3
Forestry

3.1 Introduction: forest problems and forest transition

Forest coverage is estimated to be over 4 billion hectares worldwide by 2010, composing 31 per cent of the total land area.¹ 53 per cent of the total forest area is located in five of the most forest-rich countries: Russia, Brazil, Canada, US and China.² By region, Russia and Northern Europe, North America, the Amazon, Congo basin and Southeast Asia have the richest forest coverage.³ Of all the forest area, 36 per cent is primary forest. Planted forest has been increasing in recent years, which accounts for 7 per cent of the forest area. The rest is naturally regenerated forest.⁴

Forest plays vital and diversified roles in supporting ecosystems and human welfare, including providing supporting services (for species), provisioning services (the production of goods), regulating services (controlling climate, water and soil conservation) and cultural functions.⁵ For example, forests had 289 gigatonnes of carbon stock in their biomass by 2010.⁶ It also provides ‘a habitat for nearly 90 per cent of the world’s terrestrial biodiversity’.⁷

Forest problems have caused global concerns. It is estimated that forest conversion and loss continue at an alarmingly high rate: around 13 million hectares of forest disappear every year. Even when considering the large-scale planting in recent decades, the net forest loss is still around 5.2 million hectares per year.⁸ South America and Africa mark the highest deforestation rates, at 4 and 3.4 million hectares annually from 2000 to 2010.⁹ At national level, the largest annual net loss can be found in Brazil, Australia, Indonesia, Nigeria, Tanzania, Zimbabwe, the Democratic Republic of the Congo, Myanmar, Bolivia and Venezuela.¹⁰ The deforestation caused the decrease of around 0.5 Gt carbon stocks in forest biomass annually during 2005–2010.¹¹ Primary forests, which are crucial in maintaining biodiversity, are decreasing at a rate of 0.4 per cent annually.¹²

Although deforestation and forest degradation are global problems, different regions and countries face different types and extents of problems. Both problems are more prominent in developing countries, especially in countries with rich tropical forests. Forest coverage has been expanding in Europe and has been stable in North America.¹³ One exception is Australia, which has experienced large losses of forests due to severe drought and forest fires between 2000–2010.¹⁴ In addition, forest degradation is still a concern for developed countries. For example, outbreaks of forest pests mainly influence temperate and boreal zones of which countries such as Canada and the US are part.¹⁵ The health of riparian forests is also a concern in North America.¹⁶ Biodiversity is an important concern for Europe, where very few primary forests have remained except in Russia.¹⁷

The literature has identified a forest transition model which ‘describes empirical patterns of change in forest cover resulting from the exploitation by human society of their forest resources’.¹⁸ This stage model distinguishes four development patterns, using the percentage of forest cover and the forest change rate as the core criteria.¹⁹ In the virgin forests stage (pre-transition), forest is relatively undisturbed by human intervention and is inaccessible for commercial uses. In this stage, countries have comparatively high forest cover and low deforestation rates. Economic development can lead to a frontier stage (early-transition) with an increasingly rapid forest change rate and shrinking forest cover. A continuing high deforestation rate leaves a small fraction of forests, hence slows down the deforestation and brings a forest and agriculture mosaics stage (later-transition). Finally, a forest stabilization stage (post-transition) can arrive in which forest coverage begins to increase again.²⁰ The literature has recorded these transition stages in North America, Europe and some tropical countries.²¹ However, whether these transition stages materialize depends on ‘the interplay of the contextual circumstances, the driving factors and the policy regime in specific localities, as well as on other transitions occurring in society’.²² Therefore, in order to be able to predict the future forest status of a country, one needs to consider which drivers and governance regime are present in that particular country. After all, countries in different development stages of the forest transition model have different drivers for deforestation and forest degradation which call for different policy responses.²³

The forest transition model suggests that countries in the frontier and mosaics stages mainly suffer from deforestation. When a country enters the stabilization stage, deforestation ceases to be a major concern. However, these countries may still suffer from forest degradation. Deforestation and forest degradation are hence two different types of problems, which also require different governance systems. Property rights can be used to limit the access to forests and to create incentives for preventing deforestation. Moreover, public and private regulation can create the necessary preconditions for the proper functioning of different types of property rights. However, even if property rights are well-established and deforestation is solved, forest degradation may still occur. Many forest services, such as supporting riparian functions and protecting biodiversity, have non-market values. Establishing property rights does not guarantee that these nonmarket values are internalized. Therefore, public and private regulation are called upon to overcome such limitations of property rights in addressing forest degradation. This chapter will examine the following two questions: first, in what respect do five different countries (Indonesia, Bolivia, Canada, the US, and Sweden) meet or not meet the necessary preconditions for the proper functioning of different types of property rights in countering deforestation? Second, how do public and private regulation interact in these countries in establishing these property rights as well as in overcoming their limitations in countering forest degradation?

The next section gives a historical overview of the international law, domestic law, and private regulatory regimes that have been developed to address deforestation and forest degradation. Section three describes how regulatory regimes addressing both forestry problems have evolved in the five countries. After accounting for the selection of these five countries for case studies, each case study starts with a description of the most important problems concerning forestry. Subsequently, the case studies describe how property rights have been established in a particular country and what additional public and private regulations have been implemented to counter deforestation and forest degradation. After describing the evolution and functioning of the regulatory mixes, the case studies evaluate the presence or absence of the necessary preconditions for property rights’ effectiveness in the regulation of forestry – establishing property rights, enforcing regulations, coordinating actions, collecting and distributing information, scaling governance – and whether or not the limitations of property rights in handling forest degradation have been overcome by public and private regulation.

Although basically the same structure is followed in each case study, the focus of the analysis varies given the particular problems that arise with forests in the different countries. For instance, when discussing the interaction between public and private regulation, the focus is on deforestation in Indonesia and Bolivia. The same part in Canada, the US and Sweden, however, focuses on whether the rules concerning riparian zone protection and biodiversity protection are compatible under public and private regulation in order to prevent forest degradation. Moreover, since the public and private regulation of property rights is no longer a major issue in Canada, the US and Sweden, but is a major issue in Indonesia and Bolivia, the case studies of the former countries will focus on overcoming the limitations of property rights in protecting forests, while the case studies of Indonesia and Bolivia will also address the role of public regulation and certification in satisfying the necessary preconditions for the proper functioning of property rights in protecting forests.

Each case study ends with a summary of the main characteristics of the regulatory mixes in that particular country. The chapter ends with a comparison of the five case studies in terms of the satisfaction of the necessary preconditions for property rights’ effective functioning in managing forests.

3.2 Forest governance: international law, domestic law and private/hybrid regimes

3.2.1 International law

Deforestation in rainforests started to trigger global attention in the 1960s. Since the 1970s, several international environmental conventions have started to address forest protection, such as the 1973 Convention on International Trade in Endangered Species of Wild Fauna and Flora (banning international trade in vulnerable forest species), the 1975 World Heritage Convention (establishing protected sites, including forest land) and the Ramsar Convention on Wetlands of International Importance (preventing the conversion of forested wetlands). The first forest-focused international agreement – International Tropical Timber Agreement (ITTA) – was reached, accompanied by its implementing organization, the International Tropical Timber Organization, ITTO in 1983. The ITTO was found to make too many compromises for economic reasons, and was not able to deal effectively with deforestation.24 The ITTA was followed by a failure to reach a legally binding global forest convention in the 1992 UN Conference on Environment and Development in Rio. In the post-Rio era, efforts to negotiate a legally binding document continued under the auspices of the Intergovernmental Panel on Forests (IPF), the Intergovernmental Forum on Forests (IFF) and the United Nations Forum on Forests (UNFF) consecutively. However, a legally binding agreement has not been reached. Instead the UNFF adopted a non-legally binding instrument on all types of forest in 2007. The forest-related rules are still dispersed among various non-forest-focused international environmental conventions. In addition to the earlier conventions mentioned above, other forest-related conventions include the United Nations Convention to Combat Desertification, the Convention on Biological Diversity and the United Nations Framework Convention on Climate Change, which respectively protect forests to combat desertification, to protect biodiversity and to address climate change.²⁵

3.2.2 Domestic law

Different property rights have been adopted under domestic law. Forest ownership is usually vested in the state, private actors or customary communities.²⁶ In some states, such as Bolivia, government claims ownership over all forests, but the land that forest grows on can be owned by private actors or customary communities.²⁷ When the forest or land is owned by the state, sometimes the rights to access, use and management of the resources are granted to other parties, for example, via logging concessions.²⁸ Public forests can also be set aside for local communities, including indigenous people.²⁹ As mentioned in the theoretical chapter, a clear cut boundary between public, private and community forest does not always exist. This research treats specific forest types as public, private or community property according to the party in whom the management authority is vested.

In addition to property rights, many other instruments have been adopted to regulate forest management and timber harvesting practices. Such instruments can be traditional command and control regulations, economic or suasive instruments. Command and control instruments include, for example, spatial planning (the establishment of protected areas), logging and transport permits, performance standards for forest management (e.g. annual allowable cut, clear-cutting standards, reforestation requirements). Economic instruments include tax, subsidy, payment for ecosystem services, carbon offsetting projects and so on. Suasive instruments include principles, soft targets, research, information and education and so on.30

3.2.3 Private/hybrid regimes

3.2.3.1 Introduction

When the international community failed to reach a legally binding forest agreement, and existing international law and organizations provided unsatisfactory solutions for forestry problems, private and hybrid regimes started to develop in the 1990s. The prevalence of private regulation has been attributed to social campaigns targeting companies since the 1980s and to the rise of a neoliberal political climate.³¹ The private and hybrid regimes cover not only timber products, but also a variety of forest-related commodities.

The earliest and most influential of these private regimes concerns forest certification, represented by the Forest Stewardship Council (FSC) and the Programme for the Endorsement of Forest Certification (PEFC). The forest certification schemes set standards for forest management and the supply chain of timber production. It requires an accredited, independent third-party certifier to evaluate and audit the production processes or methods according to predefined environmental and social sustainability standards.³² The standards are defined by an independent governing body, and audits are conducted by private actors.

A more recent regime regulating forest management and the timber industry is the legality regime. In the last decade, developed countries are increasingly concerned about the legality of timber products imported from emerging economies and developing countries where the risk of illegal logging is high. Therefore, they require a verification of the legality of imported products, usually by third parties.³³ Responding to the requirements, many emerging economies and developing countries have started to develop such legality regimes. In a legality regime, standards are defined by domestic law, and timber producers usually can choose their own measures to verify and to guarantee the legality of their products, often by means of certification or other third-party verification schemes.³⁴ The legality regimes are of a hybrid nature: the government plays an important role in deciding the standards and in regulating the process. Third parties are often used to conduct the audits.

In addition to these regimes regulating forest management and timber harvesting directly, similar initiatives have been developed to regulate other commodities, the production of which may be an important driver for deforestation and forest degradation. For example, commodity roundtables for agricultural products started to emerge in early 2000s, such as the Roundtable on Sustainable Palm Oil (RSPO), the Roundtable on Responsible Soy (RTRS) and the Roundtable on Sustainable Biofuels (RSB). These roundtables are modelled on the FSC, which involves multiple stakeholders to develop environmental and social standards and provides third-party certification programmes. Instead of the roundtables focusing on one type of agricultural product, some certification systems apply to a wide range of crops and livestock, such as the Sustainable Agricultural Network.³⁵

In the certification regimes discussed above, civil society has voting rights in deciding the standards and third parties are used to audit the compliance by producers. Industry can also use self-imposed guidelines without or with lower levels of oversight. The Audit Protocol of the Leather Working Group³⁶ and the Consumer Goods Forum (CGF)³⁷ constitute examples. In addition, some buyers have also signed agreements to avoid purchasing products with deforestation risks, such as the Soy Moratorium³⁸ and the G4 Cattle Agreement.³⁹ Several voluntary information disclosure initiatives have started to develop. For example, the Carbon Disclosure Programme requires its members to disclose how they address forest risk commodities in their supply chain.⁴⁰

Among the various private regimes, forest certification is the most important and earliest one targeting forest management directly. Though legality regimes also address forest management, they have only started to develop recently and their joint effectiveness with other instruments still needs to be tested in practice. Most other private initiatives target commodities which influence forests in a more indirect way and have a much shorter history. Therefore, the discussion of private instruments here focuses on forest certification.

3.2.3.2 Forest certification

The FSC was initiated by the World Wildlife Fund (WWF) and other environ mental NGOs, with the engagement of timber product retailers and other commercial interests in 1993.41 Upon its creation, countries responded differently to this scheme. Some countries were favourable from the very beginning, such as Sweden.⁴² Other countries were more hesitant, and established industry-dominated alternatives, such as the Sustainable Forest Initiative (SFI) in the US, the Canadian Standards Association (CSA), and the Norwegian Living Forests standard. Many such national certification schemes later became connected through endorsement by another influential international certification scheme, the Programme for the Endorsement of Forest Certification (PEFC).⁴³ Together, the FSC and PEFC covered 10 per cent of the global forests by 2014.⁴⁴

Both the FSC and PEFC include standards for forest management and for the chain of custody, applying to forest management and to the supply chain respectively. The FSC has developed a global standard for well-managed forests, the FSC Principles and Criteria.⁴⁵ To tailor the general standards to the local situation in different jurisdictions, the FSC delegates the authority to elaborate them to its national affiliates.⁴⁶ Many countries have published their own FSC standards. Forest management is audited by certification bodies, which are accredited by an independent organization Accreditation Services International (ASI). Usually, forest managers or owners are the clients of forest management certification.⁴⁷ A typical certification process includes both a preliminary assessment, a formal assessment (field inspection, consultation, preparing preliminary report, peer review of the report, certification issuance) and annual audits following the issuance of certification.⁴⁸ The preliminary assessment indicates the changes applicants need to make to achieve certification, hence it helps them to move towards the formal assessment. After the formal assessment, a decision will be made on certification, which may ‘(1) approve the application unconditionally; (2) grant provisional approval on condition that specified “corrective actions” are taken to rectify specified “minor non-compliances” within a certain time (minor Corrective Action Requirements, minor CARs); (3) indicate that approval will be granted after certain “major non-compliances” are corrected (major CARs); or (4) deny the application’.⁴⁹ The FSC has established a procedure to handle complaints. Under the FSC system, complaints should first be addressed to the party against whom the complaint is made. When no satisfactory explanation is provided, the complainant can first file a complaint to the certification body (CB).⁵⁰ If a CB finds evidence for the deviation from FSC standards, it can take different decisions, varying from Observations, Minor CAR or Major CAR to the suspension or withdrawal of the certificate, with increasing levels of coercion.⁵¹ If the complainant is not satisfied with the decision of the CB, he can file a complaint to the ASI and finally to FSC International.⁵²

Unlike the FSC, which is a global programme, the PEFC is a mutual recognition framework (an umbrella organization), which endorses multiple independent national certification schemes according to common Sustainability Benchmarks.⁵³ Such benchmarks include both standards for forest management and chain of custody. How the certification process and complaint handling work depends on the individual national schemes.

The FSC and the PEFC have different governance structures. The FSC is organized independently of national governments. The FSC is accountable to its ‘wide range of environmental, social and economic stakeholders’.⁵⁴ Its governance structure, stringent standards and transparency have attracted broad support among NGOs, market players and governments.⁵⁵ Most PEFC programmes are initiated and operated by industry or landowner associations and are often more closely linked with the government while the participation of social and environmental groups is more limited.⁵⁶ Therefore, many NGOs criticize the credibility of PEFC programmes. However, the competition between the FSC and PEFC systems, together with the efforts of governments and NGOs to compare and benchmark⁵⁷ certification schemes, have contributed to ratcheting up the standards under the two schemes and to convergence between them.

3.3 The selection of countries

As discussed earlier, a number of factors need to be considered in choosing countries for further study: the prominence of forestry problems, the stage of development, the prevailing property rights and the presence of an institutionalized certification system. The countries we have selected are confronted with typical forest problems, either deforestation and/or forest degradation; they are in different stages of forest transition, have adopted different types of forest property rights and have comparatively wide certification coverage.

According to such criteria, five countries were chosen: Indonesia, Bolivia, Canada, the US, and Sweden. They all have substantial forest coverage: 51.4 per cent in Indonesia, 52.2 per cent in Bolivia, 34.1 per cent in Canada, 33.3 per cent in the US and 69.2 per cent in Sweden.⁵⁸

Indonesia and Bolivia are two developing countries suffering from rapid deforestation. Bolivia is in the frontier stage⁵⁹ and Indonesia is in the transition from frontier to forest and agriculture mosaic stage.⁶⁰ They both have adopted diverse types of property rights: public, private and communal. Although fewer forests have been certified in Indonesia and Bolivia than in the three developed countries, given the low penetration rate of forest certification in developing countries, they represent examples with comparatively well-institutionalized certification schemes for developing countries.

Canada and the US will be analysed together, given their relatively similar structure and geographical proximity albeit with different property rights regimes. Canada, the US and Sweden are developed countries in the stabilization stage of forest transition. In these countries, forest degradation is a more prominent problem than deforestation. In the US, 42 per cent of forests are publicly owned while the rest are owned by individuals, families, corporations, and indigenous tribes. Over 90 per cent of forests in Canada are publicly owned. 81 per cent of forests in Sweden are privately owned.⁶¹ Community-owned or managed forests do exist in these three countries (such as those owned or managed by Native American tribes in the US, First Nations in Canada and Sami people in Sweden) but only on a small scale.⁶² Forest certification has started to develop in these countries and has a wide coverage there: around 36 per cent of forest areas in North America are certified⁶³ and more than half of the forests are certified in Sweden.⁶⁴

Indonesia and Bolivia are confronted with rapid deforestation. For forest resources, if access is not restricted, different users tend to free-ride and to harvest the resources to the maximum possible, without inclination to conserve. Property rights can be used to limit access. In Indonesia and Bolivia, public, private, and community forests co-exist. The property rights are often less clear and less secure than in the three developed countries. This ambiguity has led to conflicts between forest users and has contributed to high deforestation rates. The case studies of these two countries will raise the question why public regulation and certification have failed to satisfy the necessary preconditions for the proper functioning of property rights and consequently have failed in addressing deforestation.

Besides, public and private regulation are called upon to overcome the limitations of property rights in addressing forest degradation. The case studies of Canada, the US, and Sweden will examine two prominent degradation problems: the loss of ecological function caused by insufficient protection of riparian forests and the loss of biodiversity. In these countries, a comparatively clear boundary between forests has been established. The deforestation problem has largely been solved but not the problem of forest degradation. To address the problem of forest degradation, Canada and the US have established riparian buffer zones under both public and private regulation. In Sweden, both public regulation and certification include forest management standards directly related to biodiversity protection. This study will focus on how public regulation and certification interact to address these forest degradation problems.65

3.4 Case study: Indonesia

3.4.1 Environmental problem: deforestation

Indonesia is a country with rich forest resources. Of its 187.67 million hectare extent, 98.559 million hectares (52.5 per cent) were covered by forest in 2010.⁶⁶ Around 240 million people, including over 300 ethnicities, live in Indonesia.⁶⁷ The importance of forestry in Indonesia’s economy decreased to 0.80 per cent of the GDP in 2009, but its downstream industry possessed a higher proportion of the annual GDP (wood products industry: 1.43 per cent and paper and printing industry 1.09 per cent).⁶⁸ Forest products represented 6 per cent of the exports from Indonesia in 2010.⁶⁹ The EU and North America are important export markets for forest products of Indonesia; however the market has been increasingly directed to China and other Asian countries.⁷⁰

Indonesia has experienced fast deforestation in the past decades. Although the data vary from source to source, most confirm the alarming forest loss rate. For example, the data from the Ministry of Forestry in Indonesia (MoF) show that the deforestation rate was 1.87 million ha per year from 1985–1997. After the fall of Suharto in 1998, Indonesia witnessed a sharp increase in the deforestation rate to 3.51 million hectares per year from 1997 to 2000. This was followed by a decreased rate to 1.08 million hectares per year from 2000–2005.⁷¹ The FAO (Food and Agriculture Organization of the United Nations) statistics show a lower, but still alarming deforestation rate: 0.3 per cent per year during the period from 2000 to 2005 and 0.7 per cent per year during the period from 2005 to 2010.⁷² It is estimated that the process has led to an accumulation of 24.1 per cent of Indonesia’s forest cover lost from 1990 to 2005,⁷³ or 40 per cent from 1950 to 2000.⁷⁴ In spite of all the efforts to curb forest loss, the deforestation rate increased again in recent years, to more than 2 million hectares per year in 2011 and 2012.⁷⁵ Generally speaking, Indonesia is in a transition from the frontier to the forest and agriculture mosaic stage, with a long lasting and still alarming deforestation rate.⁷⁶ However, significant regional differences exist. For example, forest cover in Java has been reported as increasing in recent years, while Sumatra and Kalimantan still experience very fast deforest ation.⁷⁷ ‘Forest degradation is also at pace, with a continuous transformation of primary into secondary forest’.⁷⁸ Corresponding to this process, bio diversity is being lost at high speed in Indonesia.⁷⁹

3.4.2 Good governance

Indonesia is a lower-middle income country with annual GDP of US$888.5 billion in 2014.⁸⁰ The World Bank has initiated the Worldwide Governance Indicators (WGI) project, which evaluates six dimensions of governance: voice and accountability, political stability and absence of violence, government effectiveness, regulatory quality, rule of law and control of corruption.⁸¹ The WGI project ranks countries according to percentile range, with 0 as the lowest rank percentile and 100 as the highest percentile rank. Indonesia ranks 53.20 regarding voice and accountability; 31.07 regarding political stability, 54.81 regarding government effectiveness, 49.04 regarding regulatory quality, 41.83 regarding the rule of law and 34.13 regarding the control of corruption.⁸² The scoring of the World Bank WGI on control of corruption is similar to the rank of corruption control by Transparency International. According to Transparency International, Indonesia ranks 88 out of 167 countries.⁸³ This means that overall Indonesia is ranked in the lower half in terms of good governance.

3.4.3 Property rights as well as public and private regulation

3.4.3.1 Property rights

The forest governance system in Indonesia dates back to the Dutch colonization, when a scientifically based, top-down forestry policy was formally adopted.⁸⁴ Although in practice, ‘the Colonial Government only directly controlled the forests in Java, with forests on the outer islands being subject to adat (customary law)’.⁸⁵ The adat regulates the community-based land-use rights. Although the adat system varies among communities, it usually adopts a communal approach, where land rights are vested in the communities and the exercise of individuals’ rights depends on the consent of the community.⁸⁶ This communal approach has been incompatible with the western categorization of land rights enshrined in written law. However, it was recognized ‘to the extent that this did not interfere with Dutch commercial or state interests’.⁸⁷ After independence, the state took over the control of forests in Java from the Dutch, but the status on outer islands remained unclear until Suharto came into power in 1966, representing the start of the New Order regime.⁸⁸

When Suharto came to power, Indonesia suffered from poor economic performance and external debts, forcing it to rely on its natural resources, including forest exploitation, to boost economic growth.⁸⁹ The 1945 Constitution authorized the state to ‘control’ the land, waters and natural resources in Indonesia.⁹⁰ This was further confirmed in the Basic Agrarian Law of 1960 (BAL 1960)⁹¹ and the Basic Forestry Law of 1967 (BFL 1967).⁹² The BAL 1960 was intended to ‘unify all the land law of Indonesia into a single system’.⁹³ The BAL recognized three kinds of land ownership: state land (untitled land, tanah negara), private land (titled land, tanah hak) and customary land (tanah ulayat).⁹⁴

The BAL was intended to act as ‘an umbrella law for all other laws and regulation on land and natural resources’.⁹⁵ However, it is not always referred to in relevant legislation. The passing of the BFL in 1967 led to a de facto division of the authority between the BAL and the BFL. The BFL 1967 differentiated Forested Areas and Non-Forested Areas and granted the MoF authority to regulate over 143 million Forested Areas (70 per cent of land area).⁹⁶ The Forest Areas were designated according to legal processes and often did not match actual forest cover.⁹⁷ In practice, only around 68 per cent of the designated Forest Areas actually was covered with forest and 15 per cent of Non-Forested Areas were covered by forests nonetheless.⁹⁸ As mentioned, the application of the BAL 1960 was restricted to Non-Forested Areas.⁹⁹ The BFL 1967 put forests under the control of the state and prohibited private or community ownership.¹⁰⁰ In addition to maintaining direct control on Java, the state also ‘outsourced the management of forests on the outer islands to timber companies through the granting of timber concessions’.¹⁰¹ In the highly centralized system, the central government had an exclusive right to grant timber concessions and by 1995, over 60 million hectares of forest had been granted as forest concessions, leading to a concentration of forest concessions in the hands of political elites.¹⁰² Small-scale loggers and local communities were marginalized by the concession rules, since a minimum threshold of 50,000 hectares applied.¹⁰³ The status of local communities was further weakened by the creation of protected forests on their traditional lands,¹⁰⁴ a mass state-sponsored Transmigration Programme and the erosion of customary governance institutions via the Village Governance Law.¹⁰⁵ During this period, the status of ‘indigenous Indonesians’ was not recognized and even the term ‘adat’ (customary communities in Indonesia) was removed from the official vocabulary. The Village Governance Law tried to restructure the local villages according to the Javanese village and hence systematically disempowered other indigenous governance institutions and forest management systems.¹⁰⁶ In spite of this marginalization process, the close partnership of government, business interests and military power suppressed massive land conflicts. Most illegal logging was conducted by industrial permit holders, for example, by logging outside the permitted areas.¹⁰⁷

The Asian Financial Crisis of 1997 triggered the end of the Suharto regime and a rapid transition to a democratic governance system, the Reformasi, followed. In the Reformasi period, the double track of BAL and BFL persisted. Under the BFL, in addition to state forests, the new law allowed private forests and started to recognize customary forests to a limited extent.¹⁰⁸ Closely mimicking the BAL 1960, Article 4 of the BFL 1999 stipulates that ‘Forest control by the state shall respect customary law, as long as it exists and its existence is recognized and not contradicting national interests’.¹⁰⁹ The law requires governmental regulation of the process of recognizing or abolishing adat communities.¹¹⁰ Such a governmental regulation, however, has never passed. This half-hearted recognition of customary forests makes the status of local communities weak. The MoF ‘routinely allocates logging concessions with little regard for community claims and some regional governments deny the existence of adat communities in their territory’.¹¹¹ A landmark case was adjudicated by the Indonesia Constitutional Court in 2013, which invalidated the classification of forests under the BFL 1999.¹¹² According to the judgment, customary forest is to be excluded from state forest and is to be admitted as an independent type of forest ownership.¹¹³ In spite of this progress, the exact meaning of ‘customary forest’ and the process of establishing it are still unclear. In practice, the existence of the adat community depends on the recognition by the government and the adat rights can be revoked or it can be determined that adat rights contradict national interests.¹¹⁴ The lack of clarification in the process of recognizing adat rights and their exact content also contribute to the insecurity of the adat rights.¹¹⁵ Consequently, although the adat system has alternately been suppressed and endorsed in the history of Indonesia, it has rarely enjoyed ‘more than minimal force in practice’.¹¹⁶

In summary, under the current legal system, forests in Indonesia are subject to two regulatory systems. The Non-Forested Areas are subject to the BAL and the Forested Areas are subject to the BFL 1999, while three types of land ownership exist for both regulatory systems: public, private and customary. However, the property rights are not clearly established, do not internalize the externalities of forestry well, and are often contested because of ambiguous legislation and conflicts of interest between officials and stakeholders. Consequently, it is estimated that 52.6 per cent of the 31,864 villages in Indonesia were located in forest areas in 2007, of which only 23.6 per cent remained located in forest areas in 2009.¹¹⁷ Many of these areas are claimed by the government as state forest, and allocated to concessionaires. It is reported that ‘22.5–24.4 million hectares were subject to conflicts as a result of unclear boundaries between villages and state forests’.¹¹⁸ The unclear land tenure does not only influence the welfare of local communities, but also the performance of communities and concessionaries in terms of protecting the forests.¹¹⁹

3.4.3.2 Public regulation

In addition to domestic property rights, a number of other public policies also have a crucial impact on recognizing and protecting forest tenure, such as decentralization, spatial planning, forest permits and policies promoting community-based forest management.

Decentralization. The Reformasi period has witnessed an effort of decentralization, the emergence of civil society and increasing recognition of indigenous rights. A series of decentralization laws (known as otda laws) have been passed to transfer the political, administrative and fiscal authority to regional governments.120 Immediately following the end of the Suharto period, two otda laws¹²¹ were passed in 1999, to transfer power in sectors not exclusive to central government but to districts and municipalities.¹²² Forestry was not on the list of exclusive jurisdiction of central government and hence was to be decentralized. For example, the heads of districts and municipalities were authorized to issue small-scale timber extraction permits (for areas up to 100 hectares and 10,000 hectares respectively).¹²³ Since regional governments are allowed to share the revenues from issuing permits, they have strong incentives to abuse the small-scale permits: by allowing logging in broader areas, multiple permits are issued to the same area and no sustainable logging principles are required.¹²⁴ There are other disincentives for local politicians to prevent deforestation. For example, ‘local politicians use forests as a means of gathering campaign funds for regional elections’ and hence tend to be lenient towards the forest industry.¹²⁵ ‘Regional electoral candidates being given shares in certain oil palm companies in their jurisdictions, so that when they are elected and take office, they will help facilitate permits for the conversion of forest areas’.¹²⁶

In spite of the decentralization policy, the central government tried to regain power via the revised Basic Forestry Law of 1999 (BFL 1999) and new otda laws of 2004. The new otda laws ‘provide the Central Government more opportunities to monitor and intervene in regional affairs’, such as dismissing regional heads and scrutinizing regional budgets.¹²⁷ The BFL 1999 was drafted by the MoF, reflecting a systematic effort of the central government to reconsolidate their authority in the forestry sector.¹²⁸ It differentiates forests according to their functions: production, protection, and conservation. Timber concessions can only be granted to production forests and a sub-category of conservation forest. The BFL 1999 grants the authority to classify forests and to grant the status of ‘Forest Areas’ to the central government.¹²⁹ Decentralization issues require a governmental regulation,¹³⁰ which was passed in 2002 and later revised in 2007.¹³¹ The Government Regulation only transferred minor powers to regional governments, such as issuing ‘lesser permits’, including timber extraction licences for non-commercial purposes and non-timber forest product extraction permits.¹³²

Given the abuse of regional governments in issuing small-scale timber extraction permits mentioned above, the MoF has tried to revoke the authorization since 2000 through ministerial decrees. However, some regional governments tended to have different understandings of which laws should have priority in this case and continued their issuance of permits until 2004.¹³³ The continuing decentralization reforms and subsequent recentralization efforts led to a ‘tug of war’ between the central and regional governments.¹³⁴ One important contributor to the different interpretations by the MoF and the regional government lies in the ambiguous hierarchy between different types of legislation in Indonesia. According to Law 10.2004 concerning Law Making in Indonesia, the hierarchical order of legislation in Indonesia is: Constitution; Law; Governmental Regulation; Presidential Regulation and Regional Regulation.¹³⁵ Ministerial Regulations, however, have no clear position in this hierarchy.¹³⁶ The authority for regional governments to issue small permits was granted by a Governmental Regulation, but was revoked by Ministerial Regulation. It has hence been left undecided which rule should apply.

Spatial planning is another public regulatory instrument that has had an important influence on forest tenure besides rules on property rights. Spatial planning categorizes land and determines how forest is to be used. The first spatial planning law was issued in 1992 and revised in 2007.¹³⁷ It allows both the central and regional (provinces and districts) governments to conduct spatial planning at their respective levels. However, the regional plans regarding Forested Areas need to be approved by the MoF.¹³⁸ Many conflicts have arisen over plans developed by different levels of governments.¹³⁹ Many other activities than forestry take place in the forests, such as agriculture (especially estate crops), mining, establishing eco-regions and so on. Therefore, non-forestry agencies also play a role in deciding the destiny of forests, according to sector-based legislation.¹⁴⁰ For example, the Ministry of Energy and Mineral Resources designates the mining areas while the Ministry of Environment designates eco-regions.¹⁴¹ Although the 2007 Spatial Planning Law requires coordination among departments in planning land use, this is usually not what happens in practice.¹⁴²

Permits. To conduct the above-mentioned activities in forests, a permit is needed. As discussed above, the MoF is responsible for issuing most permits for natural forest logging and regional government can only issue some ‘smaller’ permits. For the state forests to be used for non-forestry activities, the MoF needs to first release the forests. Then other authorities, such as regional heads, can issue permits for mining and estate crops plantations.¹⁴³

Community-based forest management. In addition to the recognition of the customary forest, since 1999, Indonesia has also adopted several other policies to promote community-based forest management (CBFM) in state forests (such as Forest Area with Special Purpose, Village Forest, Social Forest, People’s Plantation Forest, company–community partnership in forest management, Collaboration in Managing Conservation Forest)¹⁴⁴ and in private forests (such as Hutan Rakyat and Family Forest).¹⁴⁵ The CBFM models do not allocate ownership to local communities, but allow their participation in forest management and access to the benefits from it to different extents.¹⁴⁶ These models of CBFM can either be established by government licensing or agreements with companies (company–community partnership) and conservation offices (Collaborative Conservation Management).¹⁴⁷ In the licensing models, the rights granted to local communities are usually limited, sometimes prohibiting the transfer of rights, or the use of these rights as collateral for credit. They also allow limited participation of communities in the evaluation of licences, during which the duration of the rights is determined.¹⁴⁸ The rights local communities obtain from the agreements depend on the provisions of such agreements. Usually these rights are quite limited. The weak bargaining power of communities compared to companies and conservation offices, together with the lack of a fair judicial process also fail to guarantee good and fair agreements.¹⁴⁹

3.4.3.3 Private regulation

Indonesia’s interest in forest certification started in the early 1990s, when the government was stimulated by the International Timber Trade Organization meetings and wood products were facing boycott initiated by international NGOs.150 At the same time when the international community was negotiating the start-up of the FSC, Indonesia was considering establishing its own certification system. Two voluntary schemes started to operate in Indonesia in 1999, the FSC and a national certification scheme: the Indonesian Eco-label Institute (LEI). The first FSC natural forest management certificate was granted in Indonesia in 2001.¹⁵¹ The FSC has not developed a national standard in Indonesia. Instead, the accredited certification bodies have been conducting evaluations against their own standards which are locally adapted according to the FSC Principles and Criteria. Not until 2013 was a harmonized version of these locally adapted standards published by the FSC, as a first step towards developing a full-fledged Indonesian standard.¹⁵²

The LEI standards have developed much faster. The Minister of Forestry announced that he had asked the former Minister of the Environment, Emil Salim to establish a national certification scheme by the end of 1993. Emil Salim established the LEI working group to negotiate the standards, involving a variety of stakeholders, such as government, academia, NGOs and the private sector.¹⁵³ The standards were drawn from international and national documents, such as FSC C&Is, ISO 14,000 standards, ITTO C&Is and Indonesian national C&Is. The standards drafted by this multi-stakeholder process were later approved by the government (the Indonesia National Standards Body).¹⁵⁴ The LEI institute was officially established as a foundation in 1998, and later became the accreditation body, which validated its own certifiers.¹⁵⁵ The LEI was transformed into a constituent-based organization in 2009, with its members consisting of indigenous people, a community chamber, a business chamber, an NGO chamber and an eminent person chamber. The government has no seat in the governing body.¹⁵⁶ In order to gain public trust, LEI collaborated with the FSC and established a Joint Certification Programme (JCP). According to the JCP, the forest management units are obliged to pass both LEI and FSC standards to obtain certification. The penetration rates of both FSC and LEI are still low. There were 21 units covering 1.52 million hectares of forest that held certification from the FSC by the end of 2013;¹⁵⁷ LEI certification covers 1.89 million hectares of forest.¹⁵⁸

Both FSC and LEI have made efforts to promote certification for community-managed forests to both enhance the communities’ welfare and to strengthen forest protection. FSC has developed a group certification system for smaller actors, more specifically the Small and Low Intensity Management Forests Standards (SLIMF). LEI has also established a Sustainable Community-based Forest Management System (PHBML). The FSC SLIMF applies to small forests (areas not exceeding 1,000 hectares) and low-intensity management forests (harvest rate below 20 per cent of the mean annual increment within the production forest area, and annual harvest not exceeding 5,000 m²).159 By all means, the SLIMF coverage in Indonesia is still very limited, with around 2,000 hectares.¹⁶⁰ By June 2013, 32,683 hectares of community forests had obtained an LEI PHBML certificate.¹⁶¹

In addition to these voluntary schemes, a mandatory certification scheme (PHPL) was introduced in the early 2000s. All logging concessions were required to obtain the PHPL certificate. Community forests are exempted from this requirement.¹⁶² Under this scheme, independent auditors (LP) accredited by the MoF assess the performance of the industries according to sustainable forest management standards, issued via several decrees in 2002 and 2003.¹⁶³ Although this certification scheme is mandatory, only 62 forest concessions have been certified before March 2013, composing only 35 per cent of the total number of forest concessions.¹⁶⁴ This certification system is also criticized for lacking independence and transparency, and for being paper-based with little meaningful impact.¹⁶⁵

The effort to introduce certification originally yielded little uptake. Nonetheless, Indonesia continued to face strong pressure from consumer countries and civil society campaigns to tackle its rampant illegal logging, particularly when some developed importing countries started to impose legality standards in their domestic legislation. Such a legality regime was implemented by the EU, the US and Australia, requiring all the timber products entering into the market to comply with the law in the country of harvest.¹⁶⁶ Due to a lack of trust in the public administration of developing countries, a common approach in these jurisdictions is to require the establishment of a legality verification system, with third-party auditors evaluating the performance according to exporting countries’ domestic legislation.¹⁶⁷ In this political climate, the legality verification scheme (TLAS) started to develop in Indonesia.¹⁶⁸ The PHPL and TLAS were later incorporated in the voluntary partnership agreement (VPA) which Indonesia concluded with the EU in 2011.¹⁶⁹ Under the new system, forest operators can apply for both mandatory certification and legality verification. LPs are still responsible for conducting the assessment under the certification regime, while other independent verifiers (LVs) conduct the assessment under the TLAS. Both LPs and LVs are accredited by a National Accreditation Committee. If the assessment standards are satisfied, LPs can issue the SFM certificates and the LV can issue the legality certificates and export licences. The MoF does not issue certifications itself, but acts as a regulatory body of the LPs and LVs.¹⁷⁰

Another voluntary forest certification scheme, the Indonesian Forestry Certification Cooperation (IFCC) was established in 2011. The IFCC published its SFM standard and chain of custody standard, which were endorsed by PEFC in October 2014. The Standardization Committee, the standards setting body of IFCC, is composed of businesses, NGOs, local communities, the scientific community, and governmental authorities and so on.¹⁷¹ IFCC relies on the national accreditation body to accredit the certifiers.¹⁷² Since the introduction of TLAS and IFCC is comparatively recent, empirical evidence of their impact is not yet available. PHPL has been functioning for more than one decade now, but it does not apply to community forests and is criticized as having little practical impact. Therefore the following discussion focuses on the FSC and the LEI.

3.4.4 The interaction between public and private regulation

3.4.4.1 The interaction on paper

As mentioned earlier, customary rights are only given reluctant recognition under domestic law.¹⁷³

Clear land tenure and the protection of indigenous people or local communities are required under forest certification schemes. As discussed earlier, auditors evaluate the forest management performance against locally adapted FSC P&C standards in Indonesia. Principle 2 of the FSC P&C requires ‘Long-term tenure and use rights to the land and forest resources shall be clearly defined, documented and legally established’. Principle 3 concerns indigenous peoples’ rights: ‘The legal and customary rights of indigenous peoples to own, use and manage their lands, territories, and resources shall be recognized and respected’. In addition, Principle 4 requires forest management to enhance the well-being of local communities. The FSC also has a scheme tailored to CBFM forests, the SLIM certificate. It allows small and community producers who are eligible as ‘small or low-intensity forest management units’174 to form a group and apply for a single FSC certificate. Such an arrangement can reduce the costs and workload for the group members; hence it can ease the burden for local communities who would like to apply for FSC certification.

LEI has three standards for forest management: Sustainable Production Natural Forest Management Certification (PHAPL), Sustainable Plantation Forest Management Certification (PHTL) and Sustainable Community-Based Forest Management (PHBML). Using PHAPL as an example, it establishes standards of production, ecological and social sustainability. For the sustainability of social functions, it requires a ‘guaranteed community-based forest tenure system’, ‘guaranteed resilience and community and employees’ economic development’, ‘guaranteed continuity of social and cultural integration of community and employees’, ‘realization of the responsibility to safeguard nutritional status and prevent negative impacts on community’ and ‘assurance of workers’ rights’.¹⁷⁵ PHTL also includes similar requirements.¹⁷⁶ PHBML is a tailored standard for CBFM, including more robust standards concerning local communities, such as requiring an ‘established symmetrical social relationship pattern in the production process’ and ‘fair benefit sharing in accordance with community interest’.¹⁷⁷

The above analysis shows that three types of rules exist in Indonesia regulating land tenure and rights of indigenous people/local communities: the written law, customary law and private standards. Generally speaking, certification schemes respect customary law, while the latter is, at best, half-heartedly recognized under national law. Only until recently, a customary forest has been admitted as a category of ownership independent from state ownership. However, the criteria for the acknowledgement of such a forest and the process of establishing it remain obscure. The potential conflicts of these three types of rules fail to create a secure land tenure system, and create challenges for the protection of customary communities.

3.4.4.2 The interaction in practice

The land tenure policies do not only fail to create a reliable system and to achieve satisfactory improvement in local communities’ access to and benefits from the forest, but also have a negative influence on the forest management behaviour of both communities and concessionaires. Historically, agriculture and timber harvests in forests out of Java were regulated by the adat system. Based on traditional knowledge, such a system includes rules to ensure land fertility and to protect the forests. The adat systems had their own governing institutions under the leadership of Pasirah, who had authority to manage the forest, decided on individual use of the forest and protected the ecological functions.178 The self-governing institutions under the adat system used to be the same as the village government. However, the implementation of the Village Government Law restructured local villages and their governing institutions. Villages were ‘rearranged into administrative units containing a standard 100 families’.¹⁷⁹ The standardization sometimes joined geographically isolated units into one village, preventing effective governance. Moreover, the Pasirah lost authority over forests and the village head became the official village government, implementing policies from higher levels of government without considering local conditions and local rules.¹⁸⁰

The decline of adat institutions weakened the traditional control of forest use. The rapid growth of logging companies and agriculture plantations, as well as the large increase of transmigrants, has further endangered the forests in outer islands. The concessionaires obtained certificates from the government, marginalizing the local communities living in and around the forests. Finding it difficult to identify agricultural land according to adat rules, local people have been forced to cultivate vulnerable land or protected forests and to shorten the fallow period of farmland. Such activities have increased land erosion and have reduced fertility. The conflicting interests of timber or plantation companies, transmigrants and local communities have also led to uncontrolled forest fires in the 1990s. The companies used fire to clear forests, to facilitate access and to reduce compensation to local communities. Local communities traditionally used fire under the control of the adat system to prepare land for cultivation, but now deliberately set fire to their land, which was occupied by companies, in retaliation. Migrants farming in forests have never been subject to traditional adat rules and hence have also used fire to gain access to farmland without controlling it.¹⁸¹

The weakening of adat institutions and the conflicting interests among various actors has led to rapid forest clearing and high deforestation rates in the 1980s and 1990s. Even after the Reformasi period, when customary rights of local communities started to be recognized, strong incentives for deforestation remained. With the decrease of government control, land conflicts began to increase. Both companies and local communities have continued to clear forests for more profitable use to support their land claim. Moreover, the marginalization of local communities has incentivized them ‘to directly engage in illegal logging or to support deforestation by commercial operators in exchange for employment and/or other forms of payment’.182

As discussed above, in addition to establishing customary forest, the government has also introduced CBFM policies to enhance local communities’ engagement in and benefits from forest management. However, the adoption of these CBFM models is still limited. For example, although adat communities can apply for permits for a Forest Area with Special Purpose, in practice, it has only been used once. Less than 0.6 million hectares of the People’s plantation forest have been awarded, far less than the target set by the government.¹⁸³ The rights allowed under these CBFM models have often been limited, unable to empower local communities and incentivize their sustainable management performance. Many CBFM policies take little account of customary practice. ‘Imposed regulatory instruments have proved cumbersome and inappropriate in customary contexts, even weakening pre-existing forms of community organization and excluding the poorest (often landless) households and the informal forest use on which they most depend’.¹⁸⁴ As a result, some communities have abused licences and have conducted destructive logging.¹⁸⁵ However, other CBFM models have led to more positive results, such as the Village Forest model. The stakeholders in licensed areas have reported empowered communities and better conservation of forests.¹⁸⁶ Still, the application of the Village Forest model has also been limited: only six villages had obtained a licence by 2011.¹⁸⁷

The forest certification schemes have not provided satisfactory solutions for the public regulatory system in Indonesia that fails to create secure forest tenure and to incentivize sustainable forest management. Although both the FSC and the LEI have already started to operate in Indonesia since the late 1990s, their coverage is still limited.¹⁸⁸ Both schemes require clear and secure land tenure as a requisite to grant certification.¹⁸⁹ However, the above analysis shows that to achieve such a requisite has been a great challenge in Indonesia so far. The FSC standards require companies to obtain ‘free and prior informed consent’ (FPIC) from the communities, which seems a crucial mechanism to empower the systematically marginalized local communities. However, to achieve FPIC is also wrought with difficulty. The logging permits are often issued before the start of consultation with local communities. The power differentials lead to the question whether the ‘consent’ comprises a fair outcome.¹⁹⁰

To promote the CBFM, both the FSC and the LEI have established tailored schemes: the SLIMF and PHBML. Even with the vision to reduce the burden to communities caused by certification, these standards have only engaged very limited participation.¹⁹¹ Numerous challenges prevent their uptake. Institutional capacity is an important one of them. To get certified and remain competitive in the market, an institution is required to ‘help members secure markets and supplies, to achieve suitable economies of scale, and gain market power through joint bargaining, processing and purchasing of supplies and service’.¹⁹² Neither an adat institution nor local government is suitable to conduct such tasks under market-based certification schemes. The communities need to develop specific organizations, usually cooperatives to fulfil the requirement for certification.¹⁹³ Certification costs remain high for communities who can seldom afford those costs without donor support. What is more, the expected price premium is not guaranteed.¹⁹⁴

Field studies have been conducted on the sites which have received their certificate between 2004 and 2007.¹⁹⁵ All such sites were private land covered with small-scale teak plantations (rather than natural forests). With the aim of ‘land rehabilitation, water conservation and the utilization of barren land’, local communities had already started tree planting on these sites under government support (a forestation and reforestation programmes) long before certification.¹⁹⁶ The environmental quality had already improved significantly by then. Forest certification was later introduced to the local communities by NGOs and the private sector, who supported their application. The earlier government programmes had already motivated local communities to conduct environment-friendly activities and had prepared them for certification. A recent study also finds this positive synergy between public and private regulation in an FSC certified community forest. The certified villages had already joined the Social Forestry Programme (one CBFM model) before getting certified. Positive effects have been noted, including economic benefits to community members and increasing forest conservation behaviour.¹⁹⁷ On the one hand, such case studies show positive interaction effects between public regulation and forest certification have been achieved. On the other hand, they question the added value of certification schemes to governmental support. Moreover, the above analysis shows that local communities are still marginalized in the current land tenure system, and the progress of CBFM has been slow. This may suggest that most forest communities are still not prepared for the current certification schemes.

3.4.5 How does the interacted system address deforestation?

In what respect has Indonesia satisfied or not the necessary preconditions for the proper functioning of different types of property rights in countering deforestation? How do public and private regulations interact in Indonesia in establishing these property rights as well as in overcoming their limitations in countering forest degradation?

3.4.5.1 Public forests (state forests)

As discussed earlier, the BAL differentiates between public, private and customary land. The BFL 1999 defines public (state) forests as forests on public land. However, in practice, Forested Areas are often misunderstood as state forests. Due to conflicts within the BFL and between BFL and other regulations, the definition of Forested Areas is unclear, leading to different applications by the MoF and other government agencies/regional governments.¹⁹⁸ The different interpretations by various agencies contribute to conflicting permits and rapid deforestation.

70 per cent of land areas have been claimed as Forested Areas, creating challenges for forest management agencies to patrol the vast areas and to ensure the enforcement of forest regulation. Weakness of forest management institutions has been identified as a key cause of the rapid deforestation in Indonesia.¹⁹⁹ ‘Limited resources and poor management of forestry data and information create difficulties for institutions responsible for forestry in demarcating state forest boundaries’ and for monitoring forest-related activities.²⁰⁰ In addition, collusion and corruption have also been important issues hampering forest management.²⁰¹

Moreover, the capacity of various government agencies to regulate state forests in the public interest has been weakened by the decentralization process. Decentralization was supposed to increase local political participation and to allow decision-making by those having a good understanding of local conditions.202 However, it has been riddled with conflicting interests and attempts by the central government to regain power and reap the increasing regional revenues and local benefits from forest management.²⁰³ This ‘tug of war’ between different levels of government has been aggravated by the passing of inconsistent legislation. The conflicts between the MoF and regional governments have been escalated by the lack of clear hierarchy between different legislations. Hence, whether the decentralization really has steered local participation in forest management and addresses deforestation is seriously questioned.

There has also been lack of coordination between governance agencies responsible for different sectors, such as forestry, agriculture and mining. These various agencies tend to adopt compartmentalized programmes and focus narrowly on sectoral objectives, ‘partly because bureaucratic performance is assessed against sector-based targets’.²⁰⁴ The lack of coordination has led to conflicting planning and permitting as well as to weak monitoring.

Certification has limited capacity to address the above-mentioned limits of public regulation. Clear forest tenure is a precondition for forests to get certified. Therefore, the lack of clear forest property rights acts as a barrier to the wide coverage of forest certification. Certification provides an additional layer of monitoring and enforcement. However, the coverage is still very limited. Moreover, certification has often been limited to the relatively well-performing sites and has limited capacity to address the large number of bad performers.

3.4.5.2 Private forests

As discussed above, a land certificate and the designation of local or regional governments are needed to establish private forests. However, the land registration process is slow and costly, leaving many forests unregistered, adding difficulties in formally establishing private forests. The regulation to allow the conversion of private land in protected and conservation forests to state forests further adds to the uncertain status of private forests.

Private enforcement requires the capacity of private rights holders to monitor the behaviour in and the status of their forests, and to resort to the judicial systems when disputes arise. The corrupt judicial system, however, has made the costs of resorting to private enforcement in the courts very high.²⁰⁵

As in the example of public forests, certification has only limited possibilities in addressing the above-mentioned problems.

3.4.5.3 Community forests

Property rights. Communal property rights lack clear boundaries of resources and users as well as suitable appropriation and provision rules, which define the content of the property rights. In Indonesia, the law only provides minimum recognition of customary rights over forests. Only from 2013 onwards, was it admitted as one type of forests distinct from state forests. However, the content and the procedure of establishing customary forests remain unclear. Moreover, because of the ‘tug of war’ among different levels of government and the lack of coordination between agencies of different sectors, conflicting decisions are common, leading to unclear boundaries for forests. The CBFM policies try to grant more rights concerning forest management to local communities. However, the rights granted to communities are often limited, failing to create sufficient protection incentives.

Certification recognizes customary rights and requires clear forest tenure as a precondition to certify forests. However, challenges to get certified exist for many community-managed forests, due to the high costs, demanding expertise and institutional needs associated with it. Though communities can also apply for certification by collaborating with forest companies, their bargaining power is weak, especially when their rights are not formally recognized by law. Once certified (for the already better performers with clearer boundaries), however, it can consolidate the rights of clients and strengthen clear boundaries.

Enforcement. Traditionally, forests were governed by the forest-dwelling communities, who developed their own governing rules ‘that were woven around the socio-cultural features as well as the economic activities of local communities’ and had their own self-governing institutions.206 Under the communal property rights system (the community-based tenure system), ‘a complex bundle of group and individual property rights’ exists across communities.²⁰⁷ The different systems have various rules concerning the conditions under which community members can clear new plots of land for agriculture and harvest forest products.²⁰⁸ For example, based on local experiences, such rules control the use of fire to clear land, include conditions to prevent erosion and maintain fertility. ‘In this way, the adat system aims to maximize livelihoods by ensuring fertility and protecting the ecological processes upon which agriculture depends’.²⁰⁹ As mentioned earlier, the communities used to have their own governing institutions under the leadership of Pasirah, who manages the forests and decides the scope of individual rights. In these governing institutions, community members play a key role in determining management rules, with clear rights and responsibilities. Hence they have incentives to be involved in the daily monitoring of the forestry-related activities.

Since the colonial period, the state has tried to gain control over the forests, replacing the traditional adat governing systems with a public regulatory one. During the New Order period, the government tended to grant concessions to well-positioned commercial interests in state forests, where traditional communities used to live. Conflicting rights claims, however, are prevalent. Moreover, since 1979, the government has reorganized the local governing institutions according to the Village Government Law. The traditional adat institutions lost their role in governing forests and were replaced by village heads, who were responsible for implementing policies top down, rather than designing and implementing rules that fitted the adat systems. In the reorganization, sometimes geographically isolated communities were thrown together, making it difficult for the local government officials to effectively manage forests. Consequently, community members, who used to benefit from the protection of forests and took part in the self-governing institutions, were excluded from decision-making. Many forests became subject to conflicting claims from local communities and commercial interests who received concessions from the government. Therefore, the traditional way of relying on local communities to monitor forest-related behaviours has been seriously undermined. As mentioned before, the capacity of public regulators to protect vast state forests is limited. The lack of monitoring is followed by weak sanctions and a costly judicial system. Therefore, the replacement of customary self-governing institutions with governmental control has led to the dismantling of the traditional enforcement system. The limited capacity of the public regulatory system has often left a vacuum in forest governance.

Certification schemes can provide an additional layer of monitoring. However, current certification coverage in Indonesia is still limited, let alone for community-managed forests. As discussed earlier, special organizations such as cooperatives have been established to conduct the daily management. However, such cooperatives have often been criticized for ‘poor governance and obscure management practices allowing for collusion and corruption’.²¹⁰ Therefore, unlike under the traditional governing institutions, reluctance of present day community members to engage in the cooperatives has been noted in some cases.²¹¹ In addition, under the certification schemes, it is the third-party certifiers who conduct monitoring rather than the resources users under the customary governing system. Compared to resource users, the certifiers are at a greater distance from the daily management of the forests. Moreover, certifiers may compete with each other in order to attract clients (forest managers). Sometimes, they ‘offered to conduct minimum services (auditing), lowering standards to win contracts and satisfy funders’ expectations’.²¹² Therefore, whether certification can always provide an effective alternative to customary self-governing institutions in monitoring is questioned. In addition, unlike self-governing institutions and public regulation which can, in principle, rely on a variety of sanctions, the potential ‘sanctions’ that certification schemes can provide are limited. Private certification schemes are voluntary. Under the FSC scheme, as mentioned above, if the CB finds a violation of certification standards, it can issue minor CARs, major CARs and the suspension or revocation of a certificate. The strongest form is the latter option. Therefore, the deterrent effect certification schemes place on forest managers is limited.

Coordination. For community-managed forests, many individuals have stakes in them and coordination between these individuals is crucial. Under the adat system, self-governing institutions involving the broad participation of community members exists. This system, however, has been largely dismantled. Replacing traditional customary forests by state forests and allowing commercial interests to manage them makes the use of forests more complicated. More actors are involved, with conflicting claims, significantly increasing coordination costs. The public regulatory system itself does not offer a platform to solve the conflicts, but often simply requires the companies to negotiate with local communities. The bargaining power difference is further enlarged by legal and administrative practices that exclude customary rights. Therefore, a fair negotiation is not guaranteed.²¹³ Certification requires local participation in decision-making, by for example requiring companies to obtain ‘free and prior informed consent’ from communities before starting forestry. However, as discussed above, such requirements are often violated.

Information. The replacement of traditional communal governing institutions with public forests has also had a devastating influence on the availability of information. Traditional communities have lived in the forests for a long time and have depended on forests for their subsistence. Traditionally knowledge has been accumulated by local members which has helped them to maintain sustainability for many generations. Under the current system, it is up to the professionals, public/private regulators,

Table 3.1 Summary of the scores for the presence or absence of the necessary preconditions for property rights’ effectiveness

to collect information concerning forestry, which is much more costly than relying on local members under the customary institutions.

How Indonesia performs regarding the preconditions for the proper functioning of property rights is summarized in Table 3.1.

3.4.6 Conclusion

Three layers of rules regulate forest tenure in Indonesia: customary law (adat), national law and private certification schemes. The interaction between the multi-layered systems has not been available to establish clear forest tenure, let alone to overcome the limitations of forest tenure in controlling deforestation (for summary, see Table 3.1).

First, inconsistencies exist in defining property rights over forests in the multi-layered system. Traditionally, most forests are managed by local communities under the adat system. The communal rights, however, have been replaced by state ownership in modern Indonesia. Forest certification schemes require secure land tenure and respect of customary rights. However, the recognition and protection for customary rights under national law have been tortuous. Customary rights were excluded during the New Order regime and got limited acknowledgement in the BFL 1999. The independence of the customary forest from the state forest was only confirmed recently. Since the requirement of clear forest tenure is not fulfilled, certification schemes have limited capacity to address the chaotic definitions in law in Indonesia. Even state forests suffer from unclear boundaries, due to the lack of coordination between levels of government and departments. Private property rights over forests also face uncertainties due to the large amount of unregistered forests.

Second, the enforcement of property rights also presents challenges. Traditional self-governing institutions have been dismantled and replaced with public regulation. Due to limited enforcement capacity and corruption, government has been unable to fill the enforcement gaps left by adat systems. The costly and slow judicial system also prevents effective private enforcement. Certification schemes provide an additional layer of enforcement, but have limited impact because of limited coverage.

Third, a coordination mechanism exists under the traditional self-governing institutions. Excluding customary communities and promoting commercial interests in the forests traditionally controlled by communities has led to many conflicts between different actors, and to increasing coordination costs as well as to a loss of information gathering and sharing.

Altogether, a multi-layered forest governance system has developed in Indonesia, which suffers from contradictions and lacks coordination both within public regulation, and between public and private regulation.

3.5 Case study: Bolivia

3.5.1 Environmental problem: deforestation

Bolivia has 57.2 million hectares of forest, composing 53 per cent of its total land area.²¹⁴ 80 per cent of its forest coverage is located in the lowlands while the rest is in the highlands.²¹⁵ Bolivia is a landlocked and poverty stricken country.²¹⁶ Around 62 per cent of the total population self-identify as members of an indigenous group.²¹⁷ 80 per cent of the indigenous population is categorized as poor.²¹⁸

Although being a forest-rich country, Bolivia has suffered significant deforestation and forest degradation. Since the mid-1980s, the deforestation rate has increased steadily from 0.33 per cent (during 1987–1991) to 0.53 per cent in 2006 and 2010.²¹⁹ Generally speaking, Bolivia is in the second stage of forest transition (frontier stage) – with still large forest coverage and an increasing deforestation rate.²²⁰ However, regional differences exist, including some areas still in the virgin forest stage, others in the frontier stage, and yet others in the forest and agriculture mosaic stage.²²¹ The deforestation is most prominent in lowland forests.²²²

The Bolivian lowlands were traditionally occupied by indigenous groups. Historically, three waves of ‘land occupation’ (by investors and labourers for rubber tapping since the 1890s, by colonists from the west for food production since the mid-1950s, and by medium and large commercial agriculture since the 1980s) have created conflicts between indigenous people and other groups, and furthered pressure on the forests.²²³ Migration from the west, population growth in the colonist settlement areas and increased demand for food associated with urban population growth are still important drivers of deforestation today.²²⁴ The problems associated with demographic factors and conflicts between different groups have further been amplified by institutional changes, such as policies concerning access to land and land tenure, strong pro-agriculture policies, and weak forest regulations.²²⁵

3.5.2 Good governance

Bolivia is a lower-middle income country with annual GDP of US$33.00 billion in 2014.²²⁶ According to the World Bank WGI project, Bolivia ranks 48.28 regarding voice and accountability, 31.55 regarding political stability, 29.81 regarding government effectiveness, 20.19 regarding regulatory quality, 12.50 regarding the rule of law and 29.81 regarding control of corruption.²²⁷ The score of the World Bank WGI indicator on control of corruption is similar to the rank of corruption control from Transparency International. According to Transparency International, Bolivia is ranked 99 of 167 countries.²²⁸ Hence, in terms of good governance, Bolivia scores average or below average in all respects.

3.5.3 Property rights as well as public and private regulation

3.5.3.1 Property rights

The first Forestry Law of Bolivia was enacted in 1974, which declared the state owner of all forests and required users of forests to obtain permits from the state.²²⁹ These permits were issued in the form of logging contracts, which ‘could only be obtained by registered enterprises’ and hence excluded local and indigenous communities.²³⁰ The exclusion resulted in fierce social conflicts among stakeholders and culminated in a demonstration by indigenous people in 1990.²³¹ During this period, forest companies dominated forest extraction, which operated over 21 million hectares of forest.²³² This period was characterized by corruption and weak enforcement capacity, which made the logging virtually unregulated and led to deforestation.²³³

The indigenous movement, and deteriorating economic conditions, combined with growing concerns about deforestation and forest degradation led to the land and forest law reform in the mid-1990s.²³⁴ The reform was also influenced by the rise of neoliberalism in the 1980s and 1990s.²³⁵Typical measures included, ‘deregulation of domestic market, trade liberalization, privatization of public companies, public subsidy reduction and state role reduction’. The neoliberal reform on the one hand created pressure on forests by promoting agricultural development and on the other hand shaped the forest rights and regulation policies.

The documentation of land ownership had long been a problem in Bolivia and conflicting land claims were very common.²³⁶ In order to solve such conflicts and to establish a national, reliable property register, the National Institute for Agrarian Reform Law (INRA Law) was enacted in 1996.²³⁷ It clarified the process for land entitlement and granted indigenous communities an exclusive right to communal lands via establishing Tierras Communitarias de Origen (Native Community Lands) (TCOs).²³⁸ Since then, three types of land ownership have existed in Bolivia: public, private, and communal ownership via TCOs. The INRA Law also created new institutions such as the INRA (‘monitoring the implementation of the rural cadastre, the delimitation of public lands and the expropriation of private lands’) and the Agrarian Superintendence (hereinafter SA, classifying lands and supervising land-use plans).²³⁹

Also in 1996, the new Forestry Law was approved (Law No. 1700). Although it still claimed all forests are state-owned, it broadened the rights of indigenous people and local communities to utilize forests.²⁴⁰ It also regulated forestry practices to promote good forest management.²⁴¹ An independent public agency established as the competent authority under the Forestry Law, the Forestry Superintendence (hereinafter SF, responsible for approving forest management plans, supervising and controlling forest operations).²⁴²

A new round of reforms started in 2006, when President Evo Morales came to office, marking a shift towards post-neoliberalism.²⁴³ In this period, ‘the role of government in promoting economic and social development’ was re-emphasized and many hydrocarbon and mining companies were renationalized.²⁴⁴ The reform also changed the regulation of land rights and forest management. The INRA Law was revised by the ‘Law of Community Redirection of the Agrarian Reform’ (Law No. 3545).²⁴⁵ The land regularization and titling process under the 1996 INRA Law had long been criticized as bureaucratic and costly and has been modified under the new law. An important institutional change had also been implemented during this period: the SF and SA have been replaced by the Forest and Land Inspection and Social Authority (ABT). It is no longer an independent agency but under the aegis of the Ministry of Rural Development.²⁴⁶ Efforts have been made to revise the 1996 Forestry Law, but consensus has not been achieved yet.²⁴⁷

3.5.3.2 Public regulation

Several public regulatory instruments have had significant influence on the forest tenures, including decentralization, concessions, and performance standards for forest managers.

Decentralization. Bolivia has traditionally been a centralized country, where local government had quite limited authority and resources to decide and implement policies.²⁴⁸ However, in the 1990s, a decentralization reform started, marked by the Popular Participation Law of 1994 (No. 1551) and the Administrative Decentralization Law of 1994 (No. 1654).²⁴⁹ The decentralization process started in response to the need to institutionalize local participation and forest regulation reforms.²⁵⁰ The reform tried to shift authority from central government to prefectures (via the Administrative Decentralization Law) and municipalities (via the Popular Participation Law), with special focus on the latter.²⁵¹ The Prefectures are responsible for formulating forest development plans at departmental level, public forest education, forest research and developing a programme to strengthen municipal institutional capacity.²⁵² The municipalities are responsible for monitoring logging activities, raw material supply and processing, deciding municipal forest reserves to be assigned to local communities (ASLs) and formulating land-use plans at municipal level.²⁵³ To carry out these responsibilities, municipalities are required to create municipal forestry units (Unidades Forestales Municipales, Municipal Forestry Unit UFMs).²⁵⁴ In the new round of reforms since 2006, the earlier decentralization which shifted power to municipalities has lost support and prefectures have started to regain more importance.²⁵⁵

Concessions. Since the 1996 reforms, concessions have been used to grant rights to access and harvest forests on public land to private actors and indigenous people. Private enterprises can choose to maintain their long-term logging contracts awarded according to the previous forestry law (20 years) or convert them to concessions (40 years with automatic renewal every five years).256 Local communities can obtain concessions for forests on public land by organizing themselves as associations (ASLs).²⁵⁷ The municipalities are required to delimit the boundary of municipal forest reserves (20 per cent of public forests within municipalities) and the reserves are to be allocated to traditional forest users and indigenous people organized in as ASLs under concession contracts.²⁵⁸ Authorization is also needed for actors to use forests on private land and community land. The owners of private land can access the forests on their land when a few legal requirements are satisfied.²⁵⁹ The same applies for TCOs on communal lands.²⁶⁰ In summary, nowadays, five types of forest tenure exist: industrial concessions, former long-term contracts; local communities associations (ASLs), indigenous territories (TCOs) and private properties.²⁶¹

The 2006 reform tried to further strengthen the position of indigenous people. Since then, public forests are no longer allocated to concessions but only to communities.²⁶²

Performance standards regarding forest management. Different rules apply according to the types of forest tenure. Forest concessionaires and private landowners (for forests of more than 200 hectares) are required to develop and implement a forest management plan and an operational annual plan, for which detailed, scientifically based technical standards are required.²⁶³ The regulation for small private properties and forest community operations (TCOs) has been modelled on this regulation and has created barriers preventing participation in commercial forest exploitation.²⁶⁴ Another major change introduced by the revised Forestry Law is the replacement of the harvest volume-based tax system with an area-based tax system, with the aim of restricting corruption and encouraging more intensive (rather than selective) logging.²⁶⁵ The regulatory regime for non-timber forest products mimics the regime for timber products.²⁶⁶ The competent authority under the Forestry Law, the SF, was designed as an independent agency deriving its direct finance from forest taxes.²⁶⁷ To promote the transition to the new regime, Fonabosque, a national forestry development fund, was created.²⁶⁸

3.5.3.3 Private regulation

The 1996 Forest Law was developed following a multi-stakeholder dialogue involving the private sector, environmental NGOs, indigenous groups, governments, and international assistance agencies.²⁶⁹ A parallel approach at that moment was to develop a certification regime with the goal of encouraging sustainable forest management and to boost its timber exports.²⁷⁰ A non-governmental organization, the Bolivian Council for Voluntary Certified Forest Management (Boliviana Certificación Forestal Voluntaria, Bolivian Council for Voluntary Forest Certification CFV) was established in 1995 to develop national certification standards. The CFV standards were approved in 1998 and endorsed by the FSC in 1999, making it the first FSC national initiative in the developing world.²⁷¹ The certification standards are ‘virtually the same as’ the standards under the revised Forestry Law.²⁷² The certification presents more stringent standards only in social issues, such as labour rights, community organization and consensus building.²⁷³ After the first certification was awarded to an indigenous community, the certification coverage increased quickly in Bolivia and reached 2.21 million hectares in 2005.²⁷⁴ This was the country with the largest certified tropical forest area,²⁷⁵ which was very notable in this poor country with widespread corruption and limited access to export routes.²⁷⁶

In recent years, the Bolivian forest market experienced a significant change. Exports to the US and America fell due to the economic downturn. At the same time, the regional (South America), Asian and domestic market increased significantly, which diluted the incentives to seek forest certification.²⁷⁷ The land reform decreased the forest areas under concessions and made communities the most important forestry players. The latter, however, faced more challenges in obtaining certification.²⁷⁸ The government also shifted away from its early support of the FSC certification scheme, fearing that foreign NGOs would dominate the forest governance narrative.²⁷⁹ Instead, a national certification scheme was created in November 2014 under the ABT.²⁸⁰ A national system is believed to be less costly and more accessible since the NGOs lack financial capacity to seek FSC certification.²⁸¹ Against this background the area of FSC certified forests started to decrease sharply since 2009. Only 0.87 million hectares of forests remained certified in 2013.²⁸²

3.5.4 The interaction between public and private regulation

3.5.4.1 Interaction on paper

To tackle the chaos created by land conflicts and to promote a more equitable distribution of benefits between various stakeholders, a land reform started in the mid-1990s. The reform merged the land rights and forest use rights.²⁸³ Under the new regime, five categories of access rights exist. On the public land, long-term logging contracts, commercial concessions, and ASLs can be established. In addition, the reform recognized private property rights and ‘the collective property of indigenous people over the land that these groups occupied traditionally’ as TCOs.²⁸⁴ Both the TCOs and private landowners are allowed to commercially use the forest on their own landholdings.²⁸⁵ However, the indigenous people and private owners need to justify their economic and social function (FES) to acquire and maintain ownership.²⁸⁶ ‘The FES was relatively broadly defined, including not only agricultural but also forest and conservation activities’.²⁸⁷

The land regularization and titling process was slower and more expensive than originally expected. To accelerate the process, especially the titling of TCOs, a new round of land reform started in 2006. The forest concessions were cancelled and all public lands were to be allocated to communities and landless people.²⁸⁸ A more specific definition of FES was provided: the actors satisfy the FES if ‘they intend to meet the “best interests” or welfare for all residents or achieve economic development through the “best use” of the land’. The best use may take the form of agricultural activities, forestry, biodiversity conservation or ecotourism.²⁸⁹ If the FES is not complied with, the state can expropriate the land for redistribution.²⁹⁰ Therefore, through the two rounds of land reform, the law formally recognized the land tenure of indigenous people as well as local communities and attempted to remove overlapping land claims and conflicts, at least on paper. In spite of the clearer land tenure, its security is not guaranteed due to the frequently changing policies.

The CFV (FSC Bolivia) approved the ‘Standards for Certification of Forest Management of Timber-Yielding Products in the Low Lands of Bolivia’ (FSC Bolivia standards) in 1998.²⁹¹ The standards adhere to the Principles and Criteria (P&C) of the FSC and require the forest management to be environmentally appropriate, socially beneficial, and economically feasible.²⁹² The FSC Bolivia standards contain several principles related to forest tenure and rights of indigenous people or local communities. Principle 2 (Tenure and Use Rights and Responsibilities) requires that ‘long-term tenure and use rights to the land and forest resources shall be clearly defined, documented and legally established’. Principle 3 (Indigenous People’s Rights) stipulates ‘the legal and customary rights of indigenous people to own, use and manage their lands, territories and resources shall be recognized and respected’. These general principles are further illustrated by specific criteria and indicators. In Principle 4 (Community Relations and Worker’s Rights), there are also some indicators requiring the enhancement of local communities’ well-being.²⁹³

As discussed earlier, the standards established under the FSC Bolivia certification and the domestic forest regulation are very similar. Regarding land tenure and the rights of indigenous people/local communities, their standards are also highly compatible. The rights of indigenous people and local communities are formally recognized in the two waves of land reform. Institutions have been created to regularize and register the landholdings and relatively clear standards and processes are established on paper. These are in line with the requirements of the FSC standards.

3.5.4.2 Interaction in practice

3.5.4.2.1 The Interaction across Sectors and Government Agencies

In addition to forest agencies and forest policies, many other government agencies and policies also have an important influence on forest management. The lack of coordination among the agencies and policies however, causes many conflicts in forest tenure.

For example, the INRA is responsible for titling TCOs according to the INRA Law of 1996. According to the Forestry Law of 1996, municipalities are provided with 20 per cent of public forests in their jurisdictions as municipal forest reserves to be allocated to ASLs. For fear that the claims for TCOs may endanger their portions of municipal forests reserves, the municipality may oppose the TCO adjudication. Therefore, the lack of coordination between different authorities may aggravate the contested, long, land regularization process.294

Lack of coordination also exists between INRA and SF, which are responsible for awarding TCOs in indigenous land (according to INRA Law) and concessions on public land (according to Forestry Law) respectively. The INRA Law and Forestry Law were issued in 1996, when indigenous rights had just begun to be recognized and logging contracts were established on much indigenous populated land. The INRA is required to respect indigenous rights. However, according to the Forestry Law, these logging contracts can automatically be converted to concessions. This has resulted in the fact that 27 out of 86 concessions awarded by 1997 were overlapping with indigenous territories.²⁹⁵

In addition, ‘the nesting of land reform in the agrarian reform paradigm’ and the neglect of forestry issues have also contributed to the failure in promoting sustainable forest management.²⁹⁶ In Bolivia, most land identified for redistribution is covered by forest.²⁹⁷ However, both the conditions for land titling and accompanying policies provide preferable treatment of agricultural over forest uses. As mentioned earlier, to be titled with private ownership or TCOs, the private actors and local communities need to prove their use satisfies an economic and social function (FES). In theory, both forest management and agricultural use can be used to justify FES. Conducting forest management according to the legal standards is costly. Many actors choose to clear forests and cultivate crops or livestock to prove FES and secure their land tenure.²⁹⁸ In addition, many supportive policies are in place to support agricultural development, such as zero interest loans, subsidies and other instruments aimed at achieving food sovereignty.²⁹⁹ However, few such accompanying policies are available for forest management activities.³⁰⁰ Even in the new land reform since 2006, the neglect of forest issues is hardly addressed. Even the Forestry Directorate is excluded from the revision process of the INRA Law.³⁰¹

3.5.4.2.2 The Interaction between Formal and Customary Institutions

The above analysis shows that the lack of coordination between governments in different levels and sectors makes the establishment of TCOs difficult. Even when TCOs are established, they are often criticized for insufficient consideration of the existing informal institutions.³⁰² The TCOs grant collective rights to indigenous people at the territorial level and a new governing body has also been established at this level.³⁰³ How to allocate the collective land and forests at the individual level, however, is usually decided by the traditional local governing organizations, usually at the village level.³⁰⁴ A territory often includes diverse communities with different cultures and governing traditions. The competition between authorities has created undesirable effects in governing the forest resources. The territorial governing institution usually acts as a collective movement to advocate indigenous interests and to secure their land tenure, and is poorly equipped to allocate and administrate the resources internally.³⁰⁵ Traditional local institutions are also weakened by the introduction of new rules and the long titling process. Based on different traditions, the interaction of territorial and local institutions has created very diverse modalities of land distribution and forest resources access modalities.³⁰⁶ The land legalization process has been longer and more costly than expected. According to the 1996 INRA Law, 106.7 million hectares of land needed to be regularized by 2006. However, only 9.2 million had been regularized by 2006 and 5.7 million hectares of them were titled as TCOs.³⁰⁷ The average costs of land regularization are estimated as US$2.75 per hectare.³⁰⁸ Only after the 2006 reform, the process has been accelerated. Sixty-four million hectares of land had been titled by 2012 and 22.5 million of them as TCOs.³⁰⁹ Besides, the conflicting claims concerning the settlement areas have often been settled by allocating titled lands to TCOs far away from the communities’ traditional settlement, rendering it difficult for members to effectively manage them. Moreover, the delay in awarding property rights to disputed lands has induced illegal transactions between indigenous people and farmers who claim the same lands, leading to further forest clearing.³¹⁰

3.5.4.2.3 The Ill-Suited Performance Standards under Public Regulation and Certification

The forest regulation under the Forest Law and forest certification scheme in Bolivia has also failed to incorporate and adapt to the local forest practice and governing institutions. As mentioned earlier, both public regulation and the CFV certification scheme adopt a scientifically based approach to forest regulation. They require the development of forest management plans and detailed technical requirements. Such requirements apply both to commercial concessions and to small private operators and local communities. Such an approach is, however, better suited to the bigger operators who are integrated in the market economy than to smaller producers.³¹¹ Local communities often have norms concerning subsistence use or small-scale commercial use of forest resources, but are not prepared for a large-scale commercial use in terms of management organization, techniques, knowledge and finance.³¹² Therefore, local communities have to create new organizations, ‘community enterprises’, or to seek collaboration with companies (CCP) to operate formally under the Forest Law and certification scheme. However, both modalities are not easily achievable.

With the support of NGOs, national government agencies or foreign donors, some communities have managed to establish community enterprises. A few communities have also got their forests certified, which was expected to bring them a securer international market and a price premium. However, the cultural differences between local communities and the market economy have provided the local members little incentive to engage actively in forest management and to learn the management, accounting and other skills needed to maintain a self-sufficient project.³¹³ Once the external support stopped, few of them could maintain their own forest management and certification.³¹⁴ Moreover, to secure market access through certification, the communities are required to provide a secure supply of timber (products) and to achieve high quality standards, which have proved difficult to satisfy.³¹⁵ Therefore it is not surprising that among the land titled to local communities and indigenous people, few had a management plan. Recalling that 5.3 million hectares had been titled as TCOs by 2006, only 0.723 million had a forest management plan by 2007.³¹⁶ Even after the 2006 reform, the development and approval of forest management plans in TCOs was still slow, varying from 0.045 million hectares to 0.417 million hectares per year from 2006 until 2013.³¹⁷ Only 0.9 million hectares obtained concessions via ASLs by 2007.³¹⁸ After that, only 0.074 million hectares of additional land were awarded concessions.³¹⁹ As for forest certification, there has even been a decrease. Although some communities had once obtained certification, all of them have lost their certification in the following inspections, due to failing to meet the requirements of the certifiers.³²⁰

Another opportunity for communities to conduct commercial use and get certification is to resort to CCP, relying on companies for their technology and organizational skills. However, this alternative also has obvious negative effects, ‘including bad working conditions, limited development of communities’ bargaining power and high transaction costs’.³²¹

For many forest operations, the CFV standards include respecting land tenure, indigenous people’s rights and ameliorating the relationship with local communities. However, an overview of the FSC certification in Bolivia shows that auditors primarily focus on documentation, monitoring, environmental issues, and compliance with laws on workers rights which can be immediately complied with. Social issues, such as respecting the rights of local communities only form an insignificant part in the required conditions.³²²

In summary, the difficulties for local communities to conduct formal forest management under public regulation and forest certification pushed them to conduct illegal logging and to engage in informal markets. Almost two decades after the land and forest law reform, illegal logging in Bolivia is still prevalent and the deforestation rate remains high.³²³

3.5.5 How does the interacted system address deforestation?

In what respect has Bolivia satisfied or not the necessary preconditions for the proper functioning of different types of property rights in countering deforestation? How do public and private regulation interact in Bolivia in establishing these property rights as well as in overcoming their limitations in countering forest degradation?

3.5.5.1 Public forests

Although the state owns all forests in Bolivia, the land on which forests grow can be owned by public or private parties, or indigenous people/communities. Public forests here refer to the forests that occupy public land. As discussed earlier, three types of forest tenure can be established in public forests: long-term contracts, concessions with private actors, and ASLs for indigenous people.

Property Rights. Before 1996, only companies were allowed to obtain logging contracts to access public forests. The 1996 reform converted the logging contracts to concessions and allowed indigenous use of public lands via ASLs. This reform tried to increase the certainty of property rights and provided incentives for sustainable management. As mentioned earlier, during the same period, certification schemes started to develop. The Forestry Law and certification scheme include similar standards. The similarity in standards, together with external support and the expectation of enhanced access to the international market, promoted the fast spread of certification in the initial stage. Because the standards were more suitable for large-scale commercial use than indigenous forest use, it is mainly the concessioners that got certified.

Since 2006, however, the concession system has been cancelled and no more concessions have been awarded. The ensuing uncertainty of property rights has provided little incentive for concessioners to continue seeking certification.324 Moreover, clients expected certification not to add much to the burden of public regulation given the similarities in standards. However, as discussed later, the lack of enforcement of public regulation has left substantial gaps between the two regulatory schemes. Together with the shift to non-environmentally sensitive markets and the loss of support from the government, certified areas have reduced sharply.

Enforcement. Under public property rights, the enforcement capacity of governmental agencies is crucial. From 1996 until 2006 SF has been the responsible agency for the implementation of forest regulation. It was designed to be financed by timber tax, part of which was also expected to be transferred to municipalities for their establishment of UFMs and local regulation. However, SF was poorly staffed. Tax revenues shrank, generating insufficient finances to SF.³²⁵ Even less funding was transferred to municipalities and UFMs have never even been established in some of them.³²⁶ The lack of finance, staff and technology has left forest regulation largely unimplemented.³²⁷ The introduction of forest certification has provided an additional layer of monitoring. However, only a small part of the vast public forest area has been covered by certification.

3.5.5.2 Private forests

After the 1996 reform, the rights for private owners to use forests on private land have been acknowledged. However, in many cases land ownership continued to be contested by different groups, due to the waves of land occupation mentioned above.328 The land regularization process started under the INRA Law, trying to sort out the chaotic land tenure picture and granting titles to private parties and indigenous people. The process, however, has been protracted and costly. Moreover, to obtain the titles, private parties and indigenous groups needed to prove that their land use satisfied FES requirements. The application of such requirements, however, is more favourable to agricultural use than to forestry use.

Relying solely on private parties to enforce forest tenure is difficult, due to frequent invasions of forests and illegal logging.³²⁹ Hence, the support from public regulators is important; however, it is criticized as slow and unreliable.³³⁰ The SF is sometimes also reluctant to enforce the law strictly and to evict outsiders.³³¹

3.5.5.3 Community forests

Property Rights. The 1996 reform has allowed indigenous groups to access forest resources, via either establishing indigenous ownership over the land (TCOs) or by establishing concessions on public land (ASLs). The new government has further prioritized the needs of indigenous communities in the land regularization process. This is in line with the certification standards, which require the protection of customary rights and a clear forest tenure.

However, recognition has been insufficient to guarantee the establishment of clear property rights. The land regularization and titling process has been criticized for being bureaucratic, costly and slow. For the TCOs, an additional governing level has been introduced (territorial level) on top of traditional governing institutions (usually villages). Diverse and sometimes geographically remote villages shared the same TCO, weakening the traditional governing institutions. Formal territorial level boundaries coexist with traditional boundaries, adding confusion and difficulties in daily management. In addition, disputes concerning settlement areas have often been settled by allocating titled land to TCOs far away from the communities’ traditional settlement. This has rendered it difficult for members to effectively manage them.

Moreover, lack of coordination between different agencies and levels of government has extended the land regularization process. Delay in the adjudication of disputed land claims has promoted illegal transactions between indigenous people and ranchers/farmers, leading to further forest clearing.

Enforcement. In theory, self-governing institutions of indigenous groups can monitor behaviour in the forests and ensure the enforcement of the communities’ property rights. Current Bolivian law recognizes indigenous ownership over land via TCOs. However, the introduction of formal institutions and norms has jeopardized the traditional governing institutions and monitoring which used to be in place. For example, a study of forest governance in Yuracare communities before and after the introduction of community forest management required by law has exposed such dangers.332 The Yuracare people used to have their indigenous rules of timber harvesting, which, although not scientifically founded, were congruent with local ecologies. The resource users who move around the forests were to conduct monitoring and report violations. The traditional monitoring by each individual of the communities has been replaced by a forestry professional ‘[who] the government requires the forest management plan holders to utilize for periodic assessment studies’.³³³ As a result, the indigenous people no longer participate actively in the monitoring of the territory, leading to the loss of many potential observers. Therefore the neglect of local context has created challenges in controlling illegal logging and promoting sustainable forest management.³³⁴

Certification has provided an additional layer of monitoring. However, due to cultural differences, expertise and budget limits as well as the unfavourable standards for community-managed forests, all the certified community forests have lost their certificates.

Coordination. In the traditional governing institutions community members have been involved in decision-making and enforcement. However, competition between the newly introduced TCOs and traditional institutions has weakened the traditional collective-choice arrangement. To get certified, communities need to either establish a community enterprise or resort to collaboration with companies. Either way, a more complicated governance system has been established, rendering the coordination among various actors more demanding.

Information. In designing the specific forest management standards, both public law and certification have adopted a western scientifically based approach and have ignored local knowledge. Such standards are based on specialized knowledge increasing the demand of forestry professionals (for designing and implementing management plans).³³⁵ They are hence more favourable to commercial concessions than to a community-managed forest.

Table 3.2 Summary of the scores for the presence or absence of the necessary preconditions for property rights’ effectiveness

This has impeded many communities from getting certified. A few communities have managed to get certified with the support of NGOs and the government. However they were not able to become self-sufficient and to maintain their certificates due to cultural, financial and expertise limits. Hence, the role of certification in securing forestry management by communities has been limited.

How Bolivia performs regarding the preconditions for the proper functioning of property rights is summarized in Table 3.2.

3.5.6 Conclusion

The state owns all forests in Bolivia, but the land on which forests grow can be managed by the public, private parties and indigenous groups (via TCOs). Three types of forest tenure can be established on public land: long-term contracting, concessions, and ASLs. None of them meet the preconditions of property rights’ proper functioning, nor do public and private regulation overcome the limitations of the different types of forest tenure (for a summary, see Table 3.2).

Large-scale ‘land occupation’ movements have led to many conflicting claims. Since 1996, efforts have been made to regularize land tenure and grant titles to private and indigenous people. The new law also prioritizes indigenous rights. Such efforts are in line with the requirements of certification schemes. Therefore, comparatively clear forest tenure only exists on paper. The weakening of traditional institutions, an expensive and slow land titling process, uncoordinated behaviour from different government agencies and policies prioritizing agriculture over forestry have failed to put the formally clear forest tenure into practice.

Even after the reform, public enforcement remained weak, due to budget and staff constraints. In many respects, the Forest Law has not been implemented. Private parties have difficulties in enforcing their property rights by themselves, as indicated by widespread land conflicts and rampant illegal logging. For community forests, although they are formally recognized under law, and traditional governing institutions are not formally abandoned, the introduction of an additional level of institutions has weakened traditional communal enforcement. In theory, certification could provide an additional layer of monitoring. However its impact is limited due to a low coverage rate.

3.6 Case study: North America

3.6.1 The environmental problem: the health of riparian forests

Canada and the US are quite similar in terms of forest coverage. They are countries with the third and fourth largest forest areas in the world: respectively 310 million and 304 million hectares.³³⁶ 34.1 per cent of land in Canada and 33.3 per cent in the US, is covered by forests.³³⁷ The land clearance for agriculture caused by the invasion of European immigrants during the nineteenth century has led to the loss of one third of the original forests in the US and less than 10 per cent in Canada.³³⁸ Forest cover has been stabilized in both countries in the past 100 years, though the percentage of primary forest continues to decrease.³³⁹

Though both countries have completed forest transition and stabilized forest cover, forest fragmentation and losses still occur in some regions.³⁴⁰ For example, forest areas are still decreasing in the west.³⁴¹ In addition, many other issues still influence forest health and the service forests provide, (for example, in terms of supporting ecosystems, enhancing the health of streams) in both countries, such as outbreaks of forest insect pest damage and forest fires.³⁴² As mentioned before, in Indonesia and Bolivia unclear property rights have led to high deforestation rates. Canada and the US face challenges from a different type of problem: forest degradation, which is associated with the loss of services provided by the forests. The establishment of rights has not sufficed to address degradation problems. Therefore, the focus is on how public and private regulations interact in order to overcome the limitations of property rights in addressing forest degradation.

The case studies of Canada and the US focus on one important service provided by the forests: maintaining healthy riparian areas. Poor management of riparian areas can deteriorate water quality, influence the terrestrial and aquatic ecosystems, increase flood and erosion risks and so on.³⁴³ Some of these negative impacts have indeed taken place in North America. For example, the dramatic decline of wild salmon stocks on the Pacific Coasts of the US and Canada have been associated with forest harvesting practices.³⁴⁴ Deforested riparian areas are also recorded which have led to narrowing stream channels and increasing water pollution.³⁴⁵ This research focuses on how different governance instruments regulate forest management activities in order to protect riparian areas.

3.6.2 Good governance

Canada is a high income country with an annual GDP of US$1.785 trillion in 2014.³⁴⁶ According to the World Bank WGI project, Canada ranks 95.57 regarding voice and accountability (out of 100), 91.26 regarding political stability, 95.19 regarding government effectiveness, 97.60 regarding regulatory quality, 94.71 regarding the rule of law and 93.75 regarding the control of corruption.³⁴⁷ The World Bank WGI indicator on control of corruption is similar to the rank of corruption control from Transparency International. According to Transparency International, Canada ranked ninth out of 167 countries.³⁴⁸

The US is also a high income country with an annual GDP of US$17.42 trillion in 2014.³⁴⁹ According to the World Bank WGI project, the US ranks 79.80 regarding voice and accountability, 66.99 regarding political stability, 89.90 regarding government effectiveness, 88.46 regarding regulatory quality, 89.90 regarding the rule of law and 89.42 regarding the control of corruption.³⁵⁰ The World Bank WGI indicator on control of corruption is also similar to the rank of corruption control from Transparency International. According to Transparency International, the US ranked sixteenth out of 167 countries.³⁵¹

3.6.3 Property rights as well as public and private regulation

3.6.3.1 Property rights

In Canada, over 90 per cent of forests ‘are publicly owned and most of the authority for managing these forests rests with provincial governments’.³⁵² Such forests are usually referred to as crown forests.³⁵³ The rest are mainly owned by private actors (individuals and firms). By 2008, only around 1.46 million hectares of forest were owned by local communities.³⁵⁴

Private parties can gain rights to harvest public forests via area or volume-based licences.³⁵⁵ In addition to gaining rights to access and harvest, the licensees are obliged to prepare management plans according to regional land-use plans.³⁵⁶

In the US, 58 per cent of the forests are privately owned. Of the public forests, around a half (20 per cent of total forests) are owned by the federal government, administered by the US Forest Service (USFS).357 The rest are owned by the states (8 per cent) and others (14 per cent). Only a small portion of the public forests are designated for use by local communities.³⁵⁸

The USFS is responsible for the management of federal forests and it is required to prepare forest management plans. With declining staff since the 1990s, harvesting is increasingly contracted out to private parties. However, the management is kept under government control.³⁵⁹ How state-owned forests are managed and how the forest tenure is established varies between states.³⁶⁰

This research focuses on the dominant types of forests in North America: the public forests in Canada and the private forests in the US.

3.6.3.2 Public regulation

In Canada, the legislative competence concerning ‘the development, conservation and management of forestry resources in the province’ rests exclusively at provincial level.³⁶¹ Therefore, most provinces have adopted their own Forest Act, including basic rules concerning sustainable forest management.³⁶² The Forest Act usually applies to public forest and is implemented by forest ministers. In some provinces, private forests are subject to separate provincial or local legislation, implemented by separated authorities.³⁶³ Generally speaking, the regulation of private forests is less intensive than that of public forests.³⁶⁴

Shared competence between federal, territorial and provincial governments does exist with some forest-related issues, such as ‘science and technology, industrial and regional development and the environment’.³⁶⁵ For example, the Federal Fisheries Act and some provincial laws regulate the forest activities which have a potential influence on both fish and fish habitats.³⁶⁶ Some courts have defined riparian forests as fish habitats.³⁶⁷ The Federal Fishery Act hence also provides the federal basis to protect riparian forests.³⁶⁸ It, however, does not require the establishment of riparian forest buffer zones.³⁶⁹ At provincial level, riparian issues are regulated by provincial laws, such as Forest Acts and specific riparian forest regulations/guidebooks for public forests and other legislation for private forests.³⁷⁰ The riparian zone protection can be mandatory in some provinces while voluntary in others.³⁷¹

The US also has no single federal Forest Act, but relies on ‘a complex array of interlocking state and federal laws’.³⁷² The environmental effects of forestry activities are addressed in several federal laws, such as the Clean Air Act, the National Environmental Policy Act, the Clean Water Act (the CWA), the Federal Insecticide, Fungicide and Rodenticide Act, the Coastal Zone Management Act and the Endangered Species Act.³⁷³ States also regulate forestry activities, either by specific forest laws or general environmental statutes.³⁷⁴ State and private forests can be subject to the same or different regulation.³⁷⁵

As far as riparian protection is concerned, the CWA plays an important role through regulating non-point source water pollution (NPS). The CWA requires each state to adopt programmes to achieve the NPS reduction and water quality goals.³⁷⁶ To fulfil such obligations, states have developed best management practices (BMPs) for forest operations. The BMPs are ‘a practice or usually a combination of practices that are determined by a state or designated planning agency to be the most efficient and practicable means of controlling point and non-point source pollutants at levels compatible with environmental quality goals’.³⁷⁷ The BMPs are mandatory in some states, while voluntary in others. The states that opted for voluntary BMPs rely on education and technical assistance to promote their application and states that adopted regulatory BMPs use mandatory controls and enforcement strategies.³⁷⁸ The CWA and its NPS clauses apply to all types of forests, including federal, state and private forests.³⁷⁹

One important instrument used by the provincial regulations/guidebooks in Canada and state BMPs in the US is the establishment of riparian buffer zones. In the riparian buffer zones, forest management activities and other potentially harmful activities are restricted or prohibited. It usually consists of two elements: the widths of buffer zones for a certain stream type and the extent of management restrictions. The restrictions or prohibition may concern activities such as road construction and maintenance, timber harvest, the use of silvicultural chemicals, and various other practices.380

3.6.3.3 Private regulation

In North America, three certification regimes are actively operating: the regional standards of the FSC in both the US and Canada, the CSA which applies to all Canadian forests and the SFI which applies to forests in both countries. By July 2014, around 14 million hectares of forest in the US and 55 million hectares of forest in Canada were certified by the FSC, comprising 6 per cent and 22 per cent of the total forest area respectively.³⁸¹ CSA covered 40 million hectares of forest in Canada by November 2014.³⁸² SFI has certified more than 100 million hectares of forest in Canada and the US by 2014.³⁸³ Together, 36 per cent of forest areas in North America are certified.³⁸⁴ These certification schemes have standards covering various environmental, economic and social issues related to forest management. The adoption of riparian buffer zones is an important one of them. How the riparian buffer-zone rules under public regulation and forest certification interact in order to provide protection are further analysed in the following sections.

3.6.4 The interaction between public and private regulation

As discussed earlier, the goal of the case studies of Canada and the US is not so much to examine how public and private regulation interact in influencing the establishment and functioning of property rights to address deforestation. Rather the goal is to examine whether public and private property rights help to overcome the limitations of property rights in addressing forest degradation (riparian zone protection).

3.6.4.1 Interaction on paper

Riparian buffer zones are a good candidate for the comparison of the standards under certification and public regulation. This is because two quantifiable indicators exist for the comparison of their prescriptiveness and compatibility: the widths of buffer zones for a certain stream type and the extent of management restrictions. McDermott et al. have compared the standards of a few commonly used certification regimes (CSA, SFI and some regional FSC standards) and public regulation in some states/provinces in the US and Canada, and find that certification standards ‘closely mimic government policy approaches’.385

As discussed earlier, riparian buffer zones are regulated under the BMPs in the US and under provincial laws in Canada. Three certification schemes, FSC, SFI, and CSA, apply broadly in both countries. McDermott et al. analysed the riparian protection requirements under the CSA, SFI standards and three regional FSC standards (the FSC-SE which covers ten US states, the FSC-PC which covers three US states and the FSC-BC which covers British Columbia). The CSA prescribes the procedures for developing substantive management thresholds regarding riparian buffer zones, but does not provide on-the-ground performance requirements. SFI requires forest operators to follow the BMPs for water quality protection and establishes procedural requirements for riparian protection measures where BMPs do not exist. BMPs hence became a mandatory requirement under the SFI scheme. FSC-SE also provides procedural requirements and requires the management to meet or exceed state BMPs. Both FSC-PC and FSC-BC have their own substantive requirements on the size of the riparian buffer zones and the extent of restriction.³⁸⁶

For the schemes with substantive requirements themselves (FSC-PC and FSC-BC), McDermott et al. compare the prescriptiveness of their standards with public regulation according to the widths of riparian buffer zones and the extent of restriction. They finds the FSC-BC standards closely mimic provincial policies. The FSC-PC standard resembles an average of the legal requirements in the three states it covers.³⁸⁷ The FSC-SE and SFI refer to the governmental BMPs regarding riparian protection and the CSA also requires legal compliance.

The above analysis shows that forest certification usually adopts standards closely mimicking public policies regarding riparian protection in North America. In other words, a high degree of coherence exists between public regulation and certification regarding riparian zone protection.

3.6.4.2 Interaction in practice

In addition to the coherence in the rules regulating riparian buffer zones, public and private regulators also coordinate with each other in implementing the rules. British Columbia and Ontario are such examples.

As mentioned before, the competence to regulate forest issues generally, and riparian buffer zones specifically is mainly vested in the provinces in Canada. In British Columbia, most forests (97 per cent) are publicly owned.388 The Forest Practices Board is the regulatory body for public forests, which audits ‘forest management performance by government and industry and to investigate public complaints’.³⁸⁹ In addition to the organizations responsible to enforce public regulation, independent auditors are active in auditing the performance of forestry operations against certification standards. Most forests in British Columbia are certified according to one of the certification schemes.³⁹⁰ The above analysis shows that certification standards are very similar to public regulation concerning riparian protection issues and certification regimes require legal compliance. Hence many synergies can be found in the monitoring and enforcement of the Forest Practices Board and auditors. With the aim of reducing duplication of effort by the auditees and of saving audit costs, the Forest Practices Board has made an assessment of land audited by the SFI, and established a process to rely on the work of auditors. The auditors and licensees agreed to open the certification audit files and share them with the Forest Practices Board. The SFI places high management, monitoring and documenting requirements on the forestry operations. Though such requirements may not directly lead to on-the-ground performance improvement, they make performance data more accessible and save time and costs for the Forest Practices Board in conducting their inspection. In addition, the Forest Practices Board can raise questions in their inspection, which help the industry and certifiers to re-examine the audit process and to improve their future audit.³⁹¹ Similar arrangements can also be found between the regulatory agency in Ontario (Ontario’s Minister of Natural Resources, the OMNR) and two certification schemes, the CSA and FSC.³⁹²

In the US, before the introduction of private certification schemes, the states’ BMPs had already been in place to set the specific riparian buffer-zone requirements. To evaluate whether the BMPs were actually applied and complied with and whether they were effective in achieving environmental goals, many states established monitoring and assessment programmes.³⁹³ Such assessment programmes show that during the early days when BMPs were issued, the lower bound compliance rate was about 80 per cent, for example 80 per cent in Washington in 1980s, 84 per cent in Florida in 1985 and 78 per cent in Montana in 1990.³⁹⁴ Some assessments show that the BMPs are helpful in reducing water quality impacts, preventing erosion and achieving other environmental benefits. Deficient effectiveness is usually associated with the non-compliance with the BMPs.³⁹⁵ Lots of efforts have been made to increase the compliance rate of the BMPs.³⁹⁶ The compliance rate of the BMPs has been increasing since the 1990s, and was estimated to be 89 per cent on average by 2009.³⁹⁷

Many factors, such as federal and state legislation and regulation, public pressure as well as forest certification, are believed to have influenced the compliance rate of the BMPs.³⁹⁸ Public assessment programmes show some weaknesses in public monitoring, such as insufficient funding, a lack of (qualified) staff or a high turnover for staff, inconsistency in monitoring among states and so on.³⁹⁹ As discussed earlier, forest certification schemes in North America have highly compatible standards with public regulation regarding riparian issues. Private auditors are auditing the performance of forest operators against these private standards. They hence can provide a beneficial complement to public regulation which suffered from insufficient funding and staff. Forest certification, moreover, can provide an additional incentive to comply with public regulation.⁴⁰⁰ It can also create ‘influences on the expansion of state BMPs to include additional subject areas’.⁴⁰¹ Some empirical research confirms the positive role of certification. For example, in Texas, the compliance rate of forest operations which transport timber to SFI mills is 94.9 per cent, and the compliance rate of those which transport timber to non-certified mills is 85.7 per cent.⁴⁰² This example, however, does not exclude the possibility of ‘self-selection’ problems. It is possible that these operations which seek SFI coverage already have a better BMP compliance rate than others. In addition, though the compliance rate of BMPs has been increasing since the 1990s, it is not clear whether this is because of the introduction of certification or other contributing factors such as governmental efforts.⁴⁰³

In spite of these limitations, research shows that it is common for independent auditors to require forest operators to address riparian protection issues. An examination of 80 forestry operations certified by SmartWood (a major FSC certifier) according to FSC standards in the US shows that the percentage of operations given one condition concerning the improvement of aquatic and riparian areas ranges from 38 per cent to 100 per cent, depending on the type of FSC standards.404

In summary, the certification schemes adopt similar standards to public regulation regarding riparian buffer-zone protection; therefore they have limited capacity in promoting beyond-compliance behaviours. However, certification does have added values. By adding an additional layer of monitoring and inspection, certification has the potential to strengthen the enforcement and compliance of public regulation (the BMPs in the US). In addition, the converged standards can enhance the efficiency and effectiveness of enforcement. Private auditors can complement public regulation, given the limited resources to monitor the BMPs implementation. The coordination between public and private regulators can also enhance the efficiency of enforcement. To what extent certification’s potential to strengthen public regulation has indeed been realized in practice, has not yet been firmly established.

3.6.5 How does the interacted system influence riparian zone protection?

In Canada and in the US, comparatively clear forest tenure has been established. Private property rights bring the costs and benefits of the right holders closer to the societal ones and create incentives to internalize the externalities caused by forestry activities. However, non-market values of the forests, such as the ecological function of the riparian forests are not materialized in the market and hence may not be considered by the private rights holders. The remaining externalities can act as a justification for external interventions, including both public and private regulation. The above analysis has shown the interaction between public regulation and certification concerning riparian buffer zones. This section examines how the interaction of such rules contributes to internalizing the externalities.

Different aspects concerning the transaction costs of property rights may also influence the capacity of public and private regulation to incentivize internalization, such as information creation, enforcement strengthening and scale setting. Providing information on forests, status and forestry activities, enables forest owners, managers and public and private regulators to make informed decisions about the protection of riparian forests. Monitoring can be helpful to ensure that public and private regulation is actually complied with and hence that the externalities are internalized as designed. Many externalities, such as riparian forest protection, concern both local characteristics and landscape considerations.405 Therefore, the capacity of public and private regulation to incorporate considerations at different scales is crucial.

3.6.5.1 Information

The above analysis shows that certification standards regarding riparian buffer zones closely mimic public regulation. Nevertheless, certification schemes do have added values. In addition to the substantive rules regarding riparian buffer zones, many certification schemes also have rules concerning the documentation processes related to forest management.⁴⁰⁶ Such requirements make more information about the environment and behaviour of the forest owners/managers available and transparent, complementing the information made available by public regulation. Moreover, as discussed above, public regulators sometimes coordinate with private regulators to share information. For example, in BC, the auditors and licensees agreed to open the certification audit files and share them with the Forest Practices Board.

3.6.5.2 Enforcement

Information provides the basis for forest owners/managers and regulators to decide how to internalize the externalities of the riparian forests. Monitoring is also essential to ensure that regulation is actually complied with. In the US, many states have developed monitoring programmes to track compliance with BMPs. Such programmes collect information on the implementation of BMPs and create the basis to enhance compliance.⁴⁰⁷ The introduction of certification schemes creates another layer of monitoring. The anecdotal evidence discussed above shows that certification may be helpful to enhance compliance of riparian buffer-zone rules. The coordination between public and private regulators also helps to reduce the redundancies in monitoring and hence control the monitoring costs.

3.6.5.3 Scale of governance

As for the scale of governance, riparian zone protection needs consideration over both local characteristics and landscape (watershed) coordination. Although certification is well institutionalized in North America, certification covers only 36 per cent of the forests. Moreover, certification schemes focus on individual management units.408 Public regulation is hence more suitable to solve landscape issues. However, research shows that even public regulation has not incorporated landscape and watershed-scale consideration sufficiently.⁴⁰⁹

3.6.6 Conclusion

This case study analysed how public and private regulation interacts to address riparian buffer-zone protection in North America. The discussion focused on public and private forests in Canada as well as private forests in the US. In Canada, it are the concessioners of public forests who conduct the daily management and therefore, such forests are treated as private property in the analysis. Comparatively clear forest tenure has been established in North America, but the non-market values of the riparian forests are typically not considered by private owners or managers. Therefore, external intervention is used to internalize the externalities linked to the degradation of riparian zones. This research shows many positive synergies between public regulation and certification in addressing riparian zone protection. The interaction between public and private regulation means information is shared and monitoring strengthened. The standards under two types of regulation converge and public regulators and certification schemes coordinate their activities. To incorporate considerations at the watershed-scale, though, is still a challenge under both public and private regulation.

3.7 Case study: Sweden

3.7.1 Environmental problem: the loss of forest biodiversity

Sweden has high forest coverage. Of its 45 million hectares of land, more than 60 per cent (28.2 million) is covered by forests.⁴¹⁰ Sweden has a long history exploiting its forest resources and forest industry plays an important role in its economy, accounting for 11–12 per cent of industrial employment and 11 per cent of exports.⁴¹¹

In a developed country which has completed forest transition like Sweden, deforestation is not a major concern.⁴¹² However, after a long history of intensive forest management, Sweden has experienced degradation since the nineteenth century. The intensive management has caused ‘the widespread removal of standing dead trees, coarse woody debris and large old-growth pine and spruce’, leading to dramatic biodiversity reduction in Sweden’s forests.⁴¹³ The natural old-growth forests with high conservation values have been largely depleted, with only 5 per cent remaining below the montane region.⁴¹⁴ More than 1800 forest species are listed as endangered or threatened and the number is still increasing.⁴¹⁵ Therefore this section focuses on how public and private regulation addresses this pressing problem – loss of biodiversity – in Sweden’s forests.

3.7.2 Good governance

Sweden is a high income country with an annual GDP of US$571.1 billion in 2014.⁴¹⁶ According to the World Bank WGI project, Sweden ranks 99.51 regarding voice and accountability, 86.89 regarding political stability, 95.67 regarding government effectiveness, 96.15 regarding regulatory quality, 97.60 regarding the rule of law and 97.60 regarding the control of corruption.⁴¹⁷ The World Bank WGI indicator on control of corruption is similar to the rank of corruption control from Transparency International. According to Transparency International, Sweden ranks third out of 167 countries.⁴¹⁸

3.7.3 Property rights as well as public and private regulation

3.7.3.1 Property rights

The majority of forested areas are classified as productive forest land (23.2 million hectares).⁴¹⁹ Most of the productive forests are privately owned: 50 per cent by individual owners, 25 per cent by private sector companies, 6 per cent by other private owners.⁴²⁰ The rest are owned by the state (3 per cent), state-owned companies (14 per cent) and other public owners (2 per cent).⁴²¹ There are indigenous communities – Sami people living in the forests – and they sometimes have conflicts with forest owners.⁴²² However, the group is not large.⁴²³ Small-scale private forests are predominant in southern Sweden and industrial forest owners play a major role in the north.⁴²⁴ It is estimated that 355,000 family forest owners existed in 2009, each having an average of 46 hectares of forest.⁴²⁵ Around one third of the family forest owners, possessing around 50 per cent of the individual forests, have joined the regional forest owners’ organizations, which ‘take care of operational forestry and safeguard family forestry on a smaller scale’.⁴²⁶ Forest industry is concentrated, with six industrial companies owning 39 per cent of the forests, including Sveaskog, a state-owned company and SCA, the largest private forest company in Europe.⁴²⁷ Owing to the favourable conditions of their land, non-industrial forestry provides more than 60 per cent of the harvested timber volume.⁴²⁸

3.7.3.2 Public regulation

After a ‘decade of confrontation’ between timber production supporting policies and environmental campaigns, the current Forestry Act in Sweden was passed in 1993.⁴²⁹ It was drafted by a parliamentary commission, involving multiple stakeholders, such as ‘politicians, representatives from the labour unions, forest industry, forest owners and the leading environmental NGO’.⁴³⁰ It represented a shift to the participatory and soft mode of governance. The 1993 Forestry Act sets the goals of timber production and environmental protection on an equal footing.⁴³¹ Instead of setting detailed criteria to achieve these two goals, the 1993 Forestry Act introduces only minimum performance standards and leaves forest owners substantial discretion to choose the proper measures. The principle of ‘freedom with responsibility’ has hence been enshrined in the 1993 Forestry Act.⁴³² It authorizes the competent authority to set standards for nature conservation and cultural heritage preservation, timber felling and regeneration, and maintenance of forest health via regulations.⁴³³ A few regulations have been introduced to set the standards by the competent authority, the National Forestry Board, which was reorganized as the State Forestry Agency (SFA) in 2006.⁴³⁴

In addition to specific forestry legislation, other environmental laws can also apply to forests. As an EU Member State, Sweden has an obligation to implement EU legislation, such as the Habitat Directive.435 At domestic level the Environmental Code 1998 is also crucial for forest protection, which ‘sets out the requirements relating to the conservation of ecological values, including the protection of habitat for endangered species’.⁴³⁶ In 2008, the ‘Species Protection Ordinance (SFS, 2007:845) was adopted under the Environmental Code’ to implement the EU Directives.⁴³⁷

In addition to the binding legislation, since the late 1990s, the Swedish parliament has introduced sixteen environmental objectives, with the ambition to ‘hand over a society to the next generation in which the major environmental problems have been solved’.⁴³⁸ The Environmental Objectives define the desired environmental status and the time scale to achieve them (usually by 2020).⁴³⁹ ‘Sustainable Forest’ is one of the Environmental Objectives, with the target that ‘the value of forests and forest land for biological production must be protected, at the same time as biological diversity and cultural heritage and recreational assets are safeguarded’ within one generation (by 2020).⁴⁴⁰ The State Forestry Agency is responsible for following up and evaluating the ‘Sustainable Forest Objective’.⁴⁴¹ To implement this goal, the SFA published ‘Quantitative Targets of Swedish Forest Policy’ in 2005.⁴⁴² These quantitative targets include setting aside forestland with high conservation value, enhancing biological diversity (using dead wood, mature forest and old forest as indicators), the protection of cultural heritage and developing action programmes for threatened species.⁴⁴³

The above analysis shows that different layers of environmental goals exist in the Swedish public regulatory system for forestry: the Forestry Act requires a balance between timber production and environmental protection; while the ‘Sustainable Forest’ objective and Environmental Code have the single goal of promoting sustainable development.⁴⁴⁴ Different instruments are used to achieve these goals, including command and control instruments, suasive instruments and incentive-based instruments. The former two types of instruments are the most important instruments used for forestry regulation in Sweden.

The command and control instruments are prescribed under the Forestry Act, especially section 30 which requires environmental consideration during forest management. According to this provision, the SFA has adopted a number of regulations. These include some binding requirements during forest management, such as standards for clear cuts, leaving non-productive forest land untouched, avoiding damaging sensitive habitats, leaving protective buffer zones, leaving older trees on felling sites and so on.⁴⁴⁵ The SFA monitors compliance and has an inventory system, Polytax, tracking progress.⁴⁴⁶ However, the coercion of these instruments is not strong, and non-compliance by forest owners and operators is usually left unpenalized.⁴⁴⁷

Suasive instruments include education, information and counselling provided by the SFA, inventories and practical assistance.⁴⁴⁸ These instruments are not legally binding, but are supposed to support the achievement of the ‘Sustainable Forest’ objective.⁴⁴⁹ The advice for forest owners to set aside additional conservation areas voluntarily and the development of ‘green forest management plans’ guidelines are such examples.⁴⁵⁰ The size and budget of the SFA (by then the National Forestry Board) have been reduced since the 1990s, as well as the use of suasive instruments has also been reduced.⁴⁵¹

Incentive-based instruments include taxes and subsidies, and economic compensation to forest owners when their forests are listed formally as protected forests.⁴⁵² However, the taxes and subsidies were abolished under the new Forestry Act. The funding for protected areas, on the other hand, has experienced an increase since the 1990s.⁴⁵³

3.7.3.3 Private regulation

Due to environmental campaigns and demands of the European market for sustainable harvested timber, Sweden started to respond quickly to the creation of the FSC. WWF and the Swedish Society for Nature Conservation (SSNC, the largest Swedish environmental NGO) initiated an FSC working group to develop a national standard. This workshop group was later joined by other NGOs, forest companies, forest owners, labour unions, consumer industry and Sami organizations (indigenous peoples’ organizations).454 The group was divided during the negotiations. Forest owners’ associations (representing the interests of individual owners) left the process due to conflicts with Sami people who demanded broad recognition of their customary rights over reindeer herding and concerns that proposed standards were geared to industrial forestry.⁴⁵⁵ Greenpeace also withdrew its support due to the concern over intensive forest harvesting, which was allowed under the standards.⁴⁵⁶ The other parties continued the process and adopted the first national FSC standard in 1997, which was endorsed by FSC International in 1998.⁴⁵⁷ Immediately after having withdrawn from the FSC process, forest owners’ associations joined forces to develop their own forest certification standard, which was endorsed by the PEFC in 2000.⁴⁵⁸

In the early 2000s, the Swedish FSC and PEFC started the Stock Dove process, with the aim of creating ‘a bridging document to mutually recognize the two standards’.⁴⁵⁹ Recommendations were developed in 2001 for the standards with a view to harmonize them.⁴⁶⁰ In addition, several NGOs also published reports comparing the two standards criterion by criterion.⁴⁶¹ These reports concluded that the Swedish FSC was more stringent and prescriptive than the PEFC standard on several key issues.⁴⁶² With the exception of issues concerning the Sami, the Swedish PEFC Board revised their standards according to the recommendations reported in the comparisons. For example, the revised PEFC standards imposed more stringent requirements on set-aside areas, retention trees and landscape planning, transparency, labour rights and monitoring.⁴⁶³ The revised standard was endorsed in 2006.⁴⁶⁴ On the other hand, the FSC did not follow the recommendations to lower their standards due to the concern to ‘maintain the rigour, independence and distinction of its standard’.⁴⁶⁵ In spite of this, with the competition of PEFC, forest companies managed to lobby the FSC to introduce more flexibility in the revised chain of custody standard.⁴⁶⁶ Therefore, the competition between two standards led to the ‘cross-fertilization and convergence of the two schemes’: the PEFC standard was ratcheted up to boost credibility and the FSC allowed greater flexibility to accommodate business interests.⁴⁶⁷ Therefore, later studies have only found minor differences between the two standards, such as ‘the slightly higher harvesting restrictions in FSC certification and stricter commitment by contractors in PEFC certification’.⁴⁶⁸

The certification schemes have diffused rapidly since their inception in Sweden. By December 2013, 12 million hectare forests were certified under the FSC, with twelve companies covered by normal certificates and thirteen organizations covered by group certificates (certificates targeting smaller scale forest operations).⁴⁶⁹ Eleven million hectares of forest obtained PEFC certificates by December 2012.⁴⁷⁰ All major companies had already been certified by the FSC by 2000, and individual forest owners tended to be PEFC certified due to the lower financial costs.⁴⁷¹ By December 2012, 4.9 million smaller owners were PEFC certified via the group certification, and one forest owners’ association was certified directly, covering 0.9 million hectares of forest.⁴⁷² This made around half of the individual owned forests certified by PEFC. In addition, some actors are dual-certified ‘in order to facilitate chain-of-custody certification of their fiber supply and have enough production flexibility to meet customer demands’.⁴⁷³

3.7.4 The interaction between public and private regulation

This section examines biodiversity protection as a particular type of externality which has not been internalized by establishing property rights. It discusses how public and private regulations interact to protect biodiversity.

3.7.4.1 Interaction on paper

Different goals have been established under the forest regulatory systems in Sweden: the goals under the Forestry Act, Environmental Code, ‘Sustainable Forest’ Objective and interim targets as well as the goals under private certification schemes. Under the guidance of different goals, different standards have also been established.

The Forestry Act aims at achieving a balance between timber production and environmental protection (including biodiversity protection). However, this suggests both interests may conflict sometimes. For example, according to the law, ‘conservation requirements must not be so far-reaching that they make on-going land use significantly more difficult’.474 Moreover, neither the goals nor standards established under the legislation are specific. As a framework law, the Forestry Act only established minimum performance standards and left much room for forest owners to decide suitable measures to achieve the goals.⁴⁷⁵

The goal of the Environmental Code is to ‘promote sustainable development which will assure a healthy and sound environment for present and future generations’.⁴⁷⁶ The code is applicable to ‘activities that may cause damage or detriment to human health, the environment or other interests that are protected by this Code’.⁴⁷⁷ Therefore, the Environmental Code applies to forestry as well.

The ‘Sustainable Forest’ Objective is to protect the forests and their biodiversity, cultural and recreational values. Several interim targets have been established, which need to be achieved in 2005 or 2010. The interim targets are largely quantifiable and more specific than the goals under legislation.

Another layer of biodiversity protection standards is set by private certification schemes, which are developed to achieve the triple goals of ecological, economic and social sustainability.⁴⁷⁸ The FSC Sweden standard has two principles directly related to biodiversity protection. Principle 6 requires forest management activities to conserve biodiversity⁴⁷⁹ and Principle 9 concerns specifically the management activities in High Conservation Value Forests.⁴⁸⁰

These principles are further elaborated with concrete criteria on both performance and procedural issues. The criteria include some key issues such as: setting aside 5 per cent of productive forest land in the management unit from harvesting; protecting threatened species and their habitats; creating new habitats by burning regeneration areas, requiring retention trees and keeping dead wood.⁴⁸¹ In spite of some marginal difference, the PEFC scheme also has similar standards for protecting biodiversity.

The literature has compared the legislative standards with the FSC and PEFC standards, and concludes that both certification standards are more demanding than the legislative requirements in a number of key issues, including biodiversity protection.482 For example, the 5 per cent set-aside requirement exceeds the legislative requirement, where there is no quantifiable requirement; the certification standards require the creation of new habitats where legislation only requires the protection of existing ones; the quantifiable requirements for mixed stands and dead wood also go beyond the legal requirement;⁴⁸³ in addition, the certification schemes provide protection to broader types of forests than the legally protected ones, such as woodland key habitats.⁴⁸⁴

The public regulatory systems and certification schemes closely interact with each other. First, public regulation often contains only open standards.⁴⁸⁵ The forest owners, especially individual owners, sometimes do not know how to fulfil their obligation and to achieve the public goals. Therefore, forest certification provides a valuable approach for them to translate ‘the government’s broad environment/production goals into specific operational targets and plans that landowners understood and could implement’.⁴⁸⁶ Second, certification standards can be incorporated into public regulation and hence make the legal standards more specified and rigorous. For example, leaving retention trees in harvested forests is an important measure to maintain biodiversity. In the early 1990s, the legislation had no clear standards for retention trees. The government’s attempt to regulate it was not successful due to the opposition of forest owners. Ten years later, the FSC negotiation was able to create a consensus: ten trees per hectare should be retained. This certification criterion was incorporated into government requirements in 2003.⁴⁸⁷

The positive interaction between public regulation and forest certification, however, does not mean that their goals and standards are fully compatible. For example, the interim targets for the ‘Sustainable Forest’ objective requires setting aside 900,000 hectares of Forest with High Conservation Value (HCVF). The certification schemes also make it mandatory to set aside ‘a minimum of 5% of the productive forest land area’.488 The required types of set-aside areas and the restrictions on these lands, however, are not fully aligned.⁴⁸⁹ Therefore, certification schemes could only be, at best, a partial mechanism to achieve this interim target.⁴⁹⁰

Another potential conflict brought by the different goals under public and private regulation is the requirement under the Forestry Act, which prescribes that the conservation measures should not be too burdensome (not beyond 2 to 10 per cent of net income from forestry). Such requirement provides a legal constraint in the choice of conservation measures by forest owners. Forest certification schemes do not have such requirements and may therefore allow more far-reaching conservation behaviour. In addition, the legal standards only require the protection of existing environ mental values. Certification schemes, however, require the creation of new environmental values via, for example, retention trees.⁴⁹¹ However, ‘these seemingly complementary requirements might actually be difficult to achieve together, especially on the small percentage of forest typically retained during clear-cutting’.⁴⁹²

3.7.4.2 Interaction in practice

As mentioned earlier, both the Environmental Code and the Forestry Act apply to forestry in Sweden. However, in practice, the application of the Environmental Code in the forestry sector remains limited.⁴⁹³ The Species Protection Ordinance adopted later has precedence over the Forestry Act, and it also includes more stringent standards than the Forestry Act regarding the protection of habitats.⁴⁹⁴ The co-existence of different legislation and sometimes conflicting standards lead to confusion on which rules should apply. Given the more friendly attitude to forestry under the Forestry Act, forestry issues are mainly handled under the Forestry Act. This ‘resulted in a situation in which species (protection) has largely been overlooked’.⁴⁹⁵

Even compliance with the Forestry Act has not been satisfactory. The SFA monitors the compliance of forestry law through a monitoring system, Polytax, which assesses the performance of forest owners and environmental considerations required by law. The inventory system consistently shows that the non-compliance of logging operations with legal requirements remains high (remaining in the range of 20–30 per cent since the 2000s), especially concerning regeneration felling and key biotope protection.496 However, the SFA has not imposed sanctions for non-compliance due to the soft steering governance mode and constitutional constraints concerning property rights.⁴⁹⁷ Whether the deregulated forest policy based on ‘freedom with responsibility’ needs to be revised is debatable. Governmental agencies find revisions necessary and intend to issue more direct orders and prohibitions to regulate activities concerning key biotopes. The forest sector, on the other hand, argues that the current regulatory style should be maintained.⁴⁹⁸

As the level coercion of command and control instruments is low, public suasive instruments and private certification schemes might be important complements to ensure sustainable behaviour. Rather than issuing orders and prohibitions directly, governmental agencies can also provide education, information and technical assistance to forest owners. However, research shows that these suasive instruments help to raise awareness of biodiversity protection, but usually fail to change the underlying values and preferences of the forest owners.⁴⁹⁹ A case study shows that forest owners are conducting conservation measures, but largely based on ‘their own terms rather than as an unconditional implementation of the forest policy’.⁵⁰⁰ They implement the measures they find reasonable and acceptable, but ignore the more challenging and far-reaching ones such as leaving dead wood.⁵⁰¹ Moreover, the use of suasive instruments has been shrinking, due to the reduced size of the SFA⁵⁰² and the cutting back of funding.⁵⁰³

3.7.4.3 Added value of certification schemes?

Private certification schemes provide a means to monitor the behaviour of forest owners by third-party auditors. They are found to be an important complement to public regulation. However, this by no means suggests that the two systems are substitutes. First, the monitoring systems under public regulation and certification schemes operate differently. The governmental Polytax system records performance and environmental conditions in the whole country. Certification schemes only monitor the certified forests and not all forests.504

Second, as mentioned above, the goals and standards under the public regulatory system and the certification schemes are not fully compatible. Not all environmental values in certification schemes are included in the public monitoring system. Certification schemes may also not guarantee the full achievement of public goals. Using again, set-aside targets as an example, the interim targets required an additional 500,000 hectares of forests with high conservation values to be set aside by 2010. The size of voluntary set-asides has been exceeded. However, because there is no consistent accounting and reporting system for the set-aside areas, the quality and maintenance of these voluntary set-asides under certification schemes are unknown.⁵⁰⁵ Some NGOs report that forest owners can shift the set-aside geographically and log a previous set-aside; they can also sell the set-asides and leave them logged by the purchasers.⁵⁰⁶ Therefore the duration of set-asides is not guaranteed.⁵⁰⁷

Third, the credibility of certification schemes in steering sustainable forest management has been questioned in recent years. A wide coalition of environmental NGOs, the forest sector, government and the public was mobilized in the early stages to support the rapid emergence and spread of forest certification schemes. However, this coalition weakened in recent years. On the one hand, with the motivation to secure market and reputational accountability, the forest sector has increasingly been involved in forest certification and the coverage of certification schemes in Sweden has been rapidly expanding.⁵⁰⁸ Many environmental NGOs, on the other hand, have withdrawn their support for the certification schemes. NGOs have long criticized PEFC standards as not credible.⁵⁰⁹ In recent years, criticism against the FSC has also intensified. SSNC, one of the initial founders of FSC Sweden, withdrew from the Swedish FSC board in 2008 and further withdrew its membership in 2010. Some other NGOs have also left the FSC, such as the Youth Environmental Organization and Friends of the Earth Sweden.⁵¹⁰ They argued that on the one hand the governance system and accountability mechanism were not rigorous enough and that on the other hand there was wide non-compliance of certified forests with certification standards.⁵¹¹

During 2007 and 2009, SSNC conducted field surveys on nearly 300 certified company-owned old-growth forests, including forests operated by the largest forestry companies such as SCA, Bergvik Skog, Holmen Skog, Korsnas and Sveaskog. It concluded that most of these forests were slated for logging, potentially violating FSC standards, according to which such forests should be set aside.512 SSNC and Greenpeace filed a number of formal complaints against these forest companies.⁵¹³ In addition, other disputed issues include ‘logging in areas of high biodiversity value’, ‘destruction of dead wood … and soil compaction or destruction’.⁵¹⁴ Several issues were found to fuel disputes: first, though more specified than legal standards, the criteria in the FSC standards still do not give clear guidance on the way to achieve them regarding many issues, such as leaving dead wood and protecting red-listed species outside key habitats. The unspecified standard gives rise to different interpretations between forest companies and NGOs.⁵¹⁵ Second, the slow progress in public regulation also impedes the implementation of the FSC standard. This is especially true concerning the woodland key habitat, which is referred to as ‘an area where there is occurrence of one or more red listed species or where the nature of the forest itself indicates a strong likelihood of finding a red listed species’.⁵¹⁶ The woodland key habitats are not formally protected areas under the legal system.⁵¹⁷ Nevertheless, the SFA has authority to classify forests as woodland key habitats and has started to carry out an inventory.⁵¹⁸ However, the inventory progress is very slow, with only 20 per cent of the key habitats identified.⁵¹⁹ Forest operators are committed not to log in woodland key habitats under the certification schemes. However, without formally recognizing them, companies sometimes have difficulty in identifying woodland key habitats, or adopt different priorities and mechanisms of identification from NGOs. This ambiguity in identifying woodland key habitats leads to logging in these areas and potential infringement of the FSC standard.⁵²⁰

Confusion concerning the proper behaviour expected from forest owners occurs more often due to the existence of multiple regulatory systems (mandatory legal standards, voluntary informational instruments and certification schemes). The SFA has acknowledged the difficulties in communicating the difference between legal requirements and recommendations to forest owners and the insufficient awareness of the forest policy goals and requirements.521 Lack of coordination is a cause of ambiguity in the multi-layered governance system.

Another issue criticized by NGOs is the accountability mechanism of FSC. As discussed earlier, a system of complaints handling has been established by the FSC. If a certification body finds the deviation from the FSC standard by responding to the complaints, it can take different actions, varying from observations, a Minor Corrective Action Request (Minor CAR), a Major CAR, to the suspension or withdrawal of the certificate, with increasing levels of coercion.⁵²² SSNC claims that the CBs sometimes delay in responding to formal complaints and are reluctant to issue major CARs and the suspension of certificates.⁵²³ Even though NGOs had already reported widespread non-compliance for many years, the first partial suspension of a certificate was only made in 2014.⁵²⁴ The CBs are also criticized for inconsistency in handling complaints and providing instructions to complainants.⁵²⁵ Without a strong and credible accountability mechanism, it is unclear whether the performance of certified actors will meet certification standards.

In summary, both public and private regulations have their own limitations. The coercive level of the law is low: non-compliance with command and control instruments is often noted without being followed by sanctions. Suasive instruments help to raise awareness of biodiversity protection, but usually fail to change the underlying values and preferences of the forest owners. Private certification complements the first two instruments and has a very high coverage rate in Sweden. However, monitoring differs between public and private regulation; goals and standards under public and private regulation are not fully coherent and the credibility of certification schemes has been criticized in recent years for their incapacity to enforce their own rules and for the lack of legitimacy of accountability mechanisms.

3.7.5 How does the interacted system influence biodiversity protection?

Biodiversity protection is regulated by public and private regulators because it is a non-market value of forests which private owners/managers do not automatically take into account. As was done in the case of North America, the capacity for public regulation and private certification in correcting market failures is analysed in terms of creating information, strengthening monitoring and setting the right scale.

3.7.5.1 Information

Private certification requirements and private auditing help to generate information concerning the environment and forest management.

Biodiversity protection in Sweden also provides an example of how multiple layers of regulatory systems accommodate uncertainties. Although biodiversity protection is a goal of the multi-layered systems, there is no scientifically based answer to the optimal extent of protection and how it should be done.526 Such uncertainties may cause confusion for forest owners and managers in determining how to protect the forests. The capacity of public and private regulation to accommodate scientific uncertainties is hence crucial for the protection of biodiversity. As mentioned earlier, different goals have been adopted under the Forestry Act, the Environmental Code and forest certification. Some inconsistencies exist among the multiple layers of standards. The legal standards are sometimes vague, such as the rules concerning red list and key habitats.⁵²⁷ The inconsistencies and ambiguities aggravate the differences of opinion between forest owners/managers and environmental groups, creating disputes in protecting biodiversity. Although certification standards are more specific than the legal standards in Sweden, they sometimes are still not specific enough and lead to confusion in implementation. Moreover, a recent study reviewing scientific literature on environmental standards under the SFA and FSC shows that the legislative and certification standards regarding many environmental issues do not reach the threshold recommended in scientific literature.⁵²⁸ Therefore, scientific uncertainty has not been well accommodated under the public or the private regulatory system.

3.7.5.2 Enforcement

Forest law is ‘de-regulated’ with low levels of coercion. Public monitoring shows that non-compliance with legal requirements remains high. However, the non-compliance is usually not followed by sanctions. Suasive instruments have enhanced the environmental awareness among forest owners, but have failed to change their underlying values and preferences. Reduced budgets and personnel also have limited the use of suasive instruments. Certification schemes complement oversight to steer sustainable management.

However, due to different monitoring methods and standards, certification has not been able to replace public regulation. Moreover, NGO criticisms against certification schemes, especially concerning the more appreciated FSC scheme (relating to its ability to enforce and to accountability) have intensified in recent years.

3.7.5.3 Scale

The protection of forest biodiversity needs consideration at both local and landscape level. The capability of public and private regulation of addressing biodiversity at both scales is different. Certification applies at the level of individual management units and can hence address issues at a local level, but to a lesser extent at landscape level. For example, certification requires forest owners to set aside some areas and leads to large amounts of forest being set aside from harvesting.529 However, as discussed earlier, the quality and duration of the set-aside areas are not guaranteed. Sustainability is hence doubtful. Moreover, the set-aside areas are fragmented. The poor connectivity impedes the ‘habitat network functionality for conservation of viable populations’.⁵³⁰ Public regulation has the potential to address these pitfalls. Establishing protected areas and setting them aside from harvesting can create a comparatively stable status of larger areas. Public regulation can reduce fragmentation by applying across individual managed units. However, public regulation is subject to legal and financial limits as well. For example, to set aside private forests from harvesting, public regulators need to compensate the private owners for lost production. Lack of funding is a major barrier to reaching formal protection targets.⁵³¹ Therefore, the quantitative goal to formally set aside forests has not been achieved.⁵³²

A comparison of the FSC and legal standards on biodiversity conservation in Sweden and north-west Russia shows the importance of scale for protecting biodiversity. It shows that the FSC standard in north-west Russia includes ‘indicators for all spatial scales of biodiversity conservation, from tree and stand to landscape and ecoregion’, while the Swedish standard only focuses on lower scales such as tree and stand scales.⁵³³ In the case studies chosen for the two countries (the similar areas of forested lands), Russia has three times more formally protected forests than Sweden and a similar size of voluntary set-asides under the FSC. A comparison of the habitat network functionality shows that Russia performs better, both in terms of structural and functional connectivity.⁵³⁴ This research suggests the importance of governance scale in biodiversity conservation.⁵³⁵ However, the causal link between scale and protection of biodiversity needs further underpinning since the baseline levels of biodiversity before the introduction of the current governance system are not provided. It could be possible that, due to the much longer history of intensive forest management in Sweden, the remnants of natural forests are more abundant in Russia, regardless of the current governance systems.

3.7.6 Conclusion

This case study of Sweden shows similarity to the North America case study: public regulation and certification contribute to the generation and sharing of information and to strengthening of monitoring. Certification plays an even more important role in Sweden, not only because of its wider coverage but also because of its role in complementing and specifying the general and minimum legal requirements under the legal framework. In Canada and the US, the law is more detailed. However, the goals and standards under the Swedish Forestry Law, the Environmental Code and certification are not fully coherent, which creates confusion among forest owners and amplifies conflicting views associated with scientific uncertainty. This is a lesser problem in Canada and the US where public and private standards are more alike. Moreover, although certification is an important complement to public regulation in Sweden, the different standards and ways of monitoring do not make it a substitute for public regulation. In addition, this case study also confirms the difficulty for certification schemes to achieve a level of scale that takes landscape issues sufficiently into consideration.

3.8 Comparison and conclusion

Forests are common-pool resources, which may be subject to overharvesting when access is insufficiently controlled. Three types of property rights can be used to limit access: public, private and communal property rights. Clear definition of property rights, effective enforcement, coordination, information creating and sharing as well as setting the right level of governance are crucial preconditions for effectively controlling access. Moreover, public and private regulation may be invoked to overcome the limits of property rights in internalizing externalities in forest management.

3.8.1 Indonesia and Bolivia

Bolivia is at the frontier stage on the forest transition curve. Indonesia is in a stage transitioning to the mosaic stage. Both suffer from fast deforestation. Unclear forest tenure and widespread land conflicts have contributed to deforestation in both countries. Three types of forests exist in Indonesia and Bolivia and community forests play a particularly important role.

Community forests have traditionally been governed by self-governing institutions. Such institutions are nested in an institutional background increasingly shaped by public and private regulation.

In Indonesia, customary forests have largely been replaced by public forests. Simply replacing community rights with state ownership, without considering the local ecology and communities who still live in and on the forests has had devastating effects, especially since government implementation is weak and enforcement capacity low. After the Reformasi period, the government started to recognize customary rights minimally. However, the content of such rights and the procedure of formalizing the rights remain unclear. In Bolivia, indigenous rights have been recognized under the legal framework. However, a clear and secure property rights regime which can address deforestation has yet to be established. These two cases show that the recognition of community rights and self-governing institutions by public and private regulation is a necessary but insufficient condition for effective protection against deforestation.

The content of the rights granted to communities as well as the design of governing institutions can also influence the effect of property rights in constraining deforestation. For example, in Indonesia, in addition to establishing customary forests under the Forestry Act, a variety of CBFM policies have been adopted, aiming to enhance the role of communities in forest management. Such policies often allow communities to participate in forest management and to benefit from it to some extent. However, in many cases, the transfer of rights, and the use of these rights as collateral for credit are either limited or prohibited and coverage is very low.

Certification schemes in both Indonesia and Bolivia require clear forest tenure and the protection of indigenous rights over forests. However, the very fact of conflicting forest tenure denies many forest operations the opportunity to get certified.

Indonesia and Bolivia present different ways of designing and reforming self-governing institutions. Indonesia replaced the adat governing institutions with formal government agencies – the villages. Bolivia has not formally abandoned the traditional governing institutions. However, the creation of TCOs has introduced additional governing institutions at the territorial level. Certification is a market-based instrument, requiring a managing institution which can fit into the market economy. Neither customary governing institutions nor formally established public agencies fit such a role. In both Indonesia and Bolivia, communities need to establish their own enterprises or collaborate with commercial forestry companies to get certified, which has completely failed in the latter case. The co-existence of multiple governing institutions has further weakened the traditional forest governing systems. Community members no longer participate actively in decision-making and patrolling the forests. Like in many other developing countries, public regulators in both Indonesia and Bolivia are subject to severe budget, staff and expertise constraints. Consequently, their resources are insufficient in patrolling the vast forests. Under a certification scheme, professionals rather than community members are relied on to monitor forest-related behaviour, which implies a huge reservoir for oversight in communal forests is no longer being used to the full extent. Moreover, the coverage of certification remains limited, especially for community forests. The co-existence of multiple governing institutions also increases coordination costs.

The decentralization process in Indonesia and Bolivia itself is a driver of deforestation. It is supposed to empower local people and their decision-making opportunities and hence to contribute to reducing deforestation. However, the systems are captured and corrupt, lack coordination among government agencies and conflicts between levels of government are aggravated by obscure and conflicting legislation. For example, in Indonesia, conflicting legislation concerning decentralization and recentralization reflects a tug of war between levels of government. Multiple agencies often conduct conflicting spatial planning and issue overlapping permits for the same area. The self-interest of bureaucrats issuing these conflicting permits cannot be easily overcome. However, legislation could address one factor which aggravated such conflicts – the lack of hierarchy between different levels of legislation and the conflicting clauses in the legislation. In Bolivia, conflicting interests among different levels of government and different departments also prevail, such as the reluctance of municipalities in supporting TCOs’ applications and the nesting of the land regularization process in the agricultural model. Such conflicts are also reflected in the legislation. For example, the requirement of an FES in titling private land and TCOs being more favourable to agriculture than to forestry use. In sum, replacing community property with state ownership, disregarding the local ecology and communities, and decentralization of public regulation have contributed to deforestation in Indonesia and Bolivia.

3.8.2 North America and Sweden

In North America and Sweden, community forests remain important in certain regions. However, the long industrialization and modernization history has transformed most of the forests into state or private property. A clear and secure tenure system has been established. Deforestation is no longer a major problem, but different forms of degradation exist. Many of such problems concern the non-market value of the forests, which are not considered sufficiently by property rights holders, such as the protection of riparian zones and biodiversity. Therefore, external interventions, such as public and private regulation have been adopted with the goal of having proprietors internalize these non-market values of forests. The case studies show how public and private regulation have tried to contribute to the internalization of externalities by information creation and sharing; enhancing monitoring and setting the right scale of governance.

The interaction between public and private regulation in the two case studies shows some positive synergies in generating and sharing information and in oversight. Certification schemes’ requirements concerning documentation, process, and transparency generate information and demand oversight. Although public and private regulation have the potential to improve information and enforcement, the actual effect is context-dependent. In North America, standards under certification schemes concerning riparian buffer zones closely mimic public regulation, reducing the risk of conflicting standards. However, this also raises the question of the added value of certification schemes in terms of going beyond compliance. In Sweden, public law provides only general and minimum requirements, which are specified and strengthened by private certification. Even inside the public regulatory system, there are also different goals and standards. Multiple layers of goals and standards therefore create some incoherence and confusion among resource users. Scientific uncertainties exist in how to manage the forests sustainably. How public and private regulation accommodate such uncertainties is crucial for the prevention of forest degradation. The case study of biodiversity protection in Sweden shows that the inconsistencies and ambiguities in multiple layers of governing systems have fuelled conflicts of opinion between forest owners/managers and environmental groups. Such conflicts have been aggravated by scientific uncertainties, creating difficulties in choosing an approach in protecting biodiversity.

As far as enforcement is concerned, the introduction of certification schemes adds an additional layer of inspection. In North America, the coordination between public regulators and certification schemes helps to reduce the redundancies in inspection. To rely on certification can save the resources of public regulators which can be allocated for other purposes. In Sweden, public regulation relies on a soft steering model and the coercion level of public regulation is low. In this case, the widely adopted certification provides a very useful complement to oversight. However, certification standards are not fully consistent with legal requirements and certification relies on a different mode of monitoring from public regulation. Therefore certification cannot replace public regulation.

Concerns over the scale of governance also present a challenge for public and private regulation. Both riparian forests and biodiversity protection require consideration at both local and landscape levels. Certification schemes are based on assessment on the Forest Management Unit (FMU) level. To incorporate higher level considerations needs coordination between different FMUs. Public regulation has the potential to address issues at the landscape level, but often lacks the political power to do so.

3.8.3 Putting the pieces together

The above analysis compares two groups of countries which are in different stages of forest transition and experience different types of forest problems: deforestation and forest degradation. The different problems addressed in these two groups of countries do not mean that there is no cross-learning between them. Before the limitations of property rights can be overcome, the preconditions for their proper functioning have to be satisfied.

A clear definition of property rights is crucial for their establishment and functioning. The examples of Indonesia and Bolivia show that the pure recognition of a certain type of property rights is not sufficient; establishing a suitable content of the rights and how they should be executed are also essential. In all the case studies, forest law which defines the content of property rights is based on modern management techniques. Such techniques are developed for modern, large-scale commercial forestry, and try to provide guidance on how to manage the forests by maintaining their productivity and sustainability. The Swedish law is criticized by some as not sufficiently reflecting recent scientific knowledge and hence not providing sufficient protection of the environment. On the other hand, some developing countries, such as Bolivia, fail to take into account local knowledge. Indigenous people still live in the forests and manage them in a traditional way, mainly for subsistence use. Modern forest regulation based on western science relies heavily on the specialized knowledge of forest professionals and the capacity of public regulation to monitor the whole process of forest management. Such a basis, however, often does not exist in many developing countries. A copy and paste of the western model without reflecting local knowledge fails to accommodate the indigenous interests and their communal property rights.

As for enforcement, the above analysis shows that public and private regulation can be complementary. North America and Sweden exemplified different models of complementarities. Arrangements can be made to reduce the costs of double inspection. However, the ways public and private regulation conduct inspections differ in Sweden and the standards they evaluate against are also different. This means private certification cannot substitute public regulation. The relation between public regulation and private certification is even more complicated when it comes to communal property rights, where traditional governing institutions and traditional enforcement exist abreast of public and private regulation. In Indonesia and Bolivia, the introduction of new public governing institutions has dismantled or weakened traditional governing institutions. Traditional enforcement relying on members of communities is replaced by professionals, public regulators or private auditors. The replacement has actually weakened the enforcement of property rights.

What the case studies have also shown is that the different elements of governing forests are closely linked. For example, information can influence both the definition and enforcement of property rights. As discussed above, incomplete information and scientific uncertainties exist over how to protect forests. On the one hand, some flexibility in regulation is needed to reflect incomplete information and uncertainties. However, the Swedish example shows that ambiguous and sometimes conflicting rules in public and private regulation may amplify the effect of scientific uncertainties, and lead to debates among forest stakeholders. Information availability also influences the enforcement capacity of different actors. The examples of Indonesia and Bolivia show that replacing communal property rights with public or private property rights has led to a substantial increase in enforcement costs. The community members who have easy access to experiential knowledge of forest management are no longer enforcing the traditional rules. The alternative agents policing the forests – professionals, governmental officials – are further away from daily forest management and have higher information costs.

The level of governance is also related to coordination and enforcement. In Indonesia and Bolivia, many actors still live or operate in forests, such as indigenous people, farmers and concessioners. The interests of these actors often conflict. This makes coordination costs very high. Bolivia has tried to solve the conflicting claims by establishing TCOs on indigenous land. The TCOs are established at a higher level than the traditional governing institutions. With higher levels of governance, the TCOs can lobby for indigenous interests and can promote the establishment of property rights, hence reducing external coordination costs. However, the determination of the content of property rights and the allocation among individuals still takes place at a lower level, that is, the village level. The coexistence of several governing institutions therefore increases the internal coordination costs.

As discussed above, the capacity of certification and public regulation to address issues at landscape level differs. Certification schemes operate at the level of individual forest management units. To solve things at a higher level, coordination among the individual units is necessary. Public regulation may address issues at a higher level. However the Swedish example shows that the possibility for public regulation to address issues at landscape level, for example ensuring ecological connectivity in set-aside forests, is subject to the limited enforcement capacity of regulators. Deforestation is also an issue which needs to be addressed at the landscape level. Spatial planning is an instrument which is normally used by the public regulator to address it. However, the Indonesian experience shows that without coordination between different departments and levels of government, the self-interested regulators may issue conflicting spatial plans, aggravating deforestation.

Notes

1 FAO 2010, p. 10.

2 Ibid.

3 Ibid., p. 12.

4 Ibid., p. xviii.

5 Millennium Ecosystem Assessment 2005.

6 FAO 2010, p. xviii.

7 Gupta, Van der Grijp & Kuik 2012, p. 7.

8 FAO 2010, p. xiii.

9 Ibid., p. xvi.

10 Ibid., p. 21.

11 Ibid., p. xvii.

12 Ibid., p. xviii.

13 Ibid., p. xvi.

14 Ibid.

15 Ibid., p. xx.

16 McDermott, Cashore & Kanowski 2010, p. 95; Sweeney et al. 2004, p. 14132; Verry & Dolloff 2000.

17 Paillet et al. 2010, p. 101.

18 Gupta, Van der Grijp & Kuik 2012, p. 25; Angelsen & Rudel 2013, p. 91.

19 Hosonuma et al. 2012, p. 1.

20 Ibid., p. 3; Gupta, Van der Grijp & Kuik 2012, p. 26.

21 Rudel et al. 2005.

22 Gupta, Van der Grijp & Kuik 2012, p. 25. In the other words, the forest transition model is a heuristic device rather than a ‘deterministic prediction’. Angelsen & Rudel 2013, p. 91.

23 Gupta, Van der Grijp & Kuik 2012.

24 Gulbrandsen 2010, pp. 44–45.

25 For an overview of such conventions, see Srivastava 2011.

26 White & Martin 2002, pp. 4–6.

27 Article 4, Bolivia Forest Law; Pacheco 2011.

28 White & Martin 2002, p. 8.

29 Ibid., p. 4.

30 For an overview of the regulatory instruments, see Gupta, Van der Grijp & Kuik 2012, pp. 34–44; McDermott, Cashore & Kanowski 2010.

31 Bartley 2003.

32 Steering Committee of the State-of-Knowledge Assessment of Standards and Certification, 2012.

33 Overdevest & Zeitlin 2014.

34 Bartley 2014, pp. 97–98.

35 Walker et al. 2013, pp. 15–16.

36 Leather Working Group, LWG Audit Protocol, 2012, www.leatherworkinggroup.com/about/protocol.htm.

37 Consumer Goods Forum, 2010, http://sustainability.mycgforum.com/images/sustainability-pic/Press_Release_-_2010-11-29-ClimateProtection.pdf.

38 Soy Moratorium, 2012, www.mvo.nl/Portals/0/publicaties/Magazine/2012/17/02%20press%20release%20ABIOVE.pdf.

39 www.greenpeace.org/international/en/news/Blogs/makingwaves/jbs-recommits-to-cattle-agreement-in-the-amaz/blog/43470/.

40 Carbon Disclosure Project, 2013; the Forest Footprint Disclosure Project, www.cdproject.net/en-US/Programmes/Pages/forests.aspx.

41 Gulbrandsen 2010, p. 52.

42 Hysing 2009a.

43 Liu 2014.

44 Georgia-Pacific, Forest Certification Around the World, available at: www.gp.com/~/media/Corporate/GPCOM/Files/Sustainability/Sustainability-Document-List/Forest_Certification_Around_the_World.ashx?force=1.

45 https://ic.fsc.org/en/certification/principles-and-criteria.

46 Gulbrandsen 2010, p. 55.

47 https://ic.fsc.org/en/certification.

48 Meidinger 2006, pp. 70–71.

49 Ibid., p. 71.

50 Agblede 2010, available at: http://stud.epsilon.slu.se/1837/.

51 Ibid., pp. 38–39; Sahlin 2013, pp. 7–10, available at: www.naturskyddsforeningen.se/sites/default/files/dokument-media/rapporter/2013_engelsk_rapport_skog_credibility_at_stake.pdf.

52 https://ic.fsc.org/preview.fsc-pro-01-008-v2-0-en-processing-complaints-in-the-fsc-certification-scheme-tracking-changes.a-3412.pdf.

53 www.pefc.org/standards/endorsement-mutual-recognition.

54 Gulbrandsen 2010, p. 70.

55 Ibid.

56 Ibid., p. 71.

57 Overdevest 2010.

58 http://data.worldbank.org/indicator/AG.LND.FRST.ZS.

59 Hosonuma et al. 2012, p. 9.

60 Gupta, Van der Grijp & Kuik 2012, p. 242.

61 McDermott, Cashore & Kanowski 2010, pp. 74, 80, 136.

62 Sunderlin, Hatcher & Liddle 2008.

63 www.unece.org/fileadmin/DAM/timber/publications/FPAMR-2014-final_01.pdf, at p. 17.

64 FSC Sweden 2013, p. 3, available at: https://se.fsc.org/preview.the-contribution-of-fsc-certification-to-biodiversity-in-swedish-forests.a-661.pdf.

65 In the case studies the present tense is used to describe the most recent period. The reader may want to take into account that the situation referred to in the present tense may have already changed and will certainly change in the future.

66 Indrarto et al. 2012, p. 1.

67 Gupta, Van der Grijp & Kuik 2012, p. 120.

68 Royo & Wells 2012, p. 3.

69 ITS Global 2011, p. 6, available at: www.itsglobal.net/sites/default/files/itsglobal/ITS_Indoforest_Economic_Report.pdf.

70 www.grida.no/graphicslib/detail/indonesian-exports-of-forest-products_f403#.

71 Indrarto et al. 2012, p. 3.

72 FAO 2010, available at: www.fao.org/forestry/fra/fra2010/en/.

73 http://rainforests.mongabay.com/deforestation/archive/Indonesia.htm.

74 Arnold 2008.

75 Hansen et al. 2013; Purnomo & Anand 2014, p. 28.

76 Gupta, Van der Grijp & Kuik 2012, p. 225.

77 Indrarto et al. 2012, p. 3.

78 Gupta, Van der Grijp & Kuik 2012, p. 120.

79 Indrarto et al. 2012, p. 3.

80 http://data.worldbank.org/country/indonesia.

81 http://info.worldbank.org/governance/wgi/index.aspx#home.

82 http://info.worldbank.org/governance/wgi/index.aspx#reports.

83 www.transparency.org/cpi2015?gclid=CMK59ZPMwMsCFRBmGwodsSQPKg.

84 Arnold 2008, p. 78.

85 Adat usually refers to the customary law in Indonesia and Malaysia, which ‘was the unwritten, traditional code, governing all aspects of personal conduct’. Instead of being a uniform system, the adat varies widely, even over short distances. See Arnold 2008, p. 79; Gold & Zuckerman 2014, p. 45.

86 Gold & Zuckerman 2014, p. 45.

87 Anold 2008, p. 79.

88 Ibid.

89 Palo & Vanhanen 2012, pp. 173–174; Lindayati 2002.

90 Article 33(3) of the 1945 Constitution.

91 Article 2(2) of Basic Agrarian Law.

92 Article 5(1), Law No. 5 of 1967 concerning Basic Forestry Principles.

93 Szczepanski 2002, p. 239.

94 Indrarto et al. 2012, p. 36.

95 Safitri 2010, p. 71.

96 Arnold 2008, p. 79.

97 Gupta, Van der Grijp & Kuik 2012, p. 120.

98 Ibid.

99 Indrarto et al. 2012, p. 36.

100 Szczepanski 2002, p. 242.

101 Arnold 2008, pp. 19–80.

102 Barr et al. 2006; Resosudarmo 2005, p. 117.

103 Arnold 2008, p. 80; Singer 2008, pp. 528–529.

104 Campbell 2002, p. 83.

105 Arnold 2008, p. 80.

106 Ibid., pp. 80–81.

107 McCarthy 2000, p.105.

108 This is believed to relate to the demise of the military role in social affairs and the emergence of civil society. Under such conditions, communities began to claim their rights and the conflicts between them and transmigrants/concessions operators started to rise. See McCarthy, Barr, Resosudarmo & Dermawan 2006; Arnold 2008, p. 81.

109 English copy see http://theredddesk.org/sites/default/files/uu41_99_en.pdf; www.elaw.org/node/2644.

110 Article 67(2)(3).

111 Bartley 2011, p. 531.

112 PUTUSAN, Nomor 35/PUU-X/2012, www.forestpeoples.org/sites/fpp/files/news/2013/05/putusan_sidang_35%20PUU%202012-Kehutanan-telah%20ucap%2016%20Mei%202013.pdf; for an English introduction, see http://news.mongabay.com/2013/05/in-landmark-ruling-indonesias-indigenous-people-win-right-to-millions-of-hectares-of-forest/.

113 Sari 2013, p. 21.

114 Arnold 2008, p. 86.

115 Ibid.

116 Bartley 2011, p. 530.

117 Indrarto et al. 2012, p. 13.

118 Ibid.

119 McCarthy 2000.

120 Arnold 2008, p. 77.

121 Law No. 22 of 1999 concerning Regional Governance; Law No. 25 of 1999 concerning Fiscal Balance between the Centre and the Regions.

122 In Indonesia, there is another level of government between the local authorities and central government: provinces. Following the fall of New Order, resource-rich provinces started to demand greater autonomy and separatist movements even gained strength in some provinces. For fear of the possibility of encouraging separatism, the otda laws bypassed provinces. Arnold 2008, pp. 81–82.

123 Government Regulation No. 6/1999 on Forest Enterprises and Extraction of Forest Products from Production Forests. Indrarto et al. 2012, p. 27.

124 Indrarto et al. 2012, p. 27.

125 Ibid., p. 10.

126 Ibid., p. 11.

127 Arnold 2008, p. 84.

128 Barr et al. 2006, p. 14.

129 Article 1(14) and Articles 5, 6.

130 Article 66.

131 Governmental Regulation 34/2002 and Governmental Regulation 6/2007.

132 Arnold 2008, p. 87. Barr et al. 2006, pp. 47–48.

133 Indrarto et al. 2012, p. 28.

134 Agrawal & Ribot 1999; Purwanto 2005; Singer 2009, available at: http://b-singer.fr/pdf/Forest_policies_in_Indonesia.pdf.

135 The Law 10.2004 concerning Law Making in Indonesia, Article 7; Safitri 2010, p. 69.

136 Ibid.

137 Law 24/1992 and Law 26/2007.

138 Gupta, Van der Grijp & Kuik 2012, p. 128.

139 Ibid.

140 Arnold 2008, p. 95.

141 Indrarto et al. 2012, p. 21.

142 Ibid.

143 Ibid., p. 31.

144 Safitri 2010, p. 52.

145 Sari 2013, p. 9.

146 Ibid., pp. 116–121.

147 Ibid., p. 121.

148 Ibid., pp. 293–295.

149 Ibid., pp. 295–296.

150 Muhtaman & Prasetyo 2006, p. 43.

151 Klassen, Romero & Putz 2014, p. 256.

152 FSC-STD-IDN-01-01-2013.

153 Tacconi 2007, p. 265.

154 Muhtaman & Prasetyo 2006, pp. 43–46.

155 Tacconi 2007, p. 265.

156 www.lei.or.id/anggota-lei.

157 www.tff-indonesia.org/index.php/programs/certification-support/list-of-fsc-certified-forest.

158 www.lei.or.id/iges-study-on-forest-certification.

159 Hinrichs, Muhtaman & Irianto 2008, p. 26.

160 www.tff-indonesia.org/index.php/en/map-of-tff-activity/list-of-fsc-certified-forest-in-indonesia-61198.

161 www.lei.or.id/program-kerja-2009-2013.

162 Nurrochmat et al. 2014.

163 Wells 2008.

164 Wijaya et al. 2014.

165 Wells 2008, p. 181.

166 Cashore & Stone 2014, p. 52.

167 For details, see Cashore & Stone 2012; Obidzinski et al. 2014.

168 The TLAS was introduced by the 2009 regulation on the ‘Standards and Guidelines on the Assessment of Performance of Sustainable Forest Management and the Verification of Timber Legality in the State and Privately-Owned Forests’ and was incorporated in its voluntary partnership agreements with the EU in 2011.

169 Voluntary Partnership Agreement between the European Union and the Republic of Indonesia on Forest Law Enforcement, Governance and Trade in Timber Products into the European Union, Official Journal of the European Union, L 150/252, L150/299, 2014.

170 VPA, Annex 5, sections 4.1; 4.2.

171 Form International, PEFC Conformity Assessment: Indonesia Forest Certification Cooperation Scheme 2014, p. 19.

172 Ibid., p. 146.

173 See supra section 3.4.3.1.

174 FSC-STD-01-003 V1-0.

175 LEI 5000-1.

176 LEI 5000-2.

177 LEI 5000-3.

178 McCarthy 2000, p. 111.

179 Ibid.

180 Ibid.

181 Ibid.

182 Arnold 2008, p. 97.

183 Gupta, Van der Grijp & Kuik 2012, p. 132.

184 Royo & Wells 2012, p. 11.

185 E.g. Social Forestry according to Ministerial Decree 677/1988. Safitri 2010, p. 298.

186 Gupta, Van der Grijp & Kuik 2012, p. 129.

187 Ibid.

188 Supra section 3.6.2.3.

189 Supra section 3.6.3.1.3.

190 Bartley 2011, p. 533.

191 Supra section 3.6.3.1.3.

192 Hinrichs, Muhtaman & Irianto 2008, p. 50.

193 Ibid.

194 Ibid., pp. 58–61.

195 Ibid.

196 Ibid., p. 43.

197 Harada & Wiyono 2014.

198 Supra section 3.6.3.2.2.

199 Indrarto et al. 2012, p. 12.

200 Ibid., pp. 12, 20–24.

201 Ibid., pp. 11–12, 24.

202 Ibid., p. 28.

203 Ibid.

204 Indrarto et al. 2012, p. xi.

205 Ibid., p. 24.

206 McCarthy 2000, p. 102.

207 Ibid., p. 109.

208 Ibid., p. 102.

209 Ibid., p. 108.

210 Hinrichs, Muhtaman & Irianto 2008, p. 51.

211 Ibid.

212 McCarthy 2012, p. 1876.

213 Ibid., pp. 1875–1878.

214 FAO 2010, pp. 223, 228.

215 Müller, Pacheco & Montero 2014, p. 3.

216 Nittler & Nash 1999, p. 32.

217 Barrera 2011, p. 8, available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1920297.

218 Uberhuaga, Larsen & Treue 2011, p. 81.

219 Müller, Pacheco & Montero 2014.

220 Hosonuma et al. 2012, p. 9.

221 Müller, Pacheco & Montero 2014, p. 52.

222 Ibid., p. 8.

223 Ibid., p. 3.

224 Ibid., pp. 17–18.

225 Ibid., pp. 17–19; Pellegrini & Dasgupta 2011.

226 http://data.worldbank.org/country/bolivia.

227 http://info.worldbank.org/governance/wgi/index.aspx#reports.

228 www.transparency.org/cpi2015?gclid=CMK59ZPMwMsCFRBmGwodsSQPKg.

229 Benneker 2008.

230 Peña-Claros & Dockry 2010, p. 202, available at: www.tropenbos.org/file.php/645/11-m.pe%C3%B1a-claros-r.guzman-m.dockry.pdf.

231 Ibid.

232 Fourteen million of them, however, located in private land or traditional indigenous areas. Pacheco, De Jong & Johnson 2010, p. 272.

233 Peña-Claros & Dockry 2010, pp. 202–203.

234 Ibid.; Müller, Pacheco & Montero 2014, pp. 24–25.

235 Redo, Millington & Hindery 2011, pp. 231–233. Since the 1980s, Bolivia started a deep structural reform with neoliberal orientation. See Müller, Pacheco, & Montero, 2014, p. 24.

236 Boscolo & Vargas Rios 2007, p. 192.

237 Ibid., pp. 192–193.

238 Ibid., p. 193; Redo, Millington & Hindery 2011, p. 232.

239 Pacheco 2004a, p. 11, available at: www.fao.org/forestry/19583-06647b501b992f13fa80edbbb8942712c.pdf; Boscolo & Vargas Rios 2007, p. 193; Müller, Pacheco & Montero 2014, pp. 25–26.

240 Article 4, 28 Forestry Law 1700; Real 2002, p. 51.

241 Peña-Claros & Dockry 2010, p. 203.

242 Müller, Pacheco & Montero 2014, p. 25.

243 Redo, Millington & Hindery 2011, p. 233.

244 Pacheco, De Jong & Johnson 2010, p. 275.

245 Müller, Pacheco & Montero 2014, p. 30.

246 Ibid.

247 Ibid.

248 Ibid., p. 8.

249 Pacheco 2005, available at: www.cifor.org/publications/pdf_files/interlaken/pablo_pacheco.pdf.

250 Ibid., p. 3.

251 Ibid., pp. 9–10.

252 Ibid., p. 15. Boscolo & Vargas Rios 2007, p. 196; Pacheco 2004b, p. 91.

253 Pacheco 2004b, p. 91; Pacheco 2004a, p. 12.

254 Pacheco 2005, pp. 15–16.

255 Müller, Pacheco & Montero 2014, p. 30.

256 Article 29.

257 Article 31.

258 Müller, Pacheco & Montero 2014, p. 29.

259 Article 32, Forestry Act. Boscolo & Vargas Rios 2007, p. 194; for details, see following section 3.7.3.1.

260 Ibid.

261 Boscolo & Vargas Rios 2007, pp. 193–194.

262 Noting this does not influence the existing forest concessions. Pacheco, De Jong & Johnson 2010, p. 275.

263 The technical standards include for example, a minimum logging cycle of 20 years, a minimum cut diameter by species, mandatory reserves in harvested areas, infrastructure development, stream protection and so on. See Pacheco 2004a, p. 9.

264 Müller, Pacheco & Montero 2014, p. 29.

265 Boscolo & Vargas Rios 2007, p. 197.

266 Pacheco 2004a, p. 9.

267 Boscolo & Vargas Rios 2007, p. 196.

268 Ibid.

269 Contreras-Hermosilla & Vargas Rios 2002, pp. 4–5.

270 Nittler & Nash 1999, p. 32.

271 Ibid.; Quevedo 2006, p. 318.

272 Nittler & Nash 1999, p. 34; Jack 1998.

273 Nittler & Nash 1999, p. 34; Quevedo 2006, p. 319.

274 Espinoza & Dockry 2014, p. 82.

275 Duery & Vlosky 2005; Espinoza & Dockry 2014, p. 82.

276 Ebeling & Yasué 2009, p. 1145.

277 Espinoza & Dockry 2014, p. 83.

278 Ibid., p. 84.

279 Ibid., p. 86.

280 http://abt.gob.bo/index.php?option=com_content&view=article&id=653:lanzamiento-certificacion-forestal&catid=8&Itemid=211. Since this is a totally new certification scheme unfortunately no further information is available as to its practical implementation, nor on its effectiveness.

281 Espinoza & Dockry 2014, p. 86.

282 Ibid., p. 82.

283 Pacheco 2011, p. 3.

284 Ibid., p. 4.

285 Boscolo & Vargas Rios 2007, p. 194; Pacheco 2011, p. 3.

286 Pacheco 2011, p. 3.

287 Pacheco & Benatti 2015, p. 471.

288 Ibid., p. 473.

289 Redo, Millington & Hindery 2011, p. 233.

290 Ibid.

291 Standards FSC-STD-BOL-04-2000.

292 Ibid., 2.

293 Criterion 4.1. The communities within, or adjacent to the forest management area should be given opportunities for employment, training, and other services.

294 Real 2002, pp. 79–81; Pacheco 2004a, p. 19.

295 Real 2002, pp. 50–52.

296 Pellegrini & Dasgupta 2011, p. 278.

297 Ibid., p. 279.

298 Redo, Millington & Hindery 2011, p. 232; Pacheco 2015, p. 471.

299 Pellegrini & Dasgupta 2011, p. 281.

300 Ibid.

301 Ibid.

302 Pacheco et al. 2008.

303 Ibid., p. 31.

304 Ibid.

305 Ibid., pp. 31–32.

306 The modalities vary from ‘free access forest resource management, common-access and individual natural resources management’ to ‘individual tenure and natural resources management’. See Cardona et al. 2014.

307 Müller, Pacheco & Montero 2014, p. 36.

308 Ibid.

309 Ibid.

310 Pacheco et al. 2008, pp. 32–33.

311 Ibid., pp. 40–44.

312 Ibid., De Pourcq, Thomas & Van Damme 2009.

313 De Pourcq, Thomas & Van Damme 2009; Markopoulos 2002; Becker & León 2000.

314 Ibid., p. 19.

315 Ibid., p. 15.

316 Peña-Claros & Dockry 2010, p. 202.

317 www.ine.gob.bo/indice/EstadisticaSocial.aspx?codigo=80301.

318 Peña-Claros & Dockry 2010, p. 202.

319 www.ine.gob.bo/indice/EstadisticaSocial.aspx?codigo=80301.

320 De Pourcq, Thomas & Van Damme 2009, pp. 14–15.

321 Medina, Pokorny & Campbell 2009, p. 410.

322 Nebel et al. 2005, p. 183.

323 Pacheco, De Jong & Johnson 2010, p. 274; Redo, Millington & Hindery 2010, p. 236.

324 Espinoza & Dockry 2014, pp. 85–86.

325 Pellegrini 2009, pp. 14, 34 note 7.

326 Pacheco 2004b, p. 95.

327 Ibid.; Pellegrini 2009, p. 14; Peña-Claros & Dockry 2010.

328 Ebeling & Yasué 2009, pp. 72–73.

329 Ibid., p. 73.

330 Ibid.

331 Ibid.

332 León et al. 2012.

333 Ibid., pp. 202–203.

334 Pacheco et al. 2008.

335 Pellegrini 2009, pp. 13–14.

336 FAO 2010, p. 13.

337 http://data.worldbank.org/indicator/AG.LND.FRST.ZS.

338 Bryant, Nielsen & Tangley 1997; Smith & Darr 2004.

339 McDermott et al. 2010, p. 71.

340 Wulder, White & Coops 2011.

341 McDermott et al., 2010, p. 71.

342 Ibid., p. 6; FAO 2010, p. xx; United States Department of Agriculture 2011, p. vii.

343 Harris 2010, p. 8; Phillips, Swift & Blinn 2000, p. 274.

344 McDermott et al. 2010, p. 95.

345 Sweeney et al. 2004; Verry & Dolloff 2000.

346 http://data.worldbank.org/country/canada.

347 http://info.worldbank.org/governance/wgi/index.aspx#reports.

348 www.transparency.org/cpi2015?gclid=CMK59ZPMwMsCFRBmGwodsSQPKg.

349 http://data.worldbank.org/country/united-states.

350 http://info.worldbank.org/governance/wgi/index.aspx#reports.

351 www.transparency.org/cpi2015?gclid=CMK59ZPMwMsCFRBmGwodsSQPKg.

352 McDermott et al. 2010, p. 74.

353 Ibid.

354 Sunderlin, Hatcher & Liddle 2008, p. 8.

355 McDermott et al. 2010, p. 76.

356 Ibid.

357 Ibid., p. 80.

358 Sunderlin, Hatcher & Liddle 2008, p. 8.

359 McDermott et al. 2010, p. 83; Berry 2006, p. 4.

360 McDermott et al. 2010, p. 83.

361 The Canadian Constitution Act of 1867, section 92A.

362 For a list of such Acts, see C&I Canada 2000, Table 4.4b.

363 E.g. New Brunswick, Quebec, see McDermott, Cashore & Kanowski 2012, p. 76; O’Carroll 2004, p. 19.

364 O’Carroll 2004, p. 13.

365 Canadian Council of Forest Ministers 2000, p. 60.

366 Ibid., p. 61.

367 E.g. R. v. British Columbia Hydro and Power Authority [1997] B.C.J. No. 1744 at par. 20 (B.C.S.C.) available at: www.canlii.org/bc/cas/bcsc/1997/1997bcsc11119.html.

368 O’Carroll 2004, p. 13.

369 Ibid., p. 17.

370 For an overview of the provincial laws, see ibid., pp. 19–65.

371 Ibid.

372 Lucier & Shepard 1997.

373 Ibid., pp. 194–196.

374 Ibid., p. 193.

375 www.defenders.org/publications/state_forestry_laws.pdf.

376 33 USC 1329.

377 Helms 1998.

378 Phillips, Swift & Blinn 2000, pp. 284–285.

379 Brown, Brown & Binkley 1993, p. 10.

380 Ice et al. 2004; O’Carroll 2004, pp. 19–65.

381 https://ic.fsc.org/preview.2014-fsc-market-info-pack.a-3730.pdf.

382 www.csasfmforests.ca/docs/fact_sheet_2014.pdf.

383 www.sfiprogram.org/files/pdf/2014-sfi-progress-report-spreads/, p. 14.

384 www.unece.org/fileadmin/DAM/timber/publications/FPAMR-2014-final_01.pdf, p. 17.

385 McDermott, Noah & Cashore 2008, p. 47.

386 Ibid., pp. 62–64.

387 Ibid., p. 67. Though the substantive requirements under the FSC-PC are less restrictive than some state laws, all the discussed certification standards require forest operators to comply with applicable law. The legal compliance requirements hence ensure the certification standards regarding riparian protection are not more lenient than public regulation.

388 http://cfs.nrcan.gc.ca/pubwarehouse/pdfs/31835.pdf, p. 10.

389 Kamieniecki 2000, p. 181; noting that the Forest Practices Board is not one level of government, but an independent organization responsible for the enforcement of forest law in public lands in British Columbia.

390 The certified areas were estimated as 51.9 million hectares in British Columbia by 2009, http://cfs.nrcan.gc.ca/pubwarehouse/pdfs/35713.pdf, p. 46.

391 Cafferata et al. 2003.

392 Wood 2009, p. 94.

393 Ice et al. 2004.

394 Ice, Schilling & Vowell 2010.

395 Ibid., p. 268; Ice et al. 2004; Brown, Brown & Binkley 1993.

396 Including technical assistance, education programmes, cost-share programmes and so on. For details, see Kilgore & Blinn 2004.

397 In some states, the increase in compliance rate is obvious, for example, the compliance rate in Montana increased from 78 per cent to 96 per cent, see Ice et al. 2004, p. 161; Ice, Schilling & Vowell 2010; Carraway et al. 2002, p. 31.

398 Ice, Schilling and Vowell 2010; Shepard 2006.

399 Ellefson et al. 2001, 2006; Kilgore, Ellefson & Phillips 2003; Husak et al. 2005.

400 Ice, Schilling & Vowell 2010, p. 268.

401 Kilgore, Ellefson & Phillips 2003, p. 120.

402 Carraway et al. 2002, p. 26.

403 Ice, Schilling & Vowell 2010. Carraway et al. 2002, p. 31.

404 Newsom, Bahn & Cashore 2006, p. 204. When the certification body finds the performance of its client does not satisfy the indicators required in the certification standards, it issues a condition requiring the improvement of performance within a specified time frame.

405 Lee, Smyth & Boutin 2004, p. 175.

406 Gulbrandsen 2004, pp. 86–88.

407 Kilgore, Ellefson & Phillips 2004.

408 Visseren-Hamakers & Pattberg 2013.

409 Richardson, Naiman & Bisson 2012, p. 236.

410 FAO 2010, p. 9.

411 McDermott et al. 2010, p. 138.

412 Boström 2003; Agblede 2010, p. 8.

413 McDermott et al. 2010, p. 137.

414 Sahlin 2011, p. 2.

415 Sahlin & Svenska Naturskyddsföreningen 2009, p. 2.

416 http://data.worldbank.org/country/sweden.

417 http://info.worldbank.org/governance/wgi/index.aspx#reports.

418 www.transparency.org/cpi2015?gclid=CMK59ZPMwMsCFRBmGwodsSQPKg.

419 Swedish Forest Agency 2014, Swedish Statistical Yearbooks of Forestry, p. 46, available at: www.skogsstyrelsen.se/Global/myndigheten/Statistik/Skogsstatistisk%20%C3%A5rsbok/01.%20Hela%202014%20-%20Entire%202014/Skogsstatistiska%20%C3%A5rsboken%202014%20(hela).pdf.

420 www.skogsstyrelsen.se/en/AUTHORITY/Statistics/Subject-Areas/Estate-and-Ownership-Structure/Estate-and-Ownership-Structure/.

421 Ibid.

422 McDermott et al. 2010, p. 139; Lantto & Mörkenstam 2008.

423 www.fao.org/docrep/w1033e/w1033e05.htm.

424 McDermott et al. 2010, p. 136.

425 Ibid.

426 www.nordicforestry.org/facts/Sweden.asp.

427 Gulbrandsen 2010, p. 91.

428 McDermott et al. 2010, p. 138; Schlyter, Stjernquist & Bäckstrand 2009, p. 377.

429 Swedish Gov. Bill 1992/93: 226; Nylund 2010, pp. 8–9.

430 Schlyter, Stjernquist & Bäckstrand 2009, p. 380.

431 Johansson & Keskitalo 2014, p. 121.

432 Ibid., p. 121.

433 The 1993 Forestry Act, section 30.

434 Johansson & Keskitalo 2014, pp. 122–123.

435 Council Directive 92/43/EEC on the Conservation of Natural Habitats and of Wild Fauna and Flora.

436 Lister 2012, p. 177.

437 www.riksdagen.se/sv/Dokument-Lagar/Lagar/Svenskforfattningssamling/Artskyddsforordning-2007845_sfs-2007-845/.

438 Edvardsson 2004, p. 170.

439 Ibid.

440 www.miljomal.se/sv/Environmental-Objectives-Portal/Undre-meny/About-the-Environmental-Objectives/12-Sustainable-Forests/.

441 Ibid.

442 Swedish Forest Agency 2005.

443 Ministry of the Environment, The Swedish Environmental Objective – Interim Targets and Action Strategies, Summary of Gov. Bill 2000/01:130, p. 48 (2001).

444 Johansson & Keskitalo 2014, pp. 117–119; Uggla, Forsberg & Larsson 2016, p. 37.

445 Johansson & Keskitalo 2014, p. 123.

446 Ibid., pp. 122–124.

447 Ibid., p. 124; Hysing 2009b, p. 656.

448 Hysing & Olsson 2005, p. 512.

449 Johansson & Keskitalo 2014, p. 125.

450 Hysing & Olsson 2005, p. 512; Johansson & Keskitalo 2014, p. 125.

451 Hysing 2009b, p. 656.

452 Ibid. Johansson & Keskitalo 2014, p. 121.

453 Hysing 2009b, p. 656.

454 Gulbrandsen 2010, pp. 92–93; Schlyter, Stjernquist & Bäckstrand 2009, p. 380.

455 Gulbrandsen 2010, pp. 93–94; Schlyter, Stjernquist & Bäckstrand 2009, p. 380.

456 Gulbrandsen 2010, p. 94.

457 Ibid.

458 Ibid., www.pefc.org/component/pefcnationalmembers/?view=pefcnationalmembers&Itemid=48/10-Sweden.

459 Lister 2012, p. 182.

460 Ibid.

461 FERN 2001; see also Gulbrandsen 2010, pp. 97–98.

462 Gulbrandsen 2010, pp. 97–98.

463 Ibid., p. 99.

464 Ibid.

465 Lister 2012, p. 182.

466 Gulbrandsen 2005, pp. 350–351.

467 Ibid., p. 352.

468 Savcor Indufor 2005; Schlyter, Stjernquist & Bäckstrand 2009, p. 381.

469 https://se.fsc.org/statistik-och-fakta.242.htm.

470 http://pefc.se/statistik/.

471 Lister 2012, pp. 182–183.

472 http://pefc.se/wp-content/uploads/2013/05/PEFC-Statistik-121231Summering.pdf.

473 Lister 2012, p. 183.

474 The requirement is defined as 2 to 10 per cent of the net income from forestry. See Johansson & Keskitalo 2014, p. 122.

475 Lister 2012, p. 179.

476 Chapter 1, section 1, www.government.se/contentassets/be5e4d4ebdb4499f8d6365720ae68724/the-swedish-environmental-code-ds-200061.

477 Ibid., section 3.

478 FSC-STD-SWE-02-02-2010, Introduction. PEFC-SWE-002-V2, Introduction.

479 Principle 6 of FSC Sweden: ‘Forest management shall conserve biological diversity and its associated values, water resources, soils, and unique and fragile ecosystems and landscapes, and, by so doing, maintain the ecological functions and the integrity of the forest’.

480 Principle 9: ‘Management activities in High Conservation Value Forests shall maintain or enhance the attributes which define such forests. Decisions regarding High Conservation Value Forests shall always be considered in the context of a precautionary approach’.

481 Savcor Indufor 2005, pp. 56–59.

482 Ibid., pp. 53–64.

483 Ibid., pp. 56–59.

484 FSC criterion 6.2.1; 91.1.

485 E.g. the 1979 Forestry Act mandates private forest owners to prepare a forest management plan with the support of the county board. However, the 1993 Forestry Act abolished such a requirement and reduced the governmental technical service. Instead, the SFA started to issue green management plan guidelines, with the view of balancing sustainable production and nature conservation goals. Therefore, the public regulation leaves the development of the management plan to the forest owners, who may find it difficult to figure out exactly what is expected from them. See Lister 2012, p. 190.

486 Hysing & Olsson 2005, p. 512. For example, both the FSC and PEFC require the forest owners to have a forest management plan with more detailed instructions than the guidelines provided by government. Therefore, through seeking certification coverage, forest owners could develop green management plans encouraged by government as well. See Lister 2012, p. 189. Another example concerns the ‘sustainable forest’ objective. Its interim targets include issues regarding set-aside areas, dead wood, deciduous trees and the conversion of spruce standards. Certification schemes also include concrete criteria on these issues and can hence contribute to the achievement of such targets.

487 Lister 2012, pp. 193–194.

488 E.g. FSC, criterion 6.4.1.

489 Lister 2012, pp. 191–193.

490 Ibid.

491 Johansson & Keskitalo 2014, p. 128.

492 Ibid.

493 Ibid.

494 Ibid.

495 Ibid.

496 Johansson & Keskitalo 2014, p. 122.

497 Ibid., p. 124; Hysing & Olsson 2005, p. 520.

498 Johansson & Keskitalo 2014, p. 124.

499 Hysing & Olsson 2005, p. 521.

500 Ibid.

501 Ibid.

502 Hysing 2009a, p. 656.

503 State funding for informational instruments has decreased by 48 per cent since 1990. Hysing & Olsson 2005, p. 520.

504 Keskitalo et al. 2009; Johansson 2014.

505 Lister 2012, pp. 192–193.

506 Sahlin 2013.

507 Ibid., p. 20.

508 Johansson 2012, p. 433.

509 Ibid., p. 430.

510 Ibid., p. 433.

511 Ibid.; Sahlin & Svenska Naturskyddsforeningen 2009.

512 Sahlin & Svenska Naturskyddsforeningen 2009, p. 12.

513 Sahlin 2013, p. 9.

514 Agblede 2010, p. 9.

515 Ibid., pp. 28–29.

516 Ibid., p. 30.

517 Sahlin & Svenska Naturskyddsforeningen 2009, p. 11.

518 Agblede 2010, p. 30.

519 Sahlin & Svenska Naturskyddsforeningen 2009, p. 11.

520 Ibid., pp. 30–32.

521 Johansson & Keskitalo 2014, pp. 128–129.

522 Ibid., pp. 38–39; Sahlin 2013, pp. 7–10.

523 Sahlin 2013, p. 8.

524 Stora Enso 2014, p. 38, available at: http://assets.storaenso.com/se/com/DownloadCenterDocuments/Global_Responsibility_Performance_2014.pdf.

525 Sahlin 2013, p. 9.

526 Uggla, Forsberg & Larsson 2016, p. 4.

527 Ibid., pp. 3–4.

528 Johansson et al. 2013, pp. 107–108.

529 Lister 2012, pp. 192–193.

530 Angelstam et al. 2011, p. 1126.

531 Lister 2012, p. 192. To fill the gap, the state-owned company made a pool of land available to complement the funding. However, due to the lower than average economic value of these forests, whether the added funding would be sufficient to purchase sufficient private land is unknown. See Angelstam et al. 2011, p. 1126.

532 Swedish Forest Agency 2012, p. 106.

533 Elbakidze et al., 1983.

534 Ibid.

535 Ibid., 1993.