Fighting corruption in forest product verification in Nepal

Commercial forestry in Nepal is poorly managed. This is largely because the system to verify the legality of forest products is corrupt. The experiences of the Commission to Investigate the Abuse of Authority, Nepal’s main anti-corruption agency, provides valuable lessons on combating corruption.

Community forestry in Nepal’s midhills receives international recognition, but commercial activities in the forests of the southern plains (the ‘Terai’) are less well known. Poor management means that about 8 percent of the total area is lost each year to illegal logging. This is possible because of the corruption in the verification system for forest products.

Research from VERIFOR studies forest verification in many countries, including Nepal. After reviewing the current verification system, the researchers examine options for forest product verification in Nepal and the potential role of Nepal’s main anti-corruption agency, the Commission to Investigate the Abuse of Authority (CIAA).

The government in Nepal owns and manages most of the commercially valuable Terai forests. Most commercial timber activities produce Shorea robusta (Sal) timber for domestic use. The system for verifying the legality of this production involves three levels of control: a variety of permits for harvesting, transport and selling; an internal checking system run by the Forest Department; and external monitoring (for example by the army, the police and customs officials). In practice, this verification system is driven by bribes at all levels: it is estimated that in the Terai districts in 2004, US $7 million was paid to the government by the timber trade, while US $21-28 million was paid in bribes.

Key strengths and weaknesses of the existing verification system include:

• Corruption is being widely debated in public, so there is a greater chance for the verification system to work as intended, especially with an improved legal framework since 2002.
• There is a lack of public participation in the present verification system, as well as a lack of independent monitoring agencies.
• The involvement of several different institutions can encourage greater participation and control, but in practice, this has lead to over-regulation, confusion and increased bribe taking.

The CIAA could play a significant role in forest management. It also provides valuable lessons for improving verification. The researchers recommend:

• a detailed study to establish the level of forest-related corruption in Nepal and identify ways to improve and standardise verification systems
• creating an independent, authoritative system to oversee verification under a managing agency, such as the CIAA
• establishing a comprehensive and consistent regulatory framework to ensure the verification system is enforced
• promoting public involvement in the verification process and encouraging community forestry and local forest-based industries to participate in monitoring the legality of forest products
• providing incentives for officials, contractors and forest users to act legally, along with the disincentive of punishment for taking part in corruption
• encouraging donors to support the registration and investigation of corruption.

Source(s):
‘Forest products verification in Nepal and the work of the Commission to Investigate the Abuse of Authority’, Country Case Study 10, by Dinesh Paudel, Stephen J. Keeling and Dil Raj Khanal, VERIFOR, 2006 (PDF) Full document.

Funded by: European Union; Government of Netherlands; Government of Germany

id21 Research Highlight: 22 September 2006

Further Information:
Dinesh Paudel
Nepal Swiss Community Forestry Project
PO Box 113
Kathmandu
Nepal

Tel: + 977 01 5551702
Fax: + 977 01 5551701
Contact the contributor: d_paudel@nscfp.org.np

Nepal Swiss Community Forestry Project

David Brown
Overseas Development Institute
111 Westminster Bridge Road
London SE1 7JD
United Kingdom

Tel: +44 (0)20 7922 0300
Fax: +44 (0)20 7922 0399
Contact the contributor: d.brown@odi.org.uk

Overseas Development Institute, UK

VERIFOR

Other related links:
'Illegal logging and forest livelihoods: which way forward for greater justice?'

'Bringing legality to the timber trade'

'Laying down the law in the forestry sector'

See id21's links for forestry