Documentation:Open Case Studies/FRST522/The Impact of Chinese Investment on Cameroon’s Community Forestry: An Assessment

“Tropical forest change is driven by demand in distant markets”.

Forestry is one of the key sectors in which China is currently active in Cameroon. A number of independent Chinese timber traders are active in Douala. Because Chinese market demand is stable, it sustains timber exports from all logging companies operating in Cameroon. The largest timber concession within the territory has been held by a Chinese company since 2000. From 2003 to 2009, international trade in logs between Cameroon and China has doubled in percentage; the absolute amount of log exportation increased seven times that of 6 years ago.

There is a growing web of interconnected problems. While Chinese direct investment supports Cameroon’s domestic economy, it has negative impact on forest cover and biodiversity. Besides, it also results in conflicting land claims and poor governance. Building infrastructure creates huge emissions and sucks up forest resources. In addition, high-level political manipulation; large-scale displacement of local communities and indigenous people; high biodiversity-value forest loss; illicit timber trading; and rising environmental costs are all associated with logging operations in Cameroonian forest. Presently, communities tend to get little return from forest exploitation, while the forest itself continues to be badly degraded in Cameroon. Indigenous communities are particularly suffering from deforestation.

Forest Sector in Cameroon

File:Vegetation map of Cameroon (1969).jpg

Historically, forest covers a large area in Cameroon.

The log preferences of international market have an impact on Cameroon’s forestry. Historic management plans suggest that Cameroonian timber harvesting used to be selective. However, China prefers cheaper logs, which quality is not as high as those exported to European countries. Chinese investment guideline is “reducing selectivity and increasing the harvesting rate” in Cameroonian forests (p.29). In recent years, Chinese market demands and the development of industries (e.g., improved technology, infrastructural development, reduced cost of transportation) have result in increased harvesting of low quality and secondary species.

Under current trade pattern, Chinese engagement and economic expansion in Cameroon is detrimental to the welfare of forest communities and their environment. As a result of lacking procurement policy, especially in Chinese market, there is a great extent of non-certified, illegal harvesting in Cameroonian forest. Besides, China’s increasing demand for wood also leads to an increase in illegal logging activities, which account for half of the total exports of wood.

Other practices involve conversion of natural forests for cattle ranching, rubber, and fast-growing tree monoculture plantation for paper pulp and oil palm. Specifically, Chinese investment in the rubber industry supports the rehabilitation of some existing rubber estates and expansion of plantation to new areas.

The Nature of the Tenure

Recently, Cameroon introduced a new land category called the “national domain”, alongside public and private domains, to “designate a legal category of land outside the public domain”, neither gazetted nor privately owned (p.1). Since then, private properties and land titles could be claimed on those lands, creating conditions for investments and continuing occupation. Still, land transaction is illegal on national domains.

Forest Management Agreement

In Cameroon, community forests (CFs) are designated only as national domain. CFs do not own the land, but they have exclusive rights to use land and resources, as well as they are responsible for management. As a result, the administration has little influence over the forests area and the forest service. Besides, Cameroon has adopted specific regulations to redistribute forestry taxes to improve the livelihoods of rural communities near logging concessions.

Duration

The duration for holding the land titles is 10 years. After 10 years, investors or logging companies need to extend or regenerate the tenure for continuous occupation. However, harvesting and management plan is long-term (approximately 30 years), whereas market demand pattern for logs is short-term, and the situation varies from year to year.

Governance

In most of the African countries, including Cameroon, property right is determined by the nature of the productive activities in the forest. According to Karsenty (2010, p.4), “control is established through locations rather than defined by boundaries”. Areas in the old-growth forests are allocated to families, lineages or clans, according to their development pattern of cropping. However, there is a problem of corruption. As the national legislation incorporates communities with villages in community forestry, it is reported that “customary chiefs were giving forest access to artisanal loggers in exchange for direct personal payments, at the expense of the rest of the community” (p.5).

Affected Stakeholders

Local Benefits

The local communities’ perceptions of benefits are affected by the absolute amount of revenue (e.g., area fee) redistributed, which are highly skewed among the concessions and over the territory. Some of the tangible benefits, such as wood residues that are used as fuel, are distributed to local families. In addition, monetary distributions are confirmed by both local elites and rural people and perceived as the beneficial aspect of forest exploitation. For example, compensations are made to local villagers for crops and land converted to rubber plantation. Besides, Semi-mechanized artisanal farming has relieved the scarcity of fertile agricultural land, thus contributing to food security at the local level. FSC certification is also recognized by some villagers as having a positive impact around the logging concession.

There are also intangible benefits received by the local people, including (some say) improved governance made possible by area fees and direct corporate social responsibility activities that are negotiated between the companies and the local population; as well as financial and administrative incentives associated with agroforest-industries (e.g., employment opportunities, increased production and exportation) and substantial infrastructural developments.

Conflicting Views

Even the affected stakeholders are having different perspectives. Redistributed taxes can result in mismanagement and embezzlement of funds, with little improvement in practice on local livelihood. Because the local villagers get a share from the area tax, they turned to encourage logging companies to harvest illegally in the areas surrounding the logging concession for the direct monetary benefit. There is also an increase in local stakeholders’ involvement in the wild species trafficking chain to earn additional profit due to an increasing Asian demand for illegal wildlife products. “This illegal collection and capture of wildlife resources is booming around the adjacent sites which host Chinese investments” (p.14). Nevertheless, village elders are contesting the boundaries of the logging concession not only because the foreign companies’ operation violate their user rights over land and resources but also destroy their sacred sites.

Interested Stakeholders

There are many Chinese working in the primary sector of Cameroon, involved in infrastructure construction, resource extraction, agriculture and retailing, exporting a wide variety of cheap goods to China. Both state-owned and private enterprises have contributed to Africa’s extractive industries, constructing infrastructure to access mineral resources. More investments are coming from private sector instead of state-owned enterprise. There are also Chinese small-scale traders and health practitioners working in Cameroon, providing necessities and social service. Among them, forestry is an important sector that people work in. One of the nine Cameroonian logging concessions belongs to China, and China contributes to Cameroon’s forestry sector as a major importer. “Timber and wood products represented 21.9 percent of China’s overall imports from Cameroon in 2008, of which 82 percent was raw wood” (p.10). Commercial logging has opened up formerly inaccessible frontier forests (especially in East Region), making Cameroon the world’s fourth largest timber exporting country.

The Impact of Chinese Investment

Illegal logging in Cameroon

Chinese demand for tropical logs also influences trade patterns and management decisions of local logging companies, and conditions change abruptly from year to year. Specifically, two logging companies regularly harvest all available species to adapt to the changing market demand, as well as produce and export larger volumes of logs and sawnwood to China without having the FSC certification. Besides, some Chinese private entrepreneurs who do not have their own concessions have already relocated themselves to neighborhoods in Cameroon to participate in log trading. Their harvesting remains very selective of traditional high-value, certified species. Therefore, Chinese companies consolidate their position at the expense of local FSC-certified companies. Moreover, two major rubber plantation and processing developments have been taken over by the same company and, while some local jobs and corporate responsibility initiatives have improved, these projects generate a range of challenges for forests and people, including forest loss and social conflict. Nevertheless, the manager of the Chinese timber company, which received Timber Legality & Traceability Verification (TLTV) certificate delivered by the Societé Generale de Surveillance (SGS), suggests international market will only accept timber from ecological labelled companies in the future.

Chinese negotiators are reaching deals that “exchange access to natural resources for infrastructure” with the Cameroonian government. But the impact of their logging operations are destroyng the forest, both directly and indirectly. New large-scale plantations of cash crops, especially oil palms, are being established by private investors along road constructions. In addition, with the introduction of the area tax, logging companies participate less in social obligations, such as road construction and maintenance of health and education, because they already paid taxes to the state.

Assessment of Chinese Influence

Chinese influence can be assessed according to the role of Chinese capital (Chinese-owned companies) and China-related trade (exports to Chinese markets). In summary, Chinese growing influence in Cameroon’s forest sector raises challenges on environmental sustainability and conflicts over the governance of resource, more specifically, the access and benefit sharing (ABS).

Community Forestry Projects in Cameroon

While the Chinese market shapes the trade patterns and management activities of logging companies, it operates against the local customary rules and nature. “Currently, however, the most important fear on the part of the Ministry is still that, if market preferences or transportation costs do not change in the short- to medium-term, and secondary timber species are not in demand, then logging companies will more quickly empty their logging concessions of the most valuable species and abandon them. This will have a direct impact on the State’s revenues, and will concurrently compromise several pillars of the forest policy, notably those concerning the redistribution of forest taxes to rural councils to improve people’s livelihoods” (p.28). GDP growth is just one indicator that is inadequate to measure gains, people also need to take into consideration environmental externalities.

Case Study: Mbalam Iron Mining

The Mbalam iron ore deposit, located in the largest intact rainforest in Cameroon, generated both direct and indirect employment opportunities, as well as reduced poverty in forest communities. The project improves local people’s livelihood through reducing their dependence on forest resources. However, as the project attracts thousands of labourers, extensive forest areas are also opened up by the railway and deep-sea port for settlement, which in turn exposes some of the world’s most biodiverse rainforests and wildlife to severe threats. Conversion of natural capital plays a critical role in the sustainability of rural livelihoods. Positive influences are concerning increased employment opportunities, improved medical service and educational facilities. In terms of negative influences, open access for settlers in biodiverse ecosystems could result in destruction of natural habitat, as well as threats to wildlife population and biodiversity.

Present Challenges for Community Forestry in Cameroon

Environmental Challenges

China–Africa community forestry engagement is following the Environmental Kuznets Curve (EKC). EKC suggests that the quality of a country’s environment will initially decrease due to economic growth, followed by a recovery period when reaches the threshold value of economic development.

China’s wood imports from Cameroon have result in deforestation in tropical forests in the Congo Basin. It is the result of “differential marginal interests” – “commercial logging, plantation agriculture, slush-and-burn agriculture, and other land use development projects” (p.10). Environmental problems associated with deforestation in Cameroon include conversion of old-growth tropical forest to monocultural plantation and expansion of rubber plantation beyond its concession, which contribute to significant reduction of biodiversity and ecosystem resilience. Specifically, China is shifting its environmental cost to Cameroon by extending its forest carrying capacity at Cameroon’s expense. Large-scale forest areas in Cameroon are transformed into agro-industry crops. This has lead to deforestation, as well as its related soil erosion and flooding. Besides, human-caused deforestation threatens the world’s unique, endangered, even endemic species (both plants and animals) in the Cameroonian forest. Adversely affected Acanthaceae plant (a rare species) and tropical forest timber species.

Typically, China’s Vicwood-Thanry company, which owns more than 12% of forest concessions, is to blame for the manner of its commercial logging operation. In Dja and Upper Nyong forest, 140 (40%) of the total 352 plant species are identified as medical plants; commercial exploitation has resulted in the loss of many medical plants used by local people. Commercial logging also opens space for hunting bush meat, which threatens wildlife, causes extinction and habitat destruction. In some forest areas in the country, “as much as 88% of the primate population has been lost to excessive bush meat hunting” (p.14). Vicwood-Thanry stands out again as it is famous for illegal bush meat poaching and transportation. Among all the wildlife species, elephants (tusks), leopards, gorillas, forest buffaloes suffer foremost. Mining is another major threat to protected areas and forest concessions in Cameroon.

Political Challenges

Initially, political challenges are related to land allocations. There is conflict between legislative and customary land rights; minority groups do not have legal titles and must rely on customary rules for their subsistence. Besides, customary land tenure could overlap with other titles such as the industrial forest concession or protected areas. In the community concession, there is supposed to be co-management of shared resources and benefit sharing.

There is also problem with political instability. As is defined by Karsenty, it is “the lack of secure property rights for foreign investors and the high costs of doing business, due to degraded or lacking infrastructure (roads, rail networks, river transport facilities, etc.)” (p.12). As a result of weakened forest governance system, the unsustainable operation of Chinese company in Cameroon’s forest sector is undermining political transparency and law enforcement. Moreover, the “five (logging) permit” system is so loosely defined that it leaves space for loggers to misuse permits and exploit forest unsustainably. Specifically, the practices include harvesting undersized trees and logging in uncatalogued concessions. The main cause is a lack of commitment by Cameroon’s government to sustainable forest management as it cares more about economic development than the environment.

In addition, decisions by African leaders on China-backed projects seem largely pragmatic and short term, with little citizen engagement. Chinese development strategy in African countries is more likely to benefit state elites. It also decreases participatory forest governance. Although community mapping program expect to help communities map their forest habitat to facilitate their negotiation with logging companies, in reality, Indigenous members are powerless in front of the huge profit from Chinese market demand.

Last but not least is the underdevelopment of democracy concerning Chinese “separate politics from business” operation – Chinese foreign policy considers the governance of Cameroon as their domestic issue (p.16). As a result, Cameroon received little political support from China.

Social Challenges

Social challenges are challenging for the local society. Immigration of workers and their families increases the consumption of resources and demand for farmland and non-timber forest resources; land conversion to agroforest results in the loss of habitat for wildlife; competition for resources leads to the conflict between local residents and new-arrivals. There are also potential impacts on vulnerable social groups, such as women and Indigenous people. Besides, social conflicts are exacerbated as local traditional land use areas are loosely documented and commercial loggers seldom consult local communities over their logging plans. There is also a lack of negotiation about overlaps between proposed management and traditional land use. What’s more, there are open and underground conflicts between local stakeholders and contractors due to unfulfilled commitments; as well as between the different social classes of the same locality. In addition, there is no financial incentives for communities in the target logging area. All of the above have resulted in forest community livelihood standard decreasing, which is the “systematic, long-term degradation of forest wealth, reduced forest community welfare and increasing poverty”; increased child mortality rate is experienced by Indigenous groups.

On a moral perspective, Chinese investments also “disrupts the traditional cohesion of families and is likely to bring about diseases, as well as social delinquency within the concerned villages”. It involves occupation of ancestral land belonging to local populations; “de facto and de jure, agricultural areas have been considerably reduced and occupied in these villages”. It additionally includes violation of local cultural and worship heritage, attributed to the destruction of large forests blocks and operational resettlement (p.16). Terrorism is another challenge for both recipient governments and foreign investors.

Opportunities for Community Forestry in Cameroon

Forest ecosystem goods and services have a direct influence on local community livelihood. The issue in Cameroon calls for further study on the relationship between foreign investment, regulatory compliance, and tropical community forest operation to pursue effective conservation of tropical forest ecosystems. The significance of regulatory mechanisms (e.g. forest certification) is highlighted in community forest management, as they could influence harvesting practices, marketing, and benefit sharing, thus facilitating the flow of benefits from logging to local communities.

Short-term market conditions also significantly affect the long-term participatory management of all companies, irrespective of the nature of that company. Various governance instruments such as FSC certification, certificates of legal origin, or approved management plans should be put into effect to mitigate negative market externalities, especially when a company sells a large part of its production to niche markets. Nevertheless, China’s demand for timber cannot help with Cameroon’s economic transition to next stage, technological innovation is required to improve capacity.

Recommendations to the Local Government

Assembe et al. has framed the Socially Responsible Investment (SRI) that can be used to monitor financial investments while incorporating environmental, social, and governance safeguards. Besides, set up a committee to monitor changes and ensure respectful economic operation; effective public communication of socio-environmental impacts of foreign investments associated with development; ecological experts and Indigenous consultation; as well as compensation are all useful ways to enhance local government’s performance in Cameroonian community forestry. “Rules should be clarified, and specifications should require larger financial engagements by the logging companies. However, the effectiveness of the redistributive system must also be improved, and decentralized officials held accountable and sanctioned when mismanagement occurs" (p.32). Also, it is important to increase local participation in development policy and decision making.

Recommendations to Chinese Investors

The challenge in forest sector in Cameroon urgently requires the promotion and publication of Chinese social responsibility guidelines, for example, “Guidelines for Overseas Sustainable Forest Resource Management” and “Utilization by Chinese Enterprises and the Guidelines for Environmental Protection in Foreign Investment and Corporation”; development of country-specific internal corporate policies that integrate the local socio-environmental conditions, to regulate Chinese international responsibilities.

To solve the challenge, China-linked forestry enterprises and traders need to respect local tenure and laws, increase engagement with local communities, improve the sustainability of their operations and increase local product processing. Investments in industrial parks should be based on benefits to local livelihoods and sustainable use of forest resources. Besides, reducing selectivity of logging could enhance economic benefits while slowing the pace of opening the forest.

Recommendations to International Communities

Recommendations to the international community (e.g., UNESCO), are as follows: Firstly, they should strengthen supervision on international development operation, monitor environmental impacts of industrial activity on ecosystems and biodiversity. Besides, regulatory approaches are important for SFM implementation. Governance within tropical forest nations is often weak, which limits the capacity to enforce policies. In addition, international partnerships among governments, conservation organizations, development agencies and timber producers (e.g. independent observers) can support the enforcement of environmental policy and fight corruption. There are also market-based approaches for SFM implementation, which call for the development of market-based tools (i.e. green certification such as Forest Stewardship Council (FSC) to incentivize compliance with SFM policies. “FSC certification requires stricter biodiversity conservation measures and greater social obligations than the forestry law, but increases the demand for a concession's timber as well as the variety of markets where the timber can be sold” (p.2).