PIM Webinar with Dr. Steven Lawry, CIFOR, presented on September 10, 2019. Full recording and more information available at http://bit.ly/2k2s6yQ.

1. PIM Webinar
The investment effects of forest rights
devolution
How community tenure is facilitating investment in the commons
for inclusive growth
Presenter: Steven Lawry, Center for International Forestry Research (CIFOR)
September 10, 2019, 10-11 AM EST
Photo:ChandraShekharKarki/CIFOR

2. The investment imperative
• $4.5 trillion annually needed in public and private finance to meet SDGs.
• Reducing global environmental degradation and mitigating climate change requires
large amounts of private capital if sustainable land use is to become business as usual.
• Private enterprises—from small farms to large corporations—must make fundamental
changes in agricultural, forestry and land use practices if the AFLOU sector is to
contribute to holding the global temperature increase to 1.5 degrees centigrade.
• Alongside restructuring of land use practices, technological innovation, regulatory
reforms and improved supply chain management will be required.
• Importantly, there remain large barriers to investment in sustainable use of natural
resources in developing countries, including in contexts where natural resources
such as forest, pastureland and fisheries are held and used in common.

3. Commonly perceived barriers to investing in the commons
1. Commonly held resources are not subject to sale or purchase, hence resources cannot be
used as collateral and outside investors cannot hold shares in common-pool resources
(Antinori 2000, Feder and Feeney 1991).
2. The varying aims of right holders within a commons can complicate achievement of
consensus about investment goals increasing transaction costs and levels of perceived risk
and uncertainty on the part of investors.
3. Community institutions may lack the capacity, protocols and experience to negotiate and
manage investment partnerships and commercial enterprises (Antinori and Bray 2005).
4. The social character of commons ownership requires that benefits be shared across the
entire community of right holders, often in the form of investments in infrastructure,
education and employment opportunities. The equitable distribution of benefits may be
especially important to women and the poorer members of the community (Lawry et al
2017).

4. Four key conditions that, when present, can reduce risks
and provide investors with the assurances they need to
invest in Community Forest Institutions (CFI):
1. The presence of clear, secure, and sufficiently broad rights ((Elson 2012; Lawry
et al., 2017; MacQueen, 2013),
2. Relations of trust and strong social networks within communities and
between communities and external actors (Baynes et al., 2015, Dasgupta,
2005; Murtazashvilia et al., 2019).
3. Clear and enforceable rules and procedures governing the use and
management of forests and associated enterprises (Dasgupta, 2005), and
4. Sufficient technological, negotiation, and management capacity within the
community (Hewitt and Castro Delgadillo, 2009)

5. Successful country cases
• “Successful” country case studies that 20 years ago devolved significant forest
use, management and other rights to communities:
1. Guatemala - Community Forest Concessions (CFCs)
2. Mexico – ejidos and indigenous communities
3. Nepal - Community Forest User Groups (CFUGs)
4. Namibia – Community Based Natural Resource Management (CBNRM)

6. Methods
• Review of scholarly and grey literature.
• Collation of information from fieldwork visits, workshops, observation,
interviews and document analysis.
• Financial data (often “best-estimates”) including donor financial reports and
annual reports of user group associations.

7. Source: Based on Lawry and McLain, 2012:56. Devolution of Forest Rights and
Sustainable Forest Management. Volume 1.
Types of devolution forest rights models by region

8. Evolution of collective tenure regimes and emergence of
community forest management in the Mayan Biosphere Reserve
Year Policy-relevant factors
1985 Constitutional reform incorporated environmental regulations
Establishment of the national protected area system
1990 Mayan Biosphere Reserve established (Decree 5-90)
1994 New policy on forest concessions allowed emergence of community forest concessions within the
MBR
1996 Peace Accords included a provision that 100,000 hectares should be turned over to organized
communities within protected areas
1994–2002 Formalization of concessionaire contracts with community-based organizations
Certification of community forest areas
Source: Hodgdon et al., 2013; Monterroso, 2015; Monterroso and Barry, 2012; Gomez and Mendez, 2005

9. Patterns of investment in community forest institutions (CFI) in
Guatemala
Donors Government Community forestry institutions
Private
investment
Non-governmental
organizations (NGOs)
Substantial financial investment
beginning in the 1980s.
Areas of focus include:
* support for public institutions and
concessionaire development and
governance
* technical assistance
* support for secondary-level
institutions
Funding from donors is declining as
concessionaires gain competency
Recent donor investments shifting from
capacity-building to value-added
support and scaling up community
forest enterprises (CFEs)
Financial
investment minor;
most state funds
originate from
donors and
development
banks
Areas of focus
include:
* forest
governance and
management
capacity building of
public institutions
* policy
implementation
* enforcement
Substantial financial investment (relative to
revenues) as concessionaires have gained in
competency.
Areas of focus include:
* capacity building to manage/administer
concessions
* forest management plans
* value chain development*
* rights strengthening
* fire protection
* jobs for concessionaire members and other
households
* health and education
Secondary-level institutions (the Community Forest
Association of Petén (ACOFOP) and Community
Enterprise of Forest Services Ltd (FORESCOM)) are
key to acquiring additional funding/expanding
influence
Limited
financial
investment
thus far, but
partnerships
between
development
banks and
commercial
banks
providing
credit to forest
enterprises are
beginning to
emerge
Donors typically channel
assistance to CFIs through
NGOs
* forest management skills
* forest management plans
* Forest Stewardship
Council (FSC) certification
* business management
training
* value chain development
(timber and nontimber
forest products (NTFP))
* policy reform advocacy

10. Selected investment outcomes in Guatemala
• Community concessions in the Petén have been shown to have deforestation rates equivalent
to those in state-managed protected areas (Bray et al., 2008).
• Tobler et al. (2018: 251) determined that well-managed certified community logging
concessions in Petén did not negatively affect large and medium-sized mammal populations.
• Recent data from ACOFOP (2018) estimated 15,705 daily paid timber-related employment
opportunities created between 2007 and 2017); non-timber activities created 15,549 daily
paid employment opportunities between 2007 and 2017.
• Between 2000 and 2010, income from commercial forests in two community concessions
increased household income by 33% (Monterroso & Larson, 2013).
• Stoian et al. (2015) showed in resident communities, household income from community
forest enterprises ranged from 19% to 58%, dramatically reducing the incidence of poverty in
forest-reliant households
• CFE capitalization has enabled nine concessions to invest in a shared lumber mill, value-added
processing, creating jobs, and diversifying livelihood opportunities (Stevens et al., 2014).

11. Evolution of collective tenure regime and emergence of
community forest management in Nepal
Year Policy relevant factors
Pre-1970s - State control of forests
- Exacerbated mistrust between state agencies and local communities
- Accelerated deforestation
Late 1970s - Introduction of the National Forestry Plan (1976)
- “Handing over” of forest management to the local governments (Panchayat)
1982 - Decentralization Act (1982)
- Increased international pressure further empowers the Panchayat to manage local resources and attracted donor
support
1987 - Efforts to advocate for the transfer of forest rights to local communities gain momentum
- First national community forestry workshop is organized to devise frameworks, policies and strategies to support
community forest management
Late 1990 - Panchayat system is overthrown
- Multi‐party parliamentary system strongly supports rights devolution agenda
1993 - Parliament passes the Forest Act (1993)
1995/1996 - 1995 Forest Regulations and 1996 Community Forestry Guidelines specify circumstances under which CUGs can
engage in commercial forest activities; requires a CUG operational plan
Source: Fox, 1993; Hobley, 1996; Shrestha & Britt, 1998

12. Patterns of investment in community forest institutions
(CFI) in Nepal
Donors Government Community forestry Institutions Private investment Non-governmental
organizations (NGOs)
Substantial financial
investment dating from
1980s
Areas of focus:
* technical training
* CFI governance and
forest management
capacity building
* infrastructure
development
Substantial financial
investment but much
comes through donors
and development banks.
Areas of focus:
* technical training
* CFI forest governance
and forest management
capacity building
* infrastructure
development
Substantial financial investments (relative
to revenues) as CFI have gained
competencies.
Areas of focus:
* jobs for members
* forest-based enterprises
* forest management plans
* forest protection/improvements
* roads, water, education, health care
The secondary institution, Federation of
Community Forest Users Nepal (FECOFUN)
plays a key role in strengthening
community use rights to forests and
building CFE capacity to manage and
commercialize forest products.
Limited external private
sector involvement. Small
and medium scale forest
enterprises have begun to
invest in timber
processing, tourism
activities, NTFP processing
and marketing.
A blended finance
program involving
multiple development
banks, the Nepali
government, and
communities has recently
emerged.
Donors typically channel
assistance to CFIs through
NGOs
* forest management plans
* forest management skills
* FSC certification for NTFPs
* financial skills/business
management training
* NTFP value chain
development
* policy reform advocacy

13. Selected investment outcomes in Nepal
• Positive associations between community forests in Nepal and forest product supply (Koirala et
al., 2013), public environmental goods (Koirala et al. 2013), and biodiversity (Luintel et al. 2018).
• A net positive relationship between community forest management and change in forest cover
between 2000 and 2012. (Oldekop et al. 2019)
• Koirala et al.’s (2013) study of 14,571 Nepalese CUGs estimated that annual income for all CUGs
exceeded USD 49 million, amounting to USD 137 per CUG household.
• Wealthier households are more likely to benefit from CUG investments in private and public
goods, whereas poorer households were more likely to benefit from investments in common
goods (Baral et al. 2019).
• FECOFUN’s advocacy on behalf of CFIs has played a key role in creating an enabling environment
for investments in CFIs. Chief among these reforms include: the 2014 Revised Community Forest
Guidelines; the 2015 Forest Policy, which prioritizes forest enterprise development through
private sector investment; and the 2017 Industrial Enterprises Act, which makes it easier and less
costly to establish small enterprises.

14. Theory of change linking rights
devolution to financial investments and
environmental and social outcomes

15. Phase 1 – Investment in rights devolution and forest
governance institutions
Barriers to investment in community forest institutions
• Insufficiently broad rights
• Community skeptical of outside investment
• Weak community capacity to manage commercial partnerships
• Community-held lands can’t be used as collateral
• Fear of traditional values eroding with market exposure
• Tension between equity and maximizing profit
Context
• Poverty
• Weak governance
• Weak technical capacity
• Few livelihood options
• Degraded forests
Rights devolution and community forest
institution formation
• Recognition of community rights to forests
• Award and registration of title or certificate
• Formation of community institution to receive
title
• Demarcation of community boundaries
Key investors: Donors, government, NGOs

16. Changes in perceptions of risk and assurance
• Tenure perceived as secure and adequately broad
• Rules exist, are broadly understood, and are enforced
• Increased confidence that agreements will be kept
• Increased ability to negotiate effectively with external actors
Investments in building forest/natural resource governance capacity of community forest
institutions
Phase 2 – Investment in administrative and management
capacity building
Development of forest
management plan and use
rules; implementation of
enforcement system
Development of
administrative, financial,
negotiation, and business
management skills
Formation of secondary-
level organizations;
advocacy for policy and
legislative reforms
Key investors: Donors, government, NGOs, CFIs

17. Investments in and by community forest enterprises
Positive environmental, social and financial returns
Enhanced forest conditions; increase in livelihood options; political
empowerment; financial viability
Phase 3 - Investment in enterprises
Business/financial
skills, markets and
marketing, value
chain development,
certification
Harvesting
and
processing
equipment
and facilities
Forest
enhancement/
protection;
formation and
participation in
forest enterprise
alliances
Improvements to
community
infrastructure
(roads, schools,
health care); job
creation
Key investors: CFIs, donors, government, NGOs, local
investors, banks, external investors

18. Barriers to investment in community forest institutions
• Insufficiently broad rights (for example, commercial rights to nontimber forest products but not to timber)
• Community skeptical of outside investment
• Weak community capacity to manage commercial partnerships
• Community-held lands can’t be used as collateral
• Fear of traditional values eroding with market exposure
• Tension between equity and maximizing profit
Context
• Poverty
• Weak governance
• Weak technical capacity
• Few livelihood options
• Degraded forests
Rights devolution and community forest
institution formation
• Recognition of community rights to forests
• Award and registration of title or certificate
• Formation of community institution to receive
title
• Demarcation of community boundaries
Changes in perceptions of risks and assurances
• Tenure perceived as secure and adequately broad
• Rules exist, are broadly understood, and are enforced
• Increased confidence that agreements will be kept
• Increased ability to negotiate effectively with external actors
Investments in building forest/natural resource governance capacity of community forest institutions
Investments in and by community forest enterprises
Positive environmental, social and financial returns
Enhanced forest conditions; increase in livelihood options; political empowerment; financial viability
Phase 1 – Investment in rights
devolution and forest governance
institutions
Donors, government, NGOs
Phase 2 – Investment in
administrative and management
capacity building
Donors, government, NGOs, CFIs
Phase 3 - Investment in enterprise
CFIs, donors, government, NGOs,
local investors, banks, external
investors
Development of forest
management plan and rules
governing use and management
of resources; implementation of
enforcement system
Development of
administrative, financial
management, negotiation,
and business management
skills
Formation of
secondary-level
organizations; advocacy
for policy and legislative
reforms
Business/financial
management skills, markets
and marketing, value chain
development, certification
Harvesting and processing
equipment and facilities
Forest
enhancement/protection;
participation in forest
enterprise alliances
Improvements to
community
infrastructure; jobs

19. Summing up
• In the cases considered, devolution of rights to communities has catalyzed investment in collectively held
forests and other natural resources.
• “Investment readiness” is a process of internal and external social and economic development that unfolds
through stages
• Emergence of legitimate community-level governance organizations important pre-condition to attracting
and retaining investor interest
• CFEs as “social enterprises.” Where resources are collectively held, all rights holders benefit from
investment. Significant revenue invested in public goods (roads, health, education).
• Gains in local income observed, and strengthening of collective tenure has been shown to lead directly to
household level investment in housing, education and health in some settings (Velez, M. A. 2011)
• Forest cover improved in Guatemala and Nepal (wildlife populations grew in Namibia community
conservancies)
• Successful outcomes more likely where the roles of community, state and market are seen by all parties as
linked in” systems of social innovation.” This is recognized in Mexico and Namibia, less so in Guatemala
and Nepal.

20. Selected bibliography
• ACOFOP, 2018. Database established based on information from 9 active community concessionaire organizations members. Guatemala.
• Antinori, C., and Bray, D.B. 2005. Community Forest Enterprises as Entrepreneurial Firms: Economic and Institutional Perspectives from Mexico. World Development, Vol. 33 (9), 1529-1543.
• Baral, S., Chhetri, B.B.K., Baral, H., Vacik, H., 2019. Investments in different taxonomies of goods: what should Nepal's community forest user groups prioritize? Forest Policy and Economics
100, 24–32.
• Baynes, J., Herbohn, J., Smith, C., Fisher, R. and Bray, D.B. 2015. Key factors which influence the success of community forestry in developing countries. Global Environmental Change, 35,
226–238.
• Bray, D.B., Antinori, C., Torres-Rojo, J.M. 2006. The Mexican model of community forest management: The role of agrarian policy, forest policy and entrepreneurial organization. Forest
Policy and Economics 8, 470-484.
• Bray, D.B., Duran, E., Ramos, V.H., May, J-F., Velazquez, A., McNab, R.B., Barry, D., Radachowsky, J., 2008. Tropical deforestation, community forests, and protected areas in the Maya
forest. Ecology and Society 13(2), 56. [online] ww.ecologyandsociety.org/vol13/iss2/art56/.
• Carter, J. with Gronow, J. 2005. Recent experience in collaborative forest management. CIFOR Occasional Paper No. 43, CIFOR, Bogor, Indonesia.
• Cronkleton, P., Pulhin, J., and Saigal. 2012. Co-management in community forestry: How the partial devolution of management rights creates challenges for forest communities.
Conservation and Society. Volume 10 (2), 91-102.
• Dasgupta, P., 2005. Common property resources: Economic analytics. First teaching workshop on Environmental Economics for the Middle East and North Africa, 5-16 December 2005.
Trieste: ICTP.
• Elson, D., 2012. Guide to investing in locally controlled forestry, Growing forest partnerships in association with FAO, IIED, IUCN, The Forests Dialogue and the World Bank. IIED, London, UK.
• Fox, J., 1993. Forest resources in a Nepali village in 1980 and 1990: The positive influence of population growth. Mountain Research & Development, 13(1), 89.
• Gómez, I., Méndez, E., 2005. Análisis de contexto: el caso de la organización de comunidades forestales de Petén (ACOFOP). El Salvador: PRISMA.
• Hatcher, J. and Bailey, L. 2011. Tropical forest tenure assessment: Trends, challenges, and opportunities. ITTO Technical Series no. 37. RRI: Washington DC/ITTO: Yokohama.
• Hewitt, D., Castro Delgadillo, M., 2009. Key factors for successful community-corporate partnerships – results of a comparative analysis among Latin American cases. Richmond, Vermont,
USA, Rainforest Alliance.
• Hobley, M., 1996. Participatory forestry: the process of change in India and Nepal. London: Rural Development Forestry Network, Overseas Development Institute.
• Hodgon, B., Lowenthal, A., 2015. Evaluating the results of our work: Expanding access to finance for community forest enterprises: A case study work with forestry concessions in the Mayan
Biosphere Reserve (Petén, Guatemala). Community Forestry Case Study No. 10/10. New York: Rainforest Alliance, OMIN, IADB. www.rainforest-alliance.org/sites/default/files/2016-
08/expanding-access-finance-CFEs.pdf [Accessed August 19, 2019].
• Holland, M.B., Jones, K.W., Naughton-Treves, L., Freire, J-L., Morales, M., Suárez, L. 2017. Titling land to conserve forests: The case of Cuyabeno Reserve in Ecuador. Global Environmental
Change 44, 27-38.
• Koirala, G., Acharya, R. P., Dhakal, S., Karki, G., 2013. A rapid assessment of forest-based enterprises in Nepal. Kathmandu: Multi Stakeholder Forestry Programme (MSFP).
• Lawry, S., McLain R., 2012. Devolution of Forest Rights and Sustainable Forest Management. Volume 1. USAID.

21. Selected bibliography
• Lawry, S, Samii, C, Hall, R, Leopold, A, Hornby, D, Mtero, F., 2017. The impact of land property rights interventions on investment and agricultural productivity in developing countries: a
systematic review. Journal of Development Effectiveness 9(1), 61-81.
• Luintel H., Bluffstone R.A., Scheller, R.M., 2018. The effects of the Nepal community forestry program on biodiversity conservation and carbon storage. PLoS ONE 13(6), e0199526. https://doi.
org/10.1371/journal.pone.0199526.
• MacQueen, D., 2013. Enabling conditions for successful community forest enterprises. Small-scale Forestry 12(1),145-163.
• Monterroso, I., Barry, D., 2012., Legitimation of forests rights: the underpinnings of the forest tenure reform in the protected areas of Petén, Guatemala. Journal of Conservation and Society 10(2),
136-150.
• Monterroso, I., Larson, A., 2013. The dynamic forest commons of Central America: new directions for research. Journal of Latin American Geography 12(1), 87-110.
• Murtazashvilia, I., Murtazashvilia, J., Salahodjaev, R., 2019. Trust and deforestation: a cross-country comparison. Forest Policy and Economics 101, 111–119.
• Nagendra, H. 2008. Do parks work? Impact of protected areas on land cover clearing. Ambio, 37, 330–337.
• Oldekop, J.A., Bebbington, A.J, Brockington, D., Preziosi, R.F., 2019. Understanding the lessons and limitations of conservation and development. Conservation Biology 24(2), 461–469.
• Pena, X., Velez, M.A., Cardenas, J.C., Perdomo, N., and Matajira, C. 2017 Collective Property Leads to Household Investments: Lessons From Land Titling in Afro-Colombian Communities. World
Development 97, 27-48.
• Reyes Rodas, Renaldo, Justine Kent, Tania Ammour, Juventino Galvex. 2014 “Challenges and opportunities of sustainable forest management through community forest concessions in the Maya
Biosphere Reserve, Peten, Guatemala, In, Forests under pressure-Local responses to global issues. In Pia Katila, Wil de Jong, Pablo Pacheco, Gerardo Mery (eds) IUFRO World Series Volume 32.
Vienna.
• Robinson, B.E., Holland, M.B., and Naughton-Treves, L. 2014. Does secure land tenure save forests? A meta-analysis of the relationship between land tenure and tropical deforestation. Global
Environmental Change, 29, 281-293.
• Runsheng, Y, Zulu, L., Jiaguo, Q., Freudenberger, M. and Sommerville, M. 2016. Empirical linkages between devolved tenure systems and forest conditions: Primary evidence. Forest Policy and
Economics 73, 277-285.
• Schlager, E., Ostrom, E., 1992. Property-rights regimes and natural resources: A conceptual analysis. Land Economics 68, 249–262.
• Sciberras, M., Jenkins, S.R., Kaiser, M.J., Hawkins, S.J., & Pullin, A.S. 2013. Evaluating the biological effectiveness of fully and partially protected marine areas. Environmental Evidence, 2(4).
• Sharma, B.P., Lawry, S., Paudel, N.S., Adhikari, A., Banjade, M.R. 2017. Has devolution of forest rights in Nepal enabled investment in locally controlled forest enterprises?, Paper prepared for
presentation at the “2017 World Bank conference on land and poverty”, The World Bank - Washington DC, March 20-24, 2017.
• Shrestha, N. K., Britt, C., 1998. From pilot to policy: Community forestry comes of age in Nepal. World Bank/WBI’s CBNRM Initiative. Washington: World Bank.
• Stevens, C., Winterbottom, R., Springer, J., Reytar, K., 2014. Securing rights, combating climate change: How strengthening community forest rights mitigates climate change. Washington: WRI.
www.wri.org/securing-rights. [Accessed August 19, 2019].
• Stoian, D., Rodas, A., Arguello, J., 2015. Beneficios socioeconómicos y condiciones habilitadoras del manejo forestal comunitario en Guatemala y Nicaragua. Rome: Bioversity International.
• Thanh, T.N. and Sikor, T. 2006. From legal acts to actual powers: Devolution and property rights in the Central Highlands of Vietnam. Forest Policy and Economics 8(4):397-408.
• Tobler, M.W., Anleu, R.G, Carrillo-Percastegui, S.E., Santizo, G.P., Polisar, J., Hartley, A.Z., Goldstein, I., 2018. Do responsibly managed logging concessions adequately protect jaguars and other
large and medium-sized mammals? Two case studies from Guatemala and Peru. Biological Conservation 220, 245–253.
• Velez, M.A. 2011. Collective Titling and Process of Institution Building: The New Common Property Regime in the Colombian Pacific. Human Ecology. Vol. 39, 117-129.

22. Useful resources
A guide to investing in collectively
held resources
Video: Rights shaping landscapes
and livelihoods in Nepal

23. Thank you!
Q&A
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