CHALLENGE

Deforestation, accompanied by GHG emissions, continues in Peru’s 65 million ha of tropical forest largely because bare land is worth more than forests. Most non-forest activities generate revenues more quickly and with less capital than forestry. Two market failures preventing forestry from being more competitive:

1. The historic inability of Peruvian manufacturers to engage with communities in "win-win" arrangements that yield a stable supply of raw materials, and development impacts to under-serviced forest communities in the Amazon; and

2. The lack of a system that allows both community suppliers and log buyers to monitor volume, species and cost of wood production at each step, thus providing information critical to making smart management decisions.

In most natural resource industries, stable raw material flow from loyal suppliers is considered of vital importance. This priority is new for most of the Peruvian wood industry: loggers traditionally high-grade forests of commercial species with little respect for legal harvest levels, minimum diameters, or "no-cut" zones. Indigenous leaders are often not aware of legal requirements and just follow the wood buyer’s lead. Once harvested, the forest has little economic value.

APPROACH

This activity aims to strengthen forest management in the Peruvian Amazon by improving the capacity of local governments and indigenous groups to monitor wood production on a transactional (community) and regional (indigenous federation) level. This will be achieved by adapting and applying IFC's wood production tracking program (C.O.C.A) to the Peruvian context in community-company value chains and indigenous federations to document volume of round wood harvested and transported by species (the program does not include on-site processing by communities but could be modified to do so).

In addition, it will improve the ability of companies to invest in communities with optimum development impacts by providing in-service training, company-specific analyses, and workshops to communities and companies that lead to the development and implementation of strategies for long-term community engagement monitored annually by involved parties.

RESULTS

The wood-tracking program (SimproFOR) is now available for use by companies and communities in Peru. Costing functions (but not manufacturing functions) have been added to the program and a user’s manual is complete and ready for use by OSINFOR and GIZ. Both the public and non-profit entities are ready to apply the program in the upcoming harvest season (June-Oct 2015). Comments from government officials and support organizations indicate that widespread use of SimproFOR will allow the country to improve the transparency of wood flow and help companies/communities increase their efficiency.