World Rainforest Movement

Old Growth Forests at Risk: World Bank Wants to Get into the Logging Business

A draft “Revised Forest Strategy for the World Bank Group” was recently placed on the World Bank’s web page ( www.worldbank.org/forestry ). The draft strategy is scheduled to be discussed by a Sub-Committee of the World Bank’s Board in late September and to be adopted by the full Board by the end of 2001. Strategies intend to provide guidance for World Bank staff but their recommendations are not binding. Operational Policies (OP) on the other hand are binding documents and provide the most important yardstick against which civil society groups can hold World Bank staff accountable.

The draft forest strategy contains several pages which outline a new Forest OP. Much like a Trojan Horse, adoption by the World Bank’s Board of the strategy, would include acceptance of the direction set out by the OP that is embedded in it.

The OP as outlined in the draft strategy is concerned about getting the World Bank to “re-engage” in the forestry sector by directly investing in logging operations. The argument being made is that the Bank cannot be effective in promoting better forest protection without being a financial player in the logging business. At best, the argument is naïve. It is widely acknowledged today that the underlying causes of forest destruction are located outside the forest sector. A Forest Policy Review carried out by the Bank’s own evaluation department (OED) concluded that the main pressures on forests are corruption, trade liberalization and globalization. World Bank structural adjustment programs finance precisely the economic policy reforms which OED considers to be driving forces of deforestation. Yet structural adjustment is not subject to environmental assessment. The World Bank can exercise great influence on the future of the world’s forests by ensuring that its own operations do no harm and through its policy dialogue with borrowing countries. Yet, the outline of the OP is silent on these critical issues

The OP as outlined in the draft strategy represents a rupture with the World Bank’s 1991 Forest Policy Paper and subsequent OP on Forests (OP 4.36) which explicitly prohibit the Bank from supporting logging in primary, tropical moist forests. World Bank support for logging, including financing by the IFC and MIGA, the World Bank’s affiliates which subsidize the private sector, would open the floodgates for the expansion of large-scale industrial logging. Much of this logging would take place in the world’s old growth forests where profits are generated quickly. What about the rights of indigenous and other forest-dependent peoples, the protection of biodiversity and ecosystem services, such as watershed protection?

According to the outlined OP, the World Bank would use two instruments to address the social and environmental concerns. On the one hand, it would apply its existing safeguard policies, such as the OPs on Natural Habitats and Indigenous Peoples, and, on the other, it would promote independent certification of forestry operations. The use of these instruments is not at all reassuring. The existing safeguard policies are not focused on forests and contain sufficient loopholes and ambiguities to be of limited value to forestry operations. In addition, the World Bank’s evaluation department (OED) continues to document the institution’s poor record in implementing its own safeguard policies. An additional troublesome development is that the Bank is currently re-writing some of these policies and weakening policy requirements related to the protection of vulnerable groups and the environment. While independent certification is theoretically a promising tool to control rampant logging, even the best existing systems, such as the Forest Stewardship Council, have great trouble protecting endangered species and suffer from a multitude of problems. Certification schemes in which international criteria and standards are left undefined and where no mechanisms for public participation are established, are a recipe for disaster.

The World Bank needs an unambiguous, strong safeguard policy (OP) for forests, which

– Secures the rights of forest dwellers;
– Ensures that non-forest sector lending does not damage forests and forest peoples;
– Proscribes World Bank Group financing of logging in old growth forests.