1. Theme 5:
Impacts of trade and investment
on forests and people
Bogor, March 2013

2. Two research sub-themes
 Understanding the processes and impacts
of forest-related trade and investment
 Improving responses and policy options to
mitigate the negative impacts and enhance
the positive impacts of trade and investment

3. Main goal
Theme 5 of CRP6 (ex-Component 5) aims to
catalyze shifts in trade and investment trends
taking place in forested landscapes, targeted at
reducing their negative impacts and enhancing
their positive effects on forests and people to
advance sustainable and inclusive development

4. Rationale
 There is a growing influence
of T&I on forest resources
use, landscape change and
people’s livelihoods
 Main trends are linked to:
• Shifts in commodity flows;
• Growing convergence of food, feed,
energy and financial markets;
• Expanding role of transnational
capitals in producer countries and
emerging-market multinationals
 Impacts are mediated by
multiple policy, market and
institutional conditions that
operate at different scales

5. A simplified framework
Drivers Impacts Responses
 Timber Global
 Oil palm
 Soybean
 Minerals Corporate Responses in
 Others Global T&I strategies consumer
flows and and business countries
Impacts and responses
patterns models
Impacts on
National and sub- Multi-
forests and
national policies and stakeholder
people and
legal frameworks processes
trade-offs
Local actors and
Socio-
conditions (socio- Responses in
ecological
economic, institutional producer
interactions
and ecological) countries
linked to T&I
Local
Transition pathways

6. Subject areas Impacts from Chinese trade
and investments in Africa
 The role of emerging economies in
Large-scale land
land and forest resources use acquisition for food, fiber,
and energy In Indonesia
 Large-scale land acquisition and
investments and their impacts
Building enabling legal
 Implications on forests from food frameworks for sustainable
land use and low carbon
systems and biofuels development investment
 Domestic and international timber
trade and legality compliance Integrating the domestic timber
sector in the formal economy in
 Forest crime, corruption and the context of FLEGT-VPAs
integrated law enforcement
Anti-corruption and anti-
money-laundering
frameworks associated
with the forestry sector

7. Research highlight 1
China – Africa: Value chains, households, environmental impact
 Chinese involvement in
timber extends into all forest Different patterns of Chinese involvement in Congo
regions, and further to the Basin Region Timber
middle of the continent
Country Number of Area (ha) Share of national Observations
 Chinese actors are heavily active
Concessions
concession forest
(2010)
engaged in mineral Gabon (2010) 121 2,7 m 25% High-level gov’t arrangements with
extraction, with potentially Cameroon 5 0.5 m 10%
Chinese logging companies
One Hong kong-based group
large indirect effects (2009)
DRC (2010) 0 0 0 Small scale permits/domestic
 Little evidence that Chinese market trade
interests are important in
large-scale land acquisition

8. Research highlight 2
Chainsaw milling in Central Africa
 Domestic timber markets contribute with €60M
(excluding DRC) to the national economies
 Contribution (in some cases) higher and
(always) redistribute better than industrial
 Networks of corruption “fight” formalization and
affects income distribution from timber
Distribution of
chainsaw milling
costs by production
factor
Source:
Cerutti and Lescuyer 2011;
Lescuyer et al. 2010,
Lescuyer et al. 2011,
Cerutti et al. Forthcoming.

9. Research highlight 3
Implications of biofuel-induced
land-use changes
 Direct and/or indirect land-use changes from cultivation
of feedstocks can cause emissions due to carbon
losses from biomass and soil
 Among the different case studies, the largest carbon
debts are related to oil palm (certainly in peat land).
 Repayment times are the longest for oil palm due to
peat land conversion and for Jatropha due to low
yields and consequently low CO2 repayment rates
Carbon debt and
related repayment time
due to direct (dLUC)
and indirect land-use
change (iLUC)
Source: Achten and Verchot
(2011). Ecology and Society
Note: the graph represents the low iLUC scenario

10. Some findings and observations
 The corporate strategies rather than the “ethnic origin” of
investments explain the differential practices and outcomes
 “Business models” adopted by companies are crucial to
understand the differentiated local socio-economic impacts
 The disparate outcomes of large-scale investments tend to
depend on local state-society-agribusiness configurations
 Options for smallholders largely depend on the access and
performance of broader market and financial networks
 Better governance requires concerted efforts by governments of
producer and consumer countries, financial sector and investors

11. Emerging issues on pathways
 Emerging new narratives of development
- green economies, but business as usual
will persist unless incentive systems and
power structures [+ others] are modified
 While large-scale investments often lead
to negative environmental impacts, they
can contribute towards sustainable land
use and low carbon development
 Interesting policy innovations are being
put in place in forest-rich producer and
consumer countries, but impacts on
forests and people are still uncertain