Countering Forest Sector Corruption

1. Countering Forest Sector Corruption Presented by Ken Rosenbaum Sylvan Environmental Consultants On behalf of the Forest Integrity Network

2. What is the Forest Integrity Network? • FIN is an informal network of people concerned about the impact of corruption on the world’s forests. • FIN emerged from a 2000 conference at Harvard. • FIN is now a project of Transparency International.

3. FIN Activities • FIN has a new paper on civil society tools to fight corruption in the forest sector. • FIN is turning its attention to approaches for responsible businesses.

4. What is corruption? • Abuse of power for private gain. • Not just bribery; corruption can entail a whole family of actions.

5. Varieties of corruption • Bribery • Favoritism & patronage • Kickbacks • Fraud

6. Bribery (by objective) • To get a scarce benefit • E.g., a forest concession • To get a discretionary favor • E.g., to avoid prosecution • To get an incidental benefit • E.g., faster service • To impose a cost on others • E.g., competitor gets an inspection

7. Favoritism & Patronage • Self-dealing • E.g., Buy goods for government from self • Nepotism • E.g., Hire brother-in-law • Cronyism • E.g., Promote based on loyalty

8. Kickbacks • Money “under the table” from or to suppliers • Excessive gifts & hospitality • Payments from subordinates

9. Fraud • Defrauding others in the name of the employer • E.g., issuing false certification of species or origin to allow wood export • Defrauding the employer for the benefit of self or others • E.g., setting up ghost employees

10. Impacts of Corruption • Rule of Law is compromised • Money is often diverted from the forest sector • The market sends altered signals • The biggest losers are those who won’t or can’t pay to play: • The environment • Honest businesses • The poor • Future generations

11. Some truths about corruption • People may tolerate corruption, but no society approves of it. • Corruption is an ongoing, potential problem in every society. • Countries with low corruption have well-functioning national integrity systems.

12. National Integrity Systems

13. Practical Tools

14. Awareness Raising • Educate the press • Run radio & TV spots • Sponsor a national anti-corruption week • Produce comic books & street theater

15. Procurement • Organize workshops on procurement processes • Set up a concession website

16. Access to Information • Compile a forest law reference • Publish a guide to dealing with the government for forest landowners or a guide to the concession process

17. Public Institutions/Diagnostics • Compile corruption perception indexes • Create citizen report cards • Document agency structure and staffing • Create a stakeholder advisory panel

18. More Public Institutions Ideas • Compile forest operation statistics • Train people in enforcement, prosecution • Work to protect whistleblowers

19. Business Ethics • Promote a professional forest ethics code • Promote integrity pacts

20. Success?? Happy enforcement official with seized logs

21. Partial wins, ongoing fights • Shutting off the Khmer Rouge timber trade in Cambodia • Outsourcing enforcement, Ecuador • Citizen Report Cards, India • The end of the General Land Office, USA

22. No magic bullets • By all accounts, the fight against corruption must be a multi-year, ongoing effort • The choice is macro-revolution or micro-revolution/evolution, and macro-revolution is rarely without its downsides