aires are now required to create and follow management plans. A second independent observer’s offi ce monitors enforcement of these plans, taking missions with and inde- pendently from government authorities. In addition, remote sensing is used to monitor logging activity.
• Defi nition of the forest estate and provision for community forests. A forest zoning plan identifi ed and provided preliminary bound- aries for conservation and production for- ests. Outside the permanent forest estate, it provided for community forests that could be managed for timber or converted to non- forest uses based on local needs and prefer- ences. The law allowed forest communities to challenge and redraw the provisional zoning boundaries.
Outcomes
• Transparency and monitoring. The inde- pendent observers’ offices have greatly increased public scrutiny of concession operators and the government. One impor- tant consequence was an increase in auction bids above the fl oor price after the creation of the independent observer. The precedent for transparency and oversight may spill over into other parts of government.
• Greater potential control over large-scale log- ging. With the introduction of better moni- toring and a performance bond requirement, there has been a reported reduction in ille- gal logging by large-scale concessionaires.
Illegal logging by the informal sector has reportedly increased, refl ecting a scarcity of legally cut timber for local markets.
• Effect on government revenue. The new auc- tion and tax system mitigated what would otherwise have been a severe drop in gov- ernment revenues due to a ban on log exports introduced in 2000. The reduction in tax revenues since the reforms should be viewed against the improvements in sector governance and reductions in areas under logging and annual volumes harvested. Vin- cent, Gibson, and Boscolo (2003) note the unique character of Cameroon’s system, which fi xes area-based taxes for a long-term (15-year) contract. According to the authors, the lack of adjustments for timber price vol- atility exposes concessionaires to risk and may depress bids relative to a system index- ing taxes to international timber prices. • Effect on local incomes and capacity. By
2004 a total of $53 million in forest royal- ties had been distributed to communities, and additional money went to community forests. There were no such distributions before the forest tax reform. Annual audits of these funds are produced with donor support. Oyono (2005) gives a mixed but mostly disappointing account of the use of these funds. Positive impacts include stimu- lating community organization, growing rec- ognition of Pygmy rights, some productive social investments, and retention of youth in rural areas. Negative impacts revolve
Effi cient regulation also calls for a reexamination of logging rules. Stringent rules appear to favor sustainability, but they also have disadvantages. Increasingly stringent rules provide smaller and smaller environmental benefi ts at escalating costs to forest owners. Boscolo and Vincent (2000) use a bioeconomic model to examine the costs and benefi ts of logging regulations in Malaysia. They fi nd that shifting from unregulated to regulated logging, with a 40-centimeter minimum cutting limit, reduces the net present value of the timber stand by $510 a hectare (12 percent) but con- serves carbon and biodiversity. Raising the minimum cutting limit from 40 to 60 centimeters reduces the value of the stand by another $1,223 a hectare and yields only a modest additional benefi t for carbon and biodiversity conservation.
Because stringent regulations impose large burdens on loggers and forest owners, and because they are more diffi cult and expen-
Box 6.1 (continued)
around the emergence of elites that control forest revenues sent to locally elected bodies and communities. These elites confl ict with traditional authorities and are poorly super- vised. The result is social confl ict and mis- appropriation of funds, according to Oyono.
Further insight is provided by offi cial audits on what may be an evolving situa- tion as institutions mature (Ndjanyou and Majerowitz 2004). There are strong efforts to impose transparency on the system, start- ing with public transfer of royalty checks to local offi cials. As a result the share of veri- fi able expenditures by rural councils rose from 49 percent in 2003 to 72 percent in 2004. About a quarter of this revenue went to recurrent expenses, half of it salaries. Of investment expenditures, about 60 percent went to municipal buildings and vehicles,
13 percent to roads, and 10 percent to educa- tion and health. There is less accountability at the community level, where only about half of expenditures could be tracked. Edu- cation, housing, water management, and culture and sport were spending priorities. • Industry impacts. About 15 companies
changed ownership, with a trend toward more effi cient and law-abiding companies and increased domestic ownership.
• Environmental impacts. There have been no studies on how the zoning of the for- est estate and other reforms have affected deforestation or forest degradation.
Source: Vincent, Gibson, and Boscolo 2003; World
sive to enforce, compliance is likely to be low. Burdensome and unenforceable laws spawn evasion, illegality, and corruption. A dis- tressing example of a lose-lose consequence occurs when it is easier to get a permit for forest conversion than for forest management— reportedly the case in Brazil, Indonesia (FWI and GFW 2002), and elsewhere. This leads loggers to clear-cut and abandon plots that they would have been content to harvest selectively.