The World Bank’s New Forest Policy

1. The World Bank’s New Forest Policy Putting the world’s forests and their communities in danger

2. Background • WB: movement towards programmatic, upstream lending (to which the WB safeguard framework is not applied) • Harmonisation of dvpt processes and standards – Rome Declaration February 2003 – will safeguards be harmonised upwards or downwards? • Safeguard conversion process within the Bank (for the past 5 years): systematic weakening and watering down of policies • Serious problems with implementation of policies, as demonstrated by the OED review of the Indigenous Peoples Policy, and various independent assessments – the WB’s staff incentive system does not encourage policy implementation • The WB has now got a fat finger in the carbon credit pie (through the Prototype Carbon Fund) – so a strong Forest Policy is necessary

3. NGO demands OP 4.36 to cover structural adjustment and programmatic lending OP 4.36 to be cross-sectoral OP 4.36 to apply to all types of forest OP 4.36 to be applicable to all WB bodies The New Forest Policy It does not cover this lending, but Executive Directors and regional Vice Presidents to take steps to identify whether adjustment lending may damage forests Very vague language concerning Country Assistance Strategies and Economic Sector Work Policy applies to all types of forest Policy does not apply to MIGA and IFC. The Bank’s Operational Policy on Forests, OP 4.36

4. NGO demands The WB to ban logging on all old growth forests; should not fund projects that may negatively impact old growth forests The WB should not fund large scale industrial monocrop plantations Tenurial and other human rights of forest dependent peoples should be secured The New Forest Policy WB finances logging if it does not affect “critical” forests or natural habitats; the Bank prefers to avoid projects that would involve “significant” conversion or degradation of critical forests or natural habitats. The Bank prefers to avoid clearance of forests for plantations, but the language is very weak and amenable to subjective interpretation Tenure rights are secured in Bank financed logging projects, but not in plantation schemes, protection schemes and cross-sectoral projects

5. NGO demands National processes related to forests must be inclusive and participatory The Bank should ensure that projects it finances comply with International Human Rights and Environmental Standards The New Forest Policy Participation required for certification only or for community forestry, otherwise participation is determined by other WB safeguard policies The Bank will not finance projects that contravene applicable international environmental agreements (no mention of human rights)

6. Concerning upshots • Already in the pipeline: ~71 projects, with costs estimated at > US$ 2,7 million, which are likely to have implications for forests – the Forest Policy and its implementation need to be clarified if these projects are to go ahead • Old growth forest logging to be funded by the World Bank again – very serious implications, both environmental and social. • What constitutes a ‘critical’ forest? Participatory processes are not required for determining which areas are “critical”. Oversight Panel determines what ‘critical’ means • What does “significant” conversion mean?

7. The rights of forest dwellers not secured in plantation schemes, forest protection schemes, and cross sectoral project impacts • The policy relies largely on the WB’s Natural Habitats Policy to safeguard forests and forest peoples, and yet there has been no implementation review of this policy • What is the certification system to be used for timber harvesting? What does ‘timber harvesting’ mean? • Participation in projects is not required by the policy, unless the project is a community forests management scheme

8. Policy does not apply to non-forestry projects that may affect forests, unless in Country Assistance Strategies if the impacts are likely to be “significant”, in which case they will be “appropriately addressed” • The WB Forest Policy’s Oversight Panel: lack of transparency over the nomination of the members, the TORs, the meeting schedule, and no knowledge of the extent of civil society input into its discussions • Prototype carbon fund and its consequences: plantations (e.g. Plantar), erosion of forest community’s rights in the face of market forces, protected areas, etc

9. Next steps • To demand clarification on the vague language of the policy (Letter to Pres. Wolfensohn – we have had assurance that it will be responded to eventually) • To remain on the qui-vive concerning the pipeline projects which can affect forests, to elaborate field-based case studies on the forest policy in certain crucial projects, and to use every opportunity to expose malpractice and lack of implementation in such projects (e.g. the DRC Economic Recovery Sector’s Forestry Component, which is redrafting the Forestry Code) • To remain alert to the activities of the Oversight Panel, and campaign for further transparency

10. To monitor the Prototype Carbon Fund and the Bio Carbon Fund of the World Bank • To initiate a campaign targeting ‘friendly’ Executive Directors, specifically the Dutch ED (Ad Melkert), in order to have a voice on the Bank’s Board. Rietje from IUCN has agreed to act as coordinator for the campaign in Europe, bringing together the different case studies and ensuring that there is continuous follow-up with the Dutch ED • To target campaigns to southern EDs as well, who are getting more powerful within the Bank Board

11. To ensure that an appropriate southern member is nominated to the WB Inspection Panel, and use the latter as a hook for denouncing non compliance with the Forest Policy. • To clarify the certification scheme which will be used for ‘timber harvesting’ by the WB, and to clarify what exactly will be certified when the term ‘harvesting’ is used (plantations? logging?) • To capture the opportunity of harmonisation to move towards better standards for all development agencies, and to use the Rome Declaration as an opportunity to push for human rights standards and accountability within development projects

12. Short note on the draft Indigenous Peoples Policy, OP 4.10 • The controversial conversion of the Operational Directive on Indigenous Peoples 4.20 into the Operational Policy 4.10 is coming to a close – indigenous movement has been very vocal concerning the inadequate draft policy • In October 2002, a roundtable between indigenous human rights lawyers and representatives and the WB was held: the indigenous representatives held a very strong argument concerning the international legal obligations of the WB, and the vice-president for Environmentally and Socially Sustainable Development at the WB, Ian Johnson, committed to look into expanding the legal discussion, and redrafting the policy in line with some of the indigenous demands (namely inclusion of the rights of Free Prior and Informed Consent, protection from involuntary resettlement, and land tenure)

13. The revised OP 4.10 was supposed to be released this month, but it has been pushed back, and the Bank staff are asking the indigenous movement to accept an interim policy, and to wait for issues such as free prior and informed consent, land rights and protection from involuntary resettlement to be addressed in the future. • In “exchange” for such an acceptance, the WB would support the funding of the UN Permanent Forum on Indigenous Issues, and would provide a small grants facility for indigenous peoples capacity building. The indigenous movement is not pleased.