World Bank Toughens Stand on Concessions

The World Bank denounced the government’s use of logging companies to manage forests in a statement released Tuesday that heralded a major shift in the Bank’s long-criticized forestry policy in Cambodia.

In comments on the findings of a donor-funded review of forestry, the World Bank said the government should in theory be able to use foreign companies to sustainably log tracts of forests awarded to them as so-called forest concessions. But corruption and weak institutional skills make the concession system unworkable in practice, the Bank said.

“Use of concessions as a means to attract foreign investment to increase the public returns in state assets, though a viable option in theory, has a poor track record in Cambodia,” it said.

Logging companies, required in 2001 to prepare sustainable management plans before continuing logging, did not seem committed to preparing the plans “and some have been disingenuous and cavalier,” the Bank said.

Despite substantial assistance to the Forestry Admin­istration and its former incarnation, the De­partment of Forestry and Wildlife, the agency “has been similarly lackadaisical” in following through with the donor-backed review process, the Bank said.

In its summation, the Bank referenced a 2000 report by the ADB that declared the concession system a disaster. “Clearly concessionaire and Government performance has been largely a continuation of the ‘system failure’ described in the ADB-supported assessment,” the Bank said.

The Bank’s comments, which also addressed other conservation and governance issues, indicated a marked break from statements made as recently as August, in which the Bank emphasized its intention to work within the concession system, especially via its Forest Concession Management and Control Pilot project. “[T]he search for meaningful progress is what has been motivating the Bank to continue seeking ways to bring order, transparency and commercial discipline to the forest concession system,” said Bank regional communications manager Peter Stephens at the time.

Environmentalists were enthusiastic Wednesday about the Bank’s apparent change of heart, though they emphasized that the Bank needed to explain why it supported the concession system for so long. “This is a substantial shift in their position on forestry policy in Cambodia and it’s what we’ve been calling for,” said Mike Bird, country director of Oxfam Great Britain, who said he hopes the Bank will explain what led to the change in policy.

“It’s very refreshing that they admit there’s no way the concession system is going to work,” said Mike Davis of forestry watchdog Global Witness. He also called for the Bank to clarify their position: “People need to know where the Bank stands.”

Peter Jipp, head of the Bank credit that funds the concession project, said bank officials will answer questions Oct 28 after discussing their comments with government counterparts.

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