The presentation of Simon Milledge, principal researcher in IIED’s Natural Resources Group and team leader of IIED’s Forest Team, to the Chatham House event ‘Small scale and community forest producers: the challenges and opportunities of legality verification’ held at the British Academy, London, 19-20 May 2014.
The presentation focuses on legality-related challenges faced by small-scale and community forest producers and enterprises, taking lessons from Ghana, Indonesia, Malaysia and Papua New Guinea.
More information on Simon Milledge’s work: http://tinyurl.com/SimonMilledge.
Further details of the workshop: http://tinyurl.com/mkmol9c.
2024: The FAR, Federal Acquisition Regulations - Part 26
Legality-related challenges faced by small-scale and community forest producers and enterprises
1. 1
Chatham House
British Academy
19 May 2014
Author name
Date
Chatham House
British Academy
19 May 2014
Lessons from Ghana, Indonesia, Malaysia
and Papua New Guinea
Simon Milledge, IIED
Legality-related challenges faced
by small-scale and community
forest producers and enterprises
2. 2
Chatham House
British Academy
19 May 2014
Characteristics of SMFEs
Flexible, highly diverse
Rapid job creation
Supply domestic markets and exports
Less capital‐intensive, high IRR
Address broader dimensions of poverty:
resource rights, local wealth,
entrepreneurship, social capital
3. 3
Chatham House
British Academy
19 May 2014
Learning from the past
Why the focus on exports/formal sector?
Drivers of major initiatives
Emphasis on foreign exchange earnings
Visibility, number and ease of working
Emphasis on resources not people
Underestimated value
Political economy
Low ‘domestic demand’ signals
4. 4
Chatham House
British Academy
19 May 2014
Assessing feasibility
Sociological
Economic
Environmental
Political
Administrative
Financial
Technical
Institutional
Remote
Industry
Operating
5. 5
Chatham House
British Academy
19 May 2014
Sociological challenges
Perceptions: SMFEs, informal sector
Mistrust: bad advice, exploitation
Societal concerns: market signals
Poverty: illiteracy, labour availability
Social capital: underdeveloped
6. 6
Chatham House
British Academy
19 May 2014
Economic challenges
Industry trends: domestic markets
increasing relative to export markets,
outpacing enabling environment
Resource availability: supply-demand
mismatch
Competition: from imports
Subsidies: in an inadequate policy
environment
7. 7
Chatham House
British Academy
19 May 2014
Environmental challenges
Land degradation and declining quality of
forest resources
Unsustainable harvest levels driven by:
- high demand
- excessive competition
- major land allocations to large-scale enterprises
- ineffective regulation
- corruption
- weak incentives for sound management
8. 8
Chatham House
British Academy
19 May 2014
Political challenges
Unsupportive legal framework: insufficient
focus on the laws that affect small-scale and
community forestry – resource access & control
Insecure tenure: creates uncertainty
Illegality: chainsaw milling illegal but
unenforceable, inequitable use of enforcement
Dispute resolution: lack of support
Regulatory inconsistencies: ineffective
regulation, discretionary and discriminatory
concession allocations, corruption
9. 9
Chatham House
British Academy
19 May 2014
Administrative challenges
Regulatory processes: Unclear,
complex, excessive - land allocation,
business registration, trade permits,
taxation, finance
Poor quality of data: land, informal
sector, SMFEs
10. 10
Chatham House
British Academy
19 May 2014
Financial challenges
Investment incentives: price
incentives uncompetitive with other
permitted land uses, high transaction
costs, low security
Partnerships: low bargaining power
Sources of finance: financial
management, collateral, start-up capital,
risk profiles, terms, financing avenues
11. 11
Chatham House
British Academy
19 May 2014
Technical challenges
Certification: low awareness, high
cost, inflexibility of standards, lack of
market-place differentiation
Information: markets, contracts, land
allocation and financing
Forest management: plantation inputs,
natural forest management
12. 12
Chatham House
British Academy
19 May 2014
Institutional challenges
Capacity: finance, business skills,
quality control, marketing, negotiation
Support: training, mediation
Organisation: cooperatives and
associations
Collaboration: participation and
partnership, less on recognition and
decision-making authority
13. 13
Chatham House
British Academy
19 May 2014
•Market signals
•Business skills
•Organisation
•Finance, cost
• Industry structure
• Harvesting
practices
• Legal reform
• Tenure
• Formalisation
• Enforcement
• Public perception
• Livelihoods
• Resource access
• Benefits regime
Social
acceptance
Legality
Economic
viability
Environmental
sustainability
• Legality needs to be
addressed together
with wider priorities
• Includes structural
reform/enabling
environment aspects
(c.f. coloured text) and
more operational areas
14. 14
Chatham House
British Academy
19 May 2014
Where focus is needed
Legality definition
Tree tenure and benefits regime
Inclusive management and benefit sharing
Financial instruments and incentives
Adequate training and improved product
Improved enterprise organisation
Trade chain partnerships