Despite the Post-War II global development reputation, Is Nepal's community forestry in crisis?

Two days ago, Nepal's most popular Nepali broadsheet published an editorial on Community Forestry (CF), lamenting the Government's plan to introduce a new forest legislation that will curtail some of the fundamental rights of local communities over forest areas.

Formally started over four decades ago in the aftermath of Himalayan degradation crisis, Nepal’s CF system has truly come of age. With over 22,000 community forestry user groups (CFUGs) and nearly 2 million hectares of forests under community management, this system has become the country’s largest platform of civic engagement as well as a solid foundation of local democracy. This was made possible by the enactment of 1993 Forest Act, which is seen as the global best practice in granting secure tenurial rights over public forests. CF development is also positively correlated with the increase in forest cover to 44%, as some remote sensing studies show.

Kantipur report demonstrates that the new law may not fully respect the CF system the way it evolved. Should this time-tested and flagship development success of Nepal need to undergo a fundamental change at this stage? How should legislative reform be pursued to move ahead and not return back to the difficult past? In proposing a new legislation to regulate Nepal CF, a few dimensions need a closer look.

Resource ownership: Nepal’s public forest are regarded as ‘national forests’ as per the current law. Community forest is a part of national forest formally handed over to CFUG registered with the government Forest Office. The current Forest Act 1993 allows communities to enjoy perpetual rights over community forests once handed over to them. The government can suspend a CFUG in case of blatant mismanagement of community forests, but there is a compulsory legal provision to re-transfer the right to CFUG by reorganising the group. Such a perpetual and sustained rights of access to forest has been the key foundation for the success of community forestry in Nepal, and deviation from this foundational legal arrangement can jeopardy the achievements made to date. 

Who regulates CFGUs? With federal constitution and the election of three layers of the government - federal, provincial, and local - the question of who will regulate the community forestry system should be explored in the new light. The pre-federal arrangement is that District Forest Office, a district level unit of the national government Department of Forest, is authorised to legally register the CFUG as an institution to manage CF. This office is also legally empowered to transfer a part of national forest to a CFUG as per a forest operational plan, which forms a part of the contract between the CFUG and the government regarding the management and utilisation of community forests. No local or subnational government arrangements are part of CF governance.

Now in the new federal system, there is a strong and enlarged system of local government, with much greater powers to govern, as defined in the new constitution itself. Forest is also in the concurrent list of the constitution, with community forestry related matters being the responsibility of local and provincial governments. Given this situation, it is prudent to offer local governments the power to register CFUGs and regulate their institutional aspects. The new Divisional Forest Office, under the new provincial government, could be authorised to approve forest operational plans of CFUGs and then to transfer the forest rights to CFUGs. Any matters related to large wild animals, which are not common in community forestry but in national parks and conservation areas, remain the responsibility of the federal government. 

Revenue sharing: Recently, Local Government Operations Act has been promulgated by the Parliament and this has also touched on the subject of revenue sharing in community forestry system. It has required CFUG to pay 10% tax to local government on the sale of forest products by CFUGs to markets. Instead of revenue sharing arrangement, it would be better to have taxation arrangements based on financial transactions and profits. In time to come, CFUGs are likely to take more commercial path, and like other business, taxation policy for CFUGs can also be made similar to other businesses.

As a matter of principle, taxes from community forestry should be shared among governments proportionately to the regulatory burden, in addition to the base tax levied by the federal government. An expert team can calculate figures through an assessment of constitutionally prescribed roles of the three layers of government, which can then be discussed with representatives of key stakeholders. A proposal for CFUG to pay taxes to local and provincial government may sound upraising to CFUGs, but it is important to reposition community groups in the new federal, democratic system of governance.

Service delivery: One of the critical aspects of community forestry development in Nepal has been how technical and institutional development services are managed. Nepal’s forest governance history as well as the Forest Act 1993 has authorised the government Department of Forest as not only the regulator of community forestry, but also the provider of technical services - such as those related to forest assessment, planning, and management. While this practice has allowed communities to seek technical service from the government when there is limited alternative service outside, this arrangement has problematically mixed up regulatory/monitoring role and service delivery role, creating conditions for rent seeking and the lack of responsiveness in the delivery of service itself.

Based on this lesson, and also recognising the principal of separation of technical service delivery and regulatory roles, CFUGs’s institutional autonomy should be respected and strengthened when it comes to identifying and choosing technical and institutional development service from the wider service industry. Indeed, there is a need to provide a clear and enabling regulatory arrangement for the registration and operation of service providers outside of the government system, while new Divisional Forest Office retains the power to monitor the quality and regulate the technical service. Technical and regulatory roles thus must be de-coupled. 

Monitoring and regulatory compliance: CFUG have developed excellent institutional capacity for self-governance, and have functioned well even without active monitoring from the government. Internal democratic practice and accountability procedures have evolved to underpin the institutional capacity of CFUGs. Yet, community system of governance cannot remain isolated from the larger system of governance, in which democratic oversight and regulatory compliance are essential aspects of forest governance.

Until now, the national Department of Forest, through its DFO, has retained the legal responsibility to monitor the performance of CFUGs. CFUGs are required to submit annual report covering institutional and forest related activities of the fiscal year. In the new federal system, it is prudent to have multi-level monitoring and compliance mechanisms, assigning complimentary and clear roles to different levels of governments. Local governments should be authorised to monitor CFUG institutional practices - such as periodic general assembly, social inclusion, fairness in benefit distribution and so on. Reporting of these aspects should be done in an annual basis. The provincial government should monitor forest management related practices of the CFUGs, through less burdensome and less frequent reporting, perhaps three yearly reporting of forest management and condition.