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Environment and Social Impact Assessment (ESIA)

Scaling-up Participatory Sustainable Forest Management

Lao PDR - Forest Investment Program

SUPSFM Preparation Team

Vientiane, Lao PDR

January 2012

Table of Contents




Lessons learnt from past experiences 26


Environmental setting 86




Kaye, M. 2012. Global forest expert panel presents key findings on link between biodiversity and carbon. Forests News- CIFOR. 158

 On a global level up to 80% of all deforestation is the result of agriculture. Moss, C. 2012. Infographic: Charting the history of agriculture and climate change. Forests News- CIFOR. Web source: 161



Appendices 180

ADB Asian Development Bank

CSO Civil Society Organizations

CEDAW Convention on the Elimination of All Forms of Discrimination against Women

CESCR International Covenant on Economic, Social and Cultural Rights

CFV Case-Free Village

CIF Climate Investment Funds

CIFORD Community Initiative for Rural Development

CSS Country Safeguard Systems

DAFO District Agriculture and Forestry Organization

DOF Department of Forestry

DOFI Department of Forest Inspection

EGDP Ethnic Group Development Plan

EGDS Ethnic Group Development Strategy

EG Ethnic Group

ESIA Environment and Social Impact Assessment

EMFA Exemplary Managed Forests in Asia

EMF Environmental Management Framework

EU European Union

FAO Food and Agriculture Organization

FCPF Forest Carbon Partnership Facility

FID Forest Inspection Department

FINNIDA Finnish International Development Agency

FIP Forest Investment Plan

FMU Forest Management Units

FOMMACOP Forest Management and Conservation Project

FPIC Free, Prior Informed Consultation

FSC Forest Stewardship Council

GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit

GOL Government of Laos

GVFC Group of Village Forest Committees

GVFO Group of Village Forest Organisations

HBVF High Biodiversity Value Forest

HCV High Conservation Value

IDA International Development Agency

IEC Information Education Material

IRD Institut de Recherche sur le Développement

JICA Japan International Cooperation Agency

LAK Lao Kip

LBA Lao Bar Association

LFNC Lao Front for National construction

LPSFM Landscape Participatory Sustainable Forest Management

LUPLA Land Use Planning and Land Allocation

LSMP Legal Sector Master Plan

LWU Lao Women’s Union

MAF Ministry of Agriculture and Forestry

MDB Multilateral Development Bank

MFAF Ministry for Foreign Affairs of Finland

MOIC Ministry of Industry and Commerce

MONRE Ministry of Environment and Natural Resources

NAFES National Agriculture and Forestry Extension Services

NAFRI National Agriculture and Forestry Research Institute

NBCA National Biodiversity Conservation Areas

NC National Consultant

NPA Non Profit Associations

NPV Net Present Value

NTFPs Non Timber Forest Products

PAD Project Appraisal Document

PAFO Province Agriculture and Forestry Office

PCR Project Completion Report

PDO Project Development Objective

PES Payment for Environment Service

PFA Production Forest Areas

PLUP Participatory Land Use Planning

PSFM Participatory Sustainable Forest Management

PM Prime Minister

PRF Poverty Reduction Fund

PSC People Supreme Court

REDD Reducing Emissions from Deforestation and forest Degradation

SUPSFM Scaling up Participatory Sustainable Forest Management

SCF Strategic Climate Fund

SIDA Swedish international Development Agency

SFMA Sub Forest Management Areas

SIA Social impact Assessment

STEPP Strategic and Tactical Enforcement Patrol Program

SUFORD Sustainable Forestry and Rural Development Project

SUFORD-AF Sustainable Forestry and Rural Development Project – Additional Funding

SWAT Soil & Water Assessment Tool

VD Village Development

VDC Village Development Committee

VFC Village Forestry Committee

VFLC Village Forestry and Livelihood Committee

VFO Village Forest Organization

VLG Village Livelihoods Grant

VMU Village Mediation Unit

WAD Women’s Advancement Division

WB World Bank

WCS World Conservation society


Lao PDR is one of the least developed countries in Southeast Asia. The country has considerable natural resources in forests, water resources, and minerals and these are significant for cultural development, environment protection, and economic development. Its forests cover about 40% of the country, the highest percentage in Southeast Asia, but the total area of forest has declined dramatically from 70% of the land area of 26.5 million ha in 1940, to 49% in 1982, and to only 40% or about 9.5 million ha in 2010. Data on changes in forest cover suggest that during the 1990s the annual loss of forest cover was around 1.4% annually, giving an average annual loss of forest cover of about 134,000 ha.

In addition to the declining forest area, there has been a steady fragmentation of forests and a decline in the average growing stock within the residual forest, which have both reduced carbon values and had a negative impact on biodiversity. Annual emissions from deforestation and forest degradation were estimated at 95.3 million tCO2e in 1982, declining to 60.6 million tCO2e by 2010. For the period from 2012-20, the average annual emission is estimated at 51.1 million tCO2e.

The Lao Forest Investment Program (FIP) to which this ESIA and subsequent safeguard frameworks (from ADB and IFC) relate, have been developed to support the national Forest Strategy 2020 (FS2020) and ongoing efforts to protect and restore forest cover and to reduce forest carbon emissions and implement a national REDD+ program. The program themes have been developed to directly address the primary drivers of deforestation and forest degradation. The underlying idea is that grassroots forest managers operating in any and all forest areas will become more active and vigilant in protecting the forests in their areas from the various agents of deforestation and degradation, and will rehabilitate degraded lands using land management systems that will provide them with livelihood benefits, while enhancing carbon stocks.

Overview of PSFM Implementation in PFAs. The current implementation of Participatory Sustainable Forest Management (PSFM) in Production Forest Areas (PFAs) has its roots in village forestry, which was piloted in the late 1990s at large scale covering two state production forests (Dong Sithouane in Savannakhet Province and Dong Phousoi in Khammouane Province). The piloting of village forestry was undertaken by the Forest Management and Conservation Project (FOMACOP) with technical assistance provided by the Ministry for Foreign Affairs of Finland (MFAF) and financial support by the International Development Agency (IDA) of the World Bank (WB). The appropriateness of the developed village forestry systems and procedures has been shown by the inclusion of Dong Sithouane and Dong Phousoi in the FAO List of Exemplary Managed Forests in Asia in the early 2000s, as well as by the certification as sustainably managed forests of forest management units (FMUs) in the two forest areas by the Forest Stewardship Council (FSC) in 2005-2010 with extension in 2010-2015.

The piloting of village forestry was followed by the institution of participatory management of production forests for nation-wide application as an official government policy in the early 2000s. Many of the current PSFM concepts, systems, regulations and operating guidelines have been formulated based on the pilot village forestry model. PSFM was first applied in 2004-2008 in 8 PFAs, which have a total area of 0.66 million ha and are located in 4 provinces in Southern Laos. This was undertaken by the Sustainable Forestry and Rural Development Project (SUFORD), which like FOMACOP were provided with technical assistance support by MFAF and financial support by IDA. MFAF and IDA continued their support through an additional financing phase, SUFORD-AF, expanding the application of PSFM to cover a total of 16 PFAs, which have a total area of 1.28 million ha and are located in 9 provinces in Southern and Central Laos.

1.1.1Further Scaling Up of PSFM

As the completion of SUFORD drew near, the Lao Government (GOL) proposed the Lao Investment Plan to the Forest Investment Program (FIP) of the Climate Investment Fund (CIF) with the core objective of reducing GHG emissions from forests by reducing deforestation and forest degradation, conserving and enhancing carbon stocks, and sustainable management of forests (five GHG emission-reducing activities that together constitute REDD+). The Lao Investment Plan includes components on managing five categories of forest areas, i.e. PSFM in three categories of state forest areas (production/ conservation/protection), village forestry in village-use forests, and smallholder forestry in land allocated to villagers, and includes a component to strengthen the enabling environment. The proposal was favorably considered by the FIP Steering Committee with funding provided for three projects, namely: (a) Protecting Forests for Ecosystems Services with the Asian Development Bank (ADB) as the designated Multilateral Development Bank (MDB) partner, (b) Smallholder Forestry with the International Finance Corporation (IFC) as the designated MDB partner, and (c) Scaling up PSFM (SUPSFM or the Project) with WB as the designated MDB partner. During the design of the project it was deemed necessary to introduce a landscape approach to facilitate dialogue and coordination among forest managers at the local level, Provincial and District level authorities and to facilitate the inter agency support to improve local communities livelihoods and tenure security.

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