So lets roll it to the meat of the matter!
2.5 Non-revision
of stumpage fees
Stumpage
fees represent the price paid by timber companies to government for the
harvesting rights of trees. The Timber Resources Management (Amendment)
Regulation (2003), LI 1721 specifies that holders of timber rights permits
shall pay stumpage fees which ‘shall
be reviewed to reflect market
demand and inventory levels of timber species’. It was recommended that the
review should take place quarterly. However, since 2004 the stumpage fees[1]
for timber exploitation have not been reviewed, contrary to the requirements in
the legal provisions. FWG alerted
the Forestry Commission to the fact that there had been no review for nearly 10
years. In response, the Forestry Commission mentioned that a review was
supposed to happen in 2011,[2] but there has still been no action.
The non-revision of stumpage fees leads to loss of revenue for the government, traditional
authorities and district assemblies. Forest communities and the public are thus
heavily subsidizing timber extraction and the industry. Documents sourced
(internally)[3] from the Forestry Commission in June
2011 indicate that the prices being charged currently are ridiculously low. According
to the document, the average proposed stumpage fee is in excess of about 250%
per species compared to the current price. There is therefore currently a high
social cost related to timber exploitation in terms of lost revenue to
stakeholders. For example in the case of Milicia
excelsa/regia (local name Odum), its proposed revised fee is Ghc 94.49 (US $187.09)
per cubic meter, compared with the current fee of Ghc 25.16 (US $49.82) per
cubic metre.[4] Coupled with the sheer increase in the
number of timber permits (particularly salvage permits), the government,
traditional authorities and forest communities are losing millions of dollars. Attempts
to push the revision through are blocked by the industry and the Forestry
Commission. In 2005, Forest Watch
Ghana (FWG)[5]
conducted a study that revealed that as much as US $50 million had been lost from uncollected stumpage and irregularities
in the permits regime.[6] It is safe to conclude that traditional authorities
(as custodians of the forest resources in trust for the people) and forest
communities are losing millions of dollars in timber revenue as a result of the
non-revision and therefore need to put pressure on the government to make these
changes immediately.
3 Conclusions and Recommendations
While there has been progress
in the deployment of the technical specifications of the VPA (Wood Tracking
System, legality verification protocols and manuals), the governance reform
which is crucial to the VPA is moving very slowly. In addition there has been
much less multi-stakeholder consultation in the implementation phase than there
was in the negotiation phase. So far most of the policy and legislative reforms
undertaken have happened with little local participation or meaningful
consultation, contrary to the government’s claims.[7] The
contents of the policies on the domestic timber market and timber procurement
give us less cause to be optimistic about the reforms envisaged in the VPA
because they give less attention to the governance objectives[8] in the
VPA. Ensuring that the concerns and recommendations of forest communities are
heard and incorporated in the new policy and legislation will be a crucial part
of bringing about the reform in governance that the sector needs. The processes
at the national level have not been sufficiently coherent and clear, and – discouragingly
– have often lacked the political will to fully take on the difficult reform
issues regarding land and tree tenure. There is an increasing tendency to
maintain the status quo, even around the processes that are taking place, and
the CSOs have not galvanized strongly enough around the issues. This is due partly
to the changed dynamics in the CSOs concerned. In addition, the government
appears to lack the political will to really shift the dynamics of power and
give more control to communities, as was hoped with the VPA. The government
should stop the rhetoric and actually demonstrate its commitment to governance
reform in the sector. Along with the new Forest and Wildlife Policy that has
been passed, the new Consolidated Forest Act should be revisited and concluded.
It should clarify and strengthen the tenure of forest communities to their
forest resources (especially in off-reserve areas in granting economic rights
to planters or farmers who cultivatee naturally occurring trees). The government
should also have full disclosure on all permits in the sector; it should review
stumpage fees, and work to convert all leases into TUCs within the year. There
is urgency for the WTS to be implemented at a national scale and for the other aspects
of the LAS to be in place. Any delay in issuing FLEGT licences will only serve
to strengthen the current distortions, inequities and unfairness in the system.
There is need for political will from government to reform the land/tree tenure
regimes through a consultative and multi-stakeholder process.
Parliament should
exercise its supervisory responsibility over government and ensure that all
permits granted for timber rights pass parliamentary ratification. This is to
ensure accountability by clamping down on administrative abuses of the permits
regime, ensure that revenues due to the government actually accrue to it, and
that all the stakeholders constitutionally mandated to receive a share of the
revenue actually receive proper compensation for the lost of the resource.
CSOs should
reorganize and re-strategize as a matter of urgency to campaign vigorously for
coherent forest governance reforms focusing on land and tree tenure reforms.
CSOs must continue to ensure that the permits regime in Ghana fully complies
with the laws and regulations agreed in the VPA. In this regard, there is a need
for sustained action on the campaign for the conversion of all old leases to
TUCs. There should be a review of stumpage fees, following which the correct fees
should be collected by the government. There is a need for improved efficiency
in the use of the district assemblies’ and traditional authorities’ share of
the revenue accruing from timber exploitation. Any attempt to amend sections of
the legality definition of the VPA to include ‘special permits’ should be
rejected.[9] It will
only add to the problems with the permits regime and provide opportunities for
abuse and corruption, as is the case with salvage permits.
Lastly, the EU and
donors to the forestry sector have a responsibility to put pressure on the
government to ensure that the reforms to improve forest governance are in place
and working. Thus the EU and other donors need to tie the funding of the sector
firmly to the government’s performance in achieving governance targets, and use
the performance to trigger the release of funds.
There
is every reason to be optimistic that the Ghana VPA is capable of achieving its
desired objectives of improving governance in the forest sector, transparency
and accountability, as long as all stakeholders rise to the challenge. All
hands must be on deck to make this change happen.
Is Ghana's VPA grinding to a halt and failing to achieve improvements in forest governance?
[1] Regulation 21 (3) of the Timber Resources (Amendment)
Regulation, LI 1721 states that the stumpage
fee represents royalties which provide a basic return to the landowner and
contributes to the cost of forest management and timber regulation.
[2] FWG has sourced a document from within the Forestry Commission that
indicates a proposal for revision of the stumpage fees with old and new
figures. The understanding is that there is strong lobbying from powerful lobby
groups’ within the sector to prevent these proposals from being approved and
implemented.
[3] FWG sourced
a document through its allies within the Forestry Commission on the proposal of
a review of the stumpage fees.
[5] Forest Watch Ghana is a civil society coalition formed in 2004 which
campaigns for fair access to forest resources especially for communities, fair
benefit-sharing of forest revenues especially for communities and participatory
forest governance. FWG was actively involved in Ghana’s negotiation of the VPA
and served on the Steering/Implementation Committee and several working groups.
It is also involved in monitoring and engaging other forest sector initiatives
such as REDD+. Its membership is made up of CBOs, NGOs and individuals and
currently stands at around 35.
[6] FWG through the Forest Governance Learning Group published a study
(including featuring in the dailies) which highlighted irregularities in the
permits regime in Ghana and its impact on the forest sector. Visit the website
of IIED for more information under its Forest Governance Learning Group on http://www.iied.org/forest-governance-learning-group
[7] In the 4th memorandum (13–16 March
2013) of the JMRM, the government asserts that
the domestic market policy was subjected to a wider consultation. See www.fcghana.org
[8] The VPA document indicates policy and legal
reforms with clear governance objectives bordering on rural livelihoods, rights
and sustainable cultural and industrial development. Ghana VPA Annex II, page
58.
[9] This proposal is contained in the 5th JMRM memorandum (28–31 May 2013).
Available at www.fcghana.org
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