1. PURPOSE OF THE DOCUMENT

This document responds to a call from the European Parliament for "an integrated international strategy seeking to ensure the qualitative and quantitative conservation and sustainable management of forests"[1]. It defines the objectives of the European Community in forest development co-operation, identifies areas for dialogue and assistance, and sets out actions to achieve these objectives, taking into account experience gained in recent years.

This communication reaffirms the commitment of the Community and Member States to sustainable economic and social development, while fostering environmental protection. It pursues the goal of combating poverty in developing countries while the improving of the quality of human life within the carrying capacity of supporting ecosystems.

2. STATE OF FORESTRY IN DEVELOPING COUNTRIES

2.1. Forests and trees in developing countries

Forests and trees in developing countries are vital assets offering economic, social and environmental benefits to local communities, national economies and the global environment. Their multifaceted roles include wood and non-wood production, social, religious and cultural functions, recreation, as well as employment and income generation, biodiversity conservation, energy and food production. In addition, they provide environmental services such as biodiversity conservation, nutrient cycling, protection of the microclimate, protection of croplands and watersheds. They also have global values comprising carbon storage, tourism and future genetic resource use. All of these functions and values need to be recognised and valued so that forests can contribute to balanced economic, social and environmental development.

In 1995, forests covered 27% of the total land area of the globe, or 3.45 billion hectares, with developing countries accounting for up to 57% of the total forest cover[2], or nearly two billion hectares. This estimate includes forests in protected areas, inaccessible natural forests, managed natural forests, and man-made forest areas such as plantations. However, these figures do not include trees outside forests which in many regions also provide important products and services to sustain rural and urban livelihoods.

Rural populations, particularly poorer people, depend on forest resources for part of their livelihoods. Many forest products and services cannot be provided by other land uses. However, with increasing pressure on forest resources trade‑offs between competing land uses have to be made. In this context, developing countries “with low forest cover”, such as those of the Mediterranean, or with tropical coastal areas with tidal forests, face particular challenges.

During the last decades, considerable resources have been allocated to forest sector development. Efforts both from the international community and from partner countries have led to numerous interesting and positive results which still need to be capitalised and built upon. Indeed, policy makers and forest managers are responding to changing national priorities and to international commitments; a broader approach to forest management is being sought, balancing social, economic and environmental objectives, limiting timber harvesting intensities and improving management practices. Efforts to support biological diversity conservation have increased while areas under forest plantations are growing. In many countries forest related laws are being revised to take account of these changes.

Despite these promising initiatives, the areas under forest cover continue to decrease in most countries. It is estimated that in the period 1990 to 1995, 13.6 million hectares of forest were lost per year an annual rate of loss of 1.6%. Compensated to a small extent by afforestation in developed nations, annual net loss amounted to 11 million ha. Figure 1 below indicates that there was a net decrease of 65.1 million hectares in developing countries and an increase of 8.8 million hectares in developed countries. Deforestation is defined as a permanent change of use of forestland to other permanent uses such as agriculture, grazing, road construction and infrastructure. However, in addition to deforestation many existing forests are also subject to a continuous but poorly recorded degradation of stands. This may include managed forest as harvest levels, cutting cycles, logging and regeneration methods often violate sustainability principles. In addition to the actually under forest cover, the growing stock, expressed in terms of species distribution, age and dimension is of crucial importance to provide the desired forest functions. (fig 1. Source FAO 1999[3])

The underlying causes of deforestation and forest degradation include: (i) land tenure, resources management and stakeholder participation; (ii) trade and consumption; (iii) international economic relations and financial flows; and (iv) valuation of forest goods and services[4]. In many developing countries growing populations are demanding more farm land, thus encroaching on forests. In the future this may accelerate conversion of forests. There is a need to incorporate trees and forests into sustainable agricultural systems.

A major issue in forest conversion is the imbalance of power between those who profit, and those who lose. Moreover, social and environmental costs of loss of biodiversity, carbon stocks, cultural assets and the very livelihood for forest‑dependent peoples are rarely considered or never compensated.

The reasons for deforestation and forest degradation vary from region to region. In Africa, the main factor is the expansion of cash crop farming as well as subsistence agriculture. In Latin America, reductions in forest area are largely the result of government resettlement schemes, large-scale cattle ranching and hydroelectric reservoirs. In Southeast Asia, large commercial logging operations and plantation activities contribute to forest degradation. The Mediterranean countries currently face a major challenge to reverse the consequences of generations of overuse of their forests and trees.

2.2. The quest for sustainability

If used in a sustainable way, forests and trees can continue to make a significant contribution to economic and social development, to conserve biological resources and to maintain natural ecosystems.

Sustainable forest management (SFM) is embodied as the overarching objective in forestry development where sustainability refers not only to even flow of timber yields, in the silvicultural meaning of the term, but to the entire spectrum of environmental, economic or social services which forests provide. Yet there is limited practical experience in implementing sustainable management systems in tropical forests, even for wood and non-wood production. Notwithstanding the existence of sound theories on sustainable forest management and the efforts to identify criteria and indicators for SFM, the political conditions, the lack of applicable management systems, vested and short term financial interests have in many cases precluded effective implementation of SFM in natural forests. In contrast there is an increasing and encouraging trend towards establishing plantations as a means to provide timber and fibre for domestic and international markets, and to reduce pressures on natural forests whilst taking into account appropriate social and environmental considerations.

Certification of forests is based on objective criteria and indicators for assessment of sustainability of their management. Labelling of forest products from such certified sources could become a useful market-based instrument, giving consumers the possibility to contribute to sustainable forest management by preferring its certified products. Forest certification schemes and their associated labels may differ by countries or regions. Competition between such schemes may contribute towards cost-efficiency, but a profusion of such schemes and their associated labels could lead to consumer confusion. This important tool therefore requires further efforts to promote compatibility and comparability, including the possibility of mutual recognition. Forest certification only refers to forest management and not to the entire life cycle of the wood-based product.

Spectacular forest fires have caught public attention in recent years. Many ecosystems depend on fires, and fires have occurred in tropical rainforests even before significant human disturbances. While any causal relationship between global warming and increasing frequency of forest fires can still be disputed, it is clear that forest degradation has created favourable conditions for most of the recent large-scale forest fires during «El Niño» phenomenon. Fires often lead to deforestation, not because forests can not regenerate, but because the underlying causes of the fires are not suppressed. The problem of forest fires has to be counteracted by a careful review of different sector policies and provision of suggested changes favouring the sustainable use of natural resources.

A major factor to be considered in forest policy is the impact of subsidies in adjacent sectors that can encourage deforestation. For example, financial support for agricultural input or products can artificially augment financial returns of a competing land-use. Such agricultural subsidies may have their place, provided that delineation of lands devoted to agriculture or forestry use has been carried out in the context of site assessment and cross-sectoral land-use planning.

A reason for lack of progress in SFM of natural forests in the tropics is that current concession and timber pricing policies create strong incentives for unsustainable management. Unsustainable practices («cut and run, high-grading») give higher financial returns to private sector entrepreneurs and concessionaires in the short run. SFM of natural tropical forest can be financially viable, but the direct costs and the opportunity costs during implementation may act as a disincentive.

Lack of adequate and transparent information on the state and use of forest resources, too, may hamper sustainability of forest management. Information on forests is often incomplete, and statistics tend to focus on commodities, rather than on the state and potential of forest resources. Deteriorating forest conditions often escape detection. Only very few time series exist which would permit to accurate assessment and monitoring of sustainability. The full use of the results of scientific research still needs to be made to create objective conditions to increase benefits from ecosystem dynamics and new product technologies.

2.3. Environmental functions

While tropical forests cover only 7% of the earth’s land area, they are thought to harbour half of all known plant and animal species. Forests are, however, much more than just a number of species; they form ecosystems in which biological and a-biotic processes are linked. They are able to maintain health and stability of the system itself and contribute to the wider environment up to the global climate.

Biological diversity is high in undisturbed tropical forests. It may deteriorate as a result of anthropogenuous interference. There is an international commitment[5] to conserve this biological diversity for future generations in order to do this, the interests of the international community need to be reconciled with the needs and priorities of people and national economies in developing countries.

In 1993, 6% of the world’s total land area fell under some form of protected status[6]. Yet many valuable elements of biodiversity remain outside these areas. Hence, biodiversity should be deliberately maintained and enhanced, not only in protected areas, but also during management of in production forests as well as plantations.

Forest and trees stabilise landscapes by preventing land slides and by protecting soils against erosion. They can increase organic matter content on and in the soil, raise available water capacity and nutrient contents. Forest soils have the critical function of water filtering. In marginal areas, forests play a critical role in preserving soils and facilitate natural succession of ecosystems. They also have roles in mitigating desertification.

Forests and trees have key roles in national and global environmental stability. They store more carbon above and below ground than the atmosphere. Thus, fluctuations in the condition of forests may have a considerable effect on climate change. Since forests can act both as sources or sinks of CO², they can both contribute to, as well as mitigate climate change. Moreover, they may undergo major shifts in changing climate. Consequently, forests appear prominently in strategies to assess and address this global problem.

All forest stands eventually reach an upper limit of on-site carbon storage. However, carbon may be stored in durable forest products, too. In addition, harvest and milling residues and small timber from sustainable forests may replace fossil fuels, without raising the atmosphere ´s carbon content. Hence, managed sustainably, forests continue carbon sequestration and substitution. In contrast, unmanaged stands have a limited ability for climate change mitigation, since eventually growth and decomposition will reach equilibrium.

2.4. Economic functions

While there is no accurate estimate of forests’ contribution to the global economy, a partial indicator is their share of gross domestic product (GDP) and international trade. At global level, forest products and services are estimated to contribute some 2% of world GDP and 3% of international merchandise trade. Forests provide a relatively high contribution to GDP in many developing countries, particularly in Africa (6%), and South America (3%). Yet, only 6 to 8% of the world production of roundwood enter international trade.[7]

Concerning wood supply and demand, trends show that there is no global wood supply crisis on the foreseeable horizon; technologies for new and emerging supply sources will meet expected demand with little or no real price increases. There is a trend toward increasing reliance on supply sources outside of the natural forest (trees outside of forests, plantations, recovered fibres) for industrial wood products.

These estimates do not account for the global goods and services provided by forest such as carbon storage, biodiversity conservation and future genetic resource use, freshwater storage and natural heritage, nor do they include the use of non-traded wood and non-wood forest products by local populations.

Many accepted valuation methods exist to calculate appropriate costs and benefits for those services of forests, for which markets do not exist. However, this information is only useful if decision-makers fully consider these values in the choice between alternative actions. In most instances, these “externalities” are not internalised in decisions. For example, the benefits from forests in the upper catchment area of a river basin on downstream water availability and flood prevention can be quantified, but this is irrelevant for decisions about the forests upstream, as long as downstream beneficiaries are unwilling to pay owners for these services. This problem is however not limited to developing nations, and has generally not been solved in the developed world either, market values for carbon offsets, contract nature protection and payment for water services represent a hopeful beginning.

The prevailing pricing system for standing timber in the form of stumpage and concession fees used in developing countries, often established by government decrees, has led to serious under-valuation of timber and forests. Revenues to forest owner, usually the State, often amount to only 10 20% of those achievable under true market conditions and without export restrictions.

Consistent fee collection could increase public revenues even more. A higher price for raw materials would also stimulate efficient utilisation and minimise waste in the forest and during processing. Implementing these important changes, both for wood and non-wood forest products, could raise the financial contributions of the forest sector, promote local employment and income, attract investment in forestry, and strengthen the role of forests and forest administrations. At present, low revenues from public forests reduce their weight during budget allocation and in the eyes of politicians, land-use planners and donors.

Trade in forest products is an important aspect of forestry in developing countries. Applying the recent trend of reduction of tariffs to forest products trade has been under discussion for some time, but its potential impact on the forest resource base will have to be investigated in detail to make trade and environment policies mutually supportive in favour of sustainable development. Non-tariff barriers, such as log export bans or sale of export quotas, can favour domestic industry in the short term, but may weaken returns to forest owners, reduce stumpage values, lead to waste and inefficient resource allocation in the long term. A compromise will have to be reached between impediments to trade and environmental benefits of sustainably produced forest products for both producers and consumers.

An important function of forests related to climate change is the prevalent use of wood to meet energy requirements. In developing countries some 80% of total energy requirements is met by wood. Since wood is a renewable resource, the sustainable use of this form of energy as a possible substitute for oil based energy can limit net carbon release.

2.5. Social functions

A wide range of stakeholders has interests in the forest sector, at international, national, and local levels. In order to avoid conflicts and maintain forests as multifunctional assets, it is important to appreciate the roles, motivations, influences and constraints of decision-makers, power groups, local people, national lobbies for agriculture, industry, infrastructure and farmer communities.

Forests have existential values and deep cultural meaning for the indigenous people inhabiting them; they are often also vital to the very existence of many rural populations. In spite of this, adequate representation is often lacking and access is insecure. Ownership and tenure of forest land and trees are often not adequately defined, leading to resource allocation and usufruct problems. These issues need to be considered in national policies and most importantly given proper consideration in relationship between economic and environmental stakeholders.

A fundamental and agreed principle in any contemporary forestry activity is the importance of a participative process from policy development through identification, appraisal and implementation of activities. General acknowledgement of democratic principles, gender-based approach, community empowerment, and indigenous peoples’ rights, are essential elements in this process.

2.6. Institutional aspects

Government services have responsibilities in implementing policies as well as in enacting the legal framework. Institutional capacity for the control and sustainable management of forests in many tropical countries is weak. Over the last decade, the influence of the State has declined. The role of the state in ensuring long-term security of environmental goods and services, while enhancing participation of the private sector, civil society, NGOs and local institutions, requires redefinition.

Forest officials are often poorly paid civil servants; on the other hand they control an asset that has a high market value. Temptations for corrupt behaviour are therefore strong.

Recently, new institutional arrangements have had an impact on forest management: (i) decentralisation of forest administrations, devolution of responsibility within these decentralised agencies, from central to local levels, (ii) privatisation either of land or of forestry operations and the related change in Government’s role, i.e. the need to increase monitoring, (iii) greater participation by a wide range of interest groups in the planning process, (iv) greater involvement of local communities in the management of forest resources. A wide range of management models appropriate to local situations exist throughout the developing world.

The institutional set-up of the forest sector is suffering from the dilution or atomisation of responsibility and interests among public institutions working in the forest, environmental, agriculture, industrial, financial and other sectors. A challenge for any administration is to find a balance between the need to address forestry issues in many sectors whilst maintaining a coherent sectoral capacity.

2.7. The Challenge. Reconciling conflicting demands on forests

Forests are under pressure from various demands for their goods and services to fulfil livelihoods’ needs, as well as conservation and economic needs. Beneficiaries of these different functions will attempt to secure their interest in the forests. However many of these functions have no recognised market value and others are undervalued. A balanced perspective requires a balanced contribution of all stakeholders involved. Unfortunately, this is often neglected.

Instead powerful vested economic interest, bureaucratic inertia and a lack of adequate information about forest resources frequently prevent equitable solutions in developing nations. Solving this problem is fundamental to successful forest policy implementation and enforcement. It can only be achieved through participation and promoted through transparent information on forest resources and their changes. Accountability, monitoring, verification are needed so that trends, significant changes and, if the case arises, abuses, can be publicly exposed.

Presented in another way, forests and the forest sector are mainly affected by elements lying outside the sector, which will need “reorienting” cross-sectoral and forest-related policies in favour of forests. Addressing issues pertaining to the forest sector itself or to forests themselves would not have a sustainable and long-term impact.

3. INTERNATIONAL COMMITMENT [8]

Tropical forests have been a major concern of the international community for the last two decades. A major impetus was given to international commitment to forests in June 1992, when the United Nations Conference on Environment and Development (UNCED) in Rio de Janeiro adopted the Rio Declaration on Environment and Development, Agenda 21 and the so-called “Forest Principles”[9]. For the first time, there was an expression of political commitment to and general consensus on forest-related principles, objectives and actions.

Two legally binding instruments of direct relevance to forests - the Framework Convention on Climate Change (FCCC) and the Convention on Biological Diversity (CBD) - were opened for signature at the Rio conference and have in the meantime been ratified by most countries. The FCCC recognised the carbon sink function of forests and the CBD the biodiversity in forest ecosystems and land-based protected areas. The need for vegetation cover was endorsed in the Convention to Combat Desertification (CCD) in 1994. While not forest-specific, these conventions contain elements of relevance to forest conservation and sustainable use.[10]

The international community continued the UNCED process through the establishment of the Intergovernmental Panel on Forests (IPF) in 1995, under the auspices of the UN Commission on Sustainable Development (CSD). The IPF mandate was to pursue a consensus and formulate options for further actions to combat deforestation and forest degradation, and to promote the sustainable management, conservation and development of all types of forests. The IPF conclusions were submitted to the UN General Assembly during its 1997 Special Session (UNGASS) which endorsed over 100 negotiated proposals for action (see annex 6 on IPF elements). Subsequently the Intergovernmental Forum on Forests (IFF) was established to pursue discussions and report to the CSD in 2000[11].

The Kyoto Protocol of the Framework Convention on Climate Change in 1997[12] makes provision for the clean development mechanism (CDM). The potential role of tropical forests in carbon sequestration through afforestation, rehabilitation of degraded forest ecosystems, reduced-impact logging (RIL), modified harvest levels and cutting cycles needs to be carefully explored after anticipated clarifications of CDM rules.

Since 1992, Governments are pursuing «the formulation of scientifically-sound criteria and guidelines for the management, conservation and sustainable development of all types of forests». Criteria and indicators are aimed at improving the quantity and quality of information available to decision-makers and the general public about trends towards or away from sustainable use of a nation’s forests. They will help guide national policies, as well as national legislation governing management practices in the country.

Discussions during UNGASS have highlighted the following trends:

· It is necessary to seek better co-ordination between forest conservation and overall development policies, finding common goals, launching mutually reinforcing initiatives, and developing mechanisms for priority setting whenever common goals cannot be identified; there should be a shift of emphasis from forest conservation to sustainable use, particularly in the case of poor developing countries;

· Positive incentives for sustainable forest management should be developed, especially measures to tackle market, institutional and policy failures; sustainable forest management should be carried out in the context of long-term changes such as global warming and urbanisation;

· Action on and ownership of sustainable development policies at national level is essential, as is support from the international community through forest partnerships. Donor-developing country partnerships should be based on internationally agreed principles and require both adequate aid budgets and a long-term commitment on the donor side together with true ownership and commitment to reform on the developing country side;

· Global functions and values of forests are be duly recognised and evaluated, in particular as reservoirs of biodiversity and suppliers of non-timber products, as carbon sinks, as buffers against desertification and through their impact on the hydrological cycle; but their internalisation in both developing and developed countries is lacking.

4. EUROPEAN COMMUNITY COMMITMENT [13]

The Community's policy statements on forests in the context of co-operation with developing countries are well in line with the international commitments concerning forests in these countries. Environmental issues were first formally presented in EC co-operation policy statements in the mid-1980s when a chapter on drought and desertification was incorporated in the Lomé III Convention. The Community’s recognition of the value of forests and their importance in development co-operation was formalised in 1989 with a Communication of the Commission to the Council and the Parliament on “Conservation of Tropical Forests: the Role of the Community” (October 1989; 89/c 364/01). A basis for EC development assistance for tropical forest conservation was established in 1990 with the Development Council Resolution on Tropical Forests[14]. This was followed in 1991 with the creation of a budget line “on operations to promote tropical forests” (TFBL - B7-5041, now B7-6201), and by the adoption in 1995 of Regulation 3062/95 setting out a legal framework for the management of this budget line[15]. This gave priority to specific operations determined according to the needs of each country as reflected in development and environment policies relating to forests and according to community co-operation priorities. To ensure the continuity of this financial instrument, the Commission adopted in 1999 a proposal for a new regulation to be presented to the Council and the Parliament.

For the African, Caribbean and Pacific regions (ACP), the Lomé IV-bis Convention identified deforestation as a serious problem and pointed to the need for joint action, especially in timber trade and marketing. The Lomé Convention also contains a Protocol on Sustainable Management of Forest Resources, establishing a number of priority areas for EC assistance. Preliminary work has now begun for a successor arrangement to the existing Lomé Convention and sustainable development has been identified as a key theme, with particular attention to be given to combat deforestation.

As far as development co-operation in Asia and Latin America (ALA regions) is concerned, Regulation (EEC) No. 443/92[16] covering ALA co-operation in general, stresses the importance of environmental and forestry issues by stipulating that 10 % of Community aid for ALA countries be allocated to the environment, especially to the protection of tropical forests.

Between 1992 and 1996, the EC committed approximately 494 M€ to actions to promote tropical forests in over 510 projects and programmes. Several financing instruments were used including the TFBL (52%), the ALA budget line (27%) and EDF-Lomé Convention (15%). Through Science and Technology co-operation programmes implemented between 1982 and 1998, 69 joint-research projects were supported, corresponding to a total of 44 M€ in Commission contributions. An additional 9 M€ were committed by the Joint Research Centre (JRC) in support of the programme TREES.

Recently, the EC published (i) the Forest Sector Development Co-operation Guidelines “Forests in Sustainable Development” which was issued in 1996; (ii) the “Evaluation of the Forestry Component of the EC programmes in Developing Countries”, carried out in 1997-98 and (iii) the EU Tropical Forestry Sourcebook, describing development co-operation on tropical forests of the EC and the Member States, published in 1998.

The EC is fully taking into account the relevant recommendations of IPF and concrete strategies are being put in place to implement the Rio Conventions, FCCC, CBD and CCD, which also have relevance to forests.

Furthermore, the EC is implementing IPF proposals for actions and supports the on-going processes of appropriate international fora, such as the Intergovernmental Forum on Forests (IFF), as well as the World Trade Organisation / Conference on Trade and Environment (WTO/CTE) to address Trade and Environment challenges in the Forest Sector. Conditional trade concessions have been tabled by the EU to provide additional incentives to those countries that apply sustainable forest management principles under the General System of Preferences (GSP)[17].

The graph below shows categories of EC projects, classified according to themes, the main ones being forest conservation, buffer zone development, education and research. (Figure 2[18]). In Asia, most commitments have been directed to sustainable forest management, while in Africa and Latin America, the main focus has been conservation and protection of natural areas. In Latin America, the range of activities has been the most diverse and relations with local partners from all sectors of society have been established.

The underlying concept is that natural resource management, including forest use, is linked to sustainable socio-economic development. Forests cannot simply be sacrificed for development of other sectors, and the stage of development determines the framework for the treatment of forests. There may be conversion of forests, based on rational land-use planning, and harvest levels for overmature timber may exceed increment in the short run, as long as overall forest sustainability is maintained. Centuries of European forest history and more recent development - forest interaction in many developing nations show that forest management and socio-economic development must progress together. This is the basis of the strategy that follows.

The regional distribution of commitments is shown in Figure 3

[DQC1]

5. THE WAY FORWARD: OVERALL OBJECTIVES

5.1. EU development objectives

The European Union development objectives are stated in Art. 130u of the Treaty of the European Union (Maastricht Treaty) and re-affirmed in the Amsterdam Treaty (1996):foster sustainable economic and social development, integrate developing countries into the world economy, and fight poverty. They need to be achieved in a context of good governance and rule of law (decentralisation and devolution, stakeholder participation at decision and implementation levels, recognition of indigenous peoples).

The overall objective of the European Community’s forest development co-operation is to maintain adequate forest cover, improve forest management in developing countries as a contribution to the local, regional and global environment and overall sustainable development. In this context, the Community and its Member States aim at enabling individuals and communities, especially women[19], rural and poor people, dealing with forests and forestry, and society at large, to benefit in an equitable way from forest-related products and services which are being produced on a socially, economically and environmentally sound basis. This goal is consistent with that developed for the EU territory through the pan-European process[20].

5.2. Forestry specific objectives

Based on the framework of the general EU development objectives and on the analysis presented in chapter 2 "State of forestry in developing countries", the following specific objectives of Forest Sector Development Co-operation can be identified:

· reduction of uncontrolled deforestation and forest degradation to contribute to mitigating global change;

· increasing the extent of areas under sustainable forest management, as a contribution to economic and social development;

· increasing of revenue from forest products and making its distribution more equitable;

· maintain genetic resources by conservation of natural forest ecosystems and their associated biodiversity;

· creation of institutional frameworks capable of meeting conflicting demands on forests by taking into account the interests of all stakeholders;

· expanding the forest related knowledge base.

These objectives will be achieved through EC aid programmes, by means of various complementary financial instruments and in complementarity with Member States' aid programmes by appropriate sharing of responsibilities according to respective priorities.

This will require activities at international and national policy level, at field level in forest areas as well as in rural areas, in the forest products processing and marketing chain and related research, education and training.

6. WAYS TO ACHIEVE THE OBJECTIVES

Four major areas will provide the framework for development co-operation actions within individual countries and within regions, as well as within the international context.

6.1. Support the development and implementation of a policy framework, on a participatory basis, favourable to the forest sector at national and international levels, in order to maintain the multifunctional roles of forests and to reconcile conflicting demands on them.

6.1.1. Policies at national level in forest-related sectors.

At national level, sector policies that have a direct or indirect impact on the forest sector need to be improved. This will involve:

· Supporting policies to enhance good governance and accountability and to enable institutional reforms and capacity strengthening;

· Promoting land use policies and planning, land allocation, users rights and secure tenure in order to render forestry a viable alternative for local people;

· Supporting alleviation or modification of subsidies in adjacent sectors which promote unwanted forest conversion, in particular the agriculture and infrastructure sectors;

· Supporting fiscal policies in favour of the conservation and sustainable use of forests and of alternative income generating activities for the efficient utilisation of forest products.

Examples of actions to be supported, according to country specific context, consist of:

(1) support the redefinition of the role of the State to allow it to perform its valuable function of correcting policy failures and of promoting the internalisation of environmental costs; and demonstrate the economic and social benefits of forests to officials of planning and finance bodies;

(2) assistance to the formulation, with appropriate and equitable participation of local people, of policy and legislation conducive to private sector development;

(3) promote national accounting practices which recognise the multiple functions of forests in order to allow for due consideration of forestry in sectoral allocation of budgetary resources;

(4) promote policy research on inter-sectoral relationships impacting on forest conservation and sustainable use, with emphasis on land-use, agriculture and agro-industry, energy and water policies.

6.1.2. Policies at national level within the forest sector.

This will involve:

· Promoting the application of economic incentives that capture the full social and environmental costs and benefits of forests; and improving legislation when appropriate;

· Promoting the increase of equitable net revenues to public and private owners and the reinvestment of them in sustained forest management;

· Improving valuation and pricing systems for forest-based products and services through market mechanisms;

· Enabling policy, legal and market conditions for private sector production forests and plantations where appropriate and environmentally and socially acceptable;

· Supporting the formulation of national forest programmes, within wider national environment plans that articulate a clear strategic vision through country‑driven processes;

· Promoting energy policies based on CO2 neutral biomass.

Examples of actions to be supported, according to country specific context, consist of:

(1) translation of the value of forest resources into concession policies that reflect the scarcity of forest products by changing the presently prevailing system of prices for wood raw-material in the form of stumpage and concession fees, established by government decrees, to a system where the prices are established through market forces;

(2) supporting the provision of incentives for certain functions if costs and benefits can not be internalised; develop accounting methods which permit the internalisation of environmental costs and benefits; as well as supporting codes of conduct for forest operations;

(3) ensuring secure user-rights by local communities committed to sustainable forest management;

(4) supporting government services to maintain an active role in the conservation and restoration of key forest ecosystems of high environmental value and in the implementation and enforcement of adequate legislation;

(5) supporting effective decentralisation of forest administrations, fiscal decentralisation, devolution of responsibilities to the private sector and civil society in productive and monitoring functions;

(6) supporting information sharing (efficient national and local forest inventories taking into account assessments of forest cover, growth, harvesting etc), testing and promotion of certification and audit systems according to internationally agreed criteria and indicators.

6.1.3. EC’s role at international level

This will involve:

· Participating in discussions on a possible global legally binding instrument concerning management and protection of all forests, which could provide a strong incentive for improved implementation and enforcement of policies and legislation established by sovereign nations[21];

· Exploring innovative ways of contributing to the long term financial viability of SFM and forest conservation, which could include market premium for certified forest products; trusts and endowments; carbon‑sequestration schemes; debt‑for‑nature swaps; small grants funds;

· Facilitating partnerships, in the case of priority areas straddling country borders, between institutions (e.g. national parks authorities, research institutes) and programmes (e.g. Biosphere Reserves, regional river basin management), as well as North-South partnerships;

· Participating in the development of trade policies which support both development and environmental challenges and internalise environmental and social externalities of forest management.

Examples of actions to be supported, consist of:

· maintaining a strong pro-active presence in the international discussion fora and follow-up recommendations related to forests, such as the CBD, FCCC, CCD, CITES, IFF, WTO/CTE, UNCTAD;

· supporting the establishment of global forest monitoring systems;

· contribute to international and national efforts to agree on standards and criteria for sustainable forest management, and other forest related topics;

· support the use of rules that apply world-wide in order to tackle the problem of trans-national logging companies operating in unregulated frameworks;

· encourage Governments to take advantage of tariff reduction opportunities under the General System of Preferences (GSP)[22], and to implement relevant international Conventions such as the UN-Convention to Combat Desertification, and the UN-Convention on Biological Diversity.

6.2. Improve, at field level, sustainability of interventions in forest conservation and use, as well as promote farm forestry and other sustainable and socially equitable forms of land use which have an impact on forests.

This will involve:

6.2.1. Within conservation and protected areas:

· Supporting the management of protection areas and buffer zones, including 'core' areas and wildlife and bio-corridors;

· Recognising, protecting, supporting and disseminating Traditional Forest-Related Knowledge and Technology (TFRKT), in particular traditional forest management systems.

6.2.2. Within forest areas: production forests and forest plantations

· Improving the economic, ecological and social sustainability of the production of wood, fuelwood, as well as non-wood forest products; as well as improving existing or developing new financial mechanisms for forest management;

· Ensuring participation of local populations in forest management schemes;

· Supporting the enforcement of existing forest legislation, in particular concerning illegal logging;

· Improving technology of forest management operations to increase ecological as well as economic sustainability inter alia through Reduced Impact Logging (RIL);

· Promoting the conservation of natural forests integrated in plantation mosaics, as well as multiple‑species plantations without reducing the actual area of primary forests;

· Facilitating the establishment of small‑scale plantations and woodlots on private lands, such as out-grower schemes, where the estimated yields and economic benefits justify such investments.

6.2.3. Within rural areas

· Integrating forest sector development with agriculture and watershed management;

· Concentrating development efforts in environmentally sensitive areas, especially those subject to desertification;

· Ensuring (i) adequate soil stabilisation though tree planting, for the protection of watersheds, roads and other infrastructure; (ii) regeneration and planting of fodder trees in dry lands; (iii) and integration of trees in agricultural systems through various forms of agroforestry, sylvo‑pastoral systems and farm forestry;

· Developing alternatives to agricultural practices that contribute to forest clearing and promoting sustainable agriculture, especially in areas close to forests and critical watersheds.

Examples of actions to be supported, according to country specific context, consist of:

(1) introducing sustained yield forest management techniques including soil and site mapping, inventories, harvesting plans, road network plans, low impact extraction techniques, transport organisation, regeneration measures and silviculture;

(2) providing support for the recognition of customary rights of indigenous peoples and other rural people living in or near the forests as well as for the reconciliation of formal and customary rights;

(3) strengthening community based production capacity and marketing operations, including quality control, primary and secondary processing (transport and storage), packaging, business management, community cost-benefit sharing agreements;

(4) refining gender-based planning in NWFP as women are important repositories of traditional forest knowledge and have specific needs;

(5) promoting energy conservation, biomass production, and the use of viable alternatives to fuelwood in case of shortages;

(6) supporting local and national capacity building on cultural aspects to allow a sound consideration of the multiple dimensions of forests and mediation between different forest stakeholders.

6.3. Improve the efficiency of utilisation and processing of wood and non-wood forest products, through equitable and comprehensive approaches, allying economic development and people’s interests.

This will be achieved by:

· Developing markets for existing and potential NWFP, and for lesser known timber species (LKS);

· Facilitating transfer of environmentally sound technologies to the private sector;

· Promoting local processing initiatives, based on timber and other forest products from sustainable sources, with a view to stimulating local employment generation and export earnings;

Examples of actions to be supported, according to country specific context, consist of:

(1) upgrading product chains, industrial and processing operations by introducing modern techniques and appropriate technology for timber conversion, drying, grading, storage, quality control, energy efficiency, waste utilisation, chain of custody, marketing of products;

(2) establish private entrepreneur-ship, especially small-scale and community based, in the various forest-related branches - forest management, farm forestry, nurseries and wood industry, in the wider context of private sector development;

(3) improve marketing and enhancing trade of wood and non-wood forest products from sustainable sources, using lesser known timbers, secondary forests, certification mechanisms and development of local/regional product brands, quality standards and labels.

6.4. Contribute to the development of research, information, capacity building, and technology transfers in support to the above.

This will be achieved by:

· Contributing to the strengthening of developing countries research capacity by inter alia mobilising the strengths, expertise and resources of the European as well as international scientific community

· Promoting information exchange and research concerning forest ecosystems, services and products, land tenure systems and indigenous peoples’ rights;

· Providing high quality scientific and policy oriented information for policymakers and planners in order to improve their decisions about land use and forest management;

· Facilitating the training of the various stakeholders involved in the forest sector, for the efficient utilisation of forest resources, including energy uses.

Examples of activities to be supported, according to specific national or regional contexts, can include:

(1) assessment of ecosystem dynamics and modelling, and study of its resilience to anthropogenic action; as well as assessment of biodiversity, for instance in terms of its importance as a gene pool, and study of its relationship with logging and other harvesting practices;

(2) research on the potential for long-term c