ក្រុមការងារហិរញ្ញប្បទានព្រៃឈើ

Sub-group of Forest Financing

Background

 

The Forestry Law was ratified by the National Assembly and the Senate in 2002, it is designed to provide a clear framework for Cambodia in managing, harvesting and utilization, development and conservation of the forest resources in Cambodia. Moreover, this law aims to ensure the goal of sustainable forest management for social, economic and environmental benefits. In addition, the Royal Government of Cambodia adopted the National Forestry Program (2010-2029). The NFP set six program areas for priority implementation, one of which is the development of sustainable financing mechanisms (NFP, 2010).

 

Current levels of financial support, from government and donor budgets, are significantly below that needed to ensure successful implementation of the NFP to meet its set goals and objectives. The government budget allocated to the Forestry Administration has remained <$ 2 million/year, despite the significant increase in overall government revenues. There are very few policies or regulations that would enable collection of revenues from the forestry sector, and the revenues that are collected are remitted to the national treasury, rather than hypothecated to support the implementation of the NFP. Private sector engagement in sustainable forest management is very low consequently, Cambodia relies heavily on support from development partners, especially bilateral and multilateral donors and large NGOs.

 

Successful implementation of the NFP requires Cambodia to improve its ability to gather revenue from forestry sectors, either from existing forest financing sources such as legal timber trade, taxes from Economic Land Concessions (ELCs), transport permits from non-timber forest products (NTFPs), and government budget allocations; or from innovative forest financing mechanisms such as REDD+, Payments for Environmental Services (PES), and other forest and biodiversity offset programs etc..,

 

Cambodia is in the readiness phase of designing a national mechanism for REDD+, and other international climate change funds. The Cambodia Climate Change Alliance (CCCA) has established a multi-donor Trust Fund, which is administered by UNDP according to international fiduciary standards, but is led and directed by the Cambodian Government (Ministry of Environment, Department of Climate Change). This is a relatively successful example of a government-donor trust fund mechanism, which could be adapted to become a National Implementing Entity (NIE) in the future to enable the government to access international climate change funds directly. In other sectors, Cambodia has successful experiences in managing other fund mechanisms, which have attracted support both from donors and the government budget, such as the Commune/Sangkat fund and the National Social Security Fund. At a local level, some REDD+ projects are piloting fund management mechanisms, such as the goal of setting up a Seima Fund, Oddar Meanchey REDD+ fund, and Central Cardamoms Protected Forest Trust Fund.

 

In order to move forward with forest financing, Cambodia needs to undertake a review of possible financing sources to be prioritized to ensure long-term implementation of the NFP, and what are the possible fund management and disbursement mechanisms that need to be established to support this. Significant questions exist regarding the appropriate structure of any fund management mechanism, since it would need to follow international standards of effectiveness, transparency, and accountability (in order to attract international support), but it has to align with an existing laws and regulations relating to fund management in Cambodia, and must be aligned with the existing policies of other relevant government ministries such as the Ministry of Economy and Finance (MEF).

 

The Sustainable Forest Financing Sub-Group

 

The Wildlife Conservation Society (WCS) has been specifically invited by the Forestry Administration to lead a policy process to address these issues and develop ideas for long-term forest financing mechanisms. This work is being conducted under the auspices of the Technical Working Group on Forestry Reform (TWG-FR), the government-donor coordination mechanism for the forestry sector. The interim forest financing sub-group is chaired by the Deputy Chief of Forestry Administration, Dr. H.E Chea Sam Ang with WCS as a co-chair. The sub-group comprised of representative from Forestry Administration, Ministry of Environment, Ministry of Economic and Finance, development partners, Nation and International NGOs  and Private sectors.

 

Forest Finance Options Assessment Report (3.8 MB)

អនុក្រុម
Sub-group

danida_eu-1