1.3 Objectives and the Methodology of this Review
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Review of the Implementation of the Master Plan for the Forestry Sector of Nepal April, 2014 Prepared for The Ministry of Forests and Soil Conservation Singh Durbar, Kathmandu 1 Foreword The Master Plan for the Forestry Sector (MPFS), implemented in 1988 and concluding in 2011, has provided the policy framework for forest conservation and management in Nepal for the last 25 years. The country experienced significant political, economic, and environmental changes during the over two decades of MFPS. The forestry sector itself faced challenges and opportunities, resulting from changes internal and external. In short, much has changed in Nepal and across the world since 1988. With the end of the MFPS in 2011, the Ministry of Forests and Social Conservation (MFSC) must now prepare a new, relevant, and innovative forestry strategy for the future. A comprehensive review of the MPFS and the contexts in which it operated must serve as a basis for the new Forestry Sector Strategy (FSS). This review of the MPFS has been possible due to the support of several government and non-government organizations as well as individuals. The MFSC highly values and appreciates their support. The MFSC would also like to extend its sincere thanks to the Multi-Stakeholder Forestry Program (MSFP) and the Hariyo Ban Program for supporting the review process. The MFSC would like to thank the team involved in reviewing MPFS and preparing the FSS for their sincere effort in producing this report. MFSC acknowledges the extensive support of Joint Secretary Mr. Ram Prasad Lamsal in coordinating the effort. MFSC would also like to extend its appreciation to Dr. Keshav Raj Kanel, Dr. Dhruba Prasad Acharya, Dr. Binod Bhatta, Dr. Bharat Kumar Pokhrel, Ms. Madhu Ghimire, Mr. Nav Raj Baral, and Mr. Peter Branny for their contribution in shaping this report. For their support and assistance throughout the process, MFSC would also like to recognize Mr. Krishna Prasad Acharya, Joint Secretary, MFSC; Dr. Bishwa Nath Oli, Director General, Department of Forests; Resham Bahadur Dangi, Deputy Director General, Department of Forests; Mr. Pem Kandel, Director General, Department of Soil Conservation and Watershed Management; Dr. Maheshwar Dhakal, Department of National Parks and Wildlife Conservation; Mr. Hasta Bahadur Thapa, Department of Forest Research and Survey; Mr. Ram Nandan Sah, Mr. Tirtha Raj Joshi, Dr. Anuj Sharma and Mr. Bishal Ghimire from the Department of Forests. MFSC also acknowledges the following individuals for their work in collecting data and preparing an initial draft of various sectoral program reports: Mr. Yajna Nath Dahal, Mr. Kumud Shrestha, Dr. Jaggannath Joshi, Mr. Pashupati Nath Koirala, Mr. Krishna Prasad Osti, Mr. Dil Raj Khanal, Dr. Bikram Tamang, Ms. Sangita Bista, Mr. Nagendra Regmi, and Mr. Injun Acharya. MFSC also thanks Ms. Dibya Gurung for her input to the GESI section of this review report and Ms. Surabhi Pudasaini for editing this report. For providing relevant data and information, MFSC would like to extend its sincere appreciation to the Office of the Auditor General, Ministry of Finance, Financial Comptroller General Office, all departments of MFSC, Timber Corporation of Nepal (TCN), Forest Products Development Board (FPDB), Herbs Production and Processing Company Limited (HPPCL), Trade and Export Promotion Center (TEPC), Singhadurbar Vaidyakhana, Gorkha Ayurved Company, Agro Enterprise Center of the Federation of Nepalese Chamber of Commerce and Industry (AEC-FNCCI). MFSC would also like to thank the following associations for their input: Nepal Forester’s Association (NFA), Federation of Community Forest Users in Nepal (FECOFUN), Association of Collaborative Forest Users of Nepal (ACOFUN), Nepalese Federation of Forest Resource User Group (NEFUG), Himalayan Grassroots Women’s Natural Resources Management Association Nepal (HIMAWANTI-Nepal), Federation of Forest Based Industry and Trade, Nepal (FenFIT), Nepal Federation of Indigenous Nationalities (NEFIN), Federation of Private Forest Stakeholder Nepal (FEPFOS-Nepal), Forest Environment Workers' Union Nepal (FEWUN), Green Growth Nepal (GGN), Dalit Alliance for Natural Resources (DANAR), Nepal Herbs and Herbal Products Association (NEHHPA)and the National Forum for Advocacy Nepal (NAFAN). Lastly, MFSC would like to extend its sincere appreciation to all individuals and organizations who contributed directly or indirectly to preparing this report. 2 Acronyms ACAP AFU APP BISEP-ST BZMC CBD CDM CDO CEGR CF CFM Cft CIAA CIFOR CITES CNP CTEVT DDC DFCC DFID DFO DFRS DNA DNPWC DoF DPR DSCO DSCWM FAO FDF FECOFUN FINNIDA FMUD FORESC FPDP FRDP Annapurna Conservation Area Project Agriculture and Forestry University Agriculture Perspective Plan Bio-diversity Sector Programme for Siwaliks and Tarai Buffer Zone Management Committee Convention on Biodiversity Clean Development Mechanism Chief District Officer Conservation of Ecosystem and Genetic Resources Community Forests Collaborative Forest Management Cubic Feet Commission for the Investigation of Abuse of Authority Center for International Forestry Research Convention on International Trade in Endangered Species of Wild Fauna and Flora Chitwan National Park Council for Technical Education and Vocational Training District Development Committee District Forestry Coordination Committees Department for International Development District Forest Office Department of Forest Research and Survey Deoxyribonucleic acid Department of National Parks and Wildlife Conservation Department of Forests Department of Plant Resources District Soil Conservation Offices Department of Soil Conservation and Watershed Management Food and Agriculture Organization Forest Development Fund Federation of Community Forestry User Groups of Nepal Finnish International Development Agency Forest Management and Utilization Development Project Forest Research and Survey Centre Forest Product Development Board Forest Research Development Plan 3 FSRO GDP GESI GFP GAD GO GoN GRB Ha HRD HRM IAS IFAD IGA IOF ITTO IUCN KAFCOL LAPA LFLP LFP LFUG LRMP M&E MAP MDG MEA MoAD MoE MoF MPFS MRV MFSC M3 NAPA NCCNR NEPAP NFAP NFI Forest Survey and Research Organization Gross Domestic Products Gender, Equality and Social Inclusion Gender Focal Person Gender and Development Government Organization Government of Nepal Gender Responsive Budget Hectare Human Resource Development Human Resource Management Invasive Alien Species International Fund for Agricultural Development Income Generating Activities Institute of Forestry International Tropical Timber Organization International Union for Conservation of Nature The Kathmandu Forestry College Local Adaptation Plans for Action Leasehold Forestry and Livestock Program Livelihoods and Forestry Program Leasehold Forest User Group Land Resource Mapping Project Monitoring and Evaluation Medicinal and Aromatic Plants Millennium Development Goal Multilateral Environmental Agreement Ministry of Agriculture Development Ministry of Education Ministry of Finance Master Plan for Forestry Sector Measurement, Reporting and Verifications Ministry of Forests and Soil Conservation Cubic Meter National Adaptation Programme of Action National Commission for Conservation of Natural Resource Nepal Environmental Policies and Action Plan National Forestry Action Programs National Forest Inventory 4 NFRP NGO NP NPC NSCFP NTFP OFMP PA PAF PES R-PIN RBME REDD RPP RRI SCWM SDC SESA SHL SNNP SNP SNV SPCR SPS TAL TCN TFAP TISC UNFCCC UNFF VAT VDC WID WR WUPAP WUPAP WWF This National Forest Research Plan Non-governmental Organization National Park National Planning Commission Nepal Swiss Community Forestry Project Non-Timber Forest Product Operational Forest Management Plan Protected Area Poverty Alleviation Fund Payment for Environmental Service Readiness Program Idea Not Result Based Monitoring and Evaluation Reducing Emissions from Deforestation and Forest Degradation Readiness Preparation Proposal Rights and Resources Initiative Soil Conservation and Watershed Management Swiss Development Cooperation Strategic Environment and Social Assessment Sacred Himalayan Landscape Shivapuri-Nagarjun National Park Sagarmatha National Park SNV Netherlands Development Organization Strategic Program for Climate Resilience Sanitary and Phytosanitary Standards Tarai Arc Landscape Timber Corporation of Nepal Tropical Forest Action Plan Tree Improvement and Silviculture Component United Nation’s Framework Convention on Climate Change United Nations Forum on Forestry Value Added Tax Village Development Committee Women in Development Wildlife Reserve Western Upland Poverty Alleviation Project Western Uplands Poverty Alleviation Project World Wide Fund for Nature 5 Executive Summary MPFS started in 1986 but was finalized in 1988 with a planning horizon of 25 years. The goal of the plan was to meet the Nepali people’s basic needs for forest products, protect the land, conserve the ecosystem and genetic resources, and contribute to economic growth. A logical analysis of the goal, objectives, and strategies led to the formulation of six primary and six supportive forestry development programs. These had to be coherently and consistently implemented to restore the declining forests and expand the opportunities in productive employment and economic growth through forest-based industries. About 92 percent of the total projected cost (USD 1.74 million constant to 1988 exchange rates) of the MPFS was allocated for the implementation of six primary programs. The remaining eight percent of the cost was allocated to the six supportive programs. Over the last decade, two other themes – Gender, Equity and Social Inclusion (GESI) and Climate Change – emerged as important programs of the forestry sector. This summary presents the achievements, lessons, and the future direction of forestry based on the findings emerging from the review of these twelve plus two programs. In broad strokes, this review finds that the success of the forestry programs depends significantly on inclusive and credible policy, accountable governance, and bottom-up planning. Community and Private Forestry This is the first priority program of the MPFS. The program aimed to develop and manage forest resources through the active participation of individuals and communities to meet their basic needs. The MPFS envisioned three major outcomes under the community and private forestry program: increased area of sustainably managed natural forests, restoration of open and degraded forests both in public and private land, and reduction in the consumption of fuelwood through the promotion of improved cook stoves and the adoption of biogas. This has been the most successful forestry program. There are now about 1.7 million ha of community forests in Nepal (representing about 29 percent of the total forests) and about 2.25 million households as members of community forestry user groups (CFUGs). The program has contributed to halting forest loss and degradation (especially in the mid-hills) and has increased the access of the rural people to forests and forest products. Lessons from the community forestry program have influenced other development programs in Nepal. The program has also influenced community forestry approaches in other countries; community forestry is now globally recognized as a successful development initiative that has achieved impacts both inside and outside the forestry sector. Other associated components of this program such as seedling distribution, enhanced use of fuel-saving devices, and biogas installations have also been successful. The greening of the landscape and increased biomass mainly in the mid-hills is attributed to the success of community forestry as supported by the forestry legislation of 1993 and the autonomy granted to CFUGs. Though designed to fulfill household needs for forest products, more than half the supply of commercial logs are today sourced from community forests. Recent information from Community Forestry Division suggests that CFs generate three times more revenue than the national forests under the jurisdiction of the Department of Forests (DoF). Though community and private forestry are classified as one program, the situation between the two is somewhat different. There is rather less policy-levels support for the latter. For example, while some seedlings were distributed to local households for private tree plantations, no further 6 commitments have been made by the government. Nonetheless, farmers seem enthusiastic about planting and nurturing trees on their private land. This can be seen in the increasing supply of soft wood to veneer and plywood industries from private tree plantations. A number of issues remain in both the community and private forestry sectors. First, better income and employment generating programs for community forest users are required. Second, CFUGs need support in harvesting and marketing forest products. Third, the imposition of VAT on private forest products requires further consideration. Finally, excessive regulations on harvesting, transporting, and trade of forest products increases the cost of doing business across the board. National and Leasehold Forestry This is the second priority program of the MPFS, targeting the Tarai and the mountain districts. The plan proposed to have either the government or the corporate sector manage large blocks of forests located at a distance from villages. The main aim of these forests was to produce wood needed for urban use and forest-based industries. The plan also proposed large scale plantations or enrichment plantations by the government (national forests) or by the private sector (leasehold forests). Limited progress in managing national forests was made during the MPFS period. Several efforts were, however, made to better manage Tarai forests. Key among these was the Forest Management and Utilization Development Project (FMUDP). FMUDP developed a model of technical forestry for the Tarai forests, though this was never implemented. At a later stage, several efforts were made to develop and manage forest resources in the Tarai through the establishment of District Forestry Coordination Committees (DFCC), creation of forests in public land, private sector participation in the forest development fund, and through the production and distribution of seedlings. More recently, some progress has been made in managing blocks of Tarai forests through the CFM model in partnership between the DFO and local/distance users. To date, 54,100 ha of forest have been managed as CFM. Similarly, 133,000 ha of forest land has been declared protected forests for biodiversity and environmental conservation. A new initiative has attempted to involve all actors within the forestry sector in preparing a District Forestry Sector Plan. Significant progress has been made in implementing pro-poor leasehold forestry. Under this program, which was not conceived in the MPFS, about 41,300 ha of forest land has been leased to poor households. A total of 6,957 leasehold forest (LF) groups have been formed, with a membership of 65,402 households. Of these groups, about 88 percent are reported to be functional and about 68 percent fall in the good to moderately good category. The national forest program has been constrained by a number of issues. Among them, the lack of decentralized institutional mechanisms to foster local people’s participation is a key issue. Other issues include: lack of forest land use classification; mounting pressure on the forests of the Tarai and Chure due to changes in demography; frequent policy changes in the allocation of forests as well as in the harvest and sale of forest products; wild fires, uncontrolled grazing, and the illegal removal of forest products; increased work burden of the DFO staff; lack of skills to ensure practice of sustainable forest management; haphazard conversion of national forests into protected forests reducing the potential of multiple use; and forest encroachment and degradation. 7 Wood-based Industries This program aimed to facilitate the conversion of wood into commodities needed by the people, and to contribute to economic development through industrialization. Significant gaps remained in the demand and supply of timber during the entire period of MPFS. This adversely impacted the efficiency, growth, and sustainability of forest-based industries. Forest-based industries also suffered in the absence of various supportive policies. Furthermore, the proposed low-cost financing to forest-based industries for renovation, expansion, and pollution-control facilities were also not realized in practice. The production of veneer and plywood has significantly increased over the years due to the availability of soft wood mostly from private forests, and to a lesser degree from community forests. The insecurity of investment in timber production/processing has de-motivated investors. The situation has been further exacerbated by the absence of planned forest management, unsustainable supply of raw materials, and inconsistencies in policies. The issues that need to be tackled include: enhanced supply of wood from government-managed and community forests, encouraging private entities to undertake leasehold forestry, arranging financing at low interest rates through private sector actors, and simplification of procedures for transporting forest products. Furthermore, there is pressing need to carry out research on fast-growing short rotation timber species. NTFP/MAP Development This program aimed to increase the supply of NTFPs/MAPS, provide employment opportunities, and contribute to the growth of the local and national economies. The MPFS intended to promote MAPs, and five other NTFP groups of products (lokta, sal-seed, katha and cutch, pine resin, and sabai grass). Among these, sal-seed and sabai grass are not currently being used as projected by the MPFS. For the promotion of MAPs, the government prioritized 30 species of MAPs/NTFPs, but only 19 species have been traded widely. The supply of lokta has been low for the last five years while that of Khair has been fluctuating over the course of the last two decades. In contrast, the pine resin processing industries have grown significantly, increasing the area and quantity of resin tapping. Despite the significant gap in the projected demand and supply of various NTFPs/MAPs, they still make up about 8 percent of total exports. This is very low considering the full potential. Part of the problem is the decreasing supply of NTFP resources from the wild. Meanwhile, there is little cultivation on private land either through intercropping in agroforestry or as a single crop. The subsector is also adversely affected by practices such as arbitrary granting of transport permits, levying of informal fees during transport, and taxation on NTFPs/MAPs produced in private forests and agricultural land. Soil Conservation and Watershed Management The MPFS acknowledged the very high rate of soil erosion as well as the rapid deterioration of watersheds. As a result, it aimed to protect and conserve watersheds through the mobilization of national and local resources. During the plan period, on-farm conservation activities took places in 5,746 ha of agricultural land. Rehabilitation activities were also undertaken over 10,000 ha of degraded land, on 1,600 gullies, and on 1,000 landslides of various scales. Furthermore, protection activities were undertaken on 1,489 drinking water sources with construction done on 847 8 conservation and run-off harvesting ponds. A total of 413 watershed management plans, 304 subwatershed management plans, and 1,167 community development plans were prepared and implemented at different scales. Soil conservation and watershed management services were expanded from 25 project districts to 56 regular districts. Despite all these improvements, the physical targets set by MPFS were not fully achieved. Furthermore, the progress made cannot be directly compared to the plans laid out in the MPFS as many of the targeted activities were either renamed or merged. Insignificant progress was made in meeting people’s demand and fulfilling conservation needs. Though the Soil and Watershed Conservation Act was enacted in 1982, its provisions were not adequately implemented. Furthermore, the act did not strengthen institutional and organizational arrangements for the proper use of land resources and coordination among agencies. As a result, protection and regulatory measures were not enforced in critical watersheds. In recent years, the challenges of soil erosion have become further intensified due to improper land use, road track opening by using bulldozers, and due to large-scale and improper excavation of stones, pebbles, and sand. The DSCWM, however, does not have adequate capacity to address such challenges. Conservation of Ecosystem and Genetic Resources This program aimed to protect special areas for their eco-system and genetic resource values as well as to promote in-situ and ex-situ conservation of plant and animal genetic resources. To this end, operational strategies were proposed in five program components including protected area management, genetic resources conservation, visitor use and tourism, preservation of natural and cultural values, and institutional strengthening. The expansion of protected areas for in-situ conservation was quite significant after the implementation of MPFS. The area of PAs has increased from 7.4 to 23.23 percent during the plan period. The policy shift from 'people exclusionary' and 'species focused' to 'people-centered community based' and 'ecosystem/landscape approach' is also a significant achievement. The population of several protected animals such as tiger, rhino, and wild buffaloes are also increasing. In addition, other major efforts made for ex-situ conservation during the MPFS period included: reform of the central zoo; establishment of breeding and conservation centers for elephants, vultures, and gharial; translocation of rhino and blackbuck; and establishment and maintenance of botanical gardens and a national herbarium. Despite such progress, a number of issues and challenges exist for the conservation of ecosystem and genetic resources. Wildlife poaching and the illegal trade in wildlife parts and NTFPs has remained a serious conservation challenge. Human-wildlife conflict in and around PAs has become a major obstacles for conserving wild animals, particularly threatened species. Poaching of and illegal trade in plant/animal species and their parts is also a serious threat. Furthermore, the concentration of visitors in just a few protected areas has accelerated negative environmental impacts. The expansion of invasive alien species (IAS) is also a serious threat to forest ecosystem and biodiversity conservation. Meanwhile, within forestry organizations, there are staff problems both in terms of number and capacity of existing employees. There are similar problems in budget allocation, infrastructure, and logistics. 9 Policy and Legal Reform The reform agenda for forestry policy was explicitly aimed at increasing the supply of forest products for both household consumption and for urban/industrial needs; reducing the demand of fuelwood through improved stoves and biogas; conserving the biodiversity and genetic resources; focusing on integrated farming and improved watershed through decentralized land use planning; and increasing the role of private sector in forest industries and enterprises. Based on these points of the reform agenda, five strategies were proposed. One of the strategies was solely devoted to policy implementation. This strategy called for reforms in forest law to promote community forests based on decentralized users’ groups. The strategy also called for improving the livelihood of the poor dependent on forests; reforming the roles and responsibilities of forest agency staff; providing extensive and intensive retraining to forestry staff so that they become advisers to users’ groups; expanding the capacity of the communities and the government in planning, research, and extension; and fostering the involvement of NGOs in forestry programs. Some of these reform strategies were taken on board by the Forest Act 1993 and the Forest Rules 1995. Indeed, some of these reforms are more empowering than those recommended by the MPFS. These legal regimes allow the communities to manage forests anywhere, and also sell the surplus products in the market. They could use the money thus generated for livelihood and community development. The autonomy granted to CFUGs has helped in the development of democratic platforms at the grass-roots level for social and political mobilization. The decentralization continued even in the management of buffer zones around National Parks and Reserves, and watershed management at the sub-watershed level. Legal provisions on pro-poor forestry, though not articulated in the MPFS, have expanded further opportunity to reduce poverty and increase greenery in the degraded forest land. Community-based management has been extended to climate change adaptations such as LAPA. Forestry planning has been based on a bottom-up and multistakeholder approach even though the budget is provided by the NPC. A Forest Development Fund has been established to carry out forest regeneration and management. Though the fund has yet to be operationalized, the idea is to have half the total budget collected by raising funds from private timber traders. Policy provisions have, however, been weak in nurturing commercial leasehold forestry, promoting wood-based industries, and managing government forests. While TCN is still operating, its market share has significantly reduced. The Nepal Fuelwood Corporation has been merged with TCN. The HPPCL though still in operation gets its raw material through competitive bidding. The size and scope of the Forest Products Development Board has also been significantly reduced, with its area of operations shrinking to less than 20,000 ha in the central and eastern Tarai. A forest land use policy has not been formulated although potential areas of community and leasehold forestry have been estimated. The challenges in policy/legislation relate to the frequent, abrupt, and unilateral ‘policy’ declarations which go against the spirit and letter of the forest act and regulations. Institutional leasehold forestry rules are not compatible with the incentives for commercial actors. In short, policies on forest enterprise development are conflicting and lead to underinvestment in forestry operation and industries. 10 Institutional Development Plan The Institutional Development Plan (IDP) of the MPFS was prepared to facilitate systematic organizational development of forestry sector institutions. The plan proposed to reorganize the MFSC and its various departments. The short term goal was to immediately eliminate the most oblivious short comings. The long-term goal was to continuously strengthen the MFSC to ensure effective implementation of MPFS plans and programs. As proposed by the IDP, the MFSC, its departments, and some parastatals were restructured, dismantled, or privatized. After the implementation of MPFS, a drastic change in structure and staffing was made in 1993 and 2000. However, both these reforms undermined the spirit and strategies set by the MPFS. These reforms were reported to be much influenced by the values of the High Level Administrative Improvement Commission and the Structural Adjustment Program. But they failed to address the issues of forestry organizations, creation of social image, professionalism, retention of proactive forestry professionals, and fostering of change agents in the government service. The issues around inadequate structure, limited human, physical and financial resources, and cooperative political leaders still exist. The most pressing need of the day, when looking at the forestry sector from a holistic point of view, is to make organizations context specific and decentralized. Human Resources Development This program is related to the state of human resources within the MFSC, the parastatals, and educational institutes providing training. The demand and supply projections were made, gaps were identified, and a financial plan presented. The objective of the plan was to provide human resources necessary to implement the MPFS programs. This, however, was a very narrow focus. Many important aspects of human resource development such as transfer and promotion system, career planning and development, workforce diversity, and succession planning were left out. The restructuring of 1993 and 2000 missed both the provisions and the spirit of the MPFS. Nevertheless, significant progress has been made in some aspects of human resource development. Major achievements were made in forestry education and training. Forestry education at the bachelors, MSc, MPhil, and PhD levels are offered at various institutes. Within the forestry sector, reorientation and re-training of forestry staff was emphasized by all institutions and projects. The HRD and training division at the center and five regional centres have also been institutionalized. All these changes, together with new opportunities for workshops, seminars, and study tours have significantly contributed to changing the role of forestry field staff from ‘policing’ to ‘facilitating’. The HRD and HRM, however, face a number of issues and challenges. The human resource system – appointment, transfers, appraisal, promotion, training – is still very ad hoc. The MFSC also does not have a HR policy or an information system. In a grave oversight, there is no appropriate grievance handling mechanism. This is further exacerbated by a leadership style that is either feudal or laissez-faire. The attitudinal aspects of staff including intentions, commitments, enthusiasm, and inspiration are often ignored. As a result, the sector has failed to attract and retain competent human resources as well as failed to address GESI issues. 11 Forestry Research and Extension This program aimed to strengthen the research capacity as well as expand extension service to utilize research results for the benefit of the forestry sector. The achievements of the program have been mixed. The overall research capacity of the ministry and department to carry out the research effort from conceptualization to reporting has been weak across the board. Indeed, the research agenda has rarely been crafted based on the needs of the users. For example, the forestry sector has not adequately researched its contribution to environmental protection, social inclusion, and especially its impact on economic development aimed at poverty alleviation. Similarly, minimal research has been done on the impact of tourism, industry, and other factors on watersheds and national parks. Forest Resource Information and Planning The main aim of this program is to develop national capacity to conduct forest surveys and gather information on forest resources that can be fed into both long-term and operational planning. While information generation was not satisfactory in the MPFS period, good progress has been made in institutionalizing participatory bottom-up planning in some sub-sectors. Nonetheless, the forest resources information generated is not adequately disaggregated by either physiographic and political boundaries or forest management regimes. There is a pressing need for such disaggregated information. Indeed, a user friendly forest resources inventory map should be prepared by both physiographic region and forest management regimes. Monitoring and Evaluation This program aimed to institutionalize a system for monitoring forestry operations and their impacts as well as use the gathered information to guide the development process. The MFSC practiced a M&E system guided by the NPC, and thus designed to cover all sectors of the GoN. As a result, it did not capture the requirements set by the MPFS for its programs. In fact, it hardly reflected the status of implementation of MPFS. To date, there has been little achievements in implementing four sets of activities (Designing a M&E system, capacity building, collaborating, and using advanced techniques) proposed by the MPFS’s M&E plan. Though a computer-based M&E system was designed, it was never used except in the case of the community forestry database. The individuals working in the M&E division are treated as inferior to those in other sectors, and thus lack motivation in carrying out their tasks. Donor funded projects and programs regularly monitor and evaluate their activities, outcomes and impacts, but their institutionalization and sustainability are weak as they are not followed through once funding from donors is terminated. Climate Change and Forestry Climate change has become a global issue since the Rio conference of 1992 though it was not a concern when the MPFS was drafted. With two main components - carbon mitigation and adaptation - the overall policy on climate change is guided by climate adaptation, mitigation and carbon sequestration as well as mobilization of financial resources for technology development/transfer and for capacity-building. From Nepal’s perspective, climate change adaptation at the community level is an important approach as articulated in the climate change 12 policy, NAPA, and LAPA. On the mitigation front, MFSC is now preparing a REDD+ strategy to reduce deforestation and degradation and enhance forest management through financial assistance from the World Bank. Lessons from community forestry have been expanded to climate adaptation in the LAPA process. Climate adaptation plans can be designed and implemented by the groups formed under the forestry sector at the local level. As monitoring, review and verification (MRV) and social safeguards are important components of REDD+, they can be very useful tools to conserve, manage and use the forests. The issue of who owns the carbon has been hotly debated in different forums. The debate is focusing on whether the payment under REDD+ should go to government first and then be channeled to other community-based organizations. The question of whether a market mechanism, development grants, or a hybrid (mixed) payment mechanism is best is also unresolved. Gender, Equity and Social Inclusion The GESI strategy adopted by the MFSC in 2008 commits to ensure gender and social inclusion in the forestry sector. The Ministry has identified four change areas including: GESI sensitive policy and strategy, good governance and institutional development, GESI sensitive budgeting/programming and monitoring, and equitable access to resources and benefits. The objectives of the GESI strategy within the forestry sectors are twofold. First, it aims to assist government, non-government, donor and private sector bodies working in the forestry sector to institutionalize social inclusion in their organization and programs. Second, it aims to guide all organizations working in the forestry sector to be responsive and inclusive. The strategy has shown some results in a few areas. The representation of women in various regimes of community-based forestry has significantly increased. However, women’s participation in the state structure of MFSC is only 3.3 percent. The government has, however, committed to increasing inclusion through both the Interim Constitution of 2007 and the revised Civil Service Act. It also initiated a gender responsive budgeting practice in 2007/08. Yet, only 3.55 percent of the ministry’s total budget is directly earmarked for gender. The culture of male dominance is still prevalent in the society although the laws and rules are becoming more inclusive. The government is struggling to translate the emerging progressive policies into practice. Evolution of Political Economy and forestry The political economy of Nepal has changed significantly over the last 30 years. The country has undergone three constitutional and regime changes in that short timeframe. The MPFS was designed during the time when the monarchy had absolute power. The subsequent political change of 1990 which ushered in multiparty democracy led to a decentralization of forestry programs and the expansion of civil society. Empowering people to participate in development and conservation works was a mantra of this new regime. However, the armed internal insurgency beginning in 1996, led to the virtual immobilization of state authority. The state machinery, including the forestry sector, was virtually confined to urban areas. In 2006, a ceasefire was called and ultimately resulted in a peace treaty among the warring factions. 13 As part of the peace agreement, an interim constitution based on principles of republicanism, federalism, and proportional representation was drafted in 2007. Elections to a constituent assembly were held in 2008 and again in 2013, though this body has yet to produce the muchanticipated new constitution. Meanwhile, elections at the local level have not been held since 1997. In the long absence of legitimate and elected local officials, civil society bodies such as CFUGs have become major players in rural Nepal. Financial assistance, mostly donor funding, for forestry among other rural development activities, were channeled through these grass root organizations which were also more democratically formed and operated. These political transitions, which took place over the MPFS time period, had significantly affected forestry development in Nepal. The key political economic factors are listed below: The structure of the economy has changed. When the MPFS was drafted, agriculture and forestry accounted for more than 66 percent of the total GDP of Nepal. Today, the share of agriculture and forestry has gone down to about 33 percent. The MPFS allocated USD 1.7 billion for the implementation of the twelve programs described above. Excluding USD 1.1 billion of total allocation to be provided by the private sector, which is not recorded in the government’s accounting, the analysis shows that only about 35 percent of the total allocated amount was actually spend in the forestry sector. Similarly, the total share of government spending on the forestry sector has declined from 3.5 percent in 1992 to about 2.0 percent in 2011. The proportion of revenue from the forestry sector to the government has also decreased from 2.5 percent in 1993 to 0.25 percent in 2011. On the positive side, the income of the CFUGs has increased from zero in 1990 to about NPR 2 billion in 2011, which is about four times the government revenue from the forestry sector. There has been a demographic shift among the three ecological regions. About 60 percent of the total population used to live in the hills in late nineties. Now, more than 50 percent of the total population lives in the Tarai. Similarly, the urban population has increased from about 5 percent to 17 percent during the MPFS implementation period. This has significantly reduced the pressure on forests in the hills but increased pressure on the Tarai and Chure regions. The number of youth going overseas as labor migrants has soared to about five million, bringing in about USD 4 billion in remittances annually. This amounts to about 25 percent of Nepal’s total GDP. Most of this income is, however, spent on consumption with very little invested. Today, about 17 percent of household energy is met by LPG imported from India. In 1988, the share of LPG in household energy was negligible. Shortage of male labor (and consequently its high price) due to overseas employment and urban migration as well as the infusion of cash into the rural economy (due to remittance) has led to decreased pressure on forests. Alongside, there has also been an abandonment of marginal farming areas and its conversion into forests as well as the nurturing of trees on 14 farms in the mid-hills and mountains. This has led to increases in area and condition of mid-hills forests even as road networks have cut into forest areas to a degree. Increased demographic pressures, expansion of public infrastructure, and marketization of the economy has negatively impacted forest area and condition in the Tarai and the Chure hills. International experiences and discourses have shown that our understanding of forestry is continuously evolving. One major shift is that from centralized to decentralized forestry, with managing authority slowly being transferred to local communities and indigenous peoples. International experiences have shown that decentralized forest management systems under different forest regimes are better performing that centralized management systems. Moreover, international criteria of forest management now also covers tenure rights of the local people alongside their role in decision-making and gaining profits. While the GoN has carried out large-scale decentralization efforts, security of tenure rights of the local/indigenous users have been diluted over time. Learning and way forward Key lessons learnt from 25 years of MPFS implementation are grouped below into the following five categories: Management and Utilization of Forest Resources and Conserving Biodiversity Participatory approaches are highly effective for ensuring local commitment, local benefits and local awareness of plans and processes. They have been applied to forestry programs and in climate change policies. There is improved growing stock in many forests (particularly community forests) that have been effectively protected and managed over the past 25 years. However, they are not being used for value addition, employment generation and income growth. A critical factor for the success of CF is that CFUGs and other forest user groups can operate as autonomous, independent, and self-governing entities. The legislation that provides this mechanism needs to be ensured in future. Improved coordination between the primary programs of MPFS is needed. This would lead to better achievement across all programs. For example, community and private forestry can supply raw materials for wood and non-wood based industries and they can also contribute to the conservation of ecosystems and watersheds. A large part of the government-managed forests lack effective forest management and stakeholder participation. In fact, they are effectively open-access. Due to political instability and the lack of rule of law, large parts of the national forests are being converted to other land uses or are subject to illicit timber harvesting and forest degradation. DSCWM cannot fulfil the entire demand for soil conservation and watershed management services. Leveraging services from other agencies also concerned with watershed management such as forestry, agriculture, irrigation, roads, local development, environment, and hydropower can synergize soil and water conservation. The DSCWM needs to re-invent itself from implementer to facilitator. 15 Poaching and illegal trade in wildlife and forest products continues to be a critical issue. These have been exacerbated by civil unrest and poor rule of law during and after the conflict. The solution lies in effective management of resources, reducing poverty and enhancing good governance including enforcement. Successes in biodiversity conservation can have adverse impacts on forestry. The concentration of visitors in certain parts of the PAs and the need to develop associated visitor facilities is necessary to avoid environmental damage. Improved numbers of certain species - elephants and tigers - has the downside of increasing human wildlife conflict. Given this reality, the compensation processes for loss of life or property needs to become meaningful and more responsive. Forest resource information systems and planning need to be improved. Current levels of forest resource information and data management systems are insufficient for effective and transparent planning in the forest sector. Data should be disaggregated based on political and physiographic regions as well as based on forest management regimes. MFSC has too few qualified staff responsible for updating and analysing such MIS systems. Outsourcing to private agencies for data generation, analysis, and synthesis can mitigate this shortfall. There is a need to balance natural resource conservation with the needs of development. Roads, hydro-schemes, power-lines, and urban expansion are all necessary for Nepal’s development. But they also adversely affect forests and protected areas resulting in habitat fragmentation, higher levels of illicit use, and pressure for over-use of resources and land. Conservation cannot be tackled in an isolated way through a process of exclusion. Instead, the only way forward is by involving and informing decision-makers, planners and civil society in decisions. Policy and Legal Framework The policy framework must be backed up by supportive legislation in all interventions and programs. A deliberative and open policy development process will ensure its implementation. Various government orders, directives and regulations are inconsistent with forest policy and laws. This has particularly affected the wood-based industry, community forestry, and the national and leasehold forestry program where government restrictions on collection, transportation and marketing of forest products, and price controls exist. For investment and effective implementation, a transparent and predictable regulatory framework and operational environment is essential. Implications of the Local Self Governance Act (1999) need to be considered. There is a critical need to engage with local government at all levels to enhance accountability and to follow the spirit of decentralisation legislation. Inconsistencies between the LSGA and the Forest Act (1993) need to be removed or clarified. The application of Environmental Regulations for the forest sector needs to be reviewed as IEE/EIAs are legally binding for a range of forest management operations. They make program implementation expensive, time consuming, and the process seems to be redundant for sustainable forest management. 16 Forest Sector Institutions A constraint for most programs is a lack of speciality staff. Forestry staffs need to be trained in technical, managerial, and communication aspects of forestry. As the actual forest management is gradually decentralized to entities outside the government, the staff should be more skilful in regulation, monitoring, and facilitation. Nowadays many skill areas in forestry are also available outside government institutions. The sector must promote using them through contractual, service providers, or other arrangements. This approach can be extended to cover other areas of activity. The strongly protection-orientation and command and control attitude of MFSC administration has not shifted significantly over the MPFS period. These attitudes are inconsistent with policies, with the increased capacities of individuals, and with the needs of a modern democratic society. Policy shifts need to be matched by institutional reforms in the changing context and changes in attitude amongst individuals. MFSC staff is overburdened with administrative tasks. The focus for most field-level forest sector activity lies at the DFO. DFOs have largely become administrators rather than sector specialists and they are expected to undertake a very broad range of administrative tasks – often beyond their management capability. This is not sustainable and some functions of DFOs need to be altered or assigned to other parties to address this issue. The sector lacks insufficient political engagement and support. Forest legislation does not give enough space for local level government leaders and political parties in the decisionmaking process. New institutional mechanisms taking into account the concept of federalism and power-sharing in natural resource management need to be developed during formulation of new forest sector strategy. Forest Sector’s Contribution to Economic Development Over-regulation is a constraint. Eexcessive regulation on the harvest, transport, process and sale of forest products is increasing the cost of business. This has increased the transaction cost and also demotivated communities and private tree owners in managing forests and trees on farms, Fiscal policy is a constraint. Revisions of royalties have taken place on a rather ad-hoc basis is necessary. The present royalty rates for wood are too high, with 13 percent VAT imposed on timber sales and some NTFPs produced in private land. Meanwhile, there is no VAT on the production and sales of agricultural commodities thus stifling private landowner involvement in commercialisation of forest products. Only comparatively small quantities of forest products are legitimately supplied to industry from government-managed forests. The overall supply of forest products is far less than could be potentially produced. Not only does this reduce government revenue, it also limits the expansion of the wood-using industry and the commercialisation of the forest sector. TCN has a distorting impact. Although the role and functions of FPDB have been drastically reduced, the government still gives preferential treatment to TCN for the supply of timber (logs) at reduced rates. Despite this, TCN is unable to operate on a fully commercial basis and its role in distorting markets and creating a dis-incentive for private sector investment is increasingly being questioned. 17 There is a need for a stable regulatory environment to attract investment. The more than 5,000 wood-based industries registered and operating in Nepal face the following problems: impractical environmental standards, dual taxation, inconsistency in the auction system, lack of private sector participation in policy-making process, and lack of transparency in decision-making processes. These problems result in erratic and confusing regulations, ultimately creating uncertainty and challenges to the growth of wood-based industries. Sources of finance for small-scale forest-based industries are inadequate. Taxation, loan regulations, and land-related laws are also not favourable for the establishment of smallscale private and community-based enterprises. Commercial leasehold forestry is virtually not implemented. The Forest Regulations (1995), which only focused on improving degraded forest, is to blame for this oversight. Even where provisions do exist for lease of degraded forest for commercial purposes, for example eco-tourism, factors such as high annual rental fee act as a disincentive to uptake. Addressing Poverty and Social Exclusion The sector provides good opportunities for addressing poverty and social exclusion. A high percentage of people in Nepal still live in poverty and still depend on forests for their livelihoods. Experience has shown that there are good opportunities for the forest sector to contribute to their livelihoods. Governance is the key to addressing issues around poverty and social exclusion. Local forestry groups are now becoming more inclusive and pro-poor in the country. The MFSC GESI strategy attempts to do this amongst MFSC institutions – however many elements have not yet been implemented. Nepal’s Climate Change Agenda The forest sector is critical to Nepal’s climate change agenda. The progress of developing Nepal’s response to climate change has enhanced public awareness of the important role that forests play. This is strongly conveyed in Nepal’s NAPA as well as in the strategic processes being followed for REDD+. REDD+ is fully compatible with forestry sector goals. REDD+ aims for a healthy and vibrant forestry sector. Expansion of forest, carbon, soil and watershed conservation measures using systems for Payment for Ecological Services (PES) to leverage funds is a potentially viable approach for Nepal. It, however, requires much more action-oriented piloting and testing. Local forest groups provide a strong institutional base for community-based adaptation, planning, and implementation. As inclusive and well-governed local institutions, community forest groups of various kinds can be effective for implementing actions to enhance the climate resilience of the most vulnerable households. Climate change is already affecting Nepal’s forests. These effects include invasive species, forest fires, changes in forest regeneration and growth, soil and water conservation, floods, and water source depletion. Although quantitative data is lacking, there is sufficient local experience to demonstrate these effects at present. 18 Contents Foreword ................................................................................................................................................................................ 2 Acronyms ............................................................................................................................................................................... 3 Executive Summary ............................................................................................................................................................ 6 Chapter 1: Introduction ......................................................................................................................... 23 1.1 Background..................................................................................................................................................... 23 1.2 Rational and Imperatives of MPFS .......................................................................................................... 24 1.3 Objectives and the Methodology of this Review .................................................................................... 25 1.4 Strengths and Limitations of this Study .................................................................................................. 25 1.5 Structure of this Paper ................................................................................................................................. 26 Chapter 2: The Context of the MPFS ................................................................................................. 27 2.1 International Context ................................................................................................................................... 27 2.2. National Political and Planning Context ................................................................................................ 27 2.3. Prevailing Environmental Discourse ....................................................................................................... 28 2.4. Organizational Culture and Knowledge System .................................................................................. 29 2.5. The State of Forests, Projected Depletion Trend, and Program Design......................................... 29 Chapter 3: Forestry Programs and their Relationships ................................................................. 31 3.1 Objectives and Programs ............................................................................................................................ 31 3.2 Program Relationships and Implementing Mechanism ...................................................................... 33 Chapter 4: Key Achievements and Outcomes of the Primary Programs ................................... 35 4.1 Community and Private Forestry Program............................................................................................ 35 4.1.1 Key Achievements .................................................................................................................................................36 4.1.2 Key Issues and Challenges ..................................................................................................................................39 4.1.3 Lessons Learnt and Way Forward .....................................................................................................................40 4.2 National and Leashold Forestry Program .............................................................................................. 41 4.2.1. Components and Targets .....................................................................................................................................42 4.2.2 MPFS Program versus Implementation Modalities .....................................................................................42 4.2.3 Key Achievements of National Forestry Program .......................................................................................43 4.2.4 Key Issues and Challenges of National Forestry Program ........................................................................46 4.2.5. Key Achievements of Leasehold Forestry Program ...................................................................................48 4.2.6. Key Issues and Challenges of Leasehold Forestry Program ....................................................................51 4.2.7 Lessons Learnt and Way Forward .....................................................................................................................52 19 4.3. Wood-based Industries Development Program .................................................................................... 53 4.3.1. Key Achievements ................................................................................................................................................53 4.3.2. Key Issues and Challenges ................................................................................................................................56 4.3.3. Lessons Learnt and Way Forward....................................................................................................................56 4.4 Medicinal and Aromatic Plants and Minor Forest Products ............................................................. 57 4.4.1 Key Achievements .................................................................................................................................................57 4.4.2 Key Issues and Challenges ..................................................................................................................................59 4.4.3 Lessons Learnt and Way Forward .....................................................................................................................59 4.5 Conservation of Ecosystem and Genetic Resources .............................................................................. 60 4.5.1 Key Achievements .................................................................................................................................................61 4.5.2. Key Issues and Challenges .................................................................................................................................62 4.5.3 Lessons Learnt and Way Forward .....................................................................................................................66 4.6 Soil Conservation and Watershed Management ................................................................................... 67 4.6.1 Key Achievements .................................................................................................................................................67 4.6.2 Key Issues and Challenges ..................................................................................................................................68 4.6.4 Lessons Learnt and Way Forward .....................................................................................................................71 Chapter 5: Review of Supportive and Additional Programs ........................................................ 73 5.1 Policy and Legal Reform ............................................................................................................................. 73 5.1.1 Key Achievements .................................................................................................................................................75 5.1.2 Key Issues and Challenges ..................................................................................................................................85 5.1.3. Lessons Learnt and Way Forward....................................................................................................................85 5.2 Institutional Development Plan ................................................................................................................. 87 5.2.1 Key Achievements .................................................................................................................................................88 5.2.2 Key Issues and Challenges ..................................................................................................................................89 5.2.3. Lessons Learnt and Way Forward....................................................................................................................90 5.3. Human Resources Development ............................................................................................................... 91 5.3.1 Key Achievements .................................................................................................................................................91 5.3.2. Key Issues and Challenges .................................................................................................................................92 5.3.4 Lessons Learnt and Way forward ......................................................................................................................94 5.4 Forestry Research and Extension.............................................................................................................. 95 5.4.1 Key Achievements .................................................................................................................................................96 5.4.2 Key Issues and Challenges ..................................................................................................................................97 5.4.3 Lessons Learnt and Way Forward .....................................................................................................................97 5.5 Planning and Information ........................................................................................................................... 98 20 5.5.1 Key Achievements .................................................................................................................................................98 5.5.2. Key Issues and Challenges .............................................................................................................................. 100 5.5.3 Lessons Learnt and Way Forward .................................................................................................................. 100 5.6 Monitoring and Evaluation...................................................................................................................... 100 5.6.1 Key Achievements .............................................................................................................................................. 101 5.6.2 Key Issues and Challenges ............................................................................................................................... 101 5.6.3 Lessons Learnt and Way Forward .................................................................................................................. 102 5.7. Gender and Social Inclusion ................................................................................................................... 102 5.7.1. Key Achievements ............................................................................................................................................. 102 5.7.2 Key Issues and Challenges ............................................................................................................................... 104 5.7.3 Lessons Learnt and Way Forward .................................................................................................................. 105 5.8 Climate Change and Forestry ................................................................................................................. 107 5.8.1 Key Achievements .............................................................................................................................................. 108 5.8.2 Key Issues and Challenges of REDD+ ......................................................................................................... 109 5.8.3 Lessons Learnt and Way Forward .................................................................................................................. 109 5.9 Financial Allocation in Forestry over Time ......................................................................................... 110 5.9.2 Key Issues and Challenges ............................................................................................................................... 112 5.9.3 Lessons Learnt and Way Forward .................................................................................................................. 113 Chapter 6: Other Factors and Actors Driving MPFS Performance ......................................... 114 6.1 Political Changes ........................................................................................................................................ 114 6.2 Economic Changes ..................................................................................................................................... 115 6.3 Demographic Changes .............................................................................................................................. 116 6.4 International Experiences ........................................................................................................................ 116 Chapter 7: Conclusions ........................................................................................................................ 118 7.1 Lessons Learnt ............................................................................................................................................ 118 7.1.1 Management and utilization of forest resources and conserving biodiversity ................................. 118 7.1.2 Policy and legal framework .............................................................................................................................. 119 7.1.3 Forest sector institutions .................................................................................................................................... 120 7.1.4 Forest sector’s contribution to economic development ........................................................................... 121 7.1.5 Addressing poverty and social exclusion ..................................................................................................... 123 7.1.5 Nepal’s climate change agenda ....................................................................................................................... 124 7.2 Way Forward .............................................................................................................................................. 124 7.2.1 The nature of Nepal’s forestry sector strategy (FSS) ............................................................................... 125 7.2.2 Forestry sector governance and administration .......................................................................................... 125 21 7.2.3 Management of forest resources ..................................................................................................................... 127 7.2.4 Forest sector contribution to economic development............................................................................... 127 7.2.5 Forestry sector contribution to social inclusion and poverty reduction .............................................. 128 7.2.6 Forest biodiversity and environmental conservation ................................................................................ 128 7.2.7 Forestry sector response to climate change ................................................................................................. 129 References ........................................................................................................................................................... 130 Annex 1: Reports Prepared by the Master Plan for the Forestry Sector (MPFS) ............................ 133 Annex 2: Gazette notification on NTFPs..................................................................................................... 134 Annex 3: Ratified/accessed/signature by Nepal in MEAs ....................................................................... 135 Annex 4: Bottom up planning process in the forestry sector ................................................................. 136 List of Tables: Table 2.1: Forest and shrubland in Nepal ........................................................................................ 30 Table 4.1: The targets and achievements of MPFS on MAPS and other minor forest products ..... 57 Table 5.1: Policy and legal reform strategy of MPFS under six primary programs ........................ 74 Table 5.2: Legal instrument on all forms of national forests ........................................................... 76 Table 5.3: Policy instruments on all forms of national forests ........................................................ 78 Table 5.4: Policy and legal instruments on wood-based industries ................................................. 79 Table 5.5: Legal and policy instruments on NTFPs/MAPs ............................................................. 80 Table 5.6: Legal and policy instruments on watershed conservation .............................................. 81 Table 6.0: Budgetary allocation in different programs of MPFS ................................................... 112 List of Figures: Figure 3-1: Logical relationship among plan objectives, strategies, and programs ......................... 33 Figure 4.1: Community Forests from 1987 to 2013 (Area, CFUGs, and households) .................... 37 Figure 4.2: Forest use for non-forest and commercial lease purposes ............................................ 36 Figure 4.3: Leasehold forest groups and their area of management over 20 years .......................... 49 Figure 4.4: Timber supplied from various forest regimes and agencies .......................................... 54 Figure 5.1: Comparative study of estimated vs actual MPFS expenditure .................................... 110 Figure 5.2: Share of revenue and expenses from MFSC to GoN ................................................... 111 Figure 6.1: Contribution of industry, service, and agriculture to national economy ..................... 115 22 Chapter 1: Introduction 1.1 Background The forestry sector contributes significantly to the betterment of the environment, enhances the livelihood and health of people, is a repository of biodiversity, and furthers the growth of the economy. The sector has intimate linkages with other sectors such as agriculture, watershed protection, tourism, and energy including hydropower. Realizing its multifaceted importance, the Ministry of Forests and Soil Conservation (MFSC) of the Government of Nepal (then His Majesty’s Government of Nepal) carried out a comprehensive study of the sector starting from early 1986. The study, supported by FINNIDA and the Asian Development Bank, aimed to revert the accelerated deforestation and degradation of land with all its associated impacts. It took three years to prepare the Master Plan for the Forestry Sector (MPFS). The government approved the MPFS in 1988. The plan, which had an implementation period of 25 years including three years for preparation, came to an end in 2011. The MPFS became a vehicle in the paradigmatic shift of the forestry sector in Nepal. It recommended the mobilization of communities and the private sector in the conservation, management, and utilization of forest resources in a larger scale than stipulated in previous plans and policies. Though the plan was designed during the phase of ‘guided democracy’, the restoration of multi-party democracy in 1990 expanded the role of local communities in combating the process of forest depletion. The growing international concerns over rapid deforestation and degradation in tropical countries were also a driving factor in the management of Nepal’s forestry sector. Consequently, the strategic framework of the Tropical Forest Action Plan helped in mobilizing resources to prepare the MPFS. The MPFS was centered around five strategies: production and utilization, conservation of ecosystem and genetic resources, forest decentralization to communities and livelihood promotion, private sector involvement, and policy implementation. These strategies were intended to balance the demand and supply of forest products as well as to conserve ecosystems and watersheds. The major thrust of the MPFS was to transfer forest management authority from the forest administration to the local communities. The role of forest officials was to be advisers to forest management groups. The total proposed outlay of the MPFS was USD 1,742 million. Of this total, 46.6 percent was allocated to the Community and Private Forestry program and 20.2 percent to the National and Leasehold Forestry program. The remaining outlay was distributed between ten other programs, for example in conserving the ecosystem and genetic resources. While community forestry was the priority program, the leasehold forestry program was designed to solicit private sector investment. Meanwhile, the government was to invest in managing the remaining national forests. There were two objectives, related to each other, in preparing the MPFS. : Identify priority programs, implementable proposals, and estimates of investment needs for 25 years. All these details were to be included in the ongoing and subsequent periodic plans to be formulated by the National Planning Commission (NPC). Develop planning, project formulation, monitoring and evaluation, and donor coordination functions for the MFSC in order to enable the ministry to implement the master plan proposals included in its framework of annual plans. 23 1.2 Rational and Imperatives of MPFS The National Forestry Plan of 1976 had realized the need to reverse the process of forest degradation and deforestation in Nepal through various interventions including people’s participation in forest management and utilization. However, the then government was reluctant to decentralize forest management to the forest users. Instead, it only gave superficial management rights to the local political bodies. As a result, forest depletion and soil erosion continued at an accelerated scale. It was in this context that the need for a long-term MPFS, based on detailed analysis of the situation, was felt. The three year planning exercise of the MPFS was focused on analyzing the situation, synthesizing prevailing and projected trends, and formulating new policies and programs to meet the ongoing and future needs of the country. The MPFS prepared 13 reports (see annex 1), including six primary and six supportive programs for intervention. It also produced one report projecting land use changes as well as the accompanying demand and supply scenarios of the main forest products (timber, fuelwood, and fodder) over time. The projected forestry scenario under different trends (current, moderate, and optimistic) provided the rational for setting the objectives and designing the 12 forestry programs under the MPFS. The plan also highlighted the importance of continuity in planning as a process rather than preparing a planning document. The necessity of building the capacity of agencies involved in the MFSC to plan and implement activities was also highlighted. The MPFS identified four imperatives to develop the forestry sector: Satisfaction of basic needs: Forests resources are required to fulfill basic survival needs. This includes fuelwood/charcoal as a source of energy for households and industries, timber for building construction, fodder for animal husbandry, herbs for human health, protected areas for tourism promotion, and watershed management for maintaining agricultural productivity as well as to prevent natural hazards. Sustainable utilization of forest resources: To ensure the sustainable use of the essential forest resources noted above, the MPFS states that these products should be used within their carrying capacity. This limitation is also necessary to protect watersheds, prevent soil erosion, conserve biodiversity, and ensure a sustained supply of forest products. Participation in decision-making and sharing of benefits: Local community participation in forestry management is required to reduce the concentration of government power, to expand opportunities for local residents, and to generate enthusiasm for forest protection among the local communities. This also entails bringing decision-making power to the forest users’ level so that they themselves benefit from their improved management, harvesting, and plantation efforts. Socio-economic growth: Multiple contributions from the forestry sector should be streamlined to provide maximum benefits to local and national economies. Special provisions should be made for the poorest segments of society. These strategies and imperatives have been the basis of the 12 forestry development programs implemented in Nepal. These programs are designed to interact with each other so as to bring synergetic impacts in the field. 24 1.3 Objectives and the Methodology of this Review The team guiding this MFSC review began by carrying out a thorough review of past forestry sector policies, programs, and the previous MPFS. This was necessary to understand changes in political and social priorities as well as the current context of environment protection and climate change. Based on this review, and with the expiry of the previous MPFS in July 2011, the MFSC review team has realized the need for a new forestry sector strategy. It is in this context that this study is being carried out. The specific objectives of this study are: To document the achievements, challenges, and lessons learned from the previous MPFS. To identify what worked, what did not work, what could be improved, what was missed, and factors affecting successes and failures from 25 years of the implementation of MPFS. To make a critical analysis of the relevance of the themes and approaches outlined by the earlier MPFS in the changed socio-political, economic, and environmental context. To gather lessons learnt with the aim of using the knowledge in preparing a new forestry sector development strategy for the coming 10 years. This review of the MPFS comprised of at least three components. The first component consisted of consultations with a variety of stakeholders – frontline staff, civil society and academic institutions, forest entrepreneurs, mid-level forest professions, and policy makers – in the capital and the regions. There were also a series of consultations by the Federation of Community Forest Users of Nepal (FECOFUN) team and the Gender, Equity, and Social Inclusion (GESI) team from the grassroots level in the field to the center in Kathmandu. Their feedback on the performance of the forestry sector over the past 21 years was illuminating and invaluable for this review. The second component comprised of desktop reviews of all 12 MPFS programs as well as of two other programs, namely forestry and climate change as well as gender equity and social inclusion. The latter two have emerged over the last decade. The reviews were also enriched by the international experiences that have evolved over the last two decades. These desktop review documents were further improved through peer review by Nepali experts. The third component comprised of informal discussions and dialogues with representatives of professional groups, NGO staff, and government officials. Two major deliverables will emerge from this study. First, an analysis and synthesis of emerging forestry and related issues will be prepared. Second, and most importantly, this study is the foundation for the preparation of a new forestry sector strategy. 1.4 Strengths and Limitations of this Study The MPFS document had suggested the need to periodically review the master plan so as to take corrective measures to streamline forestry programs and activities in the changing context. However, no review of the past performance of MPFS has been undertaken. The only exceptions are the assessments of the forestry sector undertaken by the National Planning Commission (NPC) during the formulation of new periodic plans. Thus, this review is the first comprehensive assessment of the achievements and challenges of the MPFS programs, institutions, and policies. The review is partly based on information, documents, and data gathered from a range of government sources as well as the institutional memory of 25 various individuals including the team members of this review. A wealth of information was also generated through consultations with multiple stakeholders active in the management and promotion of the forestry sector in Nepal. Despite the cooperation of government and non-government actors, the review team faced some difficulties in gathering information, outcomes, and relevant literatures. The single greatest barrier to information was the long time period of over 25 years; soliciting views from stakeholders spanning over two decades was a daunting task. The team took four months – rather than the initially planned two months – to complete this review because of difficulties in gathering reliable and credible data. The challenges in data collection were threefold: the large scale and complexity of the programs, the fact that the programs were implemented in silos but impacts had to be considered in an integrated manner, and the difficulty in measuring program effectiveness and impacts. 1.5 Structure of this Paper This study is divided into seven chapters. After the introduction, the second chapter deals with the national and global scenario in which the plan was prepared. The third chapter presents the MPFS programs, their relationships to each other, and the institutional modalities used to implement them. The fourth and fifth chapters form the core of the study. These two chapters analyze and synthesize the key achievements and outcomes along with the underlying incentives/factors driving the programs. The sixth chapter highlights the political, economic, and demographic trends of Nepal over the past decades, which have a significant bearing on the implementation of forestry programs. Chapter six also presents the international trend in forestry, which partially influenced forestry in Nepal. The final chapter concludes with major learning from the review and implications or future directions useful for preparing a new Forestry Sector Strategy (2014-2024) for Nepal. 26 Chapter 2: The Context of the MPFS The MPFS design was a coming together of different contexts prevailing within the country and outside, also keeping room for future scenarios generated through simulation models. These prevailing contexts were formed through the confluence of several factors – international initiatives, the political context, national goals of the Seventh Periodic Plan, environmental discourse, and organizational culture. 2.1 International Context The destruction of tropical forests drew international attention beginning in the 1980. The ongoing depletion was considered a threat to the very existence of global commons such as biodiversity and climate. The Tropical Forest Action Plan (TFAP), later renamed Tropical Forestry Program, was agreed upon in 1985 as an international framework for forest-related action after its adoption by the World Forestry Congress in Mexico. It was also agreed that TFAP needed to be translated into national programs based on national priorities and development plans. Thus, the MPFS was prepared in the context of TFAP but based on Nepal’s priorities and development challenges. The TFAP was launched with the following objectives: To increase awareness of the problems of deforestation and to mobilize all relevant stakeholders in order to address them. To introduce inter-sectoral planning approaches involving all relevant partners to stimulate generation of more effective policies and programs. To mobilize national and international resources to assist in the preparation and implementation of National Forestry Action Programs (NFAP) in a coordinated manner The TFAP identified five areas of inter-sectoral priorities: forestry in land use, forestry based industrial development; fuelwood and energy, conservation of forest ecosystems, and institutional development. The process was to enable wider participation of major stakeholders and also to build national capacity to implement programs. The TFAP provided a rational to formulate the MPFS in Nepal. 2.2. National Political and Planning Context The Panchayat polity, with constitutional and political power vested in the king, did not allow political parties to function. The ‘control and command’ nature of forest administration was not able to stop or reverse the process of forest depletion. There were, however, pressures on the polity to decentralize and liberalize the economy to improve forest management. The state was in a dilemma – should it decentralize forest management or should it retain central control. The easy solution, to appease both pressure groups, was for the state to decentralize forest management to the local political units (village Panchayats), which were controlled by the center. Thus, the concept of Panchayat and Panchayat Protected Forests were incorporated in the National Forest Plan of 1976, and ultimately included in the Forest Act. Lessons learnt from the pilot forestry project funded by the Australian government showed that forests could be more effectively, equitably, and efficiently managed by the local communities than the local Panchayats. Furthermore, the Decentralization Act of 1982 and its regulations were used to involve the 27 local users’ groups in the management of forest resources. The Panchayat system was under intense pressure to democratize the political process towards the end of the master planning process. As a result, the then government agreed to operationalize the concept of users’ group in the management of forests as well. Once the Panchayat system was overthrown in 1990, it became easier to legalize community forestry; forest users groups were formed in 1993 and regulation began from 1995. The Seventh Five-year Plan (1986-1990) of Nepal pledged to meet the basic needs – food, housing, clothing – of the Nepali people by the year 2000. This was the mandate given by the king to the government. Accordingly, every sector was compelled to design programs and strategies to meet basic needs within this timeline. The MPFS, thus, was geared to meet the needs of fuelwood (for cooking food), timber (house construction), fodder (for livestock), and medicinal and aromatic plant products (for health). Soil and water conservation was also linked to maintain or enhance the productivity of both upstream and downstream land as well as to help in food production. Ecosystem and genetic resource conservation was linked to promote ecotourism and maintain a healthy environment. Similarly, woodbased industries were designed to produce panel and furniture products for household and commercial purposes. Alongside, they were also intended to provide productive employment and to generate revenue for the government. As the overwhelming majority of people lived in the rural areas where the economy was subsistence based, the community forestry program was designed to meet the subsistence needs of the rural people through forest products. Meanwhile, the national and leasehold forestry program was designed to produce timber, fuelwood, and non-timber forest products (NTFPs) for commercial purposes. 2.3. Prevailing Environmental Discourse Starting in the 1970s, there was an intense national and international environmental discourse on accelerated deforestation in the hills of Nepal. These discussions focused particularly on the adverse impact of soil erosion in Nepal, and neighboring Bangladesh. The World Bank postulated that if the same trend of deforestation continued in Nepal, the mid-hill forests would be depleted within 25 years and the Tarai forests within 15 years. This logic was based on the declining supply of fuelwood due to continuous forest degradation and deforestation as well as increasing harvesting of forest products to meet the needs of the increasing population. The suggested ‘gap analysis’ between the demand and supply of wood products became the guiding mantra for expanded tree plantation programs in barren mid-hill land. The ‘gap analysis’ later became the “Theory of Himalayan Degradation”. Under both these theories, the poor rural households of the mid-hills were characterized as the culprits responsible for land degradation and soil erosion in Nepal. The suggested remedy was a technocratic one; carrying out massive afforestation and reforestation through the Department of Forests. The experiences and lessons of the pilot forestry project implemented in Sindhu and Kavre districts had, however, already disproved the efficacy of these technocratic strategies. Carried out in the 1980s, these pilot projects had demonstrated that forest rejuvenation occurred most quickly and effectively if the local people were empowered to protect and utilize the forests through rules designed by the community itself. Thus, the key strategy to increased forest greenery was to trust the local people, authorizing them to protect, manage, and utilize the local forests they accessed. In addition to being effective, this institutional innovation for expanding greenery could be widely replicated in the mid-hills of Nepal. This model of forest rejuvenation and expansion sharply countered the “Theory of Himalayan Degradation”. This decentralized model gradually came to be adopted as the new paradigm of forest 28 management though community mobilization and empowerment. This approach was adopted by the MPFS as the priority program of forest management in the mid-hills of Nepal. 2.4. Organizational Culture and Knowledge System The organizational and administrative culture of Nepal’s forestry sector was influenced by the systems existing in India. Indeed, India’s practices were often simply superimposed onto Nepali society. This system was based on control and command as well as revenue and rent collection. Forest management entailed state ownership of forests and its management by foresters employed by the state. A system of permits and licenses issued as well as regulated by the forest officials was legally enforced. However, because the rules were so rigid and divorced from reality, they were essentially disregarded by the local users. People were afraid of forest officials. And the hierarchical nature of the forest administration system prevented forest officials from trusting the local people. Reforming the organization culture to close the trust deficit between foresters and users was a key requirement to ensure better forest management. A reduction in the trust deficit would allow both the indigenous knowledge of the local people and the scientific knowledge of the foresters to guide management strategies. A new culture of relationships and responsibilities had to be reinvented between the forest staff and the people. Thus, the reforms could not only include transferring forests management to local forest users. Rather, a true reform process required a radically different understanding of what constituted appropriate knowledge of the forest. This required changing the role of forest officials to forest advisers rather than forest managers. To reconfigure these new roles, the forestry staff had to be retrained. Alongside, the forest user groups’ capacity to undertake these new rules had to be strengthened. The reinvention of forest administration and CFUGs had to be synchronized to have a synergetic impact on forests and local people. These imperatives were considered vital even by the forest officials. They were, thus, included in the MPFS. 2.5. The State of Forests, Projected Depletion Trend, and Program Design The forest area of Nepal has declined over the last six decades as shown in table 2.1. In 1964, the Forest Survey and Research Office (FSRO) estimated the forest- and shrubland area to be 45.5 percent of the total national land. Based on the forest area reported by the Land Resource Mapping Project (LRMP) of 1978/79, the MPFS estimated the forest and shrubland area of Nepal to be about 42 percent. As per the National Forest Inventory carried out through the Department of Forest Research and Survey (DFRS), the annual deforestation rate of Nepal was estimated to be 1.7 percent during the period from 19781991. Similarly, the rate of deforestation in the Tarai was estimated to be about 1.3 percent within the same period. However, a study conducted by DoF in 2005 shows that the forest cover in Tarai districts as a whole has decreased by an annual rate of 0.06 percent from the period 1990/91 to 2000/2001 (DoF 2005). The recent forest inventory carried out by the Department of Forest Research and Survey shows that the forest area in plain Tarai of 18 districts has decreased by 32,000 ha with an annual rate of 0.4 percent in the last 19 years from 1991 to 2010. Similarly, the forest area in the same region has decreased by 16,500 ha with annual rate of 0.44 percent in the last nine years from 2001 to 2010. (FRA/DFRS, 2014) The table 2.1 shows that forests cover in Nepal has declined over the last six decades. Importantly, it also shows that there has been an increase in the degradation of forests over time – the rate at which 29 forests are converted into shrub land has increased. Based on the past trend of deforestation and degradation across Nepal, it was reasonable to assume that deforestation rates would rise with the steady growth in population. To meet the growing needs of forest products, MPFS projected three scenarios to develop forestry programs in Nepal: the current trend or the business as usual scenario (BAU), the medium term scenario, and the optimistic scenario. As per this analysis of Nepal, under the BAU scenario, for example, the biomass fuelwood deficit would peak at about 3 million Tons (T) in 1995/96. This would, however, gradually reduce to a deficit of 1.4 million T in 2010/11. As a result, the forest land use would reduce from 6.67 million ha in 1985/86 to 5.59 million ha in 2010/11. Table 2.1: Forest and shrubland in Nepal Report produced by Year Forest Shrub Total 000 ha % 000 ha % 000 ha % FSRO 1964 6402 45.5 - - 6402 45.5 LRMP 1978/79 5616 38.1 689 4.7 6285 42.8 HMG/N (MPFS) 1985/86 5424 37.4 706 4.8 6210 42.2 DFRS (NFI) 1999 4268 29 1560 10.6 5828 39.6 Sources: FSRO 1967; LRMP 1986; HMG/N 1989; DFRS/FRISP 1999 Under the moderate trend scenario, the fuelwood deficit would peak at 2.7 million T in 1990/91. There would, however, be an overall surplus of 3.2 million T in 2010/11, with a caveat that there would be a fuelwood deficit of about 370,000 T in the Tarai. This scenario would lead to a change of land use in Nepal, leading to about 5.8 million ha under forest cover in 2010/11. The forest area would further increase to about 5.9 million ha by 2010/11 under the optimistic scenario. The scenario analysis was carried out to ensure that distinct forestry programs reinforced each other rather than worked in isolation. At present, there are no up-to-date macro-level forest/land use change data available in Nepal. However, recent micro-level data based on watersheds or on individual districts suggest that forest area is increasing in the mid-hills and in some cases in the mountains. This change is attributed to the community forestry program, demographic shifts, cash infusion from remittances, and changes in energy use pattern (Profor 2013, Niraula et al. 2012, Kanel et al. 2012, Gautam et al. 2003). The composition of the forest management regime has changed significantly over the decades. Less than 30,000 ha of forests were managed under community forestry principles in 1985. By the end of 2013, the area under community forestry has expanded to 1.7 million ha. Similarly, about seven percent of the total forest was under the protected area system during the time the MPFS was prepared. Now, the area is about 23 percent of the total area of Nepal, about 12 percent of the total forest area of Nepal. Similarly, other forest management regimes (such as CFM, pro-poor leasehold forests, protected forests, and religious forests) have also expanded over time. 30 Chapter 3: Forestry Programs and their Relationships The MPFS developed four long-term and three medium-term objectives in order to conserve, manage, and utilize forests as well as watershed areas. It was hoped that these forests along with wood-based and Medicinal and Aromatic Plant products (MAP)/NTFP-based enterprises would broaden inclusive development in Nepal. Six primary and six supportive programs were designed to meet these objectives, listed below. 3.1 Objectives and Programs The four long-term objectives included: To meet the people’s basic need for fuelwood, timber, fodder, and other forest products on a sustained basis while also contributing to food production through an effective interaction between forestry and farming practices. To protect the land against degradation through soil erosion, floods, landslides, desertification, and other effects of ecological disturbance. To conserve the ecosystems and genetic resources. To contribute to the growth of local and national economies by managing forest resources and developing forest-based industries, thus creating opportunities for income generation and employment. The three medium-term objectives included: To promote people’s participation in forestry resource development, management, and conservation. To develop the legal framework needed to enhance the contribution of individuals, communities, and institutions to forest resource development, management, and conservation. To strengthen the organizational framework and develop institutions of the forestry sector to enable them to carry out their missions. The six primary programs included: Community and Private Forestry: This program is aimed at developing and managing forests through the active participation of household members and communities. Supporting the communities in meeting their basic needs is a key concern of the program. National and Leasehold Forestry: This program is aimed at developing and managing national forests through government agencies or by leasing forests to the private sector. This program is intended to complement community and private forestry as well as to supply raw materials for forest-based industries. 31 Wood-based industries: This program is aimed at processing and adding value to wood needed by people. In turn, the value-added is intended to contribute to income generation, employment opportunities, and increases in the national revenue through industrialization. MAPs and other minor forestry products: This program is aimed at increasing the supply of MAPs and other minor forest products. Once harvested, these resources are converted into products for distribution to domestic and foreign markets. Soil conservation and watershed management: This program is aimed at protecting the land against degradation through preventive, rehabilitative, and conservation measures. Conservation of ecosystems and genetic resources: This program is aimed at protecting and managing special areas for their ecosystem and genetic resource values. These special areas are also intended for the provision of amenities as well as for promoting in-situ and ex-situ conservation of genetic resources of plant and animals. The six supportive programs included: Policy and legal reforms: This program is aimed at developing and implementing policy and legal frameworks to facilitate and enhance the contribution of individuals, communities, and institutions to forest resource development, management, and use. Institutional reform: This program is aimed at strengthening the organizational framework in the forestry sector for more efficient implementation and service delivery in the priority areas. Human resources: This program is aimed at developing and managing the capability of human resources in the forestry sector. Research and extension: This program is aimed at strengthening research, bolstering extension and public information capabilities, and promoting the utilization of research results. Resource information and planning assistance: This program is aimed at developing a forest resources information system within the line ministry. Alongside, this program aims to build the capability of the line ministry to conduct surveys, take inventories, and undertake other information-generating activities. In the long term, these activities will lead to better use of information as well as more efficient operational planning by the government, users, and other stakeholders. Monitoring and evaluation: This program is aimed at institutionalizing a system for monitoring operations and their impacts as well as for processing monitoring data into information to guide the development process. The supportive programs were designed to complement the main programs. Each of the supporting programs had to assist the effective implementation of the main programs. Supporting programs also had to complement one another. For example, the national and leasehold forestry program had to produce and supply forest products needed for the expansion of wood-based industries. Forests 32 under the community and private forestry program as well as under the national and leasehold forestry program had to contribute to the conservation of the ecosystem and genetic resources. 3.2 Program Relationships and Implementing Mechanism The programs were designed in a logical framework. Their interdependencies and relationships are shown below in a schematic diagram (Figure 3.1). Figure 3-1: Logical relationship among plan objectives, strategies, and programs 33 The implementation of the programs was also considered from the perspectives of the forestry organizations designed to implement them. For example the community and private forestry program and the national and leasehold forestry program were implemented through the Department of Forests. The Department of National Parks and Wildlife Conservation had the primary responsibility for implementing the conservation of ecosystem and genetic resources program. The Department of Soil Conservation and Watershed Management (DSCWM) was responsible for the implementation of the soil conservation and watershed management program. Meanwhile, the wood-based industries development program was led by the private sector, while the government was tasked with creating a conducive policy and operational environment. Similarly, MAPs and the NTFP program were implemented partly by the DoF, partly by the Department of Plant Resources (DPR), and partly by the private sector and parastatal organizations. The first three supportive programs were led by the MFSC. Separate entities were created to implement the other three supportive programs in a coordinated manner. In designing these 12 programs, the MPFS intended to create a complementary relationship among the programs. The MPFS intended for these relationships to occur both conceptually and in implementation, with the respective lines agencies taking a coordinated approach. In reality, the different departments and divisions implemented the program in ‘silos’ without much synchronization. Moreover, the restructuring of the ministry in 1995 weakened the implementation capacity of the forest organizations. The donor community played a constructive role in the design of the MPFS as well as in the implementation of certain programs, including community forestry. Overtime, however, donor support changed to a project modality. As a result, parallel donor structures with direct funding of activities became the norm. Donors argued that these parallel structures allowed funds to flow more quickly and expedited the field implementation process. Yet, donor funded projects/programs had to encounter two different sets of bureaucracies – Nepali and foreign. In essence, donors were unable to evade the Nepali bureaucracy but were able to disburse funding through project modality without channeling it through the national treasury. Donors also had their own priorities and interests, at times diverging from the national priorities, in funding the implementation of the programs. For example, donors were attracted to successful programs such as community forestry. Other programs, for instance the national forestry program, were excluded by donors. Imbalance in donor support to both programs and geographical areas such as the Tarai, the Chure range, and the high mountains also led to low levels of implementation. The MPFS was also poor in terms of geographical balance; while it was visionary in its focus on community forestry in the mid-hills, it excluded the Tarai almost completely. Indeed, the MPFS does not even touch upon how the government would manage the national forests of the Tarai when it had previously faced so many hurdles in this area. The management of national forests leased by the private was also not clearly articulated in the plan. This was a major weakness considering that the leased forests enhanced supply of forest products for forest-based industries. The provision of pro-poor leasehold forestry was not mentioned in the MPFS, and this program was crafted subsequently. Overall, the implicit assumption of the MPFS appears to have been that the situation in the Tarai was too complicated (such as regulations and competition for land use) for more creative management systems. Forests had to be managed by the government or the private sector. For example, complications appeared in the piloting of the Bara forestry project – an experiment in leasehold forestry where the program was to be implemented as a joint venture between three Nepali firms and one Finnish company. The problems were largely caused due to the exclusion of the local community during the implementation phase. Eventually, the project could not take off. 34 Chapter 4: Key Achievements and Outcomes of the Primary Programs This chapter presents key achievments and challenges as well as the way forward based on the lessons learnt from each of the six primary forestry programs and the additional programs on gender/inclusion and climate change. The MPFS intended to achieve the seven following goals: Increase forest handover for local management, mainly in the mid-hills. Forest restoration to reverse the rate of degradation. Improve forest management and utilisation. Conserve biodiversity and ecosystems both in-situ and ex-situ. Increase employment opportunities. Increase income and revenue generation. Improve people’s living conditions as well contribute to fulfilling their basic needs. The MPFS estimated that 60 percent of national forests, approximately 1.8 million hectares of land, mainly in the mid-hills would be brought under local management. It was expected that this process would restore forest cover including on private land. Alongside, better soil conservation measures in the watersheds were planned. As a result, there would be minimum negative effects on agricultural land and ownership structure. The MPFS predicted that there would be at least a 34 percent increase in sustainable fuelwood production, 57 percent in timber production, and 39 percent in fodder production. Increased employment, a jump of at least 47 percent, from the baseline number of 1989 was also envisioned. The estimated figure was 2.5 million persons with full time jobs each year. The MPFs stated that approximately NPR 23,900 million of additional income at current prices (1988) would be generated with increased forest-based industries and enterprises. This would lead to a better quality of life for the rural people, especially lower income groups, through the increased availability of forest products and better amenities from the protected areas. Meanwhile, networks of national parks and wild life reserves would contribute to conserving plant and animal genetic resources. 4.1 Community and Private Forestry Program The MPFS, which was approved by the then HMG in April 1989, had the following main components: Enrichment and management of natural forests. Establishment and management of community forests in open and degraded areas. Encouragement to people to reduce the consumption of fuelwood by using improved cook-stoves and adoption of biogas. 35 Distribution of seedlings to expand the establishment of private tree farms. The MPFS projected the management of 1.28 million ha of community forests and the establishment of about 325,000 ha of tree farms in private land. These programs would lead to the production of 11.25 million tons of fuelwood, 2.34 million cubic meter of timber, and 5.5 million tons of fodder for livestock. Moreover, about 753,000 improved stoves would be adopted to reduce fuelwood consumption by 5.8 percent. Similarly, instalment and use of 154,000 biogas plants would reduce the consumption of fuelwood by 0.6 percent. Of the twelve programs formulated in the master plan, the community and private forestry programme was identified as the priority program. The largest share (46.6 percent) of financial resources was allocated to this program, out of which about 59.4 percent would be borne by the communities and private sector. 4.1.1 Key Achievements “If the present trends continues, 0.6 million hectares of Nepal’s natural forests will be lost during the next 25 years, plunging the nation deeper into the vicious cycle characterized by a widening gap between demand and supply, and by the destruction of the supply base in trying to meet the inmediate needs”. This is a quote extracted from a paper presented by the late Rabi B. Bista, then Chief Planning Officer of the MPFS, during the donors’ meeting held on 30 August 1989 in Kathmandu to announce the launching of the MPFS. Nepal’s forests did not, however, follow the trend mentioned above. Rather, forests in the mid-hills grew, deforestation was reversed, and degradation stopped. Community forests covered an area of about 57,000 ha during 1988. By the end of 2013, a total of 1.7 million ha of national forests has been handed over to 18,133 CFUGs with a membership of about 2.24 million households (figure 4.1). Of the total, 65.5 percent of the forests in the mid-hills had been handed over to local groups, covering 64.7 percent of the mid-hills households. A study by LFP shows an additional 2 M3 of wood production per ha per annum from the community forests of the mid-hills as calculated over a period of 14 years from 1994 to 2008. An estimate of the supply of wood products shows that about 6 million tons of fuelwood, and about 2.2 million M3 of timber was effectively supplied from community and private forests in 2011 (Kanel et al. 2012). The living standard survey carried out in 2011 shows that the percentage of household fuelwood collectors from community forests has increased from 12 percent in 1995/96 to 44 percent in 2010/11. Similarly, the percentage of fuelwood collectors from private forests has increased from 19 percent to 24 percent during the same period. By the end of 2013, 700,000 improved stoves and about 228,000 biogas plants had been installed and were operational. Both of these programs helped in reducing the consumption of fuelwood in the rural areas of Nepal. Households have also moved collecting fodder from government forests to community forests. For example, about 10 percent of fodder collectors used to collect from the community forests in 2003/4. The number increased to 17 percent in 2010/11. (CBS 2011). Forestry in Nepal is today in a healthy state. This claim is backed by people’s perceptions, office records of groups’ operational plans, and a range of government reports. Indeed, government progress and projects’ evaluation reports indicate increases in forest density, regeneration, species diversity with more wild plants and animals, increased volume of water springs with more volume, and better soil nutrition and moisture during dry season to name just a few positive signs. Alongside, there has been a decrease 36 in the number of forest fires, reduced grazing pressure, a drop in encroachment of forest land, and reductions in the illegal felling of trees. Significantly, the number of complaints and forests offences reported to the DFO office has decreased noticably. Significant achievements have been made in increased representation of women and marginalized groups in user group committees. There has also been an increase in the number of trained human resources and service providers at the village level. There has been phenomenal increase in the awareness and sensitivity of forestry officials, nongovernment service providers, and local community members on the need for positive discrimination. There is an increased trend of pro-poor provisions in group decisions regarding funding and forest land allocation. Figure 4.1: Community forests from 1987 to 2013 (area, CFUGs, and households) The pro-poor policies can be attributed to the practice of carrying out social mobilization through community forestry, which led to the proliferation of grassroot CFUGs. These groups not only protected and utilised the forests, but also provided a platform for developing leadership and resolving conflicts. The CFUGs continued to be active even when the country faced a 10-year long armed insurgency. In 1995, FECOFUN, an umbrella group established to lobby for the rights of CFUGs members, was formed. Today, FECOFUN also plays a crucial role in networking between CFUGs, NGOs, forest offices, and political parties. 37 Despite its many successes, the community forestry program has had a poor record in employment generation. Though a huge potential exists, a CFUG has generated only 2 person years of employment on average, which is only 36,000 person years in total (MFSC, 2012)1. This is much lower than the numbers envisioned in the MPFS: 2.5 million person years of full time jobs in total by the sector with community and private forestry expected to generate half these jobs. That would, however, amount to 34 times more than the current rate at which community forestry creates jobs. Most of the contributions of community and private forests are, however, found to be in terms of non-monitised value. These contributions take the form of undervalued or non-priced goods and services as well as in the formation of social capital and democratic practices at the grassroots level. Indeed, community forestry has become a catalysts for gender equality, social inclusion, and pro-poor practices in the forestry sector. The inability of community forestry to kickstart employment and industries may be a function of structural changes in the Nepali economy. In 1988, 60 percent of Nepal’s total GDP came from agriculture, forestry, and fisharies. In 2013, these sources contributed to 33 percent of the total GDP. In the intervening decades, the economy became market- and cash-driven. Similarly, people’s dependency on forests for fuelwood and fodder has significantly changed over time. For example, the percent of people using LPG as household energy has increased from virtually none in 1988 to about 18 percent in 2011 (CBS, 2011). Based in the economic structure of the 1980s, the MPFS did not foresee the commercial sale of forest products outside the CFUGs. However, timber sale outside the groups for commercial purpose has been one of the main sources of wood for forest-based industries in Nepal. An analysis of the timber supply from community forests to the market (outside CFUGs) in the fiscal year 2009/10 shows that a maximum of about 164,000 M3 of round wood timber was supplied from 2,324 CFUGs. This constituted about 58 percent of the total timber supply. Private tree owners contributed to about 27 percent of the total market supply. The remaining 15 percent was supplied from the government-managed forests. The trade in timber is a significant source of government revenue. CFUGs, for example, have to contribute 13 percent VAT to the government on the external sale of timber. In 2009/10, the government earned NPR 68 million simply in VAT paid for timber sales. This suggests that the CFUGs generated total revenue of NRs 523 million from surplus timber sales. In the same fiscal year, the government also collected an additional NPR 56 million charging 15 percent tax on the sale value of Sal timber and Khair wood as per a revenue-sharing arrangement with the CFUGs. Thus, the government in total collected about NPR 124 million from the CFUGs. The CFUG generated NPR 515 million from the commercial sale of timber from community forests to the market in the fiscal year 2009/2010. The total government revenue in the same fiscal year was about NPR 411 million from the sale of forest products obtained from the national (government-managed) forests. There is no reliable data on income from the sale of forest products within the group. However, it can be estimated that at least the double of the value CF timber sales (valued at market price) in the market is distributed among the CFUG members for their own consumption. Therefore, the total value of timber extracted from CF in 2009/2010 comes to about NPR 1.5 billion, which is at least three times higher than the government revenue from the sale of forest products from government managed forests. 1 http://www.msfp.org.np/uploads/publications/file/ebook_interactiv_20130517095926.pdf 38 There is also a massive trade in timber from private plantations. The latest survey shows that about about 55,000 ha was under compact private treee plantations in 2011 (CBS 2013). It was only 27,000 ha in 2001. In addition, trees on farmland have significantly increased and forests in abandoned agricultural land have also expanded over the years. This expansion may not necessarily be due to the community and private forestry program. It may be because of youth migration for labor, cash flow into the village, increased opportunities to sell tree products due to the expansion of road networks, scarcity of domestic labor, and low incentives for farmers to continue in subsistence agriculture Many of the achievements mentioned above reach far beyond the expectations and imagination of the MPFS. For example, despite limited support from the government and donors, the supply of wood and commercial timber from private land has increased tremendously in recent years. The management and use of community and private forests have gone beyond basic needs. Geographically speaking, the community forestry program has been expanded into the Tarai and mountain regions; about 19 percent of national forests in the Tarai are now under community forests and 22.1 percent of households are CFUG members. Similarly, 16 percent of national forests in the mountains have been handed over to 13 percent of the region’s population. The mountains and other remote parts of the country do still, however, have areas that could be transformed to community forests. 4.1.2 Key Issues and Challenges It can be said that the community and private forestry programme has achieved its institutional and environmental objectives. It has failed, however, in achieving the economic objectives of job creation and income generation to the extent envisioned in the MPFS. Therefore, the review team has identified some gaps in the economic practices of community forestry. For example, the cost of labour invested by member households and the time spent by individuals in community forestry activities is unknown. Similary, the CFUGs do not keep track of the growing forest stock or of the volume of harvestable timber, firewood, and fodder. There are also no records of the income generated from internal and external sale. As a result, it is difficult to estimate the gross and net income generated, and the amounts distributed to users, to the central treasury, and to local government bodies. Another issue flagged by FECOFUN has been the categorization of certain forests, especially in the Tarai. According to the Forest Act of 1993, community forestry is the prefered form of management, valued over leasehold, religious, or collaborative forestry as well as over the protected area system. Whereas in practice, the system of collaborative forestry and the protected area system has been prefered over community forests in the Tarai and inner Tarai. Forest Act/Rules have granted CFUGs status as autonomous, independent, and self-governing organizations involved in forest conservation, management, and community development. They have rights to access, use, manage, and sell forest products as per the operational plan. However, these rights have often been diluted through administrative orders, circulars, and decisions. These orders, circulars, and decisions have heavily increased the transaction cost of forest production and utilization. Indeed, they have hampered the growth of forest-based industries in Nepal. On other other hand, illegal harvesting of timber in some community forests has compelled the CIAA to take action against forest officials and executive members of the CFUGs. The issue of how best to motivate CFUG members to promote sustainable forest management and increase the productivity of community forests is a key issue in Nepal. 39 Several forestry projects including community forests in the mid-hills and the Tarai, the Livelihood and Forestry Program, the Biodiversity Sector Program in the Tarai and Siwaliks, and the Tarai Arc Landscpate Program promoted tree plantation on farms and distributed tree seedlings to households. The MPFS had identified expanding commercial tree seedling production and distribution as well as relaxing the cumbursome permit proceduresfor private tree products as a key goal. This has not been a success. Indeed, over the years the trend has been of a limited number of seedlings produced by the line agencies in the district. Meanwhile, restricted budgets and administrative hurdles have been imposed on farmers wishing to harvest and transport products from private trees to the market. There is significant interest, especially in the Tarai, in commerical tree plantation as cash crops. The permit system has, however, been a major disincentive for private tree growers. 4.1.3 Lessons Learnt and Way Forward Building on the institutional and environmental achievements of community forestry, the new forestry development strategy should focus on income generation and job creation. To succeed in these areas, reforms are needed in the following areas: Intensification of forest management and the application of tools and techniques for sustainable management of forests. Enterprise development and value addition of forest products. Simplifying marketing inside and outside the village, district, region, and country. Simplifying the regulatory and adminstrative procedures of extraction, harvesting, sale, permit, and transport of forest prodcuts, especially timber. With reference to the last point, several surveys (CBS 2013) show that trees on private land have significantly increased overtime. Farmers are also abandoning their marginal land to be converted into forest land as youth are migrating in search of alternative (to agriculture) income earning employment opportunities. As the labor shortage increases, forests and trees on private land will tend to increase. Tree planting on private land can further be enhanced if quality and desired seedlings are provided to the farmers. Further, the contribution of VAT from private forests is insignificant (about NPR 60 million) compared to the transaction cost of permits and hassles farmers have to encounter in the sale of their products. Since there is no VAT in the trade of agriculture products, it is necessary that VAT on private forest products are also eliminated as soon as possible. The government can capture more than this sum through value addition in the supply chain. The farmers will intensify tree plantation and forest management in their private land if the permit regime is simplified. Though the areas of reform have been noted above, the question of why the focus of community forestry should shift towards intensive management perhaps has not been made. The following eight points highlight the reasons we need to shift to an economic focus in forestry: Forest growing stock, biomass, market, human resources, and local institutions exist. There is immense potential to increase the sustainable harvesting of timber and wood to several times more than the current production rate. Local communities are willing to shift to a market focus to create more jobs locally. 40 The environmental, political, and demographic context is changing fast; the youth are increasingly less interested in subsistence farming, preferring income earning jobs. Such jobs could be provided through commercial forestry. Sustainable harvesting generates excess production meeting more than the local consumption. Commercialisation will add value to the supply chain and provide employment to the local people. The current level of employment through community forestry in thining, prunning and harvesting is estimated to be just two persons per CFUG round the year. This can and should be increased significantly. Sustainable management of community forests can generate both intermittent and final products. Forests can produce income earning products through thinning, prunning, singling, harvesting, and cleaning of weeds. The intermittent harvesting of forest crops is necessary for both maintaining forest health and extracting products for domestic and commercial needs. These intermittent and final wood products can be used as timber or composite wood. Community forestry has been more or less successful in achieving institutional and ecological sustainability. It is now time to move towards financial gain and economic sustaniability. Rigourous studies on the financial, economic, and ecological contribution of community forests are needed if the shift towards income and employment generation is to take place. Solid research must form the foundation of any subsequent interventions. 4.2 National and Leashold Forestry Program National and leasehold forestry is the second priority program of the MPFS. The program aims to complement community and private forests by developing and managing national forests through government agencies or private sector leases. While the community forestry program aims to fulfill the household needs of rural people, the national and leasehold forestry program aims to produce forest products for commercial use, expansion of forest-based industries, revenue generation, and employment to the people at large. The MPFS categorizes national forest as forests managed by the government or the Department of Forests (DoF). This is equivalent to the government-managed forest category created by the Forest Act 1993 and Forest Regulations 1995. Leasehold forests, as identified by the MPFS, are similar to the corporate-based or institutional leasehold forest provided for by the Forest Act. The pro-poor oriented leasehold forestry program implemented by the DoF was not conceived during the MPFS. However, the prevailing Forest Act and Forest Regulations have specific provisions for pro-poor leasehold forestry. The fundamental differences between these two types of leasehold forestry lie in (a) the annual rental fee for the use of the forest land, (b) the organizational characteristics of the leaseholder, and (c) the decision to lease the forests. There is an annual rental fee for using the land leased to the corporate sector. However, it is free for the poor households. Further, while corporate bodies or firms can rent leasehold forests, poor households have to first organize themselves into groups before they can apply for the leasehold forests. Additionally, a group of poor households can get the leasehold forest by the decision of the District Forest Office (DFO). However, corporates can have the leasehold forest by the decision of the MFSC. The initial duration of the lease is 40 years but renewable for another 40 years in both corporate and propoor leasehold forestry. 41 Theoretically, MPFS envisaged national forests as being on an equal footing with community and leasehold forests. The Forest Act 1993 and Forest Regulations 1995, however, signal governmentmanaged forests as residual national forests, which have not been converted to the community and leasehold categories. In this paper, we use the term “national” forest as equivalent to “governmentmanaged” forest, unless specifically described differently. 4.2.1. Components and Targets The program seeks to demonstrate enhanced management techniques for natural and plantation forests in the Tarai as well as inaccessible areas in the mid-hills and mountains. Once the forest agencies demonstrated the enhanced management techniques, these forests would be gradually handed over to local people as community forests. Until then, the remaining inaccessible forests of the mountains and the Chure range were to be considered protected forests or wilderness areas. The program contained the following components: Land use classification of forests. Forests would be classified into National Protection Forests or Wilderness Areas, National Production Forests, and Community Forests (including the present and potential community forests). Establishment and management of production forests in suitable areas to supply wood to urban and wood-deficit areas. Leasing of available and suitable forest land to private sector for industrial plantations. Trial plantings followed by large-scale plantations on degraded land. These replanted areas would be managed as demonstration sites or national production forests. Practice silviculture and yield regulation in natural forests. These forests would be managed as demonstration sites or national production forests. Loans for private and industrial leasehold forestry would be provided by the Agricultural Development Bank. The program aimed at managing about 0.5 million ha of forests though government and leasehold arrangements over the MPFS period. This was projected to lead to the production of about five million tons of fuelwood and about 1.1 million M3 of timber by the end of 2011. These targets were not separately segregated into national and leasehold forests. About USD 352 million (1988 constant prices) was estimated to be required to implement the program during the 21 year period (1989/90 to 2009/10). This amounts to about 20.2 percent of the total projected investment made under the MPFS. The private sector was expected to contribute about 25.5 percent of the total program cost over the years. 4.2.2 MPFS Program versus Implementation Modalities To date, most accessible forests in the mid-hills and mountains have been handed over as community or pro-poor leasehold forests. Some accessible forests in the Tarai and Siwaliks have also been handed over as community forests. But the process of handover has been very slow in these two regions, with some 42 efforts coming to a complete halt. A major problem in the Tarai is that many community members would be distant users (households living farther away from the forests). Meanwhile, many conservation issues have been faced in the Siwaliks. Each of Nepal’s 75 districts – except Mustang which is covered as a protected area under the ACAP – prepares a District Operational Forest Management Plan spanning five years. These plans are applicable to all the forest management regimes as well as state the amount of forest products to be harvested from each regime. Since the community forests and pro-poor leasehold forests conduct detailed inventories of forests types and the silvicultural systems to be followed in both harvesting and regenerating the forests, green trees harvesting is allowed from the former and planted trees from the latter. No clear harvesting and regenerating system is followed in the national forests, except in those Tarai forests which are now being managed as collaborative forests. This category is discussed in detail below. In much of these residual forests, an “undeclared policy of removing 4 D trees (Dead, Diseased, Died, and Decayed)” has hampered the management of these forests (NRB, 2013). At present, the GoN is managing some blocks of national forests under a collaborative forest management program in some districts of the Tarai. In this program, the government collaborates with adjacent and distant forest users and local government bodies such as VDCs and DDCs. This Collaborative Forest Management (CFM) model is still in a pilot phase at 20 sites, covering a total area of about 54 thousand hectares, across nine Tarai districts. Since CFM is not specified in the Forest Act and Forest Regulations, this program is being run through guidelines approved by the GoN in 2002 and further revised in 2011. The section below reviews both the national and leasehold forestry programs. In the latter, the main focus is on the pro-poor leasehold forestry as the corporate-based leasehold forestry is of small scale. 4.2.3 Key Achievements of National Forestry Program The DoF is responsible for the implementation of the national and leasehold forestry program. Accordingly, the National Forestry Division, one of the three divisions of the DoF supports the implementation of the program in the districts. The DFO is responsible for the implementation of the program along with the handing over, technical support, and monitoring of community forestry and enhancement of private forestry in the field. The National Forestry Division has three sections namely (a) Forest Protection Section, (b) Forest Management Section, and (c) Forest Product Utilization section. The functions of the division are stated as follows: To promote scientific management and development of national forests. To promote proper and equitable utilization and distribution of forest products. To promote leasehold and collaborative forest management through DFOs. To protect the forests through DFOs. Not much progress has been made in the management of national forests. Indeed, national forest management has been a bottleneck in the development of forestry in Nepal. The Forest Act/Regulations have a provision for allocating some part of national forests as protected forests for restoring its cultural and conservation value. In the latter phase, protected forests have been declared as an integrated comanagement modality of 133,000 ha forest land for biodiversity and environmental conservation. As the 43 implementation of the national and leasehold forestry program is facing serious challenges, we review some achievements and processes under this program. Listed below are some major interventions of the DoF to better manage the national Tarai forests during the MPFS period. I. FMUD project and technical forestry The Forest Management and Utilization Development Project (FMUDP) supported by the Finnish government provided both financial and technical assistance to focus on national forestry programs in the Tarai. The project ran from 1991 to 1995. The objectives of the project were to increase the longterm productivity of the national forests of Nepal. The activities would be concentrated primarily in the Tarai area, the main objectives being the fulfillment of people’s basic needs of forest products and protecting the environment. The outcome of the project was to be improved protection of actively used national forests with increased productivity. Working procedures for the district-level managers of Tarai forests were prepared under the project. Although forest management plans were also prepared previously, they were not operational. These earlier plans were prepared by the center, were protection oriented, and did not focus on proper harvesting and utilization of the forests. The project developed a strategy for operational planning (working at the sub-district and forest stand level rather than at the district forest as a whole) based on information related to socio-economic background, forest management aspects, technological factors, and economic factors. A number of practical studies relating to stocking, yield and growth, species composition, and regeneration status of the Tarai forests were carried out in order to make the Operational Forest Management Plans (OFMPs) more practical and easier to implement. These studies showed that the Tarai forests could yield as much as 12 to 15 cubic meters of wood per hectare per year in comparison to the previous figure of 5 cubic meters per ha per annum. Similarly, the rotation age of Sal (Shorea robusta) was reduced to 80 years from 120 years. The project also prepared the “contents of an operational forest management plan”. The project initially piloted two plans in Rautahat and Bara districts. Later, similar plans were prepared for another 17 districts based on the concept, guidelines, and modalities of these two plans. FMUDP spent significant efforts in generating information and knowledge on the potentials of implementing OFMP in Tarai districts. Several reports and papers were prepared by FMUDP focusing on new information on Tarai forests and their management. As a result of the extensive groundwork, certain parts of the OFMPs were implemented. Activities such as delineation of plots, marking trees, fire line construction, and climber cuttings were carried out as per the plans. The implementation was, however, not backed by political forces and some forestry stakeholders. Local communities surrounding the forests and further afield noted that these plans were prepared without their participation. As a result, these plans were not implemented in totality. II. Development of a technical forestry model The initial exploration on technical forestry based on stand level management, which started through OFMP, showed the technical potential of managing old growth forests of the Tarai with a shelterwood silvicultural system. The shelterwood system was suggested as the most appropriate silvicultural system for the management of these matured to over-matured forests. The simulation model developed by 44 Kanel (1994) also showed the high payoff of active forest management in the Tarai. These technical forestry studies showed that the growth rate of the Tarai’s Sal forests is significantly higher than the estimates available in the yield tables from India. Similarly, the rotation of Sal forest could be reduced from 120 years as was the practice then to 80 years. Thus, a technical model of forest management was developed through the FMUD project. This approach of forest management is now being tested in the CFM plots in the Tarai. III. Development of District Forestry Coordination Committees (DFCC) The forest administration realized that without the cooperation of the local people and district level political bodies, forest management in the Tarai and adjoining areas could not be implemented. This realization, and the innovative work done in the Tarai through BISEP-ST, led to the formulation of a district-level multi-stakeholder forum named the District Forest Coordination Committee (DFCC). Chaired by the DDC president, the DFCC included all forest stakeholders as members working in a district. A directive on DFCC was approved initially in 2006 and was again revised in 2011. The DoF believes that this mechanism can help in allocating different forest management regimes as well as in resolving other forest-related conflicts on the ground. IV. Institutional modality of involving distant users and CFM One of the stated achievements of the CFM is the design of a unique forest tenure regime in the management of larger natural forests in the Tarai with the cooperation and participation of both proximate and distant users, local governments, and the central government. The chairperson of the users’ committee is the representative of the users whereas the member secretary is the local forest officer. The CFM program is supposedly self-sustaining as fifty percent of the income from the harvest and sale of matured forests accrues to the committee. This institutional arrangement in terms of tenure reform, forest governance, the inclusion of distant users, and the application of active technical forestry are all highlighted as achievements (various publications of Hamro Ban, National Seminar of DFOs2009). V. Public forest management in the southern Tarai Public land under the jurisdiction of local government is being used for tree cropping in the southern parts of the Tarai, where national forests are lacking. These areas are being planted by the poorer households as part of a group with support from DFOs. In some cases, the households use agro-forestry as a technique, while in others trees are planted along the fringes of local ponds established in the public land. The objective of this program is to involve poorer households who do not have access to private land for tree planting, to increase the income of the poorer households, and also to increase the supply of forest products. VI. Establishment of the forest development fund (FDF) The FDF was established in 2007 to expand forest development and management activities. The Fund was designed to ensure a sustained flow of resources to the forestry sector. This was a necessary measure in a context where the annual budget devoted for forests depends on political priorities. The fund was created with NPR 5 per Cft levied from private timber traders and NPR 5 per Cft provided by the government for the same wood. To date, about NPR 204 million has been collected in this Fund. 45 However, the operational modality of spending the money on different forest activities has yet to be approved by the government. VII. Production and distribution of seedlings The production and free distribution of seedling for plantation in private land has expanded since 1990. This has helped to expand the number of trees on farms. As a result, timber production from private forests has been increasing. Different projects such as Tarai community forestry, BISEP-ST, LFP Tarai, Tarai Arc Landscape Program, Rastrapati Chure Program, and recently the government itself have increased budget for free seedling distribution. 4.2.4 Key Issues and Challenges of National Forestry Program A key constraint in managing national forests is the lack of a decentralized institutional mechanism as well as of local people’s participation. This institutional vacuum still prevails, particularly in the Tarai, Chure, and the high mountains. Some major issues, challenges, and threats are as follows: I. Land use classification of forest land The land use classification system has not yet been operationalized for real zonation in order to manage the forests. Categorization of the forest land – into forest and non-forest, accessible and non-accessible forest, productive and protective forests, and forests and grazing land within the forest boundary – is a pending task. Similarly, the forests have not been categorized for scientific management, mixed management, reclamation, and for protection. The Ministry of Land Reform and Management has lately (2012) prepared a land use policy. This policy has also been approved by the government, but it is too general and lacks a proper enforcement mechanism to make it implementable. II. Pressure on Tarai and Chure forests The demography of Nepal is shifting. More people are either moving to urban areas or to the Tarai and Chure areas. The latest census report shows that more than 50 percent of the total population of Nepal now resides in the Tarai and Chure areas. This has caused tremendous pressure on the forests of these regions. Official data shows that about 90 thousand people are encroaching on the forests in 25 Tarai districts. The higher density of population also requires more public infrastructure such as roads, schools, medical facilities, and other open spaces. The forests are gradually converted either into private residential areas, private farms, or public infrastructure. Even in the mid-hills and mountains, national forests surrounding urban or bazar areas are prone to illegal use or deforestation. Pressure is also mounting to provide forest land for hydro-electricity generation, mainly in the mountains and the midhills. Similarly, pressure is also increasing to provide forest land for police and army barracks, hospitals, and academic institutions. These are all challenges for forest management. III. Frequent policy changes in the allocation of forests and harvest/sale of forest products The government had demonstrated a habit of changing forest policies frequently without a consultative process beforehand. In some cases, the Forest Act is in conflict with other legislation on local development, mining, and water resource development. The frequent and abrupt changes in forest policies create risk which discourages investment in forestry and limits people’s participation. The 46 recent attempt to revise the Forest Act and Regulations and the restrictions on the sale of forest products has adversely affected motivation among communities and created frustration among the forest-based industrialists. The attempt has unnecessarily increased the transaction cost of doing business in forest products’ processing and marketing. It has even promoted the import of timber from other countries such as Myanmar, Malaysia, and elsewhere. IV. Wild fires, uncontrolled grazing, and illegal removal of forest products Since there is no practical tenurial regime to regulate the household use and extraction of forest products, access to national forests is in fact free for all. Although the Forest Act/Regulations prescribe the mechanism for entering and grazing in the national forests, enforcement is weak. It is reported that some herders entering the national forests deliberately set fire in the forest to get a flush of green grass during the dry season. This and other reckless activities, such as throwing burning cigarette stubs in the forest, promote the spread of fires in the forest. The government, including DFOs, does not have equipment or training to control the wildfires. Such fires are especially acute during the early summer season when high temperature coincides with the presence of dry ignitable material – fallen branches, leaves – on the forest floor. Uncontrolled grazing compacts the forest floor (soil), adversely affecting regeneration and regenerated seedlings. Illegal removal of forest products by rural households depletes forest resources and is anathema to better forest management. Although these are activities against the provisions of the prevailing Forest Act and Regulations, enforcement of them is very weak or non-existent. V. Workload of DFO staff The DFO staff is responsible for the implementation of both community and private forestry as well as for national and leasehold forestry programs. The tenure and ownership of community, private, and leasehold forests is more or less defined in the Forest Act/Regulations. The management responsibility of these forests lies within the community, private holder, and leaseholders respectively. The DFO staff support these entities in executing the programs. However, in the case of national forests, the responsibility of protecting and managing, access rights and control of the forests, and the sale of forest products lies with the DFO staff. Moreover, the DFOs are also involved in the legal adjudication of forest offences. Regular monitoring and inspection has also to be carried out by the DFO. Forest technicians face difficulties in carrying out these multiple and conflicting functions. Moreover, the MPFS also recommends that the forestry staff be involved more in technical aspects of forestry rather than occupied by administrative tasks. VI. Skills, knowledge, and capacity in sustainable forest management The need for foresters to upgrade their skills, knowledge, and practices on SFM has become a common concern. This issue was highlighted at a DFO seminar in 2010 as well as by numerous Hamro Ban publications. Although much has been written about community forestry in the social sciences, the technical aspects of enhancing forest productivity and forest product marketing still need strengthening in Nepal. Collaborative forest management in some districts of the Tarai is generating some knowledge on silvicultural systems. However, such practices suitable for Chure, mid-hill, and mountain forest management have neither been innovated nor adopted in these regions. Developing appropriate skills, generating new knowledge, and practicing these innovations are serious challenges in the management of Chure and mountain forests as well as in expanding active forest management in the Tarai. 47 VII. Conversion of national forests into protected forests or protected areas A large area of national forests has been transformed into protected areas since the adoption of MPFS. This measure has limited these areas for multiple use. In some cases such as the Banke and Gauri Shankar area, these policies have antagonized the local communities who had access to these forests before the transfer. Converting multiple use forestry (national forests, community forests) to protected areas or protected forests inhibits the supply of forest products to be used by local households and as raw material for forest-based industries. The trade-off between production forest and protected forests, and the comparative advantage of these management regimes have to be assessed before forests are allocated into different management regimes. VIII. CFM and block forest management A DFO seminar held in 2010 in Kathmandu presented a case for both the CFM and for block forest management systems. The CFM model has already been discussed in the context of the Tarai. Block forest management is, however, discussed in the context of all of Nepal. The seminar proposed the management of block forests both by the government in national forests and/or as public-private partnerships in corporate leasehold forests. How these types of forest management regimes would be differentiated and allocated has not been clarified by the government. IX. Forest encroachment and degradation About 80,000 ha of national forests have been encroached on by individuals and institutions, mainly in the Tarai. The average rate of deforestation in the Tarai was 1.3 percent per year between 1978/79 to 1990/91, but declined to 0.4 percent per year during 1990/91 to 2010/11 (DFRS, 2014). However, forest degradation (reduction in growing stock, forest species diversity, lack of regeneration, among other indicators) appears to be higher than deforestation in the Tarai. Empirical databases on this subject are lacking. 4.2.5. Key Achievements of Leasehold Forestry Program I. Commercial leasehold forestry program Figure 4.2: Forest use for non-forest and commercial lease purposes The Forest Act of 1993 has a provision to lease degraded forest plots below 20 percent crown cover for commercial and scientific purposes. Meantime, the leasehold forest policy of 2002 has also enumerated guiding principles to lease out parts of forests for commercial purposes. The DoF record shows that about 14 percent (1,600 ha) of total allocated leasehold forest land (about 13,000 until 2013) has been used for tree-based forestry purposes. Eco-tourism and herbal farming constitute about four percent of total commercial leases. Contrastingly, 82 percent of total forest land has been leased for non-forestry purposes to the army and police as well as to hydropower developments. 48 II. Pro-poor leasehold forestry program The Forest Act of 1993 has made special provisions to lease degraded forest land to groups of households living below the poverty line. Pro-poor leasehold forestry is one of the priority programs of the government. This program has been considered an instrumental model for poverty reduction and the rehabilitation of degraded forests by the government of Nepal. The program is implemented by the DoF, the Ministry of Federal Affairs and Local Development, and the Department of Livestock Development. However, the handing over of the forest lease is the responsibility of the concerned DFO. The program began as a small pilot project in 1989 in two mid-hill districts – Kavre and Sindhupalchowk. It has since been extended to 40 districts covering areas from the Tarai to the high mountains. Perceived as an innovative program for poverty alleviation, pro-poor leasehold forestry has already been mainstreamed in the forestry sector. The NPC has designated it as a priority government program. The DoF has been regularly implementing this program with financial and technical support from IFAD and the Food and Agriculture Organization (FAO). Meantime, a number of other donors (SNV/BISEP-ST, DFID/LFP, SDC/NSCFP, PAF/Nepal) have also supported the implementation of the program in their respective project areas. About 41,300 ha of forest land has been leased to poor households. A total of 6,957 leasehold forest (LF) groups have been formed, with a membership of 65,402 households (Figure 4.2). Of them, 916, 26 and 71 LF groups were established through the Western Upland Poverty Alleviation Project (WUPAP), Bio-diversity Sector Programme for Siwaliks and Tarai (BISEP-ST), and the Livelihoods and Forestry Program (LFP) respectively. The average size of LF user groups (composed of poorer households) is 9.4 and average forest area is 5.93 ha per group (0.60 ha/HH), though these numbers vary across the program (WUPAP and FAO TA Pilot districts having about 1 ha/HH). Among these interventions, the Leasehold Forestry and Livestock Program (LFLP), a project funded by IFAD has been a major promoter of leasehold forestry. The project is now running in 26 districts. The ethnic composition of participants in the LFLP is 58.8 percent Janajati and 12.5 percent Dalit, with Brahmins, Chhetris, and Newars making up the remainder. Meanwhile, women make up 37.8 percent of participants, a higher percentage than many similar programs in the forestry sector. In all, about 88 percent of the groups are reported to be functional. Figure 4.3: Leasehold forest groups and their area of management over 20 years 49 The majority of LF groups, about 68 percent, have good to moderate institutional and technical capability. Yet, they are managing 89 percent of the allocated forest area. With reference to financial management, less than 40 percent are in the good to fair category. Nevertheless, the groups have been organized into inter-groups and cooperatives. Altogether, 55 cooperatives have been formed by 500 LF groups. In the latter phase of the program, district federations of the individual user groups were formed in six LFLP districts. Recently the TA/FAO/LFLP (2012 and 2013) carried out detailed outcome level studies of LFLP covering the major components of leasehold forestry including institutional development, forest and livestock development, and rural finance development. Major findings of these studies in terms of livelihoods capital of LFUGs are: III. Impact on natural capital The majority of the degraded land has been converted into multiple use forests with trees, grass, and herbs. The forests now have more than 90 percent ground cover. Leasehold farmers have increased fodder and grass production to feed livestock. Some have practiced high value NTFPs for markets. Forest fires and open grazing have been controlled. The program has also reduced pressure on adjacent forests as the leasehold farmers have produced their forest product needs from their leased land. IV. Impact on social capital Poor households are organized into more than 6000 LFUGs. LFUGs in six districts have been organized into district federations and about 500 LFUGs have been organized into 54 Cooperatives. Moreover, they have been able to develop linkages beyond forestry pulling more than NPR 3 million in funds from other district based offices. About 11 percent of the ultra-poor LFs have been lifted up to the rich category as compared to a similar upward movement for only 1-2 percent of the control groups over a period of 10 years. Representation of women in LF management and benefit-sharing has increased from 34 percent in 2005 to 55 percent in 2012. LF is mainstreamed in the forestry sector and it is ranked a national priority (P1) project by the NPC and MoF. V. Impact on human capital School attendance of children has increased. Similarly, LF has significantly contributed to saving women work hours for the collection of forage/fodder and firewood from 2.5 hours in 2000 to 2 hours in 2012. Part of the time saved was "re-invested" in livestock rearing, agricultural production, and work in kitchen gardens. VI. Impact on financial capital Over 90 percent of LF members are involved in saving and credit schemes with accumulation of NPR 62,035,796. More than two thirds of the funds have been mobilized in various IGAs and the repayment rate is satisfactory. The number of cooperatives has increased from 17 in 2005 to 54 in 2012. The S&C groups of LF have initiated developing linkages with other financial institutions. LF households are involved in more than a dozen micro- or household level IGAs from kitchen garden to agro-forestry enterprise development. The average annual cash income of the LF households has increased from NPR 25,589 before the project to NPR 43,768 post-intervention. Livestock products are the overriding income source, with the total almost doubled as compared to the base year level. 50 LF households linked with good road networks and markets have changed their traditional farming system with increasingly more farmers joining in the commercial farming of cash crops such as vegetables, fruits, broom grass, and NTFP such as Chiraito, Argheli, and Kurilo. They have been promoting the commercialization of forage and fodder seed production across the country. VII. Impact on physical capital Households investing on education, health, and clothing has increased. The number of households with thatch roofs, brush wood, and mud stone are steadily decreasing. The LF project has increased the access of LFUGs to various basic services such as drinking water, health and sanitation facilities such as toilet and cooking stoves, electricity and education, and quality of livestock. 4.2.6. Key Issues and Challenges of Leasehold Forestry Program Private or corporate-based leasehold forestry has virtually been a neglected program except for some interventions in eco-tourism and NTFPs. This is due to the fact that the existing Forest Act does not have a provision for leasing existing forests for management and utilization. The lack of legal provisions has adversely affected the implementation of corporate-based forest management through leasehold forestry. Secondly, the existing annual rental fee for bare or degraded forest land is very high. This is a further disincentive for the private sector. Both of these legal provisions need to be simplified so that private investors can be tempted to sustainably manage part of the national forests for wood and nonwood production. Despite the positive attributes of the pro-poor LF, more than a dozen articles on LF, the LF Supervision Mission, and an Interim Evaluation Report (IFAD 2003, 2009 and 2012) have reported a few relevant institutional, technical, and socio-economic issues about the sustainability and scaling up potential of pro-poor LF. The commonly stated issues include: the adoption of a blanket approach mostly driven by donors, competition with community forestry, unsecured tenure rights, conflicts with customary land tenures, exclusion of poor households and traditional users, lack of post-formation support, poor support for livelihood diversification and value chain development, weakening group cohesion, poor coordination and governance (GOs and LFUGs), and poor monitoring and knowledge management system. The most pertinent issues and challenges of group leasehold forestry are: I. Inheritance rights and its risk assessment A major issue of pro-poor leasehold forestry is the generational continuity and its risk assessment. Many youths from the mid-hills are not interested in subsistence based farming, and are temporarily migrating overseas for employment, or moving to the Tarai or urban areas. Similarly, farming a small patch of degraded forest may not provide enough incentives for the poor. Population dynamics and its management should therefore be considered for the next generation of leasehold forestry. An option would be to merge community forestry and leasehold forestry for institutional sustainability. II. Rise in social conflicts over traditional use rights Inclusion of the relatively rich and the elites in LF groups while poor households are excluded has been a problem of the LF program. Similarly, the handing over of LF plots used for grazing and the collection 51 of grass and other biomass by local communities without their prior consensus has resulted in conflict over rights to use between LFUG and non-LFUGs. There has also been tension between the formal LFUGs and customary land tenure systems including shifting cultivation. III. Weakening group cohesion The trend of managing LF plots on an individual basis has weakened group cohesion, threatening the sustainability of the program. LF households involved in individual management have informally started selling their plots to Non-LFUGs or leasing plots to other group members. IV. Entrepreneurship development and climate change Although the program has produced much better results than other programs in supporting the poor and generating livelihood opportunities, the program has not been able to foster direct employment through enterprise development. The poorest are a climate change vulnerable group, and should be the major target to address the issue in rural development. V. Indebtedness Significant numbers of LF households who have borrowed loans during the HLFFDP period have experienced repayment problems and many face the risk of being landless. VI. Cultivation and marketing of NTFPs Sustainable production of NTFPs in high altitudes is currently not possible. Mainstreaming the technical services demanded by local users is a challenge. Event-based and seasonal service providers may not support the users’ regular demand in the long term. High altitude forest land and degraded land management require more inputs to be provided partly on subsidy. About 50 percent of the land still needs maximum inputs for optimal and sustainable utilization of the land. 4.2.7 Lessons Learnt and Way Forward The implementation of the national and corporate leasehold forestry program is very weak. Significant progress has been made in pro-poor leasehold forestry, which was not conceived in the MPFS. The major lessons learnt are as follows: The recent practice of CFM in some national forests in the Tarai has been a success. Significant volumes of wood can be obtained from the removal of old growth and the natural regeneration of the forests. This CFM approach can be further expanded in the Tarai where the issue of distant users is acute. However, the mechanism of benefits sharing and the cost of CFM implementation need further consideration. Similarly, the institutional structure (representation, decision-making, and benefit sharing) of the CFM also needs to be reformed. No existing national forest has been leased to private parties for management and utilization. The MPFS had envisioned the involvement of corporate (private) sector in the management of national forests. However, the Forest Act only allows corporate sector involvement in new plantations and not in the management of existing forests. Even in new plantations, the high leasing fee has been a disincentive. The existing Forest Act needs to be revised so that private 52 entities can manage the existing forests for the supply of forests products. Similarly, the annual rental fee of the leasehold forest should be streamlined to make it competitive with other investment activities. The protective regime of forest management and the command and control nature of forest administration have to be changed to increase better performance both in forest management, and organizational performance. New knowledge and skills in tenure reform, sylvicultural system, GIS and MIS, entrepreneurship, organizational management, and leadership have to be imparted to forest professionals so that they produce better results. Similarly, a culture of positive attitude and team work has to be instilled to promote sustainable forest management. All of these things have to be strengthened so that the capacity of the staff and the forestry agency is enhanced. Similarly, some of the functions (such as managing the forests) of the DFO staff could be changed and they could be assigned to other parties. This has already happened in some of the other technical ministries of Nepal The pro-poor leasehold forestry is successful where the adjacent and non-poor have agreed to the tenure of the leasehold forestry. However, the group-based leasehold forestry and community forestry program are so compatible and synergetic that they could be merged to optimize the benefits to the rural poor. Various studies show that sustainable forest management and REDD readiness and results complement each other. The market for forest carbon is very low, and Nepal seems to face several hurdles (incremental production and leakages) in capturing the value of forest carbon. However, dealing with the drivers of deforestation, governance reforms, and application of MRV will ultimately help in enhanced management of forests. REDD+ readiness and strategy formulation should promote forest management. The carbon credit that can be generated from better forest management should be considered as additional financing rather than as a tradeoff between wood production (provisioning services), and carbon sequestration (regulating services). 4.3. Wood-based Industries Development Program This program aimed to facilitate the conversion of wood into commodities needed by the people, and to contribute to economic development through industrialization. The program identified the possibility of operating eight industries, namely timber harvesting, sawmilling and wood seasoning, furniture, parquet, plywood, veneer, matches, and wooden handicrafts. It also identified eight issues and constraints ranging from supply and pricing of raw materials to research and development. These issues are still relevant today. 4.3.1. Key Achievements The eighth to tenth five-year plans and two three-year interim plans were implemented during the MPFS period. All these plans incorporated the major objectives of the MPFS. However, the designed programs were not directed towards maintaining an effective balance between the demand and supply of timber products. The MPFS recognized that coordination is virtually non-existent among forestry, agriculture, livestock farming, energy policies, and other public sectors. The market-led economic liberalization policy was not effectively pursued in the case of timber and fuelwood markets. The regular supply of forest products required to sustain the forest-based industry did not take place as planned by the MPFS. 53 There has been a huge gap in the demand and supply scenario for raw materials, mainly in the urban and suburban areas as well as in the Tarai region. It has also been difficult to ascertain the actual progress and status of the forest-based industry in the absence of an appropriate monitoring system as envisioned by the MPFS. Moreover, there have not been supportive policies (for instance, industrial policy, trade policy, banking/financial investment policy) to promote forest-based industries. However, supply of raw materials has been the major constraint in the development of this sub-sector. As per the estimate of the MPFS, the demand for industrial sawn wood was about 438,000 M3 in 2011. However, about 376,000 M3 of roundwood (or about 188,000 M3 of sawn timber) was officially supplied in the 2009/10 fiscal year. However, the supply was reduced to about 80,400 M3 of round wood in 2010/11. The MPFS emphasized the need to generate revenue from the payment of market prices for forest products from the national forest. This provision was not considered in the past. Recently, government royalty (floor price) on timber sales have increased significantly. But these increases are not linked with the cost of production and management. The MPFS forwarded a strategy to free internal trade and the transport of timber and fuelwood from all restrictions. To support this, a provision was made to seal the transport vehicle carrying forest products at the district of origin so that there would be no hassles at transit points/checkposts on the way. However, several hurdles in the form of permit regimes and informal taxes from various groups/institutions still exist. Figure 4.4: Timber supplied from various forest regimes and agencies The MPFS made some provision which required parastatal organizations (e.g. TCN) to compete on equal terms with private enterprise. These provisions were initially enacted, but subsequently relaxed. The MPFS also proposed to make low-cost financing available to forest-based industries for renovation, improvement of productivity, expansion, and pollution-control facilities. It also forwarded strategies for liberalization of the regime to import raw materials for forest-based industries and support for technical and vocational training. There was no practical movement on all these provisions. 54 Significant increase has taken place in terms of imports of timber logs (from countries such as Myanmar, Malaysia, Vietnam, Nigeria) and substitution of timber products (by steel, aluminum, PVC). This situation has considerably hindered the growth and survival of forest-based industries, further exacerbated by the poor management of national forests. An estimate by FenFIT indicates that about NPR 20 billion is invested by private entrepreneurs (about 5,000 industries/establishments) in various forests-based industries including timber and non-timber. Around 200,000 persons are directly or indirectly employed in these industries. Despite the MPFS proposed financing plan – NPR 2.1 billion at 1988 constant price of which 743 million comes from the GoN, 210 million from the private sector, and 1.15 billion from external assistance – the investment from the GoN and external assistance has been practically nil. Some noteworthy points of the program are: Commercial leasehold forestry: Despite provisions in the MPFS, only about 10,000 ha of forest land has been leased for commercial purposes. Out of this, approximately 14 percent (1,600 ha) had been used for forestry related activities. Timber production and harvesting: Timber production in Nepal has been occurring in national forests, community forests, and private forests. The main actors in harvesting have been from the private sector, even though some harvesting is carried out by TCN and FPDB. In the case of community forests, some communities are harvesting themselves. Timber processing: The TCN was the main harvesting and processing organization in the past. However, they are now processing to a much lesser extent. At present, the main actors in processing are from the private sector, though some communities (either individual CF or an alliance of CFs) have also been involved in processing timber. The private sector institutions are also the main actors in the marketing of the various intermediary and finished products. At the district level, some distribution/sale of the forest products is also done by the District Forest Product Supply committees. Some community organizations such as CFUGs and cooperatives are also engaged in marketing forest products. Market chain analysis: This analysis revealed that the policy environment, including rules and regulations pertaining to the timber trade and industry, has not been very supportive. Despite a recent easing of guidelines for timber transportation, the problem of taxation at multiple levels by multiple groups continues. Banks and financing institutions have not been supportive of the forestry sector, as it is considered a risky area for bank loans. Quality control and branding support is still a distant thing to institutionalize this sector. The facilities for seasoning and treatment of wood are limited and even the existing facilities are not operating at full capacity. Changes in wood technology: Several advancements in wood technology have taken place in the two decades since the MPFS was drafted. The veneer and plywood industry at that time was mainly using simal, sissoo, and poplar as raw material. At present, Alnus is the main species used as raw material. Similarly, national forests were the only sources of timber then. Today, community and private forests also produce logs for veneer and plywood production. Moreover, in the past, most of the technology required large-sized wood/timber. With the newer technology, smaller sized wood/timber can be used as raw material. 55 4.3.2. Key Issues and Challenges As timber production is a multi-year venture, investors see it as a risky undertaking. Besides, trees are biological resources, thus susceptible to drought, flood, pest and diseases, fire hazard, and grazing. Another aspect is that usually the return from the industrial timber plantation only comes at the end of the rotation period. Since there is no provision of insurance, the following factors make timber a risky investment: As there has not been a planned management of forest with consideration of sustainable supply of raw materials, investors have limited confidence in the sector. Quick and frequent change in policies and decisions creates an environment of uncertainty, which in turn negatively affects investments. Predictability of policy is a major issue in forestry investment. Interference of various agencies such as the police, the CDO, or the CIAA interfere in the timber market chain further complicating the process. There is a shortage of trained technical human resources as formal and informal training facilities do not exist. The CTEVT has a few training programs, but they are limited to the lower skill levels. There is no insurance or other risk avoidance mechanism for risky forestry works such as harvesting, lumbering, and processing. This is a serious challenge in the forestry sector. 4.3.3. Lessons Learnt and Way Forward Based on the above review, the lessons learnt are as follows: Enhanced management and supply of wood from government-managed forests and community forests is needed. Implementation of private leasehold forests is needed so firms can manage the existing forests for sustainable wood supply. Financing with low interest rates should be made available through banks or other financing institutions for private nurseries and plantations. Carry out research and development related to fast growing short rotation timber species. Further simplify the procedure for trade and transport of forest products. Make parastatal organizations (such as TCN) compete with private enterprises. Ensure financing at low interest rates for forest-based industries seeking renovation, improvement, expansion, and pollution-control facilities. 56 4.4 Medicinal and Aromatic Plants and Minor Forest Products The MPFS prepared a plan for the development of MAPs and five other NTFPs with the following objectives: To increase the supply of NTFPs. To provide employment opportunities and contribute to the growth of local and national economies. 4.4.1 Key Achievements The MAPs/NTFPs have significant potential. But the substantial supporting and promotional work required to tap this potential was not carried out during the decade-and-a-half of MPFS implementation. Nonetheless, rural people from across Nepal have been collecting and selling NTFPs to augment their income. NTFPs have also been an important source of revenue to the GoN; DoF records show that the government collected about NPR 21 million as revenue from NTFPs during 2008/09. NTFPs were mostly exported to India in crude or semi-processed form. However, during the last few years, some semi-processed or processed NTFPs have also been exported to India and elsewhere. Such exports mainly include essential oils from about 18 plants. The MPFS intended to promote MAPs and five other NTFP groups of products. Table 4.1: The targets and achievements of MPFS on MAPS and other minor forest products Unit New herbal centers New processing centers New cooperatives. Farmers trained Herbal farms: Private farms Community forests Other plantations Herbal collection: From the wild From farms Lokta, increased capacity Pine resin processed Sal seed collection New production areas:* Khair trees Sabai grass Target Achievement No. No. No. No. 12 4 46 2,000 10 4 No data available No data available ha ha ha 2,500 3,000 500 No data available No data available No data available t/total t/total T t/year t/year 15,683 176,600 1,000 22,000 80,000 2,882 No data available 41 2,421 Stopped ha ha 6,000 6,000 No data available No data available I. Medicinal and aromatic plants (MAP) The MPFS sought to promote MAPs/NTFPs for economic development of the country by sustainable production, value addition, and trading in the global market. Though 30 species of 57 MAPs/NTFPs have been prioritized by the government, only 19 species have been traded widely at maximum rates. II. Lokta The MPFS sought to build the capacity of the industries to produce 1,000 metric tons of lokta per year. This target was not met. The annual supply of lokta during the last five years has been less than 100 metric tons per year. III. Sal seed Though the MPFS planned to enhance Sal seed collection, the Sal seed industries have been closed and there has been no supply of the seed for over a decade. IV. Khair The supply of Khair has been fluctuating every year during the last two decades. Over the last nine years, the highest collection of Khair took place in the fiscal year 2004/05 (18,650 M3). V. Pine resin During the formulation of MPFS, only three rosin and turpentine industries were supporting resin tapping and processing. At present, about 17 such industries are involved in resin‐tapping and making rosin and turpentine in Nepal. They collectively tap about 40,438 metric tons of resin annually from about 13.5 million trees. Pine resin is processed to produce rosin and turpentine, and they are mostly exported to India. VI. Sabai grass There are four paper mills active in paper production. However, the quantity of Sabai grass used is not known, as they mostly use paddy and wheat straw as raw material. There has been a significant gap in the projection of demand and supply scenarios for various NTFP commodities. It has also been difficult to ascertain the actual progress and status of the NTFP-based industry in the absence of an appropriate monitoring system as envisioned by the MPFS. The contribution of NTFPs/MAPs has been around 8 percent of total exports. Achievements regarding some of the MPFS provisions/strategies are discussed below. The MPFS proposed to promote agroforestry in the form of fruit trees inter-cropped with medicinal and aromatic plants. However, very little has been achieved in this regard. There has been decreasing supply of NTFP resources from the wild. A few NTFP species have been cultivated in private land, either intercropped in agroforestry or as a single crop. The MPFS provisioned for fair prices to the rural poor engaged in collecting and selling MAPs. Unfortunately, no efforts were made to ensure this. Rural people sell to local traders, who often do not pay them the just amount. However, certain highly priced NTFPs such as yarsha gumba do signficantly contribute to the rural income. The government collected NPR 5.1 million from the sale of 511 Kg of yarsha gumba during 2010/11. The MPFS forwarded a strategy for identification and utilization of herbs and other minor forest products. An NTFP policy along these lines was formulated only in 2004. This policy also identified and prioritized MAPs for cultivation and trade. 58 The MPFS also proposed regulations to discourage the export of low value-added products and encourage export of high value-added products. There was no implementation on this front. 4.4.2 Key Issues and Challenges Key issues and challenges in the arena of NTFPs including MAPs are as follows: Barrier of 3 km in mountains/hills and 5km in the Tarai is required from the forest to establish a forest-based enterprise. This provision has hampered the establishment and promotion of forestbased industries in rural Nepal. The authorities responsible for issuing certificates of origin are not issuing them for products manufactured from enterprises registered as cooperatives. This is a major hurdle in NTFP trade. Transport permits are arbitrarily issued and nullified. Multiple check points and “informal fees” in the transport, trade, processing, and marketing of products continue uncontrolled. Lengthy and costly export formalities and difficulties at Indian customs are the norm. Absence of modern and well-equipped chemical testing facilities/laboratory to identify the chemical constitution of MAPs processed in Nepal. Limited Sanitary and Phytosanitary Standards (SPS), quarantine inspection, and testing facilities/centers in Nepal. Non-trade barriers exist in exporting countries. Arbitrary royalty rates and VAT for NTFPs are barriers for traders. Royalties and taxation is also applied for NTFPs/MAPs produced in private forests and on agricultural land. 4.4.3 Lessons Learnt and Way Forward Nepal has some comparative advantage in niche products, which can be internationally captured provided the regulatory and fiscal constraints are removed. Abolish the rule that dictates the distance from forest for establishing forest-based industries. Enterprises registered as cooperatives should get the same legal recognition as other organizations. Introduce simplified mechanisms to regulate the transportation of NTFPs/MAPs. 59 Export formalities required for international marketing of NTFPs/MAPs needs to be simplified to export the products efficiently and effectively. Capacity enhancement of existing labs to be compatible with international labs is necessary. Quarantine facilities and centers should be added at strategic locations. Revision of royalty and VAT rates based on scientific criteria (phenology, availability, market price) and with intensive stakeholders/experts consultation is needed. Royalty provision for cultivated products from private land should be stopped by enforcing a clear mechanism of identifying the privately cultivated NTFPs/MAPs. Several strategies need to be developed to promote this sector such as managing NTFPs/MAPs in the wild, promoting their cultivation and domestication, processing and value addition, branding certain products for national/international marketing, and research and development. Research and development should be carried out on both biophysical production potential, processing, and marketing of the products. 4.5 Conservation of Ecosystem and Genetic Resources The MPFS identified conservation of ecosystems and genetic resources as an important component of the forestry sector. For the successful conservation of ecosystem and bio-diversity resources, the MPFS also emphasized forestry’s inter-connection and inter-dependency with other subsectors. The aim was to ensure in-situ and ex-situ conservation of floral and faunal diversity with reduced human pressure on the protected areas. Several constraints were identified for the conservation of ecosystem and generic resources. They included inadequate policy guidelines, shared responsibilities with inadequate coordination, lack of management capacity, inadequate training and equipment for field management, lack of skills on human relationship management, community pressure on resources, and adverse impact of tourism and poaching. The plan aimed to protect special areas for their ecosystem and genetic resource values, as well as for the provision of amenities, and promote in-situ and ex-situ conservation of plant and animal genetic resources with the following objectives: To manage diverse ecosystems represented in protected areas for their scientific, scenic and recreational, economic, and cultural values. To conserve flora and fauna diversity and enhance rare and endangered species of plants and animals. To manage visitor use and tourism in protected areas without prejudicing natural or cultural values. To help preserve the cultural heritage and religious values of communities living inside protected areas. To achieve the above objectives five program components were identified. These included protected 60 area management, genetic resources conservation, visitor use and tourism, preservation of natural and cultural values, and institutional strengthening. Operational strategies were proposed for each component. 4.5.1 Key Achievements After the implementation of MPFS, there has been a significant increase in protected areas and in-situ conservation of ecosystem and biodiversity in the country. The area of PAs has increased from 10,798 sq km (7.4 percent of Nepal’s land area) in 1988 to 34,185.52 sq km at the end of the plan period (which is 23.23 percent of Nepal’s land area). There is a reasonable increase in the population of several protected animals. The tiger population has reached 198 in 2013 from 98 in 1995. The rhino population has also increased to 534 in 2011 from 358 in 1988. Similarly, wild buffaloes (Arna) population has reached 259 in 2012 from 63 in 1996. The increasing number of these protected animals indicates a success of Nepal’s conservation efforts. Another area of achievement is a paradigmatic shift in the conservation policies from 'people exclusionary' and 'species focused' to 'people-centered community based' and 'ecosystem/landscape approach'. Despite such a paradigmatic shift, the legal framework of PA is contested on the issues of the process of PA declaration, governance, power sharing between government authority and local citizens, and equity aspects of sharing benefits. Efforts are made towards ex-situ conservation and specimen preservation through establishment of botanical gardens, breeding centers, and national herbariums. Numbers of botanical gardens have increased to 11 today from merely five during the early MSFP years. These gardens conserve and demonstrate a variety of tree species, medicinal plants, climbers, orchids, cactus, and many other plant species. About 161,800 plant specimens are preserved at the National Herbarium. Department of Plant Resources (DPR) has studied and documented various aspects of the country’s flora and vegetation. Exploration and collection of plant materials were carried out in every district of the country. Such explorations and research has facilitated around 300 publications that include books, manuals, quality standards, catalogue of plant species, and scientific journals. Several faunal species are conserved at the Central Zoo of Lalitpur and at various small zoos at regional levels. Similarly, breeding and conservation centers for elephants, vultures, and gharials have been established in Chitwan and Bardia National Parks. Translocation of rhinos from Chitwan National Park to Bardia National Park and Shuklaphanta Wildlife Reserve, and translocation of blackbuck from the Central Zoo to Bardia National Park have been successful. Wildlife poaching and the illegal trade of wildlife parts and NTFPs has remained a serious conservation challenge for the last few decades. Curbing these activities has recently become a priority of the GoN, and significant progress has been made since. A number of Wildlife Crime Control Committees at different levels were formed and made active. As a result, a large number of poachers and traders were arrested and wildlife parts confiscated. The GoN made significant progress in controlling rhino poaching in the last few years. The year 2011 was celebrated as Zero Poaching Year, which is considered a landmark achievement. The MPFS had emphasized the need to have harmonious relationships between PA management and local communities. As a result, the participatory approach of conservation was promoted with the amendment of the National Parks and Wildlife Conservation Act in 1993. But, the structure and staffing of the DNPWC was not reformed in line with the shift in conservation policy. The structure of the 61 department also did not expand as per the geographical expansions of the PAs. Departments were reorganized, integrated, and split multiple times. The re-organizations neither followed the institutional arrangements proposed by the MPFS nor captured the broader aspects of changing management style, working style, strategies, working culture, and service need of the people. MPFS was prepared during the time when government was thought to be the sole agency in planning and implementation of conservation programs and activities. During the implementation of MPFS, however, the role of the government gradually changed from implementer to facilitator. The DNPWC recognized the role of communities and introduced several management changes to foster better relations with people. Today, many national and international conservation partners are active in supporting DNPWC and community institutions to plan and implement conservation and livelihood programs/activities. 4.5.2. Key Issues and Challenges I. Human resources and capacities As of December 1988, the DNPWC and the protected areas management team had a total staff of 1,126. Of these, 82 positions were at the professional level or gazetted officers. The MPFS estimated a total staff of 1,134 by 1995, with the number expected to remain constant at the end of the plan period in 2009. Meanwhile, the DNPWC and protected areas offices had a total staff of 1,041 as per 2013 statistics. The institutions are understaffed, and ill-equipped to manage the current work and extended areas of the PA system. Moreover, the implementation of buffer zone programs in 200 VDCs and the introduction of three breeding centers require a substantial number of staff. Similarly, the number of visitors to 17 protected areas has increased by fourfold in the last ten years and eightfold in the last 20 years. The current staff cannot serve so many visitors, manage different programs particularly buffer zone activities, and deliver other services. It is important to note that the shortage is not only in terms of numbers; staff knowledge and skills also need to be enhanced on emerging areas such as climate change, research, and new modes of conservation management. The Department of Plant Resources (DPR) faced institutional turmoil in the early period of the MSFP. The department was integrated with several other forest research/survey divisions and a consolidated Department of Forestry and Plant Research was established. However, this structure did not last long. The DPR again got a separate departmental status in the restructuring of 1993. The department currently has a staff of 349. More recently, the DPR's structure and staffing were further changed in 2013 to adjust the promoted staff under provision 24d of the civil service act. To increase the capacity of existing DNPWC and DPR staff, a number of trainings, workshops, study tours, exchange visits (in-country and international) are organized. However, there is neither training needs assessment nor any training plan for capacity building. Similarly, there is no capacity building of frontline staff including senior game scouts and elephant caretakers (DNPWC, 2067/68). Further, there is inadequate park infrastructure and facilities in PAs; there are inadequacies in security posts, administrative posts, water and electricity supply, furniture, toilets, and vehicles. The DPR also does not have any training plan for its staff members. The budget allocation for in-situ and ex-situ conservation is also very limited as compared to the need. Similarly, the existing infrastructure and laboratory also lacks appropriate equipment and maintenance. The biotechnology laboratory at DPR also needs strengthening for quality enhancement and lab accreditation. 62 II. High concentration of visitors in few protected areas Four protected areas of the country (SNP, SNNP, ACAP and CNP) are seen to have the highest concentration of visitors. About 90 percent of visitors are concentrated in these PAs, putting extensive pressure on natural resources in these areas. A substantial number of tourist lodges have been established in SNPBZ during the last forty years due to increased number of visitors. The number of lodges increased from one small inn in 1971 (Stevens, 2003) to 17 in 1980 to 225 in 1997 (Mattle, 1999 cited in Nepal, 2003) to nearly 500 in 2009 (Sherpa and Bajracharya, 2009). These PAs have neither assessed visitor carrying capacities nor identified tourism zones. High concentrations of visitors in a few protected areas, which are biologically fragile and already under stress from local populations, have accelerated negative environmental impacts (Wells, 1993). In addition, a large amount of garbage has accumulated along the trekking routes. This suggests an immediate need to determine the carrying capacity of the protected areas and encouragement of visitors in other less crowded protected areas. III. Governance and decentralization The general issues of governance in government bureaucracies, including working style, decision making, transparency, and accountability are also prevalent in both the DNPWC and the DPR. The poor decision-making is noticed in PA management, as there is a tendency of asking for departmental permission even if the full authority lies with the wardens of each entity. The traditional haakim2 style is evident when forestry officials appear at public functions or negotiations. Such a style of working together, driven by a “command and control” structure, contradicts the participatory approaches needed in BZ program implementation. The delayed release of programs and budgets from the center to the respective local offices is almost a regular phenomenon making it difficult to complete the planned program implementation within the assigned fiscal year. Similarly, BZMCs are neither fully empowered nor adequately trained for their governing roles. There are also limited studies showing the consideration of gender, minorities, the poor, and marginalized members in the BZUGs. IV. Gender equity and social inclusion (GESI) The NBS 2002 had emphasized the role of women in biodiversity and natural resource management, calling for their participation in decision-making. However, GESI consideration in the DNPWC is weak. Very few women work within the PA system and there are no visible efforts to increase the number of women staff. Some initiatives have been taken to mainstream gender balance in conservation and development. For instance, buffer zone management activities include women empowerment through non-formal education. Similarly, the participation of women is encouraged in community-based organizations such as user groups and user committees (Sharma and Yonzon, 2005). Nonetheless, the fact that the DNPWC does not even have a ladies toilet demonstrated the state of gender inclusion. The department has neither implemented the MFSCs’s GESI strategy nor appointed a gender focal person. V. Human-wildlife conflict 2 Haakim is a colloquial term used for a person who is in the government service as a gazetted officer, and has the authority to make decisions (Pokharel, 1997). Haakim style denotes traditions, practices, and behavior resembling feudal style inherited from the 16th & 17th century Moghul regimes and further solidified and perpetuated by the Rana and Panchayat regimes (Pradhan, 1993). 63 The increasing human-wildlife conflict in and around PAs is proving to be one of the greatest challenges faced in wildlife conservation, especially that of endangered species (Bajimaya, 2012). Humans are most likely to come in contact with wild elephants, tigers, leopards, rhinos, bears, wild buffalos, wild boars, deers, and monkeys. Human-wildlife conflicts result in crop damage, livestock depredation, property damage, as well as injury and death. Similarly, wild animals are affected by retaliatory killings, injuries, trapping, electrocution, poisoning, and habitat disturbances. Wild elephants are reported to be the most pervasive human casualty. Yadav (2007) reports the killing of 18 wild elephants and 66 human casualties by wild elephants in five districts of eastern Nepal from 1986 to 2002. In the past 27 years, tigers have killed 97 people in Nepal. There has been a significant increase in the number from an average of 1.5 persons per year from 1979 to 1998 to 8.25 persons per year since 1999 (Gurung et al, 2006 as cited in Karki and Dhakal, 2012). During the last three fiscal years (from 2009/10 to 2011/12), there have been a total of 85 human casualties and 64 injuries caused by different wild animals in different parts of the country (Bajimaya, 2012). Similarly, the loss of livestock has also been significant. In the last eight years, tigers killed at least 2,923 livestock including sheep, goats, pigs, and buffalo (Thapa, 2011 as cited in Karki and Dhakal, 2012). The wildlife damage compensation guideline 2011/12 allows compensation for human death and injury as well as for crops and other property damaged. The compensation process is, however, complicated and long. Meanwhile, the compensation amount is nominal. These factors combined create significant local anger against the park. To reduce property loss from human-wildlife conflict, there is a dire need for education, awareness, and warning. Similarly, knowledge is also needed on species-wise tackling method. Park staff members are in need of preparedness training as well a supply of appropriate equipment. Most importantly, the issue needs to be dealt with by creating appropriate human-wildlife conflict strategies, resources, and technologies. VI. Poaching of and illegal trade in plant and animal species Poaching and illegal trade of plant and animal species is a serious issue for the conservation of biodiversity in Nepal. Nepal is considered a source as well as transit point in the illegal trade of body parts of wild animals, especially tigers, rhinos, snow leopards, and musk deer. Illegal transit of red wood from India to China has remained a regular phenomenon for the last few years. Illegal trade of wildlife parts is well organized at the transnational level. Evidence shows increased poaching activities during the decade long armed insurgency from 1996 until 2006. From 2000 to 2005, 157 rhinos died across the country. Of these, 99 deaths were directly linked to the conflict situation (McNeely, etal, 2006). Specifically, many security posts in the PAs were deserted during the conflict, providing easy opportunities to poachers and smugglers (Yonzon, 2004). Recently, the government has formed a National Wildlife Crime Control Coordination Committee and a Central Level Wildlife Crime Control Bureau. Both these bodies have been effective in strengthening enforcement. However, the lack of a forensics lab with appropriate scientific equipment and knowledge makes species identification and determining cause of animal death difficult. Similarly, there are not enough resources for purchasing equipment, coordinating logistics and human resources, and for effective intelligence gathering. Even though poaching is increasing, the GoN is yet to adopt and internalize crime control in its annual planning system by establishing programs and providing a budget. 64 VII. Expansion of invasive alien species Expansion of invasive alien species (IAS) is a serious threat to the forest ecosystem and biodiversity conservation across parts of the country. A recent study on IAS by the REDD Cell reports that IAS are more common in tropical and subtropical regions of Nepal. The report further states that IAS are “the ‘passengers’ of deforestation and forest degradation at their early stage of colonization, which later change into ‘drivers’ by disrupting regeneration process”. Several of these species have become a severe threat for the maintenance of wildlife habitat in Nepal’s PAs. Among these species, Mikenia micrantha has already begun covering grassland, wetlands, riverbanks, and other prime rhino habitat areas in the Chitwan National Park. This has adversely affected the growth of native plant species palatable to rhino and deer (DNPWC, 2067/68). To address this challenge, Nepal requires both in-depth studies on IAS as well the adoption of strategies to control these species. To this end, national quarantine and sanitary and phytosanitary measures need to be strengthened and strictly enforced (Sharma et al, 2006). VIII. Effects of climate change The effects of climate change appear to be emerging as a serious challenge for Nepal. The rapid retreat of glaciers (average retreat of more than 30 m/year), rapid rise in temperature (>0.06 0C), erratic rainfall, and increase in the frequency of floods and drought have already been observed. The change in global temperature suggests that many, if not most, wild species will experience climate change as a stressor that reduces survival and/or reproduction. Climate change has the potential to lead to population declines, or even extinction (TNC, 2010). The effects of climate change can have a tremendous impact on all aspects of forest ecosystem services. Mitigating these effects and fostering the adaptation of biodiversity to climate change is likely to be a grave challenge. IX. Increase in threatened bird species Despite increases in conservation areas and conservation efforts, the number of bird species in the threatened list has increased over time. While 133 bird species in Nepal were on the threatened list in 2004, the number had jumped to 149 species by 2010. Similarly, the number of critically endangered bird species increased from 40 in 2004 to 61 in 2010. The number of endangered species has also increased from 38 in 2004 to 50 in 2010 (BCN and DNPWC, 2011). This increase in number of bird species being threatened every year shows a worsening situation. Birds that rely on habitats and wetlands are particularly at risk (BCN and DNPWC, 2011; Baral et al, 2012). About 64 percent or 29 species of wetland birds are considered critically threatened or endangered due to habitat loss and damage, food shortages, fish poisoning, water pollution, invasive weeds, hunting and trapping, and disturbance and destruction of feeding and nesting sites (Baral, 2009). Similarly, veterinary use of diclofenac is considered to be an important cause of decline in the vulture population. Protection of these threatened species, especially wetland birds, is both challenging and necessary. X. Infrastructure and other development activities in forest areas Infrastructure such as hydropower dams and plants, transmission lines, highways, and irrigation canals use large areas of forests causing habitat fragmentation. Today, a number of hydropower projects are proposed in and around PAs. These types of human-induced interventions have resulted in the movement of species beyond their areas of origin, fragmentation of wildlife habitats, and ecosystem disturbances. Bringing a balance between conservation and development needs of people is one of the biggest challenges. 65 4.5.3 Lessons Learnt and Way Forward The review of MPFS’s CEGR plan suggests the following as key lessons learnt and way forward: Policy and legal reform: The legal and policy framework is contested on the process of PA declaration, governance, and power sharing between government authority and local citizens, and equity aspects of benefits sharing. A thorough review of the post-conflict political situation in democratic societies is needed, with a push toward inclusive governance and state restructuring. Re-organization and capacity building: The paradigm shift towards community-based conservation in NPs and WRs requires park staff to shed their traditional role of command and control. Instead, they need to take up new roles to foster people-centered approaches. To this end, the DNPWC needs to be re-organized to better manage buffer zone activities. A massive training program to facilitate the role change of staff is also needed. The DPR needs reorganization, more autonomy, and capacity enhancement to carry out more effective plant research including bio-prospecting, DNA barcoding, and pest risk assessment. Representation of protected areas and ex-situ conservation: A large number of threatened plant species and mid-hills ecosystems are poorly represented by the current PA system. The network of botanical gardens does not represent the high mountains and the eastern TaraiSiwaliks regions. In order to conserve all ecosystem types represented in the country, there is a need to develop scientific criteria for the establishment of new PAs and botanical gardens. Human-wildlife conflict: The human-wildlife conflict needs to be minimized with regular attention. A holistic approach needs to be taken with favorable government policy, effective management practices, low-cost technologies, well-equipped emergency response teams, and rehabilitation of problematic wild animals. Wildlife-crime control: Institutional and capacity building of central and district level wildlife crime control bureaus need to be strengthened. Law enforcement agencies need to be strengthened with appropriate coordination, collaboration, knowledge, database management system, informant provisions, forensic lab, and logistical support. Ex-situ conservation: Breeding and plant research centers need further strengthening with increased budgetary allocation, capacity building, and collaboration with national and international research organizations. Research and studies: Studies need to be increased with research on insects, reptiles, and other animal and plant species in collaboration with national research and educational institutions. Harmonization with DDCs and VDCs: For the success of conservation efforts, particularly at buffer zones and conservation areas, the confrontational situation of the local residents with DDCs and VDCs needs to be resolved. This will benefit both local development and biodiversity conservation. Bird conservation: Bird conservation efforts need to be strengthened with habitat conservation, appropriate protection of endangered species with reference to climate change effects, and studies of nationally and globally important species in collaboration with communities, civil society, research organizations, and educational institutions. 66 Tourism in protected areas: Sustainable tourism strategies and management plans need to be developed. Alongside, increases in tourism infrastructure, local capacity, eco-friendly tourism services are needed. There is a pressing need to diversify tourism pressure from the four popular national parks. Climate change adaptation: To deal with the threat of climate change, it is necessary to identify climate change sensitive species and ecosystems and explore the adaptation strategies. Gender equity and social inclusion: The GESI vision and strategy of MFSC needs to be rolled out in the departments with appropriate working strategies developed and implemented. 4.6 Soil Conservation and Watershed Management The MPFS recognized soil, water, and forests as the principal natural resources for sustainable development. It acknowledged the very high rate of soil erosion and the rapid deterioration of watersheds. It aimed to protect and conserve soil, water, and forests through the mobilization of national and local resources. In order to address the problems, the DSCWM was mandated to plan and implement mitigation, rehabilitation, and extension/education measures. The main objectives of the soil conservation and watershed management plan of MPFS were: To contribute to meeting the people's basic needs for forest products through conservation and management of watershed resources. To protect the land against degradation by soil erosion, floods, landslides, desertification, and other effects of natural hazards and ecological imbalances. To achieve the above objectives, the plan identified primary and supportive components. The primary component included preventive measures, rehabilitative measures, as well as conservation education and extension. The preventive measures included on-farm conservation, forest development and management, shrubland and grassland management, and provision of watershed services in settlement sites. Rehabilitative measures included treatment on hill slopes including road embankments as well as control and improvement measures in valleys including waterways. The conservation education and extension component included the provision of technical and material assistance in mobilizing the community for soil conservation. Meanwhile, the supportive components included policy and legislation development, organizational development, staff training, technology development, watershed resources survey and management planning, and monitoring and evaluation. 4.6.1 Key Achievements During the plan period a number of preventive, rehabilitative, and supportive measures were taken. These included on-farm conservation activities in 5,746 ha of agricultural land; rehabilitation of over 10,000 ha of degraded land including 1,600 gullies and 1,000 landslides of various scales; protection of 1,489 drinking water sources; and construction of 847 conservation ponds and run-off harvesting ponds. The DSCWM, through its 56 district offices, implemented a strong extension and education program. More than 412,000 copies of extension materials were produced and distributed; 150 adult education and conservation packages were implemented in rural areas. The physical targets set by the MPFS have not been fully achieved. Much of the progress made by the DSCWM is not directly comparable with the 67 target as many targeted activities were either renamed or merged together. New activities which were not planned by the MSFP were also added. It is, unfortunately, a reality that the implemented activities are very insignificant in comparison to the people’s demands and to the country’s conservation needs. The periodic plans were implemented after the MPFS formulated their programs on soil conservation and watershed management in line with the provisions of the MPFS. In the early years, the periodic plans stressed land use planning/zoning, people’s participation, hazard mapping, vulnerability assessment, risk analysis, and early warning systems. In later years, the emphasis was on Chure conservation, integration of water and agricultural activities with watershed conservation programs, upstream-downstream relationships, payment for environmental services (PES), and the empowerment and mainstreaming of Dalits, Adivasis, Janajatis, Madhesis, and other disadvantaged communities. To support the program implementation, a number of policy documents, plans, strategies, and guidelines as per the provisions of the MPFS were developed. Nonetheless, the Soil and Watershed Conservation Act of 1982 has been only minimally implemented to date. As a consequence, protection and regulatory measures were not enforced in critical watersheds. Institutional arrangements related to the proper use of land resources and the coordination of the agencies concerned could not be strengthened as envisioned. Nevertheless, the project modality of the DSCWM was gradually replaced by a program modality as envisioned by the MPFS. Over time, services were expanded from 25 to 56 districts during the plan period. A number of trainings were organized to enhance the knowledge and skills of community members and staff. The impacts of these trainings were, however, not assessed. Surveys were conducted at the river basin, watershed, sub-watershed, micro-watershed, and community levels for more effective watershed management planning. Till 2010, a total of 413 watershed management plans, 304 sub-watershed management plans, and 1,167 community development plans had been prepared. Some of these plans were also implemented at different scales. While the general monitoring of these programs is continuing, the condition of critical watersheds has not been regularly evaluated. Similarly, there has not been adequate research, demonstration, and appropriate technology development for different physiographic regions. 4.6.2 Key Issues and Challenges SCWM in Nepal is suffering from a number of institutional, policy, resource, technological, and management related issues as discussed below: I. SCWM services limited to small areas While there is an increased nationwide demand for SCWM services, jurisdiction is limited to small areas. At present, the SCWM service is provided through 56 District Soil Conservation Offices (DSCOs), 45 permanent and 11 temporary. The sub-watersheds have been the planning and implementation units in each district since 1992/93. A sub-watershed comprises an area of 15 to 25 km2. Depending on its size, each district has from 20 to over 300 sub-watersheds with an average area of 20 sq. km each. Sub-watersheds are prioritized, with management plans prepared and implemented for five years. About 60 percent of a DSCO’s total annual budget is spent on priority sub-watersheds. The remaining 40 percent is spent on 'hot spot' treatments on landslides and gullies and on rehabilitating degraded land. SCWM services cover less than 10 percent of the spatial area within the 56 districts where they are active, thus leaving larger parts of the country unattended. 68 II. Shortage of qualified and well-trained professionals The DSCWM faces acute shortages of qualified professionals and mid-level technicians to plan and implement SCWM activities with an integrated approach. There are only 90 technical officers and 229 mid-level technicians in the department. These numbers are too small to address the ever-increasing needs and demands of people. Considering the extent and intensity of the problem, the existing capacity of the DSCWM is inadequate to address SCWM in Nepal. III. Lack of comprehensive policy, coordination, and legal enforcement Watershed management is affected by a complex hydrological and social system with interaction between upstream and downstream. This interaction changes over time and space, as population growth changes the pattern of land use. The SCWM related policies are scattered in various sectoral policies. However, the coordination of these policies is limited. The SCWM plans have attempted to develop coordination mechanisms at different levels. But these coordination mechanisms did not work well. A comprehensive policy, river basin management, and effective coordination among sectoral programs is lacking in SCWM. IV. DSCW receiving lower priority within forestry sector Although SCWM activities are much in demand, the sub-sector has not received adequate priority within the forestry sector. Of the total annual budget allocated to the forestry sector, the DSCWM has received less than five percent over the plan period until 2010. The low profile of SCWM within the forestry sector has also hampered the institutionalization process of the department. V. Modality of people's participation and weak support system The SCWM plan has stressed people's participation in all soil and watershed conservation activities. However, the legitimacy, resources, and modality of peoples' participation are not properly addressed in policy and practice. Different modalities of people's participation were adopted in different donor supported projects. User committees were formed in an ad-hoc basis, with no emphasis on capacity building. There has also been limited progress in linking users to other programs, particularly in water resource management and agricultural development. VI. Lack of coordination and collaboration A number of organizations are engaged in soil, water, and watershed conservation. For example, the department of Water Induced Disaster Prevention implements a number of projects and activities for the management and conservation of rivers and river basins. The Water and Energy Commission engages in policy, strategy, and coordination relating to water resources. The Department of Hydrology and Meteorology engages in assessing hazards, vulnerabilities, and risks of floods in major river basins. The Department of Roads, meanwhile, is responsible for roadside stabilization including bioengineering. There is, however, limited collaboration, cooperation, and communication among these organizations. VII. Organization and management DSCWM's organization and management survey was carried out in 2005 to address human resources issues as the problem limiting provision of services to 56 districts. The survey recommended the 69 expansion of the program all over the country with increased staffing. However, this has not yet been addressed. VIII. Governance and decentralization Weak governance in terms of participation, transparency, accountability, and predictability is not unusual across government institutions in Nepal. Although no systematic studies have been published, it is common knowledge that transfers and promotions are heavily influenced by political connections over merit. Some staff members link the lack of professionalism with corruption and the production of poor quality works. In 2012, four cases of alleged corruption at the DSCWM were under investigation at the CIAA. The Auditor General has also reported an increase in financial irregularities at the DSCWM. Internal reports produced by the DSCWM also indicate improper processes and negligence in implementing technical specifications. A few technicians were reported to be implementing SCWM activities without approved estimates, measurement books, and design plans. IX. Institutionalization of community groups All SCWM activities such as water resource protection, irrigation channel improvement, trail improvement, gully and landslide treatment, and conservation pond construction/management are implemented through local people's participation. User groups are either activity based or settlement/village/ward based. Community Development groups or Poor Occupational Women Empowerment in Resource Conservation (POWER) groups are formed where CFUGs or Water User Groups do not exist. Most of these groups are registered at the CDO office, except CFUGs and Water User Groups. The SCWM groups are neither institutionalized nor have sufficient capacity. X. Gender, equity, and social inclusion The MFSC envisioned a deep inclusion of GESI into its program with a vision of "an organization with a gender and social equity, sensitive and socially inclusive, practicing good governance to ensure equitable access to and decision making power over forest resources and benefits of all forestry sector stakeholders". Rolling out of this vision in the context of SCWM is an important consideration. XI. Limited work on climate change adaptation and mitigation Although most SCWM activities relate to climate change adaptation, no emphasis was placed on adaptation and mitigation during the MPFS period. More recently, the GoN approved a Strategic Program for Climate Resilience (SPCR) with a component focusing on building climate resilience of watersheds in mountain eco-regions. This pilot project will be funded by the Climate Investment Fund. The project is to be implemented from January 2014 with the DSCWM as the executing agency. XII. Erosion vulnerability in Chure area Chure conservation has become a national issue since the last decade. Realizing the importance of the Chure watershed, the GoN implemented several projects such as the Chure Forest Development ProjectSCWM Program (1993 to 1997), Chure Watershed Management Project (2000 to 2005), the BioDiversity Sector Programme for Siwalik and Tarai (2004-2010), and the Rastapati Chure Conservation Programme since 2011. Chure degradation, however, still remains a serious threat. The majority of people living in Chure do not have any land titles. Forest encroachment is increasing at an alarming rate. These pressures are particularly felt as the geology of the Chure is fragile and vulnerable to soil erosion. 70 To halt the increasing degradation in the Chure, an integrated approach with bio-physical, socioeconomic, and technological interventions is needed. XIII. Acceleration of erosion through rural road construction Over the last two decades, rural road construction has become a priority program of DDCs and VDCs. Across the country, tracks have been bulldozed without considering that the consequent erosion intensifies soil loss, flash floods, and gully formation. The DDCs and VDCs have paid scant attention to the erosion, and the DSCWM has been unable to influence them. Such infrastructure projects should have an environmental impact assessment built-in, alongside conservation provisions and budgets. XIV. Excavation and haphazard collection of stones, pebbles, and sand in Chure The massive construction of physical infrastructure in India, adjacent to Nepal, has created an excess demand for stones, pebbles, and sand from Nepal. If excavation is properly managed, the demand is a positive economic opportunity. Unfortunately, these products are illegally and haphazardly collected for transport to India. Improper excavation has led to further soil erosion in the Chure as well as to sedimentation in the Tarai and Bhabar areas. XV. Political stability and commitment Political stability and commitment is critical to the formulation of a comprehensive policy, institutional development, and for the expansion of the SCWM services across the country. Nepal’s political situation has, however, been unfavorable for the last decade. In just one example, DSCWM was unable to even get parliament to discuss its proposed amendments to the Soil and Watershed Conservation Act and Regulations. 4.6.4 Lessons Learnt and Way Forward The review of the SCWM plan of MPFS suggests the following as key lessons learnt and way forward: The existing policy and legal frameworks must be reformed to enhance the scope and extent of soil conservation and watershed management. A comprehensive policy framework with a river basin approach is needed. This framework should also influence the amendment of the following policies and strategies: Water Strategy 2000, Water Plan 2005, and Land Use Policy 2012. The administrative change the expected federal structure will bring about should be considered when drafting the framework. Soil and watershed conservation must be a multi-sectoral effort. Programs across departments must be informed by an integrated strategy if we are to conserve the Siwalik (Chure) watersheds. Given the profound need for SCWM services, the DSCWM’s existing organizational setting and working modality will be unable to fulfill these demands. To overcome this problem, a practical strategy would be to leverage other agencies’ services for SCWM goals. The policies of the forestry, agriculture, irrigation, road construction, and local development sectors need to be influenced to include soil and watershed conservation components in their jurisdiction. Similarly, SCWM needs to be linked with water management, PES, and with climate change resilience. As the SCWM is a cross-cutting program, the DSCWM needs to transform itself from implementer to facilitator. The DSCWM should play an enhanced role in planning, research, 71 technology development, creating low-cost soil conservation techniques, technical backstopping, as well as influencing policy. Modalities for increasing people’s participation, especially strategies to reach the poor and the vulnerable, need to be strengthened and institutionalized. Marginalized groups must have greater control and ownership over conservation planning, program implementation, and monitoring and evaluation. To this end, coordination mechanisms are needed at different levels of planning and implementation. Governance at the DSCWM and its district offices need to be strengthened in terms of participation, transparency, accountability, and predictability. Reforms in these areas are central to curbing tendencies to use political influence to get things done, to set aside professional ethics, to misappropriate budgets, and to produce low quality work. To enhance good governance, DSCWM must re-organize with appropriate regulations, trainings, staff management, and monitoring systems. Similarly, to enhance the DSCWM’s physical facilities, motivational components including rewards, capacity development, leadership, human resource management, and space for innovation need to improve. The GESI vision of the MFSC also needs to be rolled out in the department. 72 Chapter 5: Review of Supportive and Additional Programs This chapter reviews the six supportive programs: policy and legal reform, institutional reform, human resources development, research and extension, information and planning assistance, and monitoring and evaluation programs. It also reviews the activities performed through GESI as well as through the climate change programs. These two programs were not included in the MPFS. They have, however, become directly relevant in the execution of forestry programs over the last decade. MPFS implementation occurred during three distinct political regimes. Developed during the Panchayat system, the MPFS continued to be implemented during the multiparty system of the 1990s and also under the new federal republic system since 2007. Such political turmoil, including a decade of armed conflict, has seriously affected the performance of the MPFS. Although policy, legal, and institutional reforms are included only as part of the supportive program, they have become instrumental in the performance of the MPFS. For example, the Forest Act of 1993 and the Forest Rules 1995 have become the main vehicles for mass mobilization in the restoration and sustainable utilization of forests in the mid-hills. Similarly, amending the Wildlife Act in 1993 provided a legal framework for involving local people in the management of buffer zones. The Rio Convention of 1992 and the CBD provided strong stimulus for expanding PAs from 7 percent to more than 23 percent of the country over the MPFS period. Similarly, the jurisdiction of the DSWM has expanded over time, although its effectiveness in conserving watersheds is debatable. Some policies have, however, gone against the provisions of the MPFS thus adversely affecting the forestry sector. For examples, policies as well as the operational environment on forest and NTFP/MAP harvesting were not conductive to boosting the local and/or national economics. Similarly, sudden reductions in the human resources allocated to the ministry, its departments, and district offices have drastically hampered outcomes. Inadequacies in the operationalization of staffing policies, which demotivate forestry staff from being proactive, are also a major concern. The lack of incentive particularly impacts research and extension activities. Similarly, extension and publicity activities are limited to the publication of annual progress reports and the distribution of some seedlings in the field. The ministry and all the divisions do have monitoring sections which evaluate performance every trimester, half-yearly, or annually. These evaluations are carried out as per a format generated by the NPC. A broader review of the forestry program is only carried out during the preparation of periodic national plans, which span from three to five years. Donors, meanwhile, carry out independent evaluations for the projects they fund. They use these evaluations as criteria in extending or redesigning projects. The community forestry division of the DoF holds a national seminar every four or five years. At this event, multiple stakeholders deliberate on the emerging issues around community and community-based forestry in Nepal. 5.1 Policy and Legal Reform The MPFS was formulated during the last leg of the Panchayat regime. After the advent of multiparty democracy, the MPFS’ concepts were implemented through the Forest Act 1993 and Forest Regulations 1995. During the armed insurgency period from 1996 to 2006, almost all state machineries failed to 73 operate in rural Nepal. Only community based systems remained active. Though the comprehensive peace accord signed in 2006 ended the violent conflict, the political transition is still continuing. Throughout the different periods of political turmoil, the provisions of the MPFS have never been challenged. Nepal has also ratified/signed a number of multilateral environmental agreements after the MPFS. They include the Convention on Biological Diversity 1992 and numerous climate change conventions. The policy and legal reform initiative is one of six supportive programs developed under the MPFS. The program’s central contribution to the MPFS was the reinvention of forestry programs based on a partnership between local organizations and the relevant government agencies. The policy and legal reform program plays a key role in creating a supportive environment for the implementation of the six primary programs. The MPFS has also identified policy implementation as one of its five strategies. Table 5.1: Policy and legal reform strategy of MPFS under six primary programs Primary program 1. Community and private forestry 2. National and leasehold forestry program 3. Wood-based industries 4. MAPs and other minor forest products 5. Soil conservation and watershed management 6. Conservation of Proposed action agenda for policy and legal reform Update legislation with the aim of encouraging people to share benefits and take responsibility for the management of CFs. Adopt new forestry policies, legislation, and operational guidelines. Reform laws to allow forests to be leased for industrial production. Improve leasehold forest laws to make investment attractive to the private sector. Draft policy to provide 50 percent of the raw materials needed for wood-based industry from leasehold forests. Address inconsistencies and ambiguities of policies, laws, and institutional responsibility to maintain a supply of raw materials for industries. Improve and expand existing wood-based industries through more supportive industrial policies. Make DFOs responsible for the implementation of forest development activities, production and supply of raw materials, and assisting communities and private entities on forestry matters. Import and export laws should be guided by tax policy. Promote regional (SAARC level) treaties for the trade in wood-based products. Develop comprehensive legal provisions and address existing constraints. Calculate royalties based on link to price received by primary producers and price of commodities/market price. Improve customs regulations. Develop legislation to empower the National Commission for Conservation of Natural Resource. Develop national land-use policy. Declare more areas as protected watersheds. Develop policy on people's participation and decentralization. Improve legislation for the conservation of ecosystems and genetic 74 ecosystem and genetic resources resources. Formulate working policies for the consistent and effective management of protected areas. Formulate a consolidated regulation system for parks and reserves, providing specific regulations for particular parks where necessary. Develop working policies on the following: Categories of protected areas. Conservation of biological resources. Management of buffer zone and conservation areas. Community development fee and benefit sharing. Development of legal provisions on management plans. Some salient features of the policy implementation strategy include: Systematic allocation of more development resources to deficit areas. Payment of market prices for forest products from the national forest to generate revenue for forest development and management. Freeing internal trade and transport of timber and fuelwood from all restrictions. Allowing only finished forest-based products to be exported. Extension of the land-holding ceiling for private land used in forest production. Making parastatal organizations compete on equal terms with private enterprises. Making low-cost financing availabe to private nurseries, forest plantations, and forest-based industries. Allocation of sufficient human resources to productive technical forestry work rather than focus on administrative formalities. Continuation of the master planning process on policy and legal reform with a comprehensive legal review undertaken in the immediate term. Reorganization of existing institutions in order to make them more efficient at and capable of implementing the proposed programs. Review of incentives and disincentives to increase participation in forestry programs, followed by the necessary adjustments. 5.1.1 Key Achievements The policy and legal program has played a significant role in the successful implementation of the primary programs. Though many policies, thematic strategies, laws, and guidelines have been developed, none of these instruments have been explicitly mentioned in the MPFS. Moreover, only a few policies have considered international environmental commitments, trade standards, and the 75 situation of forest-based industries3. The following sections briefly review the progress made on policy and legal reform in the forestry sector during the 25 years of MPFS. I. Community and private forestry & national and leasehold forestry Both these models of forestry are critical parts of the primary development programs outlined by the MPFS. As a result, there are many legal instruments and guidelines governing these two programs. For example, the Forest Act of 1993, an umbrella act for the forestry sector, has been instrumental in achieving the goals and objectives of MPFS. This act contains the Forest Regulation of 1995 under which guidelines related to various forest management regimes have been developed. The major legal characters of these instruments in the context of national, community, leasehold, and private forests are as follows: Table 5.2: Legal instrument on all forms of national forests Legal instruments4 Forest Act 1961 (4th amendment) Forest Protection (special arrangement) Act, 1968 Forest Act 1993 (1st amendment 1999) (Note that this act repealed two previous acts – Forest Act 1961 and Forest Protection (special arrangement) Act, 1968) Forest Regulations 19955 Amendments: 1st 1999, 2nd 2002, 3rd 20056 Date 1992 Approval Parliament 1992 (6th amendm ent) 1993 Parliament Parliament This umbrella act’s objective is to meet the basic needs of the public, to attain social and economic development, to ensure the development and conservation and proper utilization of forests, and to extend cooperation in the conservation and development of all forest management regimes. Provided for the management of forests, punishment and sanctions against forest offenders, and other miscellaneous provisions. Cabinet Provided for the preparation, approval, and implementation of management plans for all types of forests. Provided for the management of private forests. 1999 1995 1999 2002 2005 Major provisions Legalized community forestry as envisioned in the MPFS. After the Panchayat system was abolished, its authority was transferred to the community forestry user groups. 3 According to the Industrial Enterprise law of Nepal, forest-based industries are the priority industries in Nepal. The government has been providing some facilities to the sector. 4 Legislative instruments reference the constitution, acts, regulations, directives, and associated guidelines. Note, however, that guidelines are not legally binding. 5 This regulation repealed five previous regulations: Panchayat Forest Rules 1977, Panchayat Protected Forest Rules 1977, Leasehold Forest Rules 1978, Private Forest Rules 1984, Forest Product (sales and distribution) Rules 1971; and Forest Protection (special arrangement) Rules 1971. 6 Through these amendments, procedures for handing over leasehold forests to the private sector were included. 76 MFSC Established procedures for managing boundary conflicts, for action against members engaging in illegal activities, and on establishing forest enterprises. 1989 DoF General procedure for the formation of user groups and identification of forest areas to handover as community forest. 1995 MFSC & DoF Designed four phases of CF: identification (users and forest) phase; FUG formation phase; operational plan preparation phase; implementation and review phase. This document was one systematic guideline of CF. Described the process for forest inventory, data collection, and using the information to prepare an operational plan for CF in a participatory way. Revised the 2001 guidelines. New provisions include an empowerment component; revision of the operational plan and stakeholder roles; and monitoring and evaluation of CF. Community Forestry Directive 1995 1st amendment 1999 Community Forestry Development Guideline 1989 Guidelines for CF Development Program 1995 & 2001 (replaced the guideline of 1989) Guideline for Inventory of Community Forests 2004 Guidelines for Community Forestry Development Program 2008 (revised) Forest Carbon Measurement Guideline 2011 1995 1999 2001 2004 MFSC & DoF 2008 MFSC 2011 MFSC Collaborative Forest Management Directives 20117 2011 MFSC Formation and Operational Directives on DFSCC, 2011 2011 MFSC Procedure for handing over leasehold forests for commercial purposes and poor 2011 MFSC Describes the steps and processes related to the measurement of forest carbon. The guideline is, however, inadequate to measure forest carbon at a national scale. Directive to ensure sustainable supply of forest products, environmental protection, and poverty alleviation through collaborative forest management. Fosters socio-economic transformation of local communities through sustainable conservation and management of natural resources. Collaboration between stakeholders is a key strategy. Describes the process for identifying areas and conditions for getting leasehold forests, socioeconomic objectives, as well as tax provisions and monitoring mechanisms. 7 Policies and directives are developed for CFM, with 17 management plans approved for implementation. Provisions for CFM are, however, written only in the revised Forestry Sector Policy 2000 and in the directives. They do not appear in the Forest Act of 1993. 77 families 2011 Presidential Chure Conservation Program Directives 2011 2011 MFSC Seeks to conserve the Chure region, alleviate poverty, and strike a balance between development and conservation. The provisions of the following policies, plans, and strategies are relevant to national forests, community-based forests, and private forests: Table 5.3: Policy instruments on all forms of national forests Policy instruments Eighth Five-Year Plan Date 19921997 Approval NPC Ninth Five-Year Plan 19972002 NPC Tenth Five-Year Plan 20032007 NPC Three-Year Interim Plan (1) 20072010 NPC Three Year Interim Plan (2) 20102013 NPC Revised Forestry Sector Policy 2000 May 2000 Cabinet Leasehold Forest May Cabinet Major provisions Increase and stabilize the supply of forest products. Maintain the ecosystem and land fertility. Increase public and private sector participation in forestry. Provide income-generation and employment opportunities for poor and marginal families. Maintain supply of forest products through community forestry. Promote export of processed products. Ensure regular supply of forest products and support poverty alleviation. Emphasis on conservation of forests and ecosystems. Improved access of the poor, women, and the marginalized. Supply forest products regularly by formulating and implementing a sustainable and balanced forest development program with people's active participation. Contribute to poverty alleviation and improved livelihoods through promotion of ecosystem services and climate change adaptation and mitigation by adopting a decentralized and participatory system. Describes the collaborative forest management system with the support of local bodies. Includes new concept of forest management for the Tarai, Chure and Inner Tarai: block forest management in the Tarai, conservation in the Chure, and handing over small areas as CF in the Tarai and inner Tarai. Reemphasizes the MPFS policy. Provides for leasing forests to families living 78 Policy 20028 2002 Forest Fire Management Strategy 2010 Forest Encroachment Control Strategy 2008 June 2010 MFSC 2011 (2068) Cabinet below the poverty line. Provides for industry, institutional organization, and eco-tourism aimed at poverty alleviation and economic development. Contains strategies to manage forest fires and protect forests, biodiversity, as well as private/community property. Seeks to control forest encroachment. Outlines plan to maintain 40 percent forest cover. Explores alternative employment and livelihoods for the landless. The effective participation of local communities has positively impacted nature conservation and natural resource management in Nepal. CFUGs have been instrumental in managing and utilizing natural resources for community development in a sustainable manner, thus also mainstreaming forest conservation in development (Khadka et al, 2012). The latest Three Year Interim Plan (2010-2013) has acknowledged the role of community forestry in forest conservation, community development, poverty alleviation, social inclusion, and local governance (GoN/NPC, 2010). Community forestry has received similar acknowledgement in Nepal’s MDGs Progress Report (2005), with Nepal successfully fulfilling seven environment related MDG goals (NPC/UN, 2005). II. Wood-based industries Developing wood-based industries is an important primary program of MPFS. The MPFS had recommended addressing inconsistencies and ambiguities in policies and a clear delineation of institutional responsibility to maintain a sustained supply of raw materials for industries. After the approval of the MPFS, (though there is no explicit link between the MPFS and the policy reforms), the following legal and policy instruments were formulated. Table 5.4: Policy and legal instruments on wood-based industries Legal & policy instruments Industrial Enterprises Act, 1992 Date Approval 1992 Parliament Forest Product 2000 (Timber/Firewood) Collection and Sales Directives, 2000 8 MFSC Major Provisions Gives first priority to forest and agricultural enterprises. Provides tax incentive and other privileges to agriculture-based industries if they fulfill environmental norms. Outlines legal provisions for marking, logging, collecting, and auctioning timber in all types of forests. Outlines provisions for collecting royalty on timber supplied for wood-based industries and The leasehold guidelines were developed nine years after this policy document came into being. 79 Forest Product Auction Procedure Directives, 2003 Micro Enterprise Policy, 2008 2003 MFSC 2008 DoE Industrial Policy, 2011 2011 Cabinet for household consumption. Describes procedure for auctioning wood-based products to industries and/or private companies. Describes the process for establishing forestbased microenterprises. Provides special privileges for the operation of micro-enterprises. Prioritizes industries based on agriculture and forestry. Emphasizes the development of cottage and forest/agro-based microenterprises as sources of rural employment. III. MAPs and other minor forest products The MAPs and other minor forest products program is the fourth primary program of the MPFS. The MPFS recommended comprehensive legal reforms including of the customs regime for this sector. It also argued that the royalty system needed to be linked to the price received by primary producers as well as the final market price of the commodities. The following policy and legal instruments, a few in line with MPFS, exist today: Table 5.5: Legal and policy instruments on NTFPs/MAPs Legal & Policy instruments Forest Act 1993 Date Approval 1993 Forest Regulation 1995 1995 Parliament Promotes community forestry (Article 25), supports leasehold forestry (Article 31), and encourages conservation of NTFP (Article 70a). Continues strict regulation of community rights to NTFPs/MAPs. Cabinet Describes the restrictive procedures required to utilize NTFPs and MAPs (Rules 11, 12, 13, 14). Herbs and NTFP Policy 2004 2004 National Biodiversity Strategy 2002 MFSC Major provisions Seeks to bolster economic development through sustainable management of herbs and NTFPs at all levels Stresses sustainable conservation, people's participation, flexible tax system, verification processes, new technologies for processing, capacity building, and incentives. Legislative reforms were not made. Provides a systematic approach to the promotion of NTFPs. Prioritizes equitable benefit sharing and sustainable harvests. No legal mechanisms developed due to lack of follow up post-NBS. 80 Guideline for NTFP-Based Enterprise 2005 2005 MFSC Resin Collection (Procedure) Directives 2007 2007 MFSC NTFP Inventory Guideline 2012 2012 MFSC Gazette Notification (See annex 2) Eight times after MPFS MFSC, DoF Provides a process to develop schemes for the promotion of NTFP-based enterprises at the local level. The implementation status of this guideline is weak due to the lack of coordination between and among government agencies. Describes the area selection procedure, technology, security measures, and monitoring system for resin collection. Describes fire management and law enforcement mechanisms used during resin collection by the communities or private sector. While the directive is applicable to all types of forests, it is particularly enforced in community forests. Describes the inventory process for leafs, roots, barks, flowers, and whole parts of NTFPs. Explains the detailed inventory method for 30 prioritized NTFPs and MAPs. GoN has been publishing gazette notifications to regulate the collection, marketing, and export of various NTFPs and MAPs. IV. Soil conservation and watershed management The MPFS had strongly recommended the development of a national land-use policy. It had also recommended developing policy on people's participation and decentralization. For institutional coordination, MPFS had suggested legally empowering the National Commission for Conservation of Natural Resource (NCCNR). The following policies have been developed for the implementation of this program. Table 5.6: Legal and policy instruments on watershed conservation 9 Legal & Policy instruments Soil and Watershed Conservation Act, 2039 (1982) 1st amendment 19929 Date Approval 1982 Parliament National Action Program on Combatting 2003 1992 MoE Major provisions Seeks to conserve land and watersheds by controlling natural calamities such as floods, landslides and soil erosion. Keeps in mind the basic needs and economic interests of the general public. Provides for a 'Conserved Watershed Area' in which the act could be implemented. Developed for the implementation of UNCCD, the program emphasizes the conservation of watersheds with the participation of local communities. Only the name of local bodies was changed in this amendment. No substantial changes were made. 81 Desertification 2003 Chure Area Program Strategy 2008 2008 N/A Nepal Land-Use Policy 2069 2012 Cabinet Presidential Chure Conservation Program Implementation Directives 2068 2011 MFSC Seeks to create an enabling environment for all stakeholders so they can contribute to the conservation of the Chure. Emphasizes the need to fulfill livelihood demands of people dependent on forest resources in an equitable manner. Seeks socio-economic and environmental development of the country through the optimum utilization of land and land-based resources. Promotes utilization of land based on its classification. Promotes conservation of the Chure region to maintain ecosystem integrity, to contribute to sustainable development, and to support poverty alleviation. In the past, the site-specific watershed conservation projects were implemented in Phewatal, Kulekhani, Bagmati, Tinau, Begnastal/Rupatal, and Shivapuri watershed areas over a long period. Likewise, IRDP projects were implemented in Mahakali, Karnali, Rapti, Rasuwa-Nuwkot, and Sagarmatha. The Soil and Watershed Conservation Act 1982 has not been implemented since it was implemented in the Kulekhani and Phewatal watershed area some years ago (GoN/ADB/FINIDA, 1988). V. Conservation of ecosystem and genetic resources The MPFS highlighted the need to reform policy guiding the conservation of ecosystem and genetic resources. The MPFS had called for a set of consolidated regulations, with specific guidelines developed for specific parks as necessary. The third and fourth amendments of the National Park and Wildlife Reserve Act took this suggestion on board, providing for conservation areas management and buffer zones across parks. Nepal has since developed a number of procedural and policy provisions for the management of protected areas. Some important laws and policies are listed below. Table 5.7: Legal and policy instruments on protected areas Legal instruments National Park & Wildlife Reserve Act, 197310 3rd amendment in 1989; 4th Date 1973 1989 1993 Approval Parliament Major provisions Incorporated provisions to manage conservation areas through semi- or nongovernmental organizations (3rd amendment). Incorporated provisions on buffer zone management, user committee/group formation, 10 Ten regulations are enacted under this act. They include: National Park and Wildlife Conservation Regulation 1974, Chitwan National Park Regulation 1974, Wildlife Reserve Regulation 1977, Himalayan National Park Regulation 1979, Khaptad National Park Regulation 1987, Bardiya National Park Regulation 1996, Buffer Zone Management Regulation 1995, Conservation Area Management Regulation 1996, Conservation Area Government Management Regulation 2000, Kanchanjanga Conservation Area Management Regulation 2007. 82 amendment in 1993. Wildlife farming breeding and research procedure 2003 2003 MFSC Procedures for handing over the management of protected areas to NGOs and other organizations 2003 2003 MFSC Procedure for handing over the land of protected areas for infrastructure development 2008 2008 Cabinet Wildlife Compensation Directives, 2009 2009 MFSC National Biodiversity Strategy 2002 Sustainable Development Agenda for Nepal 2003 2002 Cabinet 2003 Cabinet Tarai Arc Landscape (TAL) Strategic Plan (2004-2014) Sacred Himalayan Landscape (SHL) Strategic Plan (2006-2016) 2004 MFSC 2006 MFSC National Biodiversity Strategy (NBS) 2006 MFSC benefit sharing (30-50% for BZ), and compensation (4th amendment). Seeks to conserve wildlife sustainably to create jobs and generate income. Seeks to involve the private sector in wildlife conservation. Seeks to involve NGOs and other organizations in the management of protected areas. Creates policies to generate income for the poor and create employment through the sustainable management of protected areas. Seeks to mitigate the impacts of infrastructure development. Seeks to contribute to national development. Seeks to maintain consistency in development activities in protected areas. Seeks to generate extra resources for the management of protected areas. Describes criteria and procedure for getting compensation and the limitations on compensation amount. Seeks to conserve biological diversity, maintains ecological processes and systems, and share benefits equitably. Promotes people’s participation in forestry resource development, management, and conservation. Ensures that protected areas bring economic benefits to local communities by promoting protected areas as tourist destinations. Envisions a globally unique landscape where biodiversity is conserved, ecological integrity is safeguarded, and sustainable livelihoods are secured. Envisions a landscape where the biological and cultural treasures of the world’s highest sacred mountains and deepest valleys are safeguarded. Ensures people’s rights over resources and sustainable livelihoods. Contributes to achieving the goals and objectives of NBS. Identifies 13 priority projects spanning a five83 Implementation Plan (2006-2010) National Agrobiodiversity Policy 2008 Species Conservation Action Plans year period. 2008 MoAD 2010 MFSC 2006 MFSC MFSC Rangeland Policy 2012 2012 Cabinet National Wetland Policy 2003 2003 MFSC National Wetland Policy 2012 (repealed previous policy) 2012 Cabinet Seeks to conserve and sustainably use agricultural genetic resources/materials and associated traditional knowledge. The Elephant Conservation Action Plan 2010 Seeks to save elephants in the wild from extinction by addressing habitat loss and mitigating escalating people-elephant conflict. The Greater One-Horned Rhinoceros Conservation Action Plan (2006 - 2011) Promotes in-situ conservation to ensure recovery of rhinoceros population numbers. Tiger Conservation Action Plan (2008-2012) Snow Leopard Conservation Action Plan (2005-2015) Vulture Conservation Plan (2009-2013) Seeks to improve the livelihoods of rangelanddepended communities. Promotes sustainable management of rangeland through scientific and customary practices. Seeks to conserve and manage wetlands sustainable through participation. Conserves wetlands for sustainable development and environmental conservation. Promotes sustainable use of wetlands through sustainable management. VI. Influencing sectoral laws and policies As the practices of other sectors impact forestry, the MPFS had called for the harmonization of all policies and laws pertaining to natural resources management. In this context, the following policies are important for forest management: Nepal Environmental Policies and Action Plan (NEPAP) 1993, Environment Protection Act (EPA) 2053 (1997), Environment Protection Rules 2054 (1997), Local-self Governance Act 1999, Nepal MDG (Goal 7), Sustainable Development Agenda for Nepal 2003, Agriculture Perspective Plan (APP) 1995/96 and 2014/15, National Agricultural Policy 2061 (2004), Agriculture Development Strategy 2013 (Draft), Irrigation Policy 2060 (2003), Hydropower Development Policy 2001, Climate Change Policy 2011, NAPA 2010, LAPA framework 2012, Low Carbon Development Strategy (in process), Biomass Energy Strategy (in process), Industrial Policies 2011, and the Water Resource Strategy 2002, among others. These policy documents are instrumental in mainstreaming forest conservation into the development sector. To give one example of why non-forestry sector rules are important, the Local-self Governance Act 1999 authorizes local governments to sell forest products, collect revenue, and impose local taxes over forest products. They can also formulate plans to manage forests within their jurisdiction. Forest 84 protection is also linked to larger political issues. For instance, the High-level Land Reform Commission 2065 and High-level Scientific Land Reform Commission 2066 both recommended land reform as a strategy to control forest encroachment particularly in the Tarai and Chure regions11. Protecting forests becomes all the more challenging in a situation where there is rampant landlessness. VII. International commitments Nepal has ratified/accessed/signed more than 20 core MEAs (See Annex 3). As a party to these MEAs, Nepal is formulating a series of bills to comply with these instruments/agreements. A series of bills such as International Trade of Rare, Endangered and Protected Plants and Species Control Bill (2011), Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization Bill (2000), Industrial Enterprise Bill (2012) and Wetland Management Bill (2013) are in parliament for discussion. These bills are of high importance for the sustainable management of forest resources. 5.1.2 Key Issues and Challenges The forestry sector in Nepal is beset with many policy related issues. Despite continued efforts at reform, achievements have been mixed across sub-sectors. The major constraints are as follows: Weak capacity and institutional arrangements. Significant differences between policy and practice. Inconsistencies and contradictions among forest and other policies. Inadequate coordination between programs and inter-sectoral agencies. Conflicting roles of forest administration. Weak foundation in forest science and management. 5.1.3. Lessons Learnt and Way Forward In a context where the majority of Nepal’s rural people depend on forest resources for their livelihoods, there is a need to strike a balance between external driving forces, domestic interest, and local need when preparing a new forestry strategy. Some key lessons to remember for the future are noted below. I. Encouraging consistency and predictability of the policy framework Sectoral policy and laws need to be consistent internally and with other sectors. A forest law may contribute to policy convergence with other sectors, but it cannot reconcile all policy conflicts and contradictions. A forest sector legal framework must therefore include a sound analysis of legal linkages. Policy and legislation should provide consistent signals to decision makers. Changes in policy should not only be made in consultation with those affected by the reforms but also be consistent and predictable. 11 High-level Commission on Land Reform (2065), High-level Commission on Scientific Land Reform Commission (2067), Report of the Commission (2068 BS). 85 II. Minimizing procedures, simplifying regulations, and improving the operational environment Several examples given above demonstrate that inconsistencies in policies and lack of coordination between agencies negatively impact governance. The following guidelines can assist in limiting regulatory inconsistencies and enhancing the operational environment. Ensure that a coherent and sound forest policy is in place prior to making laws. Reduce the number of rules in response to legal analysis which identifies overlaps and inconsistencies. Adapt remaining rules to ensure consistency with other existing laws, including within and among different sectors. Translate new legislative acts into working norms and regulations as soon as possible. III. Improving cross sectoral-linkages and collaborations A better understanding of the linkages between different sectors and a coherent and overarching approach to forest issues can help reduce uncertainty, maximize synergies, and minimize the occurrence of illegal practices in the sector. Three levels of coordination may be defined (FAO, 2003): Inter-sectoral (or horizontal) coordination, when problems are considered mainly at the same level operating in different sectors. Intra-sectoral (or vertical) coordination, when coordination is based mainly on interaction among actors operating at different levels but within the same sector. Multi-level cross-sectoral coordination, linking international and national efforts. IV. Enhancing institutional capacity Effective implementation of policy and legislations requires functioning institutions which are accountable for their actions. In reality, institutions often function poorly. A significant barrier to effective functioning in the forestry sector is the fact that staff are overworked and underpaid. This is exacerbated by numerous other issues. Suggestions to address these problems and streamline forest policies and laws are noted below. Assess underlying social, economic, cultural, and political causes of non-compliance. Modify the policy and legal framework based on above assessment, starting with the ongoing forestry sector strategy formulation. Analyze the performance and impacts of different sectoral policies and legal frameworks. Increase clarity, transparency, and consistency of legislations. Draft legislation that is simple, unambiguous, proven, transparent, and containing minimal discretionary powers. Ensure a participatory approach to forest law design in order to promote transparency, accountability, and predictability. Ensure that laws do not contradict each other. 86 Minimize bureaucracy, streamline legal procedures, and simplify regulations. Establish international and/or bilateral collaborations. Ensure cross-sectoral linkages and collaborations to ensure a coherent and holistic approach to forestry. 5.2 Institutional Development Plan The IDP was drafted to guide and facilitate systematic organizational development as envisaged in the MPFS, which had suggested specific institutional reforms. The main objectives of the IDP were as follows. Provide effective institutional structures for policy implementation. Clearly delineate institutional, organizational, and individual responsibilities. Establish or restructure organizations to ensure effective implementation of the programs. The IDP proposed a reorganization of the various departments under the MFSC for short and long term purposes. The short term restructure was intended to be a stop-gap measure while the long-term reform was envisioned as a continuous process of strengthening the MFSC. The silent features of the plan were: Institutional development was considered context specific, democratic, community and service oriented, and flexible. Institutional reform was seen as a continuous process. Effective utilization and capacity building of existing staff, instead of increasing the number of posts, was highlighted. Special responsibilities were given to senior staff. Rational distribution and management of the departments, divisions, and sections in relation to the new forestry sector policy, revised legislation, and the regrouping of supportive functions at the ministry level. Moving donor assistance from a 'project approach' to a 'program approach'. Stressing integrated forestry sector planning to rationalize and economize overall costs. Increase the number of technical staff at the field level, reduce non-technical staff, and reverse the tendency to prioritize hiring for central level posts. Emphasize mainstreaming, strengthening, and coordination of research and development through the Department of Forestry and Plant Research (DFPR). Recognize law enforcement as a complementary strategy in forest, soil, and wildlife conservation. Stressed the need to review the overall outcome/impact of the various institutions established to coordinate between the MFSC and other government agencies working on forage development, alternate energy, R&D, energy conservation, forest land allocation, and the utilization of forest products by forestry parastatals. Explored the need for a new environmental authority structured for better coordination and surveillance in response to national and international concerns. 87 5.2.1 Key Achievements As proposed by the IDP, the MFSC and its departments – Department of Forests, Department of National Parks and Wildlife Conservation, Department of Soil and Water Conservation, and Department of Forestry and Plant Resources – were restructured. The Department of Forestry and Plant Resources was created by merging the research part of the Forest Survey and Research Office of the Department of Forests with the Department of Medicinal Plants. This was intended to centralize the resources needed to conduct quality research in the forestry sector. Similarly, efforts were made to restructure, dismantle, or privatize parastatals including: Forest Products Development Board (FPDB), Herbs Production and Processing Company Ltd (HPPCL), Nepal Rosin and Turpentine Industries Co. (NRTI), Timber Corporation of Nepal (TCN), Nepal Fuelwood Corporation (FC), Bhrikuti Paper Mill (BPM), Nepal Paper Industries Ltd (NPIL), Butwal Plywood Factory Ltd. (BPF), and Royal Drugs Ltd (RDL). Among these parastatals, the TCN and FC were merged and the Royal Drugs Ltd was transferred, along with its staff, to the Ministry of Health. Bhrikuti Paper Mill, Nepal Paper Industries Ltd, Butwal Plywood Factory, and the Nepal Rosin and Turpentine Industries were privatized. After the implementation of MPFS, drastic institutional changes in structure and staffing were made in 1993 and 2000. The reform of 1993 was much influenced by the recommendation of the High-Level Administrative Improvement Commission of the then GoN. This Commission particularly emphasized a reduction in staff, especially at the central level. A total of 171 (66.8 percent) positions were removed from the MFSC headquarters, reducing the number of staff from a total of 257 to 86. The number of posts at DoF headquarters was reduced from 186 to 130 (30.11 percent). The number of posts at the DSCWM was reduced from 124 to 86 (30.6 percent). At the DNPWC, 26 (36.62 percent) posts were removed, reducing the number of staff from 71 to 45. And at the Department of Plant Resources, 349 (54.87 percent) posts were removed, reducing the number of staff from 636 to 287. A new semi-autonomous Centre of Forest Research and Survey was formed by merging together the Forest Survey and Statistics Division of the MFSC and the Forest Research Division of the DFPR. Similarly, a new Department of Plant Resources (DPR) was formed. Five Regional Forest Directorates under the DoF were transferred under the MFSC. Another restructuring was carried out in July 2000. The main focus of this reform was also to rename or create several divisions and sections as well as staff positions. The semi-autonomous FRSC was upgraded to the Department of Forest Research and Survey (DFRS). Both sets of reforms, undertaken by the GoN in general and the forestry sector in particular, undermined the strategies set by the IDP/MPFS. These reforms neither considered the spirit nor the long-term goals envisioned by the MPFS. They also could not address issues such as the forestry sector's social image, leadership, managerial skills, professionalism, and the retention of proactive forestry professionals or change agents in government service. These reforms were more influenced by the High-Level Administrative Improvement Commission and the Structural Adjustment Program of the World Bank than the recommendations of the MPFS. 88 5.2.2 Key Issues and Challenges Looked at from an organizational development perspective, the challenges of the forestry sector can be categorized into four major areas: policy and legal instruments; governance system; enabling working environment including human, physical and financial resources as well as personal administration system, and cooperative political leaders; and staff attitude to change and learning. Some key challenges the forestry sector faces today are as follows: Across the sector, there is poor commitment to implementing policies, plans, and legislation. Existing legal frameworks, plans, and programs were/are neither fully enforced nor implemented effectively. Many legal instruments, such as the Soil Conservation and Watershed Management Act, are developed as an ideal without considering the ground reality for implementation. Similarly, the government’s fiscal and energy pricing policies are/were also not conducive to the sector in terms of encouraging public investments in forestry development and promoting alternative energy technology. Government priority is not given to forestry sector. The GoN’s level of commitment to any sector is reflected in its policy statement and resources, both financial and human. Though the government made a commitment to keep at least 40 percent of the country’s land under forest cover, the forestry sector has never been prioritized in terms of resource allocation. The sector suffers from weak governance policies across the board. Despite continuous efforts by the government and donor agencies to improve governance, there has been little improvement in forestry governance. As per media reports and CIIA investigations, corruption is a mainstream part of the institutional culture in almost all sectors. The sector undermines the principles and norms of public administration and organization management. The forestry sector is administered through the GoN’s public administration system, which is heavily characterized by over-management or over-administration. The poor state of the administration can be observed from the frequent and unpredictable change of staff. In these, and other ad hoc decision, no basic principles or norms of public administration are respected. Different stakeholders such as informal institutions NGOs, and private actors undermine the roles and responsibilities of the sector. Formal and informal institutions present in rural areas (such as VDCs, CFUGs, NGOs etc) are undermining the government programs, frequently resulting in counterproductive outcomes. The sector also undermines itself by assigning roles to the forest administration which do not fit the current local, national, or international contexts. There is weak coordination and communication across the board. Stakeholders in the forestry sector are poor at coordination, cooperation, and collaboration within and outside the sector. Within the government system, both intra- and inter-departmental/ministerial coordination is very weak. The communication system and extension mechanism are still traditional and fragmented. The parallel project structures functioning in the districts are replacing government roles. The majority of donors work directly with local NGOs, establishing parallel offices at the project sites/districts. This greatly undermines the government institutions. The MPFS stressed a 89 “program approach” to forest investment and management to remedy the fragmentation of foreign assistance in the forestry sector. However, the “project approach” has prevailed. Similarly, donor policy on forestry assistance has not been harmonized with the Foreign Aid Policy 2008, and in line with international commitments and instruments. 5.2.3. Lessons Learnt and Way Forward This review of IDP combined with contemporary literatures on institutional, organizational, and governance aspects of the forestry sector suggest the following lessons for the future. Make policy instruments more decentralized and context specific to create an enabling working environment. It is well-recognized that the policy and legal instruments of Nepal’s forestry sector are pro-community and decentralized. However, their effectiveness in terms of addressing prevailing issues is not encouraging. As policies and their implementation are determined by the political economy in general, their design and effectiveness are changed as the political system changes. In order to create an enabling environment within the context of the presently fragile and unstable political environment, the following is needed: a) Make policy environment more context specific and develop operational tools. b) Make the monitoring and evaluation system more effective so that its outcome could be used for policy feedback. c) Make regulatory and fiscal policies more conducive to better performance. d) Harness the comparative advantages from initiatives on environmental conservation and utilization. e) Synchronize and harmonize the sectoral and extra-sectoral policies. Reinvent organizations and reorient forestry personnel. Experiences from past organizational reforms are not encouraging; these reforms could not distinguish between superfluous and fundamental changes. For effective reform, organizations need to be considered living or learning organizations, capable of sensing emerging changes and adapting themselves. Shifting the working approaches from 'command and control mode’ to the more appropriate 'coordinate and connect' mode involves enormous challenges. Packages to enhance existing capacity have not been effective. For significant impact, result-based capacity building programs must be implemented. Further, these programs must be aligned with an organizational focuses on developing new attitudes and initiating changes in the mindsets of staff. Such a reform can improve the governance, service delivery, efficiency, and productivity of forestry personnel. A reorientation of this scale would require the following: a) b) c) d) e) Reinventing forestry institutions and developing them as learning organizations. Reorienting the mind-sets, skills, and roles of forestry personnel. Assessing the relevancy, effectiveness, and productivity of existing institutions. Mobilizing social networks and other new actors for forestry development. Improve public relations of the forestry institutions so that they are trusted by the general public. 90 Enhance coordination, communication, and collaboration with actors beyond forestry. Though the forestry sector involves many interdependent actors with diverse needs, the basic principles of coordination, communication, and collaboration are poorly internalized. There is a lack of decentralized and context specific coordination mechanisms. Which institution will play the coordinating role is a key question. Any organization from local government to the private sector, civil society to media could play this role, becoming an 'agent of change' in providing an enabling investment environment and required technology support. Make foreign aid consistent and compatible with Nepal’s needs and priorities. The foreign aid policy is an integral part of Nepal’s development policies and priorities. But effective aid disbursement is possible only when the aid policies and working mechanisms of all the donor agencies are synchronized with each other and with those of the forestry sector. Such synchronization would bring the donors in compliance with the Busan Partnership for Effective Development Cooperation, 2011. Similarly, the GoN and the forestry sector should focus on improving the quality of domestic policies and harnessing the capability of its human resources, thereby creating an enabling policy and investment environment. 5.3. Human Resources Development The HRD plan aimed to develop the capacity of the people involved in implementing forestry development programs. The plan discussed the status of human resources at the MFSC, the parastatals, and at organizations providing training services. Demand and supply projections were made to identify possible gaps needing attention through the implementation of the human resources development program. The objective of the HRD plan was to provide the human resources needed to implement the MPFS programs. The objective itself was very narrow, as many other important aspects of human resource development were missing in the plan including transfer and promotion system, performance management, career planning, workforce diversity, and succession planning. 5.3.1 Key Achievements The two post-MPFS organizational restructurings were not compatible with the projection of human resources made by the MPFS. These changes also appear to have missed the spirit of the MPFS. Nevertheless, significant progress has been made in some aspects of human resource development, with clear improvements seen in the training and forestry education sector. The MPFS stressed “reorienting and retraining forestry professionals and technicians so that they will shed their traditional ‘police’ roles and adopt new ones as the people’s partners in development”. The reorientation and re-training was particularly emphasized in the Community Forestry Development Program. Since then the reorientation was emphasized by all institutions and projects within the forestry sector, a HRD and Training Division was institutionalized at the center and at five regional headquarters. Bilateral and multilateral projects under the MFSC have also provided a number of trainings to develop capacity of forestry staff within their project areas. Staff member were encouraged to participate in short-term training courses, seminars, workshops, and study tours at the district, regional, national, and international levels. All these trainings have played a significant part in the changing the role of forestry field staff from ‘policing’ to ‘facilitating’. 91 Forestry education has also been expanded over the years. The Institute of Forestry (IOF) has started MSc, M.Phil, and Ph.D. programs to its existing bachelor level education. The Kathmandu Forestry College (KAFCOL), a public company which offers a Diploma in Forestry Science, BSc in Forestry, and MSc in Geographical Information Systems has been established. More recently, a new Agriculture and Forestry University (AFU) was established in 2010. This is the first university in the country offering a BSc in forestry. The AFU also intends to add masters and Ph.D. programs in forestry science. Many students also continue their higher studies at the Master’s and Ph.D. level at overseas universities, particularly in USA, UK, Australia, New Zealand, the Netherlands, and Thailand. The use of technology by MFSC staff, for example computer literacy as well as use of GPS and GIS technology has also increased. Staff members are also seen enhancing their social skills related to public interactions, public speaking, and participatory skills. A key achievement, at least on paper, is the MFSC’s human resource strategy prepared in 2004. The strategy report outlines the HR vision, strategic actions to reach the vision, a set of staff development and training principles, and a series of practical suggestions for implementation. The strategy is, however, yet to be approved and implemented. 5.3.2. Key Issues and Challenges The key issues and challenges in human resource management and development are as follows: Human resource systems on appointments, transfers, appraisals, promotions, and development/training are not streamlined as the MFSC does not have an operational HR policy. The MFSC lacks a comprehensive HR information system database with personal information, career data on postings, transfers, development, and promotion, as well as readily available appraisal information. A process of job/person profiling is needed to match people to jobs. Information is available to create job profiles for all positions, including a summary of the characteristics of the person suited to the particular job. However, comprehensive job descriptions including roles, responsibilities, authority, access to resources, reporting relationship, and competencies required as well as individual job profiles do not exist (Dearden et al, 2004). The absence of such information, complemented by political influence, has made the ministry unable to select the right person for the right job during recruitment/placement or transfer. Further, the orientation given to new recruitments and the hand over between staff leaving and entering is not adequate. This has resulted in discontinuity, with institutional memory not adequately transferred. In most cases, transfers are unplanned, unpredictable, and untimely. Moreover, the transfer decisions are adhoc, carried out without a consultative process and without following uniform criteria. Employees working in hierarchic organizations are enthusiastic to reach top levels of the hierarchy. But limited promotion opportunities force staff to remain in the same position for many years. Promotions are based on numerical calculations obtained from performance appraisal records of the current job. This puts the focus on accumulating points by fulfilling requirements rather than on being innovative, productive, and competent. The promotion system 92 neither evaluates the innovativeness nor the productivity nor the ability to cope with higher-level responsibilities. The performance appraisal form is poorly designed, and the process is neither consultative nor constructive. The outcome of the appraisal is used only for promotion purposes without connecting to career path or development needs. The appraisal system does not identify the strength and weakness of the staff, there is no feedback system to help them improve, and there is no grievance handling system associated with the outcome. In any organization, staff may have grievances related to structural and/or individual processes in the work place. If the management listens to and addresses the problems of the staff, the organizations performance increases. To effectively address issues, the organization must have a grievance handling mechanism in place. Though the Ministry of General Administration has prepared grievance-handling directives 2063 (2006 AD), it is has been found neither functional nor effective in the MFSC. A comprehensive Training Needs Assessment for MFSC was carried out in 1991. No similar exercise has been undertaken since. As a result, there is a very weak linkage between training and enhanced job performances. Further, poor records are kept of the training received by staff members, making it difficult to emphasize expertise development. Overall, a system of training staff members according to the organization’s objective has not been established. The role of management and leadership is to create an enabling working environment and motivate staff to do good work. However, the existing management and leadership style in the forestry sector can be characterized as haakim culture, rooted in a feudal state. Such a style does not inspire staff to provide quality services to people. The forestry sector has not able to make use of recent findings on leadership and management in order to enhance the performance of forestry organizations. The attitudinal aspects of staff psychology including intention, commitment, enthusiasm, and inspiration are often ignored in development organizations. Similarly, that unspoken cultural aspects including beliefs, traditions, and practices influence staff perceptions of ideas such as leadership and services is not considered (Pradhan 1993). It is widely believed that decisions in the government system are manipulated by connection and kinship, source-force (influence by power and connection), and afno manchhe12 (Bista, 1991). This feudal culture was inherited from the sixteenth and seventeenth century Moghul regimes, and further nourished by the autocratic Rana and Panchayat systems. This feudal culture continues to influence decisions about postings, transfers, promotions, performance evaluation, accountability, and rewards within the forest bureaucracy (Acharya et al, 2008). During the beginning of the MPFS, the Panchayat regime was in place in Nepal. In 1990, a popular people's movement established a multi-party democratic political system. In 2006, the end of a ten-year armed conflict ended the constitutional monarchy and established Nepal as a federal republic. Such political changes have implications for human resource development in the government in general, as well as in the forestry sector. Because the country still does not “Afno manchhe is the term used to designate one’s inner circle of associates. It means ‘one’s own people’ and refers to those who can be approached whenever need arises.” (Bista 1991). 12 93 have a constitution, there is uncertainty over the future roles/responsibilities and structure/mechanism of the MFSC in the anticipated federal system. Following the political change of 1990, Nepal adopted a liberal economic policy which exposed Nepalis to the international arena. Competent Nepali professionals are getting well-paid job opportunities abroad. Similarly, donor projects, INGOs, NGOs, and the private sector within the country are paying attractive remunerations. This has made it a challenge for the forestry sector to retain competent human resources within the government system. An update of quantitative human resource projection made by the MPFS is needed. A projection of this sort is very challenging in a situation where the future structure of the state – federal, decentralize, or unitary – is unknown. Undue political pressure and personal bias are often reported in the placement and transfer of staff. This often results in poor job implementation and significantly affects morale. Gender, equity and social inclusion are considered contentious issues in forestry sector governance. As in other bureaucratic organizations in Nepal, the forestry sector is dominated by males of the Brahmin, Chhetri, and Newar (BCN) ethnic groups at numbers disproportionate to their total population (Rai Paudyal and Ghale, 2008). This lack of inclusions is due to various structural, social, and cultural factors including unequal access to and control over economic and political assets across class, caste, and gender lines. With many of the same structural, social, and cultural factors still in place, there are significant challenges to successfully implementing gender, equity, and social inclusion programs. 5.3.4 Lessons Learnt and Way forward The review of the HRD plan of the MPFS suggests the following as key lessons and way forward: Although the MFSC’s organizational structure contains a planning and HR division, HR management and development are of the lowest priority. The ministry needs to establish HRM and HRD as a core function. This function also needs to be transformed from an administrative orientation to managing people with an emphasis on performance, development, career, and welfare. The forestry sector needs to develop and adopt a series of HRM/D policies sensitive to gender and social equity concerns. Such policies need to include affirmative action for the inclusion of women, indigenous people, and Dalits; management from people’s perspective; selection and appointment based on merit; performance based transfers and promotions; institutionalization of learning and development; and a fair and effective grievance handling mechanism. The MFSC’s Human Resource Strategy of 2004 must be updated to reflect the changed context and subsequently implemented. The MFSC must develop HR operational guidelines including principles, rationale, objectives, strategies, and mechanisms covering a wide range of thematic areas from recruitment and code of conduct to counseling and grievance handling in accordance with the civil service act and regulations. 94 The MFSC must strengthen its formal and informal linkages with academic institutions providing forestry education and training. This will enhance practical forestry education as well as facilitate regular updates in the forestry curricula in line with new and emerging needs of the sector. The MFSC also needs to build close links with the CTEVT to accredit many of the forestry trainings delivered by MFSC and other organizations. A comprehensive human resource information system database needs to be developed and implemented at the MFSC in order to facilitate HR management. The database should include personal information, career information, appraisal information, performance histories, and key achievements. A competency approach to staff development and training is necessary. In drafting a competency framework, emphasis needs to be given to improving the qualities of pre-service and in-service training. Training should not be simply treated as a reward to staff but an investment for better performance in the future. Thorough training needs assessments and training evaluations must be conducted across the forestry sector. To encourage learning and development, learning centers and libraries also need to be developed. Leadership and management are the primary function of all senior staff, DFOs, DSCOs, and wardens. The MFSC does not, however, prioritize strengthening their management and leadership skills. Nevertheless, a few senior staff are given opportunities to participate in management training courses offered by the Nepal Administrative Staff College. The MFSC needs to provide staff management education, training, counseling, and mentoring services. Links have also to be developed with national and international management institutes. Efforts need to be made to initiate a change in attitudinal and cultural aspects of the forest bureaucracy. Developing a code of conduct and openly discussing behavior within the forest bureaucracy can be a starting point. Concerted efforts need to be made to discourage misuse of the afno manchhe, haakimi, and chakari behavior. Focus should be given to promoting positive conversations, positive attitudes, commitment, and professionalism. There is a need to initiate dialogue to identify/develop roles, functions, and structures of the MFSC in the expected federal system of governance. Preparation of this nature will ensure that the role change is not abrupt and chaotic. 5.4 Forestry Research and Extension According to the MPFS, the main aim of this program was to strengthen the research and development, as well as the forestry extension and public information capability of the forestry sector. Promoting the utilization of the research was also a goal. Towards this end, some key strategies were drafted including the promotion of research and extension in one package. A three phase extension method including mass communication, field extension, and transfer of technology to be adopted was also planned. The other key pillars of the program were strengthening research in collaboration with the IOF and other agencies as well as decentralizing information dissemination and outreach activities. 95 5.4.1 Key Achievements The overall achievements of the forestry research and extension program remained mixed. Ambiguities on the institutional arrangement, mainly the leadership’s short sighted decision to alternately classify the forestry research agency a center created a lot of confusion. Overall poor budgeting in this program also resulted in poor outputs. A regular Radio program called Ban Batika and a publication called Hamro Ban were some of the regular activities carried out by the extension unit. But, because the print and electronic media used were of a more technical nature, they only attracted limited audiences and readers. The transfer of technology component remained problematic as the focus remained on ‘scientific knowledge’ rather than a mutual exchange of indigenous local knowledge and formal scientific knowledge. Achievements of the decentralized extension activities also remained mixed. Though range posts were established at the sub-district levels, each post covered more than one VDC. Forestry thus remained isolated from and out-of-synch with the local government at the VDC level. The community forestry programs of the mid-hills were an exception, benefitting from the extension services of the range posts. An Extension and Communication Division at the ministry was envisioned but not implemented. At the departmental level, the Department of Forests, the Department of Soil Conservation and Watershed Management, and the Department of Plant Resources have extension sections. They are, however, constrained by the lack of skilled human resources and an inadequate budget. The Department of National Park and Wildlife Conservation has the Conservation Education Section and Department of Forest Research and Survey has an Information Section. But neither is fully functional. Similarly, at the regional level, the Regional Forestry Directorate was made responsible for the coordination, planning, monitoring and supervision of all the forestry programs. The directorate, however, has to compete with the respective departments for resources, power, authority, and functions. At the district level, forest coordination committees were formed and guidelines prepared. These bodies have, however, remained largely centralized. Ironically, no village level coordination mechanism was crafted. Coordination between the extension sections of various departments and with parastatals remains poor. The Institute of Forestry (IOF), though it has expanded tremendously over the years, does not impart practical knowledge bolstered by internships. Despite the poor institutional coordination, some nongovernment and private sector institutions have emerged. These institutions, in collaboration with Nepali and foreign institution, fill the research gaps of the forestry sector. For example, research has been conducted in biomass growth, agro forestry, silvics, and silviculture by FRD/ FORESC/, DFRS, TISC, and forestry projects. The dissemination of study results to the local communities has, however, been weak. In terms of the research to be conducted on composition, age, size class distribution, natural regeneration and yield of the major commercial species as stated in the MPFS, the Tree Improvement and Silviculture Component (TISC) of the DoF has compiled biomass tables for several tree species. Further, attempts have been made to respond to the research demand on the problems faced by farmers on pine forests and Sisso die-back. DFRS has published two leaflets in Nepali related to survey in Sissoo die-back and its treatment. A documentary was made to cover the preventive and remedial measures of Sissoo die-back and broadcasted through TV. The problem of adequate distribution of study results, however, remained. 96 5.4.2 Key Issues and Challenges There is no official research policy yet. A research strategy has been submitted to the MFSC, but has not been approved. A working procedure of the DFRS and thinning guidelines on Pinus patula and Pinus roxburghii are some examples of working guidelines developed so far. However, the implementation of the guidelines is hardly reviewed. The Forest Research Development Plan (FRDP) states that the reformed organizational structure of the MFSC must be continued to establish a functionally integrated but physically decentralized institution. Yet, attempts have never been made to decentralize research offices at the regional level, though research buildings were constructed in each region for this purpose. The problem of hiring research staff to work at the regional office is said to have hampered implementation. The FRDP had intended to continue the National Forest Research Plan (NFRP) of 1981, with special attention given to research on the transfer of responsibility for forest management and impacts of restricted reserves. But, the NFRP was not brought into action. As per the FRDP, the DFRS accepted degrees from relevant fields other than forestry in recruiting staff. The DSCWM and DPR particularly recruited staff from different fields, other than forestry. Still, the forestry research team is still low on staff from the fields of economics and sociology. As a result, little research has been done to understand the linkage between forestry and poverty alleviation, tourism, and other critical areas. While research from non-governmental organizations has filled some of these gaps, the research from these bodies has hardly had any effect on policy reform. The research sector is sorely missing a strategic partnership among government, universities, as well as non-government and private research organizations. A partnership of this kind may be successful in bringing attention to the problem faced by local users and farmers, an area receiving scant attention currently. For instance, the knowledge farmers want on treatment of Sissoo die-back has yet to reach them. 5.4.3 Lessons Learnt and Way Forward Better leadership and coordination is needed. MFSC needs to direct the DFRS in forestry research based on the forest research development plan. The upcoming forestry strategy should recognize the government body as a coordinator of all stakeholders in the research sector. A multidisciplinary staff and research center should be built. Research staff should be of both genders, with expertise in ecology, economics, statistics, and forestry. At least 118 ecosystembased research stations to be coordinated by decentralized units in the five development regions, should be established. Research is needed on the contribution of the forestry sector to GDP and should be mainstreamed with CBS/NPC. A study is needed to measure feasibility of establishing a National Forest Research Council. Detailed review of the existing DFRS is needed so as to know and design an appropriate institutional arrangement to carry out and manage utilization focused forestry research in Nepal. Previously, a Forest Research and Survey Centre (FORESC) was established but was later dismantled and replaced with DFRS. However, the incentives and working culture of the DFRS do not appear to be compatible with research results produced by the DFRS. A possibility is to 97 transfer the DFRS into a National Forest Research Council which will manage research and coordination among the research institutions. More research is needed on community based forestry. Existing research notes that community based forestry and other devolution processes have contributed to increasing forest area and quality together with social cohesion among forest dependent communities. There is, however, need for further research on the cost and the benefits of such changes so that sustainability can be measured. 5.5 Planning and Information In the MPFS, both the resource information and planning components are lumped together under the same program. However, the government institutions responsible for these two components are separate. The Department of Forest Research and Survey is responsible for resource information mainly from the forest inventory point of view. Meanwhile, the Planning and Human Resource Development Division of the ministry, planning divisions of the departments, the Regional Forestry Directorate, and district based organizations are responsible for planning and programming. Although this review combines both the components, the nature of these two components is different. According to the MPFS, the main aim of this component is to develop a forest resources information system within the ministry. The information generated through such a system can be used for long-term and operational planning purposes by the government, communities, and the private sector. 5.5.1 Key Achievements The overall achievements of the resource information and planning program remain mixed. Though the national capacity for resource information generation has not been satisfactory, tremendous progress has been made in institutionalizing the bottom-up planning process. The two components are discussed in detail below. I. Resource information During the plan period, the National Forest Inventory (NFI) was carried out two times under the leadership of the Department of Forest Research and Survey. A third NFI is ongoing. The 1999 NFI classified land-use and estimated forest coverage. Subsequently, data on land-use change from 1999 to 2001 was generated. The latest inventory report is expected to provide similar date for the post-2001 period. The 1999 NFI does not, however, provide disaggregated data and resource maps based on physiographic regions in Tarai, Siwaliks, mid-hills and high mountain. These areas all have different forest tenure systems and consequently different land-use change patterns. For example, various qualitative and quantitative studies show that forests in the mid-hills are better managed, with the community and private forestry programs having reversed degradation. These studies record a mean 21 percent biomass increase across community forests of all types and conditions measured over a 14 years period (1.5 percent per year). In the Tarai region, the forest land has been converted to other land-use categories, especially shrub and agriculture land. As discussed in section 2.5, the forest area of plain Tarai is declining by an annual rate of 0.44 percent in the last decade (2000-2010), which is higher than the average deforestation rate of the last two decades (1991-2010). The quality of the growing stock of timber (over bark) from the reachable 98 forests of Nepal has fallen from 519 million cubic metre to 387.5 million cubic metre between the period of 1986 to 1998 (MPFS, 1988; NFI/DFRS,1999). The average standing timber for Tarai as estimated by MPFS (1988) was 101.05 m3/ha. However, the latest inventory of 2010-2012 carried out by DFRS shows that stem volume up to 10 cm diameter is 121.98 m3/ha (FRA/DFRS, 2014). Apparently, the growing stock of standing timber in Tarai appears to be increasing even though the total forest area is declining. Apart from the national inventory, a number of departments have MIS and CFUG database systems with national level information on protected areas, sub-watersheds, forests, forest products, revenue, user groups, and membership. The information is recorded and updated annually. In addition, huge amounts of social and ecological data are generated for the preparation of strategic and operational plans at the district, sub-district, and local level. These include District Forest Plans, Protected Area Management Plans, and Watershed Management and River Basin Plans. Similarly, community, leasehold, collaborative, buffer zone, and soil conservation plans are being prepared and implemented by local communities. These plans have a large amount of detailed information on both biophysical and socioeconomic attributes of the jurisdiction area. The problem is that the information is not being analyzed in a way that allows local knowledge to feed into the policy and planning processes that take place at the national and district levels. II. Planning The planning component of the MPFS has enjoyed encouraging results. The MFSC is one of very few ministries with an institutionalized, participatory bottom-up planning process (see Annex 4). Each district prepares periodic and annual plans through a consultative multi-stakeholder mechanism. Forestry officials have realized the importance of bi-directional flow of information from community level to the central level, and vice versa. Under the leadership of government agencies, civil society and private sector actors have started to participate in the planning process at various levels – integrated planning committees at VDC, VDC and DDC councils, regional directorates, departments, ministries, and the national planning commission. Through the community and private forestry program, thousands of local institutions have been established at the community level. In addition, user group networks and a federation of forest user groups have emerged to safeguard the rights of forest users. Additional service providers such as NGOs, local government bodies, and private sector agencies have also emerged. These institutions have started to collaborate not only on planning but also for implementation, joint monitoring, evaluation, reflection, and learning. Active players in the forestry sector are becoming increasingly aware of the multi-stakeholder approach and collaborative mechanisms in forestry. All stakeholders involved in forestry have begun to realize the need for the active participation of marginalized groups in all stages of project planning, implementation, and monitoring. There is a similar growing awareness of the need for good governance. This increased sensitivity on need for equitable benefit sharing in favor of the poor and women has also become institutionalized. Policy provisions have established the following quotas to promote participatory planning: 33 percent women in the committees, 50 percent women in key positions at the user committees, and 35 percent of total expenditure to be allocated to people living below the poverty line. Through these processes, ground level realities have started to feed into layers of governance. 99 Ground realities are thus reflected in policy intentions, and also more or less translated into practice by innovative officials, in collaboration with NGOs and other stakeholders. Because stakeholders now work more collaboratively and collectively, power and positions are being negotiated and redefined. Mutual trust, accountability, and transparency have begun to increase. People who have gained experience in the forestry sector have contributed significantly to institutionalize local democracy. The immediate effect has been seen at the local government level where an integrated planning committee has been made responsible for coordinating the entire sector at the VDC. 5.5.2. Key Issues and Challenges As noted earlier, the 1999 NFI did not generate information on forest resources disaggregated by physiographic characteristics and forest management regimes. This is a challenge as detailed data of this kind is key to effective planning. Similarly, few departments have qualified staff able to regularly update MIS and the user group database system. Despite the newly emergent consultative and collaborative culture in the sector, the power imbalance between government and other actors still exists. There is still a tendency to take unilateral decisions through a non-transparent approach. 5.5.3 Lessons Learnt and Way Forward Make available forest data and resource maps disaggregated by physiographic regions and forest management regimes to all relevant stakeholders. Make use of forest resource data and maps generated by NFI for the preparation of district and forest management plans at forest, watershed, and protected area levels. Build capacity of staff responsible for MIS and strengthen the planning and statistical units to update MIS and data base of user groups. A financing mechanism with multi-stakeholder representation should be established so that forestry stakeholders do not suffer from underfunding. Continue the bottom-up participatory planning process by involving all relevant stakeholders in the operational planning. Further strengthen the capacity of stakeholders who are a part of the consultative and decision-making process for policy and strategy development. 5.6 Monitoring and Evaluation MPFS aimed to institutionalize a system for monitoring forestry development operations and their impacts. It also sought to process the monitoring data into information that could guide the development process. Monitoring and Evaluation was one of the supporting programs which envisaged the efficient and effective implementation of MPFS. The M&E plan designed the following four sets of actions to guide the process: Designing a M&E system for each program. Increasing capacity of staff working in M&E division and sections. Collaborating with the training section to provide further training in M&E. Using advanced techniques of M&E such as remote sensing and GIS. 100 To this end, the MPFS developed a strategy to have continuous monitoring and evaluation of targets at different organizational levels of the MFSC. It developed M&E as a separate component with a budgetary allocation of NPR 25.2 million from government sources and NPR 113.4 million from external assistance. The M&E component was largely concerned with progress and impact monitoring. 5.6.1 Key Achievements The M&E system practiced in the MFSC followed the guidelines set by the NPC. The NPC guidelines were general, designed to suit all sectors of the GoN. Thus, it did not capture the range and quality of information required by the MPFS. The NPC itself, though it carried out a periodic review of programs under the MFSC while preparing its five-year plan (recently three-year plan), was unable to steer and lead the MPFS programs. On the technical end, the traditional paper-based monitoring used by the MFSC made it difficult to store, analyze, retrieve, and communicate monitoring data easily. Those working in the M&E division are also demoralized, as they feel that their job is inferior to other activities. A number of departments have, however, developed independent monitoring systems. For example, the DoF has developed an Integrated National Database System on diverse issues including forest area, encroachment, and forest products with source of extraction - ie national forests or community forests. In another instance, the community forest division of the DoF is using a Community Forestry National Forest User Group Database especially focused on CF. This database provides updated status on the number and memberships of CFUGs and the forest area under their management. Similarly, the DSCWM has a management information system, which is a national database system for the soil conservation and watershed management programs. In the same way, the DPR has prepared a list of indicators for different sub-components such as biodiversity conservation, biotechnology, cultivation, as well as research and development of non-timber forest products. Currently, the DFRS is doing forest inventory using satellite images, a program it had earlier implemented during 1992 to 1996. Despite all the efforts noted above, progress has been almost nonexistent to date with regard to the four sets of activities proposed by the monitoring and evaluation plan of the MPFS. 5.6.2 Key Issues and Challenges A wide information gap exists due to poor record-keeping and a weak system of reporting. There are no regular or periodic reviews of current forest conditions or of changes in trends. M&E systems are heterogeneous and weak. The field offices are required to fill-up and submit mandatory reporting formats regularly. The offices find these progress reports burdensome. This situation is more aggravated when different ministries, departments, regional offices, and a number of donors each have their own formats. The field officers would prefer to fill out one format, sending copies to different users. Motivation level of M&E staff is low. Working in M&E is considered a monotonous job, and devalued within ministries and departments. Often, staff members considered least useful/efficient are assigned to the monitoring job. 101 5.6.3 Lessons Learnt and Way Forward Strengthen the monitoring divisions of the ministries and sections with appropriate human and financial resources. Develop software for monitoring information systems and train persons working on M&E on how to use it. Start monitoring governance and project-level monitoring and evaluation. Establish a practice of Result Based Monitoring and Evaluation (RBME) for all programs under the MFSC. 5.7. Gender and Social Inclusion Gender is an important factor in sustainable forest management, community-based in particular, as has been internationally recognized. Nepal has ratified over a dozen international commitments on nondiscrimination, gender equality, and social justice. Initiated originally from the international perspective, these commitments have now become part of the national priority. Government has especially proven its commitment to good governance through effective decentralization after the movements of 2006. The GoN now has concrete plans to reach out to women and other excluded groups. The MPFS was prepared at a time when gender issues were not as widely considered as they are today. Nonetheless, the MPFS had ensured critical representation of women in decision-making processes, especially in community forestry user’s committees. The MFSC developed the GESI in 2008, identifying four areas of intervention: GESI sensitive policy and strategy. Good governance and institutional development. GESI sensitive budgeting/programming and monitoring. Equitable access to resources and benefits. The objectives of the GESI strategy are twofold. First, GESI seeks to assist government, nongovernment organizations, donors, and private sector actors working in forestry to institutionalize social inclusion into their organizations and programs. Second, GESI seeks to guide all organizations working in the forestry sector to be responsive and inclusive. 5.7.1. Key Achievements I. Status of gender mainstreaming in the forestry sector The GoN has been committed to addressing gender discrimination since its first Five-Year Plan in 1956. However, the paradigm shifted from Women In Development (WID) to Gender And Development (GAD) starting from the Ninth Five-Year Plan (1997–2002). These plans have pursued gender equality and women’s empowerment through a gender mainstreaming strategy. The Interim Constitution 2007 102 addresses gender and social development through devolution, decentralization, gender equality, and social inclusion. It also guarantees social justice and affirmative action for the marginalized and socially excluded groups. In response, the civil service act and its regulations (1991) also provided 45 percent reservation for the marginalized groups. Similarly, the Human Resource Development Strategy (2004) of the forestry sector is GESI sensitive and consists of a holistic implementation framework focused on affirmative action. There have been various initiatives to institutionalize GESI concerns in the MFSC including institutionalization of a Gender Focal Point (GFP) person in each department. There has also been the formation of a gender and equity working group at the center led by the ministry but with the participation of civil society organizations and development partners. These initiatives show a certain level of preparedness or readiness to institutionalize GESI as a crosscutting issue. Women’s concerns are incorporated in various sectoral management guidelines including the Community Forestry Development Guidelines 2008, the Protected Area Management Regulations 1996, Collaborative Forest Management (CFM) Guidelines 2003, Leasehold Forestry Guidelines 2006, and National Biodiversity Strategy 2002. The significant incorporation of GESI into forestry, especially community forests, may also be due to the growing interest and intervention of civil society in natural resource management. For example, women make up 31 percent of community forest user committees, also holding some key positions. Adhering to GESI provisions, the community forestry guidelines 2008 have specified that women should make up 50 percent of the executive body and occupy one of the two – chairperson or secretary – executive positions. Additionally, it also mentions that both husband and wife need to be included as a household member in the constitution of the forest user group. The guideline provides for the use of 35 percent of the budget to be focused on the poor and on women. Similarly in other community forest management modalities – leasehold, collaborative and buffer zone – women’s representation is 39 percent, 12 percent, and 19 percent, respectively. The state of women’s representation is, however, dismal within the government bodies. Within the MFSC, women make up only 3.33 percent of employees in contrast to the 33 percent targeted by the government. An analysis of 67 national policy documents and directives related to gender responsiveness reveals that only one is negative, 29 are gender neutral, 20 are moderately responsive, and 17 are highly responsive to gender issues. However, among the 35 forestry policy documents reviewed, only the GESI strategy 2008, CF management guidelines 2008, and Buffer zone management guidelines 1999 are highly gender responsive. The rest are either gender neutral or moderately gender responsive. Among the 30 projects/programs being implemented in the forestry sector during the 2013/14 fiscal year, only 11 programs are directly gender responsive, 15 are indirectly responsive, and the remaining four projects/programs are neutral. The gender friendly policy documents reiterate provisions to ensure women's participation in the field/community level. The increased trend/tendency towards internalization of GESI is found due to increased awareness and sensitization of policy makers and civil society members. Nonetheless, women’s participation in the planning and monitoring process is very low as there are no women in decision-making positions. However, at the field level – particularly in the community forestry and leasehold forestry programs – the inclusion of women and other marginalized groups is comparatively high. 103 In short, the progress in social inclusion has been uneven. The central problem is that while the government is committed to GESI on paper, implementation has been patchy. Overall, the forestry sector is still male-dominated, especially the government organizations. Community forestry is an exceptional success in this regard, where GESI is incorporated in theory and practice. II. International imperatives and commitments Through the MDGs, the international community agreed on a common set of development targets, including GESI. The country progress report states that despite the political instability, Nepal has already attained MDG targets related to GESI. III. Budget allocation The GoN formally introduced gender responsive budget (GRB) to ensure equality for women during the 2007/08 fiscal year. GRB has since been institutionalized in all government mechanisms. The forestry sector explicitly adopted this provision during the 2010/11 fiscal year. The total budget allocated to the MFSC for the 2013/014 fiscal year is NPR 8.63 billion. Of this, approximately 3.55 percent and 66.19 percent fall under the direct and indirect gender responsive budget category respectively. The remaining 30.24 percent of the budget is gender neutral. Meanwhile, 21 percent of the overall government budget is considered directly gender responsive for the current fiscal year. Looking at the government funded forestry sector, almost all Red Book expenditures fall under the indirectly gender responsive category. Analysis of some selected directly donor-supported activities reveals that direct funding is more propoor and pro-women in comparison to government funded programs. 5.7.2 Key Issues and Challenges The following are key GESI related issues and challenges for the forestry sector. I. Policy and legislation Most forestry sector policy documents are gender neutral. But inadequate knowledge, low interest, and weak institutional capacity on gender have led to poor advocacy for implementing provisions of the existing gender responsive policy documents. II. Institutional issues The forestry sector is male dominated, with women grossly under-represented at the decisions-making, management, and technical levels. Furthermore, GESI issues are given low priority within the formal structure of the MFSC. Forestry professionals also do not have adequate knowledge and skills to ensure gender mainstreaming. III. Gaps in policies and implementation mechanisms Most forest policy documents are either gender neutral or indirectly responsive. Poor coordination and the lack of an accountability mechanism are also partially responsible for the patchy implementation of GESI. 104 IV. Gaps in awareness, knowledge, and capacity There is no coherent strategy to communicate the importance of GESI to MFSC staff. Most of the inservice trainings are designed to plan and implement programs independently, rather than in integrated ways. V. Limited capabilities and opportunities to ensure benefits The constraints faced by female employees within government organizations make it difficult for them to participate in targeted programs and business enterprises at the scale necessary for commercialization. The policies and mechanisms for harvesting natural resources, particularly non-timber forest products (NTFP), are not conducive to the poor, women, and other excluded groups. VI. Ad-hoc implementation of livelihood activities Most micro-enterprises and income-generating activities are implemented as livelihood improvement components of larger rural development programs. They bring minimal changes, in any, in the incomes of targeted groups. Proper analysis and identification of products, markets, and capacities as well as adequate investment in technology, infrastructure, and finances are also lacking. VII. Right to natural resources The right to and ownership of natural resources, particularly forests, in Nepal’s proposed federal structure is an emerging issue. This will have implications on people and groups directly dependent on natural resources, particularly indigenous peoples and socially excluded groups. VIII. Weak service delivery Most well-intentioned policies, plans, and programs have failed to reach and benefit women and excluded groups, particularly in remote areas. This is largely due to the weak service delivery mechanisms and poor implementation. IX. Under-representation and inadequate participation The under-representation and passive participation of women and socially excluded groups in economic, political, and legal institutions has resulted in deficits in power and voice. This allows many inequalities to remain unchallenged from the local to the national levels. X. Lack of system for collecting desegregated data and weak monitoring The forestry sector does not have a sound system for collecting desegregated data from the GESI perspective. As a result, GESI considerations are not incorporated into monitoring, auditing, and reporting systems in the forestry sector. XI. Socio-cultural beliefs There is a myth or misconception in Nepal that forestry is not a suitable profession for women. This view exists within and outside the sector, and is a major challenge. 5.7.3 Lessons Learnt and Way Forward Based on the experience of GESI, the following suggestions are proposed to improve gender balance and social inclusion in the forestry sector. These suggestions are grouped in four categories. 105 I. Institutional leadership and commitment Operationalize existing policies (HRM/D and GESI strategy) and philosophical rationale of GESI analysis in the sector. Unlock the social inclusion aspects within the current systems, advocating for its review. Develop a GESI implementation action plan for the short term, the medium term, and the long term, including budgetary provisions. Review and amend the Forest Act of 1993 as well as all other related regulations, program/budget guidelines, and operational plans to ensure the inclusive and effective participation of women and other socially excluded groups. The position of GFPs should be strengthened across the board by assigning them well-defined roles and facilitating proper coordination and linkages between their functions. They should be strengthened with sufficient financial and human resources. A GESI unit should also be formed under the HRM/D division. This unit should be a gender focal point with ToR. Provide an enabling environment for the retention of female staff at all levels. II. Capacity enhancements Conduct a comprehensive capacity-development needs assessment, and carry out relevant trainings on capacity building and knowledge management. Mainstream GESI in long-range strategic planning across the subsectors and prepare a userfriendly participatory GESI manual to guide implementation. Establish a forest resources information system with desegregated data, including participation of different sex, gender, and socio-economic groups. Develop strategic partnerships with stakeholders who have core competencies in GESI. Properly implement the HRM/D strategy into practice to address the issue of low representation of women in the MFSC structure and decision-making positions. Encourage as well as attract female forestry experts towards the MFSC. III. Organizational culture and assurance of accountability Transform policies, contracts, and grants in harmony with gender-mainstreaming goals and approaches. Identify good practices and lessons learned from participatory methods and disseminate desegregated information to staff and stakeholders at the community level. Manage changes in institutional cultures and values to enhance appreciation of GESI. Provide full power, authority, and resources to the implementing body of the MFSC to mainstream GESI. 106 Develop participatory indicators for monitoring and evaluation of project processes, outputs, outcomes, and impacts related to GESI. Follow the GRB guideline of the MoF during planning, programming, and budgeting. IV. Gender-responsive strategic plan Develop and disseminate gender mainstreaming guidelines. Equip staff at all levels with participatory approaches and gender analysis tools. Produce a gender mainstreaming strategic plan. 5.8 Climate Change and Forestry This paper reviews the MPFS from the perspective of climate change. Climate change was globally recognized as a pressing issue in 1992 with the creation of the United Nation’s Framework Convention on Climate Change (UNFCCC). As the MFPS was drafted before climate change became a global issue, the plan does not have a dedicated climate change component. With all the compelling research that has emerged on climate change since 1992, the issue should be closely integrated in future policies related to the forestry sector. To this end, this section contains an in-depth discussion on the inter-linkages between climate change and the forestry sector. This review begins by highlighting global developments in climate change, including the international and national conversations around REDD. With clear changes in precipitation and temperatures in Nepal, the country is undertaking measures on climate change adaptation, especially NAPA and the promotion of REDD. Since Nepal’s contribution to greenhouse gas emissions is negligible, but its effects and impacts are significant, the forestry sector should seek additional resources from the global climate community for adaptation and mitigation. The climate-related challenges ahead are clear. The main immediate risks resulting from climate change are flash floods, glacier lakes outbursts, and significant changes in downstream water flows over the long run (CCNN 2007). Climate change will also affect human well-being, increasing disease risk, water shortages, drought, and food insecurity. In addition, some case studies from Mustang, Manang, and Ilam districts have further stressed the risks associated with climate change in Nepal. The key message is that climate change is already a reality. Climate change also has implications for the wider forestry system. This is especially true in Asia, which is likely to suffer severe losses because of high temperatures, severe droughts, flood conditions, and soil degradation. In boreal Asia, forest ecosystems will suffer from floods and increased volumes of runoff associated with the melting of permafrost. The process of permafrost depletion resulting from global warming reinforces the vulnerability of all relevant climate-dependent sectors, thereby affecting the economy in high-latitude Asia. Countries in temperate and tropical Asia are more likely to have increased exposure to extreme events, including forest die-back, increased fire risk, typhoons and tropical storms, floods and landslide, and severe vector-borne diseases. The stresses of climate change are likely to disrupt the ecology of mountain and highland systems in Asia (Gupta S. 2010). 107 5.8.1 Key Achievements The Ministry of Environment successfully drafted the Climate Change Policy 2011. In the section on climate friendly natural resource management, the policy has mentioned a few points relating to forestry, which include: Proper utilization, promotion, and conservation of forest resources as a means of alternative livelihoods. Prioritizing and implementing programs on the sustainable management of forests, agro-forestry, and soil conservation to address the impacts of climate change. Encouraging carbon sequestration and investing some benefits from forest products for controlling forest fire and conserving forests. Adoption of basin approach for water management through regular monitoring of water resources availability. I. National Adaptation Program of Actions (NAPA) NAPA is a set of programs around adaptation produced by developing countries to address the most urgent problems brought about by climate change. Adaptation is defined as an adjustment of natural or human systems in response to actual or expected climatic stimuli or their effects. The adjustments are intended to moderate harm and exploit beneficial opportunities. II. Clean Development Mechanism (CDM) The first commitment period of the Clean Development Mechanism (CDM), one of the most innovative features of the Kyoto Protocol, ended in 2012. Under the CDM, emission-reduction projects in developing countries can earn certified emission reduction credits. These saleable credits can be used by industrialized countries (Annex I countries) to meet a part of their emission reduction targets under the Kyoto Protocol. The CDM was created in 1997 by Article 12 of the Kyoto Protocol. Parties to the Protocol have since elaborated the full modalities and procedures for project activities. The CDM Executive Board (EB) is the operational decision-making body, which is assisted by various expert panels and working groups. As a part of CDM, Nepal generated some revenue through the promotion of biogas plants. III. REDD+ in Nepal At the UN Poznan Climate Change Conference (CoP 14) in December 2008, the subsidiary body for scientific and technical assistance (SBSTA) referred to ‘reducing emissions from deforestation and forest degradation in developing countries, and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries’ (Field, 2012). Since then, the concept of REDD+ has become popular and widely accepted by the global community. The CoP 19, held in Warsaw Poland, adopted an agreement on the "REDD Rulebook", which established guidelines for determining national deforestation baselines. This was a key step for allowing compliance-based REDD finance to flow. Among other donors, REDD+ is backed up by pledges of USD 280 million financing from the US, Norway, and UK. 108 A number of donors are supporting REDD+ in Nepal. The World Bank’s FCPF is supporting Nepal in preparing a REDD strategy, and has committed to supporting a pilot implementation subsequently. Similarly, the UNREDD program is also supporting the REDD program in Nepal. Bilateral forestry projects funded by DFID, USAID, SDC and the government of Finland also have strong components of REDD in field implementation. REDD+ has been optimistically awaited due to its potential benefits, including: Avoiding deforestation is one of the cheapest options to tackle climate change (Stern, 2006). Unlike emissions from fossil fuels, REDD+ can offset the emissions in one place by reforestation or enhancing carbon stock elsewhere (Skutsch and DeJong, 2010). Apart from carbon benefits, REDD+ also contributes to generating or enhancing social (poverty reduction, sustainable development) as well as ecological benefits (ecosystem services such as conservation of water, soil, harboring biodiversity). These are commonly known as co-benefits (Busch et al. 2011). REDD+ can successfully bring together many actors at different levels, from the global to the local; REDD+ has successfully generated global excitement with dozens of countries having already prepared REDD+ programs. 5.8.2 Key Issues and Challenges of REDD+ When implemented, REDD+ is likely to face the following challenges in Nepal: The possibility of elite capture for the benefit provided by the grassroots. Uncertainty of carbon markets and its trading rate; the present market value of carbon is less than USD 5 per ton. Domination of international experts in deciding the amount and value of carbon. The high costs of carrying out a need Measurement, Reporting and Verification (MRV) process by an accredited international organization. Complex methodologies which make it difficult to create a baseline scenario for carbon monitoring in a way that satisfies both the carbon credit suppliers and buyers. Ensuring the rights of local and indigenous peoples while selling secured carbon credits. Enhancing the capacity of both government and civil society institutions to implement REDD+, which requires strong technical and institutional capabilities (Ojha 2009). 5.8.3 Lessons Learnt and Way Forward The preventive role of forests has become widely recognized in recent years. There is unanimity about the role that forests can play in climate change both through carbon sequestration on one side and reducing global carbon emissions on the other (Gupta 2010). It is for these reasons that the forestry sector occupies centre stage during international climate change policy negotiations. This has been the case since the 13th CoP was held in Bali in 2007. Bass et al. (2000) have cited three forest related 109 approaches that have been used in various combinations within the strategy to reduce greenhouse gases from the atmosphere: Carbon conservation or halting/slowing down deforestation by preserving current carbon reservoirs. Carbon sequestration or increasing vegetation cover through forestation so that it can hold carbon for a longer time. Carbon substitution, or converting vegetation into timber products, which store carbon, or which substitute bio-energy for fossil fuels so that less carbon is emitted into the atmosphere. With the threat of climate change looming, it is important to manage forest resources more aggressively than outlined in the earlier MPFS. Whatever the challenges in implanting REDD+, it is important to envision it as an opportunity to get assistance from development partners to preserve Nepal’s forests and adapt to climate change. Beyond REDD, two other areas need to be explored in the days to come. One is the contribution of forests and agroforestry in adaptation. The second is the knowledge that Nepal needs to generate linkages and relationship between climate change and its impacts on forest ecosystems. 5.9 Financial Allocation in Forestry over Time The MPFS had projected an expenditure of USD 1.742 billion (at constant 1988 prices) over the 25-year implementation period. The MPFS identified three major sources of financing – private, government and external assistance. We do not have information on the amount of private investment in forestry. However, the plan had projected private sector investments to be 35.4 percent of the total projected expenditure. The government was supposed to bear 34.4 percent of the cost, with external assistance covering the remaining 30.2 percent. Excluding private investments, the projected allocation amounts to USD 1.125 billion at constant 1988 prices. Figure 5.1: Comparative study of estimated vs actual MPFS expenditure 110 Assistance to the forestry sector is channelized through two windows – the regular government treasury system and the off-treasury system. The former is known as indirect Red Book funding and the latter as direct funding. Since the indirect funding has to be spent through the regular government accounting process, it is audited by the auditor general’s office. It is thus reflected in the government’s accounting reports. The direct funding is, however, spent through the projects and not shown in the government’s accounting records. Thus, the external assistance figures recorded in the government budget are but a fraction of the total foreign assistance. This graph only includes foreign assistance reported in annual budgets and economic survey reports. The significant amount of foreign assistance spent through direct funding, a figure that has only increased since the start of the conflict in 1996, are not included in this analysis. An analysis of the total expenditure incurred through the MFSC over the period of the MPFS reveals that the allocation to forestry is declining over time. We transformed the current expenditure incurred in each fiscal year into USD at 1988 constant prices so as to compare projected investment to actual investment in each of the MPFS programs. The total expenditure of the ministry over the plan period is about USD 390 million constant at 1988 prices. The share of foreign assistance is about 16 percent. The actual expenditure is about 34.7 percent of the total projected expenditure without considering the inputs from the private sector and direct external funding. In addition, the section also contextualizes expenditures and revenues of the forestry sector in relation to total government budgets. Figure 5.2: Share of revenue and expenses from MFSC to GoN As the above diagram shows, the highest percent of government budget allocation to the forestry sector was 3.75 percent in 1991/92, just after the formulation of the MPFS. Since then, the government share of the budget allocated to forestry has declined, and was about 1.5 percent in 2010/11. The revenue share of the forestry sector has also declined from 2.5 percent in 1992/93 to about 0.25 percent in 2010/11. The analysis shows that the actual fiscal outlay to the forestry sector has been low in comparison to the projections of the MPFS. Moreover, the share of budgetary allocation to forestry has also been declining over the years in relative terms. In another study, Kanel (2012) shows that only about nine percent of the total budget allocated to forestry has been used for forestry investment; the remaining share has been used as current or regular expenditure. The total budgetary expenditure on 111 different forestry programs show that the highest share of the budget for forestry over the years was allocated to the Conservation of Ecosystem and Genetic Resources program. Table 6.0: Budgetary allocation in different programs of MPFS MPFS Programs Community and Private Forestry Program National and Leasehold forestry Wood-based Industry Medicinal and Aromatic plants Soil Conservation and Watershed Management Conservation of Ecosystem and Genetic Resources Policy, Legal, and Institutional Reform Human Resource Research and Extension Program Planning and Resource Information Monitoring and Evaluation Total Real Expenditure of MFSC during 1888/89 to 2010/11 NPR USD USD % of total current constant 8,108.71 7,320.57 Negligible 392.29 129.66 116.67 Negligible 6.28 91.98 81.85 Negligible 4.41 23.05 20.81 Negligible 1.12 4,507.60 71.53 50.18 12.82 13,230.7 81.62 256.52 808.70 184.21 281.96 35,172.89 207.83 1.28 3.70 12.80 2.86 4.38 556.98 144.37 0.88 2.40 8.82 1.95 2.99 389.84 37.62 0.23 0.73 2.30 0.52 0.80 100.00 5.9.2 Key Issues and Challenges The above analysis shows that financial allocation to the forestry sector has lagged below its potential. Although, it is estimated that forestry contributes to about 8/9 percent of the total GDP of Nepal, the percentage share of government allocation to forestry has decreased over time. In part, this is because forestry is a low priority for the government. Another problem is the lack of a formal mechanism to calculate the amount of foreign assistance to forestry channelized through direct funding; the government assumes that donors are directly funding the sector, and thus reduces its contributions. Transparency in the allocation of funding to the forestry sector is, therefore, an issue requiring attention. Similarly, there is no adequate means to estimate private funding and the opportunity cost of communities contributing their labor for the restoration, management and utilization of forest resources. 112 5.9.3 Lessons Learnt and Way Forward The lessons that we can draw from the existing issues in the scale and allocation of funding for different forestry programs can be listed below: The financial outlay in the forestry sector is too low. It should be increased substantially to really contribute to the prosperity of Nepal. Budgetary allocation should match the priority of the programs. Most of the funding from donors is channelized through direct funding and it is not transparent. It is necessary to make direct funding more transparent and recordable in the government system. The contribution of communities and private households in the promotion of community and private forests should be periodically assessed through macro-level studies. If their contribution is in terms of labor deployed to restore the forests or plant and manage trees, that should be accounted as opportunity cost in the periodic assessment. The investment by the private sector in forest-based enterprises and marketing should be assessed through periodic studies. The benefits of forestry in terms of household and commercial activities have not been estimated so far. Such studies including the contribution of forestry to the national income could assist in highlighting the importance of forestry in the national economy of Nepal, and persuading the government to allocate more funding to the forestry sector. 113 Chapter 6: Other Factors and Actors Driving MPFS Performance Factors beyond the MPFS also contributed to the performance of the forestry sector within the master plan period. National political, economic, and demographic changes played significant roles. International factors such as the Rio conferences of 1992 and 2002; globalization and liberalization all over the world; and international conventions on forestry, biodiversity, and climate change also have repercussions on how forestry is conceived and practiced in Nepal. Further, the pressure on forests leading to deforestation and forest degradation has compelled the forest agencies of developing countries to rethink forestry from new perspectives. These international experiences have also stimulated Nepal to reinvent and redesign its forestry program over time. 6.1 Political Changes The MPFS was designed during a time of absolute monarchy, when political parties were banned. The central government policy was to meet the basic needs of the people. In fact, the MPFS was also formulated for this purpose. However, the programmatic thrust was to enlist local communities in the conservation, management, and utilization of the local forest resources. Thus, the plan suggested people’s participation in the management of the forests located mainly in the mid-hills and mountains of the country. The Tarai forest was supposed to be managed by the government or by private entities on long-term lease. Once the absolute power residing in the king was removed and a multi-party constitutional monarchy was restored in 1990, people’s power loomed large. Party representatives in the newly created parliament were enthusiastic to devolve more power to the local communities. This devolution of power was formalized through the Forest Act 1993 and the Forest Rules 1995, giving significant rights to local community forest users groups (CFUGs). CFUGs were also recognized as independent, autonomous, and self-governing bodies responsible not only for the management of the local forests but also for undertaking other beneficial activities of their choosing. This new paradigm of forest management could not have been so encompassing without the political change in 1990. Subsequently, the Forest Rules of 1995 was amended to make room for group-based pro-poor leasehold forestry. In a similar vein, the concept of buffer zones and conservation areas managed by local people were incorporated into the existing Wildlife and National Park Act. The post-1990 regime also liberalized the criteria to run a civil society organization; more than 40,000 NGOs are registered in Nepal today. Some of these NGOs are actively engaged in promoting community-based forestry. The armed insurgency (1996 to 2006) hampered the functioning of government agencies in rural Nepal. However, CFUGs were the only grassroots organizations that could function without much disturbance, further reinforcing their legitimacy. The new political order ushered in by the end of the conflict in 2007 enshrined the provisions of social inclusion and proportional representation in every organ of governance. The exclusion of distant forest users in the Tarai has emboldened them to demand their rights, leading to the practice of Collaborative Forest Management. These political changes have gradually empowered communities to manage the common pool resources such as forests, water, land and watersheds through collective institutional arrangements. 114 6.2 Economic Changes The structure of the economy and population density has significantly changed since the MPFS was formulated. During the time of MPFS preparation, about 60 percent of the total GDP came from the agriculture sector which included forestry and fisheries. Now, the share of the agriculture sector (including forestry) in total GDP is only about 33 percent. Similarly, only a few youths worked overseas during the 1990s. Now, about 5/6 million youths are working overseas, bringing in about NPR 434 billion or about one fourth of the total GDP in the fiscal year 2012/13. Remittance has been instrumental in reducing poverty and meeting the trade deficit. Figure 6.1: Contribution of industry, service, and agriculture to national economy Change in Economic Structure 60 Contribution percent 50 40 30 20 10 0 1990/91 1995/96 2001/02 Fiscal Years 2005/06 2010/11 Industry Sector Service Sector Agriculture Sector Although economic growth was hovering around three percent over the plan period, the remittance economy has significantly helped in reducing the level of poverty. For example, population living below the national poverty line decreased from 42 percent in 1996 to 30.8 percent in 2003 and dropped to 25.4 percent in 2009 (CBS, 2009). Table 6.1: Average per capita income of households in NPR Particulars 1995/96 Nominal average household income in NPR 43,732 Nominal average per capita income in NPR All Nepal 7,690 Poorest 20% of population 2,020 Richest 20% of population 19,325 Source: CBS,1996; CBS,2004; CBS, 2011. 2003/04 80,111 2010/11 202,374 15,162 4,003 40,486 41,659 15,888 94,149 The increased income of the households is due mainly to the remittance economy. The increased income along with growing urbanization has led to households switching from fuelwood to other clean energy sources such as LPG. This is even true in some rural parts of Nepal. Significant social changes have also occurred in Nepal. The level of literacy has significantly increased from 30 percent in 1991 to 66 percent in 2011. Similarly, road access has also improved over time. The 115 total length of road was estimated to be about 6,000 km in 1985 compared to about 10,900 km today. The increased expansion of road has improved accessibility to forests, and thus bolstered their value, while depleting the forests during construction. Significant achievements have also been made in other human development index areas. These improvements in social development indicators as well as the scarcity of youth due to temporary migration, has also increased the scarcity of labor. This has led to reduced dependency on forests for fuelwood, fodder, and leaf litter collection. The overall balance has been negative mainly in the Tarai and Chure regions in comparison to the mid-hills and mountains. 6.3 Demographic Changes The population of Nepal has increased from 18.5 million in 1991 to 26.5 million in 2011. Since more than 80 percent of households still use fuelwood as a source of energy, and wood is a central material in constructing homes, the increase in population has a direct impact on forests. However, the total demand for wood (both fuelwood and timber combined) has not increased in proportion to the growth of the population. This is due to increased household income, labor migration and increased labor scarcity, and demographic shift among the ecological zones. The population growth rate has declined from 2.6 percent in 1991 to 1.6 percent in 2011. The urban population of Nepal was a mere five percent in 1991. As per the 2011 census, the urban population of Nepal is about 17 percent. Similarly, people have migrated from the mid-hills and mountains to the plains. In 1991, about 40 percent of the population lived in the Tarai. It has now increased to more than half. In 26 mid-hill and mountain districts, the total population has decreased over the last ten years. These demographic shifts coupled with labor shortages and cash flow have led to the expansion of forest areas in the marginal agriculture land of the mid-hills and mountains. The pressure on forests for consumptive use has significantly declined, and thus helped in the increase of biomass in both community, private, and even government forests (Niraula et al, 2013). 6.4 International Experiences The MPFS process was greatly influenced by the Tropical Forest Action Plan (TFAP), a global tool to stem increasing deforestation and forest degradation in developing countries. Similarly, international agreements, conventions, practices, and experiences in other parts of the world have also assisted in the implementation of MPFS in Nepal. The Rio Conference of 1992 was instrumental in bringing about the Convention on Biodiversity (CBD), United Nations Framework Convention on Climate Change (UNFCCC), and the United Nations Convention to Combat Desertification (UNCCD). The conference adopted non-binding principles on forest management which have yet to be ratified by the international community. These conventions and frameworks have stressed the global significance of forestry in conserving environment. Forests are acknowledged for providing invaluable ecosystem services for the prosperity of present and future generations. The United Nations Forum on Forestry (UNFF) is presently working on devising globally binding forest principles that would be applicable for all types of forests of the world. Similarly, other relevant international organizations such as FAO, CIFOR, WWF, IUCN, ITTO and the World Bank convene meetings and produce reports based on experiences, trends, and lessons from various developing countries. These studies have shown that the involvement and engagement of forest-dependent people has increased significantly over the past years. Indeed, the sustainable forestry 116 principles developed by FAO, ITTO, and CIFOR include significant roles for indigenous and local communities in decision-making and forest management. Similarly, the REDD+ has also considered the role of communities and indigenous groups in the architecture of forest governance. Studies carried out by the Rights and Resources Initiative (RRI) have shown that forest tenure and governance reform have increasingly become the dominant theme in forest management in developing countries. Across the world, forest areas administered by governments have declined from 79 to 73 percent over the last 10 years. In the same timeframe, forest areas managed by local or indigenous communities have increased from 9 to 12 percent. Looking at Asia, the percent of forests under community and indigenous group-based management has increased from 32 to 38 percent. Legal and polycentric governance reforms in forestry have increasingly expanded and strengthened the rights of local and indigenous communities in developing countries. These global experiences have also helped in transforming the paradigm of forest management in Nepal. 117 Chapter 7: Conclusions This conclusion chapter reviews the lessons learnt from 25 years of MPFS implementation and explores possibilities for a new forestry strategy. The lessons are grouped in the following five categories: 7.1 Lessons Learnt 7.1.1 Management and utilization of forest resources and conserving biodiversity Participatory approaches have proved to be highly effective in ensuring local commitment, local benefits, and local awareness of plans and processes. They have been applied to community forestry, leasehold forestry, collaborative forest management, buffer zones, watershed management, and other forest and land management modalities. The participatory approach has also been adopted for national and local planning, including for MFSC annual bottom-up planning, DFSPs and VDC level forest sector planning, LAPAs, and even for national processes such as REDD+ and NAPA. There is improved growing stock in many forests (particularly community forests) that have been effectively protected and managed over the past 25 years. However, they are not being used for value addition, employment generation, and income growth. A critical factor for the success of CF is that CFUGs and other forest user groups can operate as autonomous, independent, and self-governing entities. The legislation that provides this mechanism needs to be ensured in the future. Improved coordination between the primary programs of MPFS is needed. This would lead to better achievement across all programs. For example, community and private forestry can supply raw materials for wood and non-wood based industries and they can also contribute to the conservation of ecosystems and watersheds. A large part of the government-managed forest estate lacks effective forest management and stakeholder participation. This leads to unmanaged forests that are effectively openaccess. Coupled with past political instability and the lack of rule of law, large parts of the national forest are being converted to other land uses or are subject to illicit timber harvesting and forest degradation in the Tarai and Chure areas. DSCWM cannot fulfil the entire demand for soil conservation and watershed management services. It is necessary to leverage services from other agencies also concerned with watershed management and ensure that the sectoral strategies of forestry, agriculture, irrigation, roads, local development, environment, and hydropower, among others, include soil and water conservation components. The DSCWM needs to re-invent itself from implementer to facilitator with a critical role in planning, research and technology development, development of appropriate techniques, technical backstopping, facilitating, and policy influence. A clear institutional, legal, and policy arrangement is required for the management of critical watershed areas (including the Chure) that does not place sole responsibility on the DSCWM. 118 Poaching and illegal trade in forest products continues to be a critical issue. These have been exacerbated by civil unrest and poor rule of law during and after the conflict despite the resources set against them (such as the Nepal Army and forest guards). The solution appears to lie elsewhere – through effective management of resources, reducing poverty, and enhancing good governance. Successes in biodiversity conservation can have adverse impacts. The concentration of visitors to certain spots in PAs and the need to develop associated visitor facilities is necessary to avoid environmental damage. Improved numbers of certain species e.g. elephants and tigers has the downside effect of increasing the level of human-wildlife conflict. For this, compensation processes for loss of life or property need to become meaningful and more responsive. Forest resource information systems and planning need to be improved. Current levels of forest resource information (and data management systems) are insufficient for effective and transparent planning in the forest sector. Forest related data and information should be disaggregated based on district and physiographic regions e.g. Tarai, Siwalik, mid-hills and high mountains. The data could also be based on forest management regimes. MFSC has too few qualified staff responsible for updating and analysing such MIS systems. Outsourcing for data generation, analysis and synthesis to private agencies within the country can mitigate this shortfall. There is a need to balance natural resource conservation with the needs of development. Roads, hydro-schemes, power-lines, and urban expansion are all necessary for Nepal’s development. But they also adversely affect forests and protected areas resulting in habitat fragmentation, higher levels of illicit use, and pressure for over-use of resources and land. Conservation cannot be tackled in an isolated way through a process of exclusion. Instead, conservation is only possible by involving and informing decision-makers, planners, and civil society in decisions. 7.1.2 Policy and legal framework The policy framework must be backed up by supportive legislation. Nepal’s 1989 Forest Policy, strengthened by the powerful legal provisions of the 1993 Forest Act was fundamental to the successes of the Community Forestry Program and to a large extent with that of the Conservation of Ecosystems and Genetic Resources Program. Where supportive legislation was not put in place (in the case of the National and Leasehold Forestry Program) or where policy and legal provisions were not fully implemented (as in the case of the Wood-Based Industries Program) programs have failed to deliver. Policy process is critical. To be effectively implemented, policies need the consensus of those who are affected by them or of those who will be responsible for their implementation. A deliberative and open policy development process will ensure that this happens. Other sector policies and laws affect the forest sector. A better understanding of the linkages between different sectors and a coherent and overarching approach to policy development can contribute to achievement of policy goals. Recently Nepal’s NAPA and REDD+ processes are starting to recognise this necessity. This approach needs to be 119 continued beyond policy-making to policy implementation and to the development of a supportive and unambiguous legal framework. Various government orders, directives and regulations are inconsistent with forest policy and laws. This has particularly affected the wood-based industry, community forestry, and the national and leasehold forestry programs. In these areas, government restrictions on collection, transportation, and marketing of forest products and price controls have been frequently issued. The following steps may be useful for limiting regulatory proliferation and inconsistencies, and enhancing the operational environment: a. b. c. Ensure that a coherent and sound forest policy is in place prior to law-making. Reduce the number of rules by identifying overlaps and inconsistencies. In short, do not simply create more rules. Adapt the remaining rules to ensure consistency with other existing laws, including those within and amongst different sectors. Translate new legislative acts into working norms and regulations as soon as possible after new laws have been approved. This is essential to ensuring correct implementation and to avoiding uncertainty. Implications of the Local Self Governance Act of 1999 need to be considered. There is a critical need to engage with local government at all levels (local, district and national) to enhance accountability and to follow the spirit of decentralized legislation. Inconsistencies between the LSGA and the Forest Act of 1993 need to be clarified. The application of Environmental Regulations for the forest sector needs to be reviewed since IEE/EIAs are legally binding for a range of forest management operations. It is also necessary to reconsider whether these regulations intended for environmental protection are really necessary if applied to a sustainable forest management situation. 7.1.3 Forest sector institutions A constraint for most programs is a lack of speciality staff. Despite the wide-ranging training and educational opportunities that have been provided there is an ongoing need to continue to develop new knowledge amongst forestry professionals. More specifically: a. Forestry staffs need to be trained in technical, managerial, and communication aspects of forestry. As forest management is gradually decentralized to entities outside the government, the staff should be more skilful in regulation, monitoring, and facilitation. b. Many skill areas in forestry are also available outside government institutions and there have been successful experiences of utilising these through contractual, service providers, or other arrangements. This approach can be extended to cover other areas of activity. The strongly protection-orientation as well as command and control attitude of MFSC administration has not shifted significantly over the period of the MPFS. These attitudes are inconsistent with people-centric policies and with the increased capacities of individuals, civil society, and communities. These attitudes are also in conflict with the needs of a modern democratic society. Policy shifts need to be matched by institutional reforms in the changing context, and changes in attitude amongst individuals. 120 Government forestry institutions are characterised by weak management and out-of-date HR systems. While many individuals within MFSC are skilled and highly competent, they work within an institutional structure following HR management systems designed for old problems and are inconsistent with present-day needs. Key issues are: a. Lack of overall HR policy or set of operational guidelines covering the critical procedures for recruitment, appointment, terms and conditions, performance appraisal, career path development, codes of conduct, counselling, training, promotion and grievance handling. b. Lack of a comprehensive and readily available HR database. c. Particularly weak recruitment, placement and transfer systems resulting in decisions that are unpredictable, untimely, and subject to ad hoc influence. Promotion systems that do not encourage innovation, productivity, or demonstrated performance. d. Training and staff development that are not based on individually assessed needs. Weak linkage between training and job performance. e. Poor representation of women and other disadvantaged groups at all government levels (although this is true for all government organisations not solely MFSC). f. Loss of quality staff to international organisations and projects (implying that incentives to stay within the government system are insufficient). Forest sector institutions are becoming increasingly diverse. It was assumed that most aspects of implementation of MPFS would be via government institutions. There are now many organisations and individuals outside government with capacities and skills to fulfil a wide range of roles and services that were formally exclusively carried out by government. The challenge is to capitalise on these and maintain a balance between the capacities and varying roles of different types of organizations working in the forest sector. Clear roles and opportunities need to be created for all types of forest-sector institutions including civil society, academia, community-based organisations, the private sector, and government itself. MFSC staff is overburdened with administrative tasks. The focus for most field-level forest sector activity lies at the DFO. DFOs have largely become administrators rather than sector specialists. They are expected to undertake a very broad range of administrative tasks, often beyond their management capability. This is not sustainable and some functions of DFOs need to be altered or assigned to other parties (as has happened in other technical ministries of Nepal such as roads and telecommunication) to address this issue. The sector lacks sufficient political engagement and support. Despite the internationally recognised achievements of community-based forest management in Nepal, political leaders rarely acknowledge the sector. Forest legislation does not give enough space for local level government leaders and political parties in the decision-making process. New institutional mechanism taking into account the concept of federalism and power-sharing in natural resource management need to be developed while formulating a new forest sector strategy. 7.1.4 Forest sector’s contribution to economic development Over-regulation is a constraint. Whilst the Forest Act (1993) and its associated rules diversify the management regimes for national forests, they also over-burden forest 121 managers with excessive regulation on the harvest, transport, process and sale of forest products. Similarly over-regulation of the harvest and utilization of forest products from private forests reduces the incentive for private forest or tree owners to produce and grow more of these products. Fiscal policy is a constraint. MPFS proposed that royalty rates for forest products be adjusted to make them compatible with production costs. Revisions of royalties have taken place on a rather ad-hoc basis. Wood traders and consumers feel that the present royalty rates for wood are set too high and comparison of Nepal’s royalty rates with those of other countries seems to confirm this. For instance, 13 percent VAT is imposed on timber sales and some NTFPs produced from private land. Meanwhile, there is no VAT on the production and sales of agricultural commodities, thus stifling private landowner involvement in the commercialisation of forest products. Sufficient supplies of raw materials are not being generated from government-managed forests. Whilst MPFS sought to utilize government-managed national forests to promote the forest industry, the lack of proper management planning and harvesting control has stifled the supply of wood from this management regime. Comparatively small quantities of forest products are legitimately supplied to industry from government-managed forest and overall supplies of forest products are far less than could be potentially produced. Not only does this reduce government revenue, it also limits the expansion of the wood-using industry and the commercialisation of the forest sector with associated benefits such as cash incomes and jobs. TCN has a distorting impact. Although the role and functions of FPDB have been drastically reduced, the government still gives preferential treatment to TCN for the supply of timber (logs) at reduced rates. Despite this, TCN is unable to operate on a commercial basis. Consequently, it distorts markets and creating a dis-incentive for private sector investment. Coordinating mechanisms for the wood-using industry are lacking. The wood-using sector is becoming increasingly diverse as governmental/semi-government agencies, private industries, as well as forest user groups and their cooperatives are now operating woodbased industries. These actors are also operating other forest product-based industries, supplying timber and NTFPs into the market. The private sector, although recognised as being critical to the achievement of economic goals in through forestry, is rarely engaged in a meaningful and productive way. A representative body with expertise and knowledge of the commercial aspects of the forest sector is lacking at present. There is a need for a stable regulatory environment to attract investment. The more than 5,000 wood-based industries registered and operating in Nepal, face the following problems: impractical environmental standards, dual taxation, inconsistency in the auction system, lack of private sector participation in the policy-making process, and lack of transparency in decision-making processes. These problems result in erratic regulations, creates uncertainty and challenges to the growth of wood-based industries. A considerable amount of unregulated trade in and utilisation of forest products exists. This is partly a consequence of the excessive regulatory restrictions placed on the wood-using sector. 122 Sources of finance for small-scale forest-based industries are inadequate. Taxation, loan regulations and land-related laws are also not favourable for the establishment of smallscale private and community-based enterprises. The smaller players in the sector need bank loans and tax breaks to enable them to become established. Compared with this, larger scale industries have easier access to finance, taxation opportunities, and banking facilities. The potential of commercial leasehold forestry has not been tapped. The MPFS aimed to stimulate private sector investment in forestry through commercial leases on forest land. But the approach failed as the Forest Regulations (1995) only focused on degraded forests and not on natural forest areas. Even where provisions do exist for leasing degraded forests to private players for re-afforestation or ecotourism, factors such as high annual rental fee act as disincentive to uptake. 7.1.5 Addressing poverty and social exclusion The sector provides good opportunities for addressing poverty and social exclusion. Nepal’s national development policies focus on poverty reduction as an overarching goal. A high percentage of people in Nepal still live in poverty and still depend on forests for their livelihoods. Experience has shown that there are good opportunities for the forest sector to contribute to their livelihoods. Such opportunities can be enhanced through prioritising and expanding those programs that have the greatest impact such as community-based forestry (of all kinds), job creation (through wood-based industry), and climate resilience. There is an imbalance in roles, responsibilities and powers. Across the board, there is acknowledgement that participatory processes are needed in all parts of the sector. And forest sector stakeholders do work collaboratively. There still, however, exists a disparity in roles, responsibilities, and power between government and other actors. Key sector stakeholders such as women, poor people, and disadvantaged groups (Dalit, and other marginalized indigenous communities) have little genuine power and voice. Though these groups are usually represented in various decision-making forums, there is still a tendency towards unilateral decision-making. There is a marked lack of transparency on the part of government and more powerful civil society actors. Governance is the key to addressing issues around poverty and social exclusion. Early experiences with community forestry showed that elites would continue to predominate and exclusion of others would continue. This critical issue was partially addressed by focusing on enhancement of group governance – changes in the way such groups make decisions that affect all their members. As a result of this approach, local forestry groups are now becoming more inclusive and pro-poor in the country. The MFSC GESI strategy attempts to do this amongst MFSC institutions. However, many elements have not yet been implemented. Supportive regulations based on field-based learning can contribute to poverty reduction and social inclusion. It is, of course, not normally possible to legislate against entrenched attitudes and behaviours. There are, however, examples – the impact of CF Guidelines on benefit sharing and representation in CFUGs being one – that regulations based on field experiences and good practices can have a positive impact. 123 7.1.5 Nepal’s climate change agenda The forest sector is critical to Nepal’s climate change agenda. The progress of developing Nepal’s response to climate change has enhanced public awareness on the important role that forests play. This is strongly conveyed in Nepal’s NAPA as well as in the strategic processes being followed for REDD+. Strategic climate change processes need to be integral to Nepal’s forestry sector strategy. Considerable progress has already been made in developing strategic processes as well as local planning processes to tackle climate change related problems. Strategies for climate change relevant to the forest sector (whether for climate change adaptation or for mitigating climate change) must be integral to any future forestry sector strategy. Climate change is a cross cutting issue and must therefore be considered across all programs. REDD+ is fully compatible with forestry sector goals. REDD+ aims for a healthy and vibrant forestry sector. Expansion of forest, carbon, soil, and watershed conservation measures using systems for Payment for Ecological Services (PES) to leverage funds is a potentially viable approach for Nepal. But significant action-oriented piloting and testing will be required to implement it successfully. Local forest groups provide a strong institutional base for community-based adaptation, planning, and implementation. Community forest groups of various kinds can be effective in implementing actions to enhance the climate resilience of the most vulnerable households. Climate change is already affecting Nepal’s forests. These effects include invasive species, forest fires, effects on forest regeneration and growth, soil and water conservation, floods and water source depletion. Although quantitative data is mostly lacking there is sufficient local experience to demonstrate these effects at present. 7.2 Way Forward This section synthesizes recommendations for the future direction of Nepal’s forestry sector based on suggestions from various stakeholders, the review of past experiences, and the lessons learned. Future directions are determined by the need to address current and future issues/gaps as well as by the need to capitalize on learning that has taken place. Plans for the future are also affected by Nepal’s national and international development commitments. Below, the review team has grouped considerations for the future into key themes representing the main areas Nepal’s National Forestry Strategy will need to heed: Forest sector governance and administration Management of forest resources Forest sector contribution to economic development Forest sector contribution to social inclusion and poverty reduction Forest biodiversity and environmental conservation Forest sector response to climate change 124 7.2.1 The nature of Nepal’s forestry sector strategy (FSS) Nepal’s new FSS will differ from the MPFS in its content and structure. FSS will not be an allencompassing plan but will be a much shorter document. Its key purpose will be to set out a strategic vision and goals for the forestry sector. It will also identify approaches and priorities for achieving the visions, also tasking the different actors with key responsibilities. Some broad guidelines for the FSS include: It should be ‘owned’ across the sector. This will be necessary for it to be implemented by all relevant stakeholders including those in other sectors affected by or affecting the forest sector. The mode of implementation needs to address the many cross-cutting issues such as governance, gender and social inclusion, and climate change. The FSS must name the forestry sector stakeholders to be involved in monitoring and assessing the strategy, and making any necessary future changes in direction. A multi-stakeholder entity needs to be established to finance the future forestry programs in an intensive way. An institutional structure needs to be devised to best use the bilateral development funds to support implementation of the new FSS. Similarly, the future role of the Forestry Sector Coordination Committee needs to be clarified. Disadvantaged groups need to be provided with an effective voice in various levels of coordination committees and in sector governance more generally. Criteria and indicators need to be developed as part of FSS to enable regular monitoring and changes of direction if needed. The FSS needs to be harmonized with other strategies, including in the following sectors: REDD+, biodiversity, conservation, agriculture development, low carbon, biomass energy, and NAPA. The proposed themes and programs needs to be linked within FSS and become mutually supportive. The FSS must be made compatible with the upcoming constitutional provisions such as new state structures. 7.2.2 Forestry sector governance and administration Suggested future directions include: Reorganise MFSC institutions to: a. Better utilise the capacity and potential of non-government actors in the forest sector by promoting private-public-community partnerships. b. Reduce the administrative burden on government forestry sector staff. c. Enhance technical skills and management capabilities. 125 d. Minimise bureaucracy. e. Bring better communication and management skills to enhance the image and performance of the forestry sector. Revisit and implement the MFSC HRD strategy to put in place HR systems appropriate to the needs of a modern government organisation. Improve the gender and social balance within MFSC institutions in accordance with GESI and institutionalise GESI within the new FSS. Align MFSC institutions with local government (at different levels) thus reducing centralised control and improving linkages with accountable bodies. Formalise district forest coordination structures and plans. Draft new legislation to increase clarity, transparency, and consistency of legislation ensuring that it is unambiguous, based on tested approaches, and allows for minimal discretionary powers. Also ensure the role of the private sector in the management of forests and the development of forest enterprises. Revisit the regulatory framework – especially government orders, circulars, and directives – with the aim of deregulating these and removing inconsistencies. Investigate social, economic and political causes of non-compliance (with policies and laws) and adopt strategies to address these causes. Develop partnerships between academic institutions and MFSC to ensure the provision of sufficient numbers of professionally qualified staff to meet the future needs of the forest sector. Carry out a detailed study to determine which of Nepal’s commitments under international law are not yet implemented and identify ways in which compliance with these can be improved. Build on international best practice by pursuing a programme for forest law enforcement (and trade) in Nepal’s forest sector. The role and function of the MFSC departments and divisions must be clarified. There is currently confusion as to whether departments should primarily implement the FSS or whether they should create and support an enabling environment for others to carry out implementation. The DSCWM need to evolve into an enabling agency to provide technical support for soil and watershed conservation actions implemented by other departments, local government, and communities. The future role and function of DFRS and parastatals need to be clarified. The question of whether the DFRS can function as a semi-autonomous entity is an important one. The parastatals, especially TCN, HPPCL, and FPDB, must be made competitive and productive through privatization. 126 7.2.3 Management of forest resources Suggested future directions include: Develop a forest land-use strategy for Nepal to identify the most appropriate management modality for each patch of forest. This strategy can exist at the district level. But it is necessary to recognise the need for this land-use strategy to be agreed to by all sectors and not just the MFSC. This is especially true for the Tarai, Chure, and high mountains where allocation under different modalities is still contested. Bring all forest areas under the remit of a management plan. Promote active sustainable harvesting and management of forests in good condition to generate forest products for forest-based industries, both small and larger scale. Merge the pro-poor leasehold forestry with the community forestry program for administrative purposes. Nonetheless, the strategy must recognize the unique evolution and potential for both these models Strengthen the regulatory environment to enable patches of national forest not demanded by communities to be leased to private entrepreneurs, or managed under a PPP model for commercial sustainable utilisation. Develop a cross-sectoral watershed conservation policy as part of FSS to integrate soil and watershed conservation actions into the strategies and plans of other sectors. Climate change adaptation funds can be used for the implementation of the cross-cutting strategy. Identify appropriate forest management modalities for forests in the high mountains and Chure. A similar approach is needed for forests that are not community based or included in protected areas. 7.2.4 Forest sector contribution to economic development Suggested future directions include: Place more emphasis on commercialisation of forest products. Develop strategies to support and foster forest-based enterprises, especially small-scale enterprises in rural areas. Focus on strategies to create sustainable jobs, cash incomes, and legitimate forest-based enterprise that will benefit poor people and disadvantaged groups. Work closely with the private sector to identify viable investment opportunities and sources of finance. Work with the private sector to provide a stimulating and supportive enabling environment for investment and growth in the forest sector. Take advantage of the high demand for forest product-based commodities to follow a more strongly commercial direction for the forest sector. At the same time, the FSS must recognise that many poor households are dependent on subsistence forest products for their livelihoods. Maintain a balance between local needs, commercial interest, and economic growth. 127 Deregulate harvesting and transport of forest products and enterprise establishment rules to create a more supportive environment to enable private tree and forest owners and CFUGS to generate ‘green jobs’. Promote Nepal’s forest products internationally and remove barriers to the export of niche and high value products (but low volume) to international markets. Promote the commercial cultivation of medicinal and aromatic plants on private lands through extension and demonstration. This will reduce pressure on wild resources. Develop and manage information and monitoring systems for Nepal’s forest-based industry sector. Forest products coming from private land or cultivated NTFPs/MAPs products must be exempt from paying VAT. Permit regimes for private forests and trees need to be simplified to stimulate greater levels of planting and management of forest and trees in private land. 7.2.5 Forestry sector contribution to social inclusion and poverty reduction Suggested future directions include: Continue to support local forest groups in governance. Targeted actions are required to address the needs of the groups’ poor and socially disadvantaged members. Enable the local forest groups to develop opportunities for jobs and cash incomes in rural areas. Strengthen necessary legal provisions by revising the Forest Act to ensure that the legal autonomy of local forest groups is strengthened and ensured. Ensure intellectual property rights, patent rights, genetic resources, and other relevant knowledge is used to benefit poor people. 7.2.6 Forest biodiversity and environmental conservation Suggested future directions include: Develop a scientific basis with participatory and open process for the establishment of new PAs and botanical gardens. While creating new protected areas, take into account local, national, and international needs of biodiversity conservation. Explore opportunities for biodiversity conservation outside formally protected areas through land-use management incentives and regulation. Develop a more fair and transparent compensation system for dealing with the aftermath of human-wildlife conflict. Work closely with the private sector to continue to promote Nepal’s PAs as tourist destinations while at the same time spreading the pressure of visitors and infrastructure more widely and away from critical habitat areas. Rejuvenate critical habitats to reduce the pressure. 128 Develop a workable mechanism for investing a part of hydro-power royalty for the conservation of concerned watersheds. 7.2.7 Forestry sector response to climate change Suggested future directions include: Harmonize Nepal’s REDD+ strategy fully into the framework of the new FSS. Ensure that REDD+ does not become separate from other forest sector strategies focusing on poverty alleviation, economic growth, or biodiversity conservation. Promote the use of local forest groups as implementers of LAPA. Build climate resilient actions into management plans for forests under all management modalities. Integrate adaptation actions defined in NAPA into forest sector planning and administration. 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Parks 1491, 35-39 132 Annex 1: Reports Prepared by the Master Plan for the Forestry Sector (MPFS) Executive summary Main report Sub-plan reports Forests development plan for the supply of main forest products Forest-based industries development plan Wood-based industries Medicinal and aromatic Plants Soil Conservation and watershed management plan Plan for the conservation of ecosystem and genetic resources Forestry sector policy Institutional development plan Human resources development plan Forestry Research development plan Forest resources information; status and development plan Impacts and monitoring Plan Environmental impact assessment Financial and economic analyses Supporting report Country background 133 Annex 2: Gazette notification on NTFPs Date (BS) 20/12/2051 Notice published under art 70a of Forest Act 1993 Ban on collection, collection, use, transport and export of Cordyceps sinensis and Dactylorhiza hatagirea Ban on export of Nardostachys grandiflora, Rauwolfia serpentina, Lichean spp., Rock Exudat, Abies spectabilis, Taxus spp. without processing. 08/10/2053 Ban on export of Nardostachys grandiflora, Rauwolfia serpentina, Lichean spp., Rock Exudat, Abies spectabilis, Taxus spp. without taking permission from DoF and without processing. 01/11/2057 Ban on collection, collection, use, transport and export of Dactylorhiza hatagirea, Juglans regia and Picrorhiza scrophulariiflora 16/09/2058 Ban on export of Rock Exudat and Cordyceps sinensis without process 01/08/2060 Picrorhiza scrophulariiflora can be exported on the basis of permission provided by DoF considering the availability of this species 18/06/2061 Cordyceps sinensis can be exported without processing 09/05/2065 Mark of banned species can be exported by taking permission of DoF 16/07/2066 All banned species will be regulated under the Import and Export (control) Act 2013 (BS) Note: this notice was published by the Ministry of Commerce and Supply. 134 Annex 3: Ratified/accessed/signature by Nepal in MEAs 1. Convention on Wetlands of International Importance Especially as Waterfowl Habitat (Ramsar Convention), 1971 2. Convention on for the Protection of the World Cultural and Natural Heritage, 1972 3. Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), 1973 4. International Tropical Timber Agreement (ITTA), 1994 5. Convention to Combat Desertification in those Countries experiencing devious Drought and or Desertification, Particularly in Africa 1994 6. United Nation Convention on Biological Diversity, 1992 7. Cartagena Bio-safety Protocol to the CBD, 2002 8. ILO convention No. 169, (Indigenous and Tribal Peoples Convention, 1989) 9. (a) United Nation Framework Convention on Climate Change, 1992 (b) Kyoto Protocol to the UNFCCC, 1997 10. (a) WTO – Trade Related Intellectual Property Rights (TRIPs) (b) WTO-Agreement on Agriculture (AoA) (c) WTO- Agreement on application of sanitary and phytosanitary Measures 11. International Plant Protection Convention (IPPC), 1952 12. Plant Protection Agreement of the Asia and Pacific Region, 1956 13. Rio Declaration on Environment and Development 1992 (Rio Principles) 14. Rio+ 20 declaration 2012 (Future we want) 15. UN Millennium Development Goals (MDGs) 16. UN Non-legally binding instrument on all types of forests, 2006 17. 16th Summit (2010) Thimphu Silver Jubilee Declaration “Towards a Green and Happy South Asia” 135 Annex 4: Bottom up planning process in the forestry sector 136
