Countering Forest Sector Corruption Presented by Ken Rosenbaum Sylvan Environmental Consultants On behalf of the Forest Integrity Network

What is the Forest Integrity Network? FIN is an informal network of people concerned about the impact of corruption on the world’s forests. FIN emerged from a 2000 conference at Harvard. FIN is now a project of Transparency International.

FIN Activities FIN has a new paper on civil society tools to fight corruption in the forest sector. FIN is turning its attention to approaches for responsible businesses.

What is corruption? Abuse of power for private gain. Not just bribery; corruption can entail a whole family of actions.

Varieties of corruption Bribery Favoritism & patronage Kickbacks Fraud

Bribery (by objective) To get a scarce benefit E.g., a forest concession To get a discretionary favor E.g., to avoid prosecution To get an incidental benefit E.g., faster service To impose a cost on others E.g., competitor gets an inspection

Favoritism & Patronage Self-dealing E.g., Buy goods for government from self Nepotism E.g., Hire brother-in-law Cronyism E.g., Promote based on loyalty

Kickbacks Money “under the table” from or to suppliers Excessive gifts & hospitality Payments from subordinates

Fraud Defrauding others in the name of the employer E.g., issuing false certification of species or origin to allow wood export Defrauding the employer for the benefit of self or others E.g., setting up ghost employees

Impacts of Corruption Rule of Law is compromised Money is often diverted from the forest sector The market sends altered signals The biggest losers are those who won’t or can’t pay to play: The environment Honest businesses The poor Future generations

Some truths about corruption People may tolerate corruption, but no society approves of it. Corruption is an ongoing, potential problem in every society. Countries with low corruption have well- functioning national integrity systems.

National Integrity Systems

Practical Tools

Awareness Raising Educate the press Run radio & TV spots Sponsor a national anti-corruption week Produce comic books & street theater

Procurement Organize workshops on procurement processes Set up a concession website

Access to Information Compile a forest law reference Publish a guide to dealing with the government for forest landowners or a guide to the concession process

Public Institutions/Diagnostics Compile corruption perception indexes Create citizen report cards Document agency structure and staffing Create a stakeholder advisory panel

More Public Institutions Ideas Compile forest operation statistics Train people in enforcement, prosecution Work to protect whistleblowers

Business Ethics Promote a professional forest ethics code Promote integrity pacts

Success?? Happy enforcement official with seized logs

Partial wins, ongoing fights Shutting off the Khmer Rouge timber trade in Cambodia Outsourcing enforcement, Ecuador Citizen Report Cards, India The end of the General Land Office, USA

No magic bullets By all accounts, the fight against corruption must be a multi-year, ongoing effort The choice is macro-revolution or micro- revolution/evolution, and macro-revolution is rarely without its downsides