World Rainforest Movement

Increased poverty, land conflicts and deforestation: The Asian Development Bank’s plantations record

The ADB has handed out more than US$1 billion for forestry projects since its first forestry project in 1977. Most of the Bank’s recent forestry projects were rated “partially successful or unsuccessful”. The Bank acknowledges “problems with project design and implementation” and that “its [forestry] sector investments have had a minimal positive impact on forest loss and degradation”. Even this “minimal positive impact” is a result of defining a plantation as a forest. According to the Bank, clearing villagers’ forests and farmlands and replacing them with monoculture tree plantations is “positive”.

More than 80 per cent of the Bank’s loans for forestry projects went on establishing plantations. ADB-funded plantations have repeatedly failed due to poor selection of species, fire, disease or because the land on which they are planted was already in use by local people. Many of the Bank’s plantation projects were poorly designed and weakly monitored.

The ADB’s own documents reveal the problems clearly, as the following extracts illustrate. A project in Western Samoa was delayed “due to prolonged, and sometimes breakdown in the negotiation to secure lease of land owned collectively”. In the Philippines, an ADB plantation project “suffered from deficiencies in Project design and implementation.” The plantations established were poorly maintained and “were characterized by highly uneven and low tree growth rate.” An ADB-funded project established 20,000 hectares of plantations in Bangladesh, but villagers who took part in the project “received only minimal benefits”. The result was “impatience and a feeling of resignation among participants” and “a potentially hostile social environment.” At a project site in Nepal, only about one-third of the Bank’s target area of 5,000 hectares could be planted, “primarily because of encroachment by squatters”.

A Timber Plantation Project in Indonesia aimed to plant on 51,000 hectares of “unproductive shrubs and grasslands”. At project completion, just over half the target area had been planted. The ADB’s Project Completion Report describes the damage to the plantations by fires and failing species as “staggering”. The tree species selected for the project “were not based on proven field trials, and were not sufficiently reassessed during site planning and preparation of plantation site designs.”

One of the companies carrying out the planting, Inhutani III, clashed with Indigenous People in West Kalimantan. An Indonesian NGO, the Institute of Dayakology Research and Development, accused Inhutani III of using force in taking over lands from indigenous communities. The Bank hired a consultant for a few weeks and rejected the allegations, although the project area was reduced to exclude “areas where potential land tenure claims could rise”.

Under the Bank’s Industrial Tree Plantations Project in Laos, loans were given to farmers to plant eucalyptus trees. Many of the trees failed to grow, leaving farmers with no means of repaying the debt. “Thousands of inexperienced farmers and individuals were misled by prospects of unattainable gains, leaving the majority of farmers with onerous debts, with no prospect of repaying their loans, and with failing plantations,” notes a report by the Bank’s Operations Evaluation Department.

The project also supported commercial tree plantations. One of the companies involved, BGA Lao Plantation Forestry (now taken over by Japan’s Oji Paper) used ADB funding to bulldoze commons, forest and villager’s farmlands to make way for its monoculture eucalyptus plantations.

Monitoring by ADB staff of plantation projects is weak. In Laos, Bank missions included few trips outside Vientiane. Between 1996 and 2003 there was no forestry specialist on any of the Bank’s project review missions to Laos. Between July 2000 and February 2002 there were no ADB review missions to the country at all.

In an earlier project in the Philippines, only one socio-economic survey was carried out and only one Bank mission included a visit by a forestry specialist to the project sites. The Project Performance Audit Report notes that “There was little or no assessment of plantation growth performance, review of the appropriateness of Project design, and determination of the adequacy of Project staffing input and technical competency. No technical advice on forestry establishment or assistance in the Project performance management system was provided.”

Since 2000, the ADB has been carrying out a review of its Forest Policy. An open discussion on the problems created by the Bank’s lending to the forestry sector (as well as the impact on people and forests of the Bank’s lending to roads, dams and mining) is long overdue. But the most recent publicly available draft of the proposed policy is dated June 2003. Since then, ADB staff have promised on several occasions that a new draft would be made available to the public. In January 2008, the ADB’s Senior Public Information and Disclosure Coordination Assistant, Robert Paul S. Mamonong, promised that a “draft synthesis report is being revised and is expected to be ready by April 2008.”

A few years ago, Javed H. Mir, the ADB’s forestry specialist, gave a presentation about a “Regional Study on Forest Policy and Institutional Reforms” carried out by the Bank. He answered his own question, “What not to do?” with “Not to repeat mistakes”. Following his advice would mark a dramatic break with history for the ADB. Repeating mistakes seems to be precisely what the Bank is determined to do. The Bank’s June 2003 draft forest policy, for example, aims to “increase the extent and productivity of plantations”.

Instead of continuing to promote problems, the Bank should stop financing industrial tree plantations.

By Chris Lang,