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World Bank admits concessions failed

World Bank admits concessions failed

The World Bank has admitted that the use of commercial concessions to manage Cambodia's

forests has been a failure, but has stopped short of endorsing an end to the system

it helped the government to develop.

The World Bank (WB) released comments on a donor-funded Independent Forestry Sector

Review (IFSR) on October 18, echoing long-standing criticisms of the concession system

among other forestry issues.

In 1995, the government awarded 32 forestry concessions on state land covering a

third of Cambodia's total land area, but found most companies hopelessly ill-equipped

or unwilling to meet minimum standards of reporting and environmental care.

Under pressure from conservationists and some donors, the government has cancelled

all but six of the concessions originally granted.

It said that while offering concessions to attract investment from foreign logging

companies worked in theory, it was a disaster in Cambodia's situation.

"The basic institutional skills required to assess assets, screen investors,

manage transparent bidding processes, and enforce contract conditions are weak or

non-existent," said the report.

"Clearly concessionaire and government performance has been largely a continuation

of the 'system of failure' described in the ADB-supported assessment conducted in

2000", said the WB report.

The IFSR concluded that the concession system should be abandoned, possibly over

a transitional period of ten years.

While the recent WB comments did not directly address this suggestion, they hoped

forestry issues would be discussed at the upcoming Consultative Group meeting among

donors and the government in December.

Conservationists welcomed the WB comments, saying it represents a shift in the rhetoric

from the powerful funding body that brought it more into line with other development

organizations.

"It's an important document, it takes us a step forward, the question is how

does this get applied in practise," said Joe Walston, director of the Wildlife

Conservation Society.

"It's a question of clearing the slate and starting again or improving on the

least worst aspects of this system," said Walston.

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