2012 SECOND EXPERT MEETING ON FOREST FINANCING FOR SMALL ISLAND DEVELOPING STATES

Fiji Forest Sector & Status of Overseas Development Assistance

Tanoa International Hotel, Nadi, Fiji. 23rd -27th July

PRESENTATION OUTLINE Part 1: Forest Sector ProfilePart 2: Overseas Development Assistance Framework Part 3: Level of Assistance Part 4: Forest Sector Financing requirements Part 5: Conclusion

FOREST SECTOR PROFILE

FIJI BASIC INFORMATION

Lat. 18°00′S Long. 179°00′ELand Area: 18,270 km2

Highest peak: 1,324 mPopulation: 838,000GDP per capita: USD $3,035Total GDP: USD $2.5b (2008)% Contribution to GDP

Sugar 6%Other agriculture 6%Fisheries 3%Forests 1.3%

2000 2001 2002 2003 2004 2005 2006 2007 20080

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

FJD

Mill

ion

ABOUT MFF VISION : Our Future Generation Inherits a Prosperous and

Enhanced Fisheries and Forest Sector MISSION: Improving Livelihoods through SMART Policies on

Sustainable Management of Fisheries and Forest Resources

GOAL: Increasing the Fisheries and Forest Sectors contribution

to GDP ... through SMME’s and Downstream Processing

DEVELOPMENT APPROACH: Creating a Paradigm Shift – Production Oriented

towards Resource Conservation and Sustainable Resource Management

POLICIES, INSTITUTIONS & INTER-SECTORAL LINKAGES

Forest Policy 2007 (Based on SFM) Conservation of forests and biological resources Integrated forest resource management Resource owners and community involvement in SFM Upgrading of forest industries and promotion of high quality

products Institutional framework, and human resources

Major policies & legislations Native Lands Trust Act (1940) Fiji Pine Decree (1990) Endangered and Protected Species Act (2002) Fiji Rural Landuse Policy (2005) Environment Management Act (2005) Mahogany Industry Development Decree (2010) The Fiji REDD+ Policy (2010) Forest Decree (1990)-Currently under review Fiji Climate Change Policy (2011)

FOREST SECTOR – SNAPSHOT

Forest Cover 1.3 M ha(60%)

Natural Forest 980,878 haPine Plantation 93,429 haMahogany Plantation

60,405 ha

Total Plantation Area

153,534 ha

Fiji Forest Policy 2007 Financial Strategy (Section 6: Forest

Financing Strategy) Forestry Department Revenue Forest Sector Development Fund Trade & Commercialization Measures Financing Conservation & Protection Measures

Financing through International & Regional Forestry Cooperation

EXISTING MECHANISM FOR FOREST FINANCING

OVERSEAS DEVELOPMENT ASSISTANCE FRAMEWORK

PRINCIPLES FOR EFFECTIVE DEVELOPMENT COOPERATION

Ownership of development priorities by developing countries

Results-focus

Inclusive development partnerships

Transparency and accountability10

FIJI ODA PROCESSES

Budget Aid Coordinating Committee (BACC)

Planning, Disbursement, Monitoring and

Evaluation

Through annual budget process

Aid Funds reflected in National Budget

Provide advice to Government on ODA;

Oversee Planning and Implementation;

Appraise and Approve Aid-Funded Programmes and Projects;

Promote dialogue with Donors/ Development Partners; and

Assess and Recommend Improvements to ODA mechanism

12

Role of the BACC

NATIONAL ODA PROCESS – BUDGET PLANNING

1. Baseline Budget ODA

- baseline is set by MoF and sent to all Donors and Ministries/Departments

2. Consultations - first round of consultations between MoF, Donors and Implementing agencies.

- second round of consultations to confirm/ agree on projects to be included in the Annual Budget

3. Finalisation of Aid /ODA Estimates- ODA budget is finalised/ confirmed with Donors and included in the Budget Estimates

4. Budget Announcement- Copies of Budget Documents are send to Donors

ODA PROCESSES: DISBURSEMENT & MONITORINGDisbursement

Ministries and Departments (implementing /executing agencies)

Receive notification from Donors on remittance of Aid FundsApply for Release of Funds

Ministry of Finance

Assess/ Process applications; and Disburse funds through Budget/Accounts process

Implementation of Aid-funded Projects & Programmes

Monitoring

Government and Donors jointly monitor and evaluate projects - site visits & progress reports, etc.

i) Assuming Greater Ownership Role in the Development Policy Framework, Strategies and lead future Consultative Mechanism

ii) Aligning donors procedures, processes and programs to Government systems

iii) Strengthening Co-ordination between Government and donors, NGOs and financial institutions

iv) Improve Co-ordination and Delegation Between Donors

v) Institutional Capacity Building

vi) Improve Quality Reporting

vi) Improving Accountability of Funds

15

Key Issues for ODA

IMPORTANT ISSUES

ALL donor assistance is ALIGNED to development priorities i.e.

Roadmap targets;

BACC is the central aid coordination mechanism;

Increase integration of ODA into budget cycle;

Ad-hoc ODA funds result in unbudgeted requests;

Improve M&E of ODA resources; and

Increase dialogue and information sharing.

LEVEL OF ASSISTANCE

FOREST & FISHERIES BUDGET

STATUS OF DONOR FUNDING – NATIONAL LEVEL

2007 2008 2009 2010 2011 20120

20

40

60

80

100

120

140

160DONOR FUNDING NATIONAL LEVEL 2007-2012

Bilateral Donor Multilteral Donor Total Donor fund-ing

$FJD

m

DONOR ASSISTANCE TO THE MINISTRY

SOURCES OF DONOR ASSISTANCE

7%

19%

54%

7%

7%

6%

TYPE OF DONOR ASSISTANCE RENDERED TO DEPT OF FORESTRY FROM 1980 TO CURRENT PERIOD

Financial

Technical Advise

Training

Provision of Equipment

Provison of Vehicle & Ve-hicle Parts

Infrastructure

FOREST FINANCING REQUIREMENTS

ISSUES FOR PRIVATE INVESTMENTS AND ENABLING ENVIRONMENT FOR FINANCING SFM Attractive incentive packages from key stakeholders tailored for

various markets, and stages of wood production Linking tax deductions with degree of compliance to SFM

standards such as National Standard for Forest Certification Specialized capacity that fully understands the evolving needs of

investors for developing specific packages serving mutual needs. An institutional infrastructure to address the various needs of

investors at the various stages of the investment Administration and management must target a balance in

investment in various resource sectors (agriculture, fisheries, forests).

A strong link between regional organizations as conduits for accessing funds for implementing SFM related programs, as alternative sources for the difficult to access ODA

FINANCING GAPS AND OPPORTUNITIES(FINDINGS)

Large potential for conservation and alternative livelihoods, resourcing needs to be enhanced.

Addressing the drivers of deforestation and forest degradation

Lack of support in financial institutions targeting forest management activities

An increasing awareness on the importance of forests environmental conservation.

Lack of incentives for the private sector to improve sustainable forest practices.

A large potential for private and corporate investors to invest into forest-related activities, need to put in place incentives for afforestation and reforestation

SFM IMPLEMENTATION CHALLENGES Implementation procedures

A whole paradigm shift in forest management and decision making

Implementation modalities Communication and awareness; monitoring of

implementation Implementation priorities

Integrated resource management; transition from timber production to sfm, shift to landowner involvement, upgrading of forest industry and supply of high quality forest products, institutional framework

Role of stakeholders National government; Forestry department; other government

institutions, resource owners, forest industry, NGOs

RECOMMENDATIONSSTRATEGIES FOR INCREASING FINANCING FLOWS FOR SFM

1. Formulate a National Forest Development Strategy that includes a National Forest Finance Strategy

2. Strengthen collaboration with Pacific Regional Organizations and NGOs in forest conservation and accessing conservation grants.

3. Encourage Corporate Social and Environmental Responsibility4. Encourage Forest Certification (SFM Certification)5. Encourage Public-Private Partnerships for infrastructure

developments6. Review forest licence and service fees towards a user-pay system7. Establish incentives for forest establishment and sfm related activities8. Encourage development of non-timber and non-wood forest

products9. Levy a Green Fee on foreign visitors10. Promote Agroforestry practices11. Introduce a levy system on the sales of logs sourced from native

forests12. Promote forest-based ecotourism13. Implement the Fiji REDD+ policy

Thank You for your Attention