1. Regional Conference: ‘Building FLEG Partnerships’ under the ENPI FLEG Program <br />Chisinau, July 13-15, 2010<br />Welcoming remarks from Melanie Marlett, WB Moldova Country Manager<br />On behalf of the World Bank, I would like to welcome participants and observers to the Regional Conference on Forest Law Enforcement and Governance (FLEG) which has the objective to define the role and type of partnerships that can be strengthened to address key FLEG issues and to identify means to further develop effective partnerships. The Conference is organized within the EU funded European Neighborhood Policy Initiative (ENPI) East Countries (plus Russia) FLEG program. This covers 7 countries of the Europe and North Asia namely: Armenia, Azerbaijan, Belarus, Georgia, Republic of Moldova, Ukraine; and the Russian Federation. As well as Government representatives (the FLEG National Focal Points) from the seven participating countries, five observer countries (Kazakhstan, Kyrgyz Republic, Tajikistan, Uzbekistan and Turkey) are present, along with donors, NGOs, and ENPI FLEG Operational Committee (OC) members, country program coordinators from WWF, IUCN, WB and the Project Management Team and Secretariat. <br />FLEG is an international, participatory process of formulation and implementation of policies and practices aiming to ensure sustainable forest management, combat illegal logging and the associated trade. <br />The EU supported ENPI FLEG Program is being implemented jointly by the World Bank, IUCN (the International Union for the Conservation of Nature) and WWF, in close coordination with government and non-government stakeholders of the participating countries. The main objective of the ENPI Program is improve forest governance through selected pilot activities with the involvement of participating countries’ governments, private sector and civil society. <br />The Bank’s wider Governance and Anticorruption Strategy<br />Corruption is among the greatest obstacles to economic and social development. It undermines development by distorting the rule of law and weakening the institutional foundation on which economic growth depends.<br />Hundreds of governance and anti-corruption activities take place throughout the World Bank. These activities focus both on minimizing corruption in World Bank-funded projects, and on helping countries improve their public sector and control corruption.<br />The Bank is expanding efforts in these areas on three fronts: In Bank-funded projects, the Bank is assesses corruption risk in projects upstream, actively investigates allegations of fraud and corruption, and strengthens project oversight and supervision. At the country level, the Bank is helping countries build capable, transparent, and accountable institutions and design and implement anti-corruption programs. At the global level, the Bank is expanding partnerships with multilateral and bilateral development institutions, civil society, the private sector, and other actors in joint initiatives to address corruption.<br />In the forest sector, corruption puts at risk poor and forest dependent populations who rely on timber and non-timber forest products, undermines responsible forest enterprises by distorting timber markets, and results in a loss of revenue that could be invested in sustainable forest management or economic development.<br />The World Bank estimates the global annual market value of losses from illegal cutting of forests at over US$10 billion -- more than eight times the total official developmental assistance (ODA) flows to the sustainable management of forests.<br />Illegal logging can be poverty driven or associated with the commercial exploitation of timber. The underlying causes of illegal logging (and other forest crimes) are complex, and often lie outside the forestry sector. These comprise a general failure of governance and prevalence of corruption, including unclear, controversial or simply nonexistent policies and legislation governing the use of forest resources; weak institutional structures; and inability to monitor and enforce the regulations. They are also difficult to address as politically well-connected interest groups tend to benefit from the status quo and will actively resist change.<br />The Bank and the forestry sector in Moldova<br />The limited forest coverage in Moldova contributes to soil erosion, floods, and landslides. Moldova has currently large areas of degraded agricultural lands. Afforestation of degraded land is included as a priority in the national development documents: the National Development Plan (2007), as well as in the Program of the Government of the Republic of Moldova „European Integration: Freedom, Democracy, Welfare” 2009-2013. According to the National Development Plan (NDP), afforested areas in the country will increase from 10.3 % in 2002 to 13.2% by 2015. Another priority area is illegal logging, mainly due to rural poverty and to weak institutional capacity. In 2008 with the support of the World Bank, the country prepared the National Action Plan for Combating Illegal Logging and Improving Forest Governance. <br />The World Bank has also supported Moldova in developing and implementing CDM Carbon Sequestration, through afforestation projects – Prototype Carbon Fund and BioCarbon Fund, Soil Conservation and Community Forestry projects. These projects afforested about 31 thousand ha and are expected to sequester about 3.0 million tons of CO2 equivalent by 2017. Moldsilva, as the project beneficiary, will receive around US $ 10.0 million for the sequestered CO2 from the Carbon Funds. Between 2002-2009 Moldsilva actually planted nearly twice the area contracted (i.e. they planted 61 thousand ha in comparison to the contracted 31 thousand ha). Moldsilva therefore sold an additional 200 thousand tons of sequestered CO2 on the voluntary market. The additional carbon financing helped address the financial and capacity constraints of the State Forestry Agency so more planting was completed.<br />The FLEG Regional Conference is an important opportunity to exchange information about regional and country progress in tackling the problem of corruption and governance in the forestry sector. I see from the program that much of your discussions will be around progress with implementation of the FLEG National Action Plans, and that you also intend to discuss national-level implementation progress.<br />I would like to encourage you to focus critically on seeing that there is real and tangible progress in this area, that you go beyond simply reporting on the FLEG planning process, and come to grips with how the problem of corruption in the sector can be addressed: this is not just a problem of tracking timber flows, but has to involve law enforcement officials, taxation and revenue departments, and must engage a broad spectrum of private sector stakeholders.<br />I wish you all success during the discussions over the next days, and look forward to hearing the outcome of your deliberations.<br />