On September 27, 2012, during World Forest Week, PROFOR and FAO co-organized a panel discussion entitled "A Fair Share of the Pie," which brought together experts looking at the issue of benefit sharing. The session provided an opportunity to discuss and share ideas about ways of establishing partnerships and effective benefit sharing arrangements. It presented insights on how to share benefits and create incentives for REDD+ and sustainable forest management through partnerships involving communities and the public and private sectors.

We reproduce below some of the Questions and Answers triggered by this session, as a guide for interested readers. (Click to jump to a specific question).

• Is REDD+ an investment in development or conservation?
• How can you create "project law," when enacting law is typically the sovereign right of a nation state? I think it should be called pilot arrangement. Which governments have allowed project law to be adopted?
• From your experience, can benefit sharing mechanisms avoid a dependency syndrome and instead reward entrepreneurship even if this might be less fair?
• In the context of REDD+, what should be the role of project proponents? What percentage of the benefits should they get? And should this aspect be regulated by government or between communities and proponents?
• Is access and control an important incentive for the state to engage in benefit sharing?
• Whose responsibility is it to start the benefit sharing process and create a level playing field?
• In what areas is capacity building needed?
• How do you avoid situations of “elite capture”?
• How long did it take to set up benefit sharing arrangements in Uganda?
• Which type of partnership gives the best outcomes?
• Leadership is important. But how do we ensure that “good” leaders lead the process?

Answers were provided by:

Is REDD+ an investment in development or conservation?

Chris Knight: REDD+ is primarily intended to reduce carbon emissions from deforestation and degradation through facilitating more sustainable use of forest and agricultural land. In effect it seeks to provide incentives and rewards to communities and companies to play a role in protecting forests, and is intended to achieve community and conservation 'co-benefits'. So the simple answer is both - as long as the carbon emissions leading to global warming can be reduced.

Tan Quang Nguyen: I would say both. For many, REDD+ may mean an opportunity for conservation of the forest resources in the developing countries. In the context of poor upland forest communities, however, the revenue from REDD+ may serve as an important push for the local economy, particularly for poor and disadvantaged households. In fact, countries like Vietnam also see the revenue from REDD+ as an opportunity to get out of poverty for many poor and forest dependent community. Moreover, if and when social safeguards REDD+ are respected and realized, REDD+ can also help to empower the poor and the weak.

How can you create "project law" when enacting law is typically the sovereign right of a nation state? I think it should be called pilot arrangement. Which governments have allowed project law to be adopted?

Robin Nielsen: Project law is a term used to describe the rules that project participants and other stakeholders agree to recognize in the project area. The development of project law is one tool that project sponsors and stakeholders can use to address gaps or ambiguities in a legal framework. Project law is developed by agreement of all key stakeholders, a group that usually includes the state, project sponsor, project implementers, and local communities. Topics covered by project law may include rights to natural resources in the project area (including carbon), rules governing the use of those natural resources, penalties for non-compliance, and the roles and authority of the various stakeholders. Project law should be consistent with the formal law to the extent that formal law addresses the issues covered by project law. In addition, project law should recognize that in the event that the formal law changes and, as a result, project law conflicts with the formal law, the parties agree that they will renegotiate their statement of project law to harmonize with the formal law.  

All three of the good practices examples referenced in Section 5 of John Bruce’s report, Identifying and Working with Beneficiaries When Rights are Unclear, use some form of project law. For example, in the Makira project in Madagascar, the project stakeholders entered into a written agreement setting out the parties’ understanding of which party had what rights to various natural resources in an area and what uses could be made of those natural resources. The agreement also set out penalties for certain conduct and the forums for dispute resolution. The agreement was entered into by local communities, project implementers, and various central and local governmental authorities. Through the use of project law to supplement formal law, the parties created certainty and predictability for project participants and other stakeholders.

Governments partnering with other stakeholders on projects that use project law have no obligation to extend project law beyond the project area. However, experience with project law (e.g., effectiveness of different rules, enforceability, etc.) may provide policymakers with information useful to the process of legislative reform. Section 2.2 of the report provides additional information on project law and illustrates the concept of legal pluralism.

From your experience, can benefit sharing mechanisms avoid a “dependency syndrome” and instead reward “entrepreneurship” even if this might be less fair?

Chris Knight: These mechanisms can reward entrepreneurial efforts if local communities and businesses can be involved in the design phase. In the report accompanying the options assessment framework (Assessing Options for Effective Mechanisms to Share Benefits) we provided several examples where benefit sharing targets self-sustaining commercial activities by providing technical training, materials and equipment to equip local communities with the means to develop community forestry projects which aim to maintain longer term stable income. For example:
• Formal land titles
• Formal access or concession rights
• Goods and materials (e.g., seedlings and fertilizers)
• Capacity building and training (e.g., forest management)
• Increased market access for premium products (e.g., forestry or agricultural commodity certification)
• Price guarantees
• Cost-sharing arrangements
• Access to loans on preferential terms
• Access to microfinance on preferential terms
• Goods and materials (e.g., seedlings and fertilizers)
• Capacity building and training (e.g., forest management)
• Social infrastructure and infrastructures (e.g., schools, rural irrigation)

In the context of REDD+, what should be the role of project proponents? What percentage of the benefits should they get? And should this aspect be regulated by government or between communities and proponents?

Bwalya Chendauka:  In the Context of REDD+ the role of the project proponents will be to provide the financing of the capital required to set up the REDD project (i.e. scoping, sensitization and development of plans). The costs of the startup activities should be known by all the parties. (i.e. proponents, government and the local community). Once the benefits begin to accrue, it will be obvious that the initial funding injected into the project will have to be considered. If the proponents are a non-profit making organization, it is expected that a very small percentage of administration costs will be given back to the proponents. The other benefits should be shared according to the management plan. Ideally, government will need to regulate the project by ensuring that agreements in the management plan including those related to benefit sharing are respected. In addition, a monitoring system will be put in place as agreed and this will be done in conjunction with government.

Tan Quang Nguyen: Project proponents may play different roles, depending on the specific context: They may serve as 1) brokers between the forest managers and the buyers of the carbon credits, 2) development workers who assist local communities, or 3) advisors to the government in developing or fine tuning the legal framework related to REDD+. By nature, the project proponents would try to get as much benefit as possible, covering at least all the associated costs for them. Depending on the capacity of the communities to enter into a fair negotiation with the project proponents, the percentage can be negotiated locally or regulated by the government.

Is access and control an important incentive for the state to engage in benefit sharing?

Robin Nielsen: Designing a benefit sharing system that provides the state with some degree of access to and control of benefits can incentivize the state to engage in benefit sharing. In many cases, consideration of such incentives may be needed at the outset of project planning. Especially in countries where the formal law provides that forests are owned by the state, the state may be disinclined to consider a benefit sharing system. In those cases, particularly where local community rights are based on customary law that is not acknowledged in formal law, incentives may be needed to encourage states to develop benefit-sharing plans that recognize local community rights and support project objectives. As part of the legal framework analysis and assessment of interests and existing benefit streams, the rights and interests of the state at the central, regional, and local levels should be identified. That process will help project planners identify appropriate, effective, and continuing incentives for the state's participation and support of benefit sharing. Such an approach is more likely to result in sustainable project objectives than one that relies solely on directives.

Steve Nsita: In government-managed forests, access and control are some of the benefits the state often extends to the local beneficiaries. When people were allowed access and control, forest management officials, especially at the forest management unit level, said that they could “finally rest” from the incessant chasing after forest offenders. This motivated the forest level staff to press their superiors for scaling up of community-forest management to cover more forest area. For the communities, access and control were seen as important incentives, but even when they did not get the control and access to the level they desired, they cherished the relationship that developed between the two partners during negotiation of the partnership agreements. This relationship, it was believed, would eventually lead to more access and control. I do not know of cases in Uganda where the state is involved in benefit sharing for forests on private and community lands.

Whose responsibility is it to start the benefit sharing process and create a level playing field?

Robin Nielsen: The process for designing a benefit sharing plan (which includes consultation, legal framework analysis, identification of beneficiaries, capacity building, etc.) is collaborative and should be a shared responsibility of the project participants. That shared responsibility extends to the implementation of the benefit sharing plan, adherence to the terms of the plan, and making necessary adjustments to the plan over time. However, identifying one party to drive and facilitate the collaborative process is usually necessary to ensure that the process proceeds as intended, to avoid fragmented efforts of individual stakeholders, and avoid problems of bias or the perception of bias. The most appropriate entity to lead the process will depend on the stakeholders and project. In some countries, a national organization or quasi-governmental body might be well suited to lead the process of benefit sharing. In many developing countries, however, national and local organizations may lack the capacity and status to serve in that role. Governmental bodies may also lack the capacity or political will needed to drive the process. In such locations, project sponsors are often best placed to take responsibility to facilitate the process. International sponsors do not have the political and capacity constraints that can limit the effectiveness of some national entities. They can provide an independent perspective that aids the identification of all potential beneficiaries, assessment of capacity, and process of collaboration. In all three of the good practices examples referenced in Section 5 of Identifying and Working with Beneficiaries When Rights are Unclear, the project sponsors and implementers led the collaborative process of developing benefit sharing plans by supporting the legal framework analysis and the assessment of interests to support the identification of beneficiaries, and incorporating those findings in the development of the overall project framework and benefit-sharing plan.

Steve Nsita:  In Uganda, outside partners (government agency or private investor) initiated the benefit sharing process. They are the ones who have the power and resources to create a level playing field. As the partnership progressed, local people gained confidence and started to call for increased opportunities to participate in forest protection, and an increased share of the benefits.

In what areas is capacity building needed?

Steve Nsita: In the early stages of the partnership, the community needed confidence in negotiating with the powerful outside partner. Sometimes it was up to the outside partner to try and break communication barriers, but in the case of government forests, a local NGO often played a mediating role. Community confidence grew with repeated meetings. The community also needed capacity to run its community group as an entity (preparation of an association constitution, registration as a legal entity, record keeping, etc.). This then lead to skills training, to enable people to establish their own income-generating projects, partly funded by the outside partner.

How do you avoid situations of “elite capture"?

Bwalya Chendauka:The government, through stakeholders analysis, is aware of such possibilities. Through the REDD+ program we are planning to examine and develop Social Environmental Safeguards (SES). This will assist in identifying issues and providing for the protection of poor local communities. From this SES process within the REDD+ program, government will ensure that adequate laws, regulations and supporting guidelines are in put place.

Steve Nsita: An example: a collaborative forest management agreement for a community group near one of the central forest reserves provided for preferential licensing of grassland parts of the forest reserve for tree growing. But the forest management authority licensed a large chunk of the land to one of the local businessmen. The community put pressure on the forest authority to reduce the land in favour of licensing the community members. It worked. Therefore what the people need is building their confidence to advocate for their rights (community based advocacy).

Tan Quang Nguyen: Elite capture is common when information is not open/ accessible to all. Transparency and participation are often needed to avoid elite capture. Public discussion on all related issues will help reduce the possibility of elite capture. In reality, in the areas where community forestry has developed and people are familiar with public discussion of issues related to their livelihoods, the possibility for elite capture is less likely.

How long did it take to set up benefit sharing arrangements in Uganda?

Steve Nsita: For benefit sharing in government forests, we found that it took 5 years for the first community forest management (CFM) processes to reach the level where CFM agreements could be signed, but this was a learning phase. Over time we found that we could do it in 1-2 years. Some local NGOs tried to do it in less than one year (because of project deadlines) but this did not allow for sufficient building of trust and confidence and thus the resulting partnership suffered. Where it took more than two years, people got transferred, fatigue cropped in and the process stalled. Learning took place along the way as the negotiations proceeded.

Which type of partnership gives the best outcomes?

Kenneth Rosenbaum: The cases examined in Benefit Sharing in Practice suggest that there is no single best structure or type for a partnership. Instead, the best partnerships are the ones with good processes. A good process of setting up and running a partnership — featuring elements like full bargaining, mutual respect, good communication, patience and persistence, flexibility, practicality, verification, and so forth — helps to tailor the partnership to the local context. Some of these same elements — notably full bargaining, flexibility, and verification — lead to better benefit sharing systems within the partnership.

Leadership is important. But how do we ensure that “good” leaders lead the process?

Bwalya Chendauka: The presence of government in this program is to ensure that the local communities are involved in the selection of their representatives. Democratic processes of selecting leaders will be promoted and government will put in place clear guidelines that will be expected to be followed by all those interested in REDD+. The Forest legislation which fortunately is being revised will spell out under subsidiary legislation the modalities of equity sharing and protecting the vulnerable.

Steve Nsita: Leadership at the top of the outside partner institution is difficult to deal with within the context of benefit sharing alone. But in the experience of the National Forestry Authority, a good leader at the top was normally able to choose his/her staff carefully so that when staff who led the partnership at forest unit level left, they were replaced by equally competent ones (mostly in terms of self-drive, but also in terms of skills to work with communities). Later this careful staff posting was abandoned and some CFM partnerships started experiencing hiccups.

Tan Quang Nguyen: This is a difficult question. The classic answer would be: "through a democratic selection process." But very often, the leaders are pre-selected and it is difficult to change the leaders when the wheel is rolling. A pragmatic approach would be to make the existing leaders "good enough." In this context, capacity building can play a role.

Kenneth Rosenbaum: We can’t guarantee that leaders will be “good,” in the sense of being selfless and well-intentioned. But some of the skills of leadership can be taught, so we can help ensure that leaders will be “capable.” For example, we heard from experts and saw in the case studies that skillful leaders are persuasive. They are able to persuade because they take the time to understand problems from the viewpoint of the people they are trying to persuade. By doing that, they gain the people’s respect and they are able to make a strong case that participating in a partnership will bring benefits. These skills of listening, seeing problems from the community’s point of view, and tapping into community interests can be taught.