990, and thus the forestcode is not enforced (Egli 1990). In addition,in Gabon, �the presence of the forestry ad-ministration is very weak in the forest zone,and control is almost non-existent; there is littleenforcement of forest regulations in the field.�(Egli 1990).

Concession SizeSome concession areas are too small to

support viable silviculture, logging and trans-port units. Others are too big to be efficientlymanaged. The size of concessions variesenormously within individual tropical coun-tries.

In the Congo, 17 large companies holdconcessions covering 7.7 million hectares,with concession holdings ranging from 90,000ha to 1,200,000 ha (Egli 1990). In Gabon smallconcessions (�permis temporaired�exploitation�) range in size from 1 ha up to15,000 ha, larger concessions (�permisindustriel�) range from 15,000 ha to a maxi-mum of 200,000 ha (Egli 1990). In Cameroonthe maximum concession size has been fixed

at 200,000 ha, irrespective of the forest type,its condition, or its allowable cut. In othercountries concession size may be constrainedby forest legislation or regulations to a sizewhich is too small to manage efficiently on asustainable basis.

Forest Fees on ConcessionsLow Forest Revenue Issues

Low forest revenues are a central issue inthe management and conservation of forests.Low forest revenues can result either from lowforest fees, or from low collection rates �weak and inefficient collection systems.

In Cameroon the total of all forest rev-enues collected from all forest fees (all area-and volume-based fees) in 1987 averagedCFAF 1,603/m3 (US $ 5.40/m3). This repre-sented only between 2% and 4% of the FOBprice of export logs (Egli 1990).

In Ghana the World Bank Staff AppraisalReport of the Ghana Forest Resource Manage-ment Project found that forest revenues col-lected from all forest fees were some Cedis100 million (US $ 0.5 million), equal to aboutCedis 75/m3 (US $ 0.38), and less than 0.5% ofthe delivered price of logs at processingplants. This was only about one-sixth the for-est revenues that should have been collectedeven at the existing low levels of forest fees.

In Guinea the World Bank Staff AppraisalReport of the Guinea Forestry and FisheriesManagement Project in 1989 found forest feesto be low, almost minute. Stumpage fees for�white� woods were GF 300/m3 (US $0.50/m3) and for �red� woods GF 400/m3 (US $0.68/m3), less than 1% of the value of the sawnwoodon the local market. Stumpage fees had notbeen adjusted for six years.

In Cote d�Ivoire the Staff Appraisal Re-port of the Forestry Sector Project found thatstumpage fees were low, fixed administra-tively, updated infrequently, and that they boreno relationship to the value of the standingtimber. Stumpage fees are also easily evaded.In 1986, the total amount of stumpage feescollected was about CFAF 750 million, or aboutCFAF 200/m3 (US $0.58/m3) logged.

In Congo forest fees are in theory revisedevery five years, but in 1989 they had notbeen revised since 1982 (Egli 1990). InCameroon the �valeur mercuriale� - postedexport log and product prices upon which vol-ume-based fees are based - had not changedsince 1984 (Egli 1990). In Gabon and a num-ber of other West and Central African coun-tries, forest fees are set by presidential de-

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oncree, but in spite of this seeming ability tochange them easily, they remain low and un-changed for years.

Low Forest Fee Collection RatesIn Ghana it was found that the govern-

ment was receiving only about a sixth of whatit should be receiving based on the estimatedstumpage value of the standing timber. In theCongo about one fifth of volume-based forestrevenue is collected. In other countries thecollection rate is even lower.

Log Scaling (Measuring) ProblemsLog scaling may be done by forestry de-

partment scalers, or by company scalers andchecked by the forestry department. If scal-ing is done by the forestry department in theforest or at some central point in the log trans-port system, the government employees areusually dependent on the concessionaire fortransportation and accommodation. They areoften on their own with infrequent supervi-sion. Being isolated, dependent on the con-cessionaire and poorly paid, makes the scalersvulnerable to pressure, persuasion or bribery.They may be influenced to under-measurelogs, to give generous allowances for defect,to classify species in lower royalty classes, orto ignore some logs. If the scalers are not attheir positions, they may be persuaded to signscaling volume returns filled out by companyscalers.

Scaling may also be done by companypersonnel and checked by forestry departmentscalers. Similar problems of under-scaling,misclassification of species, under-reporting orunscaled logs can occur. Usually the checkingof company scaling involves the verificationof log measurements in the company scalingrecords, and the pressures on and incentivesfor the forestry department scalers will be toaccept the figures, perhaps without botheringto remeasure.

In the Central African Republic scaling isdone by the companies. �Due to the lack offield control, the Ministry relies entirely on theinformation supplied by the companies.� (Egli1990). In Cameroon the company scalingvolumes are checked at the log yard only twoor three times per month (Egli 1990). Onpaper the allowable margin of error on in-spection is 5%. In practice forestry depart-ment officials have little incentive toremeasure the timber. In addition, they willbe under strong pressures, of persuasion andotherwise, to accept the company�s figures.

This dependency on company records is com-mon throughout West and Central Africa.

Concession FeesAn important issue is the role of conces-

sion fees in the forest revenue system. Inmost West and Central African countries, andindeed in most tropical countries, concessionfees are minor, almost inconsequential, rev-enue sources. As a result there is little or nocost to the industry acquiring and holding largeconcession areas. Sawmillers or loggers ac-quire concessions over vast forest areas, morefor insurance purposes or speculation that forregular timber supplies. Not only does thismean that public resources are lying idle, butthese unused forests are, paradoxically, alsothe ones that are especially prone to defores-tation by shifting cultivators. The forest indus-try has little incentive to control encroachmentif they have excess area. A more significantshare of forest revenues could be collectedthrough concession fees.

Concession fees can be evaluated in twomajor groupings: (1) initial fees, paid at thebeginning of the concession and (2) annualfees, paid each year over the life of the con-cession.

Initial Concession FeesInitial concession fees are levied in a

number of West and Central African countries.In most countries they are modest, or eventoken. They are usually so low as not to haveany effect on concession acquisition or on theoperation of concessions. However, if set atmore realistic levels they do influencebehaviour and reflect the environmental andadministrative costs in granting concessions.

In Cote d�Ivoire an initial concession feeof CFAF 50/ha is levied on new concessions,and CFAF 25/ha for renewals (Egli 1990). InCameroon initial concession fees include a�taxe d�exploitation� of CFAF 2/ha, a �taxed�agrément� of CFAF 15/ha and a safety de-posit (�cautionnement�) of CFAF 40/ha (Egli1990). These initial concession fees generateless than 1% of total forest revenues (Egli1990). In the Central African Republic an ini-tial concession allocation fee is levied on aper hectare basis; it is administratively set ornegotiated individually for each concession(Egli 1990). If the concession is later sold, atransfer fee of CFAF 50/ha is levied (Egli1990). In Gabon, under the forest law of 1982,a concession allocation fee of 2.5% to 10% ofthe expected gross sales from the concession

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is to be charged on new concessions, but asthat forest law has not yet been passed, it isunclear how the new concession fee will beimplemented (Egli 1990).

Annual Concession FeesAnnual concession fees in most of the

countries of West and Central Africa are ratherlow. For most countries they generate 10% orless of total forest revenues. At such modestlevels they have little incentive effect on con-cession management or utilization, but there isopportunity for them to play a more importantrole in forest management, in encouragingmore intensive forestry and in maintainingnon-timber forest values.

Area-Based Concession Fees: Of theadministratively set annual concession fees,the one based on the total area of the conces-sion is the simplest and easiest to implementand administer.

In Cameroon annual area fees on conces-sions include four separate annual �taxes�:County Tax (�taxe communale�) CFAF 10/ha,Reforestation Tax (�taxe de reboisement�)CFAF 20/ha, Social Contribution CFAF 40/ha,and Forestry Development Tax CFAF 28/ha(all figures in this paragraph are from Egli1990). In Gabon annual area fees on smallerconcessions (�permis temporaired�exploitation�) vary among four zones of thecountry, and range from CFAF 4/ha to 20/ha.In the Central African Republic the annual con-cession fee (�taxe de superficie�) is a uniformCFAF 125/ha under the new forest code, re-duced from a fee which varied from CFAF125/ha/year on concessions of 20 years ormore, up to CFAF 2,000/ha/year on conces-sions of 5 years or less. In Cote d�Ivoire theannual concession fee (�taxe de superficie�) isCFAF 10/ha/year. In addition, in Cote d�Ivoirean area tax is also levied on the annual coupe(�travaux d�intérêt général�) at CFAF 160/ha.

Using the total concession area as a basisfor calculating the annual concession fee willencourage concession holders to release notjust excess areas beyond their needs but alsonon-forest areas, and forest areas of low pro-ductivity such as mangrove swamps and high-land areas. These are often areas of potentialconservation value, or of value in non-forestuses.

Fees Based on Productive Forest Area:An annual concession fee based on the totalproductive forest area is a second alternative.However, such a fee could only be imple-mented after the forest inventory of the con-

cession area is completed.Fees Based on Inventory Volumes: A

third base is the total inventory volume ofstanding timber on the concession. Variousmerchantability classes, levels of utilization,and species grouping can be used.

In the Congo concession fees are basedon the annual volume of timber available fromthe concession, the �volume maximum annuel�(Egli 1990). This annual cut is based on thevolume of timber available in the first cuttingcycle. It is an interesting alternative but withproblems. As the concession is based on thevolume of timber rather than a specific area,the concession and the �volume maximumannuel� will encourage the concessionaire tocream or high-grade the forest, to take his an-nual cut from the most valuable trees and spe-cies.

Fees Based on Annual Allowable Cut:A fourth alternative base for the administrativesetting of annual concession fees is the annualallowable cut. It has advantages, but alsoproblems. The value of the concession to theconcessionaire is closely related to the allow-able cut, so it represents a fair and equitablebase. On the other hand concessionaires maypressure the forestry department to overstatethe annual allowable cut on a concession area,so that they will be allowed to increase theirproduction.

Bidding for ConcessionsIn Cameroon, as in most countries, con-

cessions are allocated through a long adminis-trative process without competitive bidding.The process can take up to five years (Egli1990). Bidding on concessions is not commonin West and Central Africa, or elsewhere inthe world. In the Congo concessions are allo-cated by bidding in areas opened up to ex-ploitation, or for concessions cancelled or re-turned (Egli 1990). Bidding is for the annualvolume of wood available, the �volume maxi-mum annuel� as a per cubic metre bid (Egli1990). The government of Ghana agreed tointroduce bidding in the allocation of new log-ging concessions and the government of Coted�Ivoire has actually begun doing so.

2. Forest Concessions in Ghana

IntroductionThis case study of forest concessions in

Ghana is drawn from �Forest Concessions inNicaragua: Policies and Pricing� by John A.Gray and Lennart Hägerby, Administración

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onForestal Estal, Ministerio del Ambiente yRecursos Naturales, ADFOREST/MARENA,Managua, Nicaragua, May 1997. It is based ona visit to Ghana by Lennart Hägerby andAlejandro Lainez of ADFOREST in 1996.

The Forest Sector in the Economy ofGhana

The forest sector is important in Ghana.About 11% of the country is forest land. Theforest sector accounts for 6% of the GDP ofGhana.

The forest policy recognizes not only theimportance of the forest, as raw materialsource for the forest industry and for export,but also as source of employment and incomefor large numbers of rural dwellers and in sup-plying fuelwood. Fuelwood supplies 90% ofurban energy need and almost 100% of ruralneeds. As in other tropical countries, the for-ests have an important function in the protec-tion of the environment. For Ghana, the for-ests are also necessary for the protection ofcocoa plantations.

The savanna forest in the north is locallyvery important for firewood, charcoal, houseconstruction, and environment protection. Thecommercial forests are located in the south-western third of the country. These tropicalforests grow within a rainfall range of 1250 to2150, and cover two million hectares, to 20%of the region. Around 1.7 million ha of theseforests is divided in 252 legally protected for-est reserves. Outside of the forest reservesthere are 370,000 hectares of forests and theremaining area has been converted into agri-cultural areas.

Organization of the Forest Authorities

The Forest CommissionThe Forestry Commission, like the Forest

Department and the whole of the forest admin-istration of Ghana is part of the Ministry of Landsand of Forest Resources. The Commissionhandles all aspects of the forestry sector: forestmanagement, training, granting of concessionsand preparation of legislation. The granting ofconcessions and preparation of legislation is themost important function of the Commission. Arevision of the Forest Law has been made andis presently being debated in the Parliament.

Forestry DepartmentIn Ghana, the forest reserves are admin-

istered by the Forestry Department, part ofthe Ministry of Lands and of Natural Resources.

Even for communal forests the administrationis the responsibility of the Forestry Depart-ment. All managing, from forest inventories,stand delimitation, logging preparation, includ-ing an inventory at 100%, mapping and mark-ing of the trees that are allowed to be cut, isdone by the personnel of the Forestry Depart-ment. The Forest Department is large, with100 forest professionals, 600 forest techni-cians, 3,000 vocational workers, in total 4,800employees.

Forest ConcessionsPractically all the forest reserves are un-

der forest concessions. Forest concessionshave had a long history in Ghana and thussome concession contracts terminate everyyear. These areas are subjected to new ten-dering for another 40 year period.

The size of concessions can vary consid-erably from a minimum of 500 hectares. Atpresent there are about 200 concessions. Theconcessionaires are in general companies reg-istered in Ghana. Most of the owners are na-tional companies, but there are also Brazilian,Lebanese, German, French and other compa-nies holding concessions.

Granting of ConcessionsThe interested parties first approach the

Forestry Department and announce their inter-est in an area.

The Delegate of the Forest Departmentis consulted as well as the owner of the forest.When an inventory is made and the tenure isestablished, applications are invited. The in-vitation is made by the Forestry Departmentthrough announcements in the newspapers ofGhana.

A concession committee evaluates theapplications, based on earlier performance ofthe companies. It also considers aspects offinancial stability, capacity to comply with theactivities, tax payment record, etc. The appli-cations from companies that are qualified arepassed on to the Forest Commission which re-views the application and analysis of the con-cession committee and makes the final deci-sion.

Frequently the owner of the forest re-quests besides his share of the stumpage fee,social commitments on the part of the conces-sionaire. These can be construction of aschool, a clinic, or a road.

At the moment the introduction of someform of auction procedure is the last step ofconcession granting. If accepted this would

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mean that those companies which had beenqualified would have the opportunity to makeoffers on the annual concession fee. Thepresent annual concession fee is US$0.70 perhectare per year.

In addition to the natural forest there arealso forest plantations. Some of the teak plan-tations are ready for commercial thinning. Inplantation forests, the Forestry Departmentcharges US$12 per hectare and US$6 per treein addition to normal stumpage.

Forest Concession ManagementWhen the concessionaire requests an area

for extraction, the Forestry Department makesa 100% inventory. All trees with a D.B.H. of50 cm or more are measured, registered andmarked on a large scale stand map. Each treeis numbered on the map, and on the trunk andthe stump. The regional office of the ForestryDepartment defines the trees which can becut by the concessionaire, along with the per-centage of the total volume and the minimumD.B.H. for each species. If the basal area oftrees to be cut does not reach 15 square meterper hectare no extraction is considered. Fi-nally, a map is drawn up showing the treesallowed to be cut.

An �Annual Management Plan� is pro-duced by Forestry Department for the cuttingarea, and submitted to the concessionaire forhis comments. In fact, the �Plan� is not reallya Management Plan, but more of a detailed setof instructions for the cutting of trees and fortransporting the logs. Usually the concession-aire is given three years to carry out logging.While the logging and transport is underway arepresentative of the Forestry Department ispresent in the forest to ensure that the Man-agement Plan is complied with. Fines are ap-plied for cutting trees not marked for cutting.However, the fines are often less than thevalue of the wood.

Changes in the Last DecadesMany of the officials interviewed

pointed out that the system of forest conces-sions had been changed significantly in thelast decades. Previously, the typical conces-sionaire was a large company with a process-ing plant and its own organization for forestmanagement and administration. This meanta different role for the Forestry Department.The influence of the Forestry Department of-ficials was limited. On the other hand, as thecompanies were depending on their longterm concession for the supply of raw mate-

rial to the industry, for this reason they man-aged the resource well.

Today�s typical concessionaire is a smalllogging company, sometimes the owner of asawmill, and sometimes selling logs to otherindustries. In Ghana the development of con-cessions to smaller companies has resulted inan increased demand on the Forestry Depart-ment, necessitating its expansion.

With the proposed changes in the law, itwill then be easier to cancel a concession inthe case of mismanagement. The legal form ofthe present contracts makes it almost impos-sible for the authorities, to cancel a concessionbefore it expires.

The opinion of several of those inter-viewed is that the connection between own-ership of concessions and the processing in-dustry should be strengthened.

Forest Fees on ConcessionsAt present the concessionaire pays an

area based charge of US$0.70 per hectare peryear for his concession. He pays stumpage,which is a volume based fee on felled treeswhich varies by species. These stumpage feesrange from US$2.50 to US$8.25 per cubicmeter. The fees are paid to the Forestry De-partment who use these revenues to covertheir costs related to the specific concession,and to pay the owner of the forest. The distri-bution is usually 70% for the Forestry Depart-ment and 30% to the landowner, which is usu-ally a community.

A figure of 6% of the FOB value of logsof each species has been used as a target ref-erence level for stumpage fees. However,the present stumpage fees charged are muchlower. The Forestry Department is consider-ing raising the level of stumpage fees to 18%to 20% of the FOB value of logs. The admin-istrative procedures require any change in for-est fees to be approved by the Parliament. Itis said that very strong political forces areblocking that process.

Administrative Regulations and theirSilvicultural Consequences

The concessionaire receives along withthe annual Management Plan a list of trees in-cluded in the cutting permit. The list specifiesthe volume and number of trees per species.The list is accompanied by a map in scale1:2,500 or some times in 1:1,250 on whicheach tree to be logged is marked. The log-ging map is made taking into account the dis-tribution of the individual trees of the pre-

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onferred species as well the other species. Thisis to ensure an adequate composition of theforest after cutting, and especially for the nextcut, 40 years later.

However, the concessionaire can choose tocut only those species and trees that he wishes,based on the argument that the other species ortrees are presently not in commercial demand.He is not required to pay stumpage fees on thevolume marked, only on those logged.

Until 1995 there was a ban on the exportof 18 species as logs. Starting from 1995 thereis a temporary general prohibition on log ex-ports of all species. This was designed toprotect the national industry and to increasethe added value and create employment inGhana. It is expected that the ban will be-come permanent.

Lessons from Ghana�s ExperienceIn discussions with the Forestry Depart-

ment officials, the application of the conces-sion systems in Ghana and other countries wasdiscussed and compared. Ghana has had along experience with concessions, first withconcessions to industrial companies to providea guaranteed supply of raw material, later withconcessions to small logging contractors, mak-ing it possible to learn from the experience ofGhana and compare the approach of Nicara-gua with that of Ghana. The conclusions ar-rived at by the forestry officials in Ghana wereclear: forest concessions should be granted asa log source guarantee only to serious inves-tors.

In Ghana the competition between thenational forest industry, log exporters, and con-cessionaires seems to become a very politicalissue. Any attempt to change the regulations,legislation, or fees has created a political up-roar. Revision of the Forest Law has been onthe Parliament�s agenda for four years, withoutbeen passed. The stumpage level and othercharges are expressed in Cedes, the nationalcurrency. With high inflation stumpage priceshave rapidly become obsolete. It is thereforeimportant that a mechanism exists throughwhich one can correct the forest fees at theMinistry level, not at the political level.

3. Timber Sale Auctions and StumpagePrices in Honduras

IntroductionThis case study of timber sales in Hondu-

ras is drawn from �Forest Concessions in Nica-ragua: Policies and Pricing� by John A. Gray

and Lennart Hägerby, Administración ForestalEstal, Ministerio del Ambiente y RecursosNaturales, ADFOREST/MARENA, Managua,Nicaragua, May 1997.

In late 1995 during a visit to Honduras tosurvey forest management and forest adminis-tration policies, a review of the newly devel-oped procedures used for sale of timber fromstate owned forests was carried out.

The system for sale of state timber wasdeveloped mainly for the pine forests man-aged by the State Forest Management Organi-zation (COHDEFOR). It was introduced gradu-ally during 1995.

The structure of the forestry sector inHonduras is not typical of most tropical coun-tries. The dominant forest type is pine. Theroad network is well developed, better thanin many other developing countries. The for-est administration, COHDEFOR, has a welldeveloped, well staffed, and substantial orga-nization for managing the state owned forests.Timber extraction is done by private compa-nies who buy the timber rights to a stand witha well defined and marked volume to be cut.The size of the cutting areas offered may vary,but a standing volume to be cut of 2,000 to8,000 cubic meters is normal. The buyers aresawmill companies or firms specializing in log-ging and transport, who sell the logs to theprocessing industry.

The State Forest Administration (AFE) isthe unit within COHDEFOR which makes themanagement plans for the state owned for-est. These management plans are revised ev-ery 5 to 10 years. When an area is consid-ered for sale, AFE makes a detailed inven-tory, marks the trees to be cut, and draws upa plan of operation. Based on the informationfrom these preparations, the stand is offeredto the interested party.

The actual sale takes the form of an auc-tion in two steps. First, a reference stumpageprice is determined. Second, the timber is putup for auction.

Stumpage PricesIn setting reference stumpage prices for

the timber to be sold, COHDEFOR considersthat there is a direct relation between the priceof sawn lumber in the domestic market and thestumpage value. This reference stumpage priceis calculated on two reasons; (1) to establish thesize of the bank guarantee which the potentialbuyer has to present to qualify to participate inthe auction, and (2) to establish a realistic levelof the value of the stand to sell, to which bids

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can be compared, to detect and avoid the ef-fect of cartels among the buyers.

As the starting point in establishing thereference stumpage price for the stand, a basestumpage price per cubic meter of standingvolume is first established, based on 10% ofthe price of 1,000 board feet of sawn lumber.This value is then adjusted for three factorsthat are supposed to reflect the characteristicsof the stand to be sold. These factors that en-ter into the calculations are:

� the distance to the main road� the stand quality� the density in trees per hectare

Distance to public road: If the area tobe sold is not along a road, the reference priceis reduced by some 10 to 13 Lempiras (Lps)per cubic meter per kilometer. The reductionis motivated by the fact that the buyer is re-sponsible for building the access road. With adistance of more than 20 km the stand mayalready be considered beyond economic reachby AFE.

Stand quality: In this context, the qual-ity criteria is the volume per tree. That isstrongly related to the average diameter atbreast height. An average of 46 cm does notaffect the price, while every cm above thatincreases the value per cubic meter one Lps.

Density in trees per hectare: The num-ber of trees per hectare in combination withthe average size defines the volume per hect-are. This value is of key importance for costsof logging transport and road building percubic meter.

In some examples from the Olancho re-gion offered for sale in 1995 the factors hadthe following values:

Price of sawn lumber: Lps1.80 toLps4.10 per board foot. Average Lps3.11perboard foot, corresponding to approximatelyUS$ 139 per cubic meter.

Distance to public road: 1km � 29km.Stand quality: Average diameter at breast

height 44cm � 56cm.Density in trees per hectare: 75 � 137

trees per hectare.In these auctions the reference stumpage

price ended up at between Lps190 � Lps210per cubic meter, equal to US$19 to US$21 percubic meter (at an exchange rate of US$1 =Lps10).

Minimum Stumpage PricesA minimum stumpage price after adjust-

ments is maintained. In September 1995 thisminimum stumpage price was 190Lps per cu-

bic meter (US$19 per cubic meter). The rea-son for the minimum level of stumpage pricesis that COHDEFOR is responsible for refores-tation, forest management and administrationof the forest. Supposedly minimum stumpageprices are intended to cover the costs of silvi-culture, and all other forest management andadministration activities. Consequently, if thestumpage value of a stand ended up belowthis minimum level, it will not be put on themarket, but left to mature further.

Stumpage Values of Mahogany in HondurasThe stumpage value for mahogany was

Lps480 per cubic meter (US$48 per cubicmeter). However, the sale of standing ma-hogany timber was very limited. As for saleof pine, the forest management and adminis-tration responsibility lies with COHDEFOR.

Auction ProceduresAfter the stand is inventoried and prepared

for sale, the State Forest Administration (AFE)places advertisements in newspapers and in-vites bids, to be submitted in sealed envelopes.Each offer has to be accompanied by a checkas a guarantee. The value of the guarantee is3% of the reference stumpage price for thetotal volume to be sold. Those companieswhich do not win the auction have their checksreturned at the end of the auction.

On the day of the auction the envelopesare opened publicly and the top prices notedon a blackboard. Starting from the top price,open verbal bidding takes place. Within tendays after the auction the winning bidder hasto sign a contract with AFE, or loose his 3%guarantee check. Upon signing, the companyhas to present a deposit or a bank guaranteecorresponding to 15% of the total contractvalue. This is to assure AFE that the companyhas the capacity and intention to comply withits obligations in the contract.

At the end of the contract period, nor-mally two years, the deposit is returned to thecompany, provided that it has fulfilled its obli-gations. These obligations may include restor-ing the logging site, or include environmentprotection requirements. If the performance isnot satisfactory, the deposit funds are used tocomplete these obligations.

4. Forest Concessions and Forest Fees inNicaragua

IntroductionThis case study of forest concessions and

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forest fees in Nicaragua is summarized from�Forest Concessions in Nicaragua: Policies andPricing� by John A. Gray and Lennart Hägerby,Administración Forestal Estal, Ministerio delAmbiente y Recursos Naturales, ADFOREST/MARENA, Managua, Nicaragua, May 1997.

Present Forest Concessions in NicaraguaThere are two concessions in operation

in Nicaragua at present, one between a com-pany and the Government, the other betweena company and an indigenous community.The concession between Sol Del Caribe S.A.(Solcarsa), a Korean company and the Gov-ernment, represented by Marena, was signedin 1996. The other concession is a specialagreement between Madensa and an indig-enous community, Awas Tigni. Although ap-proved by Marena, it is a special case. Theforest fees were agreed between the commu-nity and the concessionaire and not definedby the Government.

An earlier concession, signed in 1995between Profosa, a Spanish company and theGovernment, was canceled by Marena a yearlater for non-compliance by Profosa.

The Solcarsa concession has not (as ofApril 1997) started any forestry operationswithin its concession area. Instead, it is buy-ing roundwood from private forest owners andlocal communities. Indigenous communitiescan sell the timber, provided they have thelegal title to the land on which it grows. Veryfew legal titles to land exist in the Atlanticregions. Until land ownership is settled, anexception to law allows a community to sellthe timber provided the local and regional au-thorities acknowledge the community�s claimto the land.

Other concession areas may be offeredover the next few years, once land claim is-sues are clarified. These include an area of300,000 hectares of pine near Puerto Cabezasin the Region Autonoma Atlantico Norte(RAAN).

Present Fees on Forest Concessions inNicaragua

The concession agreement betweenMadensa and an indigenous community, AwasTigni, is a special case. The forest fees wereagreed between the community and the con-cessionaire and not defined by the Govern-ment.

The forest fees in the other two conces-sion agreements, in the agreement withSolcarsa and in the canceled agreement withProfosa, are very similar. They include: (a) asmall initial area based fee, (b) a yearly areabased fee, and (c) the stumpage fees and otherfees based on the volume cut. Stumpage feesand other volume based fees account for 99%of the fees paid (see the tables below).

The table below shows the fees as ex-pressed in the concession contracts and in theministerial administrative orders.

Initial contract feeC$ 10 per square km

Annual area feeUS$ 0.70 per square km

Exploitation tax on marked volumeC$ 21 per cubic meter

Marking service by MarenaC$ 30 per cubic meter

Municipal tax2% of sale value

Stumpage fee on marked volumeUS$ 6�25 depending on species

Converting area based fees to an equiva-lent volume basis, based on the allowable cut,involves a few assumptions. The equivalenton a per cubic meter basis was determinedfrom the volume per hectare of allowable cutto be extracted on the 1997 Solcarsa Plan ofOperations, assuming a 30 year cutting cycleand a total merchantable volume of the conces-sion of 30 times the volume allowed for 1997.

Cost in US$ per cubic meter markedArea based (US $/m3) Volume based (US $/m3)

Initial contract fee (US$ 690) US$ 0.0016Annual area fee (US$ 434) US$ 0.036Exploitation tax US$ 2.33Marking service by Marena US$ 3.33Stumpage fee US$ 6 � 25Total US$ 0.038/m3 US$ 11.66�30.66 /m3

Total of Combined Area and Volume Based Fees US$ 11.70 - 30.70/m3

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The interpretation of how the municipal taxshould be applied is unclear. If it is interpretedas a sales tax to be paid by the seller, the con-cession holder may not sell anything where theconcession is situated but only processed prod-ucts from where the processing plant is located.In this case, on State land the Government asowner of the land and seller of the wood wouldtheoretically pay the municipal tax.

The table above shows that much lessthen one percent (only about 2/10th of 1%) ofthe forest fees on concessions holders is basedon the area of the concession, almost insignifi-cant! Such low area based concession fees willnot encourage concessionaires to limit theirconcession to what is needed for their indus-trial plants. Instead the incentive will encour-age the acquisition of as much forest area aspossible for future speculation and to keepcompetition away from others.

Preliminary Estimates of StumpageValues in Nicaragua

Estimating stumpage values for Nicaraguais difficult because of the small size of theforest industry and lack of cost and prices data.There are few firms in the forest industry andcompetitive markets do not exist for standingtimber or for logs.

A informal survey of a few sawmills andlumber exporters provided information onFOB export prices for Mahogany (Caoba) andother precious woods (Cedro Real, Cedro Ma-cho, Guapinol, Nanciton, Mora). Estimates oflogging, transport and processing costs wereobtained from an informal survey of a fewsawmill and logging operations. However,with few firms in the industry, cost data waslimited and not statistically reliable.

Stumpage Value Estimates: From thesesawnwood prices and the cost figures we esti-mated stumpage values working backward fromexport prices of lumber, deducting sawing costs,log transport costs, and logging cost (includingallowances for normal profits in each), to arriveat the derived value of the standing trees in theforest. We arrived at stumpage values for Ma-hogany (Caoba) and other precious woods ofUS$101 to US$178 per cubic metre.

These stumpage values of Mahogany(Caoba) and other precious woods, US$101 toUS$178 per cubic metre are substantial, espe-cially compared to stumpage fees and otherfees of US$11.70 to US$30.70 per cubic metre.Stumpage values are three to fifteen times theforest fees charged.

From these estimates of stumpage values

for Mahogany (Caoba) and the other preciouswood, present forest fees charges would ap-pear to collect between 6% and 30% of thestumpage value of the timber. For Mahogany(Caoba) and the other precious woods thisleaves the forest industry with betweenUS$102 and US$160 per cubic metre logged(70% to 94% of the stumpage value) as addi-tional, above-normal profits (over and abovethe profits allowed for in the cost estimates).

Because of the scarcity of reliable costand price data the stumpage values derivedare only a rough �first estimate�. There waslittle or no chance to verify the accuracy ofthe cost data or prices. As stumpage valuesare residually determined, working backwardfrom sawnwood prices, small errors in esti-mating prices, costs, lumber recovery, defector wastage can have a magnified effect on thestumpage values. In addition, the estimatesmay not have adequately allowed for someadditional costs, or for hidden costs and �unof-ficial� payments.

Nevertheless, based on these estimatesthere is a case for raising the level of feessignificantly, at least on Mahogany (Caoba) andother precious woods. Allowing for underes-timation of costs in our figures, forest fees forhigher valued species could be doubled andstill leave the industry with a substantial shareof stumpage values.

These stumpage value estimates, al-though admittedly rough, imply that forest feeson concessions could be raised substantially.Area fees on concessions could be increasedto generate a much more substantial share offorest revenues.

5. Forest Concessions and Forest Fees inGuyana

IntroductionThe case study of forest concessions in

Guyana is drawn from �Profit Without Plunder:Reaping Revenue from Guyana�s Tropical For-ests Without Destroying Them� by Nigel Sizer,published by the World Resources Institute(WRI) in 1996. The case study presentedhere is based on the book with excerpts drawnfrom the forward, synopsis and recommenda-tions presented in the WRI Internet Web Pages.

The study by Nigel Sizer illuminates thecomplex obstacles to managing forests in waysthat are good for the economy, the environ-ment, and society. It also provides practicalalternatives to ill-planned and poorly moni-tored timber harvesting.

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onGuyana�s abundant forest resources, en-

compass 85 percent of its land area. The na-tion is under enormous pressure to sell log-ging rights to boost short-term economicgrowth. But converting that value to profitwithout destroying the forest resource andmaintaining the fragile ecosystem is provingto be a difficult and complex task.

Sizer argues that an open invitation to in-vestors to exploit the forest as they see fit willnot work. Only maximizing a variety of forestvalues will improve the livelihoods of peoplein Guyana. Like many timber-rich, but eco-nomically troubled countries Guyana requiresstronger government and civil machinery toplan and negotiate foreign investment in log-ging and to ensure that companies complywith national laws and codes of practice.

Guyana has made clear commitments tosustainable development by ratifying the Con-vention on Biological Diversity and by adopt-ing the International Tropical TimberOrganization�s objective of achieving sustain-able production of timber by the year 2000.Landmark domestic laws creating theIwokrama International Rainforest Program anda new Environmental Protection Agency werepassed in early 1996. But Guyana still facesserious challenges, including reforming landallocation and land-use planning, reducingdamage and increasing revenues from logging,building sustainable communities, developingnon-timber forest enterprises, and making for-eign assistance more effective.

Major Challenges Facing GuyanaSizer identifies five major challenges the

Guyana faces in managing its forests:1. Reform resource allocation and land

use planning.2. Reduce the damage and increase the

revenues from logging.3. Build sustainable communities, espe-

cially around non-timber forest values.4. Restructure institutions and improve

training and education.5. Make foreign assistance more effec-

tive.Arguably the highest priority for the gov-

ernment as it seeks economic benefits fromforest resources is the need to clarify nationalland-use planning. As noted by Guyana�s Na-tional Coordinator of Land Use Planning, An-drew Bishop, institutionalization of coordina-tion among agencies, legal authority, proce-dures or criteria for resolving conflicts amongland users (such as loggers and miners) are all

lacking and other problems stem from institu-tional overlaps and from redundancy and con-flict among the various sectoral laws.

Skilled personnel and basic data, as wellas data-storage and retrieval systems for plan-ning, are also lacking. Nonetheless, there isregular information-sharing and informal dia-logue between key agencies such as the For-estry Commission, the Geology and MinesCommission, and the Department of Lands andSurveys.

Priority RecommendationsThe WRI study presents a series of short,

mid- and long-term recommendations aimedat priority and strategic needs. The sevenhighest priority recommendations are:

1. Define the permanent forest estate:This should include production forest for tim-ber harvesting, biodiversity hot spots for pro-tection, protection forest on steep slopes andother fragile environments, and communityforests.

2. Maintain and extend the scope ofthe moratorium on major forest land-usedecisions: In early 1995, Guyana�s govern-ment effectively declared a three-year mora-torium on new foreign and local large-scalelogging concessions to allow time for foreignassistance to strengthen the Forestry Commis-sion and for policy and legal reform. The studyrecommends that the moratorium be extendedin scope pending designation of new nationalparks and the resolution of outstandingAmerindian land claims.

3. Better monitor the negative im-pacts of timber harvesting: Timber harvest-ing is increasing rapidly, but there is little dataon how it affects Guyana�s forests or people.Policy-makers need such information if theyare to make well-informed decisions.

4. Standardize procedures for award-ing concessions and revise the forestry taxstructure: Key needs are for public an-nouncements of new forest areas available forlogging, open competition through auctions,performance bonds, increased area fees, thescrapping of royalties, and thorough back-ground checks on all investors.

5. Increase the contribution ofchainsaw loggers and small producers tothe economy and reduce their negativeimpacts: The study recommends thatchainsaws be registered and licensed like fire-arms, small producers should be forced to paythe taxes they owe, and areas set aside forchainsaw operations should be clearly demar-

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cated and activities confined to those areas.6. Strengthen community sustain-

ability initiatives: Local credit schemes, ad-vice with marketing, basic finance, and ad-ministration could all help in strengthening for-est based and rural communities.

7. Ensure that forest-sustainability is-sues are adequately considered in the de-sign of the structural adjustment programand improve donor coordination to ensurehigh quality assistance: The study suggeststhat program components promoting foreigninvestment and tax reform may need specialemphasis. There is also need for internationalbilateral and multilateral agencies to better co-ordinate their efforts. Modest foreign-donor in-terventions can buy time for alternativeforest-based development. Donor efforts shouldbe fortified and better coordinated to equipand staff Guyana�s finance and forestry depart-ments to negotiate better deals. Outside sup-port would help local people to have a say indecisions that affect them, and to find alterna-tive �green� routes to profiting from the forests.Eco-tourism, gene hunting, and low-impact log-ging all hold promise.

These seven highest priorities are dis-cussed in turn, below. The seventeen othermedium-term and long-term priorities are dis-cussed in the book.

1. Define the permanent forest estateto include production forest for timberharvesting, biodiversity hot spots for pro-tection, protection forest on steep slopesand other fragile environments, and com-munity forests.

Through the GEF National System of Pro-tected Areas project, a picture of the priorityareas for biodiversity conservation in Guyanais now emerging. Some such areas may beunder threat right now from new loggingagreements or other development proposalsand should therefore be high priorities for de-marcation as protected areas for low-impactsustainable use. This approach is being pio-neered in Guyana through the Iwokrama ini-tiative.

Immediate action should also be taken toreduce tension and frustration amongAmerindians over still-undemarcated lands thatthey claim. Many sound recommendationsfrom previous studies have yet to be imple-mented. If these basic local demands aren�tresolved, further conflicts will arise and moreattention will be devoted to crisis managementthan to the design and implementation of

long-term development programs with com-munities and investors. Where the case fordemarcating Amerindian lands has been clearlymade, Guyana�s Department of Lands and Sur-veys could consider delegating mapping anddemarcation to the communities themselvesusing simple geographic positioning system(GPS) technology and basic mapping exper-tise from either the Department or foreign do-nors and NGOs. This community-based map-ping approach can speed up demarcation, re-duce its costs, and ensure full local support forthe boundaries.

Beyond these steps, Guyana�s govern-ment clearly must urgently define the perma-nent forest estate that includes the key sitesfor biodiversity conservation and communityforestry, as well as sites critical for watershedprotection and erosion control, including someof the hillier regions in the south, and otherfragile environments.

2. Maintain and extend the scope ofthe moratorium on major forest land-usedecisions.

Guyana�s State Forests are already almostentirely allocated to loggers, and the govern-ment has every reason to fully investigate thedevelopment options described in this reportand others before further locking up morelands in large long-term logging concessions.Other options hold great promise for generat-ing sustainable benefits for local communitiesand the country.

The moratorium on large-scale loggingagreements should be extended until the de-sign of the National Protected Areas Systemhas been completed so that areas identified asthe highest priorities for national parks andother forms of reserve are not allocated forlogging. The moratorium should also coverland subject to outstanding Amerindian landclaims until the claims are settled. This movewould create considerable international good-will and support for further forest develop-ment programs in Guyana.

3. Better monitor the negative im-pacts of timber harvesting.

A major difficulty encountered during thestudy was the stark lack of information on theimpacts of timber harvesting on Guyana�s for-ests and people, even though harvesting isincreasing dramatically as Barama, DTL, CaseTimbers/UNAMCO, and other companies ex-pand their production, in addition to the thou-sands of independent chainsaw operators.

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onThis issue deserves urgent attention from theGuyana Forestry Commission, and it has beenanticipated in the British Overseas Develop-ment Authority (ODA) support program.

4. Standardize procedures for award-ing concessions and revise the forestry taxstructure to include public announce-ments, open competition through auc-tions, performance bonds, increased areafees, scrapping of royalties, and back-ground checks on all investors.

Forest Fees: Guyana�s complex struc-ture of forest sector fees, royalties, taxes, andfines includes area fees, export commissions,volume-base royalties, and corporate taxes.The government should consider restructuringthis system to make it simpler and fairer andto make tax evasion harder. Restructuringshould favor those companies with efficientoperations that best comply with environmen-tal and social standards.

A number of options are open to the gov-ernment. The best of these is a combination ofarea base fees, auctions of concessions, perfor-mance bonds, selective levies, and strict penal-ties. Bids for concessions would be evaluatedalong with information about the bidders pastenvironmental, social, and financial perfor-mance.

Area Fees: Area fees for current leaseholders should be based on estimates of rev-enue and production costs from informationcollected in the field, from market intelligencereports, and other publicly available data, tak-ing into account transport, labor, and othercosts. A more sophisticated approach wouldbe to differentiate among species, and amongvarious parts of the country since differencesin soils, forest types, and infrastructure maysignificantly alter costs. The rate would be setat such a level as to provide a well-run com-pany with �normal profits.� Once calculated,fees should be indexed with inflation. Whenexisting leases expire, the areas should be auc-tioned.

A shift from royalties to area fees wouldrelease substantial amounts of Forestry Com-mission staff time thereby allowing them to be-come more active in monitoring the impacts oftimber harvesting, promoting better forest man-agement, and so on. Area fees are easy to col-lect and provide a strong incentive to produc-ers to increase efficiency. They also providethe opportunity through area fee waivers forparts of concessions to encourage establishmentof protected areas within concessions.

Industry Resistance: Locally ownedlogging operations are highly inefficient inmany ways, but they may have enough politi-cal clout to resist higher taxes, costing the gov-ernment millions of dollars each year in lostrevenues. This impasse could be surmountedwith a three-part �carrot-and-stick� approach:gradually increasing the rate of taxation onlogging operations; forcing logging operatorsto improve efficiency, but also offering themthe technical and financial assistance neededto modernize their forest management andmilling operations and improve marketing; andimplementing policy reforms that favor indus-trial development. Removing controls and re-strictions on log exports, renegotiating tax holi-days to create a level playing field, and hold-ing government-sponsored auctions for con-cessionaires unhappy about reform should sat-isfy most concession holders.

Auction of Concessions: As currentforest leases expire or new areas becomeavailable through other means this should bewidely advertised both in Guyana and interna-tionally. These areas should then be auctioned.Well-publicized auctions are likely to garnermore than one application for the area, thuspromoting bidding. Qualification for applica-tion and the right to bid should be based uponthe company�s financial track record, its com-pliance with national law, its experience inforestry, and its membership in relevant na-tional forestry industry federations in othercountries where they operate.

Auction of access to natural resources inGuyana is not without precedent. Under theState Lands Act, licenses can be advertised withcosts paid by the bidder, and minimum floorprices set. The Mining Act calls for invitedbids for areas of land, as well as proof of ad-equate financial resources and technical com-petence. Auctions can�t work if substantial in-formation on the area isn�t made available topotential bidders. Both basic inventory dataand information on access and transport costsfrom the area to points of export are needed.Many current logging leases will expire overthe next four to five years giving time for theForestry Commission to consolidate existinginventory data and conduct more surveyswhere needed prior to reissuing the leasesthrough auction.

Screening of Bidders: Also essential iscareful screening of foreign investors who,unlike their local counterparts, do not have awell-known track record. If the prospectiveinvestor were to pay an application fee, Gov-

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ernment could use the funds to contract anindependent firm of corporate intelligenceexperts to provide unbiased information abouta company�s business capacity, marketingskills and connections, respect for host-countrylaws, environmental clean-up records, andcompliance with tax codes, as well as its fi-nancial status. Large local investors with op-erations, investments, and financial relation-ships with foreign banks and partners mayneed to be checked in-depth too. A smallerfee could be charged to cover the costs ofreviewing track records and current financialstanding.

If these background reviews reveal thatthe company has not always been a good cor-porate citizen, especially during the past fiveyears, then it should be excluded from furtherconsideration and a clear public explanationoffered, or the performance bonds for that par-ticular company raised due to the greater riskthat they will not respect the regulations.

Performance Bonds: How can govern-ment provide an incentive for responsible for-est management and compliance with the lawand codes? It should require applicants to putup a performance bond that is paid up front,or secured by a third party, and returned tothe concessionaire once the contract ends onlyif it has complied with basic social and envi-ronmental standards. If at any time during con-tract implementation compliance is breached,as much of the performance bond as is neededto pay full damages would be forfeited.

Log Exports: While there are no overtrestrictions on log exports from Guyana, theForestry Commission does exercise discretion-ary authority over log exports based uponpricing guidelines mandated by the GuyanaTimber Export Board (Transfer of Function)Act of 1981. These controls allow the Com-mission to collect a small tax on exports andexert some control over transfer pricing (thepractice of under-declaring export prices toreduce declared profits and thereby evadetaxes).

The tax structure recommended abovewould provide a far more effective, standard-ized, and open-to-scrutiny means of collectingrevenue and stopping transfer pricing. Experi-ence in other countries suggests that restrict-ing or banning log exports hurts both theeconomy and the environment. Restricting logexports lowers domestic log prices and thusinvites inefficient local processing. The eco-nomic returns from inefficient local process-ing are often less than those from direct ex-

port of raw logs. �The economic conse-quences of imposing log-export restrictionshave been negative, both from the perspec-tive of the forestry sector and the country as awhole,� says a recent World Bank study ofseveral countries.

Environmental results have been disap-pointing so far too. Log-export restrictions de-press local prices for logs, and low prices caninvite over harvesting and waste. Removingcurrent de facto restrictions would also creategoodwill in the logging industry in Guyanaimportant if other taxes are to be increased.

Protection Forests Within Conces-sions: Usually, large parts of concessions areoff limits to logging since they are swampy,too hilly, otherwise inaccessible, or poorlystocked with commercial timber species. Con-cession owners should be encouraged to for-mally map out these areas and set them asideas permanent conservation zones, effectivelymanaging them as private parks. In addition,around 5 percent of the operable area shouldbe set aside to ensure that all forest types arewell represented in the conserved forest es-tate. Such measures are contemplated in thedraft Code of Practice that the Forestry Com-mission is in the process of introducing to theindustry. Concessionaires who do this wellshould get some form of public recognition,annual awards or even a tax break propor-tional to the size of the set-aside. A simpleformula now being tested in Bolivia is to for-give the area tax on the zone set aside as apermanent protected area.

5. Increase the contribution ofchainsaw loggers and small producers tothe economy and reduce their negativeimpacts.

Chainsaw loggers, working alone or insmall groups, have been harshly criticized.They cut timber in situ and carry it to the roador river bank by hand. Most are unregisteredillegal operators who steal from the govern-ment or from concessionaires. In these cases,basic law enforcement is lacking and invest-ing in personnel and the strategic interceptionof unregistered timber in transit can make allthe difference. To its credit, the Forestry Com-mission has in recent years confiscated signifi-cantly more illegally cut timber by large andsmall producers alike.

In contrast, registered legal logging bychainsaw operators has much to recommendit. It can create employment because it is solabour-intensive. It may also cause less dam-

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onage to trees and soil as fewer roads are neededand skidders are not used. Some simple mea-sures are recommended to make chainsaw log-ging less destructive:

1. Treat chainsaws as firearms and insistthat they be registered and licensed to legalusers only. A license code should be appliedto each saw.

2. Participation by loggers in obligatorytraining courses organized by the ForestryCommission as a condition of getting licenses.These courses would teach best felling andcutting practice, chainsaw maintenance, andthe law and codes of practice, as well assimple accounting for tax collection. Loggerscould even be required to pass a simple testbefore being awarded their licenses. Sincemany of the practices taught would be in theimmediate interest of the loggers to apply,better practice should follow quickly.

3. Registration and taxation of small pro-ducers (through the licensing by the ForestryCommission) with the Inland Revenue Depart-ment and enforcement of basic tax laws cov-ering small producers. (Currently, most pay notax.)

4. Intensification of local zoning and sur-veying to ensure that small-scale logging isconfined to prescribed areas with adequateswaths of conserved forest between thelogged areas.

5. Closure of logged areas to further ex-ploitation to allow for forest regeneration andconservation.

Forest fees for chainsaw operators shouldbe similar in structure to other concessionaires,with auctions, area fees, performance bondsand so on. Area fees could be higher to coverthe greater cost to the Forestry Commission ofpolicing smaller operations.

6. Strengthen community sustain-ability initiatives.

A Community Forest Conservation andDevelopment program should be initiated toprovide basic technical assistance to commu-nities interested in developing forest-basedenterprises, such as the extraction and pro-cessing of non-timber forest products, faunamanagement, and �green� forestry. The pro-gram could include the following elements:

1. Advice in community associationstrengthening, basic administration and fi-nance, marketing, and contract negotiation.

2. Incentives to communities to partici-pate could include access to low-interest, smallloans (of say, US$100 to US$5,000) to help

build community enterprises. The fund couldbe capitalized with a small percentage of rev-enues from the logging and mining activitiesthat have taken a toll on traditional communi-ties in Guyana�s hinterland.

3. A simple knowledge bank where com-munal experiences in development and forestresource management could be deposited andshared.

4. For larger, well-organized communitydevelopment proposals, help preparing fund-ing requests for foreign donors.

5. Marketing assistance.6. Training in the preparation and over-

sight of basic biodiversity-prospectingbenefit-sharing contracts.

7. Promotion of partnerships betweencommunities and outside private investors.

Eco-Tourism: Before embarking on anyambitious and potentially costly nationaleco-tourism development program, the gov-ernment should first carefully evaluate thecosts and benefits of such a strategy. Such fac-tors as the attractiveness of Guyana toeco-tourists, the degree to which benefits willstay within the country and not be exported(in, say, payments to foreign-based travel com-panies), the extent to which local communi-ties will benefit, and so on. Such a studyshould be an integral part of the programs cur-rently being implemented by the Organizationof American States and under the Amazon Co-operation Treaty.

Wildlife Trade: Guyana�s wildlife trade,especially in primates, parrots, and macaws ispoorly monitored and regulated. Anecdotal re-ports of highly predatory collection and tradein live animals are common. This inherentlyunsustainable activity may provide significantshort-term employment for Amerindian collec-tors, and it certainly generates large profits fora handful of traders and exporters, as well asimporters and retailers abroad, but it does last-ing damage to the forest environment as localpopulations of species that disperse seeds de-cline. Unless this trade can be adequatelyregulated and monitored, with quotas basedon scientific research, then it should be againprohibited, as it was in Guyana earlier in thisdecade.

7. Ensure that forest-sustainability is-sues are adequately considered in the de-sign of the structural adjustment programand improve donor coordination to en-sure high quality assistance.

The multilateral finance institutions

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should collaboratively review the current andthe proposed structural adjustment programsto make sure that none of its components pro-mote degradation of the forest resource baseor have undue negative impacts on local com-munities. Especially worthy of attention are thepromotion of foreign investment and tax ad-ministration reform.

Guyana has shown great leadership byoffering almost 400,000 ha of lowland rain for-est to demonstrate sustainable forest use. Theinitiative is at risk of collapse due to lack ofdonor interest. Iwokrama represents a uniqueresource for promoting basic and applied re-search in Guyana�s forests, and it should attractforeign scientists and funds. It can help to de-velop new technologies, markets, andrevenue-generating forest-based industries thatwould be of benefit to Guyana and the region.

How much Iwokrama ultimately contrib-utes to our knowledge about tropical rain for-ests as a resource for development will alsodepend upon how effectively it forms part-nerships and works with the private sector toget the innovations developed, tested, anddemonstrated at Iwokrama adopted by others.For starters, the program needs to conduct re-search and demonstration activities outside ofthe Iwokrama area on commercial loggingconcessions and with Amerindian villages.

6. Forest Concessions in Suriname

IntroductionThe case study of forest concessions in

Suriname is drawn from �Backs to the Wall inSuriname: Forest Policy in a Country in Crisis�by Nigel Sizer and Richard Rice, published bythe World Resources Institute (WRI) in 1995.The case study is based on the book with ex-cerpts drawn from the forward and synopsispresented in the WRI Internet Web Pages.

Suriname is under enormous pressure �from within and without � to restructure itseconomy and heal the wounds of twelve yearsof civil unrest. Poor, bereft of foreign currencyreserves, suffering 500-percent annual infla-tion and rising unemployment, Suriname is des-perately resisting advice to implement struc-tural adjustment. To attract foreign investment,the government is poised to award forest con-cessions covering one fourth of the nation�s ter-ritory to Asian timber companies, companieswhose records in Malaysia and Indonesia hasbeen questioned (Sizer and Rice 1995).

With tropical forests covering 80 percentof its terrain, Suriname is among the world�s

most heavily forested countries. Indeed,Suriname is probably richer in rainforest nowthan Costa Rica was when the Spaniards ar-rived in the sixteenth century.

Forest ConcessionsIn 1993, Suriname, its economy near col-

lapse, took the step of inviting foreign inves-tors to explore possibilities for establishingmulti-million hectare logging concessions inthe country�s interior. By mid-1994, at leastfive proposals were on the table and in nego-tiation for forest resources that had barely beeninventoried or evaluated. If those contracts hadgone through, some 25 to 40 percent ofSuriname�s land area could have been loggedunder conditions that would have been an eco-nomic and environmental disaster both forSuriname and for the world. Fortunately, thecrisis was averted

Each of the proposed concessions lies inforests now accessible only by aircraft or dug-out canoes. One of the tracts is home to 10,000forest-dwelling peoples. Although the conces-sion contracts had already been drafted andsubmitted to Parliament, Suriname still had theopportunity to consider other options.

Nigel Sizer and Richard Rice examinesthe proposed contracts and suggest options fora more sustainable approach to forest man-agement and forest concessions.

The authors suggest that if Suriname hadgone ahead with the concessions, it wouldhave foregone tens of millions of dollars inannual revenues--up to 10 percent of grossdomestic product -- essentially giving away itsforests and getting shattered biodiversity, ru-ined fisheries, eroded soil, displaced popula-tions, and perhaps ethnic strife in return.

Recognizing that Suriname�s governmentmay feel compelled to go ahead with substan-tial forest concessions, Dr. Sizer and Dr. Ricepropose ways to improve concession policy,outlining how Suriname�s government couldprotect both forests and forest-dwelling com-munities by ensuring compliance with contractprovisions.

If it changed the way that forestry con-cessions are awarded, taxed and enforced, thegovernment would prevent the worst environ-mental damage and reap enough revenue todeal with its most pressing social and eco-nomic problems. Specifically, the authors pro-pose auctioning off concessions after estab-lishing minimum bids and making sure thatprospective bidders have good track recordsin other countries, in addition to levying

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onvalue-added taxes on timber and processedwood products.

Sizer and Rice outline how Suriname�sgovernment could protect both forests andforest-dwelling communities of Amerindiansand Maroons, descendants of escaped slaveswho live by the traditions their ancestorsbrought from West Africa 300 years ago.Launching a program to protect communallands, sharing information with forest commu-nities on pending development proposals, andrequiring social impact assessments for con-cessions within or bordering on communallands would improve development planning.Establishing a program to continuously moni-tor forest concessionaires� performance wouldhelp ensure compliance with contract provi-sions.

Sizer and Rice suggest that Surinamecould strengthen social progress by requiringthat concessionaires and wood-processing in-dustries meet minimum employment standardsand integrate training and apprenticeship pro-grams into their business plans. Governmentcould also help ensure that concession work-ers have the right to organize labour unions.

Foreign AssistanceRecently, Suriname�s government began

negotiations with foreign donors to establishan assistance program that could take the placeof the Asian offers for concessions.

The authors endorse the Inter-AmericanDevelopment Bank�s efforts to take the leadin establishing a multilateral assistance pack-age that would give Suriname enough time toexplore other ways of using its forests to spureconomic development. The assistance fundswould help build the capacities of Suriname�spublic and private sectors to design sustain-able forestry options, in addition to providingcompensation to cover the short-term oppor-tunity costs of putting the contracts on hold. Amodest investment in assistance at this crucialjuncture can enable Suriname to examine otheroptions for forest development.

Directing Benefits to Forest CommunitiesBacks to the Wall outlines ways to ensure

that all people with a stake in the forests mustbe represented in decision-making circles ifconcession agreements are to reflect their rightsand interests. Suriname has already establishedcouncils designed to give people in the hinter-land a say in decisions that will profoundly af-fect their lives, but the nation has been unableto get them up and running because of budget

constraints. Backs to the Wall stresses that sup-porting these participatory mechanisms shouldbe a key part of any international assistancepackage. The authors note, that simply provid-ing Suriname�s councils enough money to oper-ate would go a long way toward bringing iso-lated rural peoples into the forest policy-makingprocess.

Sizer and Rice suggest that the Organiza-tion of American States, which is already help-ing forest-dependent communities map theirlands, could broaden its efforts into a formalland-demarcation program that includesmechanisms for resolving conflicts betweencommunities and outside interest. Multilateralfunders could supply technical and financialassistance to communities throughmicro-enterprise development grants to helpthem better satisfy their needs.

ConclusionsThe authors end by suggesting develop-

ment alternatives that would make the most ofSuriname�s unique opportunities. Because thenation doesn�t face the population and migra-tion pressures that lead to deforestation in othercountries, it can make a compelling case forthe relatively small cash transfers needed tokeep its forests intact. Besides tapping suchmechanisms as the climate treaty�s Joint Imple-mentation provisions, Suriname could attractfunds from debt-for development programs,green venture capital, and green investmentfunds. Unlike most countries, Suriname has in-vested little in unsustainable logging, so it iswell-positioned to take advantage of the merg-ing demand for �green seal� timber, i.e., woodand wood products that are certifiably producedin sustainable ways.

7. Forest Concessions in Indonesia

IntroductionThis case study of Indonesian forest con-

cessions is drawn from a paper �Desarrollo delSector Forestal de Indonesia: Su Contribucion ala Economia y al Ingreso por Exportaciones�presented at a seminar on the export potentialof the Nicaragua forest sector, held in Managua,December 10, 1996 (Gray 1996), with addi-tional materials from Gray and Hadi (1989) andother sources.

The present system of Forest ProductionConcessions (HPH) was, established in 1970by Government Regulation No.21/1970. Itforms the basis for the management of naturalforests in Indonesia (Barber 1988, Gray and

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Hadi 1989). Under the Concession System,private sector companies are allocated cuttingrights to an area of natural forest for a fixedperiod (currently 20 years). Concessionairesharvest timber under a forest managementplan which establishes an Annual AllowableCut, the cutting system to be used (currentlythe Indonesian Selective Cutting and PlantingSystem - TPTI), diameter limit (currently 53cm minimum), and cutting cycle (currently 35years).

The concession system has evolved overthe past 25 years. Additional regulations anddecrees have been added in response tochanging circumstances in the forest industryand in world markets, the evolution of devel-opment objectives under each Five-Year Plan(Repelita), problems of forest managementsupervision, experience gained and lessonslearned. As a result, the number and com-plexity of concession regulations and decreeshas made enforcement difficult for the Minis-try of Forestry and compliance with a compli-cated process for the concessionaires (Grayand Hadi 1989).

The number of concessions has grown un-til they cover almost all commercial forest land.By 1993 there were 576 concessions coveringover 60 million ha. Concessions have beengranted in all provinces, except on the island ofJava and in Nusa Tenggara. Log production fromconcessions, officially about 25 million cubicmetres/year, is generally considered to underes-timate actual log production by 20% to 40% as aresult of under-scaling, under-reporting and ille-gal logging.

Concessions granted in the 1970�s arenearing the end of their 20-year term and willbe subject to assessment, renewal, or re-as-signment. Ministry procedures for renewalhave been established (Gray and Hadi 1989).The procedures and criteria are intended to becomprehensive, but many of the criteria aresubjective, rather than objective and quantifi-able, making their application difficult andopen to interpretation and to dispute.

Current Concession ManagementRequirements and Problems

Forest management by concessionaires iscontrolled by a series of decrees and regula-tions that specify the management plans andprocedures to be followed and the proceduresfor checking by the Ministry of Forestry, theregional offices of the Ministry (KANWIL -Kantor Wilayah Kehutanan), and the Provin-cial Forest Service (Dinas - Dinas Kehutanan).

It is generally agreed that the decrees andregulations if they could be fully and properlyimplemented, properly supervised and en-forced, could achieve sustainable forest man-agement on concessions. The first problem isthat the decrees and regulations are often toonumerous and too complex for proper com-pliance or effective enforcement (Gray andHadi, 1989).

A second problem is that of implementa-tion. Some concessionaires may try to be con-scientious in following the decrees and regu-lations, but others are not. Without adequatesupervision and enforcement there is no in-centive for compliance.

A third problem is that of supervisionand enforcement. Field-level inspection en-forcement is weak and often not carried out.Field supervision of forestry operations is al-ways difficult. Cutting areas are by natureremote. Transportation and living conditionsin the field are not easy. Field staff of theDinas are poorly paid, trained and supported.They are therefore open to influence fromthe concessionaires they are to inspect andsupervise.

Although administrative guidelines are inplace for control of concession operations andlogging practices, the supervision on theground and thus the implementation of theguidelines has proven insufficient to achieveperformance. There is evidence of conces-sion damage, planning, overexploitation, il-legal logging, underreporting of log volumescut, failure to forest, and dissatisfaction amongforest communities. Although a number ofcompanies in the private sector have per-formed well and are self-motivated to achievesustainable forest management, the problemsof field implementation have not providedthe required performance incentive and hasproduced unfairness and inequities for thosecompanies that have performed.

Ownership of Forest ConcessionsMost concessions are now owned or con-

trolled by companies with wood processingfacilities, the result of deliberate governmentpolicy decisions. This has encouraged increas-ing concentration of ownership. Many ForestConcessions are held by companies that arepart of a larger group of companies whichown plywood plants, sawmills and other woodprocessing plants. Ownership of concessionsis concentrated in the plywood industry. Onlythe larger sawmills have concessions. Manymedium and smaller sawmills have no assured

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onwood supply and are dependent on logs fromland clearing.

The ownership of concessions by pro-cessing plants ensures these plants of a securewood supply, but it means that the timber fromthese concessions goes to the related plants,even when the timber might be more valuableif processed into different products in anotherplant. Given the diversity of species in thetropical forest, and the sizes and qualities oflogs, the loss of potential values from the for-est may be important.

Many companies or groups hold severalconcessions. A 1989 study of forest conces-sions showed that two-thirds of the conces-sions were held by companies with two ormore concessions. Some large forest companygroups held 8 or more concessions, and up to28 concessions (Gray and Hadi 1989). Thetop four concession holding company groupsheld 17% of the concession area, the top ten,31% of the total area in forest concessions(Gray and Hadi 1989). Since then concessionsownership has been further concentrated.

Less concentrated ownership of conces-sions would facilitate development of woodprocessing centres and of log markets throughwhich concession holders and processingplants could buy and sell logs to match theirneed for different species, grades and sizeswith the supplies of timber available.

Lessons from Indonesia�s ExperienceSince 1980, Indonesia has been highly

successful in expanding forest products ex-ports, in shifting from the export of logs toexport of much higher values forest productssuch as plywood, mouldings, doors, furnitureand other processed wood products, in domi-nating the world plywood markets, and inpenetrating new markets for plywood.

Indonesia�s development of the forest sec-tor provides useful lessons for other countries.Countries seeking to expand their forest sector�scontribution to the economy can benefit bothfrom the experiences of Indonesia�s successesand from Indonesia�s concerns. The experi-ence and lessons of Indonesia�s successes andof the concerns are discussed in turn.

Forest and Environmental Manage-ment: Indonesia�s forest concession systemhas provided the security of timber supply andbasis for investment in processing plants andfor their expansion and modernization. This isparticularly true for the plywood industrywhere almost all plywood mills are tied to aconcession.

However, the forest concessions have notbrought about sustainable forest managementnor protection of non-timber and environmen-tal forest values.

Concession Size: As indicated aboveforest concessions in Indonesia are often large,beyond the need of concession owners. Onsuch concessions there is no scarcity of area,and consequently no incentive to manage theforest intensively. As suggested, area basedforest fees would provide some incentive to�economize� on area.

With large concessions tied to plywoodmills and the larger sawmills, log markets havenot developed. The smaller sawmills havedifficulty in securing log supplies. Smallerconcessions which provided a major part, butnot all of a company�s log needs would helpto encourage development of log markets.Log markets would allow firms without timbersupplies to buy logs, and other companies withlog supplies to trade logs to obtain a moresuitable species or quality mix for their plant.

Concession Length of Tenure: Forestconcessions are currently of 20 year tenure.Some people have argued for longer tenure tomatch the harvesting cycle or growing cycleof slow growing tropical timber. However,longer tenure will not necessarily provide theincentive for long term forest management, notif the growth rate of the timber is less than therate of return on alternative investments. Ifthe growth rate of tropical forests is 1%, 2% or3% per year and the rate of return on invest-ments elsewhere is say 5% or 10% or more,then the incentive for concession owners willbe to log the forest and reinvest the fundselsewhere. Under such circumstances longertenure will not encourage investment in forestmanagement (Gray 1993, Gray andYevdokimov 1996b). Other incentives or ob-ligations are required and will need to be en-forced.

However, tropical forests provide a rangeof outputs and benefits in addition to timber,foods and fuelwood, medicines, recreation,environmental tourism, watershed protectionand erosion control, etc. These are not mar-keted, and thus are difficult to value. How-ever, the non-timber values are often equal tothe timber value. When these non-timber val-ues are added to the timber values, the ben-efits of forest management are at least doubled,and forest management become economicallyviable.

Forest Concessions and Non-TimberForest Outputs: Forest Concessions in Indo-

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nesia are allocated to timber production andare managed for a single use, timber produc-tion. Other uses, community uses, and rightof forest communities are recognized. How-ever, in practice forest communities, forestdwelling people and forest using groups havebeen ignored. This has generated conflict withforest communities and forest users. It hasbeen suggested that local communities have ashare in both the forest revenues and in themanagement of concessions. If local commu-nities have a stake in the forest and a share inthe management and revenues they will bemore willing to balance timber and non-timberuses.

Other Forest Outputs and Benefits:The non-timber forest uses can generate ben-efits that contribute to the economy in additionto timber values. Management of forest forwatershed protection can reduce flood dam-age, save on flood control expenditures, re-duce harbour siltation and siltation of reser-voirs, thereby contributing to the nationaleconomy by saving on costs. By providingfuelwood, foods and other outputs, as well asjobs, to meet local communities needs, forestmanagement for timber and non-timber out-puts can contribute to local and regional de-velopment and alleviate poverty.

Management of tropical forest for envi-ronmentally based tourism can also contributeto exports (of services) and foreign exchangeearnings, and to diversification of the local,regional, and national economy. In addition,environmentally based tourism is less demand-ing of infrastructure and is more dispersed thanresort based tourism.

Economic Growth and Depletion ofNatural Resources: Like many developingcountries, Indonesia�s impressive growth hasbeen heavily dependent on its rich natural re-sources. As quoted above, Indonesia hasachieved impressive and sustained growth, 7%per year based on measured Gross DomesticProduct(GDP). However, GDP calculationscan overstate growth in resource based coun-tries such as Indonesia. Although GDP calcu-lations include investment in and depreciationof physical capital like buildings, plant andequipment, they ignore depreciation of natu-ral resource assets such as forests, minerals,petroleum. Thus it is possible for resourcebased countries to use up their natural re-sources, while based on GDP they appear tobe growing, and end up resource poor anddestitute.

In a study of Indonesia, Robert Repetto

and others attempted to correct GDP for thisomission by incorporating estimates of depre-ciation of Indonesia�s forests, petroleum re-sources, minerals and soil erosion (partly theresult of deforestation)(Repetto et al 1989).Adjusting for resource depreciation loweredgrowth rates for the period 1971-1984 from7.1% per year to 4.0% per year, a full 3%lower.

In a similar study for Costa Rica Solóranzoand others estimated Costa Rica�s natural re-source depreciation from deforestation, soilerosion and overfishing. Costa Rica�s naturalresource depreciation averaged 6.2% of GDPover the period 1970-1989. However, in thelater years the rate rose to 8-9% of GDP, aboutthree times the depreciation of buildings andequipment (Solóranzo et al 1991).

Countries with resource based economicdevelopment initiatives need to plan for in-vestments in maintaining their resource base.Such investments, like investments in physicalcapital and infrastructure are development ini-tiatives and contribute to GDP.

Summary of Experiences and Les-sons: The review of Indonesia�s experiencehas emphasised the importance of the incen-tives, incentives for exports, incentives for ef-ficient utilization, incentives for investment,incentives for forest management, etc. An im-portant implication is that providing the rightincentives for the forest industry and other for-est users is key to encouraging efficient de-velopment of the forest sector. Incorporatingcheck and balances will facilitate supervisionand make forest management more automaticand less regulatory.

8. Forest Fees in Indonesia

IntroductionThis case study of Indonesian forest con-

cessions is drawn from a paper �Desarrollodel Sector Forestal de Indonesia: SuContribucion a la Economia y al Ingreso porExportaciones� presented at a seminar on theexport potential of the Nicaragua forest sector,held in Managua, December 10, 1996 (Gray1996), with additional materials from Gray andHadi (1990) and other sources.

The most important forest fees in Indo-nesia are those on the volume of timber cut.They generate well over 95% of the forestrevenue. The forest fees on the timber cutare based on log volumes as measured in theforest. These fees are:

Forest Products Royalty (IHH) - be-

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ontween US$ 7.00/cubic meter to US$ 12.00/cubic meter depending on species (1995rates). Levied in Indonesian Rupiah.

Reforestation Fee (DR) - between US$13.00/cubic meter to US$ 16.00/cubic meterdepending on species and region of the coun-try (1995 rates). Levied in US dollars.

Forest Products Royalty (IHH): TheForest Products Royalty (IHH) is levied in Indo-nesian Rupiah at rates per cubic meter of logvolumes. It is set out in a schedule of rateswhich vary by species or species group forlogs, pulpwood and other products. The sched-ule includes 40 different rates, although mosttimber harvested falls into only a few of therates. The rates are revised every six months,based on 6% of average log prices as set by theMinistry of Forestry in consultation with the In-donesian Loggers Association (APHI) and theMinistry of Finance. Thus rates are adjustedregularly for inflation and for increases in logprices, an important advantage in keeping ratesup-to-date. Revenues from the Forest ProductsRoyalty are distributed on a percentage basisto: provincial governments, local governments,forest renewal, regional forestry administration,and to payment of property taxes.

Reforestation Fee (DR): The Refores-tation Fee (DR) is levied in US dollars per cu-bic meter of log volume at rates that are nowvaried by species and region of the country.The rates, which are set by regulations, havebeen dramatically increased in recent yearssince 1989 through several changes in regula-tions (new decrees). The Reforestation Feeswas originally established in 1980 at a uniformUS$4.00/cubic meter and remained at thatlevel until 1989. In 1989 it was raised toUS$7.00/cubic meter, to US$10.00/cubic meterin 1990, and then to the present US$13.00/cubic meter to US$16.00/cubic meter in 1993.As a result of these increases the ReforestationFee (DR) is now the major forest fee. Rev-enues from the Reforestation Fees are paidinto a �Reforestation Fund� and accumulatedfor use in funding reforestation on or outsideconcession, establishment of forest plantation,or drawn upon for other uses. The �Fund� hasnow accumulated a substantial surplus.

Other Forest RevenuesOther forest fees generate less than 5%

of forest revenue. They include: the scalingand grading fee charged for log measurementand based on log volumes, fees on forest con-cessions, the log export tax, and thesawnwood export tax.

Fees on Forest Concessions: Fees onconcessions include the Forest Concession Li-cence Fee (IHPH), a one-time initial fee, whichvaries by province, of US$4.00/ha, US$7.50/ha, or US$10.00/ha charged on the entire con-cession area. The Land and ImprovementsTax (PBB) is the other tax levied on conces-sions. It is an annual tax levied by the Minis-try of Finance on concessions at rates per hect-are which vary by forest class. Concessionsfall into the lowest of the 50 land classes. TheLand and Improvement Tax generates onlyabout 2% or less of forest revenue.

Sawnwood Export Tax: The SawnwoodExport Tax is at such high levels that only minutevolumes of rough or semi-processed sawnwoodare exported, and thus it generates very littlerevenue. The rates are at such high levels thatthe export tax is equivalent to a sawnwood ex-port ban.

Log Export Ban and Log Export Tax:The Log Export Ban, introduced in 1985, hasnow been changed to a Log Export Tax, but atsuch high levels that no logs are exported le-gally. Thus it generates no revenue and atsuch high levels is essentially equivalent tothe log export ban which it replaced.

The Level of Forest FeesThe forest fees and royalties levied on

the standing timber or the logs cut in principlereflects the value of the timber cut, that is, thevalue of the timber. Forest fees and royaltiesare the price paid for the timber, the raw ma-terial input of the forest industry. As with anyother input and as in any other industry, if thetimber input is priced too low, below its valueto the industry, it will be treated as a cheapinput, overused and poorly utilized. Underlow timber fees the forest industry will havelittle incentive to maximize the value of theforest products produced from the availableforests. The sectors outputs and exports willbe below their potential, and generate lesservalues from the forest than they could.

In the same way, if forest fees and areacharges on forest concessions and other tim-ber rights are less than the value of the timberrights, then they too will be used inefficientlyand country�s economic development willagain be below its potential.

It is important that forest fees reflect thevalue of the timber, collect a fair share of valuein forest fees, and keep up with changing tim-ber values and with inflation. Forest fees thatreflect the value of the timber provide an in-centive to use the timber efficiently, to achieve

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a high conversion rate, and to produce valu-able products more that will increase exportearnings. Low forest fees put a low price ontimber and result in poor utilization and lowconversion rates, and sanction use of valuabletimber in production of lower valued prod-ucts.

Until recently Indonesia�s forest revenuesystem has not been particularity effective incollecting forest revenues, nor in reflectingstumpage values, as a number of studies haveshown (Ruzicka 1979; Gillis 1988; Gray andHadi 1990; Darusman 1992; Aspek EkonomiPengusaha Hutan � Seminar on Economic As-pects of Forest Revenues 1992). However,Indonesia has recently shown interest instrengthening its forest revenue system andimproving revenue collection (Government ofIndonesia 1990abc, World Bank 1990, ReidCollins 1993).

In a study of Indonesia�s forest pricingand concession policies Gray and Hadi (1990)evaluated the stumpage values and the pro-portion of that value collected in forest rev-enues under differing situations (high and lowvalued species, company and contract logging,differing logging conditions and terrain). Forthe major species, under average logging con-ditions they estimated that about 29 per centof the stumpage value was collected by forestfees. The estimates of the percentage of

stumpage values collected by forest fees var-ied by species and situation; from a low of 22per cent for more valuable species on moreaccessible, easier to log sites; to a high of 75per cent for lower valued species under moreremote and difficult logging conditions.

Gray and Hadi (1990) also traced thetrend of forest fees over the decade of the1980�s, one of significant change in the forestindustry. Over the decade, inflation had a sig-nificant impact on forest fees and the share ofstumpage values collected. Forest fees re-mained relatively unchanged from 1980through 1988. Fees were raised in 1989 byUS$ 3.00/cubic meter and another US $3.00/cubic meter in 1990, doubling fees in moneyterms and reversing a downward trend in thelevel of �real� (inflation free) forest fees.Forest fees, when adjusted for inflation, de-clined by 50 per cent from 1980, rising only atthe end of the decade to end the decade inreal terms only about 20% above 1980 levelsin real terms, in spite of doubling in moneyterms.

In 1992, several additional studies ofstumpage values and the share of that valuecollected in forest revenues were undertaken,presented and discussed at a seminar on forestrevenues held in Jakarta (Aspek EkonomiPengusahaan Hutan � Seminar on EconomicAspects of Forest Revenues 1992) (Darusman

Table 3. Estimates of Stumpage Values and Forest Revenue Shares: Indonesia, 1990-1993

Share of Stumpage

by byStumpage Government Industry

Source and Year: Values as Forest as AboveRevenue Normal

ProfitUS$/m3 Percent Percent

APHI - Association of Indonesian Forest Concession Holders (1992) $21 84% 16%

Tim Dep-Hut - average of five provinces (1992) � 51% 49%

Sutopo and Darusman - Riau Province (1992) $48 31% 69%

Gray and Hadi (1990) - Meranti Species, easy to Moderate Terrain $52 29% 71%

Reid Collins (1993) $40-45 25-35% 65-75%Jaakko Poyry Consultants (1992) $45-62 19-33% 67-81%

WAHLI - Wahana Lingkungan Hidup Indonesia Environmental NGO (1992) � 17% 83%

Sources: Darusman 1992, Reid Collins 1993

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on1992). Their results are presented in Table 3.

Estimates of stumpage values collectedby the Indonesian government ranged from alow of 17 per cent in a study by WAHLI, anIndonesian environmental NGO; to a high of84 per cent in a study commissioned by theAPHI, the Indonesian Loggers Association.The other studies were carried out by interna-tional forestry consulting firms and Indonesianexperts. Their estimates of the share of stump-age values collected as forest revenues for avariety of species and situations varied be-tween a low of 19 per cent to a high of 51 percent. However, the majority of the estimateswere in the range of 25 and 35 per cent ofstumpage values collected as forest revenues.Variations among the studies in the share ofstumpage values collected are understandableand to be expected, given the diversity oftropical forests, species, logging conditionsand costs throughout the country. They pointout the necessity that forest fees reflect differ-ences in species and timber quality, locationand logging cost.

Export plywood prices have risen since1992, and as a result the stumpage prices oftimber increased further. A recent analysisby the Ministry of Forestry and the BritishOverseas Development Agency (ODA) basedon actual logging and processing cost dataestimated that forest fees could be increasedfurther, by US$ 28.00/cubic meter toUS$57.00/cubic meter above the current(1995) levels of US$21.00/cubic meter toUS$27.00/cubic meter, while maintaining rea-sonable profitability in the industry.

Lessons from Indonesia�s ExperienceSince 1980, Indonesia has been highly

successful in expanding forest product ex-ports, in shifting from the export of logs toexport of much higher values forest productssuch as plywood, mouldings, doors, furnitureand other processed wood products, in domi-nating the world plywood markets, and inpenetrating new markets for plywood.

Indonesia�s development of the forest sec-tor provides useful lessons for other countries.Countries seeking to expand their forest sector�scontribution to the economy can benefit bothfrom the experiences of Indonesia�s successes

and from Indonesia�s concerns. The experi-ence and lessons of Indonesia�s successes andof the concerns are discussed in turn.

Forest fees in Indonesia have reflectedonly about 25-35% of the value of the timberin spite of recent increases. Thusgovernment�s share of the timber values hasbeen about one-third, leaving two-thirds of thevalue with the forest industry (after allowingnormal profit from operations). The forest in-dustry, of course, prefers low forest fees.These result in higher profits and make forestoperations and exports more profitable. How-ever, low forest fees do not encourage effi-cient use of the forest. Low forest fees pro-vide the wrong incentive.

For the forest industry forest fees and roy-alties on timber and logs become part of thecost of the logs. Low fees mean cheaper logsand weaken incentives to increase the recov-ery of lumber and plywood. In spite of thesuccess of the Indonesian forest industry, theproduct conversion factors (product recovery)are lower than comparable rates in other coun-tries (Hardie 1989, Jayabhanu and Rolin-Hymans 1989). Improved conversion factorswould result in increased output of sawnwoodand plywood and help Indonesia meet futuredomestic demands and exports from a shrink-ing timber supply. Higher forest fees wouldprovide an incentive for improved recovery.

Level of Forest Fees: Indonesian feeson forest concessions are low, generating lessthan 5% of forest revenues. With low fees onconcessions there is little to discourage the ac-quisition and holding of large concession area,even if it is beyond a company�s needs. Largeforest areas are tied up in few hands. Withexcess area, companies have no incentive tomanage their concession efficiently. The out-put of the forest, forest product production andexports are below the potential.

Area Based Fees: Higher per hectareconcession fees provide an incentive to utilizethe concession area more effectively, to notacquire excess area, and to relinquish excessarea. In addition, area based concession feesare simple and easy to administer, and gener-ate additional revenues, taking pressure offmore the difficult to collect fees and royaltieson logs.

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1. Introdução

A Amazônia brasileira, detentora da maior reserva de madeira tropical do mundo, produzatualmente 25 milhões de metros cúbicos de madeira em tora ou 80% da produção do país. Amaioria dessa produção (>90%) é absorvida pelo mercado interno. As exportações de madeirarepresentam uma parcela modesta do mercado internacional de madeiras tropicais (em torno de4%), mas deverão crescer expressivamente na próxima década devido à exaustão, em curso, dosrecursos florestais da Ásia. Adequar-se à dinâmica de mercado e às práticas de bom manejo seráo grande desafio para a Amazônia na próxima década.

Na Amazônia, a atividade madeireira se concentra ao longo de um arco ao sul da baciaamazônica e nas margens dos principais rios da região. Aproximadamente 80% do volume explo-rado vêm das florestas de terra firme, enquanto a produção originária da várzea representaapenas 20%. Nas regiões mais remotas, os madeireiros entram na floresta em busca apenas deespécies altamente valiosas, como o mogno. Nas áreas mais próximas, de fácil acesso, o baixocusto de transporte permite a exploração de mais de cem espécies.

O setor madeireiro da Amazônia tem ainda uma partipação modesta no PIB nacional, menosde 2%. Entretanto, a nível regional a participação desse setor é cada vez mais expressiva. Porexemplo, no Pará a atividade madeireira representa 13% do PIB.

Essa importância econômica se confronta com o fato de que a exploração florestal naAmazônia ocorre de forma predatória. Os impactos ecológicos são severos nos casos em que éeconomicamente viável a extração de todas as espécies madeiráveis. Quando é apenas economi-camente viável a extração das espécies de alto valor (15-20 espécies), os danos nas florestas sãomenores, mas a abertura de estradas pela atividade madeireira pode agir como um catalisadorpara a colonização e subseqüente desmatamento.

Entre as várias causas da exploração predatória estão o baixo valor do recurso madeireirodevido à abundância dos estoques, à escassez de iniciativas promissoras de manejo florestal, aomonitoramento deficiente e à insuficiência de florestas de produção (por exemplo, Flonas).

Para que as práticas de manejo florestal sejam adotadas na região é fundamental atacar aquestão da abundância dos estoques, a escassez de florestas públicas de produção e a inoperânciado sistema de monitoramento e fiscalização da atividade madeireira.

Política Florestalcoerente paraAmazônia:Zoneamento Florestal,Florestas de Produção eMonitoramento Florestal

Adalberto Veríssimo 1

Carlos Souza Junior 1

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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2. Zoneamento Florestal○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

Atualmente não existem estratégias paradecidir onde a atividade madeireira deve ocor-rer ou ser proibida na Amazônia brasileira.Como resultado, a exploração madeireira temocorrido em muitas áreas protegidas. Sem con-trole e planejamento por parte do governo, aindústria madeireira poderá exaurir extensasáreas de florestas da região.

Uma maneira de elevar o preço da maté-ria prima é torná-la artificialmente escassa. Issopode ser feito através de um zoneamento flo-restal. Em essência, o zoneamento irá delimi-tar as áreas que devem ser protegidas da ex-ploração madeireira (devido ao alto valor bio-lógico) das áreas com nítida vocação para pro-dução florestal. Os critérios para o zoneamentodevem incluir informações sobre vegetação,áreas prioritárias para conservação, situaçãofundiária e áreas legalmente protegidas, aces-so (rodovias e hidrovias)e áreas economicamen-te acessíveis à explora-ção madeireira.

Usando essa basede informações, os pes-quisadores do IMAZONgeraram dois mapas. Oprimeiro, mostra a pro-porção das florestas doEstado que são econo-micamente acessíveis àexploração. O segundomapa apresenta áreasprioritárias para exploração madeireira e áreasque deveriam ser protegidas. O estudo reali-zado em 1995 enfocou o estado do Pará, ondeocorre a maior parte da exploração madeireirado país.

Primeiro, temos que 80% das florestas doPará são economicamente acessíveis à explo-ração madeireira: em 21% é viável explorartodas as espécies comerciais existentes inclu-indo as de baixo valor (> 100 espécies); em30% é vantajoso explorar apenas as espéciesde médio e alto valor (15-20 espécies); e fi-nalmente em 29% é atrativo explorar apenas omogno, uma espécie de alto valor que ocorreno sul do Estado (Figura 1).

Em seguida, mostramos como poderia serfeito o zoneamento da atividade madeireira noEstado. Inicialmente, constatamos que em 19%das terras do Estado não há recursos florestais(13% são áreas desmatadas e 6% tipos de ve-

getação não-florestal). As áreas designadaspara a exploração madeireira, com base emfatores econômicos e aspectos de conserva-ção, somaram 32% das terras do Estado. Essasáreas incluem os locais onde a exploraçãomadeireira já ocorre. Propomos que nas áreasrestantes (49%) a atividade seja proibida, pelomenos por enquanto. Entre essas áreas estãoas áreas onde a atividade madeireira já é le-galmente proibida (29%), bem como áreas nãoprotegidas, mas com altíssima prioridade paraconservação. E, finalmente, 32% são áreas maisindicadas para a exploração florestal com baseem considerações econômicas e importânciabiológica (Figura 2).

Esse exercício mostra que usando infor-mações disponíveis é possível prever a ex-pansão da atividade madeireira e desenvolverum visão de como poderia ser feito o

zoneamento dessa ativi-dade. Certamente, ou-tras formas de zonea-mento são possíveis.Um exercício dessetipo é imprescindívelna formulação de polí-ticas públicas para osetor florestal da Ama-zônia. Como conse-qüência do zoneamen-to, o governo podepriorizar os investimen-tos em infra-estrutura,

promoção e os esforços de monitoramento efiscalização em áreas previamente definidascomo aptas à exploração florestal.

2.1. Ampliar a Rede de Florestas deProdução na Amazônia

As florestas de produção (isto é, florestasnacionais, estaduais e municipais) são impor-tantes para garantir uma proporção razoávelde madeira de origem legal e manejada naregião. Atualmente, as áreas de florestas deprodução representam menos de 2% das ter-ras da Amazônia. Dada a importância da ativi-dade madeireira para a economia regional e aameaça da exploração predatória para o meioambiente, a proporção de terras designadascomo florestas de produção deveria represen-tar um proporção razoável das terras da região(> 10% das terras).

As Flonas apresentam inúmeras vanta-

Atualmente não existemestratégias para decidir onde a

atividade madeireira deve ocorrerou ser proibida na Amazôniabrasileira. Como resultado, a

exploração madeireira tem ocorridoem muitas áreas protegidas.

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gens, incluindo segurança fundiária, compro-misso a longo prazo com a atividade florestal,produção sob regime de manejo e arrecada-ção de royalties.

Há três aspectos a serem abordados emuma política florestal com enfoque em Flonas:i. ampliação da rede Flonas (inclusive estadu-ais e municipais), ii. consolidação de algumasFlonas existentes em caráter demonstrativo(por exemplo, Flona do Tapajós) e iii. relacio-namento dos programas estratégicos dezoneamento e monitoramento florestal.

2.2. Onde estabelecernovas florestas de produção?

Uma crítica recorrente feita a respeito dasflorestas de produção (atualmente só existemFlonas) é de que a sua localização é remota e,portanto, não oferece atrativos econômicospara a exploração madeireira. Por essa razão,é fundamental que as florestas de produçãosejam criadas dentro do raio econômico da ex-ploração madeireira. Um estudo que está sen-do conduzido pelo IMAZON mostra como asinformações de preço de madeira, custos detransporte, localização dos pólos madeireiro deprodução, população rural e malha fundiáriaem áreas de floresta podem ser utilizadas paraindicar as áreas mais viáveis para o estabeleci-mento de florestas de produção. Os resultadospreliminares desse estudo mostram, por exem-plo, que as áreas mais recomendadas para oestabelecimento de florestas de produção sãoaquelas onde é economicamente possível ex-trair todas as espécies de valor econômico (>100 espécies). No caso do Pará, 22% das flo-restas estão nessa situação. Em seguida, estão30% das florestas do Estado onde é viável aexploração de espécies de médio e alto valor(15-20 espécies). Por último, há 29% das ter-ras do Estado onde só é viável extrair o mog-no, a espécie mais valiosa da Amazônia. Nes-se caso, a oportunidade para a criação de flo-restas de produção é facilitada pelo fato deque uma parte razoável dessas terras édevoluta.

2.3. Florestas de produção para quem?Para a criação de florestas de produção,

além de pensar estrategicamente sobre a sualocalização, deve-se também levar em contaos aspectos de oportunidade para os diversosgrupos sociais envolvidos com a atividade ma-deireira (empresas privadas, comunidades tra-dicionais, pequenos produtores).

A utilização dos recursos florestais das flo-restas de produção por parte das empresas pri-

vadas é recomendado e necessário, especial-mente para as empresas que não possuem áre-as próprias. Para atrair as empresas, será neces-sário revisar profundamente o modelo atual degestão das florestas de produção excessivamen-te centralizado e burocrático. Os valores deroyalties devem refletir as condições locais depreço para a madeira em pé (stumpage value)e devem ser calculados a partir de informaçõesde campo.

Além de envolver as indústrias madeirei-ras na exploração manejada dos recursos flo-restais das florestas de produção, o governoprecisa incorporar as comunidades locais nagestão e utilização dos recursos florestais dealgumas delas. Estes habitantes locais, inclu-indo os caboclos e colonos, geralmente possu-em um tipo de conhecimento que os predis-põem a manejar a floresta de forma adequada.

É reconhecido que em alguns países asconcessões para esse fim não foram bem su-cedidas. Entretanto, medidas poderiam seradotadas incluindo treinamento em técnicas demanejo, marketing (i.e., contatos com compra-dores, preços dos produtos no mercado, etc),para assegurar o seu sucesso. Agências do Go-verno e ONGs poderiam também exercer umpapel importante fornecendo informações so-bre questões técnicas e financeiras.

A criação de uma rede de comunidadesenvolvidas com o manejo florestal em flores-tas de produção poderia estabilizar a frontei-ra de forma mais efetiva do que qualquer ou-tra medida. Ao invés de estar localizadas nafrente do processo de desmatamento, essasflorestas de produção poderiam atuar comozonas �tampão� contra as ameaças futuras dedesmatamento, oferecendo uma alternativaeconômica às populações locais baseada nosrecursos florestais.

Para ter êxito a criação de florestas deprodução precisa receber apoio dos governoslocais. Portanto, é importante envolver osorgãos públicos locais em todo o processo dedefinição das florestas de produção. A formamais promissora para alavancar apoio políticoé destinar parte das receitas oriundas da ex-ploração florestal sob manejo para os municí-pios onde as florestas de produção estão loca-lizadas.

2.4. Monitoramento FlorestalOs esforços de criação de florestas de

produção só terão êxito se houver um siste-ma eficiente de monitoramento para garantiro cumprimento da lei florestal. O princípiobásico do monitoramento florestal é elevar os

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onpreços da matéria prima de origem predató-ria de maneira a se igualar com os custos demanejo. Para isso será necessário reformar oatual sistema de monitoramento e fiscaliza-ção. O sistema em vigor é excessivamenteburocrático (valoriza mais os procedimentosde escritório do que as ações de campo),ineficiente (custo elevado), não transparente(os procedimentos complexos tornam virtual-mente impossível um controle social) e, por-tanto, sujeito a desvios e corrupção.

O sistema de controle e monitoramentoflorestal precisa ser reformulado. Uma manei-ra de fazer isso seria através de um projetopiloto que enfocasse no sistema de cadastrodas indústrias, fontes de matéria prima, leisestratégicas, critérios de fiscalização, procedi-mentos de auditoria independente por partede ONGs nos processos de monitoramento efiscalização florestal.

Há necessidade também de simplificar oaparato regulatório para se fazer respeitar a le-gislação. Ao invés de uma série complexa deleis de valor duvidável, largamente desrespei-tadas, seria mais sensato estabelecer um núme-ro bem limitado de leis de fácil implementaçãoe que, ao mesmo tempo, assegurem o bom usoda floresta. Segundo pesquisadores doIMAZON, é possível utilizar uma lei simplesque teria grandes poderes de reduzir os danossobre as florestas e ao mesmo tempo ser facil-mente implementada. Vamos chamar essa leide �5/30/5�. O �5� inicial refere-se ao númerode árvores que poderiam ser extraídas por hec-tare; �30� ao tempo mínimo em anos para osciclos de corte; e o último �5� se refere à largu-ra do aceiro, que deve ser mantido em voltadas áreas exploradas, durante a primeira déca-da após a exploração, para evitar incêndios nosub-bosque. A implementação dessa lei poderáassegurar a integridade do ecossistema face àexploração madeireira.

Outro aspecto do monitoramento é aquestão da punibilidade. A multa é a penamais comum aplicada aos infratores. Os dadosmostram, porém, que as multas têm sido pou-co efetivas. Por exemplo, em 1996, apenas6% das multas aplicadas na Amazônia foramefetivamente pagas pelos infratores. Isso re-vela a fragilidade do aparato regulatório (devi-do a ausência de uma �lei de crimes ambien-tais�) além da ineficiência do IBAMA.

ConclusãoA exploração madeireira representa ris-

cos e oportunidades sem igual na história deuso dos recursos naturais da Amazônia. Se atendência de crescimento caótico e não con-trolado continuar, os madeireiros poderão afe-tar boa parte das florestas acessíveis da baciaamazônica. Como vimos, a exploração madei-reira nesses casos é a primeira etapa da ca-deia que acaba resultando em desmatamento.Apesar desse cenário cinzento, existe oportu-nidades promissoras para o uso sustentável dosrecursos florestais na região. As ações dezoneamento florestal, criação de novas flores-tas de produção e estabelecimento de um sis-tema efetivo de monitoramento florestal sãofundamentais para garantir um bom uso dosrecursos florestais.

LiteraturaUhl, C., , P. Barreto., A. Verissimo., P. Amaral.,

A.C. Barros., E. Vidal, J. Gerwing , J. Johnsand C. Souza Junior. 1997. An IntegratedResearch Approach for Addressing NaturalManagement Problems in the BrazilianAmazon. Bioscience.

Veríssimo, A; P. Barreto., M. Mattos., R. Tarifaand C. Uhl. 1992. Logging Impacts andProspects for Sustainable ForestManagement in Old Amazonia Frontier. TheCase of Paragominas. Forest Ecology andManagement 55: 169-199.

Verissimo, A., P. Barreto., R. Tarifa and C. Uhl.1995. Extraction of a high-value naturalresource from Amazonia: the case ofMahogany. Forest Ecology and Management72: 39-60.

Veríssimo, A and A. C Barros. Atividade Ma-deireira e o Futuro da Amazônia. In press.In A. C. Barros and A. Veríssimo (Editors). Aexpansão da Atividade Madeireira na Ama-zônia.. Belém, Pará, Brazil, Imazon pp 1-8.

Veríssimo, A., Souza Junior, C. , Stone, S. &Uhl, C. In Press. Zoning of TimberExtraction in the Brazilian Amazon.Conservation Biology.

Nota

1 Instituto do Homem e Meio Ambiente da Amazônia (IMAZON)

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Preamble: Government Goals

�All timber resources contained in the territories owned by The Federative Republic of Brazilare the national wealth of The Federative Republic of Brazil.

�The Government seeks to advance the economic development of the people of The Federa-tive Republic of Brazil and to that end desires to encourage and promote the rational explo-ration and development of the timber resources of The Federative Republic of Brazil.

�The Government, through the operation of timber enterprises, seeks to receive fair value forits resources and to foster regional development, employment opportunities, and local busi-ness. It also seeks transfer of skills, know-how and technology to Brazil nationals, andacquisition of basic data regarding the country�s timber resources.

� In the process of developing timber resources, the Government gives high priority to protec-tion of the environment and avoidance of waste and misuse of its resources.

�The Company has access to the skills, information, knowledge, experience and proventechnical and financial capability and other resources necessary to undertake a program ofDevelopment, Construction, Harvesting, Processing and Marketing and is ready and willing toproceed in these undertakings pursuant to the terms and conditions set forth in this Agree-ment.

�The Government and the Company are willing to cooperate in developing timber resourceson the basis of the laws and regulations of the Republic of Brazil and this Agreement.

In consideration of the foregoing and the mutual promises and conditions set forth in thiscontract, the parties agree as follows:

Some SuggestedContract Provisionsfor Forestry Contractson Land Owned byThe FederativeRepublic Of Brazil

David N. Smith 1

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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onDefinition of Affiliated Company

�Affiliated Company� or �Affiliate� meansany person or entity that directly or indirectly(or through one or more intermediaries), con-trols or is controlled by, or is under commoncontrol with, the person or entity specified.�Control� (including the terms �controlled by�and �under common control with� and �con-trols�) means the possession, directly or indi-rectly, of the ability to influence managementdecisions. Without limiting the generality ofthe above, such influence is presumed to existif one person holds, directly or indirectly, 25%or more of the outstanding voting shares ofthe other person or entity.

Harvesting And Processing InAccordance With InternationalStandards

The Company accepts the rights and ob-ligations to conduct operations and activitiesin accordance with the terms of this Agree-ment. The Company shall conduct all suchoperations and activities in a good technicalmanner in accordance with good internationaltimber industry and engineering standards andpractice and in accordance with modern andaccepted scientific and technical principlesusing appropriate modern and effective tech-niques, materials and methods to achieve mini-mum wastage and maximum safety as pro-vided in this Agreement and governing laws.All operations and activities under this Agree-ment shall be conducted so as to avoid wasteor loss of natural resources. Production shallnot be restricted to the extraction of high gradetimber and shall be in accordance with ap-proved development plans and approved eco-nomic cut-off grades.

The Company undertakes that any har-vesting, processing or treatment of timber priorto domestic sale or export by the Companyshall be conducted in accordance with gener-ally accepted international standards. In ac-cordance with such standards, the Companyundertakes to use all reasonable efforts to op-timize the recovery of timber from harvestingand processing activities and shall submit evi-dence to the Ministry of compliance with thisundertaking.

Services From Affiliates and AffiliateTransactions

The Company may contract for necessarytechnical management and administrative ser-vices, provided that it shall not be releasedfrom any of its obligations hereunder. In the

event that such services are contracted fromAffiliates, such services will be obtained onlyat a charge not more than a non-affiliated partywith equivalent qualifications to perform suchservices would charge for provision of suchservices at equivalent standards. All suchcharges shall be fair and reasonable and ac-counted for in accordance with accepted in-ternational accounting principles consistentlyapplied. The Company shall, on request bythe Ministry, produce evidence verifying allsuch charges.

The Government shall in no event bebound by the Company�s characterization ofany transaction with an Affiliate for accountingpurposes. In the event that the Governmentestablishes that any payment, deduction,charge for expenses or other transaction withan Affiliate is not fair, reasonable and consis-tent with the general practice that would havebeen followed by independent parties in con-nection with a transaction of a similar nature,the Government may, for the purposes of de-termining the Company�s income tax liability,substitute the payment, deduction, charge forexpenses or other transaction which wouldhave prevailed had the transaction occurredbetween independent parties.

Reports and Security Deposits

ReportsThe Company will keep the government

advised about all phases of the Enterprisethrough submission to the Ministry of quarterlyand annual progress reports, beginning withthe first calendar quarter plus any part of acalendar quarter that remains following thedate of signing of this Agreement. Such re-ports will indicate the progress and results ofthe Company�s Feasibility Study, Survey, Con-struction, and Harvesting And Processing ac-tivities under this Agreement. The Companywill, upon request, keep the Minister advisedfrom time to time of the Company�s plans con-cerning the Enterprise, including the progressof any construction, operation, employmentand expenditure. Quarterly progress reportsshall be submitted within 30 (thirty) days afterthe end of each calendar quarter and be insuch form as the Minister may from time totime prescribe.

Quarterly progress reports shall include:(i) the results of any timber surveys;(ii) other timber analyses;(iii) numbers and locations of workings,

work accomplished, number of workers

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employed and work contemplated in thenext quarter;

(iv) information concerning the selection ofroutes from the Timber Areas to a suit-able port for the export of product;

(v) information concerning the planning ofsuitable permanent settlements, includ-ing information on suitable water sup-plies for permanent settlements andother facilities;

(vi) expenditures made;(vii) copies of any maps of the Contract Area

prepared by the Company;(viii) information on Affiliates, contractors,

and subcontractors whose services areused in the enterprise, and

(ix) all other information directly relevant tothe Enterprise which the Governmentmay request and which is within theCompany�s control in order to appraisethe Company�s activities under thisAgreement.

The Company shall submit an annual re-port beginning with the first calendar year fol-lowing the commencement of the OperatingPeriod which shall include:

(a) the number and description of the work-ings which were in progress at the endof the year preceding the year in ques-tion (with a showing as to which are incommercial production); the number anddescription of workings abandoned dur-ing the year; the production of each ofthe workings, regardless of whether incommercial production or not, with a fulldescription of the kind and quality andanalyses of timber harvested from eacharea, and the number of workings onwhich activities are continuing at yearend, but which have not gone into com-mercial production.

(b) the total volume of timber, by kind, bro-ken down between volumes harvestedand volumes transported from the con-cession area and their destination; vol-umes stockpiled; volumes sold or com-mitted for export (whether actuallyshipped from Brazil or not); volumes ac-tually shipped from Brazil (with full de-tails as to the position of intermediateproducts, byproducts or final productsand of the terms on which they weredisposed); and

(c) work accomplished and work inprogress at the end of the year in ques-

tion with respect to all of the installa-tions and facilities related to the exploi-tation program, together with a full de-scription of all work programmed for thefollowing year with respect to such in-stallations and facilities including a de-tailed report of all investment actuallymade or committed during the year inquestion and all investment committedfor the following year or years.

The Company shall also furnish the Gov-ernment all other information related to theCompany�s activities under this Agreement ofwhatever kind and which is, or could by theexercise of reasonable efforts by the Companyhave been, within the control of the Companywhich the Government may request in orderthat the Government may be fully appraisedof the Company�s activities.

Quarterly reports shall be submittedwithin thirty (30) days of the end of the quar-ter in question. Annual reports shall be sub-mitted within 90 (ninety) days of the end ofthe year in question.

All reports shall be accompanied by ex-ecutive summaries.

Security DepositsThe Company shall within 30 (thirty) days

after the date of signing of this Agreementdeliver to the Government a banker�s guaran-tee agreement in the amount of US$X00,000(X hundred thousand U.S. dollars) to beknown as the First Security Deposit.

The First Security Deposit shall be re-leased by the Government in an amount equalto the minimum expenditure requirements foreach period when(i) the minimum expenditure is made, and(ii) the Company has submitted the Reports

required in this Article.

The Company shall within 30 (thirty) daysafter the date of signing of this agreement de-liver to the Government a banker�s guaranteein the amount of US $ x000,000 (x hundredthousand dollars) to be known as the SecondSecurity Deposit.

The Second Security Deposit shall be re-leased by the Government within six monthsof the end of the Term of this Contract if thecompany has met all of its obligations, includ-ing with regard to protection of the environ-ment and reforestation.

If the Company has not met these obliga-tions, the Second Security Deposit shall be

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onused by the Government for Environmentalrehabilitation and reforestation to the extentnecessary.

MarketingThe Company shall have the right to ex-

port [timber] [processed products] obtainedfrom the operations under this Agreement.Without in any way prejudicing the Company�sbasic right to export its products, such exportwill be subject to the provisions of the exportlaws and regulations in Brazil. The Companywill endeavor at all times to fulfill the require-ments of the domestic market for its productsprovided that to do so will not jeopardize theCompany in its ability to observe the provi-sions of committed sales agreements for itsproducts.

The Company shall sell the products,whether to Affiliates or Non-Affiliates, in ac-cordance with generally accepted internationalbusiness practices, at the best internationalmarket prices, and on the best terms compat-ible in the circumstances then prevailing, pro-vided that the Government shall have the rightto prohibit the sale or export of timber or prod-ucts derived therefrom as may be contrary tothe international obligations of the Governmentor on the basis of external political consider-ations affecting the national interest of Brazil.

The Company shall not enter into anycontract for sale of its products for a term inexcess of 3 (three) years without the prior ap-proval of the Government, which approvalshall not be unreasonably withheld or delayed.

Sales commitments with Affiliates andNon-Affiliates shall be made only at pricesbased on or equivalent to arm�s length salesand in accordance with such terms and condi-tions at which such sales would be made if theparties had not been affiliated, with due al-lowance for normal selling discounts or com-missions. The Company shall submit to theGovernment evidence of correctness of thefigures used in computing the above prices,discounts and commissions, and a copy of thesales contract.

If the Government believes that any fig-ures used in computing the revenues are notin accordance with the provisions of paragraph4, the Government may within 12 (twelve)months after the calendar quarter in which suchproducts were exported, so advise the Com-pany in writing. The Company shall submitevidence of the correctness of the figureswithin 45 (forty-five) days after receipt of suchnotice. Within 45 (forty-five) days after re-

ceipt of such evidence, the Government maygive notice to the Company in writing that it isstill not satisfied with the correctness of thefigures and within 10 (ten) days after receiptof such notice by the Company a Committee,(consisting of one representative appointed bythe Government and one representative ap-pointed by the Company), shall be constitutedto review the issue. The Committee shall meetas soon as convenient at a mutually agreeableplace in Brazil. If the members of the Com-mittee do not reach agreement within 20(twenty) days after their appointment or suchlonger period as the Government and the Com-pany mutually agree, the representatives shallappoint a third Committee member, who shallbe a person of international standing familiarwith the international timber industry. TheCommittee, after reviewing all the evidence,shall determine whether the figures used bythe Company or any other figures are in ac-cordance with paragraph 4. The decision oftwo members of the Committee shall be bind-ing upon the Parties. Failure of two represen-tatives to appoint a third member of the com-mittee shall require the issue to be submittedto arbitration pursuant to Article [ ] [Settlementof Disputes] of the Agreement. Within 90(ninety) days after the issue has been decided,pursuant to this paragraph, appropriate retro-active adjustment shall be made in conformitywith the Committee�s decision. The Companyand the Government shall each pay the ex-penses of its own member on the Committeeand one half of all other expenses of theCommittee�s proceedings.

Import And Re-Export FacilitiesThe Company may import into Brazil, free

of import duties, capital goods, equipment,machinery (including spare parts), vehicles(except for automobiles and station wagons),aircraft, vessels, other means of transport andraw materials needed in the survey, feasibilitystudy, construction, harvesting, processing,production and supporting technical activitiesof the Enterprise. For any equipment directlyused to support its technical operations suchas laboratory and computer equipment used inBrazil but located outside its field operations,the customs duty exemptions shall be the sameas above.

The exemption from import duties re-ferred to in paragraph 1 shall apply only tothe extent that the imported goods are not pro-duced or manufactured in Brazil and availableon a competitive time, cost and quality basis,

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provided that for the purposes of comparingprices of imports and the cost of goods manu-factured or produced in Brazil [value addedtax] and import duties shall be applied to thecost of imports.

Any equipment (which must be clearlyidentified) and raw material imported by theregistered contractors and sub-contractors ofthe Company for the exclusive purpose of pro-viding services to the Company and intendedto be re-exported will be exempt from importduties, [value added tax] and other levies. Ifsuch equipment and material shall not havebeen re-exported by the defined time, thecontractors and sub-contractors of the Com-pany shall, unless extended or exempted forreasons acceptable to the Government, payimport duties not paid upon entry. The Com-pany shall be responsible for proper imple-mentation of the obligations of its contractorsand sub-contractors under this Article.

Any item imported by the Company or itsregistered contractors and subcontractors pur-suant to this Article and no longer needed forthe exploration and production activities of theCompany may be sold outside Brazil and re-exported free from export taxes and other cus-toms duties (excluding capital gains tax) aftercompliance with laws in force and of generalapplication in Brazil. No imported items shallbe sold domestically or used otherwise than inconnection with the Enterprise except aftercompliance with import laws and regulationswhich are at the time of such import in forceand of general application in Brazil.

During the period the Company is al-lowed to import free from duties, the Com-pany shall submit to the Government not laterthan November 15 of each year (exceptwhere the prevailing regulations provide forother procedures) a list of equipment, spareparts and material to be imported during thenext calendar year to enable the governmentto review and to approve the various items tobe imported for the Enterprise. Notwithstand-ing the foregoing, the Company may requestpermission to amend the list of equipment andmaterial as required during the year. In thecase of an emergency where equipment notlisted and approved is needed by the Com-pany in order to maintain operations, the Com-pany can immediately import critical items,providing full duties are paid, and can subse-quently make applications for the refund ofsuch duties.

Without prejudice to the foregoing provi-sions, the Company shall duly observe import

restrictions and prohibitions and rules and pro-cedures of general application.

Records, Inspection And Work ProgramThe Company shall maintain in Brazil

precise and systematic technical records relat-ing to, and financial records showing, a trueand fair view of all of its operations and thestatus of timber resources, including harvest-ing, processing, transportation and marketing,in accordance with generally accepted ac-counting principles. The financial and otherrecords shall be maintained in English and Por-tuguese. The Company shall furnish to theGovernment annual financial statements con-sisting of balance sheets and statements of in-come and all such other financial informationconcerning its operations in accordance withgenerally accepted accounting principles andall such other information concerning its op-erations in reasonable detail and in such detailas the Government may reasonably request.

The Government and its authorized repre-sentatives have the right to review and auditsuch financial statement within five (5) yearsafter submission by the Company. The failureby the Government to make a claim for addi-tional payment on account of land rent, royal-ties, corporate income tax or other payments tothe Government within such five (5) years pe-riod shall preclude any such claim thereafter.

The Government and its authorized rep-resentatives may enter upon the Contract Areaand any other place of business of the Com-pany to inspect the operations at any time andfrom time to time during regular businesshours. The Company shall render necessaryassistance to enable said representatives to in-spect technical and financial records relatingto the Company�s operations and shall givesaid representatives such information as thesaid representatives may reasonably request.The representatives shall conduct such inspec-tions at their own risk and shall avoid interfer-ence with normal operations of the Company.

The Company shall submit to the Gov-ernment not later than November 30th (thirti-eth) of each year during the term of thisAgreement its work program, budget plan,sales contracts and marketing/sales plans forthe following year in sufficient detail to per-mit the Government to review such physical,financial and marketing/sales programs anddetermine whether they are in accordancewith the Company�s obligations under thisAgreement. A work program and budget forthe first year of this Agreement shall be sub-

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onmitted as soon as possible after the signing ofthis Agreement.

In addition, the following shall be deliv-ered to the Ministry:(i) Conformed copies of all sales, manage-

ment, commercial and financial agree-ments concluded with Affiliates and in-dependent parties and all other agree-ments concluded with Affiliates, to besubmitted within one month after con-cluding such Agreements.

(ii) Monthly reports setting forth the quanti-ties and qualities of timber produced,stockpiled, processed, shipped, sold, uti-lized or otherwise disposed of and theprices obtained.

The Company shall furnish to the Gov-ernment all other information of whatever kindrelative to the Enterprise which the Govern-ment may request, which is, or could by theexercise of reasonable efforts by the Companyhave been, within the control of the Companyin order that the Government may be fullyapprised of the Company�s activities.

All information mentioned in paragraph 5furnished to the Government shall be either inEnglish or Portuguese and all financial datashall be recorded in reals or United States dol-lars and records shall also be kept of exchangerates applied to the original currency.

The Company shall maintain in its princi-pal office in Brazil all original records and re-ports relating to its activities and operationsunder this Agreement including all documentsrelating to financial and commercial transac-tions with independent parties and Affiliates.These records and reports shall be open toinspection by the Government through an au-thorized representative. Such reports andrecords shall be maintained in Brazil and allfinancial data shall be recorded in reals orUnited States dollars, and the records shall alsobe kept of conversion rates applied to theoriginal currency.

The Company shall require the Company�sco-participants, Affiliates, contractors and sub-contractors (to the extent that such co-partici-pant, Affiliate, contractor or sub-contractor car-ries out operations and activities in furtheranceof the Company�s obligations, activities and op-erations under this Agreement), to keep all fi-nancial statements, records, data and informa-tion necessary to enable the Company to ob-serve the above-stated provisions.

All records, reports, plans, maps, charts,accounts and information which the Company

is or may from time to time be required tosupply under the provisions of this Agreementshall be supplied at the expense of the Com-pany.

Bank Accounts and Currency ExchangeAll investment remittances into Brazil

(equity capital as well as loan) shall be depos-ited into a foreign investment account held atforeign exchange bank(s) in Brazil and can beused in accordance with the prevailing invest-ment regulations. Conversion of the foreignexchange from such account into reals shallbe effected through the foreign exchangebourse at the prevailing rate of exchange.

The Company shall be granted the rightto transfer abroad in any currency it may de-sire funds in respect of the following items,provided that such transfers are effected inaccordance with the prevailing laws and regu-lations and at prevailing rates of exchangegenerally applicable to commercial transac-tions:(i) Net operating profits in proportion to the

share holding of the Foreign Investor(s).(ii) Repayment of loans and the interest

there on, as far as the loan is a part ofinvestment, which has been approvedby the Government.

(iii) Proceeds from sales of shares owned bythe Foreign Investor(s) (and approvedby the Government.)

(iv) Expenses for Expatriate personnel andtraining of Brazil personnel abroad.

(v) Compensation in case of nationalizationof the Company.

The proceeds of the export sale of Tim-ber and any products therefrom can be pos-sessed and used according to the Company�sneed. Without prejudicing the foregoing, theCompany shall treat the export proceeds inaccordance with laws and regulations that mayfrom time to time be in force in Brazil exceptas the Central Bank of The Federative Repub-lic of Brazil and the Company may otherwiseagree.

The Company in the exercise and perfor-mance of its rights and obligations set forth inthis Agreement shall be authorized to payabroad, in any currency it may desire, withoutconversion into reals, for the goods and ser-vices it may require and to pay abroad in anycurrency it may desire any other expenses in-curred for operations under this Agreement.

In respect of other matters of foreign cur-rency arising in any way out of or in connec-

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tion with this Agreement, the Company shallbe entitled to receive treatment no less favor-able than that accorded to any other timbercompany carrying on operations in Brazil.

The Company shall forward financial re-ports in accordance with the procedures re-quired by the Central Bank of The FederativeRepublic of Brazil.

The Company must submit quarterly re-ports on all off-shore banking accounts inwhich funds relating to the Enterprise are de-posited.

Joint Monitoring And SupervisionCommittee

In order to monitor the activities of theCompany, a Joint Monitoring and SupervisionCommittee will be appointed (by the Ministerof Natural Resources). The Committee will becomprised of eight members. Two memberswill be selected by the Company and twomembers will be selected by the Government.A fifth member will be selected by the Gov-ernment either from the government or fromthe academic/scientific community. The re-maining three members will be selected fromthe following sectors: one from a Braziliannon-governmental environmental organization;one from the local community in the area tobe directly affected by the harvesting and pro-cessing activities; and one from Brazil�s busi-ness community. Each of these last three com-mittee members will be selected from nomi-nees submitted by interested parties. TheCommittee will meet (quarterly) to review theoperations of the Enterprise, to discuss issuesof concern, and to ensure that the Enterprise isbeing operated in accordance with the goalsand expectations of the Government and theCompany.

The Committee will monitor the harvest-ing, transporting, processing and marketing oftimber products by the Company. Problemsidentified by the Committee will be submittedto the Government and the Company for reso-lution. The Committee may make recommen-dations to the Government and the Companyconcerning problems identified and may makeits services available to mediate disputes.

The Committee may make recommenda-tions for review of the terms of the Agree-ment in accordance with the Article ( ).

In order to pay for the costs of establish-ing and operating a Joint Monitoring and Su-pervision Committee and a monitoring systemwith regard to the Company�s activities, theCompany will contribute $ ( ), 000 each year

during the first five years of the Agreement.The Monitoring and Supervision Committeewill develop annual work plans and will sub-mit proposed budgets to the Minister of Natu-ral Resources and the Company for their re-view.

Schedule for Employment and Trainingof Nationals of Brazil

The Company will achieve at least thefollowing levels of employment of Braziliannationals by the end of each period in thecategories indicated, consistent with efficientoperations and subject to the provisions of theexisting laws and regulations which may fromtime to time be in force in The FederativeRepublic of Brazil.

Number of Years Following theCommencement Date of the

Operating Period3 5 8

Unskilled Labor 100% 100% 100%Skilled Labor 75% 90% 98%Clerical 75% 90% 98%Technical & Supervisory 50% 75% 85%Management & Professional 50% 75% 85%

The Company shall not be restricted in itsassignment or discharge of personnel, pro-vided, however, that the terms and conditionsof such assignment and discharge or disciplin-ing of Brazil personnel shall be carried out incompliance with the laws and regulations ofThe Federative Republic of Brazil which atthe time are generally applied.

The Company shall seek to provide di-rect participation of nationals of Brazil in theEnterprise through the inclusion of Brazil na-tionals in the management of the Companyand among the members of its Board of Direc-tors. To this end at least one seat on the Boardof Directors will continuously be occupied bya Brazil national from the date of incorpora-tion of the Company. The Company will alsotrain Brazil nationals to occupy other respon-sible positions.

The Company shall conduct a compre-hensive training program for Brazil personnelin Brazil and, subject to the approval of theGovernment, in other countries. It shall carryout such program for training and education inmeeting the requirement for various classifica-tions of full-time employment for its opera-tions in Brazil within the shortest practicableperiod of time. The Company shall also con-

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onduct a program to acquaint all Expatriate em-ployees and Affiliates, contractors and subcon-tractors with the laws and customs of Brazil.

The Company and its Affiliates, contrac-tors and subcontractors may bring into Brazilsuch Expatriate Individuals as the Company�sjudgment are required to carry out the opera-tions efficiently. Provided, however, that theMinister may make known to the Company,and the Company shall duly observe, objec-tions based on grounds of national security orforeign policy of the Government. At theCompany�s request and in compliance with theexisting rules and regulations, the Governmentwill make arrangement for the acquisition ofall necessary permits, (including entry and exitpermits, work permits, visas and such otherpermits, as may be, required). The Company�srequest shall be accompanied by informationconcerning the education, experience andother qualifications of the individuals con-cerned. In this connection, the Company shallperiodically submit to the Government its man-power requirement plans, manpower reports,training program and training report in theframework of a plan to indigence staff accord-ing to an agreed-upon schedule.

The Company agrees that there shall atall times be equal treatment, facilities and op-portunities among employees in the same jobclassification with respect to salaries, facilitiesand opportunities within the timber industryregardless of nationality. The Company shallduly observe the existing labor laws and regu-lations which may from time to time be inforce in Brazil.

Prior to the establishment of a permanentsettlement, the Company shall furnish freemedical care and attention to all its employeesworking in the area covered by this Agree-ment as is reasonable and shall maintain orhave available adequate and appropriatemedical services. If the Company establishesa permanent settlement, the Company shallfurnish medical care and attention to all itsemployees and all Government officials work-ing in the area covered by this Agreement at acost appropriate to the wage level of employ-ees. In no case may the fee be higher thanthe actual cost of services provided. The Com-pany shall establish a staff and maintain a dis-pensary, clinic or hospital which shall be rea-sonably appropriate under the circumstancesand according to the prevailing laws and regu-lations of The Federative Republic of Brazil.

If the Company establishes a permanentsettlement incorporating families of employ-

ees associated with the Enterprise, the Com-pany shall provide, free of charge, primaryand secondary education facilities for the chil-dren of all employees. Rules, regulations andstandards of general application for compa-rable education facilities in Brazil establishedby the Ministry of Education shall be followed.

Default and SuspensionSubject to the provisions [Force Majeure]

of this Agreement, in the event that the Com-pany is found to be in default in the perfor-mance of any provision of this agreement, theGovernment, as its remedy under this Agree-ment, shall give the Company written noticethereof (which notice must state that it is pur-suant to this Article) and the Company shallhave a period of a maximum 180 (one hun-dred and eighty) days after receipt of suchnotice to correct such default. The actual timewithin which to correct such default shall bestipulated in the written notice in each indi-vidual case as may be reasonable under thecircumstances considering the nature of thedefault. In the event the Company correctssuch default within such period, this Agree-ment shall remain in full force and effect with-out prejudice to any future right of the Gov-ernment in respect of any future default. Inthe event the Company does not correct suchdefault within the time stipulated in the no-tice, the Government shall have the right tosuspend or terminate this Agreement.

Notwithstanding the provision of para-graph 1, in the event the Company shall befound to be in default in the making of anypayment of money to the Government whichthe Company is required to make, the periodwithin which the Company must correct suchdefault shall be 30 (thirty) days after the re-ceipt of notice thereof. The penalty for latepayment shall be an interest charge on theamount in default from the date the paymentwas due, at the rate of the New York Primeinterest rate in effect at the date of defaultplus 4 (four) percent. This or other penaltiesprovided for in this Article may not be takenas deductions in the calculation of taxable in-come.

The Company shall not be deemed to bein default in the performance of any provisionof this Agreement concerning which there isany dispute between the parties until suchtime as all disputes concerning such provision,including any contention that the Company isin default in the performance thereof or anydispute as to whether the Company was pro-

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vided a reasonable opportunity to correct adefault, have been settled as provided in theArticle on settlement of Disputes.

If the Company is found in default withregard to any of its obligations under thisAgreement and does not remedy the defaultwithin the time set by the Government, theGovernment has the option of terminating theAgreement in accordance with the provisionsof this Agreement or of suspending the Agree-ment for a period set by the Government.

Termination; Right of Government toBuy Equipment

The Government has the rights to termi-nate this Agreement if the Company is in de-fault of any of its obligations under this Agree-ment and fails to remedy such default in ac-cordance with this Agreement. TheCompany�s outstanding obligations with regardto payment of taxes, royalties and other leviesimposed on the Company and the Company�soutstanding obligations with regard to rectifi-cation of environmental damage will continueafter the termination until such obligations arefulfilled.

If, at any time during the term of thisagreement, after having used all reasonablediligence in its endeavor to conduct its activi-ties under this Agreement, the Company be-lieves that the Enterprise is not commercial,the Company shall consult with the Ministerand may thereafter submit a written request toterminate this Agreement and to be relievedof its obligations to proceed. Such notice shallbe given one year before the planned termi-nation and shall be accompanied by all dataand information of the Company�s activitiesunder this Agreement which shall include butnot be limited to documents, maps, plans,worksheets and other technical data and infor-mation. Upon confirmation of termination bythe Minister or within a period of 6 (six)months from the date of the giving writtennotice by the Company, whichever shall bethe earlier, this Agreement shall automaticallyterminate and the Company shall be relievedof its obligations under this Agreement exceptas herein provided.

If termination occurs during the first sixmonths of the Agreement, the Company shallhave a period of 6 (six) months within whichto sell, remove or otherwise dispose of itsproperty in Brazil and to furnish the Govern-ment with the information to be turned over toit in respect of the work which the Companyhas performed to the date of the giving of the

aforementioned notice. Any property not soremoved or otherwise disposed of shall be-come the property of the Government withoutany compensation to the Company.

If termination occurs after the first sixmonths of the Operating Period or by reasonof the expiration of the term of this agree-ment, all property of the Company, both mov-able and immovable, located in the ContractArea shall be offered for sale to the Govern-ment at cost or market value, whichever is thelower, but in no event lower than the depreci-ated book value. The Government shall havean option, valid for 60 (sixty) days from thedate of such offer, to buy any or all such prop-erty at the agreed value payable in any cur-rency freely convertible in Brazil and througha bank to be agreed upon by both Partieswithin 90 (ninety) days after acceptance bythe Government of such offer. If the Govern-ment does not accept such offer within thesaid 60 (sixty) day period, the Company maysell, remove or otherwise dispose of any or allof such property during a period of 12 (twelve)months after the expiration of such offer. Anyproperty not so sold, removed or otherwisedisposed of shall become the property of theGovernment without any compensation to theCompany.

It is agreed, however, that any propertyof the Company in Brazil, movable or immov-able, that at the termination of this Agreementis in use for public purpose such as roads,schools and/or hospitals shall (together withtheir equipment) immediately become theproperty of the Government without any com-pensation to the Company.

All sales, removals or disposals of Com-pany property pursuant to the termination ofthis Agreement shall be effected according tothe prevailing laws, and regulations. Any gainor loss from sale or disposal shall be deter-mined and may be taxed in accordance withthis Agreement. All values shall be based onfair market values in accordance with gener-ally accepted accounting principles.

Rights and obligations which have comeinto effect prior to the termination of thisAgreement and rights and obligations relatingto transfer of currencies and properties whichhave not yet been completed at the time ofsuch termination shall continue in effect forthe time necessary or appropriate to fully ex-ercise such rights and discharge such obliga-tions. Additionally, the Company shall begranted the right to transfer abroad all or anyproceeds of sale received under this provi-

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onsion, subject to obligations set forth in thisAgreement.

Cooperation of The Parties; PeriodicReview

The Parties to this Agreement agree thatthey will at all times use their best efforts tocarry out the provisions of this Agreement sothat the Enterprise may at all times be con-ducted with efficiency and for the optimumbenefit of the Parties.

The Company agrees to plan and con-duct all operations under this Agreement inaccordance with the standards and require-ments imposed elsewhere in this Agreementfor the sound and progressive development ofthe timber industry in Brazil, to give at all timesfull consideration to the aspirations and wel-fare of the people of The Federative Republicof Brazil and to the development of the Na-tion, and to cooperate with the Government inpromoting the growth and development of theBrazil economic and social structure. Subjectto the provisions of this Agreement, the Com-pany will at all times comply with the lawsand regulations of Brazil.

In accordance with the provisions of thisAgreement and at any time during the term ofthis Agreement, upon request by either party,the Government and the Company will con-sult with each other to determine whether inthe light of all relevant circumstances the fi-nancial or other provisions of this Agreementneed revision in order to ensure that theAgreement operates fairly and without majordetriment to the interests of either Party. Suchcircumstances shall include the conditions un-der which the timber production and process-ing are carried out, the value and quality ofthe timber, the market conditions for and pricesof the timber and processed products, the pre-vailing purchasing power of money and theterms and conditions prevailing in SouthAmerica and elsewhere for comparable tim-ber ventures. In reaching agreement on anyrevision of this Agreement pursuant to thisparagraph 3 both Parties shall ensure that norevision of this Agreement shall prejudice theCompany�s ability to retain financial credibilityabroad and to raise finance by borrowing in-ternationally in a manner and on terms normalin the mining industry.

The Government and the Company willconsult with each other concerning the gen-eral progress of the Enterprise through a jointoversight committee.

Such consultation shall be carried out in a

spirit of cooperation with due regard to theintent and objectives of the respective Parties.Both Parties desire to realize the success ofthe Enterprise for the benefit of the people ofBrazil, the development of the nation, thegrowth and development of the economy andsociety of Brazil.

Promotion of National Interest

Preference for Local Goods and ServicesIn the conduct of its activities under this

Agreement the Company shall, consistent withits rights and obligations elsewhere under thisAgreement, give preference to the require-ments of consumers of Brazil for its productsand the Company and its Affiliates and con-tractors and sub-contractors shall, in good faithand to the fullest practicable extent, utilizeBrazil labor, services and raw materials pro-duced from Brazil sources and products manu-factured in Brazil to the extent such servicesand products are available on a competitivetime, cost and quality basis. Provided that:

(i) in comparing prices of goods producedor manufactured in Brazil to the price ofimported goods, there shall be addedcustoms duties and other levies and ex-penses that would be incurred up to thetime the imported goods are landed inBrazil.

(ii) in comparing the services available inBrazil 15% (fifteen percent) must beadded to the charge of the imported ser-vices.

ProcessingThe Company shall, consistent with its

rights and obligations elsewhere under thisAgreement, process or cause to be processedits timber in Brazil to the most advanced stagepossible with minimum wastage of timber inaccordance with the best international stan-dards.

Protection of Local Forest UsersThe Company shall conduct the Enter-

prise so as to minimize, to the extent possible,interference with local forest users.

Protection of Sacred and Historic SitesThe Company will not operate within sa-

cred or historic sites without the written con-sent of the Government. The Company willreport within 7 (seven) days any discovery of

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a site which may be sacred or historic. TheCompany will not damage or remove any sa-cred or historic items from the site without thewritten permission of the Government.

Regional Co-Operation With Regard ToAdditional Infrastructure

The Company will at all times cooperatewith the Government in utilizing its best ef-forts to plan and coordinate its activities andproposed future projects in the Contract Areaor the Project Area. Living accommodationsand facilities and working conditions providedby the Company for its operations shall be ofa standard commensurate with those of goodemployers operating in Brazil.

In relation to the region, the Company willendeavor to assist in maximizing the economicand social benefits generated by the Enterprisein the Contract Area with respect to:

(i) co-ordination of such benefits with localand regional infrastructure studies under-taken by the Government and with andbenefits generated by other local, for-eign and international public and privateentities; and

(ii) assisting and advising the Government,when requested, in its planning of theinfrastructure and regional developmentwhich the Company may deem useful tothe Enterprise and to existing and futureindustries and activities in the area ofthe Enterprise.

The Company shall allow the public andthe Government to use the Company�s instal-lations, air strips, machinery, equipment, ser-vices and facilities ancillary thereto on suchreasonable terms and reasonable charges asthe Company shall impose, provided, however,that such use shall not unduly prejudice or in-terfere with the Company�s operations here-under.

The Company shall during the Construc-tion Period and in accordance with the plansand designs for the Enterprise as approved bythe Government construct (at its own cost)such new roads (together with all warning de-vices, bridges and crossings) as may be neces-sary for the purpose of the Enterprise.

The Company shall allow the public andthe Government to use free of charge anyroads outside the Concession Area constructedand/or maintained by the Company, provided,however, that such use shall not unduly preju-

dice or interfere with the Company�s opera-tions hereunder. To avoid burdening the Com-pany with excessive maintenance costs, theGovernment and the Company shall togetherdefine what categories of traffic shall be al-lowed to use such roads and to what extent ifany the Government or third parties shall con-tribute towards such maintenance costs.

The Company shall maintain and be re-sponsible for the maintenance of all roads inthe Concession Area.

All roads constructed by the companyoutside the Concession Area shall be publicroads for the purposes of the provisions of thetraffic laws and regulations which may fromtime to time be in force in Brazil. To theevent that the plans and designs for the Enter-prise as approved by the Government so pro-vide, the Government will make such specialregulations under the traffic laws as it consid-ers necessary or desirable for the propersafety of the users of the said roads.

If the Company�s use of the existing pub-lic roads results in significant damage or dete-rioration, the Company shall pay to the Gov-ernment or other authority having control overthe road the cost (or an equitable proportionthereof having regard to the use of such roadby others) of repairs. The Company shall sharein the costs of damages or deterioration and ofupgrading to a necessary standard having re-gard to the increased traffic. In addition, theGovernment or other authority having controlover that road may require the Company topay a maintenance user charge based uponwhat is fair and reasonable having regard tothe continuing cost (excluding any profit tothe Government or such other authority) ofoperation and the maintenance of that roadand the use of that road by others.

The Company shall at its own cost and inaccordance with laws and regulations that mayfrom time to time be in force in Brazil, con-struct and provide all storage dams, waterworks, treatment, transmission and reticulationworks (hereinafter called �the Water Works�)necessary to supply adequately the needs ofthe Enterprise.

The Company shall, at its own costs, op-erate and maintain the Water Works. The Com-pany may charge reasonable rates and servicecharges to third parties for the water supply.If the Government is able to take over andadequately maintain the Water Works, theCompany and its employees shall thereafterpay reasonable rates and service charges forthe water supply.

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onIn the event that the Government is un-

able to provide adequate telecommunicationsfacilities, the Company may (in accordancewith rules and regulations which may fromtime to time be in force in Brazil) install andoperate such telecommunications facilities,provided that it shall allow the Governmentand public to use such facilities on such rea-sonable terms and reasonable charge as theCompany shall impose, on the condition thatsuch use shall not unduly prejudice or inter-fere with the Company�s operations.

In the event that comparable telecommu-nications facilities can be provided by theGovernment, the Company shall be obliged touse the Government�s network and shall paystandard charges for telecommunications ser-vices.

The Company may at its own cost, in ac-cordance with the laws and regulations whichmay from time to time be in force in Brazil(and subject to Government approval whichshall not unreasonably be withheld) constructand develop a camp or permanent facilitiessufficient to service the needs of the Enter-prise.

The Company is responsible for the costof all infrastructure relating to the Enterprise.

Environmental Management andProtection

The Company shall, in accordance withinternational standards and any environmentaland natural preservation laws and regulationsfrom time to time in force in Brazil, conduct itsoperations so as to (i) control waste or loss ofnatural resources, (ii) protect natural resourcesagainst unnecessary damage, (iii) protect sa-cred and historic sites from damage, (iv) pre-vent Pollution and contamination of the Envi-ronment, and (v) in general maintain the healthand safety of its employees and the local com-munity. The Company shall be responsiblefor reasonable preservation of the natural En-vironment within which the Company oper-ates and for taking no acts which may unnec-essarily and reasonably block or limit the fur-ther development of the resources of the area.

The Company shall include in the feasi-bility study for each timber operation an Envi-ronmental Impact Study (designed in accor-dance with generally recognized internationalstandards) that identifies and analyses the po-tential impact of its operations on land, water,air, biological resources, human settlements,sacred and historic sites, forests, agricultureand tourism in the region of the Enterprise.

The content of the Environmental Impact State-ment is set forth in Annex [ ]. The environ-mental study will also outline measures whichthe Company intends to use to mitigate ad-verse environmental impacts of harvesting andprocessing and for reforestation of the Con-tract Area including the following:(i) Procedures for collection of baseline

data on air quality, climate, surface andground water, properties of host rocks,flora, fauna and other environmental is-sues;

(ii) Forecast quality and characteristics of air-borne, waterborne or other dischargesfrom the proposed operations;

(iii) Environmental control standards for theproposed operation;

(iv) Environmental control measures to be in-corporated in the design of the facilities;

(v) Assessment of the impact on the envi-ronment of the proposed operation;

(vi) Monitoring and record keeping proce-dures and systems;

(vii) Procedures for the operations of dumpsand dams, the storage of mill dischargematerials and the disposal of hazardouschemicals and other waste materials;

(viii) Environmental management trainingprogram for all employees;

(ix) Procedures for handling environmentalemergencies;

(x) Plant closure and rehabilitation plan.

The shareholders in the Company shallbe jointly and severally liable for costs of re-forestation and environmental clean-up costsrelating to the Enterprise in direct proportionto their equity shareholdings if such costs can-not be paid by the Company.

Local Business DevelopmentThe Company shall, to the extent reason-

ably and economically practicable having re-gard to the nature of the particular goods andservices, promote, support, encourage andlend assistance to Brazil nationals desirous ofestablishing enterprises and business that willprovide goods and services to the Enterpriseand to the permanent settlement (if any) con-structed by the Company and the residentsthereof. The Company shall generally pro-mote, support, encourage and assist the estab-lishment and operation of local enterprises inthe Concession Area.

The Company shall make maximum useof Brazil contractors and sub-contractors whereservices are available from them at competi-

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tive prices and of comparable standards withthose obtainable from elsewhere, whether in-side or outside Brazil.

Insofar as it is practicable, the Companyshall give first preference in its assistancehereunder to landowners in, and other peopleoriginating from, the area of the Enterprise.

The Company and Government shall, atthe commencement of the Feasibility StudiesPeriod, each appoint for such period as is rea-sonably necessary, a member of its staff towork together to:

(i) identify activities related to the Enter-prise (including the provision of goodsand services as described above) whichcan be carried out by Brazil nationals orlocal enterprises;

(ii) advise and assist Brazil nationals desir-ing to carry on those activities or to es-tablish enterprises to do the same; and

(iii) implement, or assist in the implementa-tion of, the Business Development Pro-gram as hereinafter described, on behalfof the Company.

The Company shall, in consultation withthe appointed Government representative,prepare a Business Development Program forthe development of Brazil businesses and en-terprises associated with or incidental to theEnterprise. The program shall be submitted tothe Government as part of the Company�s busi-ness plan.

The Business Development Program willmake provision as far as is practicable for thefollowing:

(i) enterprises involved in the supply andmaintenance of timber harvesting equip-ment and the provision of consumablesupplies;

(ii) subcontracting to self-employed equip-ment operators and road constructionand maintenance;

(iii) subcontracting of site preparation, con-struction and maintenance of houses,buildings, industrial facilities and otherworks and facilities to be established,including concreting, welding, tank con-structions, steel fabrication, plumbing,electrical work and timber work;

(vi) enterprises involved in town servicessuch as sewerage and garbage collec-tion, treatment and disposal, passengertransport, freight carriage of consumeritems and stevedoring (except in rela-

tion to the shipping of the produce ofthe mine);

(v) enterprises involved in retail stores, su-permarkets, other retail outlets, can-teens, restaurants, taverns, cinemas, so-cial clubs, cleaning and laundry, andvehicle maintenance and repair facili-ties;

(vi) enterprises involved in the supply offruits, vegetables, meat and fish.

The Program may include provision forother activities agreed to by the Company andthe Government.

The Business Development Program shallalso include details of

(i) the time schedule for its implementation;(ii) additional activities which could be es-

tablished by nationals of Brazil;(iii) those activities in which the Company

intends to commence operating butwhich will be transferred to Brazil na-tionals at a later date, on a commercialbasis; and

(iv) any facilities by way of training, techni-cal and financial assistance which canbe made available to facilitate thesmooth transition of ownership and op-eration to Brazil nationals.

The Business Development Program shallbe reviewed annually by the Company, in con-sultation with the Government. It may be al-tered by mutual consent between the Com-pany and the Government with a view to se-curing the maximum benefit to Brazil nation-als and local enterprises.

The Company shall consult from time totime with representatives of the Governmentand furnish the Government at quarterly inter-vals with a report concerning the following:

(i) the implementation of the training andmanpower aspects of the Business De-velopment Program;

(ii) the implementation of provisions relat-ing to local purchasing of supplies; and

(iii) the implementation of provisions relat-ing to local business development.

Financing; Debt�Equity Ratio; DisguisedEquity

The Company shall have sole responsi-bility for financing the Enterprise and shallmaintain sufficient capital to carry out its obli-gations under this Agreement. The Company

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onmay determine the extent to which the financ-ing shall be accomplished through issuance ofshares of the Company or through borrowingsby the Company, provided that the Companyshall maintain a ratio of shareholders equity toborrowings so as to guarantee the continuingsolvency of the company in order to protectthe legitimate interests of the Government, thelenders, and the shareholders.

Any long-term borrowing by the Com-pany under this Agreement shall be on suchrepayment terms and at such effective rates ofinterest (including discounts, compensatingbalances and other costs of obtaining such bor-rowings) which are reasonable and appropri-ate for timber companies in circumstancesthen prevailing in the international moneymarkets after complying with existing proce-dures for obtaining foreign loans.

The Government has the right to denythe deduction of any interest payment for taxpurposes, and to charge a dividend withhold-ing tax where, in the judgment of the Govern-ment, the financial transaction on which theinterest is charged does not constitute a trueloan.

Assignment or Transfer of AgreementThis Agreement may not be transferred

or assigned (including for the purpose of fi-nancing) in whole or in part, without the priorwritten consent of the Minister, provided, how-ever, that where the Minister consents to atransfer or assignment, the Company shall notbe relieved of any of its obligations hereunderexcept to the extent that the transferee or as-signee shall assume and in fact perform suchobligations.

The shareholders in the Company shallnot transfer shares in the Company withoutthe prior written consent of the Minister whichshall not be unreasonably withheld or delayed.

Force MajeureAny failure by the Government or by the

Company to carry out any of its obligationsunder this Agreement shall not be deemed abreach of contract or default if such failure iscaused by force majeure, provided that theparty has taken all appropriate precaution, duecare and reasonable alternative measures withthe objective of avoiding such failure and ofcarrying out its obligations under this Agree-ment. If any activity is delayed, curtailed orprevented by force majeure, then the term forcarrying out the activity thereby affected andthe time of this Agreement shall each be ex-

tended for a period equal to the total of theperiod during which such causes or their ef-fects were operative, and for such further pe-riods, if any, as shall be necessary to makegood the time lost as a result of such forcemajeure. For the purposes of this Agreement,force majeure shall include among otherthings; war, insurrection, civil disturbance,blockade, sabotage, embargo, riot, epidemic,earthquake, storm, flood, or other adverseweather conditions, explosion, fire, lightning,adverse order or direction of any governmentde jure or de facto or any instrumentality orsubdivision thereof, act of God or the publicenemy, breakdown of machinery having amajor effect on the operation of the Enterpriseand any cause (whether or not of the kindtherein described) over which the affectedparty has no reasonable control and which isof such a nature as to delay, curtail or preventtimely action by the party affected.

The Party whose ability to perform its ob-ligations is affected by force majeure shall no-tify as soon as practicable the other party inwriting, stating the cause, and the parties shallendeavor to do all reasonable acts and thingswithin their power to remove such cause, pro-vided, however, that neither party shall be obli-gated to resolve or terminate any disagreementwith third parties, including labor disputes, ex-cept under conditions acceptable to it or pursu-ant to the final decision of any arbitral, judicialor statutory agencies having jurisdiction to fi-nally resolve the disagreement. As to labordisputes, the company may request the Gov-ernment to cooperate in a joint endeavor toalleviate any conflict which may arise.

Rules For Computation of Income Tax�Year� means (subject to any other agree-

ment by the Parties) from January 1 to Decem-ber 31, inclusive during the term of this Agree-ment and, for the calendar year or part thereofin which this Agreement shall terminate, theperiod from January 1 to the date of termina-tion.

�Products� means all salable timber andprocessed products.

�Operating Expenses� in any year meansthe amount of expenses attributable to the En-terprise which are deductible from income insuch year. Operating expenses shall include,the following amounts which are directly re-lated to the Enterprise:(a) Expenses in respect of material supplies,

equipment and utilities used in the En-terprise;

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(b) Expenses for labor and other contractedservices on behalf of the Enterprise.

(c) Expenses for premiums for insurance(foreign and domestic) on physical as-sets, inventories, business and operationinterruptions, and public liability claims,provided that where such premiums arepaid to Affiliates the premiums shall notexceed those that would be payable inarms length transactions to a party notrelated to the Company.

(d) Costs in respect of damage or losses tothe Enterprise to the extent not fullycompensated for by insurance or other-wise.

(f) Payments by the Company for royaltiesand interest and other payments includ-ing those to Affiliates for patents, de-signs, technical information and servicesprovided that such amounts and pay-ments shall not exceed those that wouldbe payable in an arm�s length transac-tion with a party not related to the Com-pany.

(g) Losses resulting from obsolescence,theft, or destruction of inventory.

(h) Payments for rentals such as thosecharged for equipment, plant, land andbuildings.

(h) Payments for land, land and buildingtaxes, royalties paid to the government,[value added tax,] sales taxes on luxurygoods, stamp duty, transfer tax, personalincome tax on employees benefits paidby the Company as stated in paragraph7 sub-paragraphs (a) and (b) of this An-nex, import duties, and other levies paidpursuant to this Agreement, except forincome taxes.

(i) Payments for handling, loading, storing,transporting and shipping.

(j) Payments for repairs and maintenance.(k) Commissions and discounts to non-affili-

ated parties.(l) Deductions permitted by paragraphs 4

through 11 below.

�Depreciation� in any year means thededuction from income of an amount in re-spect of depreciable assets on a straight linebasis computed at a rate of [16.67% (sixteenpoint six seven percent)] per year. Unuseddepreciation can be carried forward for up toseven years.

Depreciable assets comprise tangible as-sets with a useful life of more than one yearand include, by way of example, buildings,

machinery, equipment, dredges, vessels, rail-ways, rolling stock, bridges, piers, roads,docks, construction in progress and other tan-gible assets depreciable under generally ac-cepted accounting principles, plus all assetsmade available by the Company for publicpurposes, such as, among others, roads,schools and hospitals and their respectiveequipment.

�Amortization� in any year means the de-duction from income of an amount in respectof amortizable assets computed at a rate of[20% (twenty)] percent per year on a straightline basis.

Amortizable assets include, by way ofexample, (a) patents, franchises, concessions,licenses, leasehold interest and other intan-gible assets amortizable under generally ac-cepted accounting principles and (b) all ex-penses incurred prior to commencement of theoperating period in question, including ex-penses incurred in acquisition of timber rightsor timber information, Reconnaissance, Explo-ration, feasibility study and development ex-pense, employee training, education grants andother expenses normally permitted to be am-ortized under generally accepted accountingprinciples.

�Preproduction Expenses� already ex-pended by shareholders or the Company anddirectly related to the Enterprise may be con-solidated into the account of the Company as atax deductible item by way of amortization.These Preproduction Expenses must be au-dited by a public auditor and specifically ap-proved by (the Directorate General of Taxa-tion).

�Selling, General and Administrative Ex-penses� in any year are deductible from in-come and include, but are not limited to, man-agement expenses, compensation fees for ser-vices rendered abroad, executive salaries,communication expenses, dues and subscrip-tions, advertising and other selling expenses,public relations, office expenses, marketingexpenses (but not unrelated product research),legal and auditing expenses, general overheadexpenses, (including reasonable charges ofAffiliates to be allocated to the Brazil opera-tions to the extent that these charges repre-sent actual cost of service provided in suchyear).

The following items shall also be includedin Selling, General and Administrative Ex-penses of the Company:(a) Wages, salaries and other compensation,

including employee remuneration, of

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onpersonnel employed or engaged by theCompany or any of the Affiliates of theCompany in connection with Enterpriseactivities and who are assigned to theEnterprise on a temporary, part-time orpermanent basis. Such costs shall in-clude employee benefits paid by theCompany in respect of sickness, disabil-ity, termination, pensions, thrift plans,incentives, children�s education at site,compensation training and other educa-tion programs provided they are not cat-egorized as fringe benefits.

(b) All necessary facilities provided in theConcession Area or in the neighborhoodthereof for employees including but notlimited to facilities for housing, suste-nance, recreation and transport.

(c) Administrative overhead charges forproduct research, market developmentand technical, legal and accounting ser-vices of personnel employed or engagedby any of the Affiliates of the Company,who are not assigned to the Companybut who render such services for the di-rect benefit of the Enterprise.

(d) All necessary travel expenses incurredin connection with the Enterprise in Bra-zil and to and from Brazil and othercountries. In case such personnel areassigned to the Enterprise, such travelexpenses shall include reasonable relo-cation expenses for them and their de-pendents to and from Brazil and theircountry of residence.

(e) Charges for laboratory and technicalservices rendered to the Company byany of its Affiliates and/or sub-contrac-tors. Such charges shall consist of thecost of such services and shall be lim-ited to not more than the cost which a

non-affiliated party with charge for suchservices.

�Interest Expenses� paid or accrued inany year on loan capital provided that the ra-tio of loan capital to equity capital does notexceed [ ] and the interest on loans does notexceed the generally applicable market rateat the time of borrowing.

�Losses� in any year means the excess ofall deductions over Gross Income in such year.In the event a loss is incurred in any year,such a loss can be carried forward and may bededucted from net income accruing in the [7(seven)] years next succeeding the year inwhich such a loss was incurred. Those lossesfirst occurring shall be deducted first from netincome accruing in the next [7 (seven)] suc-ceeding years.

�Gross Income� means:

(a) the gross proceeds received or accruedfrom the sale of the products F.O.B.point of shipment in Brazil on the basisdescribed in the Annex on Marketing;

(b) receipts of a capital nature;(c) other income of the Company actually

received or accrued and not mentionedabove.

�Taxable Income� in any year meansGross Income in such year after deductingtherefrom all amounts in respect of expenses,costs and allowances (including the items de-fined in paragraphs 2 to 9 above as permittedby this Agreement.)

In all transactions with Affiliates (includ-ing calculations of deductions and Gross In-come), the Company shall be bound by thefinal paragraph of Annex [ ] [Affiliate Servicesand Affiliate Transactions] of this Agreement.

Note

1 Vice-Dean - Harvard Law School, Ma (USA)

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Group 1: Economic Aspects of the Forest Question

In chapters 10-16, The Causes of Tropical Deforestation: The Economic and Statistical Analy-sis of Factors Giving Rise to the Loss of the Tropical Forests, edited by Brown and Pearceanalyzes the causes of deforestation in the Philippines, Brazilian Amazon, Thailand, Indonesia,and India using econometric models (book review in journal).1

Estimated at less than 4% by volume, the tropical timber trade plays a relatively minor role indeforestation. It continues to receive attention for the following reasons: 1) Logging activitiesprovide access to the forest and are thus considered by some to be the first link in forestdestruction activities (journal).2 2) Logging for export generally selects few species and utilizesheavy harvesting equipment in contrast to domestic consumption activities (NGO).3 3) Environ-mental groups recognize that they can effect change in the tropical timber trade through theirpurchasing decisions (journal).4 4) Solutions to the fundamental problems, such as poverty,overpopulation, and land tenure, are unrealistic in the short term (journal).5

According to the World Bank Research Observer, the policy dialogue could focus moreusefully on the relative differences in the costs of forest land; on local rather than generalconcentrations of nonmarket forest-based environmental benefits, on public policy failures thatdistort market incentives to invest in forestry, and on the broader implications of the eventual useof forest land for subsistence-oriented populations (NGO).6

Commercially important timber species were not listed in the convention on InternationalTrade in Endangered Species of Wild Fauna and Flora (CITES) until 1992, when internationaltrade in Brazilian rosewood (Dalbergia nigra) was banned (NGO).7

Trade in more than a dozen other timber species is either banned or strictly controlled(NGO).8

Because of a battle about the proposed listing of mahogany (Swietenia macrophylla) inCITES that led to the subsequent delisting of several African Timber species, the Timber WorkingGroup was established to examine the relationship of CITES to the international timber trade(NGO).9

Theme 1: Prospecting Analysis of the Impact of the World Timber Market on theConservation of the Amazon Rain Forest

Brown and Pearce raise the issue of tropical deforestation as a problem of market andgovernment failures and suggest the creation of global environmental markets for controlling thedeforestation. This argument is based on the cost-benefit analysis of carbon dioxide emissionsrelated to tropical deforestation. In chapter 17 and 18, Barbier et. al. examine the role ofinternational trade in forest products for tropical deforestation and concluded that the trade wouldcontribute only a minor part to the deforestation in a direct way. In chapter 19, Vincent arguesthat the trade restrictions of tropical timber will distort the signals of scarcity of tropical timber,and thus exacerbate the depletion of tropical forests (book review in journal).10

Wood Production and Trade Data, 1981-93 � Table 9.3 (NGO).11

World production of all grades of market pulp increased by about 3.5% in 1993 despite theindustry laboring under one of the severest recessions. The total output reached 37.1 million tonsin 1993, according to Pulp & Paper International�s 1994 Market Pulp Survey. Data on market pulpoutput and trade in 1993 by major producing country (journal).12

AnnotatedBibliography

Namrita Kapur*

○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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onData on 1993 pulp exports from major

producer countries (journal).13

The Amazon forest holds about one-thirdof the world�s remaining tropical woods,but Brazil accounts for only 4 percent of thetropical timber market (press).14

Vincent reviews the three commonlycited reasons for the boom-and-bust cycle char-acteristic of tropical timber-exporting countries� exploitation by developed countries, highimport barriers by developed countries on pro-cessed tropical timber, and low prices for tropi-cal timber in the international market. He thenproceeds to refute the first two of these rea-sons and points to tropical countries� policiesrelated to timber concessions and log-exportrestrictions as primary culprits of low prices.The fees levied on concessionaires are gener-ally a fraction of the stumpage value and theshort-term nature of contracts provide little in-centive for concessionaires to invest in forestmanagement practices. Vincent proposes twopossible responses to this issue: 1) Maintaingovernment ownership, but increase thestumpage value captured by the government.2) Give concessionaires rights that are compa-rable to private ownership. The problem withlog-export restrictions is that that they artifi-cially suppress the signal that additional wood-processing capacity is not profitable. Thiskeeps prices low in the international marketand creates an illusion of abundant supplies ofwood (journal).15

Worldwide, most plywood is consumedin the country where it is manufactured.Tropical plywoods are the exception; in 1989,almost 80% of tropical plywood was tradedinternationally. African and, especially, Asiancountries are major plywood exporters. Onlya quarter of Latin American-Caribbean zoneplywood is exported (journal).16

Tropical countries need to improve infra-structure, strengthen timberland tenures andreduce restrictions on imports of high-technol-ogy equipment. Developed countries need tohelp solve debt problems and support effortsto stabilize regional economies. Developingforest industries is a tool to achieve sustain-able forest development (journal).17

It has been estimated that mature tropicalforests once covered 1.5 billion hectares, andthat now only 900 million hectares of forestremain (NGO).18

Articles with information on economic in-centives necessary to encourage using tropi-cal lands to produce wood and discourage con-version to other uses (journals).19

US imported 4% of the world�s 47 Mmmsup 3 of tropical timber products traded glob-ally in 1989; Canada imported 4.3% (NGO).20

The value of total US tropical hardwoodproduct consumption in 1993 = $533 million.Tropical hardwood plywood represented $412million or 76.9% of the value of all tropicalwood products consumed by the US in 1993.Imports of tropical hardwood lumber and ve-neer were $99 million and $20 million dollars,respectively, in 1993. US hardwood log im-ports from tropical areas amounted to $2 mil-lion in 1993 (journal).21

Over the past 5 years, tropical plywoodhas accounted for, on average, 83% of the vol-ume and 77% of the value of all US imports oftropical wood products. Southeast Asia sup-plied over 90% of the tropical plywood im-ported into the US in 1993. The major Asiansuppliers of plywood are Indonesia and Ma-laysia (journal).22

Next to plywood, lumber is the secondmost important tropical hardwood product im-ported by the US. Latin America supplied 64%of the volume and 61% of the value of tropicalhardwood lumber imported by the US in 1993.Brazil and Bolivia combined to supply 53% ofthe volume of tropical hardwood imported bythe US (journal).23

Southeast Asia was the second leadingsupply region for tropical hardwood lumber tothe US in 1993. Malaysia and the Philippineswere the two largest Southeast Asian supplynations. Malaysia provided 16.8% of the totaltropical hardwood lumber volume imported bythe US, while the Philippines supplied 4.6%.Africa plus all other sources combined to pro-vide only 5.4 Mm sup 3 (or about 3%) of totalUS imports of tropical hardwood lumber in1993 (journal).24

The volume of tropical hardwood prod-ucts that are traded internationally account for,at most, only 4% of the total volume of theforests cut (NGOs and journal).25

Examination of the industrial loggingcomponent (20-30% of tropical deforestation)shows that fuelwood use, including charcoalproduction, accounts for approximately 80%of total industrial logging removals (NGO).26

20% of all industrial logging is used by thelocal forest products industries, of which at leasthalf is consumed domestically (book).27

Only about 10% of the industrial loggingcomponent is exported (journal).28

producer countries:Nearly two-thirds of the world�s hard-

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wood harvest comes from Southeast Asia, prin-cipally the Philippines, Sumatra, and the is-land of Borneo. But logging has been so ex-tensive that virtually all the lowland forests inMalaysia and the Philippines will be gone by1990. Thailand, once a leading producer ofteak, will actually spend $100 million this year(1980) to purchase wood products from abroad(press).29

Indonesia � largest rainforests after Bra-zil, but is destroying them at an estimated 2.5million acres/year, largely through logging andslash and burn farming (press).30 Exportedwood products worth nearly $5.5 billion in1993, almost 15% of the country�s exports(press).31 Indonesian log exports were bannedin 1985, and low interest loans were offeredto companies establishing plywood factories.As a result, exports of plywood have jumpedfrom $991 million to $3.2 billion in 1992. To-tal exports of processed wood products, in-cluding furniture, reached $4.2 billion in 1992,the third largest export earner after oil andtextiles. Principal markets are Japan and SouthKorea. With pulp production costs of $250/ton � significantly lower than European andNorth American producers, Indonesia is ex-pected to become a significant producer. Ex-ports of pulp and paper have already risenfrom 188,000 tons in 1987 to 660,000 tons in1992 (press).32

Malaysia - accounts for nearly half ofworld timber exports. Sarawak accounts formost of Malaysia�s production. Sarawak�s un-processed log exports have risen to 15.8 mil-lion cubic meters in 1991 from 6.7 million in1980 (press).33

There are signs that the Sarawak govern-ment is seeking to enforce stricter controls onthe logging industry and to diversify theeconomy. First, Sarawak is encouraging theestablishment of downstream wood industriesand setting aside timber processing zones inan attempt to add value to its exports to Japanand other tropical timber consumers. A fifthof timber exports are now supposed to be pro-cessed in Sarawak, a proportion which is ex-pected to rise to 50% in the next few years.Sarawak is also trying to lure non-timber in-dustries to Sarawak from peninsular Malaysia.Second, there is a drive to encourage tourismin the state, particularly �adventure tourism�which takes advantage of Sarawak�s rivers andjungles. Third, the state is promoting the con-version of forest land to palm oil plantationsand other forms of agriculture, and the SarawakEconomic Development Corporation (SEDC) is

overseeing an aquaculture project producingtiger prawns (press).34

consumer countries:Trend in Japan to switch from tropical

hardwood to temperate hardwood and soft-wood (press).35

The US and Europe import only 7.5% and20.1%, respectively, of all tropical wood.Over half of all tropical timber products areimported by Japan, South Korea, China, andSingapore. Japan alone imports over 28% ofthe world�s tropical timber (NGO).36

firms:Jaya Tiasa � Malaysia�s largest listed tim-

ber company; Kumpulan Emas � anotherlarge Malaysian timber company (press).37

In Indonesia � Barito Pacific Timber andCitra Lamtoro Gung Persada (headed by oneof President Suharto�s daughters) � 450,000-ton/yr bleached hardwood kraft pulp mill;Barito Pacific operates at least seven factoriesin Sumatara, Kalimantan and the Moluccas andshipped 1.3 million cubic meters of timber in1992 (14% of the country�s total exports)(press).38 Barito had sales of $459 million in1993 and net profit of $145 million, almost a100% increase over the previous year. Thecompany benefited from a rise in plywoodprocess from $300/cubic meter in late 1992 tomore than $500/cubic meter in 1994. In 1994,Barito signed a preliminary agreement withMarubeni and Nippon Pulp and Paper of Ja-pan to establish a $1 billion pulp plant with acapacity of 500,00 tons. Sinar Mas group con-trols the two principal listed companies, IndahKiat and Tjiwi Kimia. Indah Kiat, with timberplantations and mills in Sumatra, has produc-tion capacity of 790,000 tons of pulp, of which410,000 tons came on stream in 1994, and344,00 tons of paper, backed up by a timberconcession of 300,000 hectares. The com-pany had turnover of $305 million in 1993, up53% on the previous year, but earnings fellfrom $57 million to $42 million. Tjiwi Kimiahas a production capacity of 21,600 tons ofpulp and 394,000 tons of paper. It supplies35% of the domestic paper market, 50% of thelocal stationery market, and exports 40% of itsproduction. The company�s turnover in 1993was up 25% to $289 million and was predictedto rise a similar amount the following year.Net Profit in 1993 was $37 million, up 19%. Asurge in the domestic price of paper to $900/ton, compared with $600/ton internationallywas expected to push up profits in 1994.

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onIndorayon, a large pulp and rayon producer,produces long and short fiber pulp with a ca-pacity of 260,000 tons backed up by 269,000ha of tropical forest and 86,000 ha of pineforest. Its rayon plant has a capacity of 60,000tons (press).39 Kiana Kertas is building a1,500-ton/day bleached hardwood kraft pulpmill in Kaltim, East Kalimantan; Takengon Pulp& Paper Utama plans to build a 350,000-ton/yrmill; Gudang Garam, parent company of ciga-rette-papermaker Surya Zig Zag and boardproducer Surya Pamenang, wants to build a500,000-ton/yr hardwood pulp mill in 10-15years time; the world�s largest pulp line, the750,000-ton/yr Riau Andalan mill is in its com-missioning phase and commercial productionwill start in January, 1995 (press).40

Japanese companies � Nippon Paperand Marubeni (press).41

In the United States � Madera Interna-tional, Inc. (Nasdaq: WOOD).

Since 1992, 200 city councils in Germany,51% of Dutch municipalities, and several USstates (including New York, California, Arizona,and Minneapolis) have placed some type ofban on the use of tropical timber. These bansare problematic for three reasons: 1) Theycould make forestry less competitive with ag-riculture, which causes more deforestation thancutting trees. 2) They may undermine the fewincentives that fledgling forest projects haveto promote sustainable management. 3) Suchbans conflict with international rules of freetrade (NGO).42

Theme 2: Analysis of Added ValueTropical timber producing countries face

increasing pressure to meet higher value-added processing requirements (press).43

Theme 3: Value of Services Provided bythe Forest

Information on what comprises a tropicalforest and the rules that govern how tropicalforest ecosystems work (book).44

Scientists believe that moist, tropical for-ests harbor the majority of the world�s species(NGO).45

Tropical forests are a significant reposi-tory of carbon, which can affect global climatechange (NGO).46

Von Thunes suggests that the increasingscarcity implied by deforestation will cause thevalues of forest-based resources (timber,fuelwood, fruits and nuts, forage, and fodder)and environmental benefits (such as climatechange, biodiversity, and erosion control) to

rise until forests eventually compete well withsome agricultural uses of the land. As a result,the world never will reach the physical limitsof deforestation (book).47

The World Bank estimated the annualcost at more than $500 million in forgone pub-lic revenues in Indonesia arising from lossesin areas such as soil erosion and flooding(press).48

Tropical rain forests are inhabited bysome 50% of the plants and animals found onthe globe (estimates which range from 2 mil-lion to 30 million species). According to Ed-ward O. Wilson, as many as 27,000 speciesmay be consigned to extinction every year(journal).49

The flora and fauna of the Amazon varyso greatly that adjacent sites can shelter en-tirely different species. One hectare in theeastern Amazon may have 120 tree species,whereas a nearby hectare may have 170 (jour-nal).50

Tropical forest loss is estimated to havecontributed one quarter of the carbon releasedinto the atmosphere during the past decade(journal).51

In the Amazon, where 50% of precipita-tion may be generated by the flora, changes inevapotranspiration could cause alterations inlocal climate and rainfall patterns that adverselyaffect agriculture. Reductions in rainfall, inturn, cause the local temperature to increase,hampering vegetation and crops (journal).52

Landowners in the Amazon are requiredby law to retain 50% of their forests � scat-tered woods of all different sizes and shapescan be found everywhere, often surroundedby pasture. Larger forest fragments, however,harbor more species than do smaller ones.Furthermore, species diversity requires appro-priate corridors to facilitate movement be-tween these fragments (journal).53

Theme 4: The Home Market and AmazonHardwoods

Brazil�s Amazonian tropical forests coverclose to 315 million ha (778 million acres);nearly two-thirds of this area is protected invarious sorts of parks and reserves. Given theplywood industry�s need for superior-qualitylogs and the fact that not all tropical timberspecies are suitable for peeling, only 5-10m.sup.3/ha are currently harvested for ply-wood (journal).54

One difficulty in assessing the volumesof tropical-wood plywood made in Brazil isthe fact that temperate softwood panels faced

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with a tropical veneer are often classified as�tropical plywood.� Most of the country�s ply-wood mills are in the south, where the localwood are temperate softwoods. Thus the ac-tual share of tropical wood is smaller than thenumbers indicate (journal).55

According to official statistics, Brazilianmills made 200,000 m.sup.3 (226 millionft.sup.2) of tropical plywood in 1976. Outputdoubled to 400,000 m.sup.3 by 1980. Nineyears later, production had more than tripledto 1.26 million m.sup.3 (1.42 billion ft.sup.2)(journal).56

Several factors limit expansion of the ply-wood industry in Brazil. In addition to avail-

ability of timber, constraints include poor in-frastructure, insufficient capital and high costof modern machinery, economic instability,uncertainty of land tenures, environmentalpressures and resulting import restrictions andcompetition with temperate plywood andother wood-based panels (journal).57

Pará encompasses one-third of the Bra-zilian Amazon and had lost 13% of its forestcover by 1990 (journal).58

In 1976, 14% of the country�s sawn woodcame from the rain forest; by 1986 the sharehad grown to 44%. The number of wood pro-cessors grew from about 100 in 1952 to morethan 3,000 in 1992 (journal).

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Map of forest types throughout the world� Figure 9.2 (NGO).59

Summary of extent and percent changefrom 1981-90 of forest and other wooded landby region � Table 9.1 (NGO).60

Map of estimated annual deforestationrates, by country, 1980-90 � Figure 9.3(NGO).61 According to FAO data, the worldlost 450 million hectares of its tropical forestcover between 1960 and 1990. Asia lost al-most one third of its tropical forest cover dur-ing that period, whereas Africa and LatinAmerica each lost about 18 percent (NGO).62

The total area deforested per decade has de-clined in Asia and appears to have stabilizedin Africa. This has not been the case in LatinAmerica, where increasingly more forest areawas converted to other uses � primarily agri-cultural � from 1960 to 1990 (NGO).63

Plantation Area Within Tropical and Tem-perate Developing Regions, 1980-1990 �Table 9.2 (NGO).64

Estimated Rate of Tropical Deforestation,1960-90 � Figure 9.4 (NGO).65

Degradation and Conversion of TropicalClosed Forest, 1980-90 � Figure 9.6 (NGO).66

Land Area and Use Data, 1981-93 �Table 9.1 (NGO).67

Forest Resources, 1981-90 � Table 9.2(NGO).68

Tarapoto declaration of the AmazonTreaty Organization regarding Amazonian for-ests � a broad range of general guidelines forthe sustainable management of forests (jour-nal).69

To help conserve the state�s forest re-sources, Sarawak plans to pass a law requiringtimber operators to plant fast-growing trees(press).70

In Malawi, the rate of deforestation ex-ceeds 3.5% annually, and fuelwood prices haverisen by more than 5% a year for the last de-cade. Fuelwood may now consume 20% of thecast income of subsistence household in ruralareas. Malawi�s deforestation has occurredlargely on open access forest (land where prop-erty rights are nonexistent or unenforced),where there is no conservation incentive. Smalllandowners are responding by planting treeson their own lands at a rate that may offset alldeforestation within ten years (journal).71

Investors responded to higher timberprices by planing industrial forests in Costa

Rica (journal),72 Kenya (journal),73 and Viet-nam (unpublished records).74 Farmers haveplanted trees to meet subsistence needs inCape Verde (journal),75 China (P.h.D.dissertation),76 Madagascar (NGO),77 Nepal(journal)78 and the Philippines (NGO).79

In a confidential report to the Indonesiangovernment in 1993, the World Bank warnedthat timber companies were cutting 50% morelogs that could be sustained by replanting(press).80

The result of overgrown fields, inappro-priate as pasture land, and cuts in clear-cuttingand cattle-raising subsidies led to the sale oflogging rights on many grazing properties.More than 100 species of wood, which hadbeen viewed as impediments to pasture, wereharvested. By 1990 there were 238 sawmillsnear Pargominas. Today logging is the area�sprincipal industry, and it is just as unsustain-able as ranching was. IMAZON researchershave determined that for each tree that is re-moved, 27 other trees that are 10 cm or morein diameter are severely injured, 40 meters ofroad are created and 600 square meters ofcanopy are opened. Recovery of the forest isslow under these conditions; it can take 70years for selectively logged forests to resembletheir original state (journal).81

Four kinds of land that characterize theAmazon: 1) primary or pristine forest 2) par-tially regrown or secondary forest 3) pasturethat is in use 4) abandoned pasture. Forest isslow to invade old pasture, in part, becausesome seed-dispersing birds do not venture intoopen spaces. Now the possibility is beingexamined of using these already deforestedareas for agriculture, ranching, or logging. Thiswould take pressure off the primary rain for-est (journal).82

The Brazilian Foundation for SustainableDevelopment, a consortium of 24 of the larg-est Brazilian companies, was formed after the1992 Earth Summit. The Foundation plans tosupport research that will define sustainabledevelopment and to help companies act inenvironmentally sound ways. It will also fi-nance the Forest Fragments Project (journal).83

Theme 5: Management Plan as a BasicInstrument for Sustainable ForestExploitation

Christopher Uhl et. al. primarily propose

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best management practices for terra firma for-ests. These practices include adopting the fol-lowing techniques: 1) Conduct forest inven-tory and map procedures before logging tominimize waste. 2) Carefully plan machinemovements. 3) Cut vines two years before log-ging to minimize damage to subcanopy treesduring harvesting. 4) Use trained loggers tominimize waste as much as three-fold. 5) Re-duce machine time by preflagging skid trails.5) Deliberately girdle undesirable trees afterlogging to provide space for target trees.

Uhl et. al. conclude with the followingpolicy suggestions: 1) Zone logging activities.2) Install a sensible, enforceable forest code,such as �Edict 5/50/5�. 5 is the limit on thenumber of trees that could be removed perhectare in a logging episode. 50 is the mini-mum number of years between logging epi-sodes. 5 is the width, in meters, of the firebreak that should be maintained around alllogged stands in the first decade following log-ging to avoid ground fires. Such a forest codewould protect the Amazon region from theleading causes of forest demise � excessiveharvesting, repeated harvesting at short inter-vals, and fire (journal).84

Intensive replanting has turned war-rav-aged South Korea into the forestry �successstory of the �70s�: one-third of the country hasbeen stocked with trees in the last decade.Elsewhere, lower-key programs are seekingto reverse age-old patterns of wasteful fire-wood use and encourage villages to protecttheir local groves. Overall though, the ThirdWorld has a dismal record of forest rebuilding.Millions of seedlings have been planted in Af-rica, Asia, and Latin America, only to perishfor lack of proper care, be nibbled to death bycattle or be cut down for firewood long beforetheir prime (press).85

Reforestation is expensive. �Our hard-woods take 90 years to reach full height. Whatbank will lend us 90-year money?� asks a Ma-laysian forestry official (press).86

Once cut down, the rain forest does notnecessarily become a desert but rather a fieldor a secondary forest that can again be har-nessed for ranching, logging or agriculture. Ifthis land can be returned to productivity, itwould reduce pressure to cut virgin forest. Itis thought that even cattle ranching may be aviable option (journal).87

It is estimated that about 40% of theAmazon�s mahogany trees � which, in general,only grow in a strip across the lower portion ofthe rain forest � thrive on reserves (journal).88

Extractive reserves, of which there are14 covering a total of 3 million hectares, con-fer land rights to squatters and people whomlarge landholders have dispossessed. In Bra-zil, 4.5% of the landowners control 81% of thefarmland (journal).89

A Brazilian law prohibits the cutting of Bra-zil nut trees, but once pasture is burnt aroundthem, the sun desiccates them (journal).90

Alfredo Kingo Oyama Homma of the Bra-zilian Enterprise for Agricultural Research(EMBRAPA) found that when a forest productsuch as latex becomes commercially impor-tant it is inevitably introduced into higher-yielding plantations or the material is madesynthetically. As a result, the price plummets,and small-scale extraction ceases to be profit-able. In counter to this, a Peruvian study foundthat 72 products could be harvested from aone-hectare plot for an annual yield of $422.This appears more lucrative that the one-timelogging profit of $1,000. On the other hand, itis noted by the head of the Ford Foundation inBrazil, Anderson, that a random sampling ofthe Amazon would not yield such a high valueof nontimber forest products. In addition, thePeruvian products could be marketed region-ally, a situation that does not yet exist for manyof the reserves in the Amazon (journal).91

Theme 6: Forest Licenses as a Form toControl Timber Exploitation

Critics seriously question the ability oftimber certification programs to effect moresustainable practices, largely because the mar-ket has not proved willing to bear the addi-tional costs (NGO).92

In 1994, the Forest Stewardship Council(FSC) adopted a set of principles and criteriafor the sustainable management of forests, aswell as guidelines on how to conduct fieldinspections and verify the chain of custody ofcertified forest products as they travel fromthe forest to the store shelf (NGO).93

In 1995, FSC developed a rigorous frame-work for the evaluation, accreditation, andmonitoring of organizations that issue certifi-cation claims in the marketplace (NGO),94 aswell as guidelines for developing regional for-est management standards and a protocol forendorsing national certification initiatives. Na-tional initiatives based on the FSC guidelinesare under development in more than 12 coun-tries, including Brazil and Indonesia (NGO).95

In response to the controversy surround-ing bans, there is now a move to promotesustainably managed tropical timber through

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onthe labeling of wood products. The organiza-tions that have undertaken to provide indepen-dent certification operate on the principle thatgood forest stewardship must mean more thansustained timber supply; it also means main-taining the health and integrity of the forest eco-system, and ensuring that all pertinent stake-holders share in the benefits. Most certifiersstrive to achieve this balance by requiring long-term management plans, minimum-impact har-vesting methods, efficient utilization of all for-est products, and third-party audits (NGO).96

An estimated 90% of all deforestation isdone for agricultural purposes, with only 10%owing to logging. Fourteen percent (240 mil-lion cubic meters) cut each year is used forindustrial roundwood while the remaining 86%(1.5 billion cubic meters) is used for fuelwoodand charcoal. Of the wood harvested, only 28%enters international trade in the form of logs,sawnwood, or wood-based panels � the kinof products to which eco-labeling might ap-ply. Combined, these numbers suggest that in-ternational trade accounts for less than 1% oftropical deforestation (NGO).97

The above statistics, however, overlookthe role of logging in opening up previouslyintact forests for other causes of deforestation:

1) For example, in Southeast Asia, log-ging operations generally penetrate previouslyinaccessible primary forest, and loggers mayremove up to 40% of the standing timber vol-ume, leaving from 15-40% of the ground withno forest cover. In South America, the FAOestimates that deforestation rates are eighttimes higher in logged over areas than in non-logged areas.

2) The so-called small impact of commer-cial logging is a claim that may be the result ofmisinterpreted data. FAO statistics regardingdeforestation are based on the complete re-moval of tree cover. Most logging in the trop-ics involves selective cutting that leaves a re-sidual cover. Hence, a logged-over area maynot be counted as deforested even though inan ecological sense it has been deforested. InBrazil, for example, in efforts to extract 2% ofthe trees, over 26% of all remaining treesgreater than 10 cm in diameter were destroyedor seriously damaged. In Malaysia, to removed3% of trees, 48% of the remaining trees weredestroyed. Even after loggers have left, thedamage continues in that remaining trees aremore vulnerable to violent storms and forestfires.

3) Statistics are also misleading in reflect-ing the portion of logging used for timber, as

opposed to the portion either wasted or usedfor other purposes. For example, the figuresfor timber production only representstemwood. They do not include roughly halfof the wood mass of each tree felled that isleft behind. They also do not include woodproduced as a by-product of road building orwood that is cut but not removed from theforest because it has been damaged or be-cause it is too costly to haul out.

4) The figures on commercial logging alsofail to consider the relative contribution of in-dustrial production versus fuelwood extractiondepending on region. The demand forfuelwood is a problem that afflicts primarily thedry tropics. In the moist tropics, however, cut-ting of firewood is only a serious threat in theimmediate vicinity of large cities, and cuttingfor furniture or veneer is a much bigger threat.

5) Some tropical countries rely heavilyon tropical timber exports. International tradeis clearly the catalytic factor for fueling suchdeforestation. In Malaysia, for example, ex-ports in 1992 accounted for 45% of all timberproduction (NGO).98

The first and largest forestry certificationprogram is the US-based Rainforest Alliance�s�Smart Wood� Program. It certified its first�well-managed� forest in 1990. By the springof 1996, nearly 2.4 million hectares of naturalforest had been certified by four third-partyorganizations. In addition to third-party certifi-cation, national certification initiatives havebeen proliferating. The Brazilian forestry sec-tor has been developing a methodology todefine the origin of raw materials used by theforest industry, which has resulted in a �Cer-tificate of Origin of Forest Raw Material�(CERFLOR). Lambaga Ekolabel Indonesia (LEI)was formed in 1993 to develop a certificationand labeling scheme for Indonesian forestproducts (NGO).99

The Forest Stewardship Council (FSC) wasestablished in 1993 to set global standardswhereby those organizations certifying thesustainability of a productive forest could them-selves be accredited. To date, the FSC has ac-credited four third-party certifiers: Smart Wood,the SGS Forestry Qualifor Programme, and theSoil Association Responsible ForestryProgramme. It is working with governments toaccredit their certification schemes (NGO).100

Currently, demand for certified wood ex-ceeds the supply in the US and UK, but thisconsumer demand alone has not compelled amove to certification. Benefits will accrue asconsumer awareness increases and certified

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producers gain market share in countries de-veloping laws or voluntary initiatives to ex-clude non-certified timber. Austria requireslabeling of timber from all types of forests.The �UK 1995 Plus Group,� a partnership be-tween WWF for Nature, UK and 54 UK com-panies has pledged to purchase and sell onlycertified wood and wood products by Decem-ber 31, 1999. A similar �North American Buy-ers Group for Certified Timber� is still beingdesigned by the New York-based Environmen-tal Advantage. Finally, the ITTO set the year2000 as a goal for when only sustainably pro-duced wood products would be used in inter-national tropical timber trade (NGO).101

The effectiveness of eco-labeling in thetropics will be most pronounced in countriesthat have a large share of their exports des-tined for Europe and the US. Congo andGabon, for example, export 88% and 69% oftropical timber, respectively, to the European

Union. For countries, like Malaysia, which ex-port most of their timber to Asia or Japan, USand European demand for certified products islikely to be ineffective. By far, the largest share(85%) of tropical timber is consumed by do-mestic markets where so far little or no con-sumer demand for certified timber exists.

Theme 7: Methodology and OngoingMonitoring Techniques for ForestExploitation

The virgin forests of peninsular Malaysiawere hacked apart half a century ago, withdestroying the landscape; the difference nowis that everything goes faster, with much largerand more destructive machines, and that thedevelopment of all-weather roads will make itgo faster yet (press).102

There are only twelve rangers to controldeforestation in the Amazon (press).103

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An institutional crisis typically underlies atangible environmental problem (NGO).104

Meyers points out shifting cultivators asthe dominant player accounting for 61% of thecurrent rate of deforestation in tropical coun-tries (book review in journal).105

Palo finds by examining population den-sity and forest coverage of 60 tropical countriesthat population density was strongly correlatedto deforestation (book review in journal).106

Southgate obtains the result that the con-straint of agricultural frontier expansion andagricultural technological improvement couldbind the expansion of agricultural land intoforest lands or other natural environments(book review in journal).107

Joint implementation has not been achievedon a scale large enough to reverse the trends offorest loss or global warming (NGO).108

According to a recent study by the Institutfur Weltwirtschaft (IfW) commissioned byGreenpeace, agriculture (including shiftingcultivation by landless, impoverished farmers)is responsible for about 90% of the hectares oftropical forests destroyed annually (NGO).109

Others believe that agriculture/ranchingaccount for about 75% of the world�s tropicaldeforestation, followed by industrial logging(including fuelwood), which contributes about20-30%, and industrial development (such asroad building, mining, and dam construction),which contributes about 4-5% (NGOs).110

Commercial timber interests first harvestat the margin between farmland and forest, andthen move deeper into the interior until theyreach a point where harvest and access costsconsume the full value of the standing resource.They repeat- or pulse-harvest this land in sub-sequent years whenever sufficient new naturalgrowth justifies it. An unused residual of natu-ral forest generally lies beyond the boundary ofeconomically viable forest; access and harvestcosts for this residual exceed the value of theland for either market or subsistence produc-tion (journal).111

Private individuals and communities willestablish clear rights to parts of the forestwhere the longrun value exceeds the costs ofestablishing and protecting the property rights(journal).112

The values of standing forest resourcesare low relative to other land uses. Forest re-sources may also be dispersed. For example,

fruit and nut-bearing trees tend to be scattered,and some high-value tropical timber speciesoccur only on an occasional hectare. The costsassociated with establishing and maintainingproperty rights for these resources can easilyexceed their in situ values. Fences, forestguards, and roadblocks may help protect theserights, but trespass and theft are common evenin the forests of industrial countries (journal).113

World Bank: In 1991, forest loans werethe Bank�s fastest-growing sector. It becamethe institution�s priority in September 1989when World Bank president Barber Conableannounced a tripling of bank forest lendingthrough the early 1990s. One loan submittedfor approval was designed to promote timberconcessions in the Ivory Coast while leveling500,000 hectares of tropical forest. The Boardasked the forest-sector to revamp its forestlending policy. One of the Bank�s obstaclesto reform in many of the world�s forest areas -principally in Africa and the Amazon - is cor-rupt local governments, which turn quick prof-its from logging that produces fuel wood, tim-ber, and pulp (press).114

The contribution of small farmers towarddeforestation is well understood. Land clearinghas been more rapid in Rondônia than anywhereelse in the Brazilian Amazon and more that halfthe deforested land in that state is divided amongsmall agricultural holdings (book).115

In Indonesia and Brazil, many colonistshave participated in settlement projects to for-ested hinterlands, organized and directed bythe public sector (book).116

In southern Brazil, they have been sellingoff their parcels, taking advantage of prices in-flated by tax and other policies favorable tothose with large land holdings (NGO).117

Moves to agriculture�s margin is also promotedby infrastructure development which reducesthe cost of marketing commodities grown inremote areas (journal).118 Agricultural colonistsin many countries also benefit from grace peri-ods for development credit and other subsidies.

In addition to inducements to migrate tofrontier areas, agricultural colonists in the thirdworld face tenure regimes that promote defor-estation. Often, removing trees and other veg-etation is a prerequisite for establishing formalproperty rights. In Sudan, for example, theparastatal Mechanized Farming Corporationawards fifteen-year leases only to individuals

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Group 3: Institutional and Legal Aspects of Forest Matters

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who clear 85% of their holdings in three years.Furthermore, because developing country gov-ernments usually take years to adjudicate claimsfor formal property rights � particularly claimsmade by small farmers settling in hinterlands �colonists tend to safeguard pending land rightsby using their parcels continuously for crop orlivestock production. In addition, agriculturaluse rights are the only form of land tenure avail-able to private agents in many countries. Thegovernment of Ecuador, for example, termi-nated all private timber concessions in thecountry�s �forest patrimony� in 1982. Agricul-tural colonization of tree-covered land is stillpermitted, however (journal).119

Most colonists realize that they risk losingland not in use for crop or livestock productionto other settlers if they allow their actions to beinfluenced by the judgment that future defores-tation is more profitable than present land clear-ing. Accordingly, any parcel is cleared immedi-ately if agricultural rents can be captured bydoing so. Settlers are obliged to neglect returnsassociated with non-agricultural land uses andto respond immediately to any opportunity tocapture agricultural rents (journal).120

One�s ability to acquire property rights in�idle� land by converting it to an agriculturaluse not only induces rational settlers to defor-est excessively, but also discourages themfrom conserving existing farmland (journal).121

Some potential limitations and pitfalls ofremedying institutionally induced degradationof developing country hinterlands throughnon-institutional measures: In addition to re-ducing soil loss, the introduction of less ero-sive farming techniques can accelerate defor-estation just as extending information on lesserosive uses of newly cleared hinterlands canresult in additional agricultural colonization.Similarly, removing policy-induced distortionsin markets for labor, credit and agriculturalcommodities can either encourage soil conser-vation and land clearing or discourage both.At an extreme, a rise in timber prices can ac-tually accelerate the cycle of deforestation anderosive farming, given tenurial conditions fac-ing agricultural colonists. Therefore, the cycleof excessive land clearing and erosive farm-ing can be broken only by accomplishing thepolitically charged task of changing the insti-tutional causes of that cycle. To be specific,conservation of forested hinterlands is encour-aged by strengthening the property rights ofsettlers, of those adversely affected by defor-estation and erosion, or of both groups (jour-nal).122

Colonists� expectations that commodityprices will increase at some future date mightinduce them to deforest more land now, evenwhen current prices might not be high enoughto justify such action. This might explain, inpart, the speculative clearing of land (under-taken to secure property rights) in some partsof Brazil (NGO).123

Peru plans to settle 2 million peasants inthe jungle over the next five years (1980-85),and Ecuador and Colombia hope to open upgas and oil fields, with long pipelines to bepushed through the forest to the coast. Brazilhas done the most damage, particularly withthe Trans-Amazon Highway that a decade agofirst opened the interior to large-scale exploi-tation. Nearly 8 million acres were cleared tobuild the highway and its ever-spreading net-work of secondary roads. Agribusiness ranch-ers and hundreds of thousands of farmers haveburned trees worth $1 billion a year simply toclear them away. Cattle grazing and logginghave further denuded the jungle (press).124

Brangantina, a region the size of Belgiumon Brazil�s northeast coast, was opened up forfarming at the turn of the century. The projectwas at first considered a model for Amazondevelopment, but by the 1940s its soil was ex-hausted. The government moved Brangantina�ssettler to Rondônia where they met the samefate more quickly (press).125

The absence of well-defined propertyrights is cited as a key contributor to rapiddeforestation and other type of �wasteful� landuse in developing areas (book),126 particularlyin Brazil (NGO).127

Migration to the Brazilian Amazon has oc-curred since the late 1960s, often through di-rected government colonization projects. Thepopulation of the state of Pará grew from justover 2 million in 1970 to more than 4 million in1985 (NGO).128 The amount of land in farmsdoubled in the 1960s and again in the 1970s.The construction of the TransAmazon andBelém-Brasília highways opened new land forprivate claims in the 1960s (journal).129

Title is a formal document issued by theBrazilian federal or state government, depend-ing on the jurisdiction, that signifies govern-ment recognition of an individual�s propertyrights to land. In addition to legal standing, therecording of the titles in the local land registry(cartório) includes survey descriptions (memo-rial descritivo), the location of boundary mark-ers, and the date of recording to establish pre-cedent for the land claim. The recording of atitle includes a list of previous owners (cadeia

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ondominal). The record is important if there is adispute over land transfers. Full public enforce-ment rights are also a privilege of a title. Hav-ing a title reduces private enforcement costs,provides security and collateral for long-terminvestment in land improvements, and promotesthe development of land markets (journal).130

Brazilian frontiers are open for privateclaiming and titling. Generally, the land claimmust be occupied by the claimant and im-proved for agricultural use � one year forclaims on government land or five years forclaims to private land based on adverse pos-session. To initiate the titling process, grouporganization is necessary because land agen-cies usually wait until a threshold number ofrequests are made before traveling to the site.Normally, title applications can be processedwithin two to five years, but if the initial claim-ant moves to a different site and sells theclaim, the title application must be reprocessedand thus titling time is extended (journal).131

Being influenced by local political pres-sures, ITERPA (State of Pará Land Institute)tended to assign titles more rapidly and com-pletely than the federal agency, INCRA (Na-tional Institute for Colonization and AgrarianReform) ITERPA applications coincide withstate election cycles (book).132

Investment in infrastructure by the fed-eral government and subsidized coloniesbrought settlers to the Amazon before landvalues had risen to a level that attracts suchmigrants. In Pará declining budgets for landagencies limited their ability to process titleapplications (Brazilian state government).133

Ranchers have been subsidized bySUDAM (Superintendency for the Develop-ment of Amazonia, a federal agency that ad-ministered a series of credit benefits and fiscalincentives (NGO).134

Alston et. al. (journal)135 provide an em-pirical basis for conclusions regarding the de-mand for and supply of title, the impact oftitle on land value, and its effects on agricul-tural investment on Brazilian frontiers. Theiranalytical framework incorporates the follow-ing issues: 1) Distance to market is a primarydeterminant of land value. At some distance,transportation costs are higher than opportu-nity costs of the marginal laborer. Those whosettle the frontier will be those who have rela-tively lower opportunity costs, limited educa-tion and experience. 2) With titled land, thestate assumes most of the enforcement costs,guarantees ownership, and thereby promotesinvestment, exchange, and production. Hence,

titled values are higher than non-titled land,especially near the market center. As youmove from the market center, higher transpor-tation costs limit the potential for exchangeand production and thus land values are lower.Competition for ownership is reduced, requir-ing less state enforcement of title, and privateenforcement costs decline. At a given distancefrom the market center, the difference be-tween values of titled and non-titled land be-comes negligible.

Analysis of census data with their analyti-cal framework produced the following results:1) Land value per hectare is a positive func-tion of title. Distance reduces value differen-tially for titled and nontitled land. The contri-bution of title to land value is greatest at themarket center, where competition and privateenforcement costs would otherwise be thehighest. The role of title declines with dis-tance as competition for control declines andproduction and exchange opportunities dimin-ish. 2) Land agencies influence those costs,with the state agency, ITERPA, appearing toprovide titles liberally, whereas the federalagency, INCRA, appears to be very slow intitling, even in the colony of Tucumã, whereland values are relatively high and distancesare comparatively short. Private costs of ob-taining a title from state government land agen-cies may be less than those for obtaining atitle from federal agencies. 3) Formal propertyrights to land promote farm-specific invest-ments (permanent crops and pasture), whichin turn, raise land values directly.

In general: 1) Title and/or investmentraised land values on Brazilian frontiers acrosstime. In the instance of Pará, the distance effecton the value of titled land was not significant.On the other hand, higher costs associated withgreater distance from administrative centerstended to reduce the proportion of farmers withtitles in Pará. 2) Title and investment contributeto land value, and title promotes farm-specificinvestment. 3) Additionally, the expectedchange in value from having a title appears toincrease the incidence of title.

Tenure institutions have the potential tocreate wealth by promoting investment, reduc-ing enforcement costs, and extending the gainsfrom trade. Where government jurisdictionshave been confused, title has been less preva-lent. Claimants to low-value, remote plots re-ceive title, especially from ITERPA, prior toelections, whereas claimants to some morevaluable plots near to markets are neglected,often due to budget and staff limitations.

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The government response to the demandfor property rights will be influenced by a va-riety of political factors, including competingconstituent pressures, electoral demands con-flicting agency and government jurisdictions,and fluctuating budgets and staffing for titlingagencies. Government policy plays a role inall this by determining who receives title(through the allocation formula), when it is as-signed (through marking and survey policies,pricing, and other settlement requirements),whether it is secure (through enforcementpractices), and how conflicts are adjudicated(through the police and courts) (journal).136

The Brazilian Constitution of 1988 con-ferred more power to counties; therefore,these local governments could enact legisla-tion requiring that specified land be used in-tensively for pasture and logging. Such lawscould generate jobs for the region and pre-serve primary forest (journal).137

Theme 8: Policy of Concessions inDifferent Countries and How They Applyto the Amazon

The cost of acquiring timber concessionsin Brazil, Latin America in general, and Afri-can nations is comparatively lower than othertropical timber producing countries (press).138

Ghana:As of 1991, Ghana had banned the export

of 17 timber species as a means of controllingdeforestation. Royalties on tree volumes wereraised to reflect the economic value of treeswhile a new timber concession policy was be-ing implemented. Rex Chachu, chief director ofthe Ministry of Lands and Natural Resources, saidthe wood processing and marketing industry inthe country has decided to donate one percentof the value of its export to support the affores-tation and reforestation programs (press).139

Indonesia:In 1994, the Indonesian government an-

nounced a ban on new timber concessions toprivate companies. In addition, existing tim-ber areas will be taken over by state-ownedagencies once their concession periods expire.The large pulp mills should not be immedi-ately affected as their concessions are not upfor renewal until 2000 (journal).140

Much of Indonesian logging is done bycompanies that have close connections to thegovernment, armed forces or bureaucracy(press).141

Private Indonesian Forum for Environ-

ment � body to help settle land disputes(press).142

1994 report that the government had be-gun buying into some timber concessions andmerging other to improve forest management(press).143

There are about 500 timber concession inIndonesia. They range in size from 20,000hectares (50,000 acres) to 2 million hectaresand are issued by the government for periodsup to 20 years subject to certain conditions, suchas selective cutting and replanting. Critics saythat many of the conditions have not been ob-served or enforced. Mr. Jamaludin, the forestryminister, said the government had alreadybought a 49% stake in 28 concessions andwould use the profits for reforestation programs.The concessions include two large ones con-trolled by Barito Pacific Timber Co (press).144

The World Bank expressed concern thattoo little is being charged for forest concessionsin Indonesia and thus contributing to rapid de-forestation and loss of water supplies andbiodiversity. Mr. Jamaludin, forestry minister,said, in July, that over the next five years Indo-nesia would reduce its annual timber cut to thelevel that the World Bank report said was sus-tainable. He also indicated that the governmentwould increase the license fees and levies paidby the holders of forest concessions (press).145

September 7, 1994: Indonesia announcedit wanted 49% stake in Barito Pacific in ex-change for renewal of the firm�s 20-year timberconcessions. Shares in Barito Pacific, whoseforestry concessions exceed five million hect-ares (12.35 million acres), nearly eight percentof Indonesia�s total natural production forests,were largely unaffected by the news (press).146

May 17, 1994: Indonesian forestry ministrybanned a large timber company from listingshares on the Jakarta Stock Exchange because ofsuspicions that the company was involved in ille-gal logging. Government policy concentrates oncontrol of illegal logging and the introduction ofhigher valued added products, a reduction in shift-ing cultivation by forest dwellers and the provi-sion of new employment, and the establishmentof renewable timber plantations to support a fast-growing pulp and paper industry (press).147

According to Indonesia�s own rules onsustainable forest management, the maximumamount of timber that can be cut is 31.4m cu-bic meters/year, but actual demand is 44m cu-bic meters, almost 40% higher. More effectivemonitoring of resources plus better tax collec-tion from timber corporations are the main rec-ommendations from action groups (press).148

148

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is 247,000 acres (press).149

The policy of collecting the money fromconcession holders has been difficult to en-force. According to Forestry Minister HasjrulHarahap, about six billion rupiah ($3.4 mil-lion) has still not been paid by some 50 timberconcession holders (press).150

Timber companies are supposed to paybond money to a reforestation fund in the min-istry for every tree that is cut down. A recentstudy by the FAO (1988) said timber compa-nies found it cheaper to forfeit the money thanto replant the seedlings. The Forest conserva-tion Network of Indonesia told a recent parlia-ment hearing there had been no proper ac-counting for the fund and called for an end totimber concessions. The government bannedlog exports in 1985 and said timber conces-sion holders should �selectively cut� trees onlyof a certain circumference. The World Bankand environmental groups say timber compa-nies cut down trees indiscriminately to removethe few valuable species from the jungle. Al-though Indonesia�s forests are state owned,huge expanses are controlled by about 500concession holders. The Forestry Conserva-tion Network said many of them are held byretired military and government officials wholack expertise in logging operations (press).151

Malaysia:Concessions are the key to the profitabil-

ity of the country�s timber companies, ratherthan the capacity of downstream production.The government strictly limits logging andmany operators who do not own timber con-cessions have difficulty getting supplies. Con-cessions in Sarawak are especially valuable.Being more politically stable (Abdul TaibMahmud has been chief minister of the statefor nearly 20 years) than neighboring Sabah,Sarawak awards longer concession periods.The state allows 50% of its logs to be exported(press).152

One of the obstacles to bringing the log-ging industry under control is the close rela-tionship between the loggers and the stategovernment of chief minister Mr. Abdul TaibMahmud. Mr. Taib�s uncle and political rival,Mr. Abdul Rahman Yakub, let it be known dur-ing an election campaign in 1987 that hisnephew�s relatives and political allies con-trolled 1.6m hectares of the state�s timber con-cessions, about a third of the total (press).153

Rights over land concessions are reservedby the constitution to the states, so there is

nothing the federal government can do. Federalregulations stipulate that most unsawn timbermust not be exported as such, in order to buildup a certain amount of local employment. Butmost of the tree-trunks go off anyway, unproc-essed to Japan, Taiwan, or Korea (press).154

Papua New Guinea:Considering lower concession prices in

Latin America and Africa, logging companies inPapua New Guinea would like to appeal to thegovernment to reduce royalties, levies and taxeson timber. Otherwise, existing timber operatorswill not expand operations and new ones willnot likely enter. Without such measures, manag-ing director of Rimbunan Hijau, Bhd Datuk TiongHiew King, predicts that the timber industry inPapua New Guinea will shrink by 30 percentwithin the next 12 months. He also suggestedthe Government amend its existing land statutesand policies to remove ambiguities that oftensurround the applications and interpretations ofthe regulations. According to him, this wouldboost the confidence of foreign and local inves-tors in the country (press).155

Suriname:Between 1993 and 1995, the Suriname

government began negotiations with severalAsian timber conglomerates to make 25-40% ofthe country�s land area (7-12 million hectares)available for logging. The government report-edly plans to sell off these forests at a fractionof their potential as a means of dealing withtheir fiscal crisis (NGO).156 Timber consortiumsfrom Malaysia, Indonesia, and China have of-fered investment packages of more than $500million (almost equal to the country�s total an-nual GDP) for access to remote, untouched for-ests in the country�s interior (NGO).157 A recentWorld Resources Institute (WRI) study on forestpolicy in Suriname found that the governmentwould lose between 41-86% of potential rev-enue from logging, depending on how hon-estly companies reported their profits(NGO).158 Several of the timber consortiumsbidding on concessions have poor environmen-tal track records and a history of unscrupulousbusiness practices (NGO).159 This has included,according to one report, bribing members ofSuriname�s parliament to secure their votes(press).160 Suriname�s Forest Service currentlylacks the capacity to adequately monitor log-gers� compliance with new concession agree-ments. The government may actually losemoney on the proposed deal once factoring inthe costs of building a monitoring capacity

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(NGO).161 The WRI report recommends newbidding and taxation practices so the countrycaptures more of the return from the harvest-ing. It suggests that the government imposecontrols to minimize environmental damage andsocial disruption from logging. These moveswould yield higher long-term profits to thecountry and could reduce the total area openedto timber exploitation (NGO).162

Theme 9: Brazilian Forests and LumberConcessions

Companies that process wood are requiredby law to plant six trees for every one that theyharvest. The federal government offers no taxbreaks, loans or any sort of financial incentiveto encourage tree-planting (journal).163

Chairman of Madera International, Inc.,Dan Lezak, announced an agreement to acquireassets consisting of timber properties and con-cessions in Brazil, Bolivia, and Peru value inexcess of $30 million from privately-ownedForest & Environmental Resources of the Ama-zon, Inc. (FERA). The acquisition will bring to-gether two of the most environmentally con-

scious companies in the industry. CONTACT:Daniel Lezak, President and Chairman ofMadera International, 818-223-8807 (press).164

In the last decade (1970-80), cattle andtimber concessions have totaled more than 20million acres � much of it to overseas basedmultinationals (press).165

The fierce reputation of Kayapó warriorshas successfully deterred encroachments innorthern Brazil. Some Kayapó chiefs, however,have opted to sell mahogany and miningrights. Greenpeace recently sought to enforcea ban on mahogany logging on the tribal lands� an action that has aggravated certainKayapó (journal).166

The chief of the village Aukre, Paiakan,is famous as a spokesperson for protecting rainforests and tradition, as well as for being askillful politician who could unify previouslywarring tribes in the face of developers. Yetother villagers have disagreed with his view.In addition, Paiakan can no longer easily be anadvocate for indigenous people in the Ama-zon; he has been charged with attempted rapeand is awaiting trial (journal).167

Notes

* UNDP/NY, USA.

Note: Unless otherwise indicated, reference number refers to entire preceding paragraph.1 Youn, Yeo-Chang. Review of The Causes of Tropical Deforestation: The Economic and Statistical Analysis

of Factors Giving Rise to the Loss of the Tropical Forests. Ed. Brown and Pearce. Journal of DevelopmentStudies. Vol. 31, No. 5, June, 1995: 794.

2 Nectoux, F. and Y. Kuroda. 1990. Timber from the South Seas�an Analysis of Japan�s Tropical TimberTrade and Its Environmental Impact. A World Wildlife Federation Inter. Pub. October. Gland, Switzerland;Sullivan, F. 1990. The Fragile Forest. Timber Trades J. June, 9: 12-13.

3 Johnson, B. 1991. Responding to tropical deforestation: an eruption of crisis�an array of solutions.World Wildlife Fund Publications. Panda House Pubs, Godalming, U.K.

4 Ozanne, L. and P. Smith 1993. Strategies and perspectives of influential environmental organizationstoward tropical deforestation. Forest Prod. J. 43 (4): 39-49; Vincent, J.R. 1990. Don�t Boycott TropicalTimber. J. of Forestry. My Chance. 88: 56. March.

5 Smith, P. and L. Ozanne. 1993. The environmental movement and tropical timber trade. Taiwan ForestProd. Ind. J. 12(1): 1-17.

6 Hyde, William, Gregory S. Amacher, and William Magrath 1996. �Deforestation and Forest Land Use:Theory, Evidence, and Policy Implications.� World Bank Research Observer 11(2): 223-248.

7 Convention on International Trade in Endangered Species (CITES) Secretariat, �The CITES Timber WorkingGroup: An Opportunity to Resolve Issues Related to Listing Timber Species in the CITES Appendices,� TropicalForest Update, Vol. 5, No. 3 (September 1995), p.4.

8 International Tropical Timber Organization (ITTO), �What is CITES: An International ConventionExplained,� Tropical Forest Update, Vol. 5, No. 3 (September 1995), p. 3.

9 Convention on International Trade in Endangered Species (CITES) Secretariat, �The CITES Timber Working

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onGroup: An Opportunity to Resolve Issues Relatedto Listing Timber Species in the CITESAppendices,� Tropical Forest Update, Vol. 5, No.3 (September 1995), p. 4.

10 Youn, Yeo-Chang. Review of The Causes ofTropical Deforestation: The Economic andStatistical Analysis of Factors Giving Rise to theLoss of the Tropical Forests. Ed. Brown andPearce. Journal of Development Studies. Vol.31, No. 5, June, 1995: 794.

11 Food and Agriculture Organization of the UnitedNations.

12 Pappens, Rita Anna. �Industry Dusts Off Plansas Future Looks Bright; Includes Related Articleon Environmentalists and Pulp Production.�Pulp & Paper International. vol. 36, no. 11,November, 1994:23.

13 Pappens, Rita Anna. �Industry Dusts Off Plansas Future Looks Bright; Includes Related Articleon Environmentalists and Pulp Production.�Pulp & Paper International. vol. 36, no. 11,November, 1994:23.

14 LaFranchi, Howard. �Spare the Ax, Spoil theAmazon.� The Christian Science Monitor 14 May1997:9.

15 Vincent, Jeffrey R. �The Tropical Timber Tradeand Sustainable Development.� Science 256(1992): 1651-1655.

16 Zugman, Isac Chami. �Exports Fuel Fast Growthof Brazil�s Plywood Industry.� Wood Technology122 (1995): 41.

17 Zugman, Isac Chami. �Exports Fuel Fast Growth ofBrazil�s Plywood Industry.� Wood Technology 122(1995): 41. The author is commercial executivedirector of two Brazilian plywood producers,Compensados e Laminados Lavrasul SA in Curitibaand Brascomp Compensados do Brasil in Belem.This article is adapted from a speech he gave at the38th International Hardwood Products Assn.meeting in Orlando, FL.

18 World Commission on Environment andDevelopment. Our Common Future (Oxford:Oxford University Press, 1987).

19 Hamilton, L.S. 1990. Boycotts of TropicalTimber Products Will Not Stop Deforestation.Position Paper. Environment and PolicyInstitute, East-West Center, Honolulu, Hawaii;Jagels, R. 1990. Alternatives to boycotting.Journal of Forestry, October, pp.30-31; Mather,A.S. 1990. Global Forest Resources. BelhavenPress, London; U.S. Department of Commerce.Wood Import and Export Statistics: 1989-1992.USDC, Bureau of Statistics, Washington, D.C.;Vincent, J.R. 1990. �Don�t Boycott TropicalTimber.� Journal of Forestry. My Chance. 88:56. March.

20 Food and Agriculture Organization of the UnitedNations. 1991. FAO Yearbook of ForestProducts: The Directions of Trade 1995-1989.FAO, Rome, Italy. p. 306.

21 Smith, Paul M., Michael P. Haas, and William G.Luppold. �An Analysis of Tropical Hardwood

Product Importation and Consumption in theUnited States.� Forest Products Journal 45(1995) 31-37.

22 Smith, Paul M., Michael P. Haas, and William G.Luppold. �An Analysis of Tropical HardwoodProduct Importation and Consumption in theUnited States.� Forest Products Journal 45(1995) 31-37.

23 Smith, Paul M., Michael P. Haas, and William G.Luppold. �An Analysis of Tropical HardwoodProduct Importation and Consumption in theUnited States.� Forest Products Journal 45(1995) 31-37.

24 Smith, Paul M., Michael P. Haas, and William G.Luppold. �An Analysis of Tropical HardwoodProduct Importation and Consumption in theUnited States.� Forest Products Journal 45(1995) 31-37.

25 Food and Agriculture Organization of the UnitedNations. 1992. FAO Yearbook of Forest Products1979-1990. FAO, Rome, Italy. 332 pp.; Food andAgriculture Organization of the United Nations.1991. FAO Yearbook of Forest Products: TheDirections of Trade 1995-1989. FAO, Rome, Italy,306 pp.; Johnson, B. 1991. Responding to TropicalDeforestation: an Eruption of Crisis � an Array ofSolutions. World Wildlife Fund Publications.Panda House Pubs, Godalming, U.K.; Lindell, G.1992. Alleviation Tropical Deforestation. ExtendNewsletter, National Wood Prod. Ext. Program.Vol. 5. USDA Forest Serv., Northeastern Forest Expt.Sta., Princeton, W. Va.; Friends of the Earth. 1989.Deforestation Rates. Tropical Forests and TheirClimatic Implications; Ozanne, L. and P. Smith.1993. Strategies and Perspectives of InfluentialEnvironmental Organizations Toward TropicalDeforestation. Forest Prod. J. 43 (4): 39-49.

26 Johnson, B. 1991. Responding to TropicalDeforestation: an Eruption of Crisis�an Arrayof Solutions. World Wildlife Fund Publications.Panda House Pubs, Godalming, U.K.; Nectoux,F. and Y. Kuroda. 1990. Timber from the SouthSeas�an Analysis of Japan�s Tropical TimberTrade and its Environmental Impact. A WorldWildlife Federation Inter. Pub. October. Gland,Switzerland.

27 Myers, N. 1994. The Primary Source. W.W.Norton, New York.

28 Smith, Paul M., Michael P. Haas, and William G.Luppold. �An Analysis of Tropical HardwoodProduct Importation and Consumption in theUnited States.� Forest Products Journal 45(1995) 31-37.

29 Reiss, Spencer with Larry Rother in the Amazon,Holger Jensen in Johnnesburg, Barry Came inHong Kong, John Taylor in New York, Mary Lordin Washington. �Vanishing Forests.� Newsweek.24 November, 1980: 117.

30 �Indonesia to Speed Up Reforestation for TimberExports.� Reuters North American Wire. 2September, 1991.

31 Richardson, Michael. � Jakarta Attacks

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Deforestation; but Limiting Effects of Loggersand Farmers Will Be Hard.� InternationalHerald Tribune. 22 September, 1994.

32 Ford, Maggie. �Survey of World Forest Products.�Financial Times. 17 May, 1994:IV.

33 Mallet, Victor. �Survey of Malaysia.� FinancialTimes. 28 August, 1992:VIII.

34 Mallet, Victor. �Survey of Malaysia.� FinancialTimes. 28 August, 1992:VIII.

35 Choong, Alex. �World Timber Industry FacingDifficult Times.� New Straits Times. 13 March,1996:24.

36 Sugal, Cheri. �Labeling Wood: How TimberCertification May Reduce Deforestation.� WorldWatch. September/October 1996: 29-34.

37 Tan, T.J. �Malaysian Timber Company Not YetOut of the Woods.� Asia Times 18 April, 1997: 3.

38 Kusjanto, Mantik. �Indonesia Uses EquityMuscle on Forest Concession.� The Reuter Asia-Pacific Business Report. 7 September, 1994.

39 Ford, Maggie. �Survey of World Forest Products.�Financial Times. 17 May, 1994:IV.

40 Kusjanto, Mantik. �Indonesia Uses EquityMuscle on Forest Concession.� The Reuter Asia-Pacific Business Report. 7 September, 1994.

41 Pappens, Rita Anna. �Industry Dusts Off Plansas Future Looks Bright; Includes Related Articleon Environmentalists and Pulp Production.�Pulp & Paper International. vol. 36, no. 11,November, 1994:23.

42 Sugal, Cheri. �Labeling Wood: How TimberCertification May Reduce Deforestation.� WorldWatch. September/October 1996: 29-34.

43 Choong, Alex. �World Timber Industry FacingDifficult Times.� New Straits Times. 13 March,1996:24.

44 Gradwohl, J. and R. Greenberg. Saving theTropical Forests (London: EarthscanPublications Limited, 1988).

45 World Bank. World Resources: A Guide to theGlobal Environment 1996-1997. OxfordUniversity Press: 1996, p. 211.

46 Sizer, Nigel. �Opportunities to Save andSustainably Use the World�s Forests ThroughInternational Cooperation,� WRI Issues andIdeas (World Resources Institute, Washington,D.C., 1994), p.7.

47 Von Thunen, Johann H. 1875. The IsolatedState in Relation to Land Use and NationalEconomy Berlin: Schmaucher Zarchlin.

48 Richardson, Michael. � Jakarta AttacksDeforestation; but Limiting Effects of Loggersand Farmers Will Be Hard.� InternationalHerald Tribune. 22 September, 1994.

49 Holloway, Marguerite. �Sustaining the Amazon.�Scientific American. July 1993: 91-99.

50 Holloway, Marguerite. �Sustaining the Amazon.�Scientific American. July 1993: 91-99.

51 Holloway, Marguerite. �Sustaining the Amazon.�Scientific American. July 1993: 91-99.

52 Holloway, Marguerite. �Sustaining the Amazon.�Scientific American. July 1993: 91-99.

53 Holloway, Marguerite. �Sustaining the Amazon.�Scientific American. July 1993: 91-99.

54 Zugman, Isac Chami. �Exports Fuel Fast Growthof Brazil�s Plywood Industry.� Wood Technology122 (1995): 41.

55 Zugman, Isac Chami. �Exports Fuel Fast Growthof Brazil�s Plywood Industry.� Wood Technology122 (1995): 41.

56 Zugman, Isac Chami. �Exports Fuel Fast Growthof Brazil�s Plywood Industry.� Wood Technology122 (1995): 41.

57 Zugman, Isac Chami. �Exports Fuel Fast Growthof Brazil�s Plywood Industry.� Wood Technology122 (1995): 41.

58 Holloway, Marguerite. �Sustaining the Amazon.�Scientific American. July 1993: 91-99.

59 Food and Agriculture Organization of the UnitedNations (FAO), �Forest Resources Assessment1990: Global Synthesis,� FAO Forestry Paper 124(FAO, Rome, 1995).

60 Food and Agriculture Organization of the UnitedNations (FAO), �Forest Resources Assessment 1990:Global Synthesis,� FAO Forestry Paper 124 (FAO,Rome, 1995), p. ix and Annex 1, pp. 18-21.

61 Food and Agriculture Organization of the UnitedNations (FAO), �Forest Resources Assessment1990: Global Synthesis,� FAO Forestry Paper 124(FAO, Rome, 1995), Annex 1.

62 K. D. Singh and Antonio Marzoli, �DeforestationTrends in the Tropics: A Time Series Analysis,�paper presented at the World Wildlife FundConference on Potential Impact of ClimateChange on Tropical Forests, San Juan, PuertoRico, April 1995, pp. 8.

63 K. D. Singh and Antonio Marzoli, �DeforestationTrends in the Tropics: A Time Series Analysis,�paper presented at the World Wildlife fundConference on Potential Impact of ClimateChange on Tropical Forests, San Juan, PuertoRico, April 1995, pp. 9.

64 Food and Agriculture Organization of the UnitedNations (FAO), �Forest Resources Assessment1990: Global Synthesis,� FAO Forestry Paper 124(FAO, Rome, 1995), Annex 1, pp. 18-21.

65 Singh, K.D. and Antonio Marzoli, �DeforestationTrends in the Tropics: A Time Series Analysis,�paper presented at the World Wildlife FundConference on the Potential Impact of ClimateChange on Tropical Forests, San Juan, PuertoRico, April 1995, pp. 8-9.

66 Singh, K.D. and Antonio Marzoli, �DeforestationTrends in the Tropics: A Time Series Analysis,�paper presented at the World Wildlife FundConference on the Potential Impact of ClimateChange on Tropical Forests, San Juan, PuertoRico, April 1995, pp. 2-3.

67 Food and Agriculture Organization of the UnitedNations, the United Nations Population Divisionand other sources.

68 Food and Agriculture Organization of the UnitedNations and the United Nations EconomicCommission for Europe.

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Treaty, �Tarapoto Proposal on Criteria andIndicators of Sustainability for the AmazonForests,� (Amazon Treaty Organization, Lima,Peru, February 25, 1995).

70 Tan, T.J. �Malaysian Timber Company Not YetOut of the Woods.� Asia Times 18 April, 1997: 3.

71 Hyde, William F. and Juan Seve. 1993. �TheEconomic Role of Wood Products in TropicalDeforestation: the Severe Example of Malawi.�Forest Ecology and Management 57(2): 283-300.

72 Hyde, William F., Amacher, Gregory S., andWilliam Magrath. �Deforestation and Forest LandUse: Theory, Evidence, and Policy Implications.�World Bank Research Observer 11 (1996): 223-248.

73 Scherr, Sara J. 1995. �Economic Factors inFarmer Adoption of Agroforestry: PatternsObserved in Western Kenya.� WorldDevelopment 23(5): 787-804.

74 Byron, Neil. 1993. personal records.75 Krutilla, Kerry, William F. Hyde, and Douglas F.

Barnes. 1995. �Urban Energy Consumption andPeriurban Deforestation.� Forest Ecology andManagement 74 (2): 181-95.

76 Yin, Runsheng. 1994. �The Farmer TreePlanting Response to Political Uncertainty inChina.� Ph.D. dissertation. University ofGeorgia, College of Forest Resources, Athens.

77 Larson, Bruce A. 1992. �Changing theEconomics of Environmental Degradation:Lessons from the National Environmental ActionPlan Process.� Winrock International WorkingPaper. Washington, D.C.

78 Bluffstone, Randall. 1995. �The Effect of LaborMarkets on Deforestation in DevelopingCountries Under Open Access: an Example fromRural Nepal.� Journal of EnvironmentalEconomics and Management 29(1):42-63.

79 Templeton, Scott. 1992. �Major Determinantsof Farmer Use of Semi-Permanent Soil ErosionControls in Upland Areas of the Philippines.�Ph.D. dissertation. University of California,Berkeley, Agricultural Economics Department;Bensel, Terrence G., and Elizabeth M.Remedio. 1993. �Patterns of CommercialWoodfuel Supply, Distribution, and Use in theCity and Province of Cebu.� Regional WoodEnergy Development Programme WorkingPaper. Food and Agricultural Organization,Bangkok.

80 Richardson, Michael. � Jakarta AttacksDeforestation; but Limiting Effects of Loggersand Farmers Will Be Hard.� InternationalHerald Tribune. 22 September, 1994.

81 Holloway, Marguerite. �Sustaining the Amazon.�Scientific American. July 1993: 91-99.

82 Holloway, Marguerite. �Sustaining the Amazon.�Scientific American. July 1993: 91-99.

83 Holloway, Marguerite. �Sustaining the Amazon.�Scientific American. July 1993: 91-99.

84 Uhl, Christopher, et. al. �Natural Resource

Management in the Brazilian Amazon: anIntegrated Approach.� BioScience 47 (1997):160-168.

85 Reiss, Spencer with Larry Rother in the Amazon,Holger Jensen in Johnnesburg, Barry Came inHong Kong, John Taylor in New York, Mary Lordin Washington. �Vanishing Forests.� Newsweek.24 November, 1980: 117.

86 Reiss, Spencer with Larry Rother in the Amazon,Holger Jensen in Johnnesburg, Barry Came inHong Kong, John Taylor in New York, Mary Lordin Washington. �Vanishing Forests.� Newsweek.24 November, 1980: 117.

87 Holloway, Marguerite. �Sustaining the Amazon.�Scientific American. July 1993: 91-99.

88 Holloway, Marguerite. �Sustaining the Amazon.�Scientific American. July 1993: 91-99.

89 Holloway, Marguerite. �Sustaining the Amazon.�Scientific American. July 1993: 91-99.

90 Holloway, Marguerite. �Sustaining the Amazon.�Scientific American. July 1993: 91-99.

91 Holloway, Marguerite. �Sustaining the Amazon.�Scientific American. July 1993: 91-99.

92 World Bank. World Resources: A Guide to theGlobal Environment 1996-1997. OxfordUniversity Press: 1996, p. 213.

93 Forest Stewardship Council (FSC), �FSCPrinciples and Criteria for Natural ForestManagement� and "FSC Guidelines forCertifiers,� (FSC, Oaxaca, Mexico, 1994).

94 Forest Stewardship Council (FSC), �FSC Manualfor Evaluation and Accreditation of CertificationBodies� (FSC, Oaxaca, Mexico, 1994).

95 Tarasofsky, Richard G. �Developing the CurrentInternational Forests Regime: Some Legal andPolicy Issues,� discussion paper, WorldConservation Union (IUCN), IUCNEnvironmental Law Centre, Bonn, Germany,April 1995, p.7.

96 Sugal, Cheri. �Labeling Wood: How TimberCertification May Reduce Deforestation.� WorldWatch. September/October 1996: 29-34.

97 Sugal, Cheri. �Labeling Wood: How TimberCertification May Reduce Deforestation.� WorldWatch. September/October 1996: 29-34.

98 Sugal, Cheri. �Labeling Wood: How TimberCertification May Reduce Deforestation.� WorldWatch. September/October 1996: 29-34.

99 Sugal, Cheri. �Labeling Wood: How TimberCertification May Reduce Deforestation.� WorldWatch. September/October 1996: 29-34.

100 Sugal, Cheri. �Labeling Wood: How TimberCertification May Reduce Deforestation.� WorldWatch. September/October 1996: 29-34.

101 Sugal, Cheri. �Labeling Wood: How TimberCertification May Reduce Deforestation.� WorldWatch. September/October 1996: 29-34.

102 Harman, Nicholas. �Malaysia: Not QuiteUtopia.� The Economist. 22 December, 1979:3.

103 Reiss, Spencer with Larry Rother in the Amazon,Holger Jensen in Johnnesburg, Barry Came inHong Kong, John Taylor in New York, Mary Lord

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Ada Cristina GonçalvesFINEPRio de Janeiro - RJ

Adalberto VeríssimoInstituto do Homem e Meio Ambiente daAmazônia - IMAZONAnanindeua - PA

Angelo Augusto dos SantosFundação Brasileira para o DesenvolvimentoSustentável - FBDSRio de Janeiro - RJ

Antonio Carlos do PradoSecretaria de Desenvolvimento IntegradoMinistério do Meio Ambiente, dos RecursosHídricos e da Amazônia LegalBrasília - D.F.

Antonio HummelIBAMA - Instituto Brasileiro do MeioAmbiente e Recursos Naturais RenováveisManaus - AM

Aspásia CamargoMMA - Ministério do Meio Ambiente, dosRecursos Hídricos e da Amazônia LegalBrasília - D.F.

Benjamin GilbertLaboratório de Química de Produtos NaturaisFAR ManguinhosRio de Janeiro - RJ

Beth FernandesMMA - Ministério do Meio Ambiente, dosRecursos Hídricos e da Amazônia LegalBrasília - D.F.Carlos Gilberto MarquesAracruz CeluloseVitória - ES

Carlos NobreCentro de Previsão de Tempo e EstudosClimáticosCachoeira Paulista - SP

Christoph DiewaltRainforest UnitBanco MundialBrasília - D.F.

Cristina MontenegroPNUD - Programa das Nações Unidas para oDesenvolvimentoBrasília - D.F.

David SmithHarvard Law SchoolCambridge, MA

Eneas SalatiFundação Brasileira para o DesenvolvimentoSustentável - FBDSRio de Janeiro - RJ

Eustáquio ReisInstituto de Pesquisa Econômica AplicadaRio de Janeiro - RJ

Evaristo LopesAssociação Nacional de Fabricantes de Papele CeluloseSão Paulo - SP

Hélio dos Santos PereiraSecretaria de Coordenação dos Assuntos deDesenvolvimento Integrado - SDIMMA - Ministério do Meio Ambiente, dosRecursos Hídricos e da Amazônia LegalBrasília - D.F.

Helvécio Mafra FilhoÁrea de Desenvolvimento e Banco de DadosIBAMA - Projeto PrevFogoIBAMA - Instituto Brasileiro do MeioAmbiente e Recursos Naturais RenováveisBrasília - D.F.

Israel KlabinFundação Brasileira para o DesenvolvimentoSustentável - FBDSRio de Janeiro - RJ

Ivan TomaselliSTCP Engenharia de ProjetosCuritiba - PR

Jag MainiIntergovernmental Panel on Forests (IPF)New York, NY

Lista de Participantes○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

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Joésio SiqueiraSTCP Engenharia de ProjetosCuritiba - PR

Johan ZweedeFundação Floresta TropicalBelém - PA

John GordonYale School of Forestry & EnvironmentalStudiesYale UniversityNew Haven, CT 06511

John GrayDepartment of EconomicsUniversity of ManitobaCanadá

John SpeersWorld Commission on Forests and SustainableDevelopmentGeneve, Switzerland

José de Arimatéa SilvaIBAMA - Instituto Brasileiro do MeioAmbiente e Recursos Naturais RenováveisBrasília - D.F.

José Edil BeneditoSecretaria de Desenvolvimento IntegradoMinistério do Meio Ambiente, dos RecursosHídricos e da Amazônia LegalBrasília - D.F.

José GoldembergInstituto de Eletrotécnica e EnergiaUniversidade de São Paulo - USPSão Paulo - SP

José Natalino Macedo da SilvaCPATU/EMBRAPABelém - PA

Joyce BarryDepartment of Forest SciencesColorado State UniversityFort Collins

Leopold RodésKlabin Fabricadora de Papel e CeluloseSão Paulo - SP

Luis Gomez EcheverriPublic-Private Partnership ProgrammesUnited Nations Development ProgrammeNew York, NY 10017

Luiz Carlos de Miranda JoelsSecretaria de Coordenação da AmazôniaMMA - Ministério do Meio Ambiente, dosRecursos Hídricos e da Amazônia LegalBrasília - D.F.

Manuel Paveri-AnzianiForestry Policy and Institutions BranchFAORome, Italy

Marcelo MarquesiniLaboratório de Silvicultura TropicalUniversidade de São PauloPiracicaba - SP

Marcia Gonçalves RodriguesFundação Aplicações de Tecnologias CríticasSão Paulo - SP

Marcos Antonio de OliveiraCCSIVAM - Comissão para Coordenação doProjeto do Sistema de Vigilância da AmazôniaRio de Janeiro - RJ

Maria Albertina P. M. CostaCCSIVAM - Comissão para Coordenação doProjeto do Sistema de Vigilância da AmazôniaRio de Janeiro - RJ

Mauro ReisFCS Consultoria, Engenharia e Comércio deSistemas Ltda.Belo Horizonte - M.G.

Milagra NuvungaNatural Resources Management Unit - SEED/BPPSNew York, NY

Namrita KapurUNDP/NYNew Haven, CT 06511

New Jordão ZerbiniSecretaria de Desenvolvimento IntegradoMMA - Ministério do Meio Ambiente, dosRecursos Hídricos e da Amazônia LegalBrasília - D.F.

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Niro HiguchiINPA - Instituto Nacional de Pesquisas daAmazôniaManaus - AM

Ovídeo GasparetttoSindicato dos Produtores de Madeira deBelémBelém - PA

Paulo BarretoIMAZON - Instituto do Homem e MeioAmbiente da AmazôniaAnanindeua - PA

Raimundo Deusdará FilhoSecretaria de Desenvolvimento IntegradoMMA - Ministério do Meio Ambiente, dosRecursos Hídricos e da Amazônia LegalBrasília - D.F.

Ralph SchmidtNatural Resources Management UnitUnited Nations Development ProgrammeNew York, NY

Ricardo TarifaRainforest UnitBanco MundialBrasília - D.F.

Samuel Wallace McDowellCâmara dos DeputadosBrasília - D.F.

Sebastião KengenIBAMA - Instituto Brasileiro do MeioAmbiente e Recursos Naturais RenováveisBrasília - D.F.

Thaís Linhares JuvenalBNDES - Banco Nacional deDesenvolvimento Econômico e SocialRio de Janeiro - RJ

Vicente Gabriel dos Santos LelisMadeireira MilItaguatiára - AM

Walfredo de Andrade Pinto SchindlerFundação Brasileira para o DesenvolvimentoSustentável - FBDSRio de Janeiro - RJ

Wilson França PradoCCSIVAM - Comissão para Coordenação doProjeto do Sistema de Vigilância da AmazôniaRio de Janeiro - RJ

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