The Forests Dialogue: Investing in Locally Controlled Forestry (ILCF)

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London, UK – May 24-25, 2010

The World Bank and other big investors will next week enter into talks with alliances that represent more than a billion forest-dependent people to give their reactions to the groups’ proposals for the first time.

They will discuss mutually-productive investment opportunities that would enable communities and indigenous peoples to realise their rights to sustainable livelihoods from forest resources.

The meeting in London in 24-25 May will bring the investors together with three key alliances — the International Family Forest Alliance, the Global Alliance on Community Forestry, and the International Alliance of Indigenous and Tribal Peoples of Tropical Forests.

Acting together as the Three Rights-Holders Groups (G3), these alliances represent people who claim rights over a quarter of the world’s forests, which collectively provide environmental goods and services worth US$75-US$100 billion a year.

They will seek support for funding that ensures greater local control of forests and the benefits that flow from them.

“Forest dependent communities have long battled to secure rights to the resources forests provide but they now face new threats from land grabs for food and fuel production,” says James Mayers of the International Institute for Environment and Development.

“International efforts to tackle climate change through payments that compensate nations for avoiding deforestation will create new opportunities to promote sustainable forestry,” adds Mayers. “But this could also encourage powerful elites to capture land, forests and finance at the expense of forest-dependent people. Investment must be got right.”

In addition to about US$1.9 billion of forest-related aid spending, donor countries have already committed US$4-8 billion to ‘REDD’ projects (PwC analysis 2010), which aim to reduce emissions of greenhouse gases by preventing deforestation and land degradation.

But only a fraction of this funding is destined for locally-controlled forestry and these funds are themselves dwarfed by mainstream investment in the forest sector, which in 2010 is around US$150 billion, according to PriceWaterhouseCoopers.

Locally controlled forestry includes the sustainable management of forests for wood, non-timber forest products and other social or environmental service values, carried out by forest-dependent families or smallholders, community groups and indigenous peoples.

“Funders are missing opportunities to make sound investments in locally controlled forestry that can contribute to sustainable livelihoods and help to limit climate change,” says Ghan Shyam Pandey of the Global Alliance of Community Forestry. “If financing mechanisms can be adapted and channelled towards smallholders and communities, this could generate two distinct kinds of investment that they need.”

“This needs to include ‘soft’ investment that helps to improve forest governance and secure forest rights, build people’s capacity to manage forests and forest-businesses effectively, and facilitate credible forest certification to assure of sustainability,” adds Pandey.  

“It should also include ‘hard’ investment of a more commercial nature to create new forest resources, and build production and processing facilities and other infrastructure.”

The meeting in London has been convened by The Forests Dialogue and Growing Forest Partnerships, an international alliance coordinated by IIED, FAO and IUCN, which supports initiatives developed by people who depend on, use, manage or regulate forests.

TFD and GFP have worked together to explore how dedicated international funds for locally controlled forestry could work and will share these findings at the meeting in London.

“Locally-controlled forestry would enable smallholders, communities, indigenous groups and other forest-dependent people to decide how to manage, grow and benefit from their forest resources,” says Mayers. “To do this they will need new investment, secure tenure and rights, and to be able to defend these rights.”