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 forestryin Nepal’s midhills receives international recognition, but commercialactivities 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 toillegal logging. This is possible because of the corruption in the verificationsystem for forest products.

Research from VERIFORstudies forest verification in many countries, including Nepal. After reviewingthe current verification system, the researchers examine options for forestproduct verification in Nepal and the potential role of Nepal’s mainanti-corruption agency, the Commission to Investigate the Abuse of Authority(CIAA).

The government inNepal owns and manages most of the commercially valuable Terai forests. Mostcommercial timber activities produce Shorea robusta (Sal) timber for domesticuse. The system for verifying the legality of this production involves threelevels of control: a variety of permits for harvesting, transport and selling;an internal checking system run by the Forest Department; and externalmonitoring (for example by the army, the police and customs officials). Inpractice, this verification system is driven by bribes at all levels: it isestimated that in the Terai districts in 2004, US $7 million was paid to thegovernment by the timber trade, while US $21-28 million was paid in bribes.

Key strengths andweaknesses of the existing verification system include:

• Corruption is being widely debated in public, sothere is a greater chance for the verification system to work as intended, especiallywith an improved legal framework since 2002.
• There is a lack of public participation in the presentverification system, as well as a lack of independent monitoring agencies.
• The involvement of several differentinstitutions can encourage greater participation and control, but in practice, thishas lead to over-regulation, confusion and increased bribe taking.

The CIAA could playa significant role in forest management. It also provides valuable lessons forimproving verification. The researchers recommend:

• a detailed study to establish the level offorest-related corruption in Nepal and identify ways to improve and standardiseverification systems
• creating an independent, authoritative system tooversee verification under a managing agency, such as the CIAA
• establishing a comprehensive and consistentregulatory framework to ensure the verification system is enforced
• promoting public involvement in the verificationprocess and encouraging community forestry and local forest-based industries toparticipate in monitoring the legality of forest products
• providing incentives for officials, contractorsand forest users to act legally, along with the disincentive of punishment fortaking part in corruption
• encouraging donors to support the registrationand investigation of corruption.